Wednesday, March 16, 2011

Watching Japan

Japan puts us all in an interesting situation, even if you don't live in Japan. While everyone is focused on the nuclear accident, the true global forces at work here are economic. Once the nuclear situation is stabilized, and it will be eventually though the damage in the interim may be horrific, Japan is going to have to rebuild. And depending on the extent of that rebuilding, the entire world may undergo a seismic shift in trade patterns.

Saturday, February 19, 2011

The Poison that is Public Sector Unions

"The process of collective bargaining, as usually understood, cannot be transplanted into the public service," President Franklin D. Roosevelt wrote in 1937 to the head of the National Federation of Federal Employees. In the private sector, organized employees and the employer meet across the bargaining table as (theoretical) equals. But in the public sector, said FDR, "the employer is the whole people, who speak by means of laws enacted by their representatives in Congress." Allowing public-employee unions to engage in collective bargaining would mean opening the door to the manipulation of government policy by a privileged private interest.

FDR was right. Collective bargaining has no place in the public sector. It inevitably leads to abuse. Favoritism, undue influence, lack of transparency, manipulation of government policy, the relentless mulcting of the taxpayer—this is the poisoned fruit of turning government agencies into union shops. It goes without saying that public employees ought to be as free as anyone else to join professional associations and affinity organizations. They are certainly entitled to all the protections of the civil rights laws and of a reasonable civil service system. But labor unions should have no right of exclusive representation in any government workplace and no right to negotiate wages and benefits with public officials who crave their votes and political support.

Wednesday, January 05, 2011

It's called Catabolic Collapse

In a recent discussion at zero hedge over a post titled Is The Collapse In FX Reserves Even More Dangerous Than The Plunge In Money Supply?, I saw someone saying he expected our society to fall in a staircase fashion. That led to the following post.

The Financial Crisis was NOT caused by Peak Oil

Personally, I mark the "public" moment of this financial crisis to July 2007, when two Bear Stearns hedge funds were both completely wiped out. Neither had anything to do with oil or oil trades. Both were highly leveraged funds that were simply in way over their heads. And those funds were symptomatic of the entire financial industry at that time.

Belief Systems

One commenter over at The Automatic Earth was recently disparaging comments he read over at Zero Hedge. I began a reply but it became long enough that I felt it better placed here instead.