Category: economy

The bulk of the $8 trillion debt was issued in just the past 10 years.

nuff sed

isn’t it sorta important why we work?

Paper vs Real: Exit From Normal

Ecological Economics
Probabilistic Regimes

isn’t it sorta important to watch the moving mouths of our five energy execs?

screw the toothless gumming about spreadsheets and taxes, the generic yaYa; please look at the guts of these men; the world dies on these fellows…. Should we know them as well as we know mothers or merely as well we know everything else?

We are vulnerable. We’re sold lies.

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics.

The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity—so much so that tax revenues will go up, despite lower rates.

1) You would think that whether this grand experiment worked would be settled after three decades.

2) You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict.

3) Tax policy is something the framers left to politics.

And in politics, the facts often matter less than who has the biggest bullhorn.

4) The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.

5) As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths.

This is what is true: The top pay less, so you can get their trickle-down.

HA! Ordinary folk pay more, the rich pay much less, and yet despite all the alleged increased trickle-down we’re still mired in the deepest economic downturn in decades.

A new radio spot by the Koch Brothers extols the spirit of cooperation that led unionized workers at Harley-Davidson to take a pay cut for the good of the company.

What it doesn’t mention is the $6.5 million paycheck the company’s CEO handed himself.

Comment snippet:

“Here in Europe we have a word for the things going on in the US right now. We call it fascism. Do you know why we call it fascism? Cause we own dictionaries. Fascism has nothing to do with oligarchy, fascism is when the government and big business cooperate in order to keep the working classes out of power.

“Look it up.”

More comment snippets: “I wish this was a surprise.”

“Good riddance. Harley Davidson is a marketing firm which happens to make motorcycles.

“All the ‘rebels’ in their little pirate costumes who think they’re riding the great freedom machine are simply whores for the HD pimp.”

“HD doesn’t make money from bikes. HD makes money from financing — bikes being the token that’s financed.”

“Employees are assets, then kiss our asses, Koch suckers.”

Devin Martin reports:

A friend of mine who works for Koch Industries recently forwarded me some corporate propaganda from his boss, Charles Koch. First, I have to say that based on what has been forwarded to me over the years, Koch Industries has to be the most blatantly propagandist corporation I’ve ever seen. For anybody who sympathizes with Koch’s Tea Party organization and libertarian views in general, any accusations of left-wing agendas on the part of NPR or any other organization would seem to be simply the pot calling the kettle black.

I can tell you from observation that the Koch empire takes indoctrination to levels I’ve never witnessed in other organizations.

It’s really quite remarkable what tens of thousands of Koch employees put up with on a regular basis. But, then, I guess the old adage about how easy it is to make somebody believe something when his paycheck depends on it still applies.

James Altucher:

“I want to fill a bathtub with all the dollar bills I would’ve used as a downpayment on a house.

“I want to bathe in that bathtub. I’m going to do that later today in fact.”

Why buy a house?

You’re trapped.

Lets spell out very clearly why the myth of homeownership became religion in the United States. Its because corporations didn’t want their employees to have many job choices. So they encouraged them to own homes. So they can’t move away and get new jobs.

Job salaries is a function of supply and demand. If you can’t move, then your supply of jobs is low. You can’t argue the reverse, since new adults are always competing with you.

In Our Plutocracy, the discussion turns to Social Security and Teachers. “You’ve got to cut back government spending and the Republicans will run on this platform….”

1) Tax cuts would have to generate an unrealistic amount of economic growth to boost revenues enough to fully offset their cost.

2) Tax cuts might produce very little – if any – economic growth and, consequently, little to no additional revenues.

3) Revenues lost due to tax cuts would eventually require spending reductions, which would pull dollars out of the economy, reducing the benefits to the economy from tax cuts. [pdf link]

Full-time Budgeteer Jean Ross also points out:

1) State and local taxes are not key factors in determining where companies do business.

2) All state and local taxes combined represent a tiny share of business costs.

3) Most USA business pay little or no state income tax.

Please linger a moment on Jean’s portrait.  Missouri has its straw, but when is the last time you’ve seen a better askance?

Ah ha, food inflation’s distant cure?

“With proper investment in agriculture, technical innovation and infrastructure for food processing, India could well become the food basket of the world in the next two decades.”

Very strong set of words, no?
Not a statement you will likely see again. Is it true?

It should go without saying, many people overlook the importance of a good boss, or are so discouraged that they give up and accept poor management (scorn ’em, ignore ’em, drop ’em).

Jones at Tyler’s challenge on food bleg:

No economic, agronomic or environmental argument for localism is valid. And when you add food preparation to the equation the problem balloons to truly grand proportions.

But that’s not what localism is about. It’s entertainment, status signalling, social behavior, unexamined ideological biases, philosophical confusion, instrumental political posturing, sexual performance, etc. etc. Those are important issues that cannot be disregarded, but they have little or nothing to do with economic or agronomic systems optimization.

Do the Egyptian?

prosperity, opportunity, justice, peace

First, the megatrend view:

This is a story of aging populations and their bureaucracies versus swelling youth populations.

China, Japan, Korea, the United States, Australia and most of Europe feature the largest populations of senior citizens in history. Moreover, their children’s generation, especially Gen X (born 1965 – 1980) is not sufficiently big enough to counterbalance their representation in government and business. The demographic counterbalance of youth exists, not in  industrialized countries, but in Latin America, Africa, the Middle East and Central Asia.

Old versus young, 20th century versus 21st, Cold War versus Assymetrical War, Core versus Gap, North versus south.

All of these tensions are at play in the countries where all the young people of the planet reside.

“What we’re watching is a massive malfunctioning of the global economy.“

At the root of the problem: dumb growth.

Dumb growth is, in many ways, bogus — rather than reflecting enduring wealth creation, it largely reflects the transfer of wealth: from the poor to the rich, the young to the old, tomorrow to today, and human beings to corporate ‘people’.

Dumb growth is growth without prosperity. And it’s far from an Egyptian problem.

Profiteers are watching you. Always.

David Cain:

I do encourage you to become a millionaire, if that’s something that interests you. If it’s billions you’re after, I’m a bit suspicious but I’ll give you the benefit of the doubt. Aspiring to trillions, though, is the domain of the wicked alone and we won’t be able to be friends any more.

The big money isn’t in creating products, it’s in creating customers.

A single, lifelong customer who lives his life spending the way you want him to is worth six or seven figures. A single one. Creating millions of these is the only way to make trillions.

You can make millions by selling a great product to people who need it, but you make billions and trillions by conditioning an entire nation of people to react to every inconvenience, every whim, and every passing desire or fear by buying something.

It does take some capital to get it going. You won’t be able to manage it with 5-dollar-an-hour overseas virtual assistants, but like I said I’d prefer if you didn’t strive to be a trillionaire, because it’s not so good for the rest of us.

While were at it, who’s the most loathsome in America? #1 is you:

Your brain’s been cobbled together over millions of years of blind evolution and it shows. You’re clumsy, stupid, weak and motivated by the basest of urges. Your MO is both grotesquely selfish and unquestionably deferential to questionable authority.

You’re not in control of your life.

You wear your ignorance like a badge of honor and gleefully submit to oppression, malfeasance and kleptocracy. You will buy anything. You will believe anything. You believe that evolution is a matter of belief, because you’re an impatient, semi-literate Philistine who’s either unable or unwilling to digest more than 140 characters at a time.

Nicholas Shaxson’s flagship, Treasure Islands and the Men who Stole the World. The Guardian newspaper is running a serialization of the book, The Truth about Tax Havens.

How money is drained by a network of bankers, accountants, and lawyers into secret, off-shore bank accounts, undermining the lives of millions of people. How does this happen? Why is no one paying attention?

Revealed: Secret businesses which aimed to exploit vaccine fears

January 11, 2011

Andrew Wakefield, the disgraced doctor who claimed a link between vaccinations and autism, was planning secret businesses intended to make huge sums of money, in Britain and America, from his now-discredited allegations.

just deserts (plural only)

Computer-aided high-frequency trading now accounts for about 70 percent of total trade volume. Increasingly, the market’s ups and downs are determined not by traders competing to see who has the best information or sharpest business mind but by algorithms feverishly scanning for faint signals of potential profit.

Don’t misunderstand me, I value standard economics and I think it provides important and useful insights into human endeavors. But I also think that it is incomplete, and that accepting all economic principles on faith is ill-advised and even dangerous. —Dan Ariely

Testing reality vs Promoting belief.

“Free-market fundamentalists have been wrong about everything yet now dominate the political scene more thoroughly than ever.” —Paul Krugman

The Rise of the New Global Elite: If you are looking for the date when America’s plutocracy had its coming-out party, you could do worse than choose June 21, 2007.

The good news—and the bad news—for America is that the nation’s own super-elite is rapidly adjusting to this more global perspective. The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy.

In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter.

“His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade,” the CEO recalled. —Chrystia Freeland

In 2010, the U.S. collected $1.3 trillion in individual income taxes,

but merely $160 billion in corporate taxes.

Treasury report here —> [pdf] <—
via The Rookie Cynic [twitter]

Why the Rich Are Getting Richer:

And yet a curious thing has happened in the midst of all this misery. The wealthiest Americans, among them presumably the very titans of global finance whose misadventures brought about the financial meltdown, got richer.

And not just a little bit richer; a lot richer.

In 2009, the average income of the top five percent of earners went up, while on average everyone else’s income went down. This was not an anomaly but rather a continuation of a 40-year trend of ballooning incomes at the very top and stagnant incomes in the middle and at the bottom.

The share of total income going to the top one percent has increased from roughly eight percent in the 1960s to more than 20 percent today. This is what the political scientists Jacob Hacker and Paul Pierson call the “winner-take-all economy.”

It is not a picture of a healthy society.

Such a level of economic inequality, not seen in the United States since the eve of the Great Depression, bespeaks a political economy in which the financial rewards are increasingly concentrated among a tiny elite and whose risks are borne by an increasingly exposed and unprotected middle class.

Income inequality in the United States is higher than in any other advanced industrial democracy and by conventional measures comparable to that in countries such as Ghana, Nicaragua, and Turkmenistan.

It breeds political polarization, mistrust, and resentment between the haves and the have-nots and tends to distort the workings of a democratic political system in which money increasingly confers political voice and power.

When you, the king, rob an empire, you’re called a great king.

What does Wall Street really do?

When you say speculating in stocks, I mean, in theory that’s the way companies raise money to go, in theory, to do something productive, by selling stocks.

Michael Hudson:

Take any stock in the United States.

The average time in which you hold a stock is–it’s gone up from 20 seconds to 22 seconds in the last year.

Most trades are computerized. Most trades are short-term.

The average foreign currency investment lasts–it’s up now to 30 seconds, up from 28 seconds last month. So we’re talking about really short-term.

The financial sector is short-term.

A transactions tax on finance would fund our shortfall and barely dent wealth holdings, but oops, we don’t tax Wall Street or multinationals.  We’ll, listen up, balance the budget with cuts, by killing the beast, destroying our government. Isn’t that slowing one place that’s still moving? Live without it they say. Where’s the good in these beliefs?

Much much more than worn out politics before we work away from harm.

Simon Johnson:

The Age of American Predominance is over.

Our leading bankers looted the state, plunged the world into deep recession, and cost us 8 million jobs.  And now many of them stand by with sharpened knives and enhanced bonuses – also most willing to suggest how the salaries and jobs of others can be further cut.

Think about the morality of that one.

72% of the total annual cost of a Community College education is the cost of textbooks.

Public four-year university students pay between 26-42% of their total annual educational costs on textbooks.

These outlandish costs of textbooks relative to the total cost of education have steadily accelerated at three times the rate of inflation.

Student loans at for-profit colleges have a 46% default rate !

Gregor Macdonald researches the energy sector.

From the .pdf available here.

When natural gas is trading at $4.00 and oil is trading at $92.00, the price discount offered by natural gas for an equivalent amount of btu is as much as 75%.

Yes, that’s right.

Instead of obtaining oil’s 5.8 million btu for $92, one can obtain 5.8 million btu in natural gas for $23.

The economic opportunity to perform the same amount of useful labor, at 50-75% off the oil price, is not a potentiality that any economist, analyst, or policy maker can afford to ignore.

BitTooth explains how LNG tankers currently supply 23 countries.

Frank Rich, NY Times:

How many middle-class Americans now believe that the sky is the limit if they work hard enough? How many trust capitalism to give them a fair shake?

Don’t think for one minute this nation is quiet.

If you could vote for taxes, the Laffer Curve brought us Depression 2.0. But please notice. For many more decades we relied on the Honesty Curve to bring us prosperity:

What’s your assessment of the latest oil supply and demand data coming out of the International Energy Agency?

Jeff Rubin: If you look at the world energy outlook from the IEA two things really stand out.

1) About 80 per cent of the oil they expect the world to be consuming by 2035 hasn’t been found or developed.

2) About 70 per cent of the oil being produced today will be depleted by then.

Institute for New Economic Thinking;

It was the crash of 2008, which brought home the fact that there is something broken in economic theory. Two ideas – rational expectations theory and the efficient market hypothesis – have a monopoly of thought.

The Economist:

The “rational expectations hypothesis” became increasingly dominant in academic economics from the 1980s onwards, partly because it combined easy mathematics with an ideology attractive in the Thatcher-Reagan period.

Its methodology of rational expectations could “prove” with apparently mathematical certainty that solvent banks would never face sudden liquidity crises, that forcing banks to hold excess capital was inefficient, that investors could perceive their collective best interests and that “markets are always right” in the sense that the financial prices incorporate the best possible forecasts about an uncertain future.

The economic orthodoxy was particularly dangerous in finance, since it allowed Nobel laureates to calculate that upheavals of the kind triggered by Lehman Brothers would not occur even once in a billion years.

h/t Next Big Future