WHAT DOES THIS MEAN?

What can you say about a nation that opposes unions for teachers, firemen, and police, but supports the professional National Football League referee's union?  Are our priorities straight?

THE AIG BAILOUT SUCCESS STORY

Who ever thought that the government $182.3 billion bailout of  American International Group (AIG) would ever be repaid much less make money to boot?*  Yet, to date, the Treasury and Federal Reserve have collected $197.4 billion from AIG for a $15.1 billion profit.   This sum includes the Treasury sale of 637 million shares of AIG common stock for a total of $20.7 billion on August 14, 2012!  All the stock sold above the breakeven point of $28.73/sh with the deal struck at $35.50/sh. The Treasury still owns 15.9% of the common stock in the company which, when sold, will be pure profit added to the current total.  The hero of this occurrence is Robert H. Benmosche, former head of MetLife, who took over AIG in August of 2009.  Is he Businessman Of The Year or what?

The AIG bailout was part of the Troubled Asset Relief Program (TARP) initiated by President George W. Bush and continued by President Obama.  It appears that the larger TARP program may eventually make an overall profit as well.**

*http://online.barrons.com/article/SB50001424053111904819604577647570064908412.html?mod=BOL_qtoverview_barlatest;
** http://www.thedailybeast.com/articles/2012/08/10/how-the-treasury-is-turning-a-profit-on-tarp.html

FEDERAL GOVERNMENT EMPLOYMENT

It is true that Bush-41 and Clinton cut the Federal work force by around 1,160,000 (me amongst them) without disrupting the economy, but those were good times and jobs were relatively easy to get. That is not so true now, I believe.

The peak post WW-II year for Federal employees was 1968 6,639,000 (the Vietnam peak) after which Federal employment gradually fell. Since 1968 the peak was 1987 5,301,000 under Reagan. Bush-41 started his term in 1989 at 5,292,000 and finished in 1992 at 4,931,000. Clinton finished at 4,129,000 in 2002. (http://www.opm.gov/feddata/historicaltables/TotalGovernmentSince1962.asp)

The peak Federal government civilian work force  (including those in the DoD) peaked at 3,067,000 in 1990 (beating the previous peak at 3,040,000 in 1969) and bottomed in 2002 (Clinton's last year) at 2,630,000. Civilian employees rose slightly under Bush-43 to 2,692,000 and rose slightly again under Obama to 2,776,000 in 2010 the last year for which I have records.

YOU CAN RATIONALIZE ANYTHING

I sit in amazement at all the comments I am hearing from American news people that the anti-Muhammad trailer (The Innocence of Muslims) release has nothing to do with the riots in the Muslim world.  Few in this country except for some American Muslims understand the global Muslim mind.  There are comments about everyone knows about our free speech in the trailer about millions of people who have never had free speech.  Others comment that everyone knows that the anti-Muhammad trailer is not a U.S. government statement.  No, they don't because nothing was ever published in their country that wasn't the official government.

It well may be that there was an attack planned on the Embassy in Benghazi, Libya, on September 11 because of the armaments in the attackers' hands, but surely the anti-Muhammad trailer added intensity to it.  Of course, the anti-Muhammad movie trailer was slow to spread and got its big boost by the Imams who fanned the flames in the Friday Muslim prayers (September 14th).  After that, the demonstrations spread quickly throughout the Muslim world and were peaceful by and large.  I feel that peaceful demonstrations were quite in order.  After all, what would we do in this country if there was an equivalent movie trailer denigrating Christ?  In this case, I can easily picture some Americans seeking out American Muslims to attack.

Has everyone forgotten Salman Rushdie who received fatwa (death sentence) from Ayatollah Khomeini for publication of his 1988 book Satanic Verses because of irreverent depictions of Muhammad?  At the time there were book burnings of his book.  I have heard that the bounty on his head has recently even been increased. (http://en.wikipedia.org/wiki/Salman_Rushdie)

Has everyone forgot the furor over the burning of Korans in Afghanistan by our military last February in which four Americans lost their lives in addition to about 40 others?(http://www.washingtonpost.com/world/asia_pacific/afghans-protest-improper-disposal-of-koran-at-us-base/2012/02/21/gIQAjhBqQR_story.html; http://www.nytimes.com/2012/01/13/world/asia/video-said-to-show-marines-urinating-on-taliban-corpses.html)

It is interesting to note that American Muslims have not demonstrated against insults to Islam by the movie trailer, so far as I know.  I suspect they are living in fear of reprisals as it is.  For one tape of Islamophobia, see: http://www.youtube.com/watch?v=NutFkykjmbM

Note added September 18, 2012: A very good discussion of the effect of insults to Islam is given by Stanley Fish (http://opinionator.blogs.nytimes.com/2012/09/17/libya-violence-and-free-speech/?nl=opinion&emc=edit_ty_20120918).  A brief excerpt:
And since for them religion is not an internal, privatized matter safe from the world’s surfaces, but an overriding imperative that the world’s surfaces should reflect, a verbal or pictorial assault on their religion will not be received as an external and ephemeral annoyance, as a “mere” representation; it will be received as a wounding to the heart, as a blow, and as a blow that is properly met by blows in return. No “sticks and stones will break my bones but names will never hurt me” for them.

Note added September 25, 2012:  Libyans reacted to armed militia's on September 21st over their attack on the U.S. Consulate and demand their dissolution: http://www.timesunion.com/news/article/Libyans-protest-defiant-militias-3884916.php.  We should remember that the hot-heads are usually a small minority of a country even if they number in the thousands.

WASHING HANDS VS. HAND SANITIZERS

It turns out that there is even a post on the effectiveness of washing hands with soap versus hand sanitizers that I found by Googling.  http://abcnews.go.com/GMA/ConsumerNews/washing-hands-soap-hand-sanitizer/story?id=8941662#.UFJG4duF8Rk.  Following are some excerpts:

"The first thing we noticed is that alcohol-based hand sanitizer clearly works the best.

In fact, the CDC says you should use a hand sanitizer containing at least 60 percent alcohol.

As for soap, the antibacterial soap worked only slightly better than the regular soap. The Food and Drug Administration recommends using only regular soap because of worries that germs will develop resistance, and people will develop laziness from high-tech soap.
...............................
The E. coli we used for our experiment was a harmless strain, not the deadly E. coli 0-157 bacteria. Swine flu is a virus, but the advice is the same: Alcohol kills viruses and soap -- any soap -- used well, washes them off.
.................................
Experts say washing with soap and water is first choice, especially if you have visible dirt on your hands. Sanitizer can't cut through that grime. Hand sanitizer is great for when you can't get to soap and water, and it's actually more effective at eliminating germs because it kills them rather than just removing them."

TRIBUTE TO EXCESS!

Look, I'm fine with rebuilding the Twin Towers area as has been done as it has symbolic value in addition to economic value.  I'm fine with the "$1.8 avg. million dollar" payments to the families of the victims not to sue the airlines (http://en.wikipedia.org/wiki/September_11th_Victim_Compensation_Fund).  I'm fine with the tasteful list of the names of all the victims in the courtyard.

But I get into trouble with the 100,000 sq.ft. museum that is 7 stories  (7 STORIES) underground (UNDERGROUND) at a cost of a billion dollars PLUS $60 million/yr for upkeep of which $20 million/yr is to be provided by the Federal government.  Sen. Coburn has objected to this, and I am with him (http://www.politico.com/huddle/0912/huddle1122.html).  It seems like there is not enough that can be done for the victims, their families, and survivors of the Twin Towers disaster.  And you can add to that the health concerns of the survivors of which I am all in favor as I am for universal health care.

Look if some billionaire or group of billionaires were to bankroll this, I certainly wouldn't stand in the way and a billion dollar gift would provide a $50 million/yr for upkeep (@5% withdrawal/yr).

I also can't imagine what they are going to put into the museum.  I can see one story and maybe it has to be underground, but 7 stories and 100,000 sq.ft.?

SO, have we done enough for the U.S military victims (58,282 KIA and 153,303 WIA requiring hospitalization) and their families of Vietnam? (http://en.wikipedia.org/wiki/Vietnam_War_casualties)  And what about the 33,651 military and plus 3,262 other U.S. deaths in Korea? (http://www.cbsnews.com/2100-507_162-202741.html)  And many of the injured have life changing wounds (lost arms, legs, and minds).

While I am at it, there were more troops killed in Iraq (4,409 plus 31,908 wounded) (http://en.wikipedia.org/wiki/Casualties_of_the_Iraq_War) than in 9/11 twin towers (2,606 in the towers and on the ground).  This is not to say that the number killed in Afghanistan won't exceed the number killed on 9/11 as the casualties have passed 2,000 with 1-1/4 yrs to run plus another 17,382 wounded in action. (http://en.wikipedia.org/wiki/Coalition_casualties_in_Afghanistan).  Then there is the little contribution of $5 billion/wk to run these wars.  Though we may have invaded Iraq over oil and the threat to kill Bush-41, we certainly only invaded Afghanistan because of 9/11.  It seems to me that this blood and treasure are a huge monument to the victims of 9/11 by itself.

"FISCAL CLIFF"

I have found the "Fiscal Cliff" (term coined by Ben Bernanke) to be a very confusing concept.  First of all, the "fiscal cliff" includes the sequestration, but it is only a part of it.  Furthermore, even the IMF's Managing  Director Christine Lagarde is concerned about its effect globally and not just on the U.S.*  I have copied the following excerpts  (in italics) from Wikipedia, an article I urge everyone to read: http://en.wikipedia.org/wiki/United_States_fiscal_cliff:**  Note  from September 10, 2012:  Additional details including many not discussed in this piece can be found in a post by Yodaorange at: http://boards.fool.com/investing-for-the-fiscal-cliff-30254941.aspx?sort=whole.

At the end of 2011, the patch to the AMT exemptions expired. Technically, the AMT thresholds immediately reverted to their 2000 tax year levels, a drop of 26% for single people and 40% for married couples. Anyone over these reduced thresholds at the end of 2012 would be subject to the AMT. 
....................................

• Expiration of the two-year extension of the Bush tax cuts provided for in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and
• Expiration of a Social Security payroll tax cut, most recently extended by the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA);
• Across-the-board spending cuts ("sequestration") to most discretionary programs as directed by the Budget Control Act of 2011.
• Expiration of federal unemployment benefits, most recently extended by MCTRJCA;
• New taxes imposed by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010;
• Expiration of measures delaying the Medicare Sustainable Growth Rate from going into effect (the "doc fix"), most recently extended by MCTRJCA and
• Reversion of the Alternative Minimum Tax thresholds to their 2000 tax year levels. 

.....................................
Without new legislation, these provisions will automatically go into effect on January 1 or 2, 2013, except for the Alternative Minimum Tax growth, which may be changed retroactively. Some provisions will increase taxes (the expiration of the Bush and FICA payroll tax cuts and the new Affordable Care tax and AMT thresholds) while others will reduce spending (sequestration, expiration of unemployment benefits and implementation of the Medicare SGR).

I thought the sequestration was going to be back loaded i.e. lower in the early years and higher in the later years, but apparently it is to be divided between DoD (budget authority of $712 billion in 2011) and other discretionary programs (budget authority of $556 billion in 2011) equally at $55 billion/yr over five years.  Technically speaking you would think that these cuts would leave the DoD with something like $200 billion/yr and leave the other discretionary spending to $150 billion by the end of the nine years (2022).  Following are some baseline figures:

For example, according to the CBO Historical Tables, defense spending (including overseas contingency operations for the wars in Iraq and Afghanistan) grew from $295 billion in 2000 to $700 billion in 2011, an annual growth rate of 8.2%. Non-defense discretionary spending grew at a 6.6% annual rate during that time, from $320 billion to $646 billion.^[20]

The austerity represented by the sequester is not unprecedented; from 1990–1999, defense spending actually declined by about 1% annually, from $300 billion to $276 billion, although non-defense discretionary spending grew by 4.5% annually, rising from $200 to $297 billion.

Obama signed the Sequestration Transparency Act of 2012 on August 7, 2012 so his administration now has 30 days to provide details on how the sequestration will be implemented; however, I write this on September 10, 2012.  The 30 days are passed, but I can find no details.  There are thoughts that the "fiscal Cliff" will be allowed to take place and then modify it.  The sequestration, however, was meant to be so bad that the "Super Committee" would act, but they didn't.  Will they act to fix the "Fiscal Cliff?"

*   http://www.businessweek.com/news/2012-09-09/u-dot-s-dot-fiscal-cliff-endangers-world-economy-lagarde-tells-apec
** Also see: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/07/16/everything-you-need-to-know-about-the-fiscal-cliff-in-one-post/

LEGITIMATE AND ILLEGITIMATE CHEATING

In what I am writing about - legitimate cheating, I suppose there is no better example than the sport of pole vaulting, sport much influenced by technology.  The legitimate cheating part is when a new technology is introduced legally when an old technology is still in use.  In the original competition the poles were of ash There was a time when bamboo, aluminum and fiberglass were all in use at the same time.  Probably the greatest pole vaulter of all time was Cornelius "Dutch" Warmerdam* who was the first vaulter to clear 15 ft or 4.57 m which he did 43 times using the bamboo pole.  His personal best was 15 ft 7-3/4 in. set in 1942 and not beaten until 1957 by Bob Gutowski using a metal pole.  Alas Warmerdam was not able to compete in the Olympics because of WW-II.   But everything changed with the introduction of the flexible fiber glass and carbon fiber pole.  It should be said that the fiberglass pole does have a metal core and the carbon fiber pole has both fiberglass and a metal core.  Actually for awhile the carbon fiber pole was actually illegal starting in 1972 but later was reinstated.**  The greatest of the fiber glass/carbon fiber pole vaulting was Sergei Bubka ** who set world records 17 times including the modern record of 6.14 m (20 ft 1-3/4 in.) in 1994 a record that still stands as of July 2012. Really the books should keep the records for ash,  bamboo, fiberglass, and carbon fiber poles.  From an ordinary persons standpoint, the modern fiberglass and carbon fiber poles will not bend.  One reporter spent a day with coaching, to use the carbon fiber pole and wrote about how difficult it was to bend the pole.  He never even cleared 6 ft that day.  But for those who can do it they get a powerful spring up from the pole and are to some extent thrown over the bar.  Actually it is a different sport.

Most new records in athletics are due, at least in part, to technological advances.  There usually is a period during which some innovative participants use a new technology first and benefit from legitimate cheating.  And is it really correct to say that records set with the new technology better the old records?   Actually the new technology makes it a different sport.  Sometimes the technological advance is rejected after awhile such as the body suit in swimming,*** extra long handles and larger racquet faces in tennis, and, of course, the carbon fiber pole for awhile in the pole vault.  The croquet stance in professional golf putting made famous by Sam Snead was eventually outlawed for another example.  But new records are usually due more to technology than conditioning.

The big controversy in athletics, however, involves performance enhancing drugs.  An athlete can participate using new technology, knee braces, elbow braces, taped thighs, and other mechanical performance enhancements which are legitimate cheating, but taking performance enhancing drugs is held to be illegitimate cheating.  Perhaps the reason for this is that the mechanical paraphernalia are not held to harm your future health whereas drugs will.  But who is the better athlete, the one not waring knee braces, etc. or the one who does?

And women's sports are even more strange.  A person may look like a woman and even possibly bear children but might not be considered a woman because she has a high testosterone level in the level of males that is 7 to 30 nanomoles per liter of blood whereas most women have 3 nanomoles or somewhat less.**  Thus what is called women's sports is actually low level of testosterone sports.  But what if you are a male at the lower level of testosterone?  You just have to deal with it.  Maybe sports are not for you.  Women with complete androgen insensitivity (another male hormone) may compete in the Olympics.

Legitimate cheating is nowhere more prevalent than in the American tax code.   The wealthy have managed to skew things around so that unearned income receives nearly all the income tax breaks.  Thus certain dividends are qualified which means they are qualified for a tax rate of 15%.  Long-term capital gains on stocks held for over a year also qualify for the 15% rate; yet the only time a company benefits from stock holders is in the IPO or Original Public Offering.  After that trading stock is no different from any other sort of gambling, though some companies will be more profitable than others.  Perhaps the most egregious flaw in the tax code goes to hedge fund operators that may make several BILLION dollars in a year and still pay the 15% tax rate even thought they have no "skin" in the game (which means personal money).

Many companies strive toward legitimate cheating by becoming monopolies although the word monopoly has sort of a dirty connotation and is no longer in use.  One word to replace it is a "moat" which means difficult to enter (an example might be to build a new office building in Manhattan).  Another example is of the cartel OPEC that controls 46% of the world's oil and is therefore able to control the cost of oil to a large degree.  Sometimes monopolies are broken up by law, perhaps the most famous case being Standard Oil that was broken up in 1911.****  A more recent case was ATT broken up in 1984.****  Once broken up, it seems to be hard to keep the breakup permanent as subsequent mergers have reunited large pieces of the original company.  For example, SBC Communications, originally one of the Bell system of ATT, bought the surviving ATT in 2005 and kept the more famous ATT brand name.  Verizon Communications is the merger of the former Baby Bell, Bell Atlantic, NYNEX, and GTE and much more.****  Thus monopolies begin to reform.

There are cases where technological changes enter to even destroy a company with a wide moat, and ATT today is in such a case where landlines are not the only way to transmit communication but wireless has been added.

To the best of my knowledge there is no such thing as legitimate rape.  Statuatory rape may not be forceable, but it is still illegitimate.

Note added September 17, 20112: There apparently is confusion among Harvard undergraduates oveer what constitutes cheating! http://www.nytimes.com/2012/09/15/opinion/the-long-legacy-of-cheating-at-harvard.html?nl=todaysheadlines&emc=edit_th_20120915
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             *http://en.wikipedia.org/wiki/Cornelius_Warmerdam
**http://en.wikipedia.org/wiki/Pole_vault, http://en.wikipedia.org/wiki/Sergey_Bubka
 ***http://articles.latimes.com/2012/jul/30/science/la-sci-olympics-gender-20120730
****http://www.thedailybeast.com/articles/2012/07/25/why-ban-full-body-olympics-swimsuits-a-scientist-explains-polyurethane.htm, http://en.wikipedia.org/wiki/Standard_Oil, http://wps.aw.com/aw_carltonper_modernio_4/21/5566/1425000.cw/content/index.html, http://en.wikipedia.org/wiki/Verizon_Communications