Monthly Archives: October 2016

How The Fed Rescued The Banks, But Not The Economy

The Federal Reserve Bank (the Fed) used something called Quantitative Easing to rescue the banks during the crash of 2008/2009. WikiPedia provides a convenient explanation of what Quantitative Easing is.

Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy. It is usually used when standard monetary policy has become ineffective. A central bank implements quantitative easing by buying financial assets from commercial banks and other financial institutions, thus raising the prices of those financial assets and lowering their yield, while simultaneously increasing the money supply.

This rescued the banks from having assets (loans) that were not collectible by having the government buy the loans. It did not rescue the economy because the borrowers still had debt that they could not repay hanging over them. It still depressed the real estate market, emptied out homes that were in foreclosure, made many people homeless, and kept the still paying borrowers from being able to buy anything else.

Imagine if the Fed had used the same amount of money to make the monthly payments on the mortgages for the borrowers. There would have been no foreclosures, many fewer homeless people, consumers able to buy other things, and banks still rescued, and a thriving economy full of jobs.

I believe this did not happen because the Fed lacked the imagination to do this, the politicians lacked the imagination to explain this to the public, and the public lacked the imagination to demand this of their government.

Jill Stein is proposing for student debt what the Fed should have done for mortgage debt (and could still do). The powers that be are busy trying to tell you that this is a crazy idea. My imagination isn’t powerful enough to figure out what is in it for the oligarchs to prevent this sensible policy from being implemented.

I can imagine your questions, though. I can also imagine the answers, but I want you to think about this for yourself for a while before I provide those answers.

Debt Derangement Syndrome: Saving Our Grandkids from Wall Street

New Economic Perspectives has this great article Debt Derangement Syndrome: Saving Our Grandkids from Wall Street by William K. Black.

The article is loaded with facts instead of ideology. It may be too much to read for people who are not that interested in how the macro-economy of a country like the USA works.

There is one point that Black makes that I feel is not emphasized enough. When written in normal text, people tend to pass over the small words that are so important. So I will attempt to quote it, but add some typographical emphasis to make the point.

Austerity, when inflation is already too low, when many millions have dropped out of the labor markets, when there are no real resource constraints to stimulus, and interest rates are often negative is a dogmatic act of economic malpractice.

This statement about austerity is true only when the conditions that Black specifies are true, all of them, even the ones I didn’t emphasize. You cannot logically refute what he says about austerity by using his words and leave out the conditions to show that austerity under completely different circumstances is good. Not only would you not be proving anything by applying his words when the specified conditions do not hold, but that act would equally be economic malpractice.

So let us state the contrapositive to Black’s prescription.

Not to use austerity, when inflation is already too high, when many millions in the labor markets are already working enormous amounts of overtime, when there are real resource constraints to stimulus, and interest rates are often high is a dogmatic act of economic malpractice.

The above is exactly what the Republicans and corporate Democrats are doing when they say during an overheated economy that we must stimulate it even more. When resources are in short supply (during an oil shortage), or when inflation is high, or when labor is in short supply, then tax cuts, and other economic stimulus is exactly the wrong medicine.

I don’t want to hear any more proposals to use the wrong economic medicine at exactly the time when it will do the most harm. Jill Stein understands this, Bernie Sanders sort of understood this. Neither Donald Trump nor Hillary Clinton nor Gary Johnson want to admit to having a clue about this.

Web Site Hacking Perspective

I thought this example might give a little perspective on web site hacking. On a different website from this one, my security software gave me this report on its recent activity.

Blocked web site attacks

Two attacks are from the Ukraine (or Denmark) and seven from France. This is on a website that is fairly inactive.

One attack computer has even been given a name

Number Host Name IP Address

If you Google this domain name, one of the responses is the following:

The spam comes from a serial spammer in Turkey, Turk Telecom (who ignore reports), but the domains are hosted by which in turn is a client of, and (a fake domain).Jan 10, 2014

If you Google the other one with IP address, you find that it is in Denmark.

You can even see what street it is on, if you want to visit.

These kinds of attacks occur millions of times a day on the internet. For the specific attacks on my website, I do not suspect the Ukraine (or Danish) nor the French governments for these attacks. The computers from which these attacks originate are in the Ukraine (or Denmark) and in France, but the person or persons instigating the attacks can be anywhere in the world.

Management Time: Who’s Got the Monkey?

Harvard Business Review published this famous article Management Time: Who’s Got the Monkey?

Editor’s Note: This article was originally published in the November–December 1974 issue of HBR and has been one of the publication’s two best-selling reprints ever.

I remember reading this, perhaps as far back as 1974. I was struggling with the duties of being a very low level “manager”. In a conversation I just had, this article provided the perfect rejoinder. That prompted me to search for the article. I was quite surprised at how easy it was to find.

Here is the gist of what it is about.

Let us imagine that a manager is walking down the hall and that he notices one of his subordinates, Jones, coming his way. When the two meet, Jones greets the manager with, “Good morning. By the way, we’ve got a problem. You see….” As Jones continues, the manager recognizes in this problem the two characteristics common to all the problems his subordinates gratuitously bring to his attention. Namely, the manager knows (a) enough to get involved, but (b) not enough to make the on-the-spot decision expected of him. Eventually, the manager says, “So glad you brought this up. I’m in a rush right now. Meanwhile, let me think about it, and I’ll let you know.” Then he and Jones part company.

Let us analyze what just happened. Before the two of them met, on whose back was the “monkey”? The subordinate’s. After they parted, on whose back was it? The manager’s.

For those who haven’t the time to read this interesting article, I don’t want you to walk away with the wrong lesson. This is what the article taught me, as a manager, to say:

“At no time while I am helping you with this or any other problem will your problem become my problem. The instant your problem becomes mine, you no longer have a problem. I cannot help a person who hasn’t got a problem.

“When this meeting is over, the problem will leave this office exactly the way it came in—on your back. You may ask my help at any appointed time, and we will make a joint determination of what the next move will be and which of us will make it.”

John Oliver At His Illogical Worst

In order to pick apart John Oliver’s illogical rant against Jill Stein, I want to focus on specific pieces of his illogic.

John Oliver is right that the Fed does not take marching orders from the President. He is also exactly right on why that is a good thing.

However, just because Congress made the Fed an independent entity within the Federal government (see previous post Who owns the Federal Reserve?), this does not mean that they are forbidden from doing something the President suggests when they think the suggestion is a good idea. For that matter, they can take suggestions from people who are not President, if the suggestion is a good one.

For those who erroneously think the Fed is “owned” by private banks, they might only be right in so far as the Fed does take advice from private bankers. So if the Fed can take advice from private bankers even though the Fed is an independent entity of the federal government, they can equally take advice from the President if they choose to do so. So Jill Stein would have to make the case to the Fed that writing off student debt would be a good idea for the Fed to carry out its general mandates set by Congress. Even if she is not President, she could try to make the case to the Fed.

I doubt very much that Congress intended to refuse to allow the Fed to do something because somebody in another branch of the government thought of it first. Where would be the sense in that?

Nano-spike catalysts convert carbon dioxide directly into ethanol

My introduction to this topic started from a Facebook post. This led to a Popular Mechanics article. Finally, I ended up with the Oak Ridge National Laboratory press release Nano-spike catalysts convert carbon dioxide directly into ethanol.

A snapshot from the video shows the chemical reaction formula.

co2 to ethanlo chemical reaction

I don’t see why this would not be possible. Ethanol is just


and Ethane is just


To understand the terminology that Oak Ridge National Labs uses, this Google search explanation helps.

Ethyl group (highlighted blue) as part of a molecule, as the ethyl radical, and in the compounds ethanol, bromoethane, ethyl acetate, and ethyl methyl ether. In chemistry, an ethyl group is an alkyl substituent derived from ethane (C2H6). It has the formula –CH2CH3 and is very often abbreviated Et.

So the only thing that needs to be introduced is Hydrogen. i don’t know what comes out other than ethanol. There may be some other compounds that are harmful, like CO, although I would doubt that one.

You do seem to need two Cs for every O instead of 2 the Os for every C that you started with, so there might be Oxygen given off in the process. If the hydrogen comes from the dissociation of water, then there would be even more excess oxygen. Excess oxygen cannot be bad, unless it ends up as ozone. I suppose that if we use this process too much, we could end up with a shortage of CO2 in the atmosphere.

In any case, this could have huge implications in the arrest of global climate change and in hydrocarbon based energy production.

I am no chemist, so I am just going by the chemistry I learned in high school and college, and what little I have run into at work.

Rigging the Election – Video I: Clinton Campaign and DNC Incite Violence at Trump Rallies

YouTube has the video Rigging the Election – Video I: Clinton Campaign and DNC Incite Violence at Trump Rallies.

In this explosive new video from Project Veritas Action, a Democratic dirty tricks operative unwittingly provides a dark money trail to the DNC and Clinton campaign. The video documents violence at Trump rallies that is traced to the Clinton campaign and the DNC through a process called birddogging.

In the good old days when men were men and news media actually did investigative reporting, this is how it used to be done.

How Ranked Choice Voting Prevents “Spoilers”

YouTube has the video How Ranked Choice Voting Prevents “Spoilers”.

Stein/Baraka Campaign Manager David Cobb explains how ranked-choice voting can eliminate the “spoiler” effect that many Democrats and Republicans stress over.

When I was growing up in Lowell, MA, this is the way the voting was done. They managed to count the vote this way long before there were computers to help.

Toward the end of the video David Cobb explains something I had not thought of before.

Oh, and by the way, an added benefit, it actually avoids mud-slinging and character assassination, encourages candidates to debate the issues in a civil tone. Why? Because you’re looking for 2nd and 3rd preference vote as well, rather than the current system.

If this could actually change the tone of our elections, this could be more than just an added benefit. This could greatly improve politics, voting, voting participation rates, and the path our country takes into the future, even if it never directly changes the outcome of a race.