The Electoral College is a good idea

The are many people who question the need for the Electoral College. After all, the popular vote lost.

Hamilton originally proposed the idea in 1788. He offered it as a safeguard against the election of populists and demagogues, who having hoodwinked the voters, might prove unsuitable to be President of the United States of America.

His idea was that electors be citizens

“most capable of analyzing the qualities adapted to the station, and acting under circumstances favorable to deliberation, and to a judicious combination of all the reasons and inducements which were proper to govern their choice. A small number of persons, selected by their fellow-citizens from the general mass, will be most likely to possess the information and discernment requisite to such complicated investigations.”

Hamilton argued that the

“electrical college affords a moral certainty, that the office of President will never fall to the lot of any man who is not in an eminent degree endowed with the requisite qualifications. Talents for low intrigue, and the little arts of popularity, may alone suffice to elevate a man to the first honors in a single State; but it will require other talents, and a different kind of merit, to establish him in the esteem and confidence of the whole Union, or of so considerable a portion of it as would be necessary to make him a successful candidate for the distinguished office of President of the United States.”

It was a time when civil intellectual debate about politics was common, and opposite views were encouraged, so that differing opinions could be fully understood. That time is gone. The debate is no longer intellectual nor civil.

Worse, many states legally bind the electors to the voters’, and the choice of electors is constrained more by who they should not be, rather than their eligibility to make an informed decision about the suitability of the voters’ choice for President of the United States of America.

The idea is a good one. It is sabotaged by the people implementing it who didn’t see how important it might be.

Trump is about to conduct the lesson.

More at:
About the Electors
The Mode of Electing the President
State Laws Regarding Presidential Electors

Michelle Obama says what we feel about Donald Trump

It has been clear for some time that Donald Trump is not fit to represent the American people in any capacity.

Without any need to explore the depths of political rhetoric that has blemished this campaign, and the reputation of all Americans, Michelle Obama’s stirring speech shows how decent people feel about Donald Trump.

The majority of Americans are disgusted by the pride that Trump has displayed, boasting about sexual assault and then denying that he actually committed these crimes.

Not so fast, say his victims.

The wealth of nations

The way that nations present their accounts is badly flawed. The balance sheet figures, which are critical to the understanding of the health of an country, are not are readily available.

In a recent report, the UN has taken an interesting approach in valuing the assets of 20 countries. In addition to the assets normally appearing on the balance sheet, each country’s human capital and natural resources are included. This makes for interesting reading. It gives one a better idea of whether politicians are investing the country’s natural wealth into its people.

The data reflects the position in 2008. At the head of the table in aggregate wealth is the U.S. at about 10 times its GDP at the time. Japan, with its limited natural resources, has invested heavily in it’s people, and so heads the list in per capita wealth.

Let’s hope our leaders take note.

More at:
Inclusive Wealth Report 2012
National balance-sheets
The real wealth of nations
Current-Cost Net Stock of Fixed Assets and Consumer Durable Goods

Heading towards the fiscal cliff

The “fiscal cliff” is a term that’s creeping into the lexicon of economic journalists. It refers to that bizarre political product borne of the negotiations to the increase America’s debt ceiling in 2011. It is designed to inflict the worst case scenario that either of the parties could conceive, imagining that this would deter the partisan bickering that has brought decision making to a standstill since the beginning of 2011.

At the heart of the problem is the huge government deficit and an inability to agree on a course of action to fix it. So the parties agreed to create a sword of Damocles, hanging over the economy, deferred until after the election on November 6, triggered to fall on December 31. They have seven weeks in which to come up with a solution.

That period is a bad time to make any decisions, let alone ones of such consequence.

Should the sword fall, estimates of the damage to the economy range between of 4% to 6% of GDP.

It is right now that these issues should be addressed. It’s also a good measure of candidacy for the presidency.

Politicians are expert procrastinators. The proficiency on display in Europe is impressive. Hopefully the voters in America won’t be as easily beguiled as those in Europe.

More at:
America’s economy Fiscal cliffs, multipliers, and the myth of central bank independence
The high price of tax breaks Not so easy Closing loopholes is politically painful
Harvard’s gloomy graduates
The cloud of uncertainty Dithering in the dark Quantifying the effect of political uncertainty on the global economy
America’s budget woes Shift this cliff
Fiscal policy Cliff-diving
CBO: Coming Fiscal Cliff Will Devastate The Economy
Fiscal policy Spending by any other name
America’s economy The two Americas
America’s economy A response from Edward Luce
Barack Obama and the economy The choice
Fiscal policy What the Fed fears
Legal language The hardest sentence in the tax code
Collateral damage

Unacceptable

Tim Johnson, the chairman of the Senate Banking Committee, opened the hearing into the $2 billion trading loss that JPMorgan recently incurred. In his address, Johnson said “it was an out-of-control trading strategy with little to no risk controls that cost the company billions of dollars. …. we can, and must, demand that banks take risk management seriously and maintain strong controls. …. I expect Mr. Dimon to be able to answer tough, but fair questions today.  A full accounting of these events will help this Committee better understand the policy implications for a safer and stronger financial system going forward.”

Johnson made the objectives almost impossible to achieve from the outset, limiting each senator to 5 minutes. It was clear from the questioning that no strategy had been agreed between the Senators, and so a number of them were left with unanswered questions.

In Dimon’s prepared testimony, he ascribed the losses to a change of strategy, that instead of reducing risk, increased it.

It was a reporter for CNBC, not one of the Senators, that questioned Dimon on the email that he’d been copied notifying him of the change. “I paid virtually no attention to it. I didn’t think it was significant,” he said. The portfolio is worth $350 billion.

If that’s not significant, what is?

Dimon, at least, is open about his mistakes.

Dimon says that clawback provisions will be applied to recover some of the losses from responsible officers.

It’s a pity that the Senator’s salaries don’t have similar provisions.

More at:
JOHNSON STATEMENT ON JPMORGAN HEARING
Testimony of Jamie Dimon Chairman & CEO, JPMorgan Chase & Co. Before the U.S. Senate Committee on Banking, Housing and Urban Affairs Washington, D.C. June 13, 2012
Dimon Says Overconfidence Fueled Loss He Can’t Defend
Dimon Fires Back At ‘Complex’ System In U.S. Senate Grilling
Jamie Dimon of JPMorgan Chase leaves Senate banking committee in the dust
Senators Suck Up to Jamie Dimon, Get Paid for It
Top 20 Contributors Senator Tim Johnson 2007 – 2012
Senate Banking, Housing and Urban Affairs Committee
Dimon, JPMorgan Chase Have History with Senate’s Banking Panel
Jamie Dimon’s Risky Business
Dimon has now joined the Lou Club