November Update

Mona and I went to visit Nick and Tonya in Alexandrian, Virginia for Thanksgiving. Alexandrian is just a couple of miles from DC so we got to see pretty much everything including the White House, The Mall, The Natural History Museum, Library of Congress, Congress, Lincoln Memorial, Jefferson Memorial, the Washington Monument, Supreme Court, Pentagon, and pretty much all the government departments including the EPA (where Tonya works), the Justice Department (where Nick works), Agriculture, FBI, etc. We were also able to walk around and see some of the cooler neighborhoods in DC. Anyway, Thanksgiving turned out wonderful and it was great to see Nick and Tonya again.

Mona’s friend Nancy flew into town a couple of days ago. We mostly hung out around town and I finally made it to Melts Bar and Grill to try one their cheese melts. Mona and I have been exploring Lakewood and have made it a point to try a new place every time we go out. Still no good Mexican food! We also found that the Lakewood Art Center has an attached coffee shop where residents can show off their talents including playing music and pictures. The place is great to walk around and is free to the public. Mona and I were also able to go to a concert on the east side of Cleveland. I was worried that nobody would come to town and for the most part, that seems to be the case. You almost have to go to Detroit, Chicago, DC, or New York to see a show. Oh well, that just means we’ll have to do more travelling:D

The weather is really dropping and it’s snowed a couple of times but nothing is sticking around for more than a day. All the leaves are officially gone and we are transitioning between seasons. We made a trip to Pennsylvania for coats since they don’t have a sales tax. We drove through Amish country which was interesting. There were people riding around on horse pulled wagons. I’m hoping this weekend; we’ll take a trip down to Amish Country which has the biggest population of Amish folk.

Zola’s language skills are way ahead of her age. At 2 years of age, you are supposed to know 40-50 words. We think she knows 400-500 words. She’s also starting to learn her colors, shapes, and says small sentences. Viola is now sitting up and mostly rolls around the floor to get around.

I’ve been getting back to writing my book which I haven’t done since I was in Arizona. The chapter I’m working on deals with the subject of “public manipulation industries.” By public manipulation industries, I’m talking about public relations, think tanks, front groups, advertising, etc. and how they’ve played a large role in our society. I start off the chapter by asking whether one can live in a truly free society when billions are spent on controlling the public mind. It is interesting that most people are unfamiliar with this subject since these industries shape anything that is media or information related. Basically, “the truth” and “knowledge” has become a commodified where the biggest funder decides what is true and what is false.

This subject is also very close to consumerism as an actual ideology and goes into the history of how and why consumerism plays such a focal point in any state capitalist society. The history is quite interesting because in the early 1920’s private companies actually had to create what they called “manufactured wants” because people bought things for practical reasons not because they were cool or fashionable. Instead, companies would focus on the superficialities in life. It’s fascinating to see the internal papers of companies and how they consciously manipulated the public. In their words, they would say things like, “We have to move America from a ‘needs’ to a ‘wants’ society.” The idea was to get consumers to focus on the superficialities in life like clothes, style, class rather than practical needs. If you just turn on the television for 2 second, you realize that they who won that little war.

Okay, that’s it for now.

Zola in October

Here's my latest video of Zola. This footage is from the last couple of weeks. As you can see, the leaves are changing.

Zola in September

This is a video I made of Zola. I took clips from the last couple of weeks and put them together. They are filmed at 3 different parks around Lakewood. Enjoy!

New Home

Well, we told some people that we were moving to Arizona but plans changed for the better. I won't explain all the details since they're pretty boring. Anywho, we now live in Lakewood, Ohio.

I love this town. Everywhere I go, I'm constantly meeting new people. There is so much to do, see, and explore. The best part is the prices of everything from homes to products at the grocery store. Plus, there's lots of outdoor activities.

Here's a stupid little video I made on the quick.



Best Parts:

- Meeting new people every day.
- Walking distance to the lake which actually looks like the ocean.
- Cool historical homes.
- When it rains its like the monsoons in Arizona. Thunder, lightening, huge downpour and then sunny skies.
- Huge homes that only cost 100 thousand.
- Has the feel of a small town and an urban city at the same time.
- Zola, Viola, and Mona love it.
- Almost everything is walking distance.
- Cool downtown area with live music and farmers market.
- Excellent parks. You can feel like you're in a big city and walk to a river, go fishing, or comb through the forest.
- Rated coolest suburb, best place to raise a family, great schools, and low crime.

The bad.

- We are so far from friends and family.
- No good Mexican food. Seriously!

Well, I haven't experienced the winter yet, so my list of the bad may change. Although, from everyone I've talked to, people here seem to celebrate the changing of the seasons whatever it is. Once you're sick of one, it ends and then you get a new season. Also, people are fanatics about the holidays. I guess Halloween is a big deal which I guess is celebrated the way Christmas is in other states.

Tons of News

It’s been awhile but I have lots to say and I probably won’t get to most of it. First Mona and I will be moving to Cleveland, Ohio. Yeah, I know what you’re thinking. Why would anyone move there? That’s what I was thinking. Well, this whole thing came about when I was doing some research on the cheapest places to live in the US. To make a long story short, Cleveland is really high on the list and Mona can get a transfer there. But you might be thinking, yeah dude, of course it’s cheap it’s Cleveland!!!

Actually, we are looking at two areas that are just outside of Cleveland. They are Lakewood and Shaker Heights. Lakewood is considered a New Urbanist dream. For those of you who are not familiar with New Urbanism, it’s the idea that communities should be walkable. Where you buy food, go to work, and enjoy entertainment would all be within walking distance of where you live. For example, Mona and I live in a New Urbanist neighborhood now since we can walk everywhere. In many ways, I’ve made walking very central to my life. Almost every morning, I take Zola to the original Farmers Market (where we see Mario Lopez filming the show Extra!), La Brea Tar Pits, The Grove, and Pan Pacific Park. It’s amazing that I don’t get sick of my walks. In fact, I still walk around thinking this place is amazing. I love all the art deco architecture, the variety of plant life, and all the originality. (I actually just got home from a one hour walk around my neighborhood at around midnight. Still tons of people out walking their dogs or just enjoying the night air. It feels totally safe even though we are about 5 miles from downtown LA and about 3 mile from where two of the most violent gangs started).

We traveled out last weekend to check out the areas. Lakewood is a really amazing place and we ended up talking to a bunch of the locals. Everywhere we went, people were striking up conversation with us. You are right on Lake Erie and everything is within walking distance. The downtown is pretty cool and they say that most people spend lots of time on their front porches which means you might be friends with your neighbors. I also hear that block parties are pretty common and most people celebrate the Fourth of July by going to the town parade and then spending the day shooting off fireworks in the neighborhood. I guess some folks will spend thousands to give a show for the whole block. So you are in an urban environment with a small town feel. Its even gotten awards for coolest suburb in the US and also an awards for being the best place to raise your family. That’s exactly what I’m looking for.

The second place is like the Beverly Hills of Ohio. Oh yeah, many of the homes in this area go for around $100,000! You can’t even buy a 1 bedroom condo in South Central Los Angeles for that much! Both places are amazing. Lakewood is all about community while Shaker Heights is about privacy and feeling … well… rich. There are real trade offs on both. It will be a tough decision.

About 8 months ago, Mona and I had looked at this really great home in Gilbert, Arizona. The place was huge, nice clean area, brand new house, lots of shopping nearby. The house was a great deal especially since it had a pool and it looked out into a park and the original price had been cut by half. However, I wasn’t excited about it. Why? Well, it took me awhile to figure this out but it’s because I find Phoenix suburbs to be absolutely alienating. I’m not sure if it’s just in Phoenix or all suburbs. Either way, I just get this overwhelming sense of alienation while I’m there. The feeling is like the type of weather you really don’t like but at least weather eventually changes. So for my sanity, I need to be somewhere to eliminate that “emotion.” My quality of life actually increases when I live somewhere I enjoy.

I’ve been working on my latest book with mixed news. The stuff I have so far is excellent. However, it’s taking me much longer than I thought. Writing fiction is so much easier. When you write non-fiction you still need to be entertaining but you also need to make sure what you are saying is logical, consistent, clear, and true. That means a lot of research is involved and I’m constantly reading journals for information. One of the great things about my work is that I have access to most journals that have been written. Even better is that I get about 6 hours a night to write. Anyway, I was just rereading some of my work and some of it is so radical (but true) that I really had to set down the pages to absorb the material. That’s good in my book… ha ha get it!

For those of you that don’t know, I’m writing a book on political philosophy. One thing that really sucks is that the language used by political philosophers have almost the exact opposite meaning to most people. To a political philosopher, a liberal (which is usually considered to be someone on the Left) is a Libertarian (which is someone who is one the far Right). I usually refer to myself as a Left-Libertarian. But most people think you can’t be a Left-Libertarian because they are opposites. Sometimes I’ll say I’m a Libertarian-Socialist but socialism here also has its opposite meaning. A socialist is usually defined as someone who advocates for state ownership. I advocate no such thing. I advocate for workers’ self-management. Instead of the state owning the workplace, all the workers are part owner. Also, I sometimes refer to myself as an Anarchist. Again, the opposite meaning. Most people who hear Anarchist think chaos, disorder, destruction while the word should be associated with a completely organized society. The word actually means anti-authoritarianism and nothing more. Anyway, you can read more about it when you buy my book for yourself and all of your friends and family:D

It has been almost a year since I’ve posted anything. That’s pretty bad. Things in LA have been good. Zola is making all sorts of progress. She is starting to talk and just in the last few weeks she started walking. Mona and I have been to quite a few concerts. Our last one was Godspeed You! Black Emperor at the Fox Theater in Pomona. A couple of months back we saw Blonde Redhead for the second time at the Hollywood Music Box. I think the best show that we’ve seen so far was Do Make Say Think at The Troubadour in West Hollywood. We went to some other concerts but I can’t remember them right now. Oh yeah, no road-trips in the last year which is extremely rare for us. I think we’ve just been too busy.

Oh yeah, and my predictions in my last blog all came true even though the media was saying the economy was about to pick up again. Some of my views have changed but I still think I got it right. In fact, to write my book I’ve had to become familiar with Classical Economics, Austrian economics, Neo-classical economics, Keynesianism, Post-Keynesianism, Marxism, institutionalism (old and new), abundance economics, green economics, and I’m sure there are more. When I say I had to learn these, I’m not saying I picked up some intro book at Barnes and Noble. I had to special order in depth books on these topics and none of them were easy to read. They were all pretty technical. Plus, I disagreed with most of them. Yeah, not fun at all.

I’m going to try and post some video in the next couple of days from our trip to Lakewood and Shaker Heights. Until next time…

Oh, and Mona's having a baby in the next few weeks. Right. I keep forgetting. Too much going on!

Reporting for Duty

Sorry my blog has been down for so long. I'm back up and running. Anyway, I'll write later. I've been writing a book so I've been very busy.

The Economy

"I've abandoned free-market principles to save the free-market system"
George W. Bush

I think there has been a lot of misunderstanding about the latest financial crisis. The media tend to emphasize deficits and the stock market. They also seem to confuse the real economy (jobs, employment rate, CPI, GDP, PMI, etc.) and the financial economy (stock prices, bond yields, interest rates, credit spreads, etc.) Lately, the media have been cheerleaders because of the rising stock market (financial economy) while the real economy has been taking a major dump. Unemployment is now at 9.5 percent but the picture gets even worse. If we include discouraged workers and partially-employed workers, the unemployment rate is already above 16 percent. Firms are also inducing workers to reduce hours and hourly wages. Plus, job losses should continue for the next year and a half and peak somewhere near 11 percent.

At the center of this whole crisis is the $8 trillion housing bubble. Again, the media have been focused on stock market. Since 1996, the housing prices started to rise and ever since then we’ve been listening to people scream about the deficit. We listened to the deficit hawks whine about a problem that really wasn’t that big (at least by comparative standards) and they let the bubble continue.

Well, the deficit hawks are back. They say you and your children and their children and on and on will have to pay back $12 trillion. Are you terrified yet? You shouldn’t be. Don’t change your underwear just yet. Let me break this all down.

It should first be noted that almost 100 percent of this money is in the form of loans. It’s not like the government is just giving this money away. So, no, your children won’t being paying this back. The people who got the money will be paying it back and paying interest on it. This potentially means that the government will make money.

About $1 trillion of that money is in the form of TARP. This program was the creation of the Bush Administration and is still being injected into the failing banks. Why were the banks failing? Because they were gambling with Collateralized Debt Obligations (CDOs) and loaning out massive amounts of leveraged cash in the form of Credit Default Swaps. After the government let Lehman Brothers fall, just about every bank in the country stopped lending out money. It turns out that all these banks are highly connected. Not just here but around the world. That means nobody, not even large institutions could get a loan. What most people don’t understand is that most major corporations receive loans everyday. Some companies might take 10 or 15 loans out everyday because they just don’t have the cash on hand. At the time, even McDonalds couldn’t receive a loan.

I know it’s popular to say, “just let the banks fail,” and I would love to agree. But our whole system as we know it would fall into a dark spiral without the rescue plan. Not only would all money in the US freeze up, there would be a domino effect in the corporate world. Every bank in the US would have to let their employees go. Everyone invested in these companies would take a huge hit. Because all these companies are so tightly knit, both smaller and larger businesses would fall. “Too big to fail,” isn’t some nice little statement. It’s a new reality. One that needs to be dealt with.

Everybody thought it would be okay if just one large bank failed. It turned out they were wrong because after Lehman Brothers went bankrupt, the entire world banking system, along with the financial economy, headed straight down.

This is why Hank Paulson, somebody who was famous for saying, “The best government is no government,” agreed to the bailout.

The second part of the rescue plan has been Obama’s stimulus package. This will cost $787 billion over the next 10 years. Again, people have many misunderstandings about this. Close to 1/3 of this bill goes out in the form of tax cuts. That’s already taken place. Instead of giving this money out in one large payment like the Bush Administration did, they are opting to have the money trickled into each paycheck. They did this because it turned out that most people who got their $500 dollar check in the mail saved that money which isn’t a stimulus at all.

So far, more than 60 percent of the stimulus takes the form of lower tax rates and higher benefit levels for programs like unemployment insurance. The lower tax rates and higher benefit levels already went into effect at the start of the spring. This means that people already have higher take-home pay or government benefit checks.

More than a quarter of the remaining stimulus is devoted to state and local government stabilization funds. This spending will limit the cutbacks at the state and local level, but will not lead to additional growth. The remaining funds are projected to be spent out at an $80 billion annual rate over the course of 2010.

Even if we assume that we are starting from zero spending at the moment, this is a boost of just over 0.5 percent of GDP. By contrast, the collapse of housing construction trimmed $450 billion or 3.0 percentage points of GDP from annual demand. The decline in consumption due to the loss of bubble wealth is in the range of $600 billion to $800 billion a year.

In other words, the remaining stimulus is an order of magnitude too small to give much of a boost to the economy. It should be noted that this was completely expected by economist but has somehow confused the media and the pundits.

The last part of the rescue plan is by far the biggest. One trillion was pushed by the Bush Administration, $787 billion by Obama, but the Federal Reserve is spending the remaining 10 trillion. The government has no control over the FED. They can do whatever they want as opposed to what most people think.

So, what are they doing? Because the banks are no longer lending out money, the FED has stepped in and started doing what the banks use to do: lend money to companies. Again, they aren’t giving the money away. They are just loans.

Since there was a $8 trillion dollar hole blown into the economy, the FED has started printing more money. Many people say this will lead to massive hyper-inflation. This is highly doubtful. At the moment, we’re having a problem with deflation. Plus, the US, compared to some other countries are not that far in debt. Other countries, including Japan and Canada have been further in debt and they didn’t see the inflation that people are talking about today. I should also mention that fact that the FED is sending money to the bank who are just sitting on that money because they don’t want to lend it out. Eventually, the FED will get it back so in reality, the FED isn’t really spending the money.

Many of you know that I was talking about the housing bubble in 2004. It seemed pretty obvious even though just about every economic pundit was saying that everything was okay even while everything was falling apart. What’s really annoying is that the media is talking to the economic pundits who got everything wrong about that economy and they continue to talk to them. At the same time, they completely ignore the people who both predicted the crash and everything that happened afterwards. Instead, they opted to talk to fear mongering deficit hawks. The reason for this might be simple. Everybody can relate to debt. We know it’s bad. End of story. It’s like when they talk about Iraq. The coverage is terrible. It mostly come down to how many soldiers died that day. They don’t talk about the all the different political factions and statistical information because it’s just too hard to grasp.

Last, I should mention all the hype about how Obama is turning the US into a Socialized country. This is all nonsense. Especially since Republicans practically invented corporate bailouts. Historically, Republicans have done the same thing. PLEASE CHECK OUT THIS CHART. The US has taken over many companies including Nixon's takeover of the railroad industry. Almost every bailout in history has turned a profit for the US government. Obama has said he has absolutely no intension of running these institutions and when they are better, he will sell them back to private hands. So unless there is some conspiracy I don’t know about, that is likely to happen.



What does the future look like? Well, it’s hard to say. I’m predicting, that home prices will continue to drop another 10 percent. This is pretty large since it has already dropped about 30 percent. The next year and a half, unemployment will continue to drop but should peak at around 11 or 12 percent. Growth will also be sub par with maybe 1 percent in 2009 and 2010.

If the unemployment rate is going to peak around 11 percent next year, the expected losses for banks on their loans and securities are going to be much higher than the ones estimated in the recent stress tests. You plug an unemployment rate of 11 percent in any model of loan losses and recovery rates and you get very ugly losses for subprime, near-prime, prime, home equity loan lines, credit cards, auto loans, student loans, leverage loans, and commercial loans – much bigger numbers than what the stress tests projected.

It’s bad but the country is by no means going to go bankrupt. You don’t have to worry about your kids being strapped with $12 trillion in debt. By 2011, things should start to pick up. Until then, things will be slow economically. Anyway, go change your underwear and stop worrying.