It's Hemp History Week!

How much do you know about industrial hemp?

Hemp is not Pot

First, let's get one common misconception out of the way. Marijuana and industrial hemp are not the same thing. Let's hear from Dr. David P. West, who holds a Ph.D. in Plant Breeding from the University of Minnesota. (There's lots more information on the myths and realities of hemp and marijuana at the link.)

Botanically, the genus Cannabis is composed of several variants. Although there has been a long-standing debate among taxonomists about how to classify these variants into species, applied plant breeders generally embrace a biochemical method to classify variants along utilitarian lines.

Cannabis is the only plant genus that contains the unique class of molecular compounds called cannabinoids. Many cannabinoids have been identified, but two preponderate: THC, which is the psychoactive ingredient of Cannabis, and CBD, which is an antipsychoactive ingredient. One type of Cannabis is high in the psychoactive cannabinoid, THC, and low in the antipsychoactive cannabinoid, CBD. This type is popularly known as marijuana. Another type is high in CBD and low in THC. Variants of this type are called industrial hemp.

The conflation of the word "marijuana" and the word "hemp" has placed a heavy burden on public policymakers. Many believe that by legalizing hemp they are legalizing marijuana. Yet in more than two dozen other countries, governments have accepted the distinction between the two types of Cannabis and, while continuing to penalize the growing of marijuana, have legalized the growing of industrial hemp. The U.S. government remains unconvinced.

Connecting the Dots: Obama's Value

What Makes Obama Worth a Billion Bucks?
First Dot: President Obama just became the first politician to ever collect over a billion dollars in career political contributions.

His total take reached $1,017,892,305 in April, some nine years after he began his 2004 race for the Senate. Obama is widely expected to raise at least $300 million more before November.

Second Dot: The Washington Post reports White House visitor logs provide window into lobbying activity.

Is Directive 10-289 in Our Future?

I'm currently rereading Ayn Rand's Atlas Shrugged, thanks to an ongoing discussion of the book with a first-time reader-friend from the previously mentioned Absolute Write Politics & Current Events forum.

For those not familiar with the novel, it tells the story of an America choking on special favors and regulation, where each attempt to "fix" things leads only to more problems, where legislation promoted for the "common good" instead serves to line the pockets of the politically-connected, where regulations claimed to promote stability instead institutionalize stagnation. An America where "too big to fail" applies not only to banks, but to the steel mills, copper mines, and railroads of those who curry favor with the administration.

An America, in short, not too far distant from the one we inhabit today.

White Male Privilege

It must be nice to be a baby boomer heterosexual white man.
During an online discussion about voting, after I sarcastically recommended the lesser of two evils theory, I got this clever non-sequiter dropped in my lap.

It must be nice to be a baby boomer heterosexual white man.

My reply, although pointed, was far too brief.

Actually, it sucks. We can't blame our failures on the inequities in the system and postulate that if only we get the right people into political office they'll fix everything. We have to face the stark reality that the One Percent's idea of "equality" is to destroy the "privileged" middle class so that all the ninety-nine percent are equally disadvantaged and dependent on their largess, rather than removing the roadblocks that allow everyone to compete with those who are politically protected and achieve all they're capable of achieving.

My concept of equality does not mean we're all equally powerless to do anything without permission from the state and grateful for whatever paltry portion of our own efforts they deign to let us keep.

Elizabeth Warren, Clueless or Complicit?

On March 8, 2007 the University of California Berkeley Jefferson Lecture Series presented The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net.

Since the title of the lecture closely paralled a topic I've been intending to explore, I decided that watching this lecture would serve to help me collect my own thoughts in preparation for writing on the subject.

The lecture was delivered by Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard University and past chair of the Congressional oversight panel created to oversee the 2008 U.S banking bailout. She conceived and led the establishment of the U.S Consumer Financial Protection Bureau, and is currently a US Senate candidate from Massachusetts. I've embedded the video, and I recommend watching it if you have the time.

What Ms. Warren Got Right

She opened her lecture by expressing her belief that "The single most important economic shift of the second half of the 20th century, in the United States, [was] that that millions of mothers poured into the full-time paid work force. A woman in 1970 who had a 16-year-old child was less likely to be in the work force than a woman in 2003 who had a six-month-old child at home. It was a profound shift in America."

"The median family in America went, over a 30-year period, from being a one-income household to a two-income household."

Malum in se, Malum Prohibitum

When it comes to the proper role of government, most people seem to agree on a few basic issues; murder, rape, fraud, theft and vandalism (acts of aggression against individuals and their property) are almost universally accepted as violations that government should prevent or punish. Conflicts tend to arise only after we step beyond that common theme.

Two legal terms illustrate that fundamental split: malum in se and malum prohibitum.

The Higher Education Bubble

With almost a trillion dollars in loans outstanding and an estimated 27% of those loans more than 30 days in arrears, it's getting easier every day to predict the next segment of the economy to collapse.

Those who understand how the bubble-blowing combination of the Federal Reserve and government policy destroyed the housing market, fueled the dot-com bubble of the early 2000s, and shares some level of responsibility for every nationwide recession since 1913 watched in trepidation when "college for all" replaced "home ownership for all" as the entitlement mantra. It's starting to look suspiciously like they were right once again.

Fitch Ratings notes that the "The Federal Reserve Bank of New York recently reported that as many as 27% of all student loan borrowers are more than 30 days past due. Recent estimates mark outstanding student loans at $900 billion- $1 trillion."

Government Integrity Analyzed

A consortium led by the Center for Public Integrity, a "nonpartisan" watchdog group, released a report on the integrity of state-level governments on Monday.

Not one state got an "A," the breakdown was 5 "B"s, 19 "C"s, 18 "D"s, and 8 "F"s.

I found it particularly telling that this "nonpartisan" watchgroup did not issue grades for either the District of Columbia or the federal government.

Here's how they begin their lament.

The Booze Cause of the Economic Crisis

Everybody should believe in something; I believe I'll have another drink.
Author unknown
Appearing at Real Clear Politics today, Causes of the Crisis, wherein Robert Samuelson proclaims "Four years after the onset of the financial crisis -- in March 2008 Bear Stearns was rescued from failure -- we still lack a clear understanding of the underlying causes."

He makes note of the two competing theories; that Wall Street, unregulated, took too many risks, and that mortgage-lending standards created the housing bubble. He then examines the case for a root cause of both.

Actually, both theories are correct -- and neither is... But the fact that these theories are not mutually exclusive suggests that both were consequences of some larger cause. Just so. What ultimately explains the financial crisis and Great Recession is an old-fashioned boom and bust, of which the housing collapse was merely a part.

In this, Samuelson is correct. He then proceeds to give a history lesson, pointing out that the boom began with the decisive defeat of double-digit inflation in the early 1980s, (while failing to address the cause of, or cure for, that inflation, however). He points to two mild recessions in the ensuing years, and gives credit to the Federal Reserve for "defusing" those two threats. He then states "booms become busts because justifiable confidence becomes foolish optimism," and continues his history lesson by spreading the blame everywhere; on investment banks, households, lending standards, regulators, ethical standards, even criminals. But not one word of explanation as to how "justifiable confidence becomes foolish optimism."

Shocker: Hybrid Cars Stalled

First Shocker: General Motors has announced it will idle production of its Chevrolet Volt plug-in hybrid for five weeks because of slow sales, in spite of efforts to boost the vehicle's consumer appeal. The shutdown begins March 19th and ends April 23. Approximately 1,300 workers at the Hamtramck, Michigan factory will be out of work for that period.

The Volt was launched with great fanfare last year, but has suffered a rocky start with sales far below projections. Its primary purpose has been to serve as a lightning rod for critics of the Obama administration's auto-industry bailout and concurrent emphasis on alternative energy. It's also a fine example of crony capitalism at its best.

The company currently has an inventory of more than 6,000 Volts on hand. At current sales volumes, that represents almost a six month's supply.

The world's No. 1 automaker sold just 7,671 Volts last year. Some 1,203 Volts were sold last month, about double the number for January, but well below December's total of 1,529.

The Rise of the Phoenix Society

In the first column in this series, The Apolitical Economic Superpower, we discussed the rapid growth of the untaxed, unregulated economy. According to the Organisation for Economic Co-operation and Development (OECD), it already provides an estimated 50% of the world's jobs. And in only eight short years, they estimate that two out of three workers world-wide will be employed in jobs outside the control of government, in the apolitical economy that this article from Foreign Policy refers to as System D.

By 2020, the OECD projects, two-thirds of the workers of the world will be employed in System D. There's no multinational, no Daddy Warbucks or Bill Gates, no government that can rival that level of job creation. Given its size, it makes no sense to talk of development, growth, sustainability, or globalization without reckoning with System D.

A Government Big Enough...

A government big enough to give you everything you need,
is a government big enough to take away everything that you have.
Gerald R. Ford, 38th President of the United States, August 12, 1974.

According to a report just released by the Congressional Budget Office, the cost of the Patient Protection and Affordable Care Act has almost doubled, from $940 billion to $1.76 trillion, in just two and a half short years. Dial the way-back machine to September 9, 2009, and listen to President Obama.

Now, add it all up, and the plan I'm proposing will cost around $900 billion over 10 years -- less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans that Congress passed at the beginning of the previous administration.

It's also very unlikely that this is the end of the story. In 1966, when Medicare was just a glimmer in power-hungry politician's eyes, the government projected that Medicare would cost $12 billion in 1990. The actual tab was $110 billion, falling just short of a factor of ten miscalculation.

Pink Slime - It's "For the Children"

Take all the scraps and connective tissue left over from slaughtering cows. Throw it in a big vat. Grind thoroughly. Squeeze it through a thin tube and spray it with ammonia hydroxide. (yes, the same stuff that's in that bottle labeled "Ammonia - Do Not Drink" stored under your kitchen sink)

Sound appetizing? I didn't think so. It's banned in the United Kingdom. Even McDonald's, Burger King, and Taco Bell, hardly bellweathers of cullinary excellence, want nothing to do with the stuff anymore, although they have used it in the past.

It's perfectly legal, after all. The U.S. Department of Agriculture first approved it for human consumption in 1994, and according to Beef Products Inc. more than 70% of the ground beef sold in the U.S. contains the stuff. Curiously though, a number of grocery chains, including Publix, have recently announced they do not use it, and other meat outlets are running away from it rapidly now that consumers are becoming aware of the issue.

Concentrated Benefits, Dispersed Costs

The concepts of concentrated benefits and dispersed costs, when applied to government, or, more specifically, to the creation of legislation, go a long way toward explaining why it is that government always gets bigger, never smaller. When examined in the light of the Cronyism Model of legislation in contrast to the Civics Class Model of legislation, these concepts also go a long way toward explaining why it seems that as government grows bigger, it tends to benefit the citizenry less and the politically-connected One Percent more. Finally, when one understands the full importance of the two concepts taken together, one recognizes the fundamental truth of Thoreaus's statement, "That government is best which governs least."

Even at the simplest level, it's fairly easy to understand why the twin concepts of concentrated benefits and dispersed costs are popular with the legislature, and in many cases, with the citizenry as well. Let's take the case of benefits for the veterans of our armed services as an example almost everyone might support. Only a small fraction of the citizenry ever belongs to the military, and this small group has shown a willingness to step forward and defend the rest of us from barbarians at the gates, so to speak. (Whether those willing to so act have been wisely deployed by their civilian leadership is a topic for another conversation.) In this case, the argument that taking a few pennies from each citizen, and thereby amassing dollars to assure the continued welfare of the much smaller group who fought in their stead becomes an easy sell. Properly packaged, even those paying for the benefit consider the legislation a good deal all around.

North Korea's San Sebastián Mines

I just read a post at The Ponds of Happenstance, home of fellow blogger Robert Upshaw, that tells the tale of the rise and fall of the Diamond Mountain Resort, a tourist mecca created in North Korea by Hyundai Asan, a spin-off of South Korea's Hyundai group. After Hyundai Asan invested almost a half-billion dollars in a fancy tourist resort and drew two million visitors from South Korea over a ten-year period, the operation came crashing to a halt when a 53-year-old South Korean woman was shot to death for allegedly entering a restricted area.

South Korea banned travel to the area shortly thereafter. In retaliation, North Korea has seized the remaining assets and intends to reopen the resort, hoping to attract foreign visitors.

My guess? They'll have as much success as the People's State of Mexico had reopening the San Sebastián Mines and the San Sebastián Line.

The One Percent's Revolving Door

In Defining the One Percent, I explained that big government and big business work together to their advantage, while occasionally pretending to be mortal enemies. Then I provided a definition of the One Percent.

The One Percent is composed of both those who would seek to influence those who write the laws to create legislation that prevent competition and force business their way, and those politicians and bureaucrats who gladly pass and enforce the legislation that provides those benefits.

The One Percent includes both Crony Capitalists and Crony Politicians. We ignore their collusion at our peril.

In On Law and Sausages - SOPA, PIPA and Cronyism, I explained how these two groups work together to create legislation that ends up benefiting a particular industry or a particular corporation at the expense of consumers and the small businesses on Main Street. But they have plenty of other tricks up their sleeves to maintain their hold on the reins of power.

One of the favorite tricks of crony politicians is to appoint a well-connected industry insider who was particularly helpful to their election campaign to a high government position. Quite often it turns out to be a position where they're responsible for regulating the industry they just departed. This generally results in a few murmurs from members of the opposition party, quelled by a lot of head-nodding over the common wisdom that it takes people with an intimate knowledge of an industry to effectively regulate that industry.

Show of hands, please. How many in the audience would recommend to their local bank that they hire bank robbers as security guards?

Anybody?

Lies, Damned Lies, and Statistics Redux

Earlier this week, I did a column on the differences between official government statistics and those available at Shadow Government Statistics, where changes to the official reporting methods over the last couple of decades are backed out to present figures that are comparable to those from earlier times.

Now, thanks to the fine efforts of one of the posters at the previously-mentioned Absolute Write Politics and Current Events forum, we have survey numbers courtesy of Gallup that appear to back up ShadowStat's assertions. Here's the pertinent chart again.

Lies, Damned Lies, and Statistics

There are three kinds of lies: lies, damned lies and statistics. - Mark Twain

The official unemployment rate is 8.3%, the official inflation rate is 3% and the Gross Domestic Product (GDP) is growing at a rate of 2.8%. So why does it seem like you know more unemployed people than the statistics would call for? Why does it seem that prices are increasing faster than the official inflation rate? And why does it seem that the economy is moribund, when the GDP is on the rise?

Does your personal experience fall more in line with an unemployment rate of 22%, an inflation rate of 11%, and a negative GDP growth rate of -2.5%? Don't be surprised. It's not your perception that's off; it's the official government statistics.

If the figures in the second paragraph seem more realistic to you than the official figures in the first, read on and we'll discover just why those official numbers look so rosy.

What's Your Candidate Done to Change the World?

"An idea whose time has come cannot be stopped by any army or any government." -Ron Paul-

Four years ago, Ron Paul was completely marginalized by the political-media establishment. His contrarian views on the increasing centralization of power in the hands of a tiny minority residing in Washington and on Wall Street, endless military intervention abroad and economic intervention at home, the fiat money perpetuated by the Federal Reserve, the ongoing attacks on personal liberty, and the destructive war on drugs were literally mocked by other presidential candidates, debate moderators, political pundits, and the press who reported the stories.

Four years later, those topics are all at the center of the political debate.

The Apolitical Economic Superpower

Christiane Amanpour of ABC News is the latest to grasp the significance of the world's off-the-books, untaxed, unregulated marketplace. This surprising economic superpower was featured in her Around the World segment on February 1^st.

This market is most often referred to by government spokesmen everywhere as the "black market," in the hopes that people will equate dodging the taxman and bureaucratic busybodies with slavery, child trafficing for pornography, murder for hire, heroin sales, and other, such unsavory pursuits. But people are waking up to the reality behind the hype. When a market is the second-largest in the world, topping 10 trillion dollars, second only to the United States $14.26 trillion, and currently provides approximately half the world's jobs, it becomes increasingly hard to conceive of it as fundamentally evil.¹

The future holds only increased respectibility, as estimates indicate that by 2020, 8 years away, fully two-thirds of the world's workforce will find themselves employed outside of officially-approved channels. This is occurring in an official world-wide economic slump where every new job is considered reason for celebration and pontification. It becomes ever more obvious that the biggest contributor to the growth of the global standard of living is not government programs, but avoiding government involvement in the economic realm to the greatest extent possible.

As Christiane puts it, "far from the canyons of Wall Street, far from the banking capitals of the world, the economy of the streets is booming." The same can hardly be said for the listless, if not moribund, state of the officially-recognized economies. Even in the United States, where avoiding political class meddling in the economy grows more difficult every day, $1.2 trillion, or about 8.3 percent of the economy, is off-the-books -- although the US is among those countries with the smallest percentage of such activity.