The Fed has given a massive adrenalin injection to the stock market, specifically, monetary reserves equal to a good 30% of the US money supply. The market was very modestly priced when President Obama assumed office. The uncertainty of the election was over. Inflationist Democrats are in office, which means lots of goodies for Wall Street at the expense of the poor, minorities and working class who think that the Democrats represent them.
True, the Republicans transferred a considerable amount of potential wealth from the public to investors via the bailout and Bernanke monetary expansion. True the Democrats went along with it. Because of these wealth transfers, the market will go up.
But there seems to be another problem that is causing further investor nausea: Democratic Party corruption. The near-300 point drop in the Dow today is in spite of Amerikan Mediazvestia's supporting the crooked, pork laden Democratic Party "stimulus". Investors are no longer merely reflecting Mediazvestia's lies. Instead, investors are puking into the Democratic Party's Congressional pork vomitorium.
Tuesday, February 17, 2009
Sharad Karkhanis Exposes Incompetence at the Professional Staff Congress
I just received this e-mail from Sharad Karkhanis's Patriot Returns site.
>Nine years ago, many PSC members had expectations that the New Caucus management of Barbara Bowen and Steven London would bring fresh energy, new ideas and direction to the competent but slow pace of activity under former PSC president Irwin Polishook. This was however followed by a rude awakening and very big DISAPPOINTMENT.
Instead of a real union, what they got in the Bowen/London New Caucus group was a militant political junta unconcerned with members' needs.
The experience of the past nine years clearly demonstrates that the Bowen/London group has led us to unprecedented disaster in Welfare Fund coverage and further disaster regarding negotiated contracts for members.
They have spent more time and more of our dues money trying to conduct United States foreign policy than they have negotiating, implementing or enforcing the contract.
They have spent more time, more energy and more of our dues money on demonstrations, parades and pickets than any other comparably-sized union in the City of New York, to no avail in terms of benefit to its members. New York City law enforcement has been required to dissipate valuable time and resources guarding these sheep in demonstrators' clothing while we members foot the bills in terms of out-of-pocket cost and loss of credibility.
These nonsensical demonstrations, including the one in front of the Chancellor's home (Click here) have served to render CUNY professional staff a laughing stock.
Expenditure of dues money on breakfasts, lunches, T-shirts, baseball caps and buses for demonstrations in Washington and Pennsylvania is highly irresponsible and wasteful of union members' dues money.
The Bowen/London gang have donated your money to such terrorists as Lori Berenson and Sami Al-Arian.
During their nine-year reign, the New Caucus group has presided over very significant reduction in prescription drug benefits. And they have so dissipated our previously-good dental coverage that it is today nearly non-existent.
They bankrupted the Welfare Fund and then re-funded it by co-opting our duly-deserved retroactive pay!
While UUP (the SUNY union) and UFT (the Teachers' union) achieved significant contractual gains, the Bowen/London New Caucus did not even get us salary increases approaching the increase in the cost of living. Our salaries have thus effectively decreased!
A group which hires a convicted felon as its house attorney and pays him handsomely from your dues money is irresponsible. Nor is it a group which cares for its members' grievances and complaints. Past issues of The Patriot are replete with stories of New Caucus misdeeds and misbehavior in the arena of grievance, all at your expense.
We at The Patriot yearn for a new beginning, for a new leadership whose motto will be "Members First." Contract negotiations, contract implementation and contract enforcement will constitute its primary responsibilities coupled with focus on improved welfare benefits and such political activity on State and local levels as is necessary to advance those causes which directly benefit members.
We deserve a union with focus on legitimate economic and professional concerns of its members, not one which wastes, month after month, the time of its elected delegates on discussion and passage of resolutions on international conflicts and every-social-issue-under-the-sun.
We have had enough.
We have endured enough.
We have suffered enough.
It is time to elect new leadership.
It's time for a real union, one with pragmatic focus on members' needs.
MEMBERS COME FIRST!
Sharad Karkhanis, Ph.D.
Professor Emeritus
Editor-in-Chief
Issues of The Patriot may be accessed at
http://www.patriotreturns.com
Archived editions are available at
http://www.patriotreturns.com/archive.htm
As you know, Susan O'Malley has sought to silence the Patriot by bringing a lawsuit which seeks to limit his free speech and financially bankrupt him. Interested colleagues have weighed in at
www.freespeechcuny.blogspot.com
>Nine years ago, many PSC members had expectations that the New Caucus management of Barbara Bowen and Steven London would bring fresh energy, new ideas and direction to the competent but slow pace of activity under former PSC president Irwin Polishook. This was however followed by a rude awakening and very big DISAPPOINTMENT.
Instead of a real union, what they got in the Bowen/London New Caucus group was a militant political junta unconcerned with members' needs.
The experience of the past nine years clearly demonstrates that the Bowen/London group has led us to unprecedented disaster in Welfare Fund coverage and further disaster regarding negotiated contracts for members.
They have spent more time and more of our dues money trying to conduct United States foreign policy than they have negotiating, implementing or enforcing the contract.
They have spent more time, more energy and more of our dues money on demonstrations, parades and pickets than any other comparably-sized union in the City of New York, to no avail in terms of benefit to its members. New York City law enforcement has been required to dissipate valuable time and resources guarding these sheep in demonstrators' clothing while we members foot the bills in terms of out-of-pocket cost and loss of credibility.
These nonsensical demonstrations, including the one in front of the Chancellor's home (Click here) have served to render CUNY professional staff a laughing stock.
Expenditure of dues money on breakfasts, lunches, T-shirts, baseball caps and buses for demonstrations in Washington and Pennsylvania is highly irresponsible and wasteful of union members' dues money.
The Bowen/London gang have donated your money to such terrorists as Lori Berenson and Sami Al-Arian.
During their nine-year reign, the New Caucus group has presided over very significant reduction in prescription drug benefits. And they have so dissipated our previously-good dental coverage that it is today nearly non-existent.
They bankrupted the Welfare Fund and then re-funded it by co-opting our duly-deserved retroactive pay!
While UUP (the SUNY union) and UFT (the Teachers' union) achieved significant contractual gains, the Bowen/London New Caucus did not even get us salary increases approaching the increase in the cost of living. Our salaries have thus effectively decreased!
A group which hires a convicted felon as its house attorney and pays him handsomely from your dues money is irresponsible. Nor is it a group which cares for its members' grievances and complaints. Past issues of The Patriot are replete with stories of New Caucus misdeeds and misbehavior in the arena of grievance, all at your expense.
We at The Patriot yearn for a new beginning, for a new leadership whose motto will be "Members First." Contract negotiations, contract implementation and contract enforcement will constitute its primary responsibilities coupled with focus on improved welfare benefits and such political activity on State and local levels as is necessary to advance those causes which directly benefit members.
We deserve a union with focus on legitimate economic and professional concerns of its members, not one which wastes, month after month, the time of its elected delegates on discussion and passage of resolutions on international conflicts and every-social-issue-under-the-sun.
We have had enough.
We have endured enough.
We have suffered enough.
It is time to elect new leadership.
It's time for a real union, one with pragmatic focus on members' needs.
MEMBERS COME FIRST!
Sharad Karkhanis, Ph.D.
Professor Emeritus
Editor-in-Chief
Issues of The Patriot may be accessed at
http://www.patriotreturns.com
Archived editions are available at
http://www.patriotreturns.com/archive.htm
As you know, Susan O'Malley has sought to silence the Patriot by bringing a lawsuit which seeks to limit his free speech and financially bankrupt him. Interested colleagues have weighed in at
www.freespeechcuny.blogspot.com
Mayor Bloomberg Meets Gomez Addams
One must judge a leader by whether the plans that he has laid have furthered or hindered the purposes of the institution he leads. In the case of Mayor Michael Bloomberg, his record is execrable. Mr. Bloomberg is a former bond trader who, if anyone, ought to be aware that financial markets are cyclical. He has been mayor for nearly eight years, during which time the fifty-year trend of New York's becoming a one-industry town has continued unabated. That industry is, of course, Mr. Bloomberg's first one, the financial industry and Wall Street.
New York has seen industry flee because of its astronomical tax rates, about which Mr. Bloomberg has done nothing. New Yorkers pay more than one half of their incomes to government (including federal and social security as well as state and city taxes) yet the services that the City provides are abysmal. New Yorkers need not watch horror movies. They just need to step into the subway system to be assaulted by the miasma of foul bums, rats scurrying to and fro and a transportation system out of the 1960s television program (based on Charles Addams's New Yorker Magazine cartoon series) The Addams Family.
In nearly eight years in office Mayor Bloomberg did nothing to reverse the long term trend of exit from New York. Taxes are as high as ever and services are worse than ever. He has failed to lead. He has failed to attract industry. His only two accomplishments are absurd televsion screens in taxi cabs and his initiative in abolishing the term limits that prevented Rudolph Giuliani from running for a third term but that will conveniently allow Bloomberg inflict his incompetence on a failing city for four more years.
Mr. Bloomberg joins the other Uncle Festers, Morticias and Pugsleys, and of course, "the thing", their hands reaching, reaching, reaching for ever more handouts, ever more freshly printed Fed bailout money from a corrupt, incompetent Congress.
New York has seen industry flee because of its astronomical tax rates, about which Mr. Bloomberg has done nothing. New Yorkers pay more than one half of their incomes to government (including federal and social security as well as state and city taxes) yet the services that the City provides are abysmal. New Yorkers need not watch horror movies. They just need to step into the subway system to be assaulted by the miasma of foul bums, rats scurrying to and fro and a transportation system out of the 1960s television program (based on Charles Addams's New Yorker Magazine cartoon series) The Addams Family.
In nearly eight years in office Mayor Bloomberg did nothing to reverse the long term trend of exit from New York. Taxes are as high as ever and services are worse than ever. He has failed to lead. He has failed to attract industry. His only two accomplishments are absurd televsion screens in taxi cabs and his initiative in abolishing the term limits that prevented Rudolph Giuliani from running for a third term but that will conveniently allow Bloomberg inflict his incompetence on a failing city for four more years.
Mr. Bloomberg joins the other Uncle Festers, Morticias and Pugsleys, and of course, "the thing", their hands reaching, reaching, reaching for ever more handouts, ever more freshly printed Fed bailout money from a corrupt, incompetent Congress.
Jan Tinbergen on Decentralization
Jan Tinbergen was a Dutch economist who won the Nobel prize in economics. His brother, Nikolaas, won the Nobel Prize in physiology or medicine. Tinbergen was a mathematically oriented economist who wrote from a Keynesian perspective. In 1954 he wrote a monograph "Centralization and Decentralization in Economic Policy"* in which he outlines structural equations that might be useful in studying the effects of decentralization on social welfare. He defines "conformity" as the conformity of policy makers' assumptions to the real world. In the chapter on centralized economic policy he notes the importance of trial and error to policy making. He is talking about quantitative policy goals such as income and price levels (p. 16):
"Conformity will hardly ever exactly be realised in practice, if only because of our imperfect knowledge of the structural constants or because of changes in such 'constants'. This circumstance makes it necessary and more or less usual for policy-makers to follow a trial-and-error policy method. They will try a certain value of their instrument and observe the result. Dependent on this result they will adjust the instrument variable. In view of this practice it is sometimes doubted whether it is any use to make econometric estimates for the values of the instrument variables. The answer is that although it is possible by trial and error to find the correct values, this method nevertheless implies some waste...social utility is usually unfavourably influenced by the frequency of changes in political instrument values."
The problem of uncovering the correct policy course becomes even more severe in the case of qualitative policies:
"In the case of qualitative changes all we can do, as a rule, is just to calculate the outcome for the alternative cases and to compare them...the problem of comparing alternative forms of organisation of economic life constitutes the problem par excellence of economic science; its real raison d'etre."
Tinbergen notes that:
"If in particular a higher degree of centralization would have been possible and would have led to target variable values with a higher utility, the reason of the discrepancy may be said to be the very fact of decentralization. In the case of non-conformity it is by wrong insight into or knowledge of the objective equations that wrong instrument variables are chosen. Simple though this phenomenon and its remedy may seem, it is not so simple in practice. One reason is that exact knowledge on the mechanism of an economy does not exist and that there can, therefore, only be question of better or worse approximations. Another reason is that even experts in this field are not unanimous and that it will be very difficult, then, for non-experts to be. Even if there is unanimity among experts in some cases, it is not easy to convince the rank and file of large organizations of this expert opinion."
Although economies of scale make centralization more efficient (p. 59):
"(I)t is in the nature of centralization that it will be more costly as soon as purely technical economies of scale are out of the question. It generally requires a bigger administrative machinery and, before all, more interference with private freedom,"
and (p. 62):
"any application of an instrument in a centralized way will imply higher disutilities, or will lower utility more than will the same application in a decentralized situation would. There is, therefore, a general tendency in a centralized situation to make less use of all the instruments, which will be the stronger the higher the disutilities are."
However, in decentralized situations policies which help other units are used to a lesser degree than they would be in a centralized situation so if there are positive overflows, the decentralized approach may not be as good.
Where all the units have similar or identical perceptions of their own social welfare then centralized regimes are to be preferred. Moreover, where policy instruments conflict among the goals of subunits or where a policy would help all the subunits if applied across the board, then a centralized approach is better.
But instruments which do not affect other decentralized units are better applied at a decentralized level (p. 74):
"In plain language, the cost and trouble will be diminished, without changing the situation any further...Each decentralization means reduction of costs and disutility generally."
Thus, where each unit's social welfare is similar to the others, policies which are neutral or do not affect the other units are best pursued on a decentralized basis and policies that can have an across the board positive effect are best pursued on a centralized basis (such as general price levels).
It is difficult to know which policies have positive overflows. Many policies have negative effects. Economists of the 1940s believed that the Fed was an instrument for positive results. Today, even the Keynesian descendants of this group does not deny that Fed oversight of the banking system has resulted in endemic catastrophes and miscalculations leading to the need for a trillion dollar welfare infusion from the public.
Polices which have outright negative effects, which I would argue that the Fed and the American banking system has, are better implemented on a decentralized basis because the groupthink, ideological commitment to central banking and massive errors that policy makers commit can be limited to local units that have preferred to take such risks.
*J. Tinbergen, "Centralization and Decentralization in Economic Policy". Amsterdam: North-Holland Publishing Company, 1954.
"Conformity will hardly ever exactly be realised in practice, if only because of our imperfect knowledge of the structural constants or because of changes in such 'constants'. This circumstance makes it necessary and more or less usual for policy-makers to follow a trial-and-error policy method. They will try a certain value of their instrument and observe the result. Dependent on this result they will adjust the instrument variable. In view of this practice it is sometimes doubted whether it is any use to make econometric estimates for the values of the instrument variables. The answer is that although it is possible by trial and error to find the correct values, this method nevertheless implies some waste...social utility is usually unfavourably influenced by the frequency of changes in political instrument values."
The problem of uncovering the correct policy course becomes even more severe in the case of qualitative policies:
"In the case of qualitative changes all we can do, as a rule, is just to calculate the outcome for the alternative cases and to compare them...the problem of comparing alternative forms of organisation of economic life constitutes the problem par excellence of economic science; its real raison d'etre."
Tinbergen notes that:
"If in particular a higher degree of centralization would have been possible and would have led to target variable values with a higher utility, the reason of the discrepancy may be said to be the very fact of decentralization. In the case of non-conformity it is by wrong insight into or knowledge of the objective equations that wrong instrument variables are chosen. Simple though this phenomenon and its remedy may seem, it is not so simple in practice. One reason is that exact knowledge on the mechanism of an economy does not exist and that there can, therefore, only be question of better or worse approximations. Another reason is that even experts in this field are not unanimous and that it will be very difficult, then, for non-experts to be. Even if there is unanimity among experts in some cases, it is not easy to convince the rank and file of large organizations of this expert opinion."
Although economies of scale make centralization more efficient (p. 59):
"(I)t is in the nature of centralization that it will be more costly as soon as purely technical economies of scale are out of the question. It generally requires a bigger administrative machinery and, before all, more interference with private freedom,"
and (p. 62):
"any application of an instrument in a centralized way will imply higher disutilities, or will lower utility more than will the same application in a decentralized situation would. There is, therefore, a general tendency in a centralized situation to make less use of all the instruments, which will be the stronger the higher the disutilities are."
However, in decentralized situations policies which help other units are used to a lesser degree than they would be in a centralized situation so if there are positive overflows, the decentralized approach may not be as good.
Where all the units have similar or identical perceptions of their own social welfare then centralized regimes are to be preferred. Moreover, where policy instruments conflict among the goals of subunits or where a policy would help all the subunits if applied across the board, then a centralized approach is better.
But instruments which do not affect other decentralized units are better applied at a decentralized level (p. 74):
"In plain language, the cost and trouble will be diminished, without changing the situation any further...Each decentralization means reduction of costs and disutility generally."
Thus, where each unit's social welfare is similar to the others, policies which are neutral or do not affect the other units are best pursued on a decentralized basis and policies that can have an across the board positive effect are best pursued on a centralized basis (such as general price levels).
It is difficult to know which policies have positive overflows. Many policies have negative effects. Economists of the 1940s believed that the Fed was an instrument for positive results. Today, even the Keynesian descendants of this group does not deny that Fed oversight of the banking system has resulted in endemic catastrophes and miscalculations leading to the need for a trillion dollar welfare infusion from the public.
Polices which have outright negative effects, which I would argue that the Fed and the American banking system has, are better implemented on a decentralized basis because the groupthink, ideological commitment to central banking and massive errors that policy makers commit can be limited to local units that have preferred to take such risks.
*J. Tinbergen, "Centralization and Decentralization in Economic Policy". Amsterdam: North-Holland Publishing Company, 1954.
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