Democratic Candidates drinking the Republican Kool Aid

[gturner]

Last week Japan and the rest of the world were stunned when China considered responding to the Japanese arrest of a Chinese sea captain with a rare-earth embargo.

Embargoes on fungible commodities are asinine. That's why anyone was surprised.

No, that's why everyone was scared. Putting an embargo on a fungible commodity when you control 97% of the production is damned effective (and Japan released the Chinese captain). Where could Japan go to replace the lost supply? Nobody else has any to spare and nobody can get any extra unless they negotiate directly with China, which might not feel compelled to sign any new agreements.

As such, trying to play power broker on REE's is equally asinine. This isn't oil we're talking about, or even copper or iron. All the economies of the world use as many tons of copper in a day as they do REE's in a year.

And it takes about forty pounds of REE's to build a Prius, in the engine and the batteries, so if you don't have any stockpiled your hybrid car production stops almost immediately because the supply chains run lean (just in time production methods). And as luck would have it, nobody has stockpiled REE's. That's why the Chinese threat was discussed by the Joint Chiefs of Staff.

On top of that, they're really not THAT rare. Many countries have sizable deposits that they don't mine because the market doesn't have the demand for it. "Rare Earth's" isn't a description, it's a translation of a French term that described the REE-bearing ore chemically. If China wants to play hardball, they'll kick themselves out of the market in 5 years.

We provided over half of the world's supply, but that ended in the 1990's when the Mountain Pass mine was shut down by environmental regulators. It's off highway 15, midway between LA and Las Vegas, next to the Mojave desert. Wouldn't want to pollute a desert with dust, now would we?

Until we reopen that mine, there is no alternative supply that comes close to meeting the demand, and it takes up to several billion dollars to get an ore concentration operation up and running.

 

[gturner]

Future prosperity and success aren't automatic. They require making the right choices

Which is why we cannot skimp on R&D and education initiatives, or be satisfied with hanging on to outdated factory jobs. Floor workers get the shaft, if you want real money, you have to be the designer, the thinker, the creator. I don't know about you, but I'd rather be on the team inventing the next iPhone, than be one of the wage slaves working on its assembly lines.

I think your problem is that when you think of the economy, all you can imagine is physical production. Mine the ore, turn it into parts, assemble the parts. That's a 19th century way of thinking, two centuries displaced from reality.

Don't I know it! In this new Obama economy jobs are a thing of the past.

So we'll have a little building where an iPhone design team works (all the people there will actually be from India and China, except for the receptionist), but the ten-thousand production jobs, from mining the ores, making the semiconductors, to final assembly, will all be overseas.

The cries of "toxic sludge" say no.

You really don't have any clue what REE's are, or how you get them. The byproducts of REE's mining are nasty products, mostly toxic heavy metals, and a lot of radioactive isotopes.

Bzzztttt..... Wrong answer. Care to try again?

That's what's wrong with our education system today. Nobody is being taught how to build things, mine things, or what ores are.

The ore in Mountain Pass is mostly carbonates (dolomite, the same stuff I go caving in), along with barium (the main ingredient in barium milkshakes), strontium (which is beneficial in the diet), fluoride (which we add to drinking water), and quartz.

 

[STR]

No, the mine was shut down because demand for REE's dropped in the 1991-1992 recession. The fact that all the equipment there was 20-30 years old certainly didn't help. Notice that, now that demand has picked up again, Molycorp turned the key and has been planning on reopening MP long before the China-Japan spat. They've actually been doing small scale mining there since 2007.

See, while you imagine that the EPA is some kind of bogeyman that goes around killing jobs, the fact is basic economics are what dictates the direction and composition of this economy.

And as a history lesson, do you know how they found Mountain Pass? A uranium prospector found high radiation levels there. I know you probably spent a lot of time googling the bulk percentages of the ore there, but that utterly ignores the fact that radioactive and heavy metal elements are ALWAYS found in low percentages, and even at those levels it's STILL enough to be a hazard.

 

[gturner]

No, the mine was shut down because demand for REE's dropped in the 1991-1992 recession. The fact that all the equipment there was 20-30 years old certainly didn't help. Notice that, now that demand has picked up again, Molycorp turned the key and has been planning on reopening MP long before the China-Japan spat. They've actually been doing small scale mining there since 2007.

If small scale mining is profitable, then large scale mining would be even more profitable. But they couldn't because they'd ran afoul of the regulators.

To reopen the mine they had to appease 18 environmental regulatory agencies and have to pay a couple million dollars a year.

And as a history lesson, do you know how they found Mountain Pass? A uranium prospector found high radiation levels there. I know you probably spent a lot of time googling the bulk percentages of the ore there, but that utterly ignores the fact that radioactive and heavy metal elements are ALWAYS found in low percentages, and even at those levels it's STILL enough to be a hazard.

Sorry, but you're wrong again. They don't bother with the radioactive find because nearby was a giant stock of virtuallly non-radioactive ore.

And no, low levels of uranium isn't a health hazard. You slurp down uranium every day in your drinking water. You eat it with all your food. My yard is chock full of it, as are all yards, as is all dirt. The average football field contains enough uranium in the topsoil to load up an M-1 tank with a full load DU penetrators. And thorium is way more prevelant than uranium. Maybe we should just go ahead and ban dirt.

Even the press stopped screaming about uranium during the Iraq war when they kept interviewing physicists who used large ingots of it as doorstops in their labs.

But the mine was shut down because it leaked wastewater that had some thorium in it. Thorium has a half-life of over 14 billion years, and I have lots of it in my bedroom. You can buy it at Walmart.

But such insane fears are further evidence of the complete failure of our educational system.

Edit: By the way, did you know people are naturally radioactive? Sometime I scream at my housemate to quit converting his potassium atoms to argons, but he never complies. The majority of radioactivity in a yard comes from potassium, not the abundant uranium and thorium.

 

[STR]

The very fact we're down to debating the composition of ore in California just shows how bankrupt your entire argument has been.

You couldn't justify cutting the estate tax, because you fail to grasp that ANY taxation alters the economy.

You couldn't justify gutting half the departments in the executive branch because you seem to not really understand what any of them really do.

Your assertion that America needs more blue-collar jobs is just plain crazy given that uneducated workers have the highest unemployment rate of any group in the country.

The idea that we shouldn't cultivate hi-tech jobs because they'll be outsourced to India is odd when you think we need more factory jobs that will get outsourced to China (or a robot) instead.

So we're down to debating the MolyCorp mine, which you insist was shut down by the EPA, but remain adamant that there is nothing toxic there, because apparently you think the EPA just shuts down random places for the power trip.

So given all that, I think I'm done here. I don't even give enough of a damn about the rocks to bother pulling up the federal records on the place.

 

[Guartho]

So... about that "states could create a flat tax effect" thing. How's the math supposed to work on that again?

 

[gturner]

It's pretty simple. Suppose all the state's residents forwarded the state a copy of their Federal 1040. The state would then add up the total revenue headed for the federal government from its citizens. For the sake of argument, let's call it $50 billion from 5 million residents, or $10K per person. None of that gets touched, it's just noted for reference.

So the state tax is calculated to readjust the residents to a flat tax that's designed to make the resident's total outlay $60 billion (the $50 billion that went to the feds plus $10 billion for the state's budget). If the average income was $40K (the average resident paid 25% in federal taxes), then the total taxable income was $200 billion.

So the state creates a tax that will create a state plus federal rate of 30%. If you paid less than 30% in federal taxes, your state tax will bring your total outlay (state + federal) to exactly 30%. If you paid more than 30% in federal taxes then you'll get a refund check from the state so that your total tax outlay was 30%.

So as far as the federal government is concerned, absolutely nothing has changed. They're still collecting their federal revenue according to the federal tax law, each resident complying with the federal tax schedules.

But as far as the residents are concerned, the complexities of the federal tax code become irrelevant because no matter how they game the federal system, the state makes sure they end up paying out 30% of their income. They'll lose their incentive to game the federal system, so the total revenue to the federal government from the state would actually go up, causing the state to raise the final rate higher than would've otherwise been, but hopefully this would be a relatively minor effect.

I used a flat tax example for simplicity, but the state could institute any structure it wanted for its residents.

 

[Guartho]

That's what I thought you meant. I think the reason no state has tried that is that they would bankrupt themselves while raising taxes on the poor to write checks to the rich.

 

[gturner]

Not according to the available data, which indicates that states that tax the rich lose both tax revenue, per capita income, and growth compared to other states.

In effect, it should accentuate the competitive advantage that no-income tax states have over states with income taxes.

 

[ichab]

No, if you come in here and spout off something ridiculous Glenn Beck made up on the fly, I'm NOT going to treat you on the same level as someone who brings actual facts to the table. Now, I have no right to make "yo momma" jokes, but there is a line between disrespecting a person, and dismissing their opinion as ignorant.

I've never watched Glen Beck nor do I listen to talk radio. All I know about Glen Beck is that he gets liberals more hot and bothered than Rush Limbaugh which I didn't think was humanely possible. We've also brought many facts to this conservation so try again.

Bullshit. It's never too late to learn a new skill. Yes, it may take longer to sink in. Yes, you might be older than your instructor. You need to get over it. The world stops for no one, it adapts to no one. YOU have to adapt to the WORLD. If you refuse, you get stuck in the bottom rung of the ladder. You always have a choice to move up. "Math is hard." is not an excuse. Age is not an excuse, unlike the body, the mind does not inevitably decay.

Yes it is too late when you're a 40+ year old and completely new to a field as compared to a 22 year old fresh out of college. And maybe you don't realize this, but SOMEONE has to do those little jobs that you love to thumb your nose at. Someone has to work the fields in order for you to eat, someone has to work in sanitation in order for your garbage to be disposed of and someone has to work in sweaty conditions in order for your roads to be built and buildings to go up. And I highly doubt that ANYONE working those jobs are doing them because they're lazy and lack the ambition to move up.

Speaking of ignorance, I have to start wondering if you've just been plain lucky in the workforce or if you're just that naive about how the world works, but moving up depends on a very large number of factors with one of them being luck.

 

[gturner]

too late to learn a new skill. Yes, it may take longer to sink in. Yes, you might be older than your instructor. You need to get over it. The world stops for no one, it adapts to no one. YOU have to adapt to the WORLD. If you refuse, you get stuck in the bottom rung of the ladder. You always have a choice to move up. "Math is hard." is not an excuse. Age is not an excuse, unlike the body, the mind does not inevitably decay.

Yes it is too late when you're a 40+ year old and completely new to a field as compared to a 22 year old fresh out of college. And maybe you don't realize this, but SOMEONE has to do those little jobs that you love to thumb your nose at. Someone has to work the fields in order for you to eat, someone has to work in sanitation in order for your garbage to be disposed of and someone has to work in sweaty conditions in order for your roads to be built and buildings to go up. And I highly doubt that ANYONE working those jobs are doing them because they're lazy and lack the ambition to move up.

Speaking of ignorance, I have to start wondering if you've just been plain lucky in the workforce or if you're just that naive about how the world works, but moving up depends on a very large number of factors with one of them being luck.

Oh come on. PLEASE don't destroy his worldview where microwave ovens appear out of thin air, drywall is self-applicating, and unicorns jump out of *deleted*.

I do factory automation for a living, including robitics. I programmed assembly lines for Toyota, IBM, Lexmark, Dell, Neiman Marcus, most of the major drug distributors, all three major candle companies (but never buggies!), Raytheon missiles, tires, greeting cards, faucets, rock crushers, and everything else.

But all that production is obsolete because we can have guys doodle ideas on napkins, not that I've met anyone who can't do that, nor do 1 in 1,000 doodles amount to anything. Yes, even though only 0.1% of the US population can look forward to future paycheck, we're going to succeed on our ideas, though those are probably going to India with the recent offer to buy out MGM. But that's okay, Sony Entertainment will save us.

 

[Guartho]

In effect, it should accentuate the competitive advantage that no-income tax states have over states with income taxes.

What happens when all the rich people who can afford to move wherever they want move to that state in order to get a check? What happens when all the poor people who can afford to move (admittedly this won't be all of them) leave the state because they don't like having to write checks to rich people in the name of fairness?

You've just setup the same problem social security has only on a much larger scale.

 

[gturner]

Then you end up with one rich-ass state, and the rich people bring high paying jobs and growth which increases the after-tax income of the rest of the residents. Which is better, paying 0% on $18,000 a year or paying 25% on $24,001 a year?

State's already experience aspects of this, with the poor flocking to high welfare-payment states where the rich are fleeing, like New York and New Jersey, and it's destroying the economy of those states as businesses pack up and leave. They have huge holes in their revenues and are cancelling construction projects, laying off teachers, and taking other extreme measures to stay afloat. You also see an endless stream of high-tech companies leaving California and moving to Texas.

You may argue that the scheme doesn't produce fairness, which may be true, but it would produce opportunity and growth, and the dynamic people will seek out that opportunity, creating more wealth. It comes down to the age-old philosophical difference between arguing about how to divide up the pie, versus making the pie bigger. Third world countries, which by-and-large use a merchantilist economic system left over from the 1600's, have spent all their efforts at constantly re-slicing the pie, and no matter how many times they toss out their old government and go with the opposite party, the pie doesn't grow.

The US started out even poorer than they did, but we grew to become the richest country on Earth, sending them Peace Corps volunteers to teach them how to make clay ovens. In part this is because we allow and encourage ordinary people to fully engage in economic activity, instead of treating them like wards of the state, a voting block of peasants that we simply appease with promises of a few more table scraps.

The great Peruvian economist Hernando De Soto (thought by many influential people to be the greatest economist in world history - including Adam Smith) has extensively researched the flaws in third world economic models, and one of his conclusions is that all the back-and-forth over class warfare does nothing to help the poor, no matter which party is in charge. These countries constantly swap right-wing and left-wing governments but neither type of party takes the bold step of relinquishing the government's hold over the economy through a vast array of ministries, keeping it illegal to engage in the everyday business transactions that Americans take for granted.

 

[STR]

I've never watched Glen Beck nor do I listen to talk radio. All I know about Glen Beck is that he gets liberals more hot and bothered than Rush Limbaugh which I didn't think was humanely possible. We've also brought many facts to this conservation so try again.

You have brought facts, I have brought facts, other(s) haven't. That comment wasn't directed at you, and I apologize if it came off that way.

Yes it is too late when you're a 40+ year old and completely new to a field as compared to a 22 year old fresh out of college.

No you're not. If you're 40 years old, you still have 20-30 years to build a second career before you retire. If you think that's not enough time to justify going to school part-time for 2 years, well, I'd have to ask where you draw the line. Is it too late when you're 30? What if you took a few years off and are just starting school at 22, when others are graduating? Why do you think that everyone has to follow only one path to a career?

Someone has to work the fields in order for you to eat, someone has to work in sanitation in order for your garbage to be disposed of and someone has to work in sweaty conditions in order for your roads to be built and buildings to go up.

Lovely sentiment there, which ignores the fact I've advocated both tax policies preferential to working families and educational assistance for them, but all that aside, you can't argue with the numbers. People without a degree are twice as likely to be unemployed as those with a degree. Indisputable fact. If there was, as you suggest, less need for educated workers, you simply wouldn't have that patten. Unemployment rates would be roughly equal across all education levels.

However, that's clearly not the case. Your argument fails Macroeconomics 101.

Going further (but still in the 101 class, you can sign up at your community collge if you don't believe me, it will run you a whopping $200 for the semester), the 5% unemployment rate among graduates is actual a fairly natural rate in a market economy. You never have 0% because of the natural movement of employees from one job to another. That under "normal conditions" the rate among grads is 2%, or lower, suggests that there is a persistent shortage of qualified workers. This is backed up by all the griping from tech companies over 9/11 immigration reforms, because our top companies have to import qualified workers because there aren't enough people being minted here.

And I highly doubt that ANYONE working those jobs are doing them because they're lazy and lack the ambition to move up.

No, they have people like you suggesting they're not smart enough to work with anything other than their hands. Ol' Joe may have forgotten a lot of math since high school, but I still believe in him, even if you'd condemn him to the bottom rung of the ladder for the rest of his life.

Speaking of ignorance, I have to start wondering if you've just been plain lucky in the workforce or if you're just that naive about how the world works, but moving up depends on a very large number of factors with one of them being luck.

Hardly. I worked my ass off in retail sales for years. Realizing I had come to hate the work, that I was tired of being reminded that I was never more than 2 bad months away from living on the street, I decided I wasn't going to deal with it anymore. I went back to school. I am older than most of my classmates, yet younger than a lot of people that are in their 40's and even 50's that are coming back.

Yeah, that's right, people in the real world ARE realizing they can improve themselves regardless of age.

I applied the work ethic I applied to working to learning, and now I'm going to start grad school in January. I went from a career of facing 10% unemployment to one that has 3%, with double the money to boot. I am not advocating anything I haven't done myself. If someone like me, who has made quite a few #### ups in my short life (some of which still burden me financially), can do it, nobody else has an excuse either. I'm not even suggesting a graduate degree for all is what's needed. There IS a place of trade workers, but as HSD doesn't qualify you to be an electrician any more than it does a forensic accountant. You need more training for both. Hell, get trained in both. Having a CPA and an electricians certification might make you mighty attractive to small businesses. Being overqualified is a far more manageable issue than being unqualified.

 

[sidious618]

As far as going back to school goes, I've had elderly people in my classes going for a degree. It's NEVER too late to go back to school.

 

[STR]

^Yeah, that's so fundamentally odd to me, that there HAS to be more to that assertion. I mean it doesn't make sense macroeconomically, it doesn't make sense from an individual's perspective, it's not borne out in the numbers. There has to be some kind of deep seated philosophical division there, that if we can identify, perhaps we can really understand the other side and vice versa.

 

[sidious618]

^Yeah, that's so fundamentally odd to me, that there HAS to be more to that assertion. I mean it doesn't make sense macroeconomically, it doesn't make sense from an individual's perspective, it's not borne out in the numbers. There has to be some kind of deep seated philosophical division there, that if we can identify, perhaps we can really understand the other side.

I hope to go to school as much as I can throughout my life. I totally want to get a doctorate in education down the road.

 

[STR]

And you'll have a more stable career and make more money for it. "Unemployed doctor" is almost a contradiction in terms. PhD unemployment, at the height of the recession, only hit 2.6%, and that's just about the highest it's ever been. In the last quarter of the 20th century, PhD unemployment never rose above 2%.

http://www.nsf.gov/statistics/issuebrf/sib97318.htm

While I'm not suggesting everyone go enroll in a PhD program (it would take decades to build up the faculty and resources for anything close to that anyway), even a BA/BS means you're looking at a max of 5% unemployment, and that's only during a crisis. Most of the time it's in the area of 2-3%. Eitherway, you're going to be vastly better off than the rest of the population.

http://seekingalpha.com/article/172215-chart-of-the-week-unemployment-rates-based-on-education-level

In fact, the current unemployment rate for BA/BS grads is still less than the average unemployment rate for those with HSD.

http://www.frbsf.org/publications/economics/letter/2005/el2005-15.html

 

[sidious618]

I'm comin' out with a masters soon so I'll be some sexy stuff for those employers.