This November’s ballot is crowded, to say the least. Even a well informed voter can be forgiven for forgetting which issue is which. Therefore, without lengthy analysis, here is a list of the issues for Colorado voters and a suggestion on how to vote:

Amendment 46: Eliminates Government Affirmative Action
Vote: Yes
Reason: The Government does not need such heavy handed and imprecise tools any more. Such preferences are grossly open to abuse and cost taxpayers extra.

Amendment 47: Right To Work
Vote: Yes
Reason: The constitutional right to free association is contrary to the idea that anyone should have to join a union or pay dues in order to secure a job. Unions also cost consumers and taxpayers extra, and they kill off jobs.

Amendment 49: Government Paycheck Deductions
Vote: Yes
Reason: The government should not be a dues collector for political entities such as unions.

Amendment 50: Gambling
Vote: Yes
Reason: The bill earmarks funds for “education,” which is a lie, however, if people want to gamble, the government has no right to stand in their way.

Amendment 51: Sales Tax Increase
Vote: No
Reason: The government wastes money of many things, and then asks for a tax increase to support popular or sympathetic programs to mask their waste in other areas. The government already has plenty of money, and a nearly 7% tax increase is unreasonable.

Amendment 52: Earmarks for Highways
Vote: No
Reason: Earmarks are a giant lie. Even if funding from a tax is earmarked for highways, the government is still free to siphon off general funds from highways to other wasteful projects. The bill will do nothing to improve roads.

Amendment 54: Limit Campaign Contributions
Vote: No
Reason: As McCain has learned, legislating the money out of politics is impossible. Laws such as this one only serve to reduce transparency.

Amendment 58: Increase Severance Tax
Vote: No
Reason: The government already gets far too much money. If 58 were offset with a general reduction in taxes, then maybe, but this is simply an extra pile of money for the government to waste.

Amendment 59: Repeal TABOR
Vote: No
Reason: TABOR is the one bright spot in the wasteful government spending over the past decade. Ref. C repealed TABOR for a few years, and none of its promised benefits became reality. Instead, the government just wants more money. TABOR is what stands between CO and the fiscal mess found in other states like CA and NY.

Referendum L: Lower Age To Serve In State House and Senate
Vote: Who cares, leaning toward Yes. If you know someone between 21 and 24 who wants to run for office, I’d be surprised. How could we do worse?

Referendum N: Allow Saloons (no food service)
Vote:Who cares, leaning toward No.
Reason: While the extreme violence and death in LoDo is caused by bars that don’t serve food (against the State Constitution), the problem is the City’s lack of providing for safety and order. This Referendum will likely do nothing to change matters either way.

Referendum O: Ballot Initiatives
Vote: Yes
Reason: If constitutional amendments were not so easy to put on the ballot, this list would not be so long.

The recession is finally here, probably. So, should economists who have been predicting gloom crow? Absolutely not, for two reasons: recessions are inevitable, so predicting them is easy if timing does not matter, and the mere prediction of a recession is not actionable knowledge.

Tucker Hart Adams is a famous pessimistic economist. She made her mark by predicting the recession of 2001. There was a recession in 2001, but it was among the most mild and harmless recessions in modern history. Without the disruption of the unexpected 9/11 attacks, there would have been no recession at all. Nonetheless, Adams predicted a “long and deep” recession due to war. Anyone who acted on her prediction would have missed out on economic opportunities.

Adams also straddles the fence on most of her predictions. She often says that her recessions will be “less harsh” unless something bad happens and then they will be “long and deep.” Earning a living by saying things will be bad if they aren’t good or somewhere in between sounds cushy.

Adams has been calling for a recession for years. She predicted the possibility of a 2005, 2006, and 2007 recession, but none ever came. As before, she hedged with a wide range of timing and severity predictions. No business could profit by heeding all of her doomsday talk. The business cycle creates recessions periodically, so knowing that a recession is on its way is not magic, only predicting the severity and timing takes skill.

Let this blogger attempt to prognosticate.

Plausible? Maybe, but anyone knows that recessions usually last less than 18 months, and the prediction gives itself an out by saying that any longer recession must be due to unspecified government action or inaction. Stating that credit will expand slowly is similarly unhelpful, since slow is a matter of perception. Like most predictions, this one is no more useful than a carnival fortune teller.

Given a long enough time horizon, even the most dire predictions are accurate. The US will fall, and the Constitution will be abandoned. Everyone will die and their homes will fall to dust. All of these are true, but so what? They give no actionable knowledge.

For the record, the most reliable indicator that economic expansion has peaked and a recession is coming in the next 12 months is an increase in real wages combined with a slowdown in the growth of worker productivity. Even that Austrian business cycle measure is often wrong, and most every day in US history has been a good day to start a business and invest in the optimistic view. Short sellers and mattress stuffers have almost always lost out.

Chicken Littles like Adams must not be praised. They auger their chicken entrails and perform other witchcraft, but cloak their voodoo with an air of science. Actually, they know less about the economy than Joe lunch pail, who takes a sense of things every day. So, the next time an ivory tower econmist opines in the Post, try to relax, and certainly don’t take his advice.

Many people probably noticed that the stock markets of the world collapsed this week, following steep declines over the past 12 months. The rational question is “has the damage stopped?” To be sure, people’s tolerance for risk, and their trust in the information they receive, are low. People must now be enticed with much higher returns for seemingly safe investments, which translates into lower prices on risky assets like stock. But just how low is low?

Consider a blue chip company, Microsoft. In the past year, a share of MS has fallen from $37.5 to $21.5, or 43%, despite the fact that MS has reliable earnings growth, cash flow, and no debt. Indeed, MS’s ratio of most recent earnings to its price is 11.5, a common P/E ratio for power utilities.

Further, MS has a cash stockpile of over $21 bln, and the P/E ratio of the operational side of MS becomes 10.26. That means that if MS has flat sales growth, it will be able to amass a cash horde equal to its current market price in less than 10 years.

Put still another way, if MS were to never grow its business again ever, and investors require an 8% per year return on risky equity capital (a historical average figure), MS should be priced at a 12.5 P/E ratio, or $23.4. MS is currently priced as if it will never have earnings growth, and indeed, over the next several decades, its earnings will decline a bit.

So, if the sky is truly falling and the US will never recover, stocks like MS are still a bargain at their current prices. Investors with even a trace of long term optimism should consider the recent market collapse as an opportunity to profit.