Reasons why Ron Paul is wrong

Reasons why Ron Paul is wrong economically for the USA

As of this writing, Santorum is imploding with his focus on sex (other people's sex, not his own) and issuing simply ridiculous statements showing him to be a sexual busybody most Americans abhor- even those that might agree with him on many of these points. Add to that his "snob" presentation of Obama advocating more education than just high school and he's showing himself to be the il-informed- in fact,his press conference on the matter nearly used Obama's words from the State of the Union speech verbatim. (Santorum is evidently playing to the crowd who things universities "indoctrinate" students in leftist views- a factor not proven by facts, but one which hangs on nevertheless.

A month ago, before he really opened his mouth, I suggested a Romney/Santorum ticket. But I've become suspicious we will see a Romney/Paul ticket. Aside from Santorum's "tantorums," Paul has not directly attacked Romney for the most part in any debate and has been fairly civil. He also consistently stays on message.

Romney will get the nomination. Despite some gaffs mostly attacked to make him seem out of touch ("Ann drives a couple of cadillacs" and "$10,000 bet"), the reality is most Americans don't have a problem with wealth in general or Romney's in particular. That doesn't mean he will win in November, but simply that most Americans will see through a politician playing 'regular guy joe sixpack." What will matter in the end is POLICIES, in my opinion

So, even if Ron Paul is NOT the VP nominee (and he won't be the presidential nominee either) how will Paul's views influence the Republican candidate? Here's why Paul is wrong economically, in my analysis. But let's agree that, yes, it is true that govt intervention can indeed mess up the conomy. It is also true that lack of govt intervention can allow whatever is bad to continue. Yes, we have had business cycles before the fed and we've had them after. Paul's positions are mainly "anti-fed" and "hard money" (gold standard) so I address primarily those two items. Here's a couple of historical background stories which inform my thinking...

1. During the turn of the century 1890s-1910s the progressive party champion William Jennings Bryan gave his famous "cross of gold" speech. you can look it up.
The USA was on a gold standard and the gold standard was the favored approach of the eastern bankers who essentiall controlled the USA economy- we did not have a FED then.
Bryan was arguing that economic growth in the country at the time was being strangled by hard money and tight money. Money supply was essentially in the hand of private bankers such as JPMorgan etal and money was tied to Gold which meant there was little to no growth in the money supply. In his speech Bryan advocated "free silver" - the concept of fiat money not yet taken hold as a general ideal, so Bryan advocated ALSO tying money not to just gold but to silver- this would immediately expand the money supply. Additionally, silver as a commodity wouldn't be sol controlled by the money interests of the bankers.

Lessons
a) to grow the economy needs an expansion of money supply- a factor that cannot occur under a "hard money" (i.e. gold standard) and also not easily accomplished without a "lender of last resort" (aka a central bank such as the Fed) see #3 below

2. Panic of 1907. While many commentators say our recent economic crisis was almost like the Great Depression, I personally consider it more like the severe Panic of 1907. Interestingly, the 1907 Panic was finally rescued by private bankers. JPMorgan basically locked a bunch of Wall St bankers in a room and strong armed them into action to save the economy. What did the bankers do? Remember this was before there was a FED - the bankers agreed to float loans, lend money and put more liquidity into the tightened economy - i.e. a STIMULUS

Lesson- well, two lessons
a) do we really want to rely on private bankers to "save" our economy or ensure it grows when such activity may be at odds with them making a profit? I wouldn't trust modern bankers in a global economy to do what Morgan did when the economy of the USA was more insulated from the world than it is now.
b) the bankers provided liquidy- i.e added money to the economy to get lending and spending going- i.e. under such an economic situation liquidity was needed.

3. Great Depression- it's been said that the FED was a large cause of the depression- which I agree with to some extent - Monetarist economists believe the Fed kept the money supply TOO TIGHT.. yes, too tight. The fed should have loosened money supply. However- anti-Fed people should realize (see my comments above in 1&2) that without a Fed we likely would not have gotten looser money in 1929 either. That the Fed was wrong in 1929 is no surprise because most economists then were "lassaizfaire" and classical economists who were opposed to looser money as well as deficit spending by govts. So actions by both the Fed and the federal govt exacerbated the downturn precisely because they were locked into those paradigms. Contrary to the depression, the recent downturn was fought with expanded money (the FED) and deficit spending stimulus (the fed govt). Most, yes MOST economists consider these actions appropriate and indeed some think were TOO LITTLE. Only a small minority consider these actions incorrect. But in my view, given the HISTORICAL lessons above and indeed see #4- we did the right thing and should NOT reverse course suddenly. Also- historically, nations around the globe that abandoned the gold standard also came out of the depression SOONER than those that held to the gold standard

Lessons
a) gold standard restricts growth and hinders recovery
b) deficit spending and expanded money can and does facilitate growth and helps climb to recovery

4. Recent austerity activities around the world have NOT benefitted those nation's citizens. Many nations that implemented severe austerity have lower GDP growth, lower wages, lower standards of living. One merely need watch the news.

5. Inflation risks- yes expanded money supply by the FED and deficit spending can both increase inflation. This was clear during the late 60s and into the 70s- a period I remember wel. But Bernanke seems to know this and is apparently monitoring the situation. Will the SHUT OFF occur accurately? Well we can hope, but I'd rather we risk a short bit of severe inflation in the future than continue on a path of economic downturn like we had from 2008 through 2010. By all accounts the economy is growing steadily yet slowly and we need to continue gradual improvement. IMO immediately trying to balance the budget or trying to put screws to Fed Reserve activities is counterproductive. In 1933 after deficit spending and growth in the economy, Roosevelt gave in to the "classic" view and cut govt spending to balance the budget and what resulted was an immediate downturn. Eventually we grew out of the depression again by govt spending... under the ramp up of industries to supply WW2- which was govt spending.

6. Austrian economics specifically disregards economic modeling and historical analysis-instead prefering to rely on "maxims" - in other words, they don't use science to study the effects of policies implemented- they simply resort to pronouncements of their theory - any evidence presented in contrary to their "theories" are simply dismissed with some excuse found that there were "ouside influences' or "other govt interference" etc etc... in other words, they have created a "religion" of their economic views much like Christianity in which the "system" (christian doctrine) isn't wrong, but that the people who use it are wrong ... the system can never be criticized. Austrians also claim the 'economy' is "too complex" to study with too many variables. Indeed there are boatloads of variables, no doubt, but if that's the case then they are basically closing their eyes to real world activities to adhere to their economic views.

7. Finally, a word on the FED and the gold standard-
FED: yes it is a hybrid creation, no doubt, but it IS run by the US govt via appointed officials nominated by the president and approved by congress- I fully understand the complaints that it is somewhat captive to the banker interests- clearly it has been at times- but it's better than NO Fed. Also, keep in mind that ALL OTHER advanced nations also have central banks. If we eliminated our FED we would be taking a knife to a gun fight and at the mercy of the economic controls of other nations. Also, except for Germany, many other nations' central banks are DIRECTLY influenced by their govts and can react according to this- which would be like our FED being told what to do immediately by congress- can you imagine the possible changes in direction every two years depending on control of congress? under the current system we have, the Fed has an ability to maintain a longer view and do it free of pressure from congress (a factor that allowed Volker to rein in inflation in the early 80s though it was painful for the economy at the time and likely contributed to carter losing to reagan)
GOLD standard: If we went back on it we would again be at the mercy of foreign powers- if you don't think other nations would not manipulate the gold market to cause havoc to our money you'd be naive- they would and have in the past- as have private speculators. At least with fiat money we have our own soveriegnty and control, even if sometimes the result is not as ideal as we would like.

Ultimately even Reagan used Keynesian activity to prime the pump- and interestingly, we have had more job creation in the last two years than did Reagan from the start of 1981 to the end of 1983. The USA economy has also increased manufacturing jobs more than compared to the same period under Reagan. Unemployment is dropping, manufacturing and GDP is picking up, the economy is improving. The Federal budget targets are for reducing the deficit (though not immediate austerity thankfully).

I think we will indeed see four more years of Obama

14 hours sleep

I ended up leaving work early yesterday and hit the bed by 5pm- and literally slept until almost 7am this morning- I still feel drained but not nearly as tired as I was yesterday- Still don't know why this congestions is hanging on. At this rate I won't be doing any cycling for another four or five days- very very VERY frustrating

Season update

I was hitting the trainer pretty steady up until this past weekend- then illness struck. Both Joni and I were out sick for three days from work. Miserable week. I will have to get back on the bike again maybe Sunday or Monday. (Joni ended up in the hospital twice in two days due to kidney infection and I've got steroids, antibiotics and an inhaler for respiratory infection- ugh)!

Due to other personal travel plans this year, I've altered my bike schedule to stay close to home. I also won't be able to fit in Lumberjack-100, unfortunately, nor will we trek north to do the Ore2Shore in Marquette. But I get a favorite back on my schedule with the 12 Hours of Pando.

BarryRoubaix is only 23 days away. I am looking forward to this event. I will do at least the minimum of five of the CPS races this year- a switch back to standard cross country after almost five years of endurance focused events.

I was able, after some difficulty, to get registered for Iceman as well- tough to get past all the waves of people trying to register

Saturday 03/23/11 Barry-Roubaix Gravel Road Race 65 mile version
Sunday 05/06/11 CPS MMBA Points Fort Custer Stampede
Saturday 06/23/11 CPS MMBA Points State Games of Michigan Saturday (Tentative)
Saturday 07/14/11 CPS MMBA Points Boyne Marathon
Saturday 08/11/11 12Hours of Pando
Saturday 08/18/11 CPS MMBA Points Maybury TT
Sunday 09/09/11 CPS MMBA Points Addison Oaks Fall Classic
Sunday 09/23/11 CPS MMBA Points Pando Fall Classic
Sunday Sept/ Oct KissCross Cyclocross
Saturday 10/20/11 Mad Anthony Cyclocross Race
Saturday 11/03/11 Iceman

Reasons why the Republican House is WRONG about the Payroll Tax cut bill

Reasons why the Republican House is WRONG about the Payroll Tax cut bill

1. they claim it is causing 'uncertainty'
Answer- there's no uncertainty- everyone on both sides of the aisle insists they want it for all of 2012, so there's no uncertainty (unless House Republicans secretly want to scuttle the tax cut anyway)

2. it's kicking the can down the road #1
Answer- false. It's a two month interim action to facilitate a longer action. Businesses and people do interim actions all the time to get past deadlines or other roadblocks as well as to prioritize

3. it's kicking the can down the road #2
Answer- maybe but.. does the house version of the bill create a PERMANENT payroll tax cut? NO. The Payroll tax cut is only proposed for the year 2012 at which time NEXT December we will be addressing a payroll tax cut issue again. So the senate bill kicks it two months down the road while the house bill kicks it 12 months down the road. The distance is different but a kick is a kick

4. A key difference is the Keystone Pipeline
Answer- this is minute and not worth the delay that is being presented. Agreed the Senate Bill doesn't immediately kick off shovels digging. But I also don't think this has been investigated enough for the following reasons
a) the canadians are trucking the oil now and will continue to- the pipeline won't disrupt their operations
b) why does the "new" piple need to go via a brand new route? We already have a pipeline going from Canada to the Gulf Coast- why can't the Keystone line simply run alongside this existing line. It might also give the oil companies a chance to better review the maintenance on the existing line while installing a new one- (we in Michigan already had a fairly significant pipe break in the Kalamazoo River).
c) a two month delay isn't significant enough to warrant holding the tax cuts hostage

5. Another key difference is the unemployment rules adjustments the House Republicans want to make.
My Answer- I OPPOSE the attempt by the House Republicans to hold a tax cut for 160million taxpayers hostage to social engineering desires that have to be bargained for at the last minute with little debate. The Republicans decried the alleged lack of debate on the Affordable Care Act now are trying to squeak through massive changes in unemployment benefits system in the dark of the holiday.

6. Legislation with non-related features added
Answer- I've LONG opposed the tactic of politicians of all stripes to pile on other features and factors into legislation regardless of its relevance.
Is the payroll tax cut good or bad? If yes- then vote yes or no on that- don't add pipelines and unemployment restructuring and funding for the spotted turtle warbler or grant to the veterans of the lost brigage into the same bill. In my view- a bill should contain only what's relevant to that bill.

Summary- Pass the senate bill- it doesn't un-do or re-do or re-make anything that can't be renogotiated later. So there's no damage to either party's positions on ANY key legislation or positions. However, holding out does damage 160million American taxpayers in an effort to SCROOGE out some legislative victory position at the holiday time

http://www.miamiherald.com/2011/12/20/2554691/comparison-of-house-senate-payroll.html

This article details the differences in the two bills- the House bill is a massive expensive bill of $180billion with numerous non-tax related add-ons. The Senate bill is a modest $33billion bill which mostly focuses on the tax cut.

Vote on the Senate bill and come home for the holidays!

More on the pipeline....
Whether you support or oppose the Keystone Pipeline expansion it is worth noting - and the reference to Lake Huron is particularly apropos to us Michigan residents that, quote,"The Ogallala Aquifer, whose total water storage is about equal to that of Lake Huron in the Midwest, is the single most important source of water in the High Plains region, providing nearly all the water for residential, industrial, and agricultural use. Because of widespread irrigation, farming accounts for 94 percent of the groundwater use. Irrigated agriculture forms the base of the regional economy. It supports nearly one-fifth of the wheat, corn, cotton, and cattle produced in the United States. Crops provide grains and hay for confined feeding of cattle and hogs and for dairies. The cattle feedlots support a large meatpacking industry. Without irrigation from the Ogallala Aquifer, there would be a much smaller regional population and far less economic activity.

http://www.waterencyclopedia.com/Oc-Po/Ogallala-Aquifer.html

More on the Keystone aspect of the legislation. The link below is to a map. It should be noted that there is already a Keystone Pipeline (solid orange line).
The proposal is for an additional line which takes an admittedly more direct route.
Some observations
a) I would think that the expansion from Cushing to Port Arthur and Houston don't need to be overseen by the Dept of State- they would have jurisdiction over the portion crossing international borders. So, barring any EPA issues, this tail end portion could begin anyway.

b) As I noted previously, there is already a pipeline. While I don't doubt that a direct route may be cheaper - at least in direct terms of materials (aka pipes and fittings etc), why can't the "expansion" simply parallel the existing line? This would avoid disruption to the people, wildlife etc on the route of the expansion proposed. It would also simplify maintenance oversight since only ONE pathway would need to be monitored not two separate pathways hundreds of miles apart.

http://insightadvisor.files.wordpress.com/2011/11/keystone-xl-pipeline.jpg

Downtime and planning

I've really taken a down time from cycling. Since Iceman the first weekend of November I've ridden outside only a couple times and not been overly diligent on the trainer. I plan to ramp up training after the first of the year. The rest of 2011 will be just easy and fun biking and I limit any trainer sessions to an hour or less.

I did get a new trainer- an inexpensive fluid trainer which I tried for the first time today. Works well for Spinervals.

I've also begun organizing my 2012 season races and reached a tentative schedule. It may get tweaked somewhat in the next couple months. It's also not as epic as 2011 was since I've decided 2012 will stay local.

Saturday 03/23/11 Barry-Roubaix Gravel Road Race

Sunday 05/06/11 CPS MMBA Points Fort Custer Stampede

Saturday 06/16/11 LUMBERJACK-100

Saturday 06/23/11 CPS MMBA Points State Games of Michigan Saturday (Tentative)

Saturday 07/14/11 CPS MMBA Points Boyne Marathon

Saturday 08/11/11 Ore to Shore

Saturday 08/18/11 CPS MMBA Points Maybury TT

Sunday 09/09/11 CPS MMBA Points Addison Oaks Fall Classic

Sunday 09/23/11 CPS MMBA Points Pando Fall Classic

Sunday Sept/ Oct KissCross Cyclocross

Saturday 10/20/11 Mad Anthony Cyclocross Race

Saturday 11/03/11 Iceman

Iceman Race report and season assessment

Iceman Race report

I finished my last mountain bike race of the year yesterday up in Traverse City. It was my second Iceman race and I had low expectations.

Having injured myself Sept 18th I was not expecting to do well. I even figured my target should be under three hours. My time last year was 2hrs31mins. I was on crutches for two weeks and limping severely for several more. I didn't ride outside again until last Sunday Oct 30th and in the last two weeks of October only managed four 30-minute sessions on trainer gym bikes.

But the Iceman event was indeed successful. I finished 68th of 127 racers in the Men 51-52 category with a time of 2:26:34. This was five minutes FASTER than my finish last year! I felt good the entire time except for a cramp in my thigh at the last ten feet during a sprint.

The weather was fantastic. At my 9:36am start time the temperature was about 32 degrees, more than ten degrees warmer than last year. I had two bottles of heed (of which I lost one during the event, predictably bouncing out of the lower cage). We started off in the mass group on the pavement in Kalkaska and rolled through neighborhoods and out onto the dirt trails.

I moved along quite well, averaging about 17mph to start. This would drop later, of course, to about 13.2. The course was hard packed in most spots with some of the singletrack being slightly greasy.

The first notable incident occurred in the first 5-6 miles during a slight small climb up a hill. It was short and steep but there was a racer walking his bike uphill. The rider in front of me moved to the left to go around the walking cyclist and as he did so he fell. I moved to the right to continue the climb around him and his tire slid UNDER my rear tire as I passed him and I was spinning my rear tire on his spokes and wheel trying to continue onward and I had to jump off my bike to run up the hill as well. I am sure that rider needed a wheel truing later hahahaha. But that was the only hill I had to walk. All the rest were rideable, though near the end I did use the grannygear on the last couple climbs.

I did get stuck a couple times behind slower riders on singletrack sections and some whipping downhills. This is not uncommon. Some riders have great fitness but lack some skills in the technical weaving portions of the trail. There were a couple of sections which I anticipated such technical single track coming up and gutted past a rider or two in front of me. One notable time I zipped around the racer in front of me and beat him to the hole shot at the singletrack and ended up opening 100 yards on him in that section. He caught me much much later on the course, perhaps ten miles later.

One nice feature this year, though it fooled some riders unaware of the feature, was that the course was guided into the campground finish area through some fenced chutes and then took you back out onto the trails and another hard climb before then again coming back into chutes and the finish. This added perhaps a mile to the course (which was now about 30 miles long). I think some racers went into that initial chute and let their guard down then were somewhat aback having to go back out for more trail and a hard climb. I'd been warned by my teammates who'd pre-rode the finish section.

Finally to the real finish chute, I came into the fenced chutes right behind another racer and as we made a turn I sprinted around and past him and pressed toward the finish tape. But with about 20 yards I saw him out of the corner of my eye on my left surging past me and I stood up to sprint to hold my position which then caused a cramp in my thigh muscle just as I tried to hammer and he beat me to the finish. I wasn't too concerned since you can't really know who all your competitors are but ironically it ended up that he was in my age group and was scored three seconds ahead of me. Darn!

Other than a couple of cyclocross events and a couple of winter races in January or February the race season is over. I will still do some outside biking, but will soon begin to focus on training for 2012.

Season Assessment

So, all in all, this was one of my best ever cycling seasons!

03/26/11 Barry Roubaix: 2Hrs19min for a place of 61st out of 94 Master Men Category
04/30/11 Cohutta 100: 12hours/2minutes, 23rd of 25 in Master Men Category
06/18/11 Lumberjack 100: 11hours/11minutes, 21st of 29 Master Men Category

7/30/10 Wilderness 100 08/20/10: 12hours/0minutes, 27st of 31 Master Men Category

Fool's Gold 100: 12hours/1minutes, 6th of 11 Master Men Category
09/04/11 Shenendoah 100: 12hours/14minutes, 19th of 53 Master Men Category
11/05/11 Iceman: 68th of 127 Men 51-52 Time 2:26 (5 mins faster than 2010)

WOW- Really, I've been now considering what to do next year. What can I possibly put on my calendar and accomplish that can compete or exceed what I've done this season?

I've really enjoyed the overall aspects of cycling. I rode a lot in college on my Puch. When I got a mountain bike I considered myself a "mountain biker" and had no real road riding affinity. But in the last couple years, as I've rode more on the pavement for training, I've enjoyed a more rounded cycling experience. I've had a blast on road rides and doing cyclocross. All this has improved my biking in every way. It's been a great season.

First bike race back since injury

With one week to Iceman, I got back on the bike outside today. I figured the bone fracture was pretty much healed, but my leg was aching quite badly especially the calf and knee areas which are not near the injury so I think the issue was simply tight muscles, ligaments and such. Stretching and more activity was needed, not less. I started spinning on the trainer and gym bikes a few times the last few weeks. I also returned to using my foam roller. Getting therapy in by riding the bikes or trainers was made a bit more difficult by work travel but the hotels had recumbent gym bikes.

I plan to ride the cross bike outside Monday and Tuesday. Wednesday I want to get to the trail and do one lap at Luton.

The race today was the Caledonia Park Kisscross race. I decided to race in the C category instead of my normal B category. Good thing because I was exhausted after this short three lap event. Each lap was 1.75 miles so it wasn't a long race but I rode fairly hard and haven't been on a bike outside since the fall on Sept 18th cracked my hip bone.

I ended up in 4th in the category after the thirty minute ride and really tried to catch two of the competitors in front of me right at the end but just as I stood up to sprint the last 100 yards so too did they. I don't think they saw me behind them but they were racing each other.

The photo below shows me in the middle of the paved path. The two guys I tried to catch are right to the left (though one is not quite visible in the photo because he's behind the front rider in the camera view).

Update on leg fracture Oct 12

Just left the doc for my follow up. He said healing is going well and the constant pain in my calf and knee are likely due to illiotibial tightness or such due to the injury and lack of activity. I plan to swim and even try spinning on the bike starting this week. I still have difficulty descending stairs normally because it applies weight to the top of the bone.

The visit confirmed it was indeed a crack across the trochanter. He indicated laying that side- left side- though it may present discomfort- actually has the effect of pushing the bone together. What I should not do is side leg lifts (as shown in photo below) as this actually pulls the top of the bone apart from the rest of the femur. The tibial and other muscles, ligaments and tendons are attached to the top at the trochanter and moving the leg in this manner pulls on the top of the bone. I suspect that when I attempted to dismount the bike at the cross race on Sept 18 after falling, that the dismount effectively created a similar motion, stressing the bone and resulting in the POP or CRACK sound I heard at the time.

I am still planning on doing Iceman, though for me it may be more of a timed ride than a race to beat anything- just finishing will be the accomplishment this year, I think.