Thursday, September 29, 2011

Ben Bernanke is the Anti-Robin Hood

In the words of Kanye West, "No one man should have all that power."

Federal Reserve Chairman, Ben Bernanke, looks so innocent.
I've watched him in a fair number of videos online, and in all of them, I can't help but think that he has no clue what he's doing, that's he's in over his head. (Here's an example.)
But some days, his distortions of the truth shine through. For example, he said that the Federal Reserve returns a profit for the US government. The truth is that the Federal Reserve prints money, and some of this money goes to the US government and some of it goes to the owners of the Federal Reserve, i.e. Bank of America, Wells Fargo, JP Morgan, etc... This is not really profit because the money came from us in the form of a tax: inflation tax.

Here's the problem: the Federal Reserve has been printing money even when prices are increasing. QE2 was an example of when the Federal Reserve was printing money while prices were increasing. In late 2010 and early 2011, gasoline prices (as well as all of the major price indexes) were increasing, and hence the purchasing power of the dollar that you earned decreased. The Federal Reserve printed money, and gave some of the money to the banks (in the form of interest for having done no work) and some of the money to the US government (in both the form of purchasing US Treasuries and direct profits given to the Treasury department.) The question is: where did they get the money to do this? Answer: they printed the money out of thin air, i.e. they taxed all of us by devaluing our currency. More currency, and the same number of goods means less goods for those who earned the money the real way, and more goods for those who earned the money by printing it out of thin air.

If on the other hand our purchasing power had been increasing (due to dropping prices of gasoline and electricity), I could understand printing money to avoid deflation, but twice in Ben Bernanke's short term as Federal Reserve Chairman, he's printed money while prices were rapidly increasing. The second time was 2010/2011. The first time was in 2007 / 2008. The price of gasoline was going through the roof. Instead of removing money from circulation (in order to maintain constant purchasing power of your hard earned dollars), Ben Bernanke printed money (i.e. printed money in order to lower the Federal Reserve's interest rates.) This was a tax on every man, woman and child who owns dollar bills. (Mostly the middle class, but this also hits the poor hard as well because food, gasoline and electricity are a main portion of their budgets.) How the hell did Bernanke convince himself that printing money while prices were increasing would be a good thing? Where in any economics textbook did he learn that printing money while prices are increasing would lead to the betterment of society?

This is why I state firmly that Ben Bernanke is the Anti-Robin Hood.

Tuesday, September 20, 2011

Could an electricity-backed currency cross the borders to Canada & Mexico?

The idea of a North American currency union is not a new one, but it's one that's hardly talked about. I've been thinking a lot recently about how interested or willing the people in the US, Canada and Mexico are to creating a combined currency, like the Euro. Given the problems with the Euro right now, the idea of using a single currency sounds like a really bad idea. (And it is politically a really bad idea right now.) But the idea of a single currency between the US, Canada and Mexico could be a really good idea because it would eliminate the need for currency exchange. This means that the prices of consumer items could be lower (by a small percent.)

Why are we afraid of a single currency? Because we don't like the idea of people in other countries being able to affect the value of our hard earned money. And that's exactly what's happening right now in Europe. The European Central Bank (ECB) is printing money and lending that money to struggling economies (such as Greece.) This is a problem! The value of the Euro (in terms of its ability to purchase fuel and electricity) is decreasing as the ECB prints money to 'help out' countries like Greece. This means that people in countries like Germany are being taxed to bailout Greece. Germany is being taxed by inflation in order to maintain Greece's unsustainable standard of living. This tax affects the rich and poor alike in Germany. Inflation hits those the most who keep their money in 0% bank accounts.

While the Euro is a particularly bad example of a single currency for multiple countries, there are good ways of implementing a single currency. My goal for the rest of the post is to explain how to implement a single currency for the US, Canada and Mexico that avoids the problems the Euro.

Monday, September 12, 2011

Tax Waste, Not Productivity

I've been excited for awhile about the idea of reading a post on "taxing waste instead of taxing income." I see the ability to tax as the ability to destroy demand for a certain product. For example, if you tax income, then you have the ability to destroy demand for income. If you tax waste, then you have the ability to destroy demand for products that produce waste, and shift demand to products that don't produce waste.

So, in this post, I wanted to see if it was possible for the US gov't to replace 100% of the income tax with taxes on waste. Note that the total revenue from income taxes is roughly $1 trillion US dollars, so let's keep that in mind when I discuss the items below.

So, what would I include in my list of potential items to tax:
(These are items that we are hoping get rid by taxing)

1) Municipal Solid Waste
2) Hazardous Waste
3) Nuclear Waste
4) Electronic Waste
5) Medical Waste
6) Industrial Waste (such as slag from steel production and fly ash from solid combustion)
7) Emissions of ozone depleting chemicals
8) Acid Gas Emissions
9) Greenhouse Gas emissions (once we get to the point that the addition of GHG's is net harmful, rather than beneficial. This number is some place between 500 ppm and 1000 ppm.)

Randomness and the Laws of Physics: Quotes from "MetaMath" by Gregory Chaitin

For those of you that were following my series of posts on the source of the directionality of time and the post on Godel's Incompleteness Theorem, I thought that you'd be interested in the following quotes from a book by Gregory Chaitin called "MetaMath." I'm going to just copy down the quotes, and then make a quick summary at the end. If you're interested in starting a discussion, write a comment, and I'll expand on my thoughts about the book.

"Since you can always fit an equation through a set of data (even random data), then question is: How do we decide if the universe is capricious or if science actually works?
And here's Leibniz's answer: If the laws has to be extremely complicated, then the points are placed at random. But if the law is simple, then it's a genuine law of nature; we're not fooling ourselves!"

"The laws of physics (as written in binary form) must be smaller in length than the data they try to fit."

"A number with infinite precision, a so-called real number, is actually rather unreal!
Most real numbers are transcendental, and hence not computable.
Why should I believe in a real number if I can't calculate it?"

 "So what would be really nice [in a computer program] is to be able to obtain more intelligence, or a higher degree of consciousness, than you yourself possess! You, who set up the rules of the [software] universe in the first place."

Sunday, September 11, 2011

To the Fallen & To Those That Remember

My thoughts and condolences go out to all people today who lost loved ones on Sept 11th.
So many lives were taken away when those planes crashed and when those buildings collapsed.
Having not lost any close friends or family members in those attacks, or in any other such a horrible tragedy, I have no clue what you face, are facing or will face in the days ahead.

I'm glad to see so many brave family members read the names of those who died in the attacks on Sept 11, 2001. It gives me courage to know that others can overcome the pain of a lost one, and to speak their loved one's name in front of millions. I thank you all for passing on your memories of the fallen to us, the living, who can help to continue their work and their goals. Their passions must be passed on to those of us who can follow in their footsteps.

Life goes on. Life is stronger than any one of us can image. Life has endured the worse of crimes against humanity, and life will continue to endure and to grow after the untold horrors that it will face in the future. It won't be easy to overcome the challenges we face, but we must face them together, as a community, not as individuals. We need shared memories and we need shared stories of the heroes, of the fallen and of those who just remember.

Friday, September 2, 2011

On Left/Right Symmetry, the Platonic Ideal, and Godel's Theorem

[Another break from engineering today...more on symmetry...and asymmetry]

Plato, who lived in Athens from (429 to 347 BC), believed that there exists a realm of perfect, ideal shapes. He believed that the shapes we see, such as the circles we try to draw on pieces of paper, are but imperfect Earthly forms of a perfect, eternal ideal that we can't see.
The idea that everything is but an imperfect example of a smaller set of pure objects might be fine and dandy for certain mathematical objects, such as the circle or the five Platonic solids (tetrahedron, cube, octahedron, dodecahedron, and icosahedron), but the idea of a perfect object breaks down for living creatures. Unfortunately, the philosophy of idealism as developed by Plato and Socrates hindered the eventual development of the theory of evolution because many people believed that each species was related only to its eternal ideal form, and not to other species. I will point out in this post the error in thinking that there could be such a thing as a perfect cat or a perfect elephant or a perfect homo sapiens.

Throughout the history of life, there have been "either/or" symmetry-breaking moments. One of the first examples was when life forms used and grew only left-handed amino acids, instead of right-handed amino acids. (For more information on the difference between left and right handed molecules follow this link.) I think it's important to stop and ask: why did life develop the ability to use only left-handed amino-acids? (Note that there are a few bacteria that use right handed amino-acids, but the overwhelming majority use left-handed amino-acids.) It turns out that this is still an open question because the evidence scientists have collected to answer the question doesn't directly confirm any one theory.

Thursday, September 1, 2011

Lilith, The Mirror, and the Strange Loops of Consciousness

I want to take a break today from technical and economic subjects to discuss something really interesting in the topic of mythology and consciousness.
While listening to the audio book of "Don't Know Much About Mythology,"  I learned that in some forms of Jewish history/mythology, there's the story about Lilith, Adam's first wife. In one creation story, Lilith was made from the earth like Adam. But she would not be subservient to him, so she left him and went to Red Sea to hang out with devils. This left Adam all alone, so God decided to create Eve from Adam's side, so that she would be subservient to him.
I never learned that story growing up, but sort of wish that I had. What's interesting is that this seems like an eternal theme...should the guy chose to marry the girl with whom he could be best friends/lovers or should he chose the girl who will obey his wishes? I could see this being turned into a Hollywood move set in modern times.

Also, it turns out that, in some of these extended stories, Lilith is associated with being able to control women who look in the mirror for too long. This makes me think to what extent has human consciousness developed because of mirrors. This seems like an interesting theme because I've always thought about the question: when in history did primates evolve the capability of recognizing themselves in a mirror. There are many species that 'pass the mirror test.'
These include all of the great apes (chimps, orangutans, humans and gorillas), bottle nose dolphins, orcas, elephants and supposedly the european magpie. How did these species evolve the capability to recognize themselves in a mirror? What surface acted as a mirror for them?