Press "Enter" to skip to content

Posts tagged as “Politics”

Before the dawn of the dawn of time…

centaur 0
Continuing my attempts at computational archaeology: before the dawn of the dawn of time ... or at least the dawn of the Internet ... computer people had .plan ("dot plan") files, chunks of text you could read from the command line using the finger protocol. This protocol is often deactivated nowadays, but it was Facebook at graduate school at Georgia Tech in the early nineties. The following was mine, from apparently late 1995. Like my attempt to find my first web page, this obviously isn't the earliest version of my .plan file, but at ~15 years it's the oldest bit of online presence I've found about myself yet. Obviously, some things have changed ... the "love of my life" died (the love itself part, not the person) shortly after writing this, as evident from the editor's note. I then went on to marry the lovely Sandi Billingsley, the real love of my life. Some of the other friends listed are no longer with us, or no longer with me and my friends. For the rest, well, read on - this is a completely unfiltered snapshot of me fifteen years ago:
The Centaur's Bio (his Old .plan File) Hi. This is the personal page of the Centaur, otherwise known as Anthony Francis. I'm ostensibly a graduate student in Artificial Intelligence at the College of Computing, but that's just a hobby. For the past eight years, I've been a science fiction writer, a vocation that became professional when I published my first short story, "Sibling Rivalry," in the February 1995 issue of _The Leading Edge_ magazine. The love of my life is a redheaded historian, Shannon Duffy. When I'm not with her I spend time with my best friends in the Edge Group, which consists of Michael Boyd, David Cater, Anthony Francis, Derek Reubish, David Stephens, and Fred Zust in the core Edge franchise as well as William Morse, and Stuart Myerburg in our recently opened Atlanta branch. [Editor's note: Sad to say, Shannon and I are no longer together; we simply had different ideas about where we wanted to take our lives. We're still friends, though, and hope to keep it that way.] I'm sorry, I can't tell you what we at the Edge Group do; we'd have to kill you (we do bad movies, good software, and great times, in no particular order). When I'm not hanging with the Edge Group I'm jamming with my other best friends Steve Arnold, Eric Christian and his fiancee Chalie, Joe Goldenburg, Kenny Moorman and his wife Carla, Ruth Oldaker, Mark Pharo and his wife Yvette, Patsy Voigt, and Fred's girlfriend Marina. The weekend tradition is to jam with William, Stuart, Mallory and sometimes Joe at Anis, Huey's, Oxford at Pharr, Phipps and wherever else we can get into trouble. (Occasionally, you can find me at the Cedar Tree or Yakitori Den-Chan with Mark & Yvette). If not, I'm either hanging with Fred & Marina, Eric & Chalie and Dave & Ruth up in ole Greenvile, South Carolina, watching (or filming) movies at my house, eating dinner with my loving parents Tony and Susan Francis, perforating the odd target with musket fire at Eric's or just noshing on late-night food at Stax' Omega or IHOP. If I'm not doing any of the above, I'm liable to be curled up with Shanny in O'Flaherty's Irish Channel Pub in the French Quarter in New Orleans, listening to Irish ballads and soaking up each other's company over an Irish Coffee (her) and a diet Coke (me). Since people have asked, my favorite authors are H.P. Lovecraft, Larry Niven, C.J. Cherryh and Douglas Hofstadter, in that order. My favorite TV show is Dr.Who, followed neck-and-neck by Babylon 5 and Star Trek (TOS TNG TMS DS9 VOY ANI, in that order) and nipped at the heels by the Tripods and the Six Million Dollar Man. My favorite comic book is Elfquest, followed closely by Albedo Anthropomorphics, Superman, Cerebus, and Usagi Yojimbo. My favorite band is Tangerine Dream, although I do listen to Rush, Yes, Vangelis, and Genesis. My favorite style of music is now called "New Age" (uuugh) but used to be called electronic music, minimalist, or just electronic rock. My second favorite style of music is soundtrack music (music for the visual image). I can stand rock. I hate disco. Rap held my interest for a while, but it officially lost me with "Whoomp(t) there it is." My favorite cuisine is Lebanese, a gift from my parents and my family, the best damn extended family in the whole wide world. I shock my parents and family by also appreciating Chinese, Japanese, Thai, Cajun, Mexican, Italian, Korean, Vietnamese, Spanish and Indian cuisine; I also have a great appreciation for the foods of the South, a culture which I find to be both vastly underrated and overdiscussed abroad. When I'm not dining out or curled up with a good book or laptop computer at Captain D's at Corporate Square in Atlanta drinking inordinate amounts of iced tea, I'm at home honing my patented personal tabbouleh (Lebanese salad) recipe, slowly learning to cook Chinese, and honing the art of grilling steaks and microwaving potatoes so that they both finish at the same time. My favorite form of literary expression is science fiction; my preferred style is flashbacks within a framing story, usually in third-person limited, although I've begun to experiment with a more liberal third-person style derived from the narrative structure of contemporary motion pictures. My primary means of plotting and expression are visual images. My favorite fictional creature is, of course, the centaur; however, the genetically engineered spaceborne professionals of *my* fiction bear little resemblance to the bearded primitves that stalk the wooded glades of your average fantasy novel (unfair though that may be to my inspirations, which include the very nice halfhorse folk of the Giesenthal valley dreamed up by Donna Barr, the ambiguous Titanides from _Titan, Wizard, Demon_ by John Varley, and Timoth the warrior sage of the Advanced Dungeons and Dragons comic. Just don't call my Porsche St.George a halfhorse too; she'll be liable to pummel a fictionalized version of you in a story sooner or later if you do). My favorite style of AI is symbolic AI with a situated/behaviorist twist. I play around with memory, agents, case-based reasoning, natural language understanding, and semiotics; I have nothing against genetic algorithms or connectionist systems other than the fact that I don't have time to pursue them as avidly. I also fiddle around with animal cognition, and can talk your ear off about chimpanzee culture and dolphin language if given the chance. My favorite style of science is Kuhnian with a cognitive flair. I have no respect for positivism or any of the horrible things it's done for science. My philosophy is somewhere between Kant, Plato and something no-one has a name for yet. To sum: the universe is real; deal, but don't assume you have the answers and *don't* assume that a single level of description can capture all of reality. My religion is theist; I believe in the tripartite single God at the heart of mainstream Christianity, and accept the messiah aspect as my savior. My theology is liberal Episcopalian with a strong theological background in my Catholic upbringing. My disagreements with the Catholic Church are primarily theological and only partially pragmatic; I gave up on waiting for them to catch up with Jesus, but they're still mostly good people. The religious right, on the other hand, is a bipartite oxymoron: neither religious nor right, and certainly not in keeping with the anti-Phariseean radical I follow. Genteel religious discussions are welcome; rude evangelizers will be biblically and theologically diced *before* I turn you over to Shannon, Joe, William, and Eric. Bring references to authorities, but don't expect me to respect them. Arguments against evolution will either be summarily flushed or buried underneath my copies of Eldredge's _Time Frames_, A.G. Cairns-Smith's _Genetic Takeover_, Dawkin's _The Selfish Gene_, _The Saint Paul Family Catechism_ and my copy of the New American Bible, flipped to the part of the preface discussing evolution. Read the gospel of Thomas; it's an eye opener, and you haven't even seen the Dead Sea Scrolls yet... Politically, I am a Goldwater liberal. I believe in war, gays in the military, religious freedom, no state-mandated prayer in schools, free ownership of automatic weapons, licensing of gun owners, aid to the Contras, prosecution of IranContra, investigation of Whitewater, and support and respect for the president regardless of party. I voted for George *and* Bill once each, don't regret it, and would do the same knowing what I know now. I believe in AIDS spending, military spending, research spending, and the space program; I also believe in welfare reform, cutting waste, a line item veto, and perhaps even some kind of budget amendment if I could be convinced it wouldn't get us into trouble in wartime. I don't believe in "school choice", "political correctness", "multiculturalism", "Rush as Equal Time", "the liberal media", "the conservative media", or "anti-special-rights amendments". I don't think we should take "In God We Trust" off of our coins and I don't think we should picket funerals of people who had AIDS. I don't believe acceptance of homosexuals as equal citizens has anything to do with the disintegration of the American family. I don't believe in hobbling industry with overregulation nor do I believe in letting them cut down trees holding endangered species just because they planned our logging programs poorly. My political heroes are Barry Goldwater, Ronald Reagan, Bill Clinton and Margaret Thatcher.
Interesting. Well, that is what it was. There are definitely opinions I would tweak, things I now think I got wrong, and snapshots of relationships that no longer hold. But the Edge is still here, I'm still here, I'm still writing, I'm still a Christian, and still a scientist. SO, all things considered, I think I'll have to stand by my dot plan file after all. -the Centaur

Embarrassing!

centaur 0
When I was visiting England over the Fourth of July many, many years ago, a British radio announcer interviewed visiting Americans to ask what the Fourth of July celebrated. I missed the interview, but the host at the bed and breakfast I was staying in at Drumnadrochit by Loch Ness asked me the next morning. I'm embarrassed to say it took me about thirty seconds to say ... "the signing of the Declaration of Independence". As it turns out, I did far better than the average tourist. Well, uh, umpteen years later, things aren't any better ... even in our homeland.  From Jay Leno's 4th of July episode of Jaywalking: As a friend said, scary stuff. I was sitting on my porch while my wife was rooting succulents and when she heard the video play she said "uh uh!" and ran over to watch. I think we got all of the questions except the Minutemen, and our "guess" (that they were an elite group of colonial soldiers who were our first line of defense against the British, essentially Revolutionary War special forces) was apparently spot on. Afterwards, all we had to say was: "Go Grandpa!" -the Centaur

IGDA on California’s Video Game Ban

centaur 0
I'm a big free speech advocate, and I'm strongly against most well-intentioned attempts to protect us from ourselves - or, more cynically, to protect some people from people whose preferences are different - so this is worth mentioning. The Independent Game Developer's Association is filing an amicus brief in the court battle over California's attempt to ban the sale of violent video games to minors.  Details on the case are here:
http://www.scotusblog.com/2010/04/court-to-rule-on-violent-videos/ The Supreme Court agreed Monday to rule on the constitutionality of a state law banning the sale or rental of violent video games to minors.  The Court accepted for review an appeal by the state of California, urging the Court to adopt a new constitutional standard that would enable states to ban such games for those under age 18.  The case is Schwarzenegger v. Video Software Dealers Association (08-1448). The Court apparently had been holding the case until it decided another First Amendment case involving violent expression — U.S. v. Stevens (08-769).  In that ruling, issued last Tuesday, the Court struck down a federal law that banned the depiction in videotapes of animal cruelty.  In that ruling, the Justices refused to create a new exception to the First Amendment free speech right.  The Court could have opted to send the California case back to the Ninth Circuit Court to weigh the impact of the Stevens decision. Instead, it simply granted review; the case will be heard and decided in the Court’s next Term, starting Oct.  4.
From IGDA's call to action:
The IGDA in partnership with the AIAS, is working with the ESA to put together an AMICUS brief to support the decision to revoke this ban and declare this law unconstitutional. With the concept that video/computer/electronic games are a new form of media and art form, our industry should be afforded the freedom of speech protections that have been fought for and won by print, audio and video groups from newspapers to rap artists to filmmakers across the country. We need your help in securing powerful arguments that explain how this industry has evolved into a true profession over the years, and a medium that touches children and adults around the world every day.
So, if you care about your rights to buy videogames, or about giving government yet another tool to control what we see and hear, you might consider weighing in - if not on this court case, if to your elected representatives asking them what on Earth they were thinking in the first place. -Anthony

People Who Don’t Get It

centaur 0
This cartoon illustrates a common misconception of The Left:
"We're fed up with Washington! The Government can't get anything done! It apparently takes a supermajority to pass anything! Let's make sure no-one has that!"
No, no, no, no, NO! For goodness sake, people, listen to what your opponents are saying instead of projecting your desires upon them. What the people who just voted a Republican into Ted Kennedy's seat are saying is this:
"We're fed up with Washington! The Government is doing things we don't like! Fortunately, it takes a supermajority to pass anything! Let's make sure the bad guys don't have that!"
Not that I think the Democrats are the bad guys - I voted for them - so let's just say that this is my creative way of making the point that it's pretty darn stupid to imagine that the people who voted out the Democrats are motivated by what Democratic voters want. If you need a reminder, in general, excluding social conservative and military issues, it's Democrats who want government action and Republicans who want to stop the government from acting.

*ARE* you feeling lucky today?

centaur 0
A friend of mine really likes the Chinese Tank Man picture: a lone figure carrying a grocery bag standing up to a whole line of tanks. To him it symbolizes the challenge of the individual against authority, even though he was ultimately disappeared ... though not necessarily killed.

Today a colleague at the Search Engine that Starts With a G forwarded me a new riff on that image:



"I'm feeling watched" indeed. Apparently this cartoonist is not alone in using that image to talk about issues with Google and China, though the sense today in the picture above is far different from the sense in 2005 when it was first riffed on:



So ... are you feeling lucky today that you are allowed to read this?
-the Centaur

This isn’t going to go away

centaur 0

I bumped into a couple African Americans in a Safeway line the other day.  All three of us were looking at a magazine cover with Barack Obama's family on the cover.   As the line moved and I turned forward, one of the men behind me said, "Wow, it still hasn't hit me," and the other said, "Yeah, I know, I can't believe it either".  I couldn't help but smile.

Then the first man said "Yeah, and the big thing is, it isn't the big story---" And his friend jumped in and said, "No, Proposition 8 is. And when that fails in the courts, they're going to look at it, and say, California, which is so liberal, didn't pass it twice ... so maybe that will make 'them' think twice."

I was dumbfounded, and had bought my pound cake and mouthwash and walked out of the store before I could think of an adequate comeback: "Did getting turned away from one or two schoolhouses make the civil rights movement stop?  No.  And this isn't going to go away either."


-the Centaur


You’re Smarter Than That

centaur 0

The election season has been difficult for all of us, but especially for conservatives that bring a rational rather than partisan approach to the table. I was speaking to a good friend tonight who's quite frustrated about how things turned out, and he mentioned how irritated he was at a demand by the ACLU that Obama close Guantanamo Bay "with the stroke of a pen".

We talked about it for a while, with things getting quite heated, but from my perspective it was clear that our differences about how to treat the enemy combatants in Guantanamo Bay were the result of real substantive disagreement on issues that were not simple, as opposed to the frothing cariactures of the right that I have often heard from those on the left.

However, there was one little quip that bugged me. When I said I voted for Obama because "McCain's choice of Palin demonstrated his values to me", my friend told me that I was "smarter than that" and that I should realize that the choice of a VP is always a bone thrown to a minority member of the party.

Well, that is one theory, but it isn't the whole story. In my recent memory, at least two Presidents have picked running mates designed to enhance their experience (Bush+Cheney, Obama+Biden), one picked them to appeal to their fan base (Bush+Quayle) and at least three picked running mates that reflected part of their values.

Yes, Palin was more conservative than McCain, and Gore was more liberal than Clinton, but both McCain and Clinton spoke louder than words by selecting someone that reflected key positions that they held: Palin is a sterling, if even heroic defender of the pro-life cause, and we all know how Gore turned out as a proponent of environmentalism.

I think the best example though is Reagan's selection of ex-CIA director Bush: to me, that was a clear reflection of the values Reagan expressed after his service on the Rockefeller Commission's review of U.S. intelligence agencies in 1975, something that arguably later reflected some of Reagan's actions in office. A VP may be designed to appeal to a group of voters, but the choice of a VP still reflects the P's values. The candidates can say a lot, but who they pick for that slot says a lot to me about what they care about and what they're likely to do.

If McCain had selected Condoleeza Rice, I would have voted for him without a second thought --- but the slice of the party McCain was reaching out to was not centrists worried about national security (and pleased to have the chance to vote for a black man or a woman or both). The slice of the party McCain picked was the religious conservative wing, a group whose influence I feel is corrupting on the entire body politic. I would feel about the same if Obama had picked an actual Communist, a group that had a similar corrupting influence on an earlier era.

And, admittedly, it's only because McCain and Obama were such a toss-up up on issues that mattered to me that could I afford to let the decision rest on the choice of the VP. When the case was more clear - as in Bush vs Dukakis - I sucked it up and voted for Bush, even though I didn't approve of Quayle.

But the candidates were very close. I did a lot of research on this campaign. I read the bios of both candidates. I researched their tax policies, the economic effects, their foreign policy stances, their decisions. I followed up on information provided by partisan friends on the left and on the right, and read sources as diverse as the National Review Online and the New Yorker. I went through the positions of both candidates with a blue pen ticking off what I did and didn't like, and they came damn near close to even. So I didn't make this decision blind, or just on the basis of Palin.

But she sure didn't help. Left or right, you're never going to win me over appealing purely to your base.

-the Centaur

Sacrifice and Responsibility

centaur 0

I voted for Barack Obama; despite my long-standing desire to see John McCain become president, I didn't agree with his choice of Sarah Palin as she does not reflect my values. But I don't agree with Obama on everything either, of course, and there has been a fair amount of back and forth on The Edge mailing lists on what's good and bad about Obama's views.

But sometimes it isn't the politician's proposals that are scary; it is what the people who are allied with them believe. Recently I came across this commentary by someone more sympathetic to Obama's views than I am:

Obama raises a long-neglected concept: sacrifice

At some point, higher taxes are inevitable to bring the deficit back in line, and Obama’s plan to limit the increases to the rich aren’t likely to be enough. That is the sort of sacrifice we must make to resolve the crisis. The economy is too precarious to endure tax increases to stabilize our finances right now, and some of the ambitious programs outlined on the campaign trail will have to be sacrificed to fiscal prudence.

We must make sacrifices at the personal level, too, by reducing our use of credit and curtailing our spending, building our savings so that we are better prepared. This is a crisis spawned, in large part, by our own delusion. We wanted to believe in ever-rising stocks, in a shop-till-the-terrorists-are-defeated foreign policy and homes that were worth whatever our mortgage broker told us.

For eight years, our government borrowed to pay for wars, tax cuts and prescription drugs, while we borrowed to pay for HDTVs, iPhones and Xboxes. Buy now, pay later wasn’t just a sales pitch, it was fiscal policy. Later is now. To fix our economy we first must change our views of debt and savings.

That will take sacrifice, the one word from the president-elect’s speech that we must hear before all others. Sacrifice, after all, is the prefix for change.

Now, let me not exaggerate: what Loren Steffy is saying here is not crazy and much of it is very sensible. Even in this snippet, there are many points to agree with that have already been discussed on the Edge mailing list:
  • taxes can't be raised right now because it will damage the economy
  • taxes should be raised when the economy is more healthy so we can balance the budget
  • consumers and the government should learn to pay their own way and not skate on credit

But the attitude of "sacrifice is required" is what I find disturbing - because deep down I don't think he isn't proposing that he make a sacrifice. I seriously doubt he sees himself as one of "the rich" whom he wants to tax, or that he has an HDTV that he paid for on credit. Instead he's proposing that others make sacrifices he thinks they ought to to make the economy more healthy. As one commenter to the article said:

I agree that in tough times success often requires sacrifices. But the great concern is who will be selected to make those sacrifices, and if it isn't voluntary, is "sacrifice" really the right word? If it is only the wealthy and companies who are volunteered, then that indicates another round of partisan politics. But if ALL Americans are asked to put some skin in the game, then it will be a chance for bonding, healing, and real change.

This is why I think the language of responsibility is so more important than the language of sacrifice. Most of the issues that Steffy raises in the article have been raised by my friends in The Edge. But if both the language of "sacrifice" and the language of "responsibility" led to similar policy recommendations, why should it matter?

The problem is that sacrifice is easy in a political context, because the people who propose sacrifice rarely have to do it. One of my friends was talking about the BART expansion in glowing concerns about the jobs it will create. But who will pay for this? On another occasion I heard my friend talk about the glories of public transportation, and I know they don't have a great deal of income. So in the long run they'll gain more from being able to more quickly get to work than they'll lose in the (very modestly) increased taxes. So it's very easy to justify a sacrifice ... if you don't have any skin in the game. (Full disclosure: I voted for the BART expansion too).

Responsibility, on the other hand, never stops. I had to look at many different propositions on the ballot; none of them will raise California's taxes more than I can pay. From that perspective, I could easily say "we need to sacrifice in taxes to pay for these needed services". But I couldn't look at it that way: I had to look at the graph of the debt load of all the propositions on the ballot, and choose: which of these things can we actually afford? Yes on disaster relief, and, (based on my experiences in Japan, London, and Washington D.C.), yes on more extensive public transportation, which costs money but is AFAIK ultimately an economic lubricant. But no on everything else. Looking at the bond load over the next thirty years, I decided California couldn't afford all of it ... even if I personally was willing to make the "sacrifice".

That's why I prefer the language of responsibility over the language of sacrifice. Sacrifice is easy to make ... it's something you can do to someone else, after all. Responsibility is something you have to take on yourself.

-the Centaur

(1) The Edge is a private group of friends, not to be confused with the Edge Foundation, even though just about everyone on the Edge would find what Edge Foundation discusses as interesting, and vice versa. Interestingly, the Edge Foundation and the Edge appear to have "officially" started at almost exactly the same time, though we didn't know about them and I'm pretty darn sure they didn't know about us.

Political Diary: Examining the Fundamentals

centaur 0

I and a number of my friends have been arguing about Obama and McCain's financial packages ... one of them even asked, "So, which of these guys is going to win the war on pandering?"

  • http://www.cnn.com/2008/POLITICS/10/13/campaign.wrap/index.html
  • http://www.politico.com/news/stories/1008/14406.html
I'm not going to dig into their proposals. Instead, I have spent some time digging into economics in response to the crisis and at my 50,000 foot level I've come across the following approximations about how the economy works as a whole, which lead me to question my knee-jerk idea of "pay the debt down now!" We've been discussing these ideas in emails, and I'm going to attempt to summarize some of what I'm thinking about, and some of their responses, here.

In sum, looking at the economy as a whole:


  • Spending equals income. The nation's net income - the GDP - sets the limit on the nation's net spending. The GDP is made up out of what consumers buy, governments spend, investors invest, plus our net exports (that last bit is a current net negative). This has a few corolloraries:
    • If government spending goes down, the GDP goes down, and hence, so does the aggregate income of the nation. Put another way, if you lay off a cop, he buys less donuts.
    • If government taxes go down, the GDP goes up, and hence, so does the aggregate income of the nation. Put another way, if you cut the cop's taxes by 10%, he buys more donuts.
  • We consume less than we earn. If wages double, spending doesn't double - it goes up somewhat less. This doesn't hold for transient events like stimulus checks, which people tend to "discount" as a one time event, but it does hold for "permanent" tax cuts, which people tend to factor in to their long-term plans. If you measure this factor over the long term, it's roughly sixty percent or so, depending on how you measure it. Take that as an approximation.
  • Spending changes have a multiplier effect. If the government cuts spending or raises taxes, there's a disproportionate effect that ripples through the economy. When you cut the cop's pay by 10%, he buys 6% less donuts (and other stuff), which leads the donut shop cutting its employees' hours 6%, which leads to 3.6% less other expenditures ... in total, that 10% becomes roughly a 25% hit on the economy. A tax cut of the same magnitude has a positive effect, also about 2.5x its initial value. This is also an approximation.
  • Lack of liquidity increases the multiplier. If your income goes up 10%, but all of your money is tied up in long-term CDs, you can't buy that new house. If mortgages are not available, you can't buy that new house. If you don't have a credit card, you have to wait until after Christmas to buy gifts, even if your Christmas bonus is a sure thing.

The actual economic picture is MUCH more complicated than this Keynesian ideal (for example, net exports have an opposite effect, and this does not factor in investor confidence, etc), but at the 50,000 foot view, it seems like a few corolloraries in this crisis might be:

  • Government services should be maintained. If the government does a radical belt-tightening or even a spending freeze relative to its current growth, there will be money in the government coffers that does not go out to the economy - and all those defense contractors, cops, social workers, civil engineers and so on that are out of work are not going to have money to spend or save, having a further impact on the economy.
  • Taxes should be cut. If the government raises taxes, even for the "good" reason of being fiscally responsibile, individuals will have less money to spend or save, having a further impact on the economy.

So, shockingly, the two candidate's plans to cut taxes are not as horrible as I thought they were. I'm not completely sure about the above logic, as the economy is very complicated, but while I'm speculating I'm going to go further on a limb and try a few more ideas:

  • If (if!) taxes are to be raised, perhaps they should be raised on the high end of the consumption curve. I'm not certain, but I strongly suspect that the consumption curve above is nonlinear - that the higher end of the curve flattens out, as Bill Gates and Warren Buffet do not have a million homes each. Since most of the money is on the high income end of the curve anyway, this is where you will have to raise taxes. It will hurt - don't kid yourself that it won't hurt - but it will have less impact than if you tried to get the same money out of the bottom end of the curve. (For example, at the bottom end of the curve people will go into debt rather than starve).
  • A tax on consumption would directly impact the consumption curve, and should be avoided. Taxing consumption is like putting a brake on the relationship between national income and national spending - it will decrease the marginal rate of consumption (the 0.6 above) and raise the Keynesian multiplier (the 2.5 above) putting the brakes on the economy. This seems to indicate that sales taxes are a bad idea, and perhaps is bad news for the FairTax idea - the FairTax may be designed to make the system more fair, but it applies taxation to a place in the economy that will interfere with the growth of GDP. I haven't dug into the FairTax in detail, so they may have an answer which will ease my fears on this issue.

I'm not arguing here based on whether I think government should be big or small, or whether I want higher or lower taxes. I want lower taxes so I can buy more books, pay off my house more quickly, or get a new hybrid electric car; but more importantly, I want lower taxes because I think it will get the economy moving, as I've stated above. Speaking frankly, I have no desire to soak the rich: the rich pay most of our taxes (no, really) and do most of our investment upon which many of us rely for their jobs. So I don't want to make their lives harder; however, the rich have a greater ability to pay and still be able to invest and consume so if (if!) we were to raise taxes they should go up on the higher end. So based on these ideas ...

  • Obama's tax cut idea is not horrible. It raises taxes on wealthy people, but overall it is a tax cut, and should stimulate the economy.
  • McCain's tax cut idea is better. It lowers taxes on more people, for a larger overall total, and should stimulate the economy more.
  • McCain's spending freeze is questionable. It's not a terrible idea, but it does suggest that we should focus on trying to grow the economy to the point it can pay for our services, rather than cut our services and thus stop pumping that money back into the economy.
  • Obama's idea to back up states the way we are banks is not a horrible one. The biggest problem is the moral hazard it creates ... obviously all 50 states cannot do this forever, or basically we're draining our income taxes into our state budges. But if we allow governments to stop providing services, it will hurt the economy.

A few notes on things not completely covered by this model:

  • McCain's mortgage plan is ... WTF? Seriously, as a friend put it recently, "if we're going to spend 700B we should think out of the bo x". The answer may or may not be McCain's plan, which is more complicated than my simple little model and my dime-store understanding of economics. It would save homeowners and reduce risk to lenders, which should help things ... but the moral hazard, and investment risk, worry me.
  • Paulson's plan to buy into banks is ... not so bad? The capital injection into the banks, because it comes with a 5% dividend, sounds like a good idea. If the government is buying things at a steal, this could help the taxpayers.

Unfortunately, I think we are in "uncharted waters", as both the Google CEO Eric Schmidt and Google gadlfy Mark Cuban. We have a crisis of investor confidence, which has led to a severe drop in the amount of investment recently. Some bold people with liquid cash, like Warren Buffet, may make money ... unless we are on the high side of a slide down to the market losing 90% of its value, as another friend pointed out happened in the Great Depression.
In this case, larger issues that the simple Keynesian model come into play:

  • Moral hazard. What kinds of behaviors do our policies enable? As one friend. has repeatedly reminded me, "if this goes on" we would keep bailing people out forever. The solution to that is to increase regulation on the bailed-out industries ... which will slow them down. So do you not bail them out ... in which case the lack of a bailout will cause a certain amount of pain. How much pain is too much pain? If we avoid bailouts and regulation, is that saying that we as a nation have to depend entirely on the market and sort of hope that maybe it will do the things we need to supply our nation with the things it needs to defend itself and maintain its global position (which in turn enables the functioning of our market)?
  • Investor confidence. As investor confidence drops, the amount of money invested in the economy drops ... causing multiplicative effects as we have seen above. In recent times these "factors" have become highly nonlinear and disruptive ... so we can't predict how much investment will happen from overall effects on the GDP. We have three big variables we as a nation can use to affect the economy: how much we tax, how much we spend, and how easy it is to lend money. The third factor has gone off the rails because of investor confidence ... it is looking like we have little control of this right now, though the TED spread is getting better. The tax and spend equation is also off the rails because of our huge debt, which means that some huge percent of our government income is not directly getting fed back into the economy in terms of goods and services, but instead is being paid off as debt, sometimes to people outside this country.

If we could wave a magic wand and fix things, we'd see a country with:

  • No debt, and thus not driving with the parking brake on.
  • If possible, less taxation overall, which would make it easier for people to spend/invest what they have.
  • If possible, less government spending in relation to GDP, which will increase the rate of growth of the economy and over time give us the revenues we need to do a wide variety of useful government programs.
  • Government spending close to government income, aaaaand...
  • A large cash reserve. This would be used to smooth over the rough times when we need to drop taxes or expend services to jumpstart the economy. It could also be used for bailouts or to smooth over state budgets ... money that was loaned out at strict rules and/or with high interest. Which makes you wonder ...
  • Is the idea of buying in to the banks a better one than we ever realized? Should the U.S. Government become a (safe, risk-averse) investor?

Right now I'm still researching, so these are more discussion points for ideas, not proposals at this point. But my big point here is I'm not talking ideology here. I'm not saying that big government is good or bad or saying that it would be wrong to redistribute wealth or wrong to encourage dependence on government. I'm saying, economically, some things will work and some things won't. Taxing the hell out of ourselves is going to slow the economy. Cutting government spending is going to slow the economy. Running with low taxes and high spending too long is going to raise debt and slow the overall growth rate of the economy, so when we get the economy running again we need to trim spending further to raise the investment rate - even if you want to ultimately provide more government services, you have to grow the economy first or you're trying to save the world with your hands tied.

If we want to have the resources available to us to do what we want - whether we want to buy guns or butter - we need to clean out the tank, release the parking brake, and drive the country's economy in the right direction.

-the Centaur