Is this the U-square root of negative two,.... with or without the birth/death model. Maybe he ought to ask for a couple more trillion just to flat line the curve. Like the fact that he stops the stat right below eight percent, and that by 2014 it's all the same anyway.
Couldn't read the whole of this. There were a lot of "assumed's" at the end when it described the multipliers. Reminds me of the sociological studies I've read where the authors "showed" what they wanted to be the case. Too many assumptions. I'll leave it to someone else to go through it with a finer tooth comb. Reading this kind of stuff makes my head hurt.
Finished watching the 11 minute interview with Elizabeth Warren, Chairwoman of the TARP Oversight Committee. The questions from the two CNN anchors demonstrate a change in media direction. Warren is openly critical and assesses blame with an emphasis on what to do differently with the next 350 billion.
HEY CR - are you going to plot this sucker like you did GWB's second term job growth? It would be great to compare jobs produced vs. plan and also Unemployment Rate vs. Plan. Could use the same chart they just provided only fill in with actual. I mean what a great opportunity to measure results & assign responsibility - they are all but begging you to do it.
I'm not a big fan of this plan so far but honestly I don't expect the guy to come out and give us the unvarnished truth.
I think its fair to say that he took this job at a really bad time. Two wars that we can't get out of and a disaster of an economy. Did you see the pictures of him when he first found out he won? He wasn't smiling.
I don't think he'll be able to pull this off, but I hope he does.
Media wants us to keep spending money. All those car ad dollars. Want to keep us foolishly optomistic, so we will keep on spending. Maybe they realize those dollars are gone anyway, and have decided to (more or less) pursue the truth.
Current ask on the MLS 125K. I talked with the listing agent. She mentioned nobody has even inquired about the place after 150+ days on the MLS.
This is the "High End" around here that will go begging for buyers.
Even at 125k that is over 4x median income...And we are just starting the higher priced defaults.
Q: how does a black man becomes a president of united states?
A: he is a distant cousin of bush sr, bush jr, cheney and the guy that nuked hiroshima and nagasaki.
Q: but he sounds so nice, he might not be a crook
A: well, his entire cabinet is full with people who orchestrated the current debacle, so i dont think he would be much help.
Q: what would you do you wanted to bankrupt a country?
A: well, i would introduce a system based on populairity contest between two parties that cannot be challenged by a third one, and then go on vacation. few decades later, the system is indebted up to its ears and "mission acomplished".
Both scenarios presented in the graph look optimistic to me.
I see U-3 unemployment > 10%. U-6 unemployment > 17.5%.
Here's the sad part. Based on the success of government sponsored "full" employment policies of the 1960s/1970s, I predict Obama's plan will actually make unemployment worse than it otherwise would have been.
I think O will get in, mess around a bit, and totally change everthing he wants to do.
I have no problem with that.
And Werner, I like engineers, but most of them are lousy managers. The ones that are also good managers, or even average managers together with the engineering often do change the world.
But I said that the law and legal system enabled civilization to exist, and that is pretty life changing.
And I point to our founders, who were often lawyers.
If they did not succeed in creating our Republic, there is only one that would be a famous name, Ben Franklin, the great scientist and polymath. But they did, and that did change the world.
Honestly, I think the Obama administration is already quietly advancing the idea that unemployment will approach 9%. They know they won't get what they ask for.. it'll be modified... bills always are.
Then they can say later on that "they tried" but were "obstructed" from binging forth the original plan. That's why unemployment is above 8%...
"So that's $221428.57 per job. Plus the goodies, presuming 3.5 million jobs saved or created."
Unfair. You need to separate out the labor costs from the created infrastructure built. Then you need to add the multiplier effect of the infrastructure created over time. I'd hazard a guess there will be a net gain long term.
We could also just give more taxpayer funds to the financial industry and let them allocate capital.
Noticed that they assume that taxpayers treat the "making work pay" tax cuts as perm. This greatly increases the marginal propensity to consume those $. However, the plan only calls for them to be inacted for 2 years. While having peole save the money, essentially by paying down debt, especially those at the strapped lower 75% or so of the income distribution, is not an awful thing. However, I think it overestimates the effectiveness of the program, which is all indirect effects.
The current Stimulus Plan is not only too small it is mis-targeted
The Plan And How to Pay For It !
Of course Krugman is correct in his assertion that the Obama Plan assumes a recovery after the plan and that there is no real reason that there will be one
Thats why we need Medicare for All first, then a infrastructure plan that spends the sane amount of money but takes years to do it. This will stimulate the economy over the long term.
The other feature we need is a reduction in the 40 hour work week to 36 or even 32. This opens up jobs and can be offset by the Medicare for All spending through the public and private sectors. A large percentage of jobs based on consumer spending are Not coming back ever Room must be made for workers in those sectors that do survive reducing the work week is the way to do it.
There are plenty of ways to pay for all of this. They are just not politically expedient.
~ raising the top rates to over 50%
~ counting all income as regular income we dont need more investment we have over production now! Green initiatives would be exempt.
~ a Carbon Tax could raise trillions but must be sensitive to lower income households
~ A Tobin Tax on all financial transactions. The City of London already uses this tax to help pay their bills.
~ And my favorite, which is not a tax : A Public Central bank that profits from the creation of currency and credit. Why should private bankers get all the profit from a right given to us by the constitution creation of our own money. This initiative could raise a trillion dollars a year!
They're seeing this as The Great Coming Of The Rand.
Someohw they've converted the destroyer of our financial system from Wall Street to the E-ville government, hence the great foretelling of "Atlas Shrugged" is coming to pass.
My older sister used to be a prosecutor at DOJ for 'tax' - you don't want her kind in your life. She did something like 23 big 'show trials' and won them all - got real prison terms in many cases too. Understand these were high profile big money evaders. White collar crime types. They mostly don't go 'criminal' after small fry like us - usually settle via 'civil' lit at IRS and that is plenty bad enough [her husband does that - you don't want to meet him either]. The ONLY example where they will actively prosecute 'wage slaves' is tax revolt... if they even suspect you are doing this they will try to crucify you in public.
The only tax revolt I'd get involved in would be abstaining from working, buying or owning property... no income, no assets, or no purchase, then no taxes. I wouldn't make a good monk so I suppose I'll continue to pay taxes. YMMV.
Wonder what the percentage of total big money evaders ever get prosecuted. Bet it's a tiny percentage. No way to tell. The best have selected themselves Darwinianly.
If Obama can successfully engineer "Gaussian Unemploument" that will probably be the thesis of some academic papers in the 2020's. Mozo Maz | 01.10.09 - 5:25 pm | #
But we now have The USS George H.W. Bush, a steel-gray vessel longer than three football fields and built at a cost of $6.2 billion.
Perhaps the dunce still in WH can say Mission accomplished again.
I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible.
The online access/storage of all medical records raises some hairs on the back of my neck. Having a data base that is nationalized and can be updated with all of your most personal information with severe limits of access, HIPPA set this up, leads me to question the uses this system could have.
When the advocating of RFID chips in newborns and children becomes a prerequisite in league with mandatory immunizations I am moving to the remotest location I can find.
"I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible."
Angry Saver - I had the same reaction when I saw this chart on Krugman's blog this morning. The base case (Without Recovery Plan) looks very optimistic:
- Peak UE is 9%. Look how fast UE is raising and recall that many people, whose layoffs were announced last year, have not been factored in the December UE number yet
- Peak UE in mid 2010 assumes rather short recession, with GDP starting to grow in Q4-2009.
I am afraid this is going to be another "crisis is contained" debacles
"I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible."
Are you Putin?
Boogus
~~~~
No he is smart ... Military spending is dead end for stimulus ... Military Keynesiism has been shown to be counter productive ...
I get the economic efficiency arguments against this. But, the powers that be, the people who actually control capital, have made it acutely clear over thirty years that they don't give a shit whether people like me and my family have jobs or not. I don't care if maximum wealth is created in the system if it's hoarded and held by the top twenty families while the rest of us fight for the scraps. I'll settle for less wealth and better distribution. I'd like both, more wealth and better distribution but that won't happen with the crony capitalists. Obama is the first political leader in my lifetime to say he will limit outsourcing to other countries. That's worth something, even if he is too late to keep the prosperity we earned over the last century.
These projections into our economic future crack me up. I understand that a 'plan' requires some sort of end result, but I wonder if Obama and company will have any more luck guesstimating the future than most economists.
That's a very rosy projection of unemployment. We could be beyond the peak of that graph in the next few months. Ken Rogoff and others are already saying unemployment is headed to 11%.
Wonder what the percentage of total big money evaders ever get prosecuted. Bet it's a tiny percentage. No way to tell. The best have selected themselves Darwinianly. lawyerliz | 01.10.09 - 5:29 pm | #
It is a very hard case to win - you really need to prove both intent to evade and actual evidence that the evasion was executed. If in the end it looks like a stupid mistake on the part of the tax payer or his/her accountant - even if bordering on criminal negligence - the 'criminal' branch will pass on it and hand it back to 'civil' for litigation. But once criminal does sink their teeth into one - they rarely lose. The power of the state just grinds them up.
Like I said - you do not want to be on the wrong side of these folks.
Boogus writes:
"I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible."
Are you Putin?
Broward Horne -- i love it when you beat up the randist types. do you have any posts on your blog dedicated to this? any links to other sites that treat the subject in a similar fashion?
ministry of truth -- how about starting a las vegas cr group? there are several people that post on this board that live in vegas and others that visit vegas. maybe get together once a month and grab a few drinks or something? none of my current friends are doomish enough, i need to diversify...
"When the advocating of RFID chips in newborns and children becomes a prerequisite in league with mandatory immunizations I am moving to the remotest location I can find."
"These projections into our economic future crack me up. I understand that a 'plan' requires some sort of end result, but I wonder if Obama and company will have any more luck guesstimating the future than most economists.
Sorry to be the cynic, but. . . ."
It's always possible to forecast the future, but to control it is more difficult.
I glad to see the government is using the same bull shit simulation models as Wall Street used in its genius financial engineering of CDO's and sub-prime loans.
Unfortunately, many are early retirement so they wont count!
Many times if employees dont begin drawing pension immediately, they wont recieve company paid healthcare, they arent considered retirement, they are terminations. They are FORCED to retire due to this
Applied Digital Solutions of Palm Beach, Fla., is hoping that Americans can be persuaded to implant RFID chips under their skin to identify themselves when going to a cash machine or in place of using a credit card. The surgical procedure, which is performed with local anesthetic, embeds a 12-by-2.1mm RFID tag in the flesh of a human arm.
A technology entrepreneur in northeastern Washington asked a doctor to implant an RFID chip into his hand in order to experiment with the technology. Amal Graafstra, who runs a technology company in Bellingham, WA, asked a doctor to place the chip under the skin of his left hand, and posted pictures of the procedure to the photo-sharing site, Flickr. Graafstra plans to use the chip for keyless entry to his car, home, or as a login for computer systems.
Under conditions of a looming economic meltdown, rising unemployment, staggering debt, the collapse of financial markets and continuing wars and occupations in Iraq and Afghanistan, U.S. imperialism, in order to shore up its crumbling empire, will continue to import totalitarian methods of rule employed in its "global war on terror" onto the home front.
The FDA in October 2002 said that the agency would regulate health care applications possible through VeriChip. Meanwhile, the chip has been used for a number of security-related tasks as well as for pure whimsy: Club hoppers in Barcelona, Spain, now use the microchip much like a smartcard to speed drink orders and payment. FDA approves implanted RFID chip for humans
This is the biggest implied flaw that I know in the Randian theory is that a sophisticated economy requires specialization of work.
But the greater the specialization of work, the less intersection in values that everyone has. A true work specialization requires a manager who subsets and routes information to the right workers.
Ergo, workers, BY DEFINITION, do not have full access to all information that they need to make "market decisions".
In other words, work specialization and "full information availability" are mutually exclusive.
The Anarcho thing just can't work for anything beyond simple economies and structures. And that is exactly what history has shown for the past 2000 years.
.
The US state of Virginia has considered putting RFID tags into drivers' licenses in order to make lookups faster for Police Officers and other government officials. The Virginia General Assembly also hopes that by including the tags fake identity documents would become much harder to obtain. The proposal was first introduced in the "Driver's License Modernization Act" of 2002, which lapsed without vote, but as of 2004 the concept is still under consideration by a committee.http://www.palowireless.com/rfid/whatisrfid.asp
A little under 1/3rd of these jobs will be in retail and hosp./leisure? By bailing out mall and hotel developers so they can keep staff working though there are no customers? I don't get this retail job creation angle.
Lawyers are not hated because they handle legal matters. They are hated because they represent 'sophistry' and 'legalism'. Although J6P might not know the meaning of those terms, he does understand what the concept of shysters, unreasonable laws and getting screwed by legalese.
"The Anarcho thing just can't work for anything beyond simple economies and structures. And that is exactly what history has shown for the past 2000 years."
Have there ever been 'Anarcho' societies that lasted more than a few months, or a few years?
RFID hack could crack open 2 billion smart cards
Analyst: One European government sent armed guards to protect facilities using the card ... This is why I'm worried RFID hack could crack open 2 billion smart cards
I see U-3 unemployment > 10%. U-6 unemployment > 17.5%.
Angry Saver | 01.10.09 - 5:19 pm | #
U6 would be in that range, if not higher with a U3 of 10%+. I posted a graph of the spread between U6 - U3, and it takes a significant hike north in the 3rd and 4th quarters of 2008 (graph on blog).
That's how we got the 40 hour workweek, vacations and sick days
Each person has 116 waking hours per week to either produce stuff or consume stuff. Assume it takes 40 hours to produce and 76 hours to consume...
if my productivity rises over the past sixty years so I'm producing twice as much stuff....
Right. I don't have enough time to consume. Stuff piles up and prices fall. The only way to really fix this is to reduce production and increase consumption. In a relatively egalitarian society, that means 32 hours of work and 124 hours of consumption.
And that's what's happened over the past 100 years. It's possible for foist all production onto a smaller set of workers who never consume but that has increasinly less political stability.
.
I think that confidence is a big issue. We need clean, solvent banks. Trying to shore up the ones that got us here may be a fool's errand. What we should do with the 700 Billion bailout money is create 100 new banks. 7 Billion capital, leveraged 10 times, is 70 Billion each. In no time those 100 banks will be opening branches near each of us. Money will flow out of the dinosaur banks, into the new banks. The dinosaur banks are holding paper not worth what they paid for? Let them sell and take their losses. That is what all investors/traders have to do. Why should the dinosaur banks be treated any differently?
Was it done by the fifth grade class at an elementary school?
First, it says unemployment won't rise above 8% if we get a "stimulus" - which is a flat-out lie.
Second, there is no model anywhere, government or otherwise, that could possibly produce an accurate chart for such a thing (they couldn't even predict the recession, fer crissake.
Third, well... why bother... it is an impossible and completely stupid chart.
Right. I don't have enough time to consume. Stuff piles up and prices fall. The only way to really fix this is to reduce production and increase consumption. In a relatively egalitarian society, that means 32 hours of work and 124 hours of consumption.
And that's what's happened over the past 100 years. It's possible for foist all production onto a smaller set of workers who never consume but that has increasinly less political stability.
~~~~~~
This would increase the set of workers producing and with personal budgets being what they are people just might think of doing something rather tan consuming.
Any remote rural area will be less susceptible to more control.
There are great swaths of open country throughout America. Live small and unnoticed and off the grid as much as possible.
Watched the new movie "Defiance" last night. I was amazed a large group of Jews could live in the forest in German claimed territory. No earthly power is all seeing/knowing/controlling. They are getting better at it though. RFID tech is insidious and unnoticed all around us. The old "if you don't see it, it doesn't exist" mindset. Your familiar with that, right?
In no time those 100 banks will be opening branches near each of us. Money will flow out of the dinosaur banks, into the new banks. The dinosaur banks are holding paper not worth what they paid for? Let them sell and take their losses. That is what all investors/traders have to do. Why should the dinosaur banks be treated any differently?
Reptillian
~~~`
Why create new banks ? Take over the insolvent banks, there are plenty ...
Krugman says you need at least $2+ trillion to soak up over capacity. I think they figured out about 1937 that the voters would not stand for the kind of deficits it would take to spend their way out of GD 1. If you get a good war going, preferably with a non white nation, the voters will go for way bigger deficits. Lessons learned. This is not going to end well.
Mot-tax revolt is really only way to take back power from elite...
Claim exempt, open home business, write everything off-learn from rich,
do extension, come back to me in a couple years when they finally catch on...The people will be angry enough to not give a dam about some middle class guy trying to keep family above watere, they would rather chase the the elitist, rich and scum of wall street..
Why fear the govt., throw me in house arrest, maybe learn a from the crooks in a min. security prison..
Citizens have become pacified....they get screwed constantly by the pigmen yet take it like sheeple lying down...
Mark Twain
"In the beginning of a change the patriot is a scarce man, and brave, and hated and scorned. When his cause succeeds, the timid join him, for then it costs nothing to be a patriot."
@citizen energyecon: - re spread between U6 - U3:
Given that the denominators in U3 and U6 are different, I am not sure what this spread means.
I personally prefer Nonagricultural Part-time Workers as percent of All Private Employment - it also goes farther back in history than the published U6 numbers.
"When Caligula leaves the White House, he will be replaced by Nero who will play his Keynesian FDR fiddle while Rome burns to the ground and we are hyperinflated into oblivion. No, he won't tax the poor. Then what, we ask, is inflation if not a stealth tax? He has told us we must spend, spend, spend immediately to avoid any further meltdown of the system. We have news for you Obama: the system has already burned down. Throwing money down these rat-holes will ignite inflation, which is the worst kind of tax on the poor. The rich will get their loopholes while the poor shell out twenty-dollar bills for a loaf of bread. Has this man read any history, or is he just another ignorant baboon like the one leaving the White House? The use of multi-billion dollar bailouts to address multi-trillion dollar problems is like trying to bail out the Titanic with a shot glass."
Another dose of tell it like it is depression from Bob Chapma
On page 13 of the release there is this paragraph about the multipliers that are assumed in the calculations:
For the output effects of the recovery package, we started by averaging the multipliers for increases in government spending and tax cuts from a leading private forecasting firm and the Federal Reserves FRB/US model. The two sets of multipliers are similar and are broadly in line with other estimates. We considered multipliers for the case where the federal funds rate remains constant, rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal expansion, on the grounds that the funds rate is likely to be at or near its lower bound of zero for the foreseeable future.
Question: Are their assumptions about the multipliers and the Federal Funds rates directly tied to interest payments on the debt reducing the amount of money that can be directly spent, or some other relationship?
Currently Accounting writes:
Nearly 40% of the average work week is spent working to pay state and federal taxes.
~~~~~
So ? ... The services defense ( though we spend too much), law, social services, public utilities, fire and local law enforcement are needed. I'm not saying that reform isn't needed, it is but your protests confirm your naiveté as to how any civilization works to function ...
No confidence from here. I do have a question as to Green energy. What effect does the currency reserve and oil dollars play in drop of importing oil. Doesn't sound good to me.
I've spent a lot of time reading some of Romer's articles on the Great Depression after Brooks' piece in the NYT. Kind of fascinating in light of the stimulus plan. Even more fascinating in light of a stimulus plan that includes tax cuts.
At any rate, Obama has to risk eating crow in the future to get this thing passed in anything resembling its current state. Will have to use dramatic numbers.
I am sorry, after reading over this plan, all I see is a very poor attempt to stop the economic slide from our current untenable position...
The govt has been keeping numbers and figures of labor employment, production, manufacturing by industry, etc...
Their goal should be a self sustaining economy...then pick a past year and use that as their goal to shoot for the number and types of industries that the govt will help to rebuild with seed money...
This piece of garbage isn't worth the paper its printed on...It has so many disclaimers that it's totally worthless as a goal and a plan...
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
waffle eater jim writes:
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
~~~~~
There were plenty of people bashing the Bush Tax Cuts ... just not the Republicans or the Blue Dog Dems in Congress.
waffle eater jim writes:
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
waffle eater jim
exactly, why is he out stumping as Prez-Elect about problems of the current admin. He should just stfu until the day after inaug.
Dinosaurs were Archosaurs, not classical Reptiles. And were it not for both dinosaur extinction and a peculiar climate change event about 40 million years ago, mamals would not be the dominant land animals.
The age of land mamals truly began only after the global forest cover (post meteor impac)t receded and the earth became drier. The first 15 million years after the dinosaur extinction were dominated by giant meat eating flightless birds.
In some ways dinosaurs never died, they just faded away..
On tax revolt - just write "paid but protested" or anything of similiar nature on your tax filing. I know you can handle the audit.
Try setting up an alternative money system using gold. See e-gold for how that works out.
Don't pay your taxes? Owe enough to make it worth while for the gov to go to trial? They will, and you better plan on having your life gone over with a finer tooth comb. Expect to pay millions in litigation cause the gov will bury your counsel in paper.
waffle eater jim | 01.10.09 - 6:28 pm | #
We weren't following relevant blogs and comment sections. We were watching/reading MSM.
The criticism offered should be accepted as beneficial not destructive. You are still allowed to make your own conclusions. I am heartened by the fact we aren't blindly following the pronouncements from on high.
Had to make an appointment for my daughter to get her eyes examined. Called the usual place, a national chain, this office is in a large mall. Expected to get an appointment in a couple weeks. It was anytime, anyday.
Given that the denominators in U3 and U6 are different, I am not sure what this spread means.
I personally prefer Nonagricultural Part-time Workers as percent of All Private Employment - it also goes farther back in history than the published U6 numbers.
MrM | 01.10.09 - 6:22 pm | #
I'm not sure what the spread necessarily means either, I am interested in what is different between its behavior last recession and the current one.
For casting the net very wide, I like the relationship that appears between CIVPART and EMRATIO.
"a right given to us by the constitution creation of our own money."
the constitution explicitly mandated money created by nature, silver and gold, not man. this lasted for most of our history in terms of cirulating currency, and 7/8 of it in regards to real money vs scrip.
nixon did give you the right to use imaginary paper, however. one of many aspects of modern america - the southern strategy, the german-circa-1920 chip-on-the-shoulder foreign policy, and extralegal executive branch - which he authored, with the help of such luminaries as cheney and rummy.
Jeff Imelt quite correctly said this is not a cyclical downturn it is a "re-set moment". Nothing in this plan attempts to re-set the economy. The old model of borrow and spend coupled with declining wages is broken. Have to say this plan is nothing more than putting lip stick on a pig. BTW what part of this plan requires a PHD in economics? Best as I can tell to come up with those numbers about how many jobs will be created.
I had a buddy years ago who talked me into variable universal life insurance. My statement I received today shows I've paid $6000 in over the last 6 years. Ending value is $486.39.
I wonder how many other people "invested" in this great new financial product? The selling point for me was the thought the account would eventually pay for itself. Makes me smile. Yes I quit paying and am letting it lapse and I switched to term life.
Records indicate that, more than once, both rich and poor wished that the barbarians would deliver them from the burdens of the Empire. While some of the civilian population resisted the barbarians (with varying degrees of earnestness), and many more were simply inert in the presence of the invaders, some actively fought for the barbarians. In Gaul the invaders were sometimes welcomed as liberators from the Imperial burden, and were even invited to occupy territory. To ensure the doubtful loyalty of frontier areas, the government was on occasion forced to make up local deficits of grain.
Zosimus, a writer of the second half of the fifth century A.D., wrote of Thessaly and Macedonia that '...as a result of this exaction of taxes, city and countryside were full of laments and complaints and all invoked the barbarians and sought the help of the barbarians.' 'By the fifth century,' concludes R.M. Adams, 'men were ready to abandon civilization itself in order to escape the fearful load of taxes.'"
(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)
"Now heres the thing: the slump of the early 1980s produced the Great Disinflation, which brought the core inflation rate down from about 10 to about 4."
"This time, however, we entered the slump with a core inflation rate of about 2.5 percent. If we experienced a disinflation comparable to that of the 1980s, that would mean ending up with deflation at a rate of -3.5 percent."
"And bear in mind that neither the CBO nor the Obama team really explains where recovery comes from; its just assumed."
"So tell me why we arent looking at a very large risk of getting into a deflationary trap, in which falling prices make consumers and businesses even less willing to spend. Tell me why this risk wouldnt remain high, though lower, even with the Obama plan, which as far as I can tell is expected to reduce cumulative excess unemployment by about a third."
My question is ... if we have ANY deflation as a result, will it make any difference whether it is 3% or 4% or 5%? Is it poison no matter what the rate? If we spend 3X the Obama plan will it still avoid it?
You are an optimist about the peak unemployment numbers. This time around our problems have been complicated by factors such as demographic profiles, entitlements and entrenched lobbies.
citizen energyecon - btw, this just in - the 3-day long gas talks between Russia and Ukraine just ended without any agreement. Putin is playing hardball
waffle eater jim writes:
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
waffle eater jim | 01.10.09 - 6:28 pm | #
Remember that moron Greenspan who told us we needed the Bush tax cuts -without it we would pay down the national debt!!!
bgates writes:
"a right given to us by the constitution creation of our own money."
the constitution explicitly mandated money created by nature, silver and gold, not man. this lasted for most of our history in terms of cirulating currency, and 7/8 of it in regards to real money vs scrip.
~~~~~~
Ever heard of colonial script ? England banished colonial script and Benjamin Franklin said it caused the Revolutionary War.
Money Without Debt ... it can be gold or silver or fiat currency that doesn't evolve form debt.
"(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)"
That's a great quote, and in substance I've seen it quite a few times, including texts on the fall of the Byzantine Empire, about a thousand years down the road from the fifth century.
Cavafy:
Waiting for the Barbarians
What are we waiting for, assembled in the forum?
The barbarians are to arrive today.
Why such inaction in the Senate?
Why do the Senators sit and pass no laws?
Because the barbarians are to arrive today.
What laws can the Senators pass any more?
When the barbarians come they will make the laws.
Why did our emperor wake up so early,
and sits at the greatest gate of the city,
on the throne, solemn, wearing the crown?
Because the barbarians are to arrive today.
And the emperor waits to receive
their chief. Indeed he has prepared
to give him a scroll. Therein he inscribed
many titles and names of honor.
Why have our two consuls and the praetors come out
today in their red, embroidered togas;
why do they wear amethyst-studded bracelets,
and rings with brilliant, glittering emeralds;
why are they carrying costly canes today,
wonderfully carved with silver and gold?
Because the barbarians are to arrive today,
and such things dazzle the barbarians.
Why don't the worthy orators come as always
to make their speeches, to have their say?
Because the barbarians are to arrive today;
and they get bored with eloquence and orations.
Why all of a sudden this unrest
and confusion. (How solemn the faces have become).
Why are the streets and squares clearing quickly,
and all return to their homes, so deep in thought?
Because night is here but the barbarians have not come.
And some people arrived from the borders,
and said that there are no longer any barbarians.
And now what shall become of us without any barbarians?
Those people were some kind of solution.
The dominant land predators for 15 million years after the dinosaur 'extinction' were super muscular 500 kg -1 ton flesh eating flightless birds.. so dinosaurs never died out..
Whales and related aquatic mammals were successful and dominant(- 50 million years) before land mammals became dominant (almost -40 million years).
//Actually, some specialists say that birds and dinosaurs should belong to the same super-class (?), Aves. If true, then birds are dinosaurs too.
Pavel Chichikov | 01.10.09 - 6:45 pm | #//
By the fifth century,' concludes R.M. Adams, 'men were ready to abandon civilization itself in order to escape the fearful load of taxes.'"
(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)
mal
~~~~~
Taxes caused by debt and hard currency ...
Usurious interest was even a problem back then. Then with more people and less coinage it became deflationary causing taxes to rise as the economy shrank.
People behave like that when they become mentally rigid and start thinking that they are inherently superior. They also look down on other groups and think that only they can come up with new ideas, and since they cannot come up with new ideas - it is all over.
Guess which group is in that chair now..
It has nothing to do with complexity and everything to do with human hubris, belief in determinism and game theory.
//Pavel Chichikov writes:
"(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)"//
My question is ... if we have ANY deflation as a result, will it make any difference whether it is 3% or 4% or 5%? Is it poison no matter what the rate? If we spend 3X the Obama plan will it still avoid it?
Doc at the Radar Station
~~~~
No, which is why great amounts of debt will have to be written off ... which is exactly the opposite of what the Oligarchy in DC is trying to do. They are trying to prop up debt ...
"Then with more people and less coinage it became deflationary"
that describes USA ca 1870-1890 (though the spanish american war helped apply some inflationary relief around the time WJ Bryan gave his speech on the subject).
but the adulteration of silver in roman currency in that era may have counteracted the effects you speak of in that society. i'd want to actually sit down and read all of gibbons before i opined on that one too much, however.
Oh I didn't envision those as the peak, just that the relationship between U3 and U6 "seemed" about right...and I wonder if U3 goes higher, the spread will as well (U3 ~12%, U6 ~22%-24%?)
MrM | 01.10.09 - 6:46 pm | #
Hooboy, that is just getting fugly. That is instant depression for a few of the impacted countries, wondering what cascade effects may result in the EU and eastern Europe...thanks for the update.
Lots of stuff on Roman currency, inflation, etc in that chapter. A sample:
Diocletian introduced a new coin worth 25 denarii, which by the 320s had shrunk to 1/3 of its original weight. There were two currencies during the fourth century: gold and copper. The gold solidus was introduced by Constantine, and retained its value for seven centuries. Copper currency, however, was inflated by assigning face values to the coins that were artificially high. The inflated copper coins went to cover military pay, and to buy gold solidi on the open market. Only by the end of the fourth century were payments in kind fully commuted to gold.
And on it goes in great detail about Roman currency. Great book. Should be required reading in these times.
Doc at the Radar Station writes:
"'For the output effects of the recovery package, we started by averaging the multipliers for increases in government spending and tax cuts from a leading private forecasting firm and the Federal Reserves FRB/US model. The two sets of multipliers are similar and are broadly in line with other estimates. We considered multipliers for the case where the federal funds rate remains constant, rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal expansion, on the grounds that the funds rate is likely to be at or near its lower bound of zero for the foreseeable future.'
Question: Are their assumptions about the multipliers and the Federal Funds rates directly tied to interest payments on the debt reducing the amount of money that can be directly spent, or some other relationship?"
The text you posted says that the Fed won't hike rates to cancel out the fiscal stimulus. There's no issue about the interest payments on the debt (which is going to be a small effect unless the dreaded Bond Market Crash materializes).
It may sound fairly strange, but under normal circumstances, a fiscal expansion ends up having limited impact on growth. Monetary policy normally moves more quickly than fiscal policy (takes awhile for spending to get approved). The Fed can raise rates if they view a fiscal expansion as being inappropriate for the economy. All that the fiscal expansion does is to change the mix of growth - more government spending, less private sector spending (as a result of the rate hike).
However, it doesn't seem likely that the Fed will be counter-acting stimulus in the current environment, unless something strange happens - like the economy starts growing.
" wondering what cascade effects may result in the EU and eastern Europe"
i'd imagine that most of the former bloc countries knew in their hearts that the relative peace, prosperity and sovereignty of the past couple of decades were momentary dreams soon to pass, just as they always have in history
OH MY GOD! Someone let these turds loose with the finger paint again! True to form they can't make up anything much more interesting than two lumps, one light blue and one dark blue.
Obama is about to learn that a melliflous presentation is no substitute for substance.
And I contributed to his campaign as the better choice.
Ya.. that is more along what I am thinking. The trouble is that the PTBs will keep on flogging U3 as the 'true' number and will thereby lose people's confidence.
PS- once U6 goes above 20%, social problems will start dominating job concerns.
//Oh I didn't envision those as the peak, just that the relationship between U3 and U6 "seemed" about right...and I wonder if U3 goes higher, the spread will as well (U3 ~12%, U6 ~22%-24%?)//
However, it doesn't seem likely that the Fed will be counter-acting stimulus in the current environment, unless something strange happens - like the economy starts growing.
bond guy
Thanks for your response. I understand why they wouldn't want to derail things by any increase in the funds rate and how that would counter-act any fiscal stimulus. I'm just wondering... how is that effecting their multipliers? Obviously the multipliers are calculated with the FF rate in the mix somehow.
Check out the history of Colonial Script. How it benefited the citizenry and was not inflationary as they were frugal.
In Pennsylvania Colonial Script existed side by side with gold coinage and stayed at par for decades ... until The Bank Of England had Parliament ban its use. The Bank of England didn't get any loans as the colonies paid for their improvements through script.
"And bear in mind that neither the CBO nor the Obama team really explains where recovery comes from; its just assumed." (Krugman)
Well, that is not exactly true. They think if they just replace the lost demand with government spending that will break the cycle (which I would have figured he agreed with). Does he think they need to defend Keynes? Perhaps he just disagrees with them on the numbers.
It is just really strange to me that Romer, who completely discounts the expansionary contribution of fiscal policy in the Depression, would be seeing fiscal policy as the end of this situation.
I just wonder 1) what the real cost of implementing the stimulus will be and 2) whether that is worth having unemployment peak lower (but still incredibly high) and sooner (assuming that happens). I would also like to see them discuss how the financial intervention will be phased out and the effect that will have. Are we to assume that the government will continue to support the financial system until the stimulus demonstrates results, and at what added cost there?
I had a buddy years ago who talked me into variable universal life insurance. My statement I received today shows I've paid $6000 in over the last 6 years. Ending value is $486.39.
Hmmm. Sounds kinda like Social Security. Except you can't get out of it.
mmckinl writes:
"Money Without Debt ... it can be gold or silver or fiat currency that doesn't evolve form [from] debt."
I cannot visualize fiat currency that does not evolve from debt. (It may be I'm missing something, I admit.)
A fiat currency is issued by some entity. If it is to have value, that entity has to make some form of representation that the currency will be trade-able for goods in the future. That pretty much means the money is a liability to the issuing entity.
If the currency is backed by gold for example, the note is still a debt-like instrument; it just can be redeemed for gold rather than more paper currency. In other words, gold is the true "money" that is backing up the paper liability.
The only way to avoid debt is to require all transactions to be barter transactions.
It is just really strange to me that Romer, who completely discounts the expansionary contribution of fiscal policy in the Depression, would be seeing fiscal policy as the end of this situation.
-Bond Girl
Doc at the Radar Station writes:
"Thanks for your response. I understand why they wouldn't want to derail things by any increase in the funds rate and how that would counter-act any fiscal stimulus. I'm just wondering... how is that effecting their multipliers? Obviously the multipliers are calculated with the FF rate in the mix somehow."
Yes. They say "We considered multipliers for the case where the federal funds rate remains constant, rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal expansion". I.e., the multipliers are different, and presumably much larger if the Fed Funds rate does not rise in response. [I haven't read the paper, and I don't know what the multipliers are.]
Ukraine Gas Accord Signing Delayed by Some Details (Update1)
By Daryna Krasnolutska and Lucian Kim
Jan. 11 (Bloomberg) -- Ukraines planned signing of an accord with Russia and the European Union on monitoring the transit of Russian gas through its territory was delayed early today by the need to discuss some details, the EU representative said. Ukraine Gas Accord Signing Delayed by ‘Some Details’ (Update1) - Bloomberg.com
....if the challenges we are experiencing is/was caused by ALL three segments being over-leveraged (the banks, the FedGov and the populace in debt up to their eyeballs), how is this stimulus plan going to correct that?
From a previous thread.. that is how evolution works and new species evolve .. not pretty but effective. Why did the 'cambrian explosion' occur after the earth almost froze over and likely killed a lot of then existent life? Why did dinosaurs come out in such good shape out of the triassic mass-extinction?
In well established systems even the most promising innovations get squeezed out or stunted by status quo... only in the chaos & disorder of 'failure' is there room for the new ideas to really take root and flourish. It is like old growth forests & their saplings underneath... the saplings never make it unless the giants burn or are harvested reducing competition & enabling the saplings to get resources (water, nutrients & sunlight).
The only long term downside is if the forest fire removing the old growth is so intense it burns the soil to bedrock and even kills the cones and seeds waiting to sprout & regenerate. When is that most likely to happen? When a forest has been 'managed' to never burn & huge amounts of duff & fuel layer the forest floor... when conditions are right it burn so hot it nearly sterilizes the soil.
Good thing that kind of disaster could never happen in an economic system.
I cannot visualize fiat currency that does not evolve from debt. (It may be I'm missing something, I admit.)
~~~~
Money is anything the government says you have to pay taxes with and by legal extension they can declare government money to be good for any form of debt or purchase.
The power of money is the power of government to make it money through payment of taxes or judgments and enforcement through the courts and law enforcement.
well, what if we see the leverage as not being leverage.
//What? We can't solve the problem of a hugely over leveraged system with even HUGER leverage?!
citizen energyecon | Homepage | 01.10.09 - 7:18 pm | #//
ya.. that is what I am concerned about.. it is hard to run countries if people lose almost all trust in the government.
//OK, so what happens if/when it fails? No one here seems to think it will work. So then what? We find out in a year? Maybe two?
nova | Homepage | 01.10.09 - 7:20 pm | #//
FDR had the option of doing a 75% "growth" gambit because convertibility was still on the table.
Argentina had the option of just picking a more generous ratio to the greenback.
We have no such option.
bgates
~~~~~
Higher taxes on the well to do while spending on social services and infrastructure. Money that is spent without borrowing but underwritten by those higher taxes.
Russia, Ukraine, EU Sign Accord on Monitoring Gas (Update1)
By Daryna Krasnolutska and Lucian Kim
Jan. 11 (Bloomberg) -- Russia, Ukraine and the European Union signed an accord on monitoring the transit of Russian gas via Ukraine, setting the stage for the full resumption of fuel supplies to Europe after four days of disruption amid freezing temperatures. Ukraine Signs Accord on Transit Gas With EU, Russia (Update3) - Bloomberg.com
//Higher taxes on the well to do while spending on social services and infrastructure. Money that is spent without borrowing but underwritten by those higher taxes.
mmckinl | 01.10.09 - 7:24 pm | #//
citizen energyecon @7:25 pm - There are two sets of parallel negotiations: one about monitoring of the transit of gas through Ukraine (signed by EU, Ukraine and Russia) and another one about prices of gas for Ukraine (broke off today).
The story about gas prices is interesting, btw - Russia wants to set it @$450, which is what most of the EU is paying. However, the EU gas prices are set via long-term contracts and are based on oil prices with 6-9 months lag, so they will drop soon. The Ukrainian gas prices are based on short-term contracts, and where they are going to be fixed for the next year or so is the subject of the second set of negotiations.
sporkfed writes:
Productivity gains went to corporations and into
the tax coffers to pay for those who do not produce. Until this changes nothing changes.
~~~~
That's why we need shorter work weeks ... to distribute the productivity gain equitably ...
When a place gets crowded enough to require ID's, social collapse is not far away. It is time to go elsewhere. The best thing about space travel is that it made it possible to go elsewhere.
Robert A. Heinlein.
Too bad we don't have space travel. Pavel has a point.
The blog above has an interesting post. The writer explains how Spain, which is spending a lot of money on creating infrastructure jobs, may have a problem.
My reading is that it costs a lot of money for the gov to create jobs. Obama may have a problem if job losses exceed job creation. Something that looks possible.
My reading is that it costs a lot of money for the gov to create jobs. Obama may have a problem if job losses exceed job creation. Something that looks possible.
nova
~~~~
Exactly why SAVING JOBS should be the first priority ... those jobs that can be saved ...
Medicare for All and shorter work weeks ...
It is cheaper, easier and faster to save jobs than it is to create them.
Interesting day full of disconfirming observations. We traveled to IKEA today and the traffic on the way there was terrible....almost as bad as rush hour traffic. Unfortunately, the exit we had to get off at was backed up because everyone was going to Cirque du Soleil for which tickets are running $300+. When we finally got to IKEA, it was packed like I've never seen it packed. We could hardly find a spot in the parking lot, and, in fact, almost decided to just leave rather than bothering...but, alas, we found one. It was a zoo inside. We didn't find what we were looking for, so we had to travel the length of their rat maze to exit the building. It was claustrophobic. On the way home, the traffic was just as congested as it was on the way in. Both my wife and I commented to one another "what recession?" Needless to say, we wished we never went. It was a waste of time and left us scratching our heads in bewilderment. Something isn't adding up.
Jobs are often discussed in quantitative terms rather than qualitative terms. Full employment is meaningless if it is not quality employment, and increasingly, the quality of employment has been diminishing.
lucifer(Unrated) writes: ya.. that is what I am concerned about.. it is hard to run countries if people lose almost all trust in the government.
Traditionally the cause of state failure, yes.
But, it will be capacity led. People never overthrow states because they are tyrannical. By the time you have a tyranny, people are getting the state they deserve, and all the "moral" machinery of state -- courts, military and law enforcement -- have declined into paralysis. Otherwise you would never have a tyrant.
States fail because tyrants suck at ruling. They're egoists and running states properly is a very demanding and largely unrewarding act.
They lose the ability to execute policy by squandering money, a failed succession or a coup that can't be suppressed -- most particularly to exert their strength at will and into a timely fashion into every corner of their domain -- and the become merely warlords, meaning the technical term for a man with a warband who doesn't execute the act of rule.
Once you rule only where the men with guns are, you don't really rule, and the Mandate of Heaven is withdrawn.
I agree. I don't know if it will happen but it makes sense, to me, to cut hours worked. Plus your ideas on health care...
The catch is how badly does the system have to break down for it to come close to happening.
nova | Homepage | 01.10.09 - 7:43 pm | #
I think these are great ideas, as well, but it will never happen because Corporations use hours worked to control their people. They would just assume lay off a bunch of people and have the remaining hacks working 80 hours a week rather than have a happy and productive workforce. A happy and productive workforce is seen as threatening....they might start thinking for themselves, and we couldn't have that, could we?
Black Star Ranch....I'm with you...Me and hubby are past retirement, consume very little, gardening is labor of love....and as I have said before bought 9 sows and one boar for my brother out on the farm to feed the community and family. But I so worry about my Country and hope O turns out to be a frigging genius economist.
Jobs are often discussed in quantitative terms rather than qualitative terms. Full employment is meaningless if it is not quality employment, and increasingly, the quality of employment has been diminishing.
Morocco Bama
~~~~~
Well, according to the statistics Americans work longer hours than any other G7 nation.
Monetary developments were a crucial source of recovery of the US economy from the Great Depression. Fiscal policy, in contrast, contributed almost nothing to the recovery before 1942. The very rapid growth of the money supply beginning in 1933 appears to have lowered real interest rates and stimulated investment spending just as a conventional model of the transmission mechanism would predict. The money supply grew rapidly in the mid- and late 1930s because of a huge unsterilized gold inflow to the United States. Although the later gold inflow was mainly due to political developments in Europe, the largest inflow occurred immediately following the revaluation of gold mandated by the Roosevelt administration in 1934. Thus, the gold inflow was due partly to historical accident and partly to policy. The decision to let the gold inflow swell the US money supply was also, at least in part, an independent policy choice. The Roosevelt administration chose not to sterilize the gold inflow because it hoped that an increase in the monetary gold stock would stimulate the depressed economy.
The Roosevelt administration chose not to sterilize the gold inflow because it hoped that an increase in the monetary gold stock would stimulate the depressed economy.
~~~~~
LOL ... Gold without demand is just metal ... and so is money - paper, without demand.
Demand is created by discretionary income and faith in the future ... We have neither at the moment and probably for moths maybe years to come ...
That monetary developments were very important, whereas fiscal policy was of little consequence even as late as 1942, suggests an interesting twist on the usual view that WWII caused, or at least accelerated, the recovery from the Great Depression. Since the economy was essentially back to its trend level before the fiscal stimulus started in earnest, it would be difficult to argue that the changes in government spending caused by the war were a major factor in the recovery....
My findings appear to dispute studies that suggest that the recovery from the Great Depression was due to the self-corrective powers of the US economy in the 1930s. I find that aggregate-demand stimulus was the main source of the recovery from the Great Depression. Thus, the Great Depression does not provide evidence that large shocks are rapidly undone by the forces of mean reversion. Rather, it suggests that large falls in aggregate demand are sometimes followed by large rises, the combination of which leaves the economy back on trend.
re: cutting the work week - i'm not sure i understand the concept there. does this apply to salaried workers? it certainly doesn't have much traction in the world i inhabit or my friends, though that probably says more about my class bias than anything else. I've always considered 60 hour weeks to be a basic prerequisite at certain key phases of projects and careers, while 30 hour weeks are something that happens in slower times. i've also always seen hourly jobs as intrinsically low value and inevitably exported (excluding cops and SEIU types)
otishertz(Unrated) writes: it occurs to me that second hand shops and surplus liquidators and craigslist will easily fill the void of dead chain retailers.
Our biggest challenge is preventing people from "trashing it out" into dumpsters rather than getting it back into the economy.
We have so much too much crap, our biggest enemy is frictional waste at the beginning when people are still thinking like Suburban Susie and trying to buy status with shiny new goods, and trashing the bad dirty old things so nobody thinks they're POOR.
Which they have been for decades, but the learning process for many born and bred American dopes will be long and painful.
Yes, but are we not already in a dystopia of sorts? we have had a succession of incompetent leaders and self-serving leadership, and we encourage a 'every man for himself mentality'. We have set up some of the conditions for system failure.. the real question is whether we will turn around and avoid the tipping point.. I am afraid that the tipping point is nearer than most people want to believe.
"But I so worry about my Country and hope O turns out to be a frigging genius economist." - IWannaknow
You'd never know it from my constant slamming of our FedGov, but I would LOVE for Obama to perform as is needed. I think though, that the system has grown too far afield of what was patterned from MY ancestors who arrived here in the early 1600s.
I DO hope for the best, but expect and prepare for the worst.
BTW, the Mrs wants us to start raising pigs as well. I don't know if I could handle the extra work though. Good luck!
Bond Girl writes:
From Romer's "What Ended the Great Depression?"
Monetary developments were a crucial source of recovery of the US economy from the Great Depression. Fiscal policy, in contrast, contributed almost nothing to the recovery before 1942.
Thanks for the snippet. I just read her wiki entry and I got this:
She has also researched the causes of the Great Depression in the United States and how the US recovered from the depression. Her work showed that the Great Depression occurred more severely in the US than in Europe, and had somewhat different causes than the Great Depression in Europe. Romer showed that fiscal policy played a relatively small role in the recovery from the depression in the US, because taxes were raised in the US almost as quickly as government spending increased during the New Deal.
I've always considered 60 hour weeks to be a basic prerequisite at certain key phases of projects and careers, while 30 hour weeks are something that happens in slower times. i've also always seen hourly jobs as intrinsically low value and inevitably exported (excluding cops and SEIU types)
bgates | 01.10.09 - 7:56 pm | #
I must restrain myself. Where's my blood pressure medication?
I've always considered 60 hour weeks to be a basic prerequisite at certain key phases of projects and careers, while 30 hour weeks are something that happens in slower times. i've also always seen hourly jobs as intrinsically low value and inevitably exported (excluding cops and SEIU types)
~~~~~
There will be slippage ... some jobs do not translate into the shorter work week scenario. I figure that a 10% reduction in the work week will translate into a 5% increase of employment.
This is going to end with a black swan event. Something like the bird flu mutation or a breakthrough on controlled fusion. Either way, it will be a new world and all of this nickle and dime worrying will diminished to a poorly remembered dream. Obama's job is to keep it together until then.
....well, when we (my great grandparents (11-times back) came over here on the Mayflower, we were escaping religious oppression and being possibly burned at the stake. There wasn't much oppressing and killing of "brown skins" going on in 1600s Plymouth....LOL
Luxury suites. Shopping sprees. Four-star hotels. Such was life in the high-flying world of the California Avocado Commission.
That, at least, is the image presented by a blistering report released last week by the California Department of Food and Agriculture, which painted the commission, a state-established trade group financed by growers, as a kind of free-spending, avocado-gone-wild farm party.
there is this slavery paradox with equality. there is no wayto enforce equality short of total domination or slavery
otishertz | 01.10.09 - 8:01 pm | #
that should tell us something about the irrationality of literal egalitarianism. not all labor is of equal market value. I'd go so far as to say not all labor is of equal value, period, outside a monetary system. because of course labor markets can be distorted by a lot of factors. but in my opinion it's throwing the baby out with the bathwater to socialize labor value.
lucifer(Unrated) writes: Yes, but are we not already in a dystopia of sorts?
Yes. We are in a weak state that appears to be in the terminal phases of policy structure compromise. Policy seems to have degenerated into competitive looting. Soon the state will have to dramatically curtail its activities due to economic crisis and that is when the fun really starts.
This will be especially true because so many of the substate actors in America are so dependent on Federal transfer payments or heavily indebted themselves.
we have had a succession of incompetent leaders and self-serving leadership, and we encourage a 'every man for himself mentality'. We have set up some of the conditions for system failure..
Weak States include an array of nation-states that may be inherently weak because of
geographical, physical, or fundamental economic constraints; or are situationally weak because
of internal antagonisms, greed, or despotism. Weak states typically harbor ethnic, religious,
linguistic, or other tensions that may at some near point be transformed into all out conflict
between contending antagonisms. Their ability to provide adequate amounts of political goods is
diminished or diminishing. Physical infrastructural networks are deteriorated. Schools and
hospitals show signs of neglect. GDP per capita and similar indicators have fallen or are falling,
sometimes dramatically. Levels of venal corruption are high and escalating. The rule of law is
honored in the breach. Civil society is harassed. Despots rule.
the real question is whether we will turn around and avoid the tipping point.. I am afraid that the tipping point is nearer than most people want to believe.
The cycle of poor policy is very hard to break. I will observe closely for about 3-6 weeks after Obama's coronation and then maybe I can make some meaningful statements about the quality of his rule. I am skeptical but remain hopeful. However I do not believe he has more than one shot.
Hopefully the Treasuries market doesn't already have a total blow-out baked in, and may the gods of the Republic watch over Obama's person.
Let us a minimum wage (for just being alive). Denominate it such that the person could have a 20% disposable income (after basic expenses- living ok).
Then pay people extra for what society will support them for.. Therefore you no starving or poor people, just people with varying amounts of discretionary income.
So you will always have a minimum discretionary demand. In any case fiat money can be printed or materialised by a few key stokes.
For those of you who think their jobs are essential and worthy and others are bums.. you might want to consider that the concept of a paid job started rather late in the history of our species. I mean what is wrong about others not suffering.. as long as it does not make you poorer?
Nah, didn't have to kill many Indians, 'cause the diseases of whites and blacks had killed off so many in the previous hundred years.
Wasn't it the Mayflower people who moved into a deserted Indian village? It was empty because the people had died.
Actually no fault here, except glod's. Sooner or later white and black people were gonna discover America, and had they each and every one had the personality of St. Francis of Assisi (Asissi? Assissi?) combined with Mother Teresa and the Buddha, it wouldn't have made that much difference, mortality-wise.
Even with modern medical care, something like the measles will kill the few remaining isolated people at the 10 and 20% rate.
"If money itself loses value over time, just like the underlying goods that it can purchase do, then it will become a better medium of exchange and take away the advantage of holding large amounts of it.
Money properly understood is a means to an end, not an end in itself.
So as Worgl struggled to maintain roads, and feed the starving poor the Mayor of this small town decided to give Gesells ideas a try. He devised a new money system in which a 1% tax on money had to be paid each month (not a tax on wealth, but a tax on money). The money was passed into circulation via wages for city employees and was required to be accepted as legal tender by all town business."
Hmmm, lucifer, there was a Heilein novel that proposed that. Together with both voluntary and involuntary genetic engineering, and a system of
duel-maintained extreme politeness.
lucifer(Unrated) writes: I mean what is wrong about others not suffering.. as long as it does not make you poorer?
Socially you will want to develop some ideal of personal development so they don't become ignorant chavs -- Americans in cariciture assured their bloated ignorance through the beauty of the welfare state. It's fun to watch at first but they quickly move on to burning things for any or no reason.
Otherwise, I think the counterarguments are pretty specious. At this point there's really no excuse for not giving everyone three squares, a roof and a walking money allowance, it's not like we couldn't perform the work to produce that with one arm tied behind our backs.
Then pay people extra for what society will support them for.. Therefore you no starving or poor people, just people with varying amounts of discretionary income.
Example-
11 You are a bum- you get a comfortable life with enough income to spend 20% on discretionary stuff and live in an OK condo and eat well (maybe drive a cheap small vehicle).
You are a neurovascular surgeon with 10 years of medical school and residency. You get the minimum + whatever the system pays you for your job. Since there are limited number of people interested in hard work + skills (even for a high wage) you get renumerated at levels of say 5-8x what the bum gets. You can therefore buy your dream houses, cars, vacations, hobby vehicles, cars and all the stuff you wanted..
With the transplanted foreign auto manufacturers...Force the companies to provide comparable health and pension benefits through any number of devices...Maybe foreign co's can get away with it outside of the US, but they should operate at some minimum standard within the US...
Exit writes:
Just curious... ResistanceisFeudal isn't by chance EHP by another name? Something is chiming with your writing style...
Exit | Homepage | 01.10.09 - 8:22 pm | #
sorry, no, I am a different fellow. but I have lurked here for long enough to consider that quite a compliment.
Who says so? Why? Yes, it will take longer to change some societies, but the idea is technically doable.. implementation.. well.. that is another matter.
"This only works in a closed system... a system without trade across national or currency borders.
Unfortunately we need trade ...
mmckinl | 01.10.09 - 8:26 pm | #"
the idea is to give money a shelf life and thereby get it off the shelf
Money in the bank is also "off the shelf" as it anchors lending. This is why the idea of pushing more consumer spending is such foolishness. Savings are also cycling through the economy.
mmckinl(Excellent) writes: Now, how do we fix it ?
It will take a program of judicial, social and bureaucratic reform with an emphasis on simplification, leveling, judicial system overhaul -- particularly the criminal system -- and just IMO, enforced involvement in the polis.
Realistically? It won't happen, the state will fail, millions will die, and the new system founded in its place will have a lot more dynamism and economic opportunity.
Hopefully it will be better in quality than the current one but often they are not as people listen too much to Lincoln / Cao Cao types and end up with a pointless kingdom; consolidation of power with no thesis of rule, and then you have another war every reign or two until you have a dynasty that really catches.
The biggest hurdle in implementing my idea is that humans, as a species, have not adapted to functioning in large groups. We are still too petty, superficial and irrationally greedy. We do not want to accept that a post-industrial civilization demands a different way of playing the prisoners dilemma- we cannot play to 'win all' otherwise we are all screwed.
Wasn't there some change in savings calculation that operated to lower the official savings rate? I remember thinking that the "savings rate" eliminated most of what I was actually saving.
For example, I think paying off the mtg doesn't count as savings at all. One could argue for an adjustment perhaps, but not count it at all? So the 95k we paid off a year ago counts as zero, but if we had put it in the bank, it does count.
The spendorama is designed prevent real revolt - also to keep the police force from laying off - they're going to be needed. I'm guessing we'll see our first "economic" riot by the end of summer. Detroit? Chicago maybe.
Black Star Ranch....I barter every week on something...We age and can't do what we did when young...Gotta have the grass cut, the tree's pruned, the outbuilding roof patched, garden broke up, a load of gravel for a low spot....and life can continue on.
I think it is necessary to explain to J6P why the old "win all" game cannot work anymore. We have reached a stage where the "lose all-losers" can hurt the system by not playing the game such that the " win all- winners" to keep on winning..
otishertz writes:
negative nominal interest rates, perhaps on bank reserves held at the fed, would explode the velocity of money.
~~~~~~~~
And blow up the banks...
The Federal Reserve is a corporation owned and operated by the Member banks for the Member Banks ... Bernanke is first and foremost responsible to his shareholders.
Yeah, luci, we evolved to live in groups of at most, a few hundred to a few thousand. It actually is amazing that we manage to live in urban agglomerates of the size we live in without going mad, or incurring much more violence that we have.
As far as hoarding goes, seems like that is a firm part of animal behavior. Polygamous animals like walruses hoard wives (sorry to get on that again). Squirrels hoard nuts.
Hoarding up to a certain point makes sense, until it doesn't. Hoarding is a form of saving, I suppose. Maybe people sensibly decided that money wasn't worth so much, so hoarding stuff, even tho non-productive was better.
We have reached a stage where the "lose all-losers" can hurt the system by not playing the game such that the " win all- winners" to keep on winning..
lucifer
I'm not sure why this struck me as hilarious...I do agree for the most part but the choice of wording is still funny.
Full employment is meaningless if it is not quality employment, and increasingly, the quality of employment has been diminishing.
Morocco Bama | Homepage | 01.10.09 - 7:44 pm | #
_______________________________-
You mean Wal-Mart jobs aren't quality? That was a heckuva trade off in the name of globalizatin by transferring the high paying mfg. jobs overseas, while increasing the number of low paying service jobs.
It's amazing how the families in the 50s and 60s could live comfortably on just one income. That was the norm, where today it's the exception.
It will take a program of judicial, social and bureaucratic reform with an emphasis on simplification, leveling, judicial system overhaul -- particularly the criminal system -- and just IMO, enforced involvement in the polis.
Realistically? It won't happen, the state will fail, millions will die, and the new system founded in its place will have a lot more dynamism and economic opportunity.
~~~~~
I don't hold out your hope of "the new system founded in its place will have a lot more dynamism and economic opportunity. " I think we are on the brink of ecological as well as economic crisis.
But we have a large forebrain, language and now technology (and now the internet). We are not just hairless apes except in physiology. Think about how many ape behaviors are suppressed by even J6P merely to function in our society?
The dynamics of possible interactions and range of outcomes changes with speed, range and accesibility of communication. Would CR have been possible in 1999 (less than 10 years ago)
"As far as hoarding goes, seems like that is a firm part of animal behavior. Polygamous animals like walruses hoard wives (sorry to get on that again). Squirrels hoard nuts."
liz, CSC got in a pissing match with someone in a thread. Byz_Ruins (I think) hypothesized he was self-regulating out. Occurred around the time that Lahde jettisoned and in his buh-bye letter advocated CSC's favorite pasttime. Are they one and the same? Enquiring minds want to know!
Comrade Kristina - is that your wedding album? Cool... and congrats. Hope your refi worked out. I've been out of the loop, too. Board solve the globe's crisis yet?
It was intentional.. people remember the 'weird' better than the 'plain'. Advertising 101
//I'm not sure why this struck me as hilarious...I do agree for the most part but the choice of wording is still funny.
Comrade Kristina | Homepage | 01.10.09 - 8:42 pm | #//
Hoarding also comes with ageing, wonder what part of the brain controls that, hubby will tell grands not to touch something that he's saving it and i'll always ask, for whom are you saving it, the land field.
I read CSC's farewell post. He said some of the original posters here were tired of the "extra chatter" and were not posting anymore. For that reason he was going to not add to the chatter anymore. This was after he had gotten in an exchange with troll of some sort. I did not read the argument he had with the troll so can't really speak on that.
Exit, yes and the refi is still being worked on, I'm waiting on this years tax papers so I can use my two best tax returns for the income requirements.
.............first.......first
At least they acknowledge the tax cuts are worthless. That portion of the plan should probably be scraped and replaced with more effective spending.
best to all.
TINFL
Got peak civilizatio
There's Unemployment, Then There's Unemployment
Paul Kedrosky: There's Unemployment, and Then There's Unemployment
Unemployment by SGS's measure is at almost 18%.
Kudos to an ambitious Obama plan but I'm skeptical about his delivering stated results esp when he is using u3 numbers.
Yeah, get the unemployment rate down before the 2012 election. That's a plan.
Is this the U-square root of negative two,.... with or without the birth/death model. Maybe he ought to ask for a couple more trillion just to flat line the curve. Like the fact that he stops the stat right below eight percent, and that by 2014 it's all the same anyway.
...Biggest joke since TARP.
Couldn't read the whole of this. There were a lot of "assumed's" at the end when it described the multipliers. Reminds me of the sociological studies I've read where the authors "showed" what they wanted to be the case. Too many assumptions. I'll leave it to someone else to go through it with a finer tooth comb. Reading this kind of stuff makes my head hurt.
So, the plan will reduce peak unemployment by 1%
How many jobs is that?
How much is being spent?
How much money are we spending per job?
Would it be more cost effective to mail the money directly to the newly unemployed for the coming 24 months?
Fiscal relief to the states isn't about job creation, it's about job retention.
Oops. Bad English. Tanta wouldn't like. Should read "finer toothed comb".
It ain't his money to give. Every dollar government spends diverts a dollar of some poor citizen to a less desirable use.
So, he porks me now and charges me for the privilege later.
The change feels better all ready.
Got peak civilization?
Right.
Trillions of dollars of deficits and we get.......1% less unemployment?
And that is based on what exactly?
Sorry, CR. Better to give tax breaks then to spend money on filling in potholes.
Almost 1/3 of these jobs, over one million -- page 9 -- are "Retail Trade" and "Leisure and Hospitality". So we get a lot of cashier jobs?
214K in Finace. 600K in retail.
Who said that there was overcapacity?
Finished watching the 11 minute interview with Elizabeth Warren, Chairwoman of the TARP Oversight Committee. The questions from the two CNN anchors demonstrate a change in media direction. Warren is openly critical and assesses blame with an emphasis on what to do differently with the next 350 billion.
Watch it. It gives hope.
TPMMuckraker | Talking Points Memo | Warren On Tracking Bailout Funds: "This Isn't Rocket Science"
HEY CR - are you going to plot this sucker like you did GWB's second term job growth? It would be great to compare jobs produced vs. plan and also Unemployment Rate vs. Plan. Could use the same chart they just provided only fill in with actual. I mean what a great opportunity to measure results & assign responsibility - they are all but begging you to do it.
I'm not a big fan of this plan so far but honestly I don't expect the guy to come out and give us the unvarnished truth.
I think its fair to say that he took this job at a really bad time. Two wars that we can't get out of and a disaster of an economy. Did you see the pictures of him when he first found out he won? He wasn't smiling.
I don't think he'll be able to pull this off, but I hope he does.
So what does everyone think of a Tax Revolt?
Try to do things for trade and use cash payments with no receipts.
Media wants us to keep spending money. All those car ad dollars. Want to keep us foolishly optomistic, so we will keep on spending. Maybe they realize those dollars are gone anyway, and have decided to (more or less) pursue the truth.
We need to get the fraud out of the system not add to it. American can't carry any more debt .I bet he would add job losses in the end.
This is how the Dems can spin 8% unemployment as a "good thing" in 2010.
We deserve to keep our Congressional majority... everything is going according to plan... It's all contained!
here comes the new change,
just like the old change.
I want to see him perform his magic to stop this...
4 /1992 IMPROVED $118,000
12/2005 IMPROVED $310,000
Current ask on the MLS 125K. I talked with the listing agent. She mentioned nobody has even inquired about the place after 150+ days on the MLS.
This is the "High End" around here that will go begging for buyers.
Even at 125k that is over 4x median income...And we are just starting the higher priced defaults.
Chris
So.......
$775 billion dollar plan
Saves or preserves 3 to 4 million jobs.
(Plus we get solar panels, upgraded fed office bldgs, non-crumbling roads and bridges, and modern schools)
So that's $221428.57 per job. Plus the goodies, presuming 3.5 million jobs saved or created.
Good deal or not?
hope = fumes
dryfly -
More on the new job estimates -
The 14-page analysis, which was posted online, says estimates are "subject to significant margins of error"
Q: how does a black man becomes a president of united states?
A: he is a distant cousin of bush sr, bush jr, cheney and the guy that nuked hiroshima and nagasaki.
Q: but he sounds so nice, he might not be a crook
A: well, his entire cabinet is full with people who orchestrated the current debacle, so i dont think he would be much help.
Q: what would you do you wanted to bankrupt a country?
A: well, i would introduce a system based on populairity contest between two parties that cannot be challenged by a third one, and then go on vacation. few decades later, the system is indebted up to its ears and "mission acomplished".
Both scenarios presented in the graph look optimistic to me.
I see U-3 unemployment > 10%. U-6 unemployment > 17.5%.
Here's the sad part. Based on the success of government sponsored "full" employment policies of the 1960s/1970s, I predict Obama's plan will actually make unemployment worse than it otherwise would have been.
Go team!
I think O will get in, mess around a bit, and totally change everthing he wants to do.
I have no problem with that.
And Werner, I like engineers, but most of them are lousy managers. The ones that are also good managers, or even average managers together with the engineering often do change the world.
But I said that the law and legal system enabled civilization to exist, and that is pretty life changing.
And I point to our founders, who were often lawyers.
If they did not succeed in creating our Republic, there is only one that would be a famous name, Ben Franklin, the great scientist and polymath. But they did, and that did change the world.
"Leisure and Hospitality".
I was sayin...!
hawaii will Not suffer under Obama.
Honestly, I think the Obama administration is already quietly advancing the idea that unemployment will approach 9%. They know they won't get what they ask for.. it'll be modified... bills always are.
Then they can say later on that "they tried" but were "obstructed" from binging forth the original plan. That's why unemployment is above 8%...
I've never seen a more gaussian model for unemployment during a recession. Has that ever happened in real life?
"So that's $221428.57 per job. Plus the goodies, presuming 3.5 million jobs saved or created."
Unfair. You need to separate out the labor costs from the created infrastructure built. Then you need to add the multiplier effect of the infrastructure created over time. I'd hazard a guess there will be a net gain long term.
We could also just give more taxpayer funds to the financial industry and let them allocate capital.
Noticed that they assume that taxpayers treat the "making work pay" tax cuts as perm. This greatly increases the marginal propensity to consume those $. However, the plan only calls for them to be inacted for 2 years. While having peole save the money, essentially by paying down debt, especially those at the strapped lower 75% or so of the income distribution, is not an awful thing. However, I think it overestimates the effectiveness of the program, which is all indirect effects.
I've never seen a more gaussian model for unemployment during a recession.
CR has charted us many times that unemplyment rises fast, and grudgingly, achingly declines over a long time.
If Obama can successfully engineer "Gaussian Unemploument" that will probably be the thesis of some academic papers in the 2020's.
With or without the "Recovery Plan," the unemployment curves converge in 2014.
The current Stimulus Plan is not only too small it is mis-targeted
The Plan And How to Pay For It !
Of course Krugman is correct in his assertion that the Obama Plan assumes a recovery after the plan and that there is no real reason that there will be one
Thats why we need Medicare for All first, then a infrastructure plan that spends the sane amount of money but takes years to do it. This will stimulate the economy over the long term.
The other feature we need is a reduction in the 40 hour work week to 36 or even 32. This opens up jobs and can be offset by the Medicare for All spending through the public and private sectors. A large percentage of jobs based on consumer spending are Not coming back ever Room must be made for workers in those sectors that do survive reducing the work week is the way to do it.
There are plenty of ways to pay for all of this. They are just not politically expedient.
~ raising the top rates to over 50%
~ counting all income as regular income we dont need more investment we have over production now! Green initiatives would be exempt.
~ a Carbon Tax could raise trillions but must be sensitive to lower income households
~ A Tobin Tax on all financial transactions. The City of London already uses this tax to help pay their bills.
~ And my favorite, which is not a tax : A Public Central bank that profits from the creation of currency and credit. Why should private bankers get all the profit from a right given to us by the constitution creation of our own money. This initiative could raise a trillion dollars a year!
So what does everyone think of a Tax Revolt?
Check out the anarcho-capitalists.
They're seeing this as The Great Coming Of The Rand.
Someohw they've converted the destroyer of our financial system from Wall Street to the E-ville government, hence the great foretelling of "Atlas Shrugged" is coming to pass.
It's an impressive leap of irrationality.
.
So what does everyone think of a Tax Revolt?
Ministry of Truth | 01.10.09 - 5:14 pm | #
My older sister used to be a prosecutor at DOJ for 'tax' - you don't want her kind in your life. She did something like 23 big 'show trials' and won them all - got real prison terms in many cases too. Understand these were high profile big money evaders. White collar crime types. They mostly don't go 'criminal' after small fry like us - usually settle via 'civil' lit at IRS and that is plenty bad enough [her husband does that - you don't want to meet him either]. The ONLY example where they will actively prosecute 'wage slaves' is tax revolt... if they even suspect you are doing this they will try to crucify you in public.
The only tax revolt I'd get involved in would be abstaining from working, buying or owning property... no income, no assets, or no purchase, then no taxes. I wouldn't make a good monk so I suppose I'll continue to pay taxes. YMMV.
Wonder what the percentage of total big money evaders ever get prosecuted. Bet it's a tiny percentage. No way to tell. The best have selected themselves Darwinianly.
The 14-page analysis, which was posted online, says estimates are "subject to significant margins of error"
REBear | 01.10.09 - 5:18 pm | #
LOL - must have been drafted by a stock broker.
If Obama can successfully engineer "Gaussian Unemploument" that will probably be the thesis of some academic papers in the 2020's.
Mozo Maz | 01.10.09 - 5:25 pm | #
Economics departments or 'creative literature'?
But we now have The USS George H.W. Bush, a steel-gray vessel longer than three football fields and built at a cost of $6.2 billion.
Perhaps the dunce still in WH can say Mission accomplished again.
I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible.
The online access/storage of all medical records raises some hairs on the back of my neck. Having a data base that is nationalized and can be updated with all of your most personal information with severe limits of access, HIPPA set this up, leads me to question the uses this system could have.
When the advocating of RFID chips in newborns and children becomes a prerequisite in league with mandatory immunizations I am moving to the remotest location I can find.
Tinfoil prognostication. My favorite type.
I would also point out that I think their baseline scenario is very optimistic.
"I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible."
Are you Putin?
Angry Saver - I had the same reaction when I saw this chart on Krugman's blog this morning. The base case (Without Recovery Plan) looks very optimistic:
- Peak UE is 9%. Look how fast UE is raising and recall that many people, whose layoffs were announced last year, have not been factored in the December UE number yet
- Peak UE in mid 2010 assumes rather short recession, with GDP starting to grow in Q4-2009.
I am afraid this is going to be another "crisis is contained" debacles
Boogus do you work for a defense contractor assclown ?
As of September 2008, 10.3% of the American population received food stamps (> 31 million people).
Supplemental Nutrition Assistance Program - Wikipedia, the free encyclopedia
Something else to consider - our current economic situation resulted during one of the largest government spending expansions in history.
Whith the above in mind, why are Krugman and others so certain that more government spending will improve things?
I don't think there is such a thing as government sponsored prosperity.
"I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible."
Are you Putin?
Boogus
~~~~
No he is smart ... Military spending is dead end for stimulus ... Military Keynesiism has been shown to be counter productive ...
Or read Blowback by Chalmers Johnson ...
I get the economic efficiency arguments against this. But, the powers that be, the people who actually control capital, have made it acutely clear over thirty years that they don't give a shit whether people like me and my family have jobs or not. I don't care if maximum wealth is created in the system if it's hoarded and held by the top twenty families while the rest of us fight for the scraps. I'll settle for less wealth and better distribution. I'd like both, more wealth and better distribution but that won't happen with the crony capitalists. Obama is the first political leader in my lifetime to say he will limit outsourcing to other countries. That's worth something, even if he is too late to keep the prosperity we earned over the last century.
Ummm.... OK, what makes them think that their "with and without" graph has any connection with reality?
I don't think there is such a thing as government sponsored prosperity.
Angry Saver
~~~~
No but there government neglect until starvation.
These projections into our economic future crack me up. I understand that a 'plan' requires some sort of end result, but I wonder if Obama and company will have any more luck guesstimating the future than most economists.
Sorry to be the cynic, but. . . .
That's a very rosy projection of unemployment. We could be beyond the peak of that graph in the next few months. Ken Rogoff and others are already saying unemployment is headed to 11%.
Wonder what the percentage of total big money evaders ever get prosecuted. Bet it's a tiny percentage. No way to tell. The best have selected themselves Darwinianly.
lawyerliz | 01.10.09 - 5:29 pm | #
It is a very hard case to win - you really need to prove both intent to evade and actual evidence that the evasion was executed. If in the end it looks like a stupid mistake on the part of the tax payer or his/her accountant - even if bordering on criminal negligence - the 'criminal' branch will pass on it and hand it back to 'civil' for litigation. But once criminal does sink their teeth into one - they rarely lose. The power of the state just grinds them up.
Like I said - you do not want to be on the wrong side of these folks.
Boogus writes:
"I want to see Obama cut inflated pork barrel defense from $600B to $400B, cut back on bullshit earmarks and other wasteful spending and then just maybe then he will be more credible."
Are you Putin?
Even at $400 Bil the US military budget will be 10 times that of Russia
Russian Military Spending
Like I said - you do not want to be on the wrong side of these folks.
dryfly
~~~~
Which is why Bush reduced audits on the rich to pursue the middle and lower class.
Where's the bank Holiday ?
Broward Horne -- i love it when you beat up the randist types. do you have any posts on your blog dedicated to this? any links to other sites that treat the subject in a similar fashion?
ministry of truth -- how about starting a las vegas cr group? there are several people that post on this board that live in vegas and others that visit vegas. maybe get together once a month and grab a few drinks or something? none of my current friends are doomish enough, i need to diversify...
No but there government neglect until starvation.
Agreed. But I think we produce plenty. The neglect was in the distribution of wealth.
Tax laws, accounting rules bad corporate management, fraud, etc. burdened the majority with unpayable debt for the benefit of a small rentier class.
A national disgrace.
anonymous writes:
...So that's $221428.57 per job...
If you take just the salary : Yeiks!!
But if that includes the capital investment needed jobs : sounds not unreasonable.
Which is why Bush reduced audits on the rich to pursue the middle and lower class.
mmckinl | 01.10.09 - 5:45 pm | #
Yes. So did Reagan - my sis was inside then and saw it happen... A sort of 'no ask no tell'.
Agreed. But I think we produce plenty. The neglect was in the distribution of wealth.
Tax laws, accounting rules bad corporate management, fraud, etc. burdened the majority with unpayable debt for the benefit of a small rentier class.
A national disgrace.
Angry Saver
~~~~~
Amen ...
Where's the Bank Holiday ?
"When the advocating of RFID chips in newborns and children becomes a prerequisite in league with mandatory immunizations I am moving to the remotest location I can find."
On which planet?
"These projections into our economic future crack me up. I understand that a 'plan' requires some sort of end result, but I wonder if Obama and company will have any more luck guesstimating the future than most economists.
Sorry to be the cynic, but. . . ."
It's always possible to forecast the future, but to control it is more difficult.
I glad to see the government is using the same bull shit simulation models as Wall Street used in its genius financial engineering of CDO's and sub-prime loans.
I very rarely do this, here or anywhere, but Runaway:
pavel.libsyn.com
Question...the ones supporting shorting week to 32/36 hrs. How will this create more jobs? I'm thinking some part time creation at best.
Just tring to understand thought process more.
I did not know the US economy was a harmonic oscillator..
Most industries are laying off 10% of work force
WHat does THAT do to unemployment?
Unfortunately, many are early retirement so they wont count!
Many times if employees dont begin drawing pension immediately, they wont recieve company paid healthcare, they arent considered retirement, they are terminations. They are FORCED to retire due to this
LAM writes:
Question...the ones supporting shorting week to 32/36 hrs. How will this create more jobs? I'm thinking some part time creation at best.
~~~~
Same amount of work spread over more workers ...
That's how we got the 40 hour workweek, vacations and sick days.
Pavel,
This planet.
Applied Digital Solutions of Palm Beach, Fla., is hoping that Americans can be persuaded to implant RFID chips under their skin to identify themselves when going to a cash machine or in place of using a credit card. The surgical procedure, which is performed with local anesthetic, embeds a 12-by-2.1mm RFID tag in the flesh of a human arm.
Chip implant gets cash under your skin - CNET News
A technology entrepreneur in northeastern Washington asked a doctor to implant an RFID chip into his hand in order to experiment with the technology. Amal Graafstra, who runs a technology company in Bellingham, WA, asked a doctor to place the chip under the skin of his left hand, and posted pictures of the procedure to the photo-sharing site, Flickr. Graafstra plans to use the chip for keyless entry to his car, home, or as a login for computer systems.
Entrepreneur's RFID chip implant to open doors, start car - Wikinews, the free news source
Under conditions of a looming economic meltdown, rising unemployment, staggering debt, the collapse of financial markets and continuing wars and occupations in Iraq and Afghanistan, U.S. imperialism, in order to shore up its crumbling empire, will continue to import totalitarian methods of rule employed in its "global war on terror" onto the home front.
The introduction of RFID-chipped passports and driver's licenses for the mass surveillance and political repression of the American people arises within this context.
The Implanted Radio-Frequency Identification Chip: "Smart Cards" in a Surveillance Society
The FDA in October 2002 said that the agency would regulate health care applications possible through VeriChip. Meanwhile, the chip has been used for a number of security-related tasks as well as for pure whimsy: Club hoppers in Barcelona, Spain, now use the microchip much like a smartcard to speed drink orders and payment.
FDA approves implanted RFID chip for humans
i love it when you beat up the randist types. do you have any posts on your blog dedicated to this?
I've done a little commentary but frankly, it's like debating flat-earthers. They're fanatically committed to the ideology beyond reason.
http://www.realmeme.com/roller/page/realmeme/?entry=ego_constraints
Wow. I have a couple of other off-hand comments but that's about it.
I do enjoy annoying Billy Beck. His latest take is just... amazing.
Two--Four
This is the biggest implied flaw that I know in the Randian theory is that a sophisticated economy requires specialization of work.
But the greater the specialization of work, the less intersection in values that everyone has. A true work specialization requires a manager who subsets and routes information to the right workers.
Ergo, workers, BY DEFINITION, do not have full access to all information that they need to make "market decisions".
In other words, work specialization and "full information availability" are mutually exclusive.
The Anarcho thing just can't work for anything beyond simple economies and structures. And that is exactly what history has shown for the past 2000 years.
.
The US state of Virginia has considered putting RFID tags into drivers' licenses in order to make lookups faster for Police Officers and other government officials. The Virginia General Assembly also hopes that by including the tags fake identity documents would become much harder to obtain. The proposal was first introduced in the "Driver's License Modernization Act" of 2002, which lapsed without vote, but as of 2004 the concept is still under consideration by a committee.http://www.palowireless.com/rfid/whatisrfid.asp
A little under 1/3rd of these jobs will be in retail and hosp./leisure? By bailing out mall and hotel developers so they can keep staff working though there are no customers? I don't get this retail job creation angle.
"Pavel,
This planet."
Sorry, it's not that I doubt that everyone might, possibly, be chipped at birth? What I meant was: Where would you go to hide from it?
lawyerliz,
Lawyers are not hated because they handle legal matters. They are hated because they represent 'sophistry' and 'legalism'. Although J6P might not know the meaning of those terms, he does understand what the concept of shysters, unreasonable laws and getting screwed by legalese.
"The Anarcho thing just can't work for anything beyond simple economies and structures. And that is exactly what history has shown for the past 2000 years."
Have there ever been 'Anarcho' societies that lasted more than a few months, or a few years?
RFID hack could crack open 2 billion smart cards
Analyst: One European government sent armed guards to protect facilities using the card ... This is why I'm worried RFID hack could crack open 2 billion smart cards
I see U-3 unemployment > 10%. U-6 unemployment > 17.5%.
Angry Saver | 01.10.09 - 5:19 pm | #
U6 would be in that range, if not higher with a U3 of 10%+. I posted a graph of the spread between U6 - U3, and it takes a significant hike north in the 3rd and 4th quarters of 2008 (graph on blog).
The US state of Virginia has considered putting RFID tags into drivers' licenses
Faraday cage wallets are going to become real popular.
That's how we got the 40 hour workweek, vacations and sick days
Each person has 116 waking hours per week to either produce stuff or consume stuff. Assume it takes 40 hours to produce and 76 hours to consume...
if my productivity rises over the past sixty years so I'm producing twice as much stuff....
Right. I don't have enough time to consume. Stuff piles up and prices fall. The only way to really fix this is to reduce production and increase consumption. In a relatively egalitarian society, that means 32 hours of work and 124 hours of consumption.
And that's what's happened over the past 100 years. It's possible for foist all production onto a smaller set of workers who never consume but that has increasinly less political stability.
.
energyecon - how are you putting the recession bars into your graphs?
I think that confidence is a big issue. We need clean, solvent banks. Trying to shore up the ones that got us here may be a fool's errand. What we should do with the 700 Billion bailout money is create 100 new banks. 7 Billion capital, leveraged 10 times, is 70 Billion each. In no time those 100 banks will be opening branches near each of us. Money will flow out of the dinosaur banks, into the new banks. The dinosaur banks are holding paper not worth what they paid for? Let them sell and take their losses. That is what all investors/traders have to do. Why should the dinosaur banks be treated any differently?
LawLiz hit it on the head;
"Media wants us to keep spending money. All those car ad [and __________] dollars. Want to keep us foolishly optimistic, so we will keep on spending."
No stimulus puts NOTHING into the pockets of the news organizations. No advertising and nothing but bad news.
reducing the work week is moronic. there isn't a "fixed" amount of work to be "spread around".
"Why should the dinosaur banks be treated any differently?
Reptillian | 01.10.09 - 6:12 pm | # "
This strikes me as rank disloyalty. A reptilian against dinosaur banks?
oops, make that 84 hours of consumption.
China probably needs to enforce something like a 40-hour work week at some point. And India, etc.
.
That's quite a chart up there!
Was it done by the fifth grade class at an elementary school?
First, it says unemployment won't rise above 8% if we get a "stimulus" - which is a flat-out lie.
Second, there is no model anywhere, government or otherwise, that could possibly produce an accurate chart for such a thing (they couldn't even predict the recession, fer crissake.
Third, well... why bother... it is an impossible and completely stupid chart.
How convenient to have authority over the organization doing the measurement and statistics calculations when you plot out a course.
They pretend to work & we prentend to pay? Command employment in the USSA.
energyecon - how are you putting the recession bars into your graphs?
Anonymous | 01.10.09 - 6:11 pm | #
Brute force - I have graph envy of CR - I manually draw and place polygons with 50% transparency...[sighs]
Right. I don't have enough time to consume. Stuff piles up and prices fall. The only way to really fix this is to reduce production and increase consumption. In a relatively egalitarian society, that means 32 hours of work and 124 hours of consumption.
And that's what's happened over the past 100 years. It's possible for foist all production onto a smaller set of workers who never consume but that has increasinly less political stability.
~~~~~~
This would increase the set of workers producing and with personal budgets being what they are people just might think of doing something rather tan consuming.
Sorry Pavel, missed the implied inflection.
Any remote rural area will be less susceptible to more control.
There are great swaths of open country throughout America. Live small and unnoticed and off the grid as much as possible.
Watched the new movie "Defiance" last night. I was amazed a large group of Jews could live in the forest in German claimed territory. No earthly power is all seeing/knowing/controlling. They are getting better at it though. RFID tech is insidious and unnoticed all around us. The old "if you don't see it, it doesn't exist" mindset. Your familiar with that, right?
Is working at C or AIG still considered private sector? Or is it public sector on private salary scales ?
In no time those 100 banks will be opening branches near each of us. Money will flow out of the dinosaur banks, into the new banks. The dinosaur banks are holding paper not worth what they paid for? Let them sell and take their losses. That is what all investors/traders have to do. Why should the dinosaur banks be treated any differently?
Reptillian
~~~`
Why create new banks ? Take over the insolvent banks, there are plenty ...
Nearly 40% of the average work week is spent working to pay state and federal taxes.
Krugman says you need at least $2+ trillion to soak up over capacity. I think they figured out about 1937 that the voters would not stand for the kind of deficits it would take to spend their way out of GD 1. If you get a good war going, preferably with a non white nation, the voters will go for way bigger deficits. Lessons learned. This is not going to end well.
wally | 01.10.09 - 6:16 pm | #
wally meet jas, jas meet ....wait a second.
reducing the work week is moronic. there isn't a "fixed" amount of work to be "spread around".
Currently Accounting
~~~~
Wrong ... there is a base amount of work needed to run any civilization ...
We reduced the work week before, with the so called productivity we've accomplished a 36-32 hour workweek is completely doable.
Mot-tax revolt is really only way to take back power from elite...
Claim exempt, open home business, write everything off-learn from rich,
do extension, come back to me in a couple years when they finally catch on...The people will be angry enough to not give a dam about some middle class guy trying to keep family above watere, they would rather chase the the elitist, rich and scum of wall street..
Why fear the govt., throw me in house arrest, maybe learn a from the crooks in a min. security prison..
Citizens have become pacified....they get screwed constantly by the pigmen yet take it like sheeple lying down...
Mark Twain
"In the beginning of a change the patriot is a scarce man, and brave, and hated and scorned. When his cause succeeds, the timid join him, for then it costs nothing to be a patriot."
@citizen energyecon: - re spread between U6 - U3:
Given that the denominators in U3 and U6 are different, I am not sure what this spread means.
I personally prefer Nonagricultural Part-time Workers as percent of All Private Employment - it also goes farther back in history than the published U6 numbers.
there is a base amount of work needed to run any civilization
Hunting and gathering?
The New Gods Of Finance Will Crush The Middle Class - The International Forecaster
"When Caligula leaves the White House, he will be replaced by Nero who will play his Keynesian FDR fiddle while Rome burns to the ground and we are hyperinflated into oblivion. No, he won't tax the poor. Then what, we ask, is inflation if not a stealth tax? He has told us we must spend, spend, spend immediately to avoid any further meltdown of the system. We have news for you Obama: the system has already burned down. Throwing money down these rat-holes will ignite inflation, which is the worst kind of tax on the poor. The rich will get their loopholes while the poor shell out twenty-dollar bills for a loaf of bread. Has this man read any history, or is he just another ignorant baboon like the one leaving the White House? The use of multi-billion dollar bailouts to address multi-trillion dollar problems is like trying to bail out the Titanic with a shot glass."
Another dose of tell it like it is depression from Bob Chapma
On page 13 of the release there is this paragraph about the multipliers that are assumed in the calculations:
For the output effects of the recovery package, we started by averaging the multipliers for increases in government spending and tax cuts from a leading private forecasting firm and the Federal Reserves FRB/US model. The two sets of multipliers are similar and are broadly in line with other estimates. We considered multipliers for the case where the federal funds rate remains constant, rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal expansion, on the grounds that the funds rate is likely to be at or near its lower bound of zero for the foreseeable future.
Question: Are their assumptions about the multipliers and the Federal Funds rates directly tied to interest payments on the debt reducing the amount of money that can be directly spent, or some other relationship?
Currently Accounting writes:
Nearly 40% of the average work week is spent working to pay state and federal taxes.
~~~~~
So ? ... The services defense ( though we spend too much), law, social services, public utilities, fire and local law enforcement are needed. I'm not saying that reform isn't needed, it is but your protests confirm your naiveté as to how any civilization works to function ...
No confidence from here. I do have a question as to Green energy. What effect does the currency reserve and oil dollars play in drop of importing oil. Doesn't sound good to me.
I've spent a lot of time reading some of Romer's articles on the Great Depression after Brooks' piece in the NYT. Kind of fascinating in light of the stimulus plan. Even more fascinating in light of a stimulus plan that includes tax cuts.
At any rate, Obama has to risk eating crow in the future to get this thing passed in anything resembling its current state. Will have to use dramatic numbers.
I am sorry, after reading over this plan, all I see is a very poor attempt to stop the economic slide from our current untenable position...
The govt has been keeping numbers and figures of labor employment, production, manufacturing by industry, etc...
Their goal should be a self sustaining economy...then pick a past year and use that as their goal to shoot for the number and types of industries that the govt will help to rebuild with seed money...
This piece of garbage isn't worth the paper its printed on...It has so many disclaimers that it's totally worthless as a goal and a plan...
Hunting and gathering?
Basel Too
~~~~
95% of Americans wouldn't last a day ... I wouldn't
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
waffle eater jim writes:
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
~~~~~
There were plenty of people bashing the Bush Tax Cuts ... just not the Republicans or the Blue Dog Dems in Congress.
Know your history.
waffle eater jim writes:
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
waffle eater jim
exactly, why is he out stumping as Prez-Elect about problems of the current admin. He should just stfu until the day after inaug.
Pavel,
Dinosaurs were Archosaurs, not classical Reptiles. And were it not for both dinosaur extinction and a peculiar climate change event about 40 million years ago, mamals would not be the dominant land animals.
The age of land mamals truly began only after the global forest cover (post meteor impac)t receded and the earth became drier. The first 15 million years after the dinosaur extinction were dominated by giant meat eating flightless birds.
In some ways dinosaurs never died, they just faded away..
On tax revolt - just write "paid but protested" or anything of similiar nature on your tax filing. I know you can handle the audit.
Try setting up an alternative money system using gold. See e-gold for how that works out.
Don't pay your taxes? Owe enough to make it worth while for the gov to go to trial? They will, and you better plan on having your life gone over with a finer tooth comb. Expect to pay millions in litigation cause the gov will bury your counsel in paper.
waffle eater jim | 01.10.09 - 6:28 pm | #
We weren't following relevant blogs and comment sections. We were watching/reading MSM.
The criticism offered should be accepted as beneficial not destructive. You are still allowed to make your own conclusions. I am heartened by the fact we aren't blindly following the pronouncements from on high.
ational health records DATABASE?
that is a far cry from national health care.
who's he foolin?
whatchu takin bout Willis?
Had to make an appointment for my daughter to get her eyes examined. Called the usual place, a national chain, this office is in a large mall. Expected to get an appointment in a couple weeks. It was anytime, anyday.
Watch drugstore reading glasses make a comeback
Given that the denominators in U3 and U6 are different, I am not sure what this spread means.
I personally prefer Nonagricultural Part-time Workers as percent of All Private Employment - it also goes farther back in history than the published U6 numbers.
MrM | 01.10.09 - 6:22 pm | #
I'm not sure what the spread necessarily means either, I am interested in what is different between its behavior last recession and the current one.
For casting the net very wide, I like the relationship that appears between CIVPART and EMRATIO.
"wally meet jas, jas meet.."
I don't mean to be so negative, anon. I've just been brought to this point by reality.
"a right given to us by the constitution creation of our own money."
the constitution explicitly mandated money created by nature, silver and gold, not man. this lasted for most of our history in terms of cirulating currency, and 7/8 of it in regards to real money vs scrip.
nixon did give you the right to use imaginary paper, however. one of many aspects of modern america - the southern strategy, the german-circa-1920 chip-on-the-shoulder foreign policy, and extralegal executive branch - which he authored, with the help of such luminaries as cheney and rummy.
Jeff Imelt quite correctly said this is not a cyclical downturn it is a "re-set moment". Nothing in this plan attempts to re-set the economy. The old model of borrow and spend coupled with declining wages is broken. Have to say this plan is nothing more than putting lip stick on a pig. BTW what part of this plan requires a PHD in economics? Best as I can tell to come up with those numbers about how many jobs will be created.
Final bit of anecdotal financial doom.
I had a buddy years ago who talked me into variable universal life insurance. My statement I received today shows I've paid $6000 in over the last 6 years. Ending value is $486.39.
I wonder how many other people "invested" in this great new financial product? The selling point for me was the thought the account would eventually pay for itself. Makes me smile. Yes I quit paying and am letting it lapse and I switched to term life.
Joseph Tainter writes on ancient Rome,
Records indicate that, more than once, both rich and poor wished that the barbarians would deliver them from the burdens of the Empire. While some of the civilian population resisted the barbarians (with varying degrees of earnestness), and many more were simply inert in the presence of the invaders, some actively fought for the barbarians. In Gaul the invaders were sometimes welcomed as liberators from the Imperial burden, and were even invited to occupy territory. To ensure the doubtful loyalty of frontier areas, the government was on occasion forced to make up local deficits of grain.
Zosimus, a writer of the second half of the fifth century A.D., wrote of Thessaly and Macedonia that '...as a result of this exaction of taxes, city and countryside were full of laments and complaints and all invoked the barbarians and sought the help of the barbarians.' 'By the fifth century,' concludes R.M. Adams, 'men were ready to abandon civilization itself in order to escape the fearful load of taxes.'"
(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)
Krugman thinks Obama's plan is only 1/3 the size it should be:
Risks of deflation (wonkish but important) - Paul Krugman Blog - NYTimes.com
"Now heres the thing: the slump of the early 1980s produced the Great Disinflation, which brought the core inflation rate down from about 10 to about 4."
"This time, however, we entered the slump with a core inflation rate of about 2.5 percent. If we experienced a disinflation comparable to that of the 1980s, that would mean ending up with deflation at a rate of -3.5 percent."
"And bear in mind that neither the CBO nor the Obama team really explains where recovery comes from; its just assumed."
"So tell me why we arent looking at a very large risk of getting into a deflationary trap, in which falling prices make consumers and businesses even less willing to spend. Tell me why this risk wouldnt remain high, though lower, even with the Obama plan, which as far as I can tell is expected to reduce cumulative excess unemployment by about a third."
My question is ... if we have ANY deflation as a result, will it make any difference whether it is 3% or 4% or 5%? Is it poison no matter what the rate? If we spend 3X the Obama plan will it still avoid it?
"Dinosaurs were Archosaurs, not classical Reptiles."
I knew that. But it spoils the joke. : )
Actually, some specialists say that birds and dinosaurs should belong to the same super-class (?), Aves. If true, then birds are dinosaurs too.
citizen energyecon,
You are an optimist about the peak unemployment numbers. This time around our problems have been complicated by factors such as demographic profiles, entitlements and entrenched lobbies.
Krugmans view
Romer and Bernstein on stimulus - Paul Krugman Blog - NYTimes.com
this plan looks too weak
citizen energyecon - btw, this just in - the 3-day long gas talks between Russia and Ukraine just ended without any agreement. Putin is playing hardball
waffle eater jim writes:
you gotta love all the criticism of the proposed plan of the President-elect who has not even taken office yet. Where were all these skeptical people putting the BushCo tax cuts under the microscope back in 2001 when some adult supervision would have kept us out of these desperate financial times?
waffle eater jim | 01.10.09 - 6:28 pm | #
Remember that moron Greenspan who told us we needed the Bush tax cuts -without it we would pay down the national debt!!!
anyone want to bet on whether more computers get put into bunker buster smart bombs than get placed in front of children in classrooms?
smart bombs, nice oxymoro
anyone want to bet on whether more computers get put into bunker buster smart bombs than get placed in front of children in classrooms?
War is the health of the State.
bgates writes:
"a right given to us by the constitution creation of our own money."
the constitution explicitly mandated money created by nature, silver and gold, not man. this lasted for most of our history in terms of cirulating currency, and 7/8 of it in regards to real money vs scrip.
~~~~~~
Ever heard of colonial script ? England banished colonial script and Benjamin Franklin said it caused the Revolutionary War.
Money Without Debt ... it can be gold or silver or fiat currency that doesn't evolve form debt.
crazyvermonter writes:
Remember that moron Greenspan
and the morons Summers, Rubin ...
"(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)"
That's a great quote, and in substance I've seen it quite a few times, including texts on the fall of the Byzantine Empire, about a thousand years down the road from the fifth century.
Cavafy:
Waiting for the Barbarians
What are we waiting for, assembled in the forum?
The barbarians are to arrive today.
Why such inaction in the Senate?
Why do the Senators sit and pass no laws?
Because the barbarians are to arrive today.
What laws can the Senators pass any more?
When the barbarians come they will make the laws.
Why did our emperor wake up so early,
and sits at the greatest gate of the city,
on the throne, solemn, wearing the crown?
Because the barbarians are to arrive today.
And the emperor waits to receive
their chief. Indeed he has prepared
to give him a scroll. Therein he inscribed
many titles and names of honor.
Why have our two consuls and the praetors come out
today in their red, embroidered togas;
why do they wear amethyst-studded bracelets,
and rings with brilliant, glittering emeralds;
why are they carrying costly canes today,
wonderfully carved with silver and gold?
Because the barbarians are to arrive today,
and such things dazzle the barbarians.
Why don't the worthy orators come as always
to make their speeches, to have their say?
Because the barbarians are to arrive today;
and they get bored with eloquence and orations.
Why all of a sudden this unrest
and confusion. (How solemn the faces have become).
Why are the streets and squares clearing quickly,
and all return to their homes, so deep in thought?
Because night is here but the barbarians have not come.
And some people arrived from the borders,
and said that there are no longer any barbarians.
And now what shall become of us without any barbarians?
Those people were some kind of solution.
Constantine P. Cavafy (1904)
Pavel Chichikov,
The dominant land predators for 15 million years after the dinosaur 'extinction' were super muscular 500 kg -1 ton flesh eating flightless birds.. so dinosaurs never died out..
Whales and related aquatic mammals were successful and dominant(- 50 million years) before land mammals became dominant (almost -40 million years).
//Actually, some specialists say that birds and dinosaurs should belong to the same super-class (?), Aves. If true, then birds are dinosaurs too.
Pavel Chichikov | 01.10.09 - 6:45 pm | #//
By the fifth century,' concludes R.M. Adams, 'men were ready to abandon civilization itself in order to escape the fearful load of taxes.'"
(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)
mal
~~~~~
Taxes caused by debt and hard currency ...
Usurious interest was even a problem back then. Then with more people and less coinage it became deflationary causing taxes to rise as the economy shrank.
" or fiat currency that doesn't evolve form debt"
isn't a claim on future taxation debt?
is there an example of a fiat regime like this in history?
REASON WILL NO ANSWER GIVE
White flags flying on the hill,
The army is retreating fast,
There is no culling of a kill,
Oak and beech refuse their mast
Starving deer will never stay,
Forage missing will repel,
Saplings are their lawful prey
Until the forest is a shell
Then they gallop, refugees,
Panic is a whipping guide,
Famine pressing herds to seize
Streams and rivers wild and wide
How would starving people live?
Reason will no answer give
\t\t\t\tPavel
\t\t\t\tDecember 18, 2008
People behave like that when they become mentally rigid and start thinking that they are inherently superior. They also look down on other groups and think that only they can come up with new ideas, and since they cannot come up with new ideas - it is all over.
Guess which group is in that chair now..
It has nothing to do with complexity and everything to do with human hubris, belief in determinism and game theory.
//Pavel Chichikov writes:
"(from The Collapse of Complex Societies. An entire detailed chapter on the history of late Roman imperial taxation and the progressive abandonment of farmland by overtaxed subjects thereof.)"//
My question is ... if we have ANY deflation as a result, will it make any difference whether it is 3% or 4% or 5%? Is it poison no matter what the rate? If we spend 3X the Obama plan will it still avoid it?
Doc at the Radar Station
~~~~
No, which is why great amounts of debt will have to be written off ... which is exactly the opposite of what the Oligarchy in DC is trying to do. They are trying to prop up debt ...
Where's the Bank Holiday ?
"Then with more people and less coinage it became deflationary"
that describes USA ca 1870-1890 (though the spanish american war helped apply some inflationary relief around the time WJ Bryan gave his speech on the subject).
but the adulteration of silver in roman currency in that era may have counteracted the effects you speak of in that society. i'd want to actually sit down and read all of gibbons before i opined on that one too much, however.
lucifer | 01.10.09 - 6:45 pm | #
Oh I didn't envision those as the peak, just that the relationship between U3 and U6 "seemed" about right...and I wonder if U3 goes higher, the spread will as well (U3 ~12%, U6 ~22%-24%?)
MrM | 01.10.09 - 6:46 pm | #
Hooboy, that is just getting fugly. That is instant depression for a few of the impacted countries, wondering what cascade effects may result in the EU and eastern Europe...thanks for the update.
I just found out about this guy and I like him. No B.S.
The Young Turks: Rebel Headquarters : News : Politics : Commentary
Lots of stuff on Roman currency, inflation, etc in that chapter. A sample:
Diocletian introduced a new coin worth 25 denarii, which by the 320s had shrunk to 1/3 of its original weight. There were two currencies during the fourth century: gold and copper. The gold solidus was introduced by Constantine, and retained its value for seven centuries. Copper currency, however, was inflated by assigning face values to the coins that were artificially high. The inflated copper coins went to cover military pay, and to buy gold solidi on the open market. Only by the end of the fourth century were payments in kind fully commuted to gold.
And on it goes in great detail about Roman currency. Great book. Should be required reading in these times.
Doc at the Radar Station writes:
"'For the output effects of the recovery package, we started by averaging the multipliers for increases in government spending and tax cuts from a leading private forecasting firm and the Federal Reserves FRB/US model. The two sets of multipliers are similar and are broadly in line with other estimates. We considered multipliers for the case where the federal funds rate remains constant, rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal expansion, on the grounds that the funds rate is likely to be at or near its lower bound of zero for the foreseeable future.'
Question: Are their assumptions about the multipliers and the Federal Funds rates directly tied to interest payments on the debt reducing the amount of money that can be directly spent, or some other relationship?"
The text you posted says that the Fed won't hike rates to cancel out the fiscal stimulus. There's no issue about the interest payments on the debt (which is going to be a small effect unless the dreaded Bond Market Crash materializes).
It may sound fairly strange, but under normal circumstances, a fiscal expansion ends up having limited impact on growth. Monetary policy normally moves more quickly than fiscal policy (takes awhile for spending to get approved). The Fed can raise rates if they view a fiscal expansion as being inappropriate for the economy. All that the fiscal expansion does is to change the mix of growth - more government spending, less private sector spending (as a result of the rate hike).
However, it doesn't seem likely that the Fed will be counter-acting stimulus in the current environment, unless something strange happens - like the economy starts growing.
" wondering what cascade effects may result in the EU and eastern Europe"
i'd imagine that most of the former bloc countries knew in their hearts that the relative peace, prosperity and sovereignty of the past couple of decades were momentary dreams soon to pass, just as they always have in history
OH MY GOD! Someone let these turds loose with the finger paint again! True to form they can't make up anything much more interesting than two lumps, one light blue and one dark blue.
Obama is about to learn that a melliflous presentation is no substitute for substance.
And I contributed to his campaign as the better choice.
is there an example of a fiat regime like this in history?
bgates
~~~~
Yes , colonial Pennsylvania ... The trouble is fractional reserve bankers have always ruined true currency to run their money making monopoly ...
As you must know, all money and credit comes from private banks. We used to own coinage but they took that too.
Why should we borrow our own money to spend?
Ya.. that is more along what I am thinking. The trouble is that the PTBs will keep on flogging U3 as the 'true' number and will thereby lose people's confidence.
PS- once U6 goes above 20%, social problems will start dominating job concerns.
//Oh I didn't envision those as the peak, just that the relationship between U3 and U6 "seemed" about right...and I wonder if U3 goes higher, the spread will as well (U3 ~12%, U6 ~22%-24%?)//
However, it doesn't seem likely that the Fed will be counter-acting stimulus in the current environment, unless something strange happens - like the economy starts growing.
bond guy
Thanks for your response. I understand why they wouldn't want to derail things by any increase in the funds rate and how that would counter-act any fiscal stimulus. I'm just wondering... how is that effecting their multipliers? Obviously the multipliers are calculated with the FF rate in the mix somehow.
bgates
Check out the history of Colonial Script. How it benefited the citizenry and was not inflationary as they were frugal.
In Pennsylvania Colonial Script existed side by side with gold coinage and stayed at par for decades ... until The Bank Of England had Parliament ban its use. The Bank of England didn't get any loans as the colonies paid for their improvements through script.
They will start saying what they had always suspected- the USA (and the west) talk about things that they are powerless/ unwilling to change..
And they were used as gullible pawns against Russia.
//" wondering what cascade effects may result in the EU and eastern Europe"//
"Why should we borrow our own money to spend?"
i didn't think that the american people had a chance to cast off the burden of the parasitical Fed in our life time, but i'm starting to wonder.
silver lining, indeed. Andrew Jackson's scowl is still there.
"And bear in mind that neither the CBO nor the Obama team really explains where recovery comes from; its just assumed." (Krugman)
Well, that is not exactly true. They think if they just replace the lost demand with government spending that will break the cycle (which I would have figured he agreed with). Does he think they need to defend Keynes? Perhaps he just disagrees with them on the numbers.
It is just really strange to me that Romer, who completely discounts the expansionary contribution of fiscal policy in the Depression, would be seeing fiscal policy as the end of this situation.
I just wonder 1) what the real cost of implementing the stimulus will be and 2) whether that is worth having unemployment peak lower (but still incredibly high) and sooner (assuming that happens). I would also like to see them discuss how the financial intervention will be phased out and the effect that will have. Are we to assume that the government will continue to support the financial system until the stimulus demonstrates results, and at what added cost there?
"as they were frugal."
they were also heavily catholic and German relative to the other colonies, weren't they?
that is interesting, thank you for the reference.
"And they were used as gullible pawns"
i'm still confused as to why the czechs are attached to 'wilsonova' as the name of that station.
Because well heeled sociopaths and their ivy league educated flying monkeys tell you to.. and you go along.
"Why should we borrow our own money to spend?"
I had a buddy years ago who talked me into variable universal life insurance. My statement I received today shows I've paid $6000 in over the last 6 years. Ending value is $486.39.
Hmmm. Sounds kinda like Social Security. Except you can't get out of it.
i didn't think that the american people had a chance to cast off the burden of the parasitical Fed in our life time, but i'm starting to wonder.
silver lining, indeed. Andrew Jackson's scowl is still there.
bgates
~~~~~
It's probably the only way we get out of this mess without a multi year depression or hyperinflation.
The banks are what caused this mess. The government let it happen through lax regulation but the banks caused it ...
The biggest mistake by many former east-european satellite countries was believing that the west was sincere and true to their word.
They should have looked out for their own interests and played the west against russia (and vice versa) by still keeping good relations with both..
mmckinl writes:
"Money Without Debt ... it can be gold or silver or fiat currency that doesn't evolve form [from] debt."
I cannot visualize fiat currency that does not evolve from debt. (It may be I'm missing something, I admit.)
A fiat currency is issued by some entity. If it is to have value, that entity has to make some form of representation that the currency will be trade-able for goods in the future. That pretty much means the money is a liability to the issuing entity.
If the currency is backed by gold for example, the note is still a debt-like instrument; it just can be redeemed for gold rather than more paper currency. In other words, gold is the true "money" that is backing up the paper liability.
The only way to avoid debt is to require all transactions to be barter transactions.
ok, the guy using his RFID chipped hand to get in his car house and bank account?
what happens when someone takes a machete' to that bitch's arm?
or plucks out someone's eyeball to get through a retina scanner.
if people see these types of problems with biometric ID they may ask, what's wrong with cash?
a cashless society where every transaction is recorded and money is not anonymous is incapable of supporting freedom.
It is just really strange to me that Romer, who completely discounts the expansionary contribution of fiscal policy in the Depression, would be seeing fiscal policy as the end of this situation.
-Bond Girl
Do you have a link to a paper she has written?
Doc at the Radar Station writes:
"Thanks for your response. I understand why they wouldn't want to derail things by any increase in the funds rate and how that would counter-act any fiscal stimulus. I'm just wondering... how is that effecting their multipliers? Obviously the multipliers are calculated with the FF rate in the mix somehow."
Yes. They say "We considered multipliers for the case where the federal funds rate remains constant, rather than the usual case where the Federal Reserve raises the funds rate in response to fiscal expansion". I.e., the multipliers are different, and presumably much larger if the Fed Funds rate does not rise in response. [I haven't read the paper, and I don't know what the multipliers are.]
Ukraine Gas Accord Signing Delayed by Some Details (Update1)
By Daryna Krasnolutska and Lucian Kim
Jan. 11 (Bloomberg) -- Ukraines planned signing of an accord with Russia and the European Union on monitoring the transit of Russian gas through its territory was delayed early today by the need to discuss some details, the EU representative said.
Ukraine Gas Accord Signing Delayed by ‘Some Details’ (Update1) - Bloomberg.com
"the expansionary contribution of fiscal policy "
better phrased as "the confiscatory parlor trick of fiscal policy"
....if the challenges we are experiencing is/was caused by ALL three segments being over-leveraged (the banks, the FedGov and the populace in debt up to their eyeballs), how is this stimulus plan going to correct that?
From a previous thread.. that is how evolution works and new species evolve .. not pretty but effective. Why did the 'cambrian explosion' occur after the earth almost froze over and likely killed a lot of then existent life? Why did dinosaurs come out in such good shape out of the triassic mass-extinction?
In well established systems even the most promising innovations get squeezed out or stunted by status quo... only in the chaos & disorder of 'failure' is there room for the new ideas to really take root and flourish. It is like old growth forests & their saplings underneath... the saplings never make it unless the giants burn or are harvested reducing competition & enabling the saplings to get resources (water, nutrients & sunlight).
The only long term downside is if the forest fire removing the old growth is so intense it burns the soil to bedrock and even kills the cones and seeds waiting to sprout & regenerate. When is that most likely to happen? When a forest has been 'managed' to never burn & huge amounts of duff & fuel layer the forest floor... when conditions are right it burn so hot it nearly sterilizes the soil.
Good thing that kind of disaster could never happen in an economic system.
dryfly | 01.10.09 - 4:56 pm | #
What? We can't solve the problem of a hugely over leveraged system with even HUGER leverage?!
bond guy writes:
I cannot visualize fiat currency that does not evolve from debt. (It may be I'm missing something, I admit.)
~~~~
Money is anything the government says you have to pay taxes with and by legal extension they can declare government money to be good for any form of debt or purchase.
The power of money is the power of government to make it money through payment of taxes or judgments and enforcement through the courts and law enforcement.
well, what if we see the leverage as not being leverage.
//What? We can't solve the problem of a hugely over leveraged system with even HUGER leverage?!
citizen energyecon | Homepage | 01.10.09 - 7:18 pm | #//
OK, so what happens if/when it fails? No one here seems to think it will work. So then what? We find out in a year? Maybe two?
Do you have a link to a paper she has written?
Doc at the Radar Station | 01.10.09 - 7:11 pm | #
I wish I did. I found them on JSTOR. (I am nerdy enough to have a library card.)
FDR had the option of doing a 75% "growth" gambit because convertibility was still on the table.
Argentina had the option of just picking a more generous ratio to the greenback.
We have no such option.
ya.. that is what I am concerned about.. it is hard to run countries if people lose almost all trust in the government.
//OK, so what happens if/when it fails? No one here seems to think it will work. So then what? We find out in a year? Maybe two?
nova | Homepage | 01.10.09 - 7:20 pm | #//
Bond Girl,
Found her webpage at Berkeley with a ton of papers and links on it:
Christina Romer
FDR had the option of doing a 75% "growth" gambit because convertibility was still on the table.
Argentina had the option of just picking a more generous ratio to the greenback.
We have no such option.
bgates
~~~~~
Higher taxes on the well to do while spending on social services and infrastructure. Money that is spent without borrowing but underwritten by those higher taxes.
Looking for confirmation elsewhere...
Russia, Ukraine, EU Sign Accord on Monitoring Gas (Update1)
By Daryna Krasnolutska and Lucian Kim
Jan. 11 (Bloomberg) -- Russia, Ukraine and the European Union signed an accord on monitoring the transit of Russian gas via Ukraine, setting the stage for the full resumption of fuel supplies to Europe after four days of disruption amid freezing temperatures.
Ukraine Signs Accord on Transit Gas With EU, Russia (Update3) - Bloomberg.com
Pull an FDR..
//Higher taxes on the well to do while spending on social services and infrastructure. Money that is spent without borrowing but underwritten by those higher taxes.
mmckinl | 01.10.09 - 7:24 pm | #//
" but underwritten by those higher taxes"
i believe that when i see it. and i don't think i will.
laffer may have the last laff on that one.
I wish I did. I found them on JSTOR. (I am nerdy enough to have a library card.)
Bond Girl | Homepage | 01.10.09 - 7:21 pm | #
OK I am going to say it and jinx this thread, but is has just rocked - this kind of thread makes putting up with all the pain worthwhile...
"OK, so what happens if/when it fails?"
Nothing will change, I'll still grow or trade for 90% of my stuff.
6-tomatoes will still fetch 4-steaks from one neighbor and a box of ammo from another. A gallon of home-made ice cream gets me 5-gals. of gas now.
Productivity gains went to corporations and into
the tax coffers to pay for those who do not produce. Until this changes nothing changes.
OK I am going to say it and jinx this thread, but is has just rocked - this kind of thread makes putting up with all the pain worthwhile...
your excitement is contagious...now, what did you mean to say?
citizen energyecon @7:25 pm - There are two sets of parallel negotiations: one about monitoring of the transit of gas through Ukraine (signed by EU, Ukraine and Russia) and another one about prices of gas for Ukraine (broke off today).
The story about gas prices is interesting, btw - Russia wants to set it @$450, which is what most of the EU is paying. However, the EU gas prices are set via long-term contracts and are based on oil prices with 6-9 months lag, so they will drop soon. The Ukrainian gas prices are based on short-term contracts, and where they are going to be fixed for the next year or so is the subject of the second set of negotiations.
sporkfed writes:
Productivity gains went to corporations and into
the tax coffers to pay for those who do not produce. Until this changes nothing changes.
~~~~
That's why we need shorter work weeks ... to distribute the productivity gain equitably ...
When a place gets crowded enough to require ID's, social collapse is not far away. It is time to go elsewhere. The best thing about space travel is that it made it possible to go elsewhere.
Robert A. Heinlein.
Too bad we don't have space travel. Pavel has a point.
from Heinlein Quotes
some other good ones on this site, too.
Euro Watch
The blog above has an interesting post. The writer explains how Spain, which is spending a lot of money on creating infrastructure jobs, may have a problem.
My reading is that it costs a lot of money for the gov to create jobs. Obama may have a problem if job losses exceed job creation. Something that looks possible.
Black Star Ranch | 01.10.09
I admire your lifestyle. Nice, but impractical for a major urban area.
My reading is that it costs a lot of money for the gov to create jobs. Obama may have a problem if job losses exceed job creation. Something that looks possible.
nova
~~~~
Exactly why SAVING JOBS should be the first priority ... those jobs that can be saved ...
Medicare for All and shorter work weeks ...
It is cheaper, easier and faster to save jobs than it is to create them.
Interesting day full of disconfirming observations. We traveled to IKEA today and the traffic on the way there was terrible....almost as bad as rush hour traffic. Unfortunately, the exit we had to get off at was backed up because everyone was going to Cirque du Soleil for which tickets are running $300+. When we finally got to IKEA, it was packed like I've never seen it packed. We could hardly find a spot in the parking lot, and, in fact, almost decided to just leave rather than bothering...but, alas, we found one. It was a zoo inside. We didn't find what we were looking for, so we had to travel the length of their rat maze to exit the building. It was claustrophobic. On the way home, the traffic was just as congested as it was on the way in. Both my wife and I commented to one another "what recession?" Needless to say, we wished we never went. It was a waste of time and left us scratching our heads in bewilderment. Something isn't adding up.
...why is it the natural gas transit problem seems like a couple of petty hoodlums fighting over control of a local back alley crap game?
how about a currency based on a unit of time, or labor?
mmckinl | 01.10.09 - 7:39 pm
I agree. I don't know if it will happen but it makes sense, to me, to cut hours worked. Plus your ideas on health care...
The catch is how badly does the system have to break down for it to come close to happening.
Jobs are often discussed in quantitative terms rather than qualitative terms. Full employment is meaningless if it is not quality employment, and increasingly, the quality of employment has been diminishing.
how about a currency based on a unit of time, or labor?
otishertz
~~~~
Impractical ... Time without activity means nothing and labor value is dependent on value judgments.
Money is the only realistic exchange medium in a complex society.
Solar unit currency.
That's why we need shorter work weeks ... to distribute the productivity gain equitably ...
Or we could just sterilize everyone so everyone can have a bigger piece of the pie!
Oh wait, something doesn't compute.
I agree. I don't know if it will happen but it makes sense, to me, to cut hours worked. Plus your ideas on health care...
The catch is how badly does the system have to break down for it to come close to happening.
nova
~~~
It will have to get very ugly, but I expect it will get very ugly.
lucifer(Unrated) writes:
ya.. that is what I am concerned about.. it is hard to run countries if people lose almost all trust in the government.
Traditionally the cause of state failure, yes.
But, it will be capacity led. People never overthrow states because they are tyrannical. By the time you have a tyranny, people are getting the state they deserve, and all the "moral" machinery of state -- courts, military and law enforcement -- have declined into paralysis. Otherwise you would never have a tyrant.
States fail because tyrants suck at ruling. They're egoists and running states properly is a very demanding and largely unrewarding act.
They lose the ability to execute policy by squandering money, a failed succession or a coup that can't be suppressed -- most particularly to exert their strength at will and into a timely fashion into every corner of their domain -- and the become merely warlords, meaning the technical term for a man with a warband who doesn't execute the act of rule.
Once you rule only where the men with guns are, you don't really rule, and the Mandate of Heaven is withdrawn.
THE PLAN: ......"It should be understood that all of the estimates presented in this memo are subject to significant margins of error."
This is the unvarnished truth.
Impractical ... Time without activity means nothing and labor value is dependent on value judgments.
Money is the only realistic exchange medium in a complex society.
mmckinl | 01.10.09 - 7:45 pm | #
that, and the fact that a currency based on a unit of labor is literally slavery.
I agree. I don't know if it will happen but it makes sense, to me, to cut hours worked. Plus your ideas on health care...
The catch is how badly does the system have to break down for it to come close to happening.
nova | Homepage | 01.10.09 - 7:43 pm | #
I think these are great ideas, as well, but it will never happen because Corporations use hours worked to control their people. They would just assume lay off a bunch of people and have the remaining hacks working 80 hours a week rather than have a happy and productive workforce. A happy and productive workforce is seen as threatening....they might start thinking for themselves, and we couldn't have that, could we?
Black Star Ranch....I'm with you...Me and hubby are past retirement, consume very little, gardening is labor of love....and as I have said before bought 9 sows and one boar for my brother out on the farm to feed the community and family. But I so worry about my Country and hope O turns out to be a frigging genius economist.
Jobs are often discussed in quantitative terms rather than qualitative terms. Full employment is meaningless if it is not quality employment, and increasingly, the quality of employment has been diminishing.
Morocco Bama
~~~~~
Well, according to the statistics Americans work longer hours than any other G7 nation.
From Romer's "What Ended the Great Depression?"
Monetary developments were a crucial source of recovery of the US economy from the Great Depression. Fiscal policy, in contrast, contributed almost nothing to the recovery before 1942. The very rapid growth of the money supply beginning in 1933 appears to have lowered real interest rates and stimulated investment spending just as a conventional model of the transmission mechanism would predict. The money supply grew rapidly in the mid- and late 1930s because of a huge unsterilized gold inflow to the United States. Although the later gold inflow was mainly due to political developments in Europe, the largest inflow occurred immediately following the revaluation of gold mandated by the Roosevelt administration in 1934. Thus, the gold inflow was due partly to historical accident and partly to policy. The decision to let the gold inflow swell the US money supply was also, at least in part, an independent policy choice. The Roosevelt administration chose not to sterilize the gold inflow because it hoped that an increase in the monetary gold stock would stimulate the depressed economy.
We need a President Czar !
i was in a thrift store today where i recycled my christmas tree and many others last week looking for drafting tables.
it occurs to me that second hand shops and surplus liquidators and craigslist will easily fill the void of dead chain retailers.
the glut and overcapacity leftover in this country from the varios bubbles will do useful work for decades at ever cheaper prices.
i paid $400 with delivery for two solid oak drafting tables that cost $2400 new.
money is only a store of value and a medium of exchange.
pokemon cards, for a while there, met the qualifications for being money.
casino chips do too.
casino chips are of course easily redeemable, closer to the analogy of gold backed money..
The Roosevelt administration chose not to sterilize the gold inflow because it hoped that an increase in the monetary gold stock would stimulate the depressed economy.
~~~~~
LOL ... Gold without demand is just metal ... and so is money - paper, without demand.
Demand is created by discretionary income and faith in the future ... We have neither at the moment and probably for moths maybe years to come ...
(Romer, cont.)
That monetary developments were very important, whereas fiscal policy was of little consequence even as late as 1942, suggests an interesting twist on the usual view that WWII caused, or at least accelerated, the recovery from the Great Depression. Since the economy was essentially back to its trend level before the fiscal stimulus started in earnest, it would be difficult to argue that the changes in government spending caused by the war were a major factor in the recovery....
My findings appear to dispute studies that suggest that the recovery from the Great Depression was due to the self-corrective powers of the US economy in the 1930s. I find that aggregate-demand stimulus was the main source of the recovery from the Great Depression. Thus, the Great Depression does not provide evidence that large shocks are rapidly undone by the forces of mean reversion. Rather, it suggests that large falls in aggregate demand are sometimes followed by large rises, the combination of which leaves the economy back on trend.
re: cutting the work week - i'm not sure i understand the concept there. does this apply to salaried workers? it certainly doesn't have much traction in the world i inhabit or my friends, though that probably says more about my class bias than anything else. I've always considered 60 hour weeks to be a basic prerequisite at certain key phases of projects and careers, while 30 hour weeks are something that happens in slower times. i've also always seen hourly jobs as intrinsically low value and inevitably exported (excluding cops and SEIU types)
otishertz(Unrated) writes:
it occurs to me that second hand shops and surplus liquidators and craigslist will easily fill the void of dead chain retailers.
Our biggest challenge is preventing people from "trashing it out" into dumpsters rather than getting it back into the economy.
We have so much too much crap, our biggest enemy is frictional waste at the beginning when people are still thinking like Suburban Susie and trying to buy status with shiny new goods, and trashing the bad dirty old things so nobody thinks they're POOR.
Which they have been for decades, but the learning process for many born and bred American dopes will be long and painful.
Comrade Byzantine_Ruins,
Yes, but are we not already in a dystopia of sorts? we have had a succession of incompetent leaders and self-serving leadership, and we encourage a 'every man for himself mentality'. We have set up some of the conditions for system failure.. the real question is whether we will turn around and avoid the tipping point.. I am afraid that the tipping point is nearer than most people want to believe.
mmckinl,
if all labor was mandated to have the same value then time denominated money could work.
we would all have to be equal for that to happen.
ooops!
money - paper, without demand.
Demand is created by discretionary income
Is it just me, or is there something circular about this logic?
Morocco Bama writes:
Jobs are often discussed in quantitative terms rather than qualitative terms.
mmckinl writes:
labor value is dependent on value judgments.
One could argue that (un)employment rates are meaningless,
But if no one is employed money does not circulate (no velocity), if we are all employed in menial labor, money circulates quickly.
But quality labor can be defined as financial engineering or video game creation.
"But I so worry about my Country and hope O turns out to be a frigging genius economist." - IWannaknow
You'd never know it from my constant slamming of our FedGov, but I would LOVE for Obama to perform as is needed. I think though, that the system has grown too far afield of what was patterned from MY ancestors who arrived here in the early 1600s.
I DO hope for the best, but expect and prepare for the worst.
BTW, the Mrs wants us to start raising pigs as well. I don't know if I could handle the extra work though. Good luck!
Bond Girl writes:
From Romer's "What Ended the Great Depression?"
Monetary developments were a crucial source of recovery of the US economy from the Great Depression. Fiscal policy, in contrast, contributed almost nothing to the recovery before 1942.
Thanks for the snippet. I just read her wiki entry and I got this:
She has also researched the causes of the Great Depression in the United States and how the US recovered from the depression. Her work showed that the Great Depression occurred more severely in the US than in Europe, and had somewhat different causes than the Great Depression in Europe. Romer showed that fiscal policy played a relatively small role in the recovery from the depression in the US, because taxes were raised in the US almost as quickly as government spending increased during the New Deal.
I've always considered 60 hour weeks to be a basic prerequisite at certain key phases of projects and careers, while 30 hour weeks are something that happens in slower times. i've also always seen hourly jobs as intrinsically low value and inevitably exported (excluding cops and SEIU types)
bgates | 01.10.09 - 7:56 pm | #
I must restrain myself. Where's my blood pressure medication?
I've always considered 60 hour weeks to be a basic prerequisite at certain key phases of projects and careers, while 30 hour weeks are something that happens in slower times. i've also always seen hourly jobs as intrinsically low value and inevitably exported (excluding cops and SEIU types)
~~~~~
There will be slippage ... some jobs do not translate into the shorter work week scenario. I figure that a 10% reduction in the work week will translate into a 5% increase of employment.
She is one of the most accessible writers I have ever read, especially for an academic.
Why do we want a czar for every problem? have we not read enough to understand that czar and kaiser are just slavic and germanic versions of caesar.
Do we really want a Caesar? Do we want a "Dictator Perpetuo" and "Pontifex Maximus"?
that, and the fact that a currency based on a unit of labor is literally slavery.
ResistanceIsFeudal
there is this slavery paradox with equality. there is no wayto enforce equality short of total domination or slavery
I think though, that the system has grown too far afield of what was patterned from MY ancestors who arrived here in the early 1600s.
Not from my angle, we haven't. We're still killing and opressing brown skins all over the world as is tradition.
"a currency based on a unit of labor is literally slavery."
as opposed to a claim on future (largely income) taxes?
"the revaluation of gold mandated by the Roosevelt administration in 1934"
i thought this occurred in 1933.
if all labor was mandated to have the same value then time denominated money could work.
we would all have to be equal for that to happen.
ooops!
otishertz
~~~~
Greater skills should demand and get greater compensation.
anonymous writes:
money - paper, without demand.
Demand is created by discretionary income
Is it just me, or is there something circular about this logic?
~~~~~
You are missing a leg ... money without velocity is paper, is the way an economist would put it.
This is going to end with a black swan event. Something like the bird flu mutation or a breakthrough on controlled fusion. Either way, it will be a new world and all of this nickle and dime worrying will diminished to a poorly remembered dream. Obama's job is to keep it together until then.
Off topic but interesting.
Denver Drivers Hold On To Older Cars In Recession:
The shaky economy has resulted in steady business for a local car repair business.
"Dan's real happy about people not buying new cars," says Dan Kaufman, the owner of Absolute Motors.
Recession Means Denver Drivers Hold On To Older Cars - cbs4denver.com
Greater skills should demand and get greater compensation.
Like baseball players and bankers. Manny's got mad skills.
Who's to define greater skills? IMO, farmers are "worthier" than doctors, but my brother probably doesn't think so.
We replace one fiat for the other.
....well, when we (my great grandparents (11-times back) came over here on the Mayflower, we were escaping religious oppression and being possibly burned at the stake. There wasn't much oppressing and killing of "brown skins" going on in 1600s Plymouth....LOL
"Greater skills should demand and get greater compensation."
i guess we come back to the whole ricardo value thing...
is the greatest pipecleaner origami artist in the world worth the same as someone with a truly valuable skill, like lebron james? i wonder.
Greater skills should demand and get greater compensation.
Like baseball players and bankers. Manny's got mad skills.
Who's to define greater skills? IMO, farmers are "worthier" than doctors, but my brother probably doesn't think so.
We replace one fiat for the other.
Basel Too
~~~~~
Fine as long as we tax the shit out of them ! lol ...
...unless you know more than I, MoronObama - and that's quite possible
someone with a truly valuable skill, like lebron james?
Bread and Circuses.
These guys clearly need their workweek cut:
Luxury suites. Shopping sprees. Four-star hotels. Such was life in the high-flying world of the California Avocado Commission.
That, at least, is the image presented by a blistering report released last week by the California Department of Food and Agriculture, which painted the commission, a state-established trade group financed by growers, as a kind of free-spending, avocado-gone-wild farm party.
Reports Outline High Life For Advocates of Avocadoes - NY Times
there is this slavery paradox with equality. there is no wayto enforce equality short of total domination or slavery
otishertz | 01.10.09 - 8:01 pm | #
that should tell us something about the irrationality of literal egalitarianism. not all labor is of equal market value. I'd go so far as to say not all labor is of equal value, period, outside a monetary system. because of course labor markets can be distorted by a lot of factors. but in my opinion it's throwing the baby out with the bathwater to socialize labor value.
lucifer(Unrated) writes:
Yes, but are we not already in a dystopia of sorts?
Yes. We are in a weak state that appears to be in the terminal phases of policy structure compromise. Policy seems to have degenerated into competitive looting. Soon the state will have to dramatically curtail its activities due to economic crisis and that is when the fun really starts.
This will be especially true because so many of the substate actors in America are so dependent on Federal transfer payments or heavily indebted themselves.
we have had a succession of incompetent leaders and self-serving leadership, and we encourage a 'every man for himself mentality'. We have set up some of the conditions for system failure..
link
Weak States include an array of nation-states that may be inherently weak because of
geographical, physical, or fundamental economic constraints; or are situationally weak because
of internal antagonisms, greed, or despotism. Weak states typically harbor ethnic, religious,
linguistic, or other tensions that may at some near point be transformed into all out conflict
between contending antagonisms. Their ability to provide adequate amounts of political goods is
diminished or diminishing. Physical infrastructural networks are deteriorated. Schools and
hospitals show signs of neglect. GDP per capita and similar indicators have fallen or are falling,
sometimes dramatically. Levels of venal corruption are high and escalating. The rule of law is
honored in the breach. Civil society is harassed. Despots rule.
the real question is whether we will turn around and avoid the tipping point.. I am afraid that the tipping point is nearer than most people want to believe.
The cycle of poor policy is very hard to break. I will observe closely for about 3-6 weeks after Obama's coronation and then maybe I can make some meaningful statements about the quality of his rule. I am skeptical but remain hopeful. However I do not believe he has more than one shot.
Hopefully the Treasuries market doesn't already have a total blow-out baked in, and may the gods of the Republic watch over Obama's person.
Let us a minimum wage (for just being alive). Denominate it such that the person could have a 20% disposable income (after basic expenses- living ok).
Then pay people extra for what society will support them for.. Therefore you no starving or poor people, just people with varying amounts of discretionary income.
So you will always have a minimum discretionary demand. In any case fiat money can be printed or materialised by a few key stokes.
For those of you who think their jobs are essential and worthy and others are bums.. you might want to consider that the concept of a paid job started rather late in the history of our species. I mean what is wrong about others not suffering.. as long as it does not make you poorer?
Lebron James generates more foreign dollars than a lot of businesses.
a state-established trade group financed by growers, as a kind of free-spending, avocado-gone-wild farm party.
SKIN DEEP; For Lashes, Blue Is Back - NY Times 11avocado.html
Currently Accounting
~~~~~
I don't think anybody here will argue that reform is desperately needed ... It's just that we are facing economic Armageddon at the moment ...
Nah, didn't have to kill many Indians, 'cause the diseases of whites and blacks had killed off so many in the previous hundred years.
Wasn't it the Mayflower people who moved into a deserted Indian village? It was empty because the people had died.
Actually no fault here, except glod's. Sooner or later white and black people were gonna discover America, and had they each and every one had the personality of St. Francis of Assisi (Asissi? Assissi?) combined with Mother Teresa and the Buddha, it wouldn't have made that much difference, mortality-wise.
Even with modern medical care, something like the measles will kill the few remaining isolated people at the 10 and 20% rate.
mmck...
money without velocity is paper
that really cuts to the essence of it.
how about some negative interest rates to get the velocity pumping?
Wörgl, austria in the great depression did this.
The miracle of Worgl « greentheo
"If money itself loses value over time, just like the underlying goods that it can purchase do, then it will become a better medium of exchange and take away the advantage of holding large amounts of it.
Money properly understood is a means to an end, not an end in itself.
So as Worgl struggled to maintain roads, and feed the starving poor the Mayor of this small town decided to give Gesells ideas a try. He devised a new money system in which a 1% tax on money had to be paid each month (not a tax on wealth, but a tax on money). The money was passed into circulation via wages for city employees and was required to be accepted as legal tender by all town business."
Comrade Byzantine_Ruins | Homepage | 01.10.09 - 8:14 pm | #
~~~~
A Brilliant Post ...
Now, how do we fix it ?
Well of ideas of what/were people can be employed...
How about inspecting food, drug and manufactured goods being imported into the US...This can be paid with a tax on the importers...
"It was empty because the people had died."
i believe the folks at roanoke died as well.
the USA was a non-starter until the tobacco trade took off.
Hmmm, lucifer, there was a Heilein novel that proposed that. Together with both voluntary and involuntary genetic engineering, and a system of
duel-maintained extreme politeness.
Can't think of the name of it.
Just curious... ResistanceisFeudal isn't by chance EHP by another name? Something is chiming with your writing style...
otishertz | 01.10.09 - 8:18 pm | #
Taxing money would work in a hard money economy but not in a fiat fractional reserve banking system.
Demand for loans is the only way we currently have of increasing money supply or velocity.
The government could print money without debt then underwrite it with higher taxes on the well to do ...
lucifer(Unrated) writes:
I mean what is wrong about others not suffering.. as long as it does not make you poorer?
Socially you will want to develop some ideal of personal development so they don't become ignorant chavs -- Americans in cariciture assured their bloated ignorance through the beauty of the welfare state. It's fun to watch at first but they quickly move on to burning things for any or no reason.
Otherwise, I think the counterarguments are pretty specious. At this point there's really no excuse for not giving everyone three squares, a roof and a walking money allowance, it's not like we couldn't perform the work to produce that with one arm tied behind our backs.
Then pay people extra for what society will support them for.. Therefore you no starving or poor people, just people with varying amounts of discretionary income.
Example-
11 You are a bum- you get a comfortable life with enough income to spend 20% on discretionary stuff and live in an OK condo and eat well (maybe drive a cheap small vehicle).
You are a neurovascular surgeon with 10 years of medical school and residency. You get the minimum + whatever the system pays you for your job. Since there are limited number of people interested in hard work + skills (even for a high wage) you get renumerated at levels of say 5-8x what the bum gets. You can therefore buy your dream houses, cars, vacations, hobby vehicles, cars and all the stuff you wanted..
Nobody loses.
With the transplanted foreign auto manufacturers...Force the companies to provide comparable health and pension benefits through any number of devices...Maybe foreign co's can get away with it outside of the US, but they should operate at some minimum standard within the US...
I believe they were actively killed by the Indians, err, native Americans, rather than diseases, so far as anybody knows.
Debunking type stuff I read recently has a lot of the first settlers as bumbling idiots.
Sitting on you ass and not killing others is good job
//Well of ideas of what/were people can be employed...//
"has a lot of the first settlers as bumbling idiots"
that's the genius of nixon's southern strategy - deep roots
Exit writes:
Just curious... ResistanceisFeudal isn't by chance EHP by another name? Something is chiming with your writing style...
Exit | Homepage | 01.10.09 - 8:22 pm | #
sorry, no, I am a different fellow. but I have lurked here for long enough to consider that quite a compliment.
lucifer | 01.10.09 - 8:23 pm |
This only works in a closed system... a system without trade across national or currency borders.
Unfortunately we need trade ...
I still want CSC back. What happened to drive him away? I was off line when it happened.
lawyerliz writes:
I still want CSC back.
Me too!
That is the part I do not like.. too deterministic.. I prefer just making sure that people have no valid reasons to commit most violent crimes.
"Together with both voluntary and involuntary genetic engineering, and a system of duel-maintained extreme politeness."
Put me in for three on the CSC issue. I really wish he'd reconsider, I'm sure he probably still lurks here.
What the heck was that novel's name??? Grrr.
Anybody know him personally and can get him back?
I don't think anybody here will argue that reform is desperately needed .
Agree on the need for reform, but concentrating more power in Washington isn't the answer.
mmckinl
the idea is to give money a shelf life and thereby get it off the shelf
Who says so? Why? Yes, it will take longer to change some societies, but the idea is technically doable.. implementation.. well.. that is another matter.
"This only works in a closed system... a system without trade across national or currency borders.
Unfortunately we need trade ...
mmckinl | 01.10.09 - 8:26 pm | #"
--
the genetic engineering part had nothing to do with the subsidy part.
Everybody was just so productive that the minimum subsidy was easy. That could actually happen.
the idea is to give money a shelf life and thereby get it off the shelf
Money in the bank is also "off the shelf" as it anchors lending. This is why the idea of pushing more consumer spending is such foolishness. Savings are also cycling through the economy.
mmckinl(Excellent) writes:
Now, how do we fix it ?
It will take a program of judicial, social and bureaucratic reform with an emphasis on simplification, leveling, judicial system overhaul -- particularly the criminal system -- and just IMO, enforced involvement in the polis.
Realistically? It won't happen, the state will fail, millions will die, and the new system founded in its place will have a lot more dynamism and economic opportunity.
Hopefully it will be better in quality than the current one but often they are not as people listen too much to Lincoln / Cao Cao types and end up with a pointless kingdom; consolidation of power with no thesis of rule, and then you have another war every reign or two until you have a dynasty that really catches.
egative nominal interest rates, perhaps on bank reserves held at the fed, would explode the velocity of money.
the fed only has to say it is so to make it so.
the number line does not stop at zero.
The biggest hurdle in implementing my idea is that humans, as a species, have not adapted to functioning in large groups. We are still too petty, superficial and irrationally greedy. We do not want to accept that a post-industrial civilization demands a different way of playing the prisoners dilemma- we cannot play to 'win all' otherwise we are all screwed.
Wasn't there some change in savings calculation that operated to lower the official savings rate? I remember thinking that the "savings rate" eliminated most of what I was actually saving.
For example, I think paying off the mtg doesn't count as savings at all. One could argue for an adjustment perhaps, but not count it at all? So the 95k we paid off a year ago counts as zero, but if we had put it in the bank, it does count.
The spendorama is designed prevent real revolt - also to keep the police force from laying off - they're going to be needed. I'm guessing we'll see our first "economic" riot by the end of summer. Detroit? Chicago maybe.
Black Star Ranch....I barter every week on something...We age and can't do what we did when young...Gotta have the grass cut, the tree's pruned, the outbuilding roof patched, garden broke up, a load of gravel for a low spot....and life can continue on.
Agree on the need for reform, but concentrating more power in Washington isn't the answer.
Currently Accounting
~~~~
The answer is public funding of the political process ...
I think it is necessary to explain to J6P why the old "win all" game cannot work anymore. We have reached a stage where the "lose all-losers" can hurt the system by not playing the game such that the " win all- winners" to keep on winning..
Ok, I've been busy with work the past two days, am I still getting my pony?
otishertz writes:
negative nominal interest rates, perhaps on bank reserves held at the fed, would explode the velocity of money.
~~~~~~~~
And blow up the banks...
The Federal Reserve is a corporation owned and operated by the Member banks for the Member Banks ... Bernanke is first and foremost responsible to his shareholders.
Yeah, luci, we evolved to live in groups of at most, a few hundred to a few thousand. It actually is amazing that we manage to live in urban agglomerates of the size we live in without going mad, or incurring much more violence that we have.
As far as hoarding goes, seems like that is a firm part of animal behavior. Polygamous animals like walruses hoard wives (sorry to get on that again). Squirrels hoard nuts.
Hoarding up to a certain point makes sense, until it doesn't. Hoarding is a form of saving, I suppose. Maybe people sensibly decided that money wasn't worth so much, so hoarding stuff, even tho non-productive was better.
halocan, whatcha up to?
We have reached a stage where the "lose all-losers" can hurt the system by not playing the game such that the " win all- winners" to keep on winning..
lucifer
I'm not sure why this struck me as hilarious...I do agree for the most part but the choice of wording is still funny.
Full employment is meaningless if it is not quality employment, and increasingly, the quality of employment has been diminishing.
Morocco Bama | Homepage | 01.10.09 - 7:44 pm | #
_______________________________-
You mean Wal-Mart jobs aren't quality? That was a heckuva trade off in the name of globalizatin by transferring the high paying mfg. jobs overseas, while increasing the number of low paying service jobs.
It's amazing how the families in the 50s and 60s could live comfortably on just one income. That was the norm, where today it's the exception.
Is it too early for a little bluegrass? "Kentucky borderline" by Rhonda Vincent and the Rage - Dedicated to my favorite poster, BR
Comrade Byzantine_Ruins writes:
It will take a program of judicial, social and bureaucratic reform with an emphasis on simplification, leveling, judicial system overhaul -- particularly the criminal system -- and just IMO, enforced involvement in the polis.
Realistically? It won't happen, the state will fail, millions will die, and the new system founded in its place will have a lot more dynamism and economic opportunity.
~~~~~
I don't hold out your hope of "the new system founded in its place will have a lot more dynamism and economic opportunity. " I think we are on the brink of ecological as well as economic crisis.
But we have a large forebrain, language and now technology (and now the internet). We are not just hairless apes except in physiology. Think about how many ape behaviors are suppressed by even J6P merely to function in our society?
The dynamics of possible interactions and range of outcomes changes with speed, range and accesibility of communication. Would CR have been possible in 1999 (less than 10 years ago)
"As far as hoarding goes, seems like that is a firm part of animal behavior. Polygamous animals like walruses hoard wives (sorry to get on that again). Squirrels hoard nuts."
mmckinl
NIRP would make treasury prices even higher adding stability to the banking system.
liz, CSC got in a pissing match with someone in a thread. Byz_Ruins (I think) hypothesized he was self-regulating out. Occurred around the time that Lahde jettisoned and in his buh-bye letter advocated CSC's favorite pasttime. Are they one and the same? Enquiring minds want to know!
Comrade Kristina - is that your wedding album? Cool... and congrats. Hope your refi worked out. I've been out of the loop, too. Board solve the globe's crisis yet?
Comrade Byzantine_Ruins
You are really good tonight.
It was intentional.. people remember the 'weird' better than the 'plain'. Advertising 101
//I'm not sure why this struck me as hilarious...I do agree for the most part but the choice of wording is still funny.
Comrade Kristina | Homepage | 01.10.09 - 8:42 pm | #//
Hoarding also comes with ageing, wonder what part of the brain controls that, hubby will tell grands not to touch something that he's saving it and i'll always ask, for whom are you saving it, the land field.
that would make it lucifer's purple cow? someone have a photoshop handy?
I read CSC's farewell post. He said some of the original posters here were tired of the "extra chatter" and were not posting anymore. For that reason he was going to not add to the chatter anymore. This was after he had gotten in an exchange with troll of some sort. I did not read the argument he had with the troll so can't really speak on that.
otishertz writes:
mmckinl
NIRP would make treasury prices even higher adding stability to the banking system.
~~~~~
The banking system needs a bank holiday to scrub the books of toxic debt and derivative time bombs.
With trillions of toxic debt and hundreds of trillions in derivatives no amount of T-Bills will solve the bank's problems.
They are going to fk this up so very badly:
YouTube -
I weep for my economy.
Jeebus.
C
Exit, yes and the refi is still being worked on, I'm waiting on this years tax papers so I can use my two best tax returns for the income requirements.
Kristina - awesome dress!
My grandmother was always saving something for something. She left what used to be a lot of money to my mom.
An excellent person to have for an ancestor, not so easy to live with.
I have been accused by several people of being the cheapest person they knew. I always said you never met my grandmother. Scots-Irish descent.
didn't this whole mess start with too much personal credit?
then continue with business depending on too much credit?
so I guess the solution is for the government to fix the problem with too much government spending. or credit.
Awesome dress and more important, cutie pie hub.