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I recently sat through a lecture on nutrition, and the speaker attempted to make the case that nutrition and restaurant food are mutually exclusive. I agree. After all, if people complained about a restaurant’s food the way they complain about hospital food, the restaurant would soon be out of business for lack of customers.

There are only a few things that bring flavor to food, and those items are: fat, sugar, and salt. All three of them are bad for you to one extent or another. The speaker in this case tried to say that since those restaurants are putting fat, salt, and sugar into food, the government needs to step in and regulate these ingredients and mandate the levels of them. There was something in there about weight gain, health problems, blah, blah.

The speaker was formerly a manager of a restaurant that was a part of a national chain, and he was complaining that the restaurants only want to sell food, and do not care about health and nutrition. He said that as a manager, he was not paid to think about the health concerns of his customers, only sales numbers.

During the question and answer period, I pointed out to the speaker that no one holds a gun to the people who eat in establishments, and overeating is the responsibility of the person stuffing his face, and that making a law to tell me what to eat because others want to lose weight is wrong. He replied, “Not if my taxes are paying for your health care.”

The next speaker in the seminar began talking about cardiac problems. He then made a statement that 600,000 pacemakers are inserted per year all over the world, and more than 58% of them are for white males over the age of 60. He tried say that this fact made the health care industry racist, because white males constitute far less than 50% of the world population. He went on to say that this was accomplished by keeping costs high, ensuring that the whites (who obviously cheat their way to the top) are the only one who can receive care.

He used the example that a pacemaker can cost upwards of $50,000 installed, and that a stent (used to open blocked cardiac arteries) cost up to $5,000. He said that laws should be put in place to set prices at a level that people could afford.

I walked out. How can you argue with people who do not understand economics? If you tell me that I must not sell a product for more than a certain price, what will you do if I simply refuse to produce said product?

I feel more and more every day like I am living in an Ayn Rand novel. It would be funny if it weren’t so true, except it won’t be Reardon metal, it will be some medical breakthrough. Perhaps a drug? Reardonodon? Reardonalanine?

We are continuing our examination of the Articles of Confederation. We began our examination with the theory of natural rights, and then followed it with a post on the Preamble and First Five Articles. The next two posts will examine the next four articles, VI through IX (six through nine for those of you ignorant of Roman Numerals) which deal with relations with other nations, including war and defense. As in the past, Articles in black, my comments in blue:

Article VI No State, without the consent of the United States in Congress assembled, shall send any embassy to, or receive any embassy from, or enter into any conference, agreement, alliance or treaty with any King, Prince or State; nor shall any person holding any office of profit or trust under the United States, or any of them, accept any present, emolument, office or title of any kind whatever from any King, Prince or foreign State; nor shall the United States in Congress assembled, or any of them, grant any title of nobility.
No two or more States shall enter into any treaty, confederation or alliance whatever between them, without the consent of the United States in Congress assembled, specifying accurately the purposes for which the same is to be entered into, and how long it shall continue.

No State shall lay any imposts or duties, which may interfere with any stipulations in treaties, entered into by the United States in Congress assembled, with any King, Prince or State, in pursuance of any treaties already proposed by Congress, to the courts of France and Spain.

No titles of nobility, and all negotiations and treaties must go through the Confederate Government.

No vessel of war shall be kept up in time of peace by any State, except such number only, as shall be deemed necessary by the United States in Congress assembled, for the defense of such State, or its trade; nor shall any body of forces be kept up by any State in time of peace, except such number only, as in the judgement of the United States in Congress assembled, shall be deemed requisite to garrison the forts necessary for the defense of such State; but every State shall always keep up a well-regulated and disciplined militia, sufficiently armed and accoutered, and shall provide and constantly have ready for use, in public stores, a due number of field pieces and tents, and a proper quantity of arms, ammunition and camp equipage.

No State shall engage in any war without the consent of the United States in Congress assembled, unless such State be actually invaded by enemies, or shall have received certain advice of a resolution being formed by some nation of Indians to invade such State, and the danger is so imminent as not to admit of a delay till the United States in Congress assembled can be consulted; nor shall any State grant commissions to any ships or vessels of war, nor letters of marque or reprisal, except it be after a declaration of war by the United States in Congress assembled, and then only against the Kingdom or State and the subjects thereof, against which war has been so declared, and under such regulations as shall be established by the United States in Congress assembled, unless such State be infested by pirates, in which case vessels of war may be fitted out for that occasion, and kept so long as the danger shall continue, or until the United States in Congress assembled shall determine otherwise.

No State can make war, or prepare for war, without running it through Congress first, except in the case of pirates.

Article VII. When land forces are raised by any State for the common defense, all officers of or under the rank of colonel, shall be appointed by the legislature of each State respectively, by whom such forces shall be raised, or in such manner as such State shall direct, and all vacancies shall be filled up by the State which first made the appointment.

Article VIII. All charges of war, and all other expenses that shall be incurred for the common defense or general welfare, and allowed by the United States in Congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several States in proportion to the value of all land within each State, granted or surveyed for any person, as such land and the buildings and improvements thereon shall be estimated according to such mode as the United States in Congress assembled, shall from time to time direct and appoint.
The taxes for paying that proportion shall be laid and levied by the authority and direction of the legislatures of the several States within the time agreed upon by the United States in Congress assembled.

This is why the large states were upset that they got the same vote as a smaller state, but had to pay more taxes.

Article 9 is the longest, and will be getting its own post. See ya there! 

Having already described the concept of Natural Rights, we now continue our study of the meaning of the constitution. The “Articles of Confederation” were the precursors of our Constitution, and I think that no study of the Constitution can be made without reading and understanding them. What I want to do is discuss the Articles, and then move on the problems and arguments that resulted, which should give us a good idea of where our founding documents came from. We will begine:

The Articles of Confederation were referred to as “The Articles of Confederation and Perpetual Union” and was the basis for the Union of the States. They were written by the Second Continental Congress and the draft was sent to the States for ratification in November of 1777. The ratification process was completed in March 1781, legally federating the sovereign and independent states, already cooperating through the Continental Congress, into a new federation called the “The United States of America.”

They were a series of 13 Articles along with a preable, and I will touch on the big ones here (my comments in blue, the actual text of the article in black):

Preamble: Listed the States that were a part of the Union, which were the Thirteen Colonies: New Hampshire, Massachusetts bay, Rhode Island and Providence Plantations, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, South Carolina and Georgia.

Article I: Stated that the Confederacy would be called “The United States of America”

Article II: This one is important to understanding the mindset of the people who wrote our Constitution. The article states:

Each state retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not by this Confederation expressly delegated to the United States, in Congress assembled.

Article III: This article states the purpose of the confederation:

The said States hereby severally enter into a firm league of friendship with each other, for their common defense, the security of their liberties, and their mutual and general welfare, binding themselves to assist each other, against all force offered to, or attacks made upon them, or any of them, on account of religion, sovereignty, trade, or any other pretense whatever.

Article IV: This article is long, so I am going to parse this one, so that it can be studied phrase by phrase:

The better to secure and perpetuate mutual friendship and intercourse among the people of the different States in this Union, the free inhabitants of each of these States, paupers, vagabonds, and fugitives from justice excepted, shall be entitled to all privileges and immunities of free citizens in the several States;

and the people of each State shall have free ingress and regress to and from any other State, and shall enjoy therein all the privileges of trade and commerce, subject to the same duties, impositions, and restrictions as the inhabitants thereof respectively, provided that such restrictions shall not extend so far as to prevent the removal of property imported into any State, to any other State, of which the owner is an inhabitant; provided also that no imposition, duties or restriction shall be laid by any State, on the property of the United States, or either of them.

If any person guilty of, or charged with, treason, felony, or other high misdemeanor in any State, shall flee from justice, and be found in any of the United States, he shall, upon demand of the Governor or executive power of the State from which he fled, be delivered up and removed to the State having jurisdiction of his offense.

Full faith and credit shall be given in each of these States to the records, acts, and judicial proceedings of the courts and magistrates of every other State.

The “Full Faith and Credit” Clause.

Article V:

For the most convenient management of the general interests of the United States, delegates shall be annually appointed in such manner as the legislatures of each State shall direct, to meet in Congress on the first Monday in November, in every year, with a power reserved to each State to recall its delegates, or any of them, at any time within the year, and to send others in their stead for the remainder of the year.

 Notice that there is no requirement for HOW the Delegates were to be picked. It could have been by vote, by heredity, or drawing names out of a hat. I think this is important, as it appears like each State in the Confederacy was intentionally staying out of the internal affairs of the others.

No State shall be represented in Congress by less than two, nor more than seven members; and no person shall be capable of being a delegate for more than three years in any term of six years; nor shall any person, being a delegate, be capable of holding any office under the United States, for which he, or another for his benefit, receives any salary, fees or emolument of any kind.
 
Ahh, yes. Term limits and conflicts of interest were being avoided with this one. (IMO, we should still be doing this.)

Each State shall maintain its own delegates in a meeting of the States, and while they act as members of the committee of the States.
In determining questions in the United States in Congress assembled, each State shall have one vote.

This was a problem that was later fixed by the Constitution. A large State would contribute and risk more, but still only get one vote, but granting more votes to larger states would allow large States to dictate to smaller ones.

Freedom of speech and debate in Congress shall not be impeached or questioned in any court or place out of Congress, and the members of Congress shall be protected in their persons from arrests or imprisonments, during the time of their going to and from, and attendance on Congress, except for treason, felony, or breach of the peace.

The parable of the Broken Window was first expressed by the great French economist, Frederic Bastiat. Bastiat used the parable of a broken window to point out why destruction doesn’t benefit the economy. The story goes like this:

A young hoodlum, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furiously, looking for the miscreant, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. Several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side: It will make business for some glazier. As they begin to think of this they elaborate upon it: How much does a new plate glass window cost? Two hundred dollars? That will be quite a sum. Then, of course, the thing is endless. The glazier will have $200 more to spend with other merchants, and these in turn will have $200 more to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor. After all, if windows were never broken, then the glaziers would soon be out of business.

The fallacy of the onlookers’ argument is that they considered only the benefits of purchasing a new window, but they ignored the cost to the shopkeeper. As the shopkeeper was forced to spend his money on a new window, he could not spend it on something else. For example, the shopkeeper might have preferred to spend the money on bread and shoes for himself (thus enriching the baker and cobbler), but now cannot because he must fix his window.

Thus, the child did not bring any net benefit to the town. Instead, he made the town poorer by at least the value of one window, if not more. His actions benefited the glazier, but at the expense not only of the shopkeeper, but the baker or the cobbler as well. Moreover, the benefit to the glazier is relatively small, because most of what he charges is to compensate him for his tedious and strenuous labor, as well as the materials he uses.

The same thing happens here when we pas a law mandating that everyone gets free health care, or in the case of ObamaCare, that everyone is forced to purchase health insurance. People rejoice because they are getting “free” somethings, without reflecting that the net cost to society is high.

Suppose it was discovered that the little boy was actually hired by the glazier, and paid a franc for every window he broke. Suddenly the same act would be regarded as theft: the glazier was breaking windows in order to force people to hire his services. Yet the facts observed by the onlookers remain true: the glazier benefits from the business at the expense of the baker, the cobbler, and so on. Bastiat argues that people actually do endorse activities which are morally equivalent to the glazier hiring a boy to break windows for him (specifically the burning of Paris):

Whence we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed;” and we must assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.”

You reflect on how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?

I have spent the last few weeks posting on how certain members of the financial industry profited through the buying off of politicians on both sides of the aisle, getting those politicians to change the rules of the game so those particular members profited immensely, and then getting out of the game before the now gamed system fell apart.

We see a repeat of history as the health care and health insurance industry game the system to their own benefit, and use the government to do it.

Subsidizing health insurance with taxes upon the rich, many will say, is justified because the rich can well afford the extra taxes. They ignore the fact that the rich do not simply roll around on top of large piles of money. What happens is that the things and services that the rich man would have bought will go unpurchased. The employees who produced the things that the rich man used to purchase (before the tax) will be laid off as demand drops.

You cannot make an economy grow by taking money from one sector and giving it to another, just as you cannot stand inside of a bucket and lift yourself off the ground by frantically tugging on the handle.

I have recently been on a kick of looking at the mortgage foreclosure crisis that started the whole recession going. Part 1, Part 2, and Part 3, looked at securitization, and Part 4 looked at the strategic default. I also wrote a post here about the greed of originators who loaned money to people that they knew couldn’t pay, knowing that the loan would be sold off to investors long before the first payment was due, thus removing all incentive for originators to make sure people could actually pay the loans back.

This post will look at why the process was so profitable, or to be more accurate, why did this happen so recently, and what changed that made it happen. The Republicans would have you believe that the Democrats are to blame, claiming that banks were required by the Clinton administration to loan to minorities. The truth is far more sinister.

The blame has its roots in the Great Depression, and the banking act of 1933, most commonly called the Glass-Steagall Act. The act separated the Commercial Banking and Investment worlds. At the time, “improper banking activity”, or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors’ money.

Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets, but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks.

The Glass-Steagall Act prevented the banks from making these risky investments, and prevented another crash caused by greed and sloppy lending practices. At least until the Gramm Leach Bliley Act came along in 1999. This law relaxed the regulation and interinvestment restrictions between the Banking, Insurance, and Securities Companies, allowing loans to be converted into securities and sold to investors.

The bill was introduced by Phil Gram (R-Texas),  Jim Leach (R-Iowa), and Thomas Bliley (R-Virginia). The bill passed with Yea votes coming from both parties- 90 to 7 with 2 abstentions in the Senate, and 362 to 57 with 15 abstentions in the House. This was a true bipartisan effort. It was signed into law by President Clinton in November of 1999.

This law allowed mergers of companies like Citi Bank (Banking) and Travellers Group (Insurance) to form Citi Group ( a failed company that needed bailout), with brands like Smith Barney, Travelers, Citibank, and Primerica. 

The year before (1998) sub-prime loans were just 5% of all mortgage lending, but by the time of the mortgage crisis in 2008, the number of sub prime mortgages was near 30%.

According to the Congressional record, top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced. After resigning as Clinton’s Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill, and he later became one of three CEOs that headed up CitiCorp, and also served as Citigroup’s chairman until 2007. Robert Rubin received over $17,000,000 in compensation from Citigroup and a further $33,000,000 in stock options as of 2008. Rupin also was a part of the Enron scandal, but wascleared of all charges that he used influence with the Treasury to keep Enron’s status from being downgraded so Citi would not lose money.

So there you have it- both parties sold us down the river.

In keeping with the theme for today’s posts, I am going to talk in this post about the allegations that the TEA party is racist because it is predominantly made up of whites. As a disclosure, I am not a TEA party member, I have not attended even ONE TEA party rally or event, and I agree with most, but not all, of what they have had to say. With that out of the way:

The Tea party has been accused lately of being a racist organization, because the majority of those in the TEA party events have been white. Actually, an organization based in the United States that is a true random sampling of the American public SHOULD be mostly white.

According to the Census Bureau, the United States has a population that is 75% white, 15% Hispanic (of any race), 12% Black, 4% Asian, and 9% other. (The preceding numbers are more than 100% because Hispanics can be white or black, or any other race for that matter). Follow the math here: For a population of 304 million, That is a mean of 43 million and a standard deviation of 82 million. To keep it simple, we will assume that there is a TEA party rally of 304 people. We will see if the TEA party is truly independent of race. 

In a normal distribution with a truly random selection, there is a 99% chance that a TEA party rally with 304 attendees would have between 221 and 235 whites in attendance, and would have between 69 and 84 non whites. Now keep in mind that we are not talking about hispanics here, as hispanic is not a race, but an ethnicity. There is a 99% chance that there will be between 23 and 57 hispanics there of all races.

I knew that Statistics class would come in handy one day. My second disclaimer: I only got a B in that class.

So our theoretical TEA party rally, if we took a random picture of it, the people in that picture should be 72.4% to 77.4% white 99% of the time. The same is true of ANY random selection of people in the US. Anything outside of that tells you that there is probably some sort of non-random selection going on. That would either be a non-random process of selecting people to be at the rally, or a non-random process in framing the picture that was taken.

A nightclub was the site of a shooting involving a fully automatic MAC-10 on April 11th. You would think that this had happened in the United States, after all the rest of the world and Hollywood would have you believe that there are shootings involving machine guns on every corner almost daily.

Instead, the shooting happened in London, which as you all know is located in the country formally known as Great Britain. (perhaps like Prince, they could change the name to an unpronounceable symbol?) Less surprising is that it involved people that are part of the rapper culture, which brings us to the point of this post.

According to the New Century Foundation’s 2005 report, The Color of Crime, blacks are seven times more likely to commit murder, eight times more likely to commit robbery, and when they do commit a crime of violence are three times more likely to use a gun, and twice as likely to use a knife, than any other race. Read on for more statistics:

• Of the nearly 770,000 violent interracial crimes committed every year involving blacks and whites, blacks commit 85 percent and whites commit 15 percent.
• Blacks commit more violent crime against whites than against blacks. Forty-five percent of their victims are white, 43 percent are black, and 10 percent are Hispanic. When whites commit violent crime, only three percent of their victims are black.
• Blacks are an estimated 39 times more likely to commit a violent crime against a white than vice versa, and 136 times more likely to commit robbery.
• Blacks are 2.25 times more likely to commit officially-designated hate crimes against whites than vice versa.

According to the Black on Black crime coalition, blacks comprise nearly 14% percent of the U.S. population, but are 43% of the murder victims, and 93% of their murderers were other blacks. I would guess, and this is my opinion here, that the majority of killers and victims in those cases were gang members.

The CDC reports that the leading cause of death among black men age 15-24, age 25-34, and age 35 to 44 is homicide. 20% of all black women who die between the age of 15 and 24 are murdered, and 92% of the time, it is another black person who did it. Isn’t it time for use to put a stop to this?

This is not a “pro-white” racial thing, as asians were found to commit crimes at one quarter the rates of any other race. It is a CULTURAL THING. In other words, I don’t think this is because whites are any better than blacks or hispanics, and I don’t think this is because of some genetic superiority. I think the problem here is the culture that I mentioned earlier- the thug rapper culture. Not the songs themselves, mind you, but the whole attitude of the music. Calling women whores, bragging about murder, stealing, drug dealing, and “gang banging.” The music is merely just another symptom of the real problem:

Among men, blacks (28.5%) are about six times more likely than whites (4.4%) to be admitted to prison during their life. Among women, 3.6% of blacks and 0.5% of whites will enter prison at least once. (U.S. Department of Justice) Based on current rates of incarceration, an estimated 7.9% of black males
compared to 0.7% of white males will enter Federal prison by the time they are age 20 and 21.4% of black males versus 1.4% of white males will be incarcerated by age 30. (U.S. Department of Justice)
More black men are in prison in America than are in college. (The Black and White of Justice, Freedom Magazine, Volume 128) 

18.5% of all births nationwide are to unwed teen mothers, and two thirds of those are to black and hispanic women. Of teen births in 1999 to girls aged 10-14, 59% were to black teens, 30% were to Hispanic teens, and 11% were to white teens.

When a black man is successful, they call him “Oreo,” or “Carlton” (after a character of the TV show “Fresh Prince”), or they call him a sellout. I have heard successful hispanics called “Potato”- brown on the outside, white on the inside. This culture that promotes drugs, violence, poverty, and punishes success is the real problem here. Bill Cosby said pretty much what I am saying right now, and was blasted for it. Bill Cosby had this to say:

We, as black folks have to do a better job. Someone working at Wal- Mart with seven kids … you are hurting us.

The black community responded with:

We’ve been letting this fool talk CRAZY now for a couple of years now. But it might be time to stick this FOOLISH OLD BIRD in a home.

How is he gonna try and talk slick about working mothers. It shouldn’t matter if a woman has one kid, seven kids, or WHATEVER … If a woman is going out and working and trying to better herself and her children’s lives, that’s nothing to be embarrassed about.

Ignoring the point Mr Cosby was trying to make- having 7 kids on a Wal-Mart salary guarantees that they will grow up in poverty, and join the failing modern rap culture.

Look, there is nothing that makes a white better than a black. What the problem here is that too many are content to accept handouts. It is acceptable in this culture to get pregnant at an early age, for the father to split, to do drugs, and join gangs. Until we can have an adult conversation about the real problem, and can work on a solution, the problem will continue.

Too many are willing to simply say that the black man is being discriminated against, because it is easier to blame others than it is to fix yourself.