A Radical Solution to the Economic Crisis

It seems I am quite out of the mainstream on the most fundamental issues of the day. Way out of the mainstream, actually. If you look at my solution to the problem of inflation, you’ll see that I am a fan of both freedom and changing the fundamental rules of the game. So, here goes:

The economic crisis has mainly been caused by the housing bust. House prices are dropping to below what people owe, so the loans that were made to those people became “toxic,” with massive defaults looming. Banks started failing, and companies and people stopped being able to get loans, which means businesses failing and fewer people being able to get housing.

One way to get out of this crisis is to increase consumer spending; this is very hard to do. The government often tries to do this with a tax rebate, and it might do so again. But what if we could have a stimulus as big as a tax rebate every month and it would cost the government nothing? That’s what I’m proposing.

But first, let’s get a little more background. There is only a finite amount of land in the world to live on. Back in the middle ages, it was parceled out among the nobles by the king; this was feudalism. If you lived on the feudal lord’s land, you had to pay him for that privilege, even if he didn’t net you anything. This tradition continued into the American colonies: many of the states were land grants by the European courts to individuals: Pennsylvania to Penn, Maryland to Lord Baltimore, and so forth.

This tradition continues to the present day in the form of titles. Government grants deeds and titles to the land and that piece of paper allows its holder to do whatever they want to those who live on it regardless of whether they have ever even seen the place, or been there, or done any maintenance on it, or anything! Just like those feudal lords back in the day.

There are other standards that could be used to determine who owns the land that are much more just. The one I am offering to you today is called “occupancy and use.” If someone lives on a piece of land, takes care of it, and improves it with their own labor, they are the owner of that parcel. This standard allows more freedom than the old feudal system and it is actually more just, as well.

What would be the implications of changing our standard from government titles to occupancy and use? After a short adjustment period, no one would be required to pay rent or a mortgage! This is the monthly stimulus I was talking about before. In most areas, people are paying between $300 and $3,000 a month JUST TO BE ENTITLED TO LIVE; to have a home. If we switched over to an occupancy and use system, that money would be going into the pockets of consumers instead; they could start saving more *and* spending more.

This would be quite a shock to the economy. Some of the implications would be plummeting house prices and failing banks. But those things are happening already! Why not channel those destructive tendencies into constructive outcomes? More people will be secure in their living situations, gain confidence in the markets, and have tons more money to spend!

There would be some winners and some losers with this system:

Losers –

People who have paid off their homes. Essentially these people will be no different than than they were before, but if they were using their home as a store of value for their retirement, it will dramatically lose most of that value (though not all; if there are people willing to pay for the house without taking out a loan, they could compete to buy it). Their retirement should end up a lot cheaper as well, though, so this might balance out.

Landlords. These people would lose their properties to their tenants, although, if they are really excellent, they will probably be able to get some of their tenants to continue paying (though much less) for their services of fixing things and being responsible for problems. Some renters rent because they don’t want to be responsible for these things and they would probably continue to do so. The fact that I am (sort of) about to become one of these means I’m not just writing this post in self-interest.

Banks. A bunch more of these would fail, which would suck in the short term.

Winners –

The poor and the middle class. Huge portions of the budget of these groups is made up of housing; often between 40 and 50%. All that money would be freed up to save or spend on things people want.

American retail and manufacturing. Think of what all that extra money will be used to buy! Think of all the improvements renters will make!

The future. We would be moving away the old feudal way of doing things and toward a more just and free society. If these changes were coupled with other freedom-enhancing reforms, America could lead the way into the governmental and societal structures of the future, just like it did in 1776. Our children and their children would have places to live, be motivated to improve them, and be able to provide for their families even more easily.


The Nerd’s Dream Cabinet

There has been much talk lately about who Obama will appoint to the U.S. Cabinet. I don’t know enough about the current mix of possible nominees to make predictions or picks, and I’m sure the people he picks will be statists and so I won’t be a fan.

So, I decided to come up with my own list! The rules: the Cabinet is made up of fictional characters, and only one is allowed from each SciFi “universe” (although I play fast and loose with that definition and include characters from, for example, multiple incarnations of Star Trek). Here’s what I came up with:

Position Nominee Rationale Policy Statement Photo
Secretary of State Jean-Luc Picard The best diplomat in the Federation! “Time is a companion that goes with us on a journey. It reminds us to cherish each moment, because it will never come again. Make it so.”
Secretary of the Treasury Hank McCoy With things being what they are today, we need the smartest we can get. Plus, he’s blue. “As Churchill said, ‘There comes a time when every man must…’ Oh, you get the point!”
Secretary of Defense Bill Adama If he can lead the military of the entire human race, he can definitely do the same for America.  Besides, is there a difference? “There’s a reason you separate military and the police. One fights the enemies of the state, the other serves and protects the people. When the military becomes both, then the enemies of the state tend to become the people.”
Attorney General Nathan Petrelli He’s a lawyer. Are there any other SciFi lawyers? “Only together can we be the stewards of our own destiny.”
Secretary of the Interior Clark Kent If anything bad happens, he can fly fast enough around the world to reverse time and fix it. He needs to be in charge of something American, since that’s what he stands for. “Truth, justice, and the American way.”
Secretary of Agriculture Samuel Beckett He has multiple PhDs, and the best picture I could find of him he was holding a pig. Plus, we need farmboy Clark Kent at Interior. “Oh, boy.”
Secretary of Commerce Quark A small businessman. Also, we need a token Republican. “Greed is the purest, most noble of emotions.”
Secretary of Labor HAL 9000 In the future, all labor will be performed by robots. We need someone who they can identify with. “I know I’ve made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I’ve still got the greatest enthusiasm and confidence in the mission. And I want to help you.”
Secretary of Health and Human Services Stephen Franklin A true doctor’s doctor. “Sometimes you have to heal the family before you can heal the patient.”
Secretary of Housing and Urban Development Lando Calrissian The mayor of cloud city has experience in an urban environment. “Here goes nothing.”
Secretary of Transportation Hoban “Wash” Washburne C’mon, he’s Wash! “Like a leaf on the wind…”
Secretary of Energy Tony Stark He built a tiny and safe personal nuclear reactor! “Is it better to be feared or respected? I say, is it too much to ask for both?”
Secretary of Education Clara Clayton We need some more diversity on the team: not enough time travelers. Plus, what other teachers are there in scifi? “Golly!”
Secretary of Veterans Affairs Sarah Connor She certainly understands PTSD and the way a soldier thinks. “The unknown future rolls toward us. I face it, for the first time, with a sense of hope. Because if a machine, a Terminator, can learn the value of human life, maybe we can too.”
Secretary of Homeland Security Fox Mulder He is the only one who sees the truth that is out there. Aliens. Threatening the homeland. “Sometimes the only sane answer to an insane world is insanity.”

Health Care Solutions: The Retail Clinic Experience

When I discuss the issues of health care with people, I tend to take what I consider the most libertarian position: that many of the high costs associated with health care are due to the structure of licensing and certification and regulation that exists in our country.  In many places around the world, prescriptions for medications needed to treat common diseases are not necessary; a pharmacist can help you get the drugs you need when you need them.  In the U.S., however, we have a gatekeeper system.

There are attempts, however, to make things work a little better here.  Some CVS pharmacies in my area have set up “minute clinics” which are in-store clinics which employ technicians who are trained to diagnose many common ills and write the prescriptions people need for those illnesses.  The prices for diagnosing and treating various ailments are given up front and everything is taken care of right there in the pharmacy.

Since I politically approve of these types of setups, I decided to go to one of these clinics and get some treatment for a sore throat / infection that I’ve had on and off for the past two weeks.  I was pretty sure I would just need a course of antibiotics and I would be fine (this happens to me nearly every year).

The technician was very careful and did everything a doctor would normally do.  She seemed pretty sure (just like I was) that I just needed some antibiotics and I would be fine, but when she listened to my lungs she thought she heard something that might indicate pnuemonia or bronchitis, and said I would have to go to a doctor.  I was skeptical because I don’t really have a cough at all, but she said she wouldn’t be able to give me the antibiotics due to the fact that my diagnosis had to be treated by a doctor.

So, I left, a little disappointed that the system didn’t work the way I thought, politically, it was supposed to.  I called my primary care doctor, but they were on lunch break so I left a message.  I drove up to their offices anyway and got lunch nearby and dilly-dallied until they called and told me to come in immediately.

I got into the doctor’s office relatively quickly after they got back from lunch and then I saw the doctor: she said my lungs sounded fine, my throat looked red, prescribed antibiotics and the whole thing was done in about 5 minutes.  She wasn’t even all that thorough, I think she just sees so many people in this situation that she diagnoses quickly and is done with it.  She seemed surprised that the clinic folks sent me to her at all.

So, I got the antibiotics I knew I needed from the start by taking up three hours of my time, burning a ton of gas, and having my insurance company pay a bunch of money.  The reform I was hoping would solve a lot of these problems apparently just made things worse, because it was so incomplete and tentative.  I still love the idea of retail clinics (and not requiring prescriptions for common drugs but letting the pharmacist be the gatekeeper) but in this case they didn’t go far enough, and for that reason I’m skeptical that the whole thing isn’t a boondoggle.

Oh well, at least I got to see a helicopter land at the hospital.

Debate Anyway!

If John McCain doesn’t show up to the debate tomorrow, Barack Obama will need someone to spar with.  He can’t do it alone!  I think it would be good for the country if he debated a few of the third party candidates: Baldwin, Barr, McKinney, and Nader.  I don’t know if it would be good or bad for him personally (and so I don’t know if he would agree to it) but it would be an interesting debate.

I think it would be good for Obama and he should agree to it.  I would wager each and every one of them would take it upon themselves to mention that John McCain was unable to fulfill his obligations as a presidential candidate.  Also, if the conventional wisdom holds, they’ll all come off as crazies leaving Obama standing as the only reasonable one.

In any case, it won’t happen.  The reason for this is that the Commission on Presidential Debates is a bi-partisan organization, when it should really be a non-partisan organization.  Bi-partisanship sounds great until you realize that the two main parties agree the vast majority of the time and both are committed to royally screwing up the country we live in.

Money: It Ain’t Worth What It Usedta Be

Of late, I’ve been rereading the Neal Stephenson classic The System of the World, which is part of The Baroque Cycle trilogy (or octalogy, depending on how you count them).  This book of the series focuses a great deal on Isaac Newton’s attempts to refine and regulate the coinage of Britain: to make sure that each coin minted has the correct amount of metal in it and only that much, since that’s what coins used to be.  A “dollar” or a “pound” was a specific amount of gold or silver that was fixed by law.

These days, that’s no longer the case.  Our money is based on a fiat system and the least expensive possible metals are used to create our coins, which essentially means the government is creating value where there was none before, just by shaping that metal into certain shapes.

I had a grand plan to figure out what the various metals are that make up each kind of coin and then try to figure out what they’re worth in reality, but someone else on the internet already did it!  Coinflation.com has the “current melt value” of most U.S. coins.  This is a good thing because I can avoid work and my numbers would have been fixed (the site in question uses current prices for each kind of metal.)  I find all this very interesting: Pennies minted before 1982 are worth more than their face value and Nickels are holding their value rather well, but almost all other coins are worth a pittance compared to their face value.

I started thinking about this after obtaining some $1 coins out of the New York City subway system card vending machines.  These coins are cute and I am going to start asking after them at the bank like I do for $2 bills as well.  They look golden, but actually they’re made of mostly copper, with some manganese, zinc, and nickel.  They have some cool printing along the sides as well, instead of the normal grooved edges.  I hope to circulate as many as I possibly can, but that might involve buying some kind of coin purse.

Reading up on these coins on Wikipedia, I discovered that the mint is also offering some pure gold coins as companions to these coins: The First Spouse Program.  First ladies throughout history are being featured on these gold coins, which contain .5oz of gold.  While these coins are worth about $430 in fiat dollars, they are marked $10 on their face.  That’s because, when dollars were fixed to gold, one dollar was defined to be 1/20th of an ounce of gold.  Someone, somewhere at the mint must be nostalgic for those days, to be stamping these coins with that $10 number.

Too Slow to Blog (and I Don’t Get Bailed Out)

I wanted to post yesterday about how when an industry is failing, the government seems to incentivize the biggest companies to fail the fastest.  That is, the first company to fail inevitably gets a bailout, but not everyone can get one, so later companies just have to work through their issues.

Sadly, I have been proven wrong, since I read over the shoulder of someone on the Metro that AIG has been bailed out by the government.  How do they make these decisions?  To shower some failing companies with money and security and leave others by the wayside?  It seems impenetrable to me.

I think my first point still stands, though.  If you know you’re going to fail, try to be the first.  That way there will still be some funds left to keep you afloat.  If that fails you, be the biggest in your field (even if you got that way by taking risks you shouldn’t have taken).

The Soda Wars 2008

Coming off of the past two weeks of political conventions reaffirmed in me my take on the current duopoly we have in government.  In nearly every fundamental way, we are being governed by political parties that are akin to Coke and Pepsi.

Both parties launched massive marketing campaigns planned by the same executives used by the big corporations.  They attempted to distinguish their brands by the use of taste tests and media buys, celebrity endorsements and local sponsorships, even while pursuing nearly the same recipe: a police state at home, multiple interventions abroad, heaps of corporate welfare, and an ever-growing public sector that cannot be reined in.

This will be especially clarified in the coming weeks as both candidates swerve towards the center, unable to distinguish themselves on nearly every issue: both offering the same syrupy government largesse with a slightly different flavor.  And even while the two parties are 95% the same, much like those powerhouses of the soft drink industry nearly every one of their consumers will remain fiercely partisan.  Coke *is* better than Pepsi, one will hear.  Another will guarantee that Pepsi is supreme.  Neither of them will waver in their fundamentalist belief that their glass of sugar water is superior to your glass of sugar water.

I’m tired of drinking cola.  Please, can I just for once have a nice refreshing glass of water?