The Huffington Post’s 2,000-word article on the US’s crumbling infrastructure mentions how Obama promised stimulus funds would go to “shovel-ready” infrastructure projects. But it blames the lack of actual infrastructure projects funded by stimulus dollars bizarrely on… too-low gas taxes?

Gregoire and others would like to see the country take up President Obama’s challenge to spend the $60 billion outlined in his proposed American Jobs Act for infrastructure spending.

Congress is divided, however, on how to fix America’s roads, bridges, dams and waterways. After Obama’s proposal was defeated last year, both the House and Senate pressed forward on writing their own long-term bills for surface transportation — the most important component of federal infrastructure spending.

But surface transportation bills double down on the same errors that got the country into its hole in the first place, according to JayEtta Hacker, who was formerly the director of transportation issues at the General Accounting Office. All of these bills, she said, are tied to a woefully inadequate system for monitoring how effectively the federal, state and local governments spend tax dollars on infrastructure.

“There are no goals,” she said. “There are no outcomes. And there’s no data or information or evidence of what kind of returns we get from the federal investment dollar.”

Instead, the federal government simply doles money out to states on a ratio that’s based on how much their drivers spent on federal gas taxes. The states, in turn, spend the money they receive on items in their federally required state transportation plan, which, Hacker said, consists of “stapled pet projects and plans for different parts of the state.”

This model, created during the vast expansion of the interstate highway system in the middle of the 20th century, is now running out of gas, quite literally: the 18.4 cents per gallon federal gas tax has not been changed since 1993. Newer fuel-efficient car models and inflation mean that the money raised off that tax, about $32 billion a year, is getting scarcer and scarcer. The federal highway system is supposed to pay for itself with the tax, but over the last three years $34.5 billion in transfers from general tax revenues have been needed to fill the widening gas tax gap.

The Congressional Budget Office just released a report showing that the Highway Trust Fund, the major source of money for surface transportation, will go bankrupt in 2014 because of declining gas tax revenues. Neither Democrats nor Republicans in Congress have a plan to fix that.

The fact that we haven’t raised the gas tax in so long, said Hacker, is “unconscionable.” But it’s not surprising: some 77 percent of Americans, including majorities of both major parties, are against a hike.

We’ve got some great points here. A lack of transparency, competition or profit motive severely limits the effectiveness of federal infrastructure spending. But then the next paragraph tries to blame it on how the money is allocated between the states. Seems like a total red herring. How does the percentage  of federal dollars allocated to each state affect how efficiently the dollars are spent?  How does raising the gas tax fix those problems? But not raising gas taxes is “unconscionable.” For sure.

The weirdest thing about the article is that it fails to mention one of the biggest reasons the US infrastructure crumbles while stimulus dollars sit unused.

Federal and state zoning and environmental regulations hamstring efforts to build and improve infrastructure. Government bureaucrats can’t spend money because of layers of red tape laid down by other bureaucrats. Listen to one of them from Shovel-ready sites in short supply.

“The layering of federal, state, and local regulations — all designed to protect our communities and environment — creates an expensive and time-consuming permitting maze.”

Dontcha think in 2,000 words that should’ve come up?

There’s not a whole lot you can do about the inherent inefficiency of government spending. But dumb regulations are easy to roll back, and need to be rolled back. That will free up not only stimulus dollars but will help clear hurdles for private investment as well.

That, or they can increase the gas tax.

Image by rainchurch.

Going from neoconservatism to libertarianism to Anarcho-capitalism has been weird in many ways. But little’s weirder than growing some love for the ACLU.

Glen Greenwald at Salon has a fantastic story about how the ACLU is suing several departments for first killing a US citizen without a trial, and then refusing to even attempt to justify it, release any information about it, or even acknowledge that it happened.

Truly: what more tyrannical power is there than for a government to target its own citizens for death — in total secrecy and with no checks — and then insist on the right to do so without even having to explain its legal and factual rationale for what it is doing?

I remember when I first heard vague references to Obama killing an American citizen without a trial last year. I hoped I had misunderstood. I’d hoped it was a conspiracy theory. But the sad truth is that the Obama administration, the most transparent administration in history, with a president who’s a former Constitutional scholar, really thinks that it’s acceptable to 1. assassinate American citizens and 2. not give any information about or justification for doing so, even after repeated FOIA requests.

Who knew the right to not be killed without a trial was a civil right the ACLU would have to defend? But that’s where we are, and I’m so thankful they’re here.

‘Free’ Libya shamed by new torture claims

I would love to see the US government enact a more humble foreign policy. The urge to “do something” in the face of human rights abuses is natural, and in a sense admirable.

Yet time and again violating another country’s sovereignty to force regime change has unintended consequences.

When a foreign military deposes a leader, it creates a power vacuum, usually filled by the next-most-well-armed person. This person doesn’t have any legitimate claim to rule other than having the guns. He or she also has the added hindrance to perceived legitimacy of having been put into power by a foreign government. So to maintain control of a population that’s already riled up and not on board, he or she tortures and kills citizens into submission.

This is entirely predictable. Iran, Afghanistan and Rwanda are all examples of what happens when foreign governments create power vacuums.

There’s an event on February 4,  No War in Iran. Let’s stop making the same mistakes. Let’s stop believing the lies that these countries pose an imminent threat to our safety (Iraq). Let’s stop believing that the US has the power to replace despotic leaders with better ones (Libya). Let’s stop believing the US has the right to kill people in other countries without declaring war (Pakistan).

Photo by Crethi Plethi

Leaders in business and government are meeting in Davos, Switzerland this week for the World Economic Forum.

Global elite seek new path for capitalism in Davos

According to Klaus Schwab, the founder and organiser of Davos, this year’s meeting will focus on how to develop a new world model as “capitalism in its current form, has no place in the world around us.”

Of course capitalism in its current form (corporatism) has no place in the world around us.

Davos, Switzerland

“The danger for the world is that the political leadership is overwhelmed,” Schwab said on Tuesday evening as he welcomed delegates.

I guess completely fucking up a world economy must really take it out of you. I wish they’d get overwhelmed enough to quit.

Here’s a good Portfolio piece on the World Economic Forum. Sadly, there seems to be a whole lotta economic ignorance at a conference full of what Portfolio calls “leaders of finance and industry.”

The WEF’s Schwab says capitalism’s original distinction between the entrepreneur and the salaryman has been corrupted by excessive pay. He says top managers should not earn more than 20 times their lowest paid worker.

Also:

British Prime Minister David Cameron, who speaks at Davos on Thursday, says years of uncontrolled “turbo capitalism” have broken the link between risk and reward, giving some executives generous pay deals despite lackluster performance.

It’s the corporatism, people! What you’re describing isn’t any kind of capitalism, including “turbo capitalism.” You’re describing the result of collusion between government and business, with the goal of subverting the market to favor the politically connected business owners and shareholders at the expense of the worker and consumer.

You might be wondering where the occupiers are in all of this. Don’t worry, they’re there, occupying igloos.

Photo by World Economic Forum.

Iran ‘definitely’ closing Strait of Hormuz over EU oil embargo

The way I understand it:

1. Iran owns the Strait of Hormuz.

2. Iran is pissed about the EU’s embargo on Iranian oil.

3. So Iran is going to close the strait in retaliation, which will slow down or stop oil supplies and drive up oil prices.

So far everything makes sense. If a government doesn’t like what a country is doing, such as developing nuclear capabilities that may or may not be nuclear weapons, they can stop buying oil from that country. It’s their choice to pay more.

If Iran can’t sell much of their oil anyway and decides to incentivize other countries to buy their oil by closing a strait they own, that’s their prerogative.

Here’s where things get batshit insane.

Joint Chiefs of Staff chairman General Martin Dempsey said, “We’ve invested in capabilities to ensure that if that happens, we can defeat that.” That, or course, is Iran choosing, perfectly legally, to close their own strait.

And he’s not fucking around. As I type there are two U.S. aircraft carrier battle groups sit in the seas off the Iranian coast and there’s a new U.S. Commando team operating near Iran.

Governments are illegit, for sure. But as long as they exist, America is best served by respecting their sovereignty. Going around opening straits through brute force, violating Iran’s sovereignty, giving their people legit reasons to resent our violent military intervention into how they use their land and water will come back to bite us on the ass. And for what? So the EU can continue its embargo without much difficulty? Don’t you embargo in order to force a country to do your bidding without military involvement and national sovereignty violations? If you can’t run an embargo without violating national sovereignty, then just go ahead and go to war or give it up. But this chest-puffing bullshit has got to stop or shit’s going to get real on the playground and we’re going to be the ones at fault.

Image by eutrophication&hypoxia.

Being the property rights lover I am, I can’t resist going through how SOPA and PIPA erode property rights and subvert our system of property rights enforcement.

Trials work

First, let’s remember that there already exists a pretty good system for prosecuting theft. Companies can bring charges against or sue thieves. The content industry sues thieves now. But the stealing is so widespread, and the winnings from the suits so small, that lawsuits alone can’t restore their pre-file-sharing levels of profit.

So now they want to shut down, without a trial, any site that any person uses to share protected content.

Property rights are good

The bills allow the content industry to deprive other sites of their ability to do business online. Stealing a site’s domain and shutting  it down is a clear violation of property rights. The system now dictates that you can’t deprive someone of their property without a trial.

Content has gotten less profitable

So to what end are we relieving each other of property without a trial? The content industry has said that so many people are stealing from them that they can’t profit within the existing system. Why give up due process to restore this business’ profit margin? Due process is essential to a functioning society. The content industry isn’t.

The solution to widespread theft within an industry isn’t to give up on due process. Theft is only part of the reason the content industry is having a hard time making a profit. Not only is content theft rampant, but competition in content is at unprecedented levels. Everyone with a computer is a content creator.

What’s next for the dying industry? Are they going to sue people for creating original, competitive content? A changing marketplace means industries adapt, move or die. Giving companies the ability to deprive each other of property rights creates more problems than it solves.

Image by boltron.

Federal Reserve missed signs as crisis loomed

Some of the Fed’s staff earlier had talked about the potential risks, but in that meeting and in subsequent ones that year [2006], there was a glaring absence of alarm about the dangers of the housing bubble and what might lie ahead for the broader economy.

The Fed didn’t just fail to predict and prevent the downturn. The Fed caused the bubble whose bursting caused the downturn.

Austrian economics as I understand it predicts that interest rates kept artificially low over time will lead to malinvestment.

When people borrow without government intervention it’s from their and others’ savings — which are dollars put aside for future use. People borrow when interest rates are low. When interest rates are low, people are cool with spending money because they’re not earning much by saving it.

Borrowers use the borrowed money to create things other people will want to buy, and people buy them with the money they’re no longer saving. Eventually enough people are borrowing and so few people are saving that money to borrow becomes scarce relative to demand and interest rates go up again. People cool their buying jets and start saving again.

The proportion of people who want to borrow, spend and save at any one time determines interest rates, which signal to people what they should be doing with their money. It’s a beautiful, self-regulating process.

Problems occur when interest rates are kept low without the actual savings, that is, when money seems plentiful but actually isn’t. Then people borrow to make shit that it turns out no one actually has any money to buy. There are no savings for people to dip into to buy the shit borrowers are making. Then you’ve got money tied up in investments that will never pay off, like McMansions. Lameage.

My point is this. The geniuses at the Federal Reserve obviously can’t predict or prevent economic downturns. They can only create them, by fucking with interest rates. So, you know, end the Fed.

Appearances are deceiving.

Reason, as per usual, has done a great job explaining the what’s going on with the recess appointment of Richard Cordray as head of the Consumer Financial Protection Bureau. Check out their The Cordray Appointment article.

In short, it’s a problematic appointment to an agency that shouldn’t exist performed in a shady way. Par for the course.

The MSM has been hailing Cordray as a regulator that will write laws to help prevent the next crash. I’ve seen my Facebook friends cheering this as a bold move for Obama to protect citizens from banks, in the face of Republican bank-lovin’ resistance.

Oh MSM and Facebook friends, this is just not so.

First of all, MSM, a lack of regulation didn’t cause the housing bubble. It was government inserting itself into the market. Specifically, the national government forced banks to lend to high-risk borrowers through the Community Reinvestment Act, then guaranteed risky home loans by creating a secondary market for them via Freddie Mae and Freddie Mac. What about that even broadly relates to a lack of regulation or oversight?

To my Facebook buds, I ask you, without government, how would a bank even fuck with you? From what do you need protection? If you don’t like or don’t understand a bank’s fees, can you not change banks? If you don’t enjoy high credit card interest rates, can you not choose not to rack up debt with that particular institution? I mean, how’s the government supposed to save you from spending more than you earn? Is that shit not on you?

All the banks suck, you say? How about a credit union? Mine’s pretty bad ass.

Banks, without government involvement, have to please customers to continue to exist, and can’t force anyone to do anything they didn’t previously agree to. Government enforces each stupid law it writes, with no input from it’s subjects, with guns. And we need the gun wielders to protect us from the banks? What?

From the New Yorker article Enemy of the State:

Yet what is and isn’t part of the mainstream is something that political campaigns determine. And the truth is that [Ron] Paul’s vision reveals—with candor and specificity—what the G.O.P.’s rhetorical hostility to government would mean if it were rigorously put into practice. A minimal state, without welfare provisions for the unemployed. A quarter of a million federal workers—as a first installment—joining those unemployed. Foreign policy and national defense reduced to a few ballistic-missile submarines. The civil-rights legislation of the nineteen-sixties repealed as so much unwarranted government intrusion. As for the financial crisis, Paul would have countenanced no regulation that might have prevented it, no government stabilization of the financial system after it happened, and no special help for working people hurt by it. This is where the logic of government-shrinking leads.

Under Paul: A minimal state, without welfare crowding out private charity for the unemployed. A quarter of a million federal workers finding cooperative, wealth-generating work in the private sector. No more illegal, immoral drone weapons killing civilians in far-off lands. As for the financial crisis, Paul knows that no regulation might have prevented it, no government intervention helped stabilize the financial system after it happened, and no government funds went to the working people hurt by it, only their bosses.

THIS where the logic of government-shrinking leads.

When anti-government rhetoric meets big issues like war and economic disaster, it’s usually good for the Democrats, because they can make the argument for action without being hypocritical.

Did you somehow miss the surge in Afghanistan, the illegal war in Libya and the civilian-killing drone attacks in Pakistan? Cuz they happened, and under a Democrat president and Congress.

Wake up! Paul is your only real option for real solutions to rampant unemployment, wealth creation, ending the wars and correcting and preventing booms and busts.