Black Dog: Well, heres another paradox PK can chew on (a tad tougher than the roast beef I would say): He admitted a couple of weeks ago on tv that US private savings (in his opinion) was keeping the yield on public debt low
He trotted out the old argument that deficits are OK because we owe it to ourselves but he did not notice that domestic purchase negates the stimulus of the government debt.
This little piggy went to the free market
This little piggy stayed in a foreclosed home
This little piggy raised a beef
and this little piggy had Sam Nunn.
"The program ended when the conditions that brought the program into being (unmarketable food surpluses and widespread unemployment) no longer existed." In 1943 under conditions of Total War yielding total employment. Um, total emplyment? Not here today.
I would agree, based on the research available with the conclusion here on Wikipedia:
Work support
The Food Stamps Program is known in public policy circles as a “work support,” meaning it is used primarily by people looking for a job, or employed but not making enough to make ends meet. Because food stamps allow this latter group to maintain their low-wage employment, most experts believe food stamps actually keep people off the welfare rolls. Peer-reviewed research on the "dependency" effect referenced above is non-existent. The available evidence, in particular a University of Maryland study conducted in 2002, indicates that enrollment in the food stamps program keeps former welfare recipients from sliding back into poverty and re-enrolling in welfare programs.
Fraud and abuse
Claims of fraud and abuse of the program have likewise proved to be unfounded. In 2005, 98% of food stamp benefits went to eligible households. According to the Government Accountability Office, at last count (2004), only 4.48% of food stamps benefits were found to be overpaid, down by more than a third from six years earlier.[citation needed] Two-thirds of all improper payments were found to be the fault of the caseworker, not the individual.[citation needed]
Healthful foods
Finally, while the evidence is mixed as to the effect of the food stamps program on weight gain, studies conducted by the USDA[citation needed] on the receipts of food stamps purchases have found that program participants are more likely to spend their income on fruits, vegetables and healthful foods than low-income consumers who do not participate in the program.
Food stamps were reintroduced as a cheap form of welfare with the connivance of the farm lobby.
But they do work and especially work well to keep children from the ills of malnutrition.
One of our few welfare success stories.
Further digging reveals the usual poverty suspects:
Statistics
According to the United States Department of Agriculture, statistics for the food stamp program are as follows:[6]
51 percent of all participants are children (17 or younger), and 65 percent of them live in single-parent households.
55 percent of food stamp households include children.
9 percent of all participants are elderly (age 60 or over).
79 percent of all benefits go to households with children, 14 percent go to households with disabled persons, and 7 percent go to households with elderly persons.
36 percent of households with children were headed by a single parent, the overwhelming majority of whom were women.
The average household size is 2.3 persons.
The average gross monthly income per food stamp household is $640.
41 percent of participants are white; 36 percent are African-American, non-Hispanic; 18 percent are Hispanic; 3 percent are Asian, 2 percent are Native American, and 1 percent are of unknown race or ethnicity.
Welcome to the face of poverty in America.
Single, poor, with children is typical.
Money doesn’t grow on trees for most of America. We sit down at our kitchen tables and write out checks to the phone-company, electric company, credit card-company, mortgage-company, and auto finance company every month. We clip coupons and go to the grocery store every week to put food in the mouths of our children. This is what our parents did before us.
I guess there's no more crisis anymore, huh? no more recession? all
done. Problem fixed byminting a trillion dollars out of thin air. Happy days are here again.
yay i love joblessrecoveries. I love outsourcing. i love hyperinflation. I love huge
deficits. I love fearmongering pandering politicians, I love $4 gas and 140 oil. I love
making petro dictators rich
I was thinking foreign vs. domestic purchase of Treasuries, ceteris paribus.
Thinking government vs. non-government "investment," if government debt is more likely for immediate consumption rather than productivity increases, then government debt is more stimulative in the near term and anti-stimulative in the long term (but that is true regardless of domestic or foreign purchase).
Notice that Krugman's paradox of thrift article also implies that there is no deleveraging occurring, which many people overlook by watching private debt without watching total system debt (including the government that tries to borrow $1 or more for every $1 you save).
I'm getting tired of the Krugman shuffle. There's always an excuse, a variable left out of the formula, an exigent event, changing circumstance, on an on. The simple fact is whatever it is being done it isn't working. It is a flawed model driving a broken mechanism that incorrectly implements a policy containing conflicting goals. Calling it a religion is unfair to religions.
I'm improving my local network per instructions from Dmitri O.
I bought an '87 toyota truck that will continue to run as long as gas, duct tape and baling wire are available.
I'm working on my gardening skills and improving the soil by composting. The summer bugs in central Arizona are amazing and tomatoes are difficult, but there are a lot of things that will grow OK in 110 degree heat.
I may or may not have some savings in non-traditional forms, but if I had such savings they definitely would not be found at my house.
When i see Bernake now, i get this picture of Don Knotts playing a Mr. Limpet character being played by the channeling of jerry Lewis... trying to be the Dr. Kavorkian of the economy, yet for some bumbling reasons just cant kill it off , more like Chevy Chase in European Vacation and he keeps running over Eric Idol.....
Not one cent, the problem of the paradox of thrift goes beyond the simple explanation in Krugman.
When I refer to money going to sleep, that is the paradox of thrift. Private capital no longer wishes to venture out for a possible profit, so it shrinks from risk by sitting in a bank, which buys treasuries because private enterprise is not operating.
The only rational course a government can pursue is to borrow the money and spend it. The choices on which to spend it are limited, and the funds will not be available forever, so the government can choose to fund permanent changes in a society with the resting capital at excrutiatingly cheap rates.
When rates rise organically due to an increase in demand for funds, then your deleveraging will be complete, and the system's income will have expanded sufficiently to encourage investment. Right now we have insufficient income, and without the government's willingness to borrow those sleeping funds, we would be much worse off.
So yes, we are Japan.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
So, instead of complaining that none of this works, Rob Dawg, maybe one should be grateful for a crappy, but manageable outcome, should we manage to achieve it, rather than the worse case of the 1930s.
That outlook would make Schumpeter proud.
The only real hope we have is that we have successfully transitioned to new economic modes under crisis before, and emerged with a high standard of living. When this is demonstrably over, that will be the real litmus test of success.
Right now, we are just enjoying that pause that refreshes, as I posited six months ago.
Dollar cliff diving...Ben must be jumping for joy.
~shill
I am beginning to wonder if this isnt really what they want... decreasing dollars and lots of inflation... Seems to be the only possible way to keep the asset classes afloat... I'd prefer to see reasonable priced housing and 2$/gallon gas but who am I to blow against the wind....
IMHO, Japan is relevant to the point that what helped them was nopt available in the 30's and is not available now. That ingredient is the rest of the world economies. Other countries couldn't help us in the 30's as we had fiscally advanced so far beyond.... and now, they are all in the sinking same life boat as us, only our hole is bigger.... Japan while broke and "messed up" had other developed nations that could assist in the recovery and import export as well as investment.... Japan also retreated from foreign RE investment of the 80's... just my HO...
Citizen AllenM (profile) wrote on Thu, 7/9/2009 - 2:23 pm So yes, we are Japan.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
Gonna be a shame when the central state loses the ability to raise funds.
More OT (many sorry's, bowing, humble, somewhat sad)
Check out the 5 year Baltic Index in terms of economic recovery:
http://www.wikinvest.com/stock/Baltic_Dry_Index_-BDI(BALDRY)
The BDI is one of the purest leading indicators of economic activity. It measures the demand to move raw materials and precursors to production, as well as the supply of ships available to move this cargo
This helps explain the jobless recovery, which has no new jobs, no spending, nothing........
Citizen AllenM (profile) wrote on Thu, 7/9/2009 - 11:23 am
So yes, we are Japan.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
So, instead of complaining that none of this works, Rob Dawg, maybe one should be grateful for a crappy, but manageable outcome, should we manage to achieve it, rather than the worse case of the 1930s.
What makes you think this is the outcome? I see no sustainable economic model going forward from the present state. Even if this is the new economy we purchased it by pulling forward the future economy for years to come through crushing taxes and debt.
When me & my friends go D.C. town.
We can't sit still we can't sit down.
We don't like to fight and we don't like to scuffle.
But we dance all night doing the Krugman Shuffle.
CHORUS:
Hey Ben, Hey Ben (Hey Ben, Hey Ben) nyah nyah....
But we never miss a chance, we get up and dance
doing the Krugman Shuffle.
Well me & my friends love Larry & Ben.
We love Paulie's brother Barry & his sister Bair.
It's such a delight to boogie and scare.
Dancin' all night doing the Krugman Shuffle.
CHORUS:
LEAD:
Me & my friends we all love to see.
Comedy classics on talking heads TV.
Those knuckle heads, oh they get in a scuffle.
They push & they shove doing the Krugman Shuffle.
Even if this is the new economy we purchased it by pulling forward the future economy for years to come through crushing taxes and debt.
I take issue with the taxes now, debt yep, but he has committed our future wealth with current debt on non fiscally responsible programs with only the promiss of this time will be different...
Note that Krugman does not allow for sleeping money because he says that savings always equals investment.
If so, however, then his argument about falling demand makes no sense:
Krugman: " Still, my sense is that the big reason for declining business investment, at least, is simply the fact that consumer demand has fallen — which is paradox of thrift in action."
Now he forgets that he just told us that government debt offset private savings and Keynesianism says that should maintain aggregate demand.
The number of US companies featured in a emminent business magazine's annual list of the world's top 500 global companies fell to its lowest level ever, Fortune magazine has said, while more Chinese firms appeared than ever before.
Signaling the effects of the devastating financial crisis on the US economy, a non-US firm topped the list for the first time in over a decade, with Anglo-Dutch energy giant Royal Dutch Shell coming in first.
BEIJING (AP) -- China surpassed the United States as the world's biggest auto market for the first half of 2009 after June sales soared 36.5 percent from a year earlier, according to data reported Thursday.
China's vehicle sales in June rose to 1.14 million, the second-highest month to date after April's 1.15 million units, the China Association of Automobile Manufacturers said. Passenger car sales hit a monthly record of 872,900 units.
WASHINGTON - Sweeping healthcare legislation working its way through Congress is more than an effort to provide insurance to millions of Americans without coverage. Tucked within is a provision that could provide billions of dollars for walking paths, streetlights, jungle gyms, and even farmers’ markets.
The add-ons - characterized as part of a broad effort to improve the nation’s health “infrastructure’’ - appear in House and Senate versions of the bill.
Critics argue the provision is a thinly disguised effort to insert pork-barrel spending into a bill that has been widely portrayed to the public as dealing with expanding health coverage and cutting medical costs. A leading critic, Senator Mike Enzi, a Wyoming Republican, ridicules the local projects, asking: “How can Democrats justify the wasteful spending in this bill?’’
But advocates, including Senator Edward M. Kennedy of Massachusetts, defend the proposed spending as a necessary way to promote healthier lives and, in the long run, cut medical costs. “These are not public works grants; they are community transformation grants,’’ said Anthony Coley, a spokesman for Kennedy, chairman of the Senate health committee whose healthcare bill includes the projects.
So, instead of complaining that none of this works, Rob Dawg, maybe one should be grateful for a crappy, but manageable outcome, should we manage to achieve it, rather than the worse case of the 1930s.
That outlook would make Schumpeter proud.
Err, what? Are we thinking about the same Schumpeter? He of 'creative destruction' being the driving force behind capitalism?
Japan didn't allow for creative destruction. IMO, that's a big part of why they haven't been able to climb out of their hole, 26 years after falling in. Propping up zombie banks with trillions of yen, throwing trillions more at the construction lobby to build eight-lane highways to nowhere, protecting their aging keiretsu with import tariffs - the list goes on.
And what have we thrown our first couple of trillion dollars at? Propping up our very own zombie banks and larding up our "stimulus" bills with hundreds of billions in government-sanctioned pork.
If that's not the polar opposite of a Schumpeterian approach to the crisis, I'd have a hard time thinking of one.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
I'd been saying that here from the beginning - few starved and not even a lot of them lost jobs or homes [some did & remained 'invisible' due to the peculiarities of Japanese culture but not many]... Incomes stagnated & profits collapsed. Not the end of the world.
That tidbit is always lost on the 'we are japan crowd'.
Comrade Coinz (homepage, profile) wrote on Thu, 7/9/2009 - 12:42 pm
mp wrote (previous thread):
Why isn't anyone talking about what they're doing in response to this environment?
I am increasing my income by 10%, stacking cash and coinz, and paying off debts faster. What are you doing?
Hording cash and cash equivalents, trimmed 401k/IRA investment to a minimum, spending more time with close family, trying to stay in touch with more friends and spread the occasional article or informed opinion (especially to younger friends in or just out of college), gotten more involved in volunteering and helping to organize a benefit event for a local food pantry. Call me a sucker, but I have a moral issue with shorting and speculation in general, and like to sleep at night and try to minimize the role "the market" has to play in my life.
As people realize the real costs of all this crap we're doing and the huge sums of nonexistent money being casually thrown around, things are not going to be pleasant to put it mildly.
"Four cemetery workers have been charged with dismembering bodies after police found what they called "startling and revolting" conditions at a historic cemetery near Chicago.
Cook County Sheriff Tom Dart says workers at the Burr Oak Cemetery in Alsip allegedly dug up more than 100 graves, dumped the bodies into unmarked mass graves and resold the plots to unsuspecting members of the public."
Gonna be a shame when the central state loses the ability to raise funds.
Byz - it isn't gonna happen THIS cycle. This cycle we borrowed in dollars and pay it back in dollars and can just print to pay it back. It is the NEXT cycle when we hit the wall - when our future creditors refuse to lend us in our own currency.
Fiduciary Doodie (profile) wrote on Thu, 7/9/2009 - 1:58 pm
I once buried a time capsule full of things that haven't happened yet.
We borrowed money from a future that hasn't happened yet. Hopefully not enough that the future we borrowed from no longer exists. That is always the tricky part with temporal monetary mechanics.
This while S&P is warning on weakness in Argentina's economy:
Argentina bourse, banks to close Friday due to flu
BUENOS AIRES, July 8 (Reuters) - Argentine financial markets and banks will close on Friday as part of government efforts to fight an outbreak of the H1N1 flu strain that has killed 70 people, officials said on Wednesday.
The government stopped short of declaring a national holiday on Friday, but it gave civil servants the day off and encouraged private companies and other institutions to do the same.
Argentina has a national holiday on Thursday.
The stock exchange, the main bond market and banks will remain closed, officials at the bourses and leading banking associations said.
President Cristina Fernandez has sought to halt the spread of the virus in the Southern Hemisphere winter by closing schools, giving pregnant workers extended leave and allocating emergency funding.
Local theaters have decided to temporarily shut their doors, while Brazilian airline Gol (GOLL4.SA) said on Wednesday it had seen a sharp drop in passengers on flights to Argentina.
The taxes will be what holds down the economy in the future.
I think the bad debt (mal-investments) will hold the eCONomy down in the future. But at least our efforts to preserve that bad debt will be good for wall st.
Give me a break.
SEC to call for Calif. IOUs treated as securities
"A regulated market for the IOUs "makes it even more advantageous" for individuals holding them, who could sell them at a fair price, Maco said. The price they receive may be discounted in accordance with the market's perception of the risk of the state repaying the notes, but it would be an orderly market price, he said."
Note that Krugman does not allow for sleeping money because he says that savings always equals investment.
If so, however, then his argument about falling demand makes no sense:
Krugman: " Still, my sense is that the big reason for declining business investment, at least, is simply the fact that consumer demand has fallen — which is paradox of thrift in action."
Now he forgets that he just told us that government debt offset private savings and Keynesianism says that should maintain aggregate demand.
Good post...
Thats why I come here....
Cheers!
..............
Kung.Fu.Panda....
That story is sad but hopefully it puts a little light on how idiotic graves really are....
July 9 (Bloomberg) -- Leaders of the world’s biggest developed and emerging nations avoided a debate over the dollar’s role in the global economy as they agreed not to devalue their currencies to promote their exports.
With officials from Brazil, India, China and Russia pushing consideration of alternative reserve currencies, their joint statement’s language on foreign exchange echoed an agreement at an April summit of the Group of 20.
The leaders agreed to “refrain from competitive devaluations of our currencies,” according to the statement released after their meeting today at the G-8 summit in L’Aquila, Italy. They also agreed to “promote a stable and well-functioning international monetary system.”
dryfly (profile) wrote (in reply to...) on Thu, 7/9/2009 - 2:58 pm
Byz - it isn't gonna happen THIS cycle. This cycle we borrowed in dollars and pay it back in dollars and can just print to pay it back. It is the NEXT cycle when we hit the wall - when our future creditors refuse to lend us in our own currency.
It sounds like the dividing point in your "cycles" is when the creditors clear their throats.
That day might be soon approaching.
I think it's instructive that Kreditanstalt went bankrupt because the state of Austria could not afford to bail it out.
This is still a young crisis, we haven't see severe issues among the sovereigns yet. I do not worry too much about what America's creditors want to do, I am worried about what they are impelled to do.
This crisis has a very long way left to run -- the decision to spend til u win on all front guarantees it will have the maximum possible duration -- and most of the players in it have a lot less fuel than there is fight.
When the 300MM people who are currently living in the US expire and if they all got graves with an aggregate size of 8' x 10' it is approximately equal to the size of Rhode Island... OK Sorry for the rant... I'm done now.... (At least I feel better that its after the Pig!)
"There's always an excuse, a variable left out of the formula, an exigent event, changing circumstance, on an on"
As ever in the intellectual life of human beings. We're limited. The history of the world - all worlds - begins with inexplicable zero entropy. It's been downhill ever since.
What happened since the bubble bursting in Japan (1990) didn't/doesn't get much news coverage but I remember hearing in the early 90's from a Japanese CSI that things in Japan were as bad as seen in American news (rape, murder, etc). I would guess that things have deteriorated since then.
As for the survivors, the fureetaa's (non-permanently employed 20's and 30's) are (semi-)permanent underclass of the 21st century. They cannot get full-time jobs even though most of them want to (age discrimination is pretty strong there). They were starting to see a light at the end of the tunnel last year when some of the fureetaa's were getting full time jobs. Unfortunately the light turned into a speeding train last fall when the orders (and economy) fell off the cliff in Japan.
My guess is that things will be worse for US for the next decade than Japan's 90's and 00's. But Japan would suffer more than the US in the 10's (because Japan is so dependent on trade and all her trading partners are and will continue to struggle).
Since this is a "Tanta" thread, every time someone says they've been "pigged", I think how much she would have HATED that -- she felt that every thread deserved to live as long as the topic had more life. Just having an angry hoarde switch from most recent thread to the next led to chaos -- as we see here.
I don't hate to say it folks -- she was right. I despise the fact that threads die when a new thread starts. It's the ADHD syndrome of the CR commentariat. And it's sad.
Mortgage Pig is the pork in my Stimulus package.
There was no federal food-stamp program from 1943 to 1961.
The government reintroduced food stamps as Americans were getting richer and food was getting cheaper.
mp wrote (previous thread):
Why isn't anyone talking about what they're doing in response to this environment?
I am increasing my income by 10%, stacking cash and coinz, and paying off debts faster. What are you doing?
food was getting cheaper.
That's "snout" what we're talking about.
Cerberus Won't Let Investors Out of Hedge Fund: Report
Cerberus says it has created a special vehicle to let some investors cash out over time.
Cerberus Won't Let Investors Out of Hedge Fund: Report - CNBC
High net leaves low net stays for a while...
Black Dog: Well, heres another paradox PK can chew on (a tad tougher than the roast beef I would say): He admitted a couple of weeks ago on tv that US private savings (in his opinion) was keeping the yield on public debt low
He trotted out the old argument that deficits are OK because we owe it to ourselves but he did not notice that domestic purchase negates the stimulus of the government debt.
This little piggy went to the free market
This little piggy stayed in a foreclosed home
This little piggy raised a beef
and this little piggy had Sam Nunn.
near-pigged
Byzantine Ruins-Are you from the Pittsburgh area?
mp wrote (previous thread):
Why isn't anyone talking about what they're doing in response to this environment?
I am buying as much stock as I can get my hands on. I figure if I win, I win. If I lose, the government will save me anyway.
"The program ended when the conditions that brought the program into being (unmarketable food surpluses and widespread unemployment) no longer existed." In 1943 under conditions of Total War yielding total employment. Um, total emplyment? Not here today.
I would agree, based on the research available with the conclusion here on Wikipedia:
Work support
The Food Stamps Program is known in public policy circles as a “work support,” meaning it is used primarily by people looking for a job, or employed but not making enough to make ends meet. Because food stamps allow this latter group to maintain their low-wage employment, most experts believe food stamps actually keep people off the welfare rolls. Peer-reviewed research on the "dependency" effect referenced above is non-existent. The available evidence, in particular a University of Maryland study conducted in 2002, indicates that enrollment in the food stamps program keeps former welfare recipients from sliding back into poverty and re-enrolling in welfare programs.
Fraud and abuse
Claims of fraud and abuse of the program have likewise proved to be unfounded. In 2005, 98% of food stamp benefits went to eligible households. According to the Government Accountability Office, at last count (2004), only 4.48% of food stamps benefits were found to be overpaid, down by more than a third from six years earlier.[citation needed] Two-thirds of all improper payments were found to be the fault of the caseworker, not the individual.[citation needed]
Healthful foods
Finally, while the evidence is mixed as to the effect of the food stamps program on weight gain, studies conducted by the USDA[citation needed] on the receipts of food stamps purchases have found that program participants are more likely to spend their income on fruits, vegetables and healthful foods than low-income consumers who do not participate in the program.
Food stamps were reintroduced as a cheap form of welfare with the connivance of the farm lobby.
But they do work and especially work well to keep children from the ills of malnutrition.
One of our few welfare success stories.
Further digging reveals the usual poverty suspects:
Statistics
According to the United States Department of Agriculture, statistics for the food stamp program are as follows:[6]
51 percent of all participants are children (17 or younger), and 65 percent of them live in single-parent households.
55 percent of food stamp households include children.
9 percent of all participants are elderly (age 60 or over).
79 percent of all benefits go to households with children, 14 percent go to households with disabled persons, and 7 percent go to households with elderly persons.
36 percent of households with children were headed by a single parent, the overwhelming majority of whom were women.
The average household size is 2.3 persons.
The average gross monthly income per food stamp household is $640.
41 percent of participants are white; 36 percent are African-American, non-Hispanic; 18 percent are Hispanic; 3 percent are Asian, 2 percent are Native American, and 1 percent are of unknown race or ethnicity.
Welcome to the face of poverty in America.
Single, poor, with children is typical.
Someday this war's gonna end...
Food stamps == Serf Pork
mortgagepig is a jerk
Money doesn’t grow on trees for most of America. We sit down at our kitchen tables and write out checks to the phone-company, electric company, credit card-company, mortgage-company, and auto finance company every month. We clip coupons and go to the grocery store every week to put food in the mouths of our children. This is what our parents did before us.
Econ & Finance Articles Updated Daily
I guess there's no more crisis anymore, huh? no more recession? all
done. Problem fixed byminting a trillion dollars out of thin air. Happy days are here again.
yay i love joblessrecoveries. I love outsourcing. i love hyperinflation. I love huge
deficits. I love fearmongering pandering politicians, I love $4 gas and 140 oil. I love
making petro dictators rich
good articles> Econ & Finance Articles Updated Daily
I would disagree that domestic purchase negates the stimulus of government debt, but domestic purchase keeps the dollar afloat.
A very fine, but important distinction.
Someday this war's gonna end...
A man has died after falling into a vat of hot chocolate at a factory in the US state of New Jersey.
BBC NEWS | Americas | US worker dies in chocolate vat
Ciao
MS
CR,
Maybe a few embedded photos of the Mortgage Pig products will help sales?
A man has died after falling into a vat of hot chocolate at a factory in the US state of New Jersey.
That's Willy Wonkish
BTW there is a great joke waiting to be told about the above post...but I'm not gonna do it...
Ciao
MS
A man has died after falling into a vat of hot chocolate at a factory
Charlie's Angels.
A man has died after falling into a vat of hot chocolate at a factory
Charlie's Angels?
Death by chocolate, not good!
I was thinking foreign vs. domestic purchase of Treasuries, ceteris paribus.
Thinking government vs. non-government "investment," if government debt is more likely for immediate consumption rather than productivity increases, then government debt is more stimulative in the near term and anti-stimulative in the long term (but that is true regardless of domestic or foreign purchase).
answered you one thread back berserker.
Notice that Krugman's paradox of thrift article also implies that there is no deleveraging occurring, which many people overlook by watching private debt without watching total system debt (including the government that tries to borrow $1 or more for every $1 you save).
Inspiring Summer music for buying Mortgage Pig Wear
Spill The Wine
YouTube -
When Krugman speaks of Malthus, his conclusions come straight from this wiki on malnutrition:
Malnutrition - Wikipedia, the free encyclopedia
Of course, then the ridiculous follows up with :
Food sovereignty - Wikipedia, the free encyclopedia
Enshrining the right to starve on your own tiny plot of marginally producing land.
That is the failure of the liberal.
Someday this war's gonna end...
was his name Augutus Gloop by any chance?
I'm getting tired of the Krugman shuffle. There's always an excuse, a variable left out of the formula, an exigent event, changing circumstance, on an on. The simple fact is whatever it is being done it isn't working. It is a flawed model driving a broken mechanism that incorrectly implements a policy containing conflicting goals. Calling it a religion is unfair to religions.
re: mp's question.
I'm improving my local network per instructions from Dmitri O.
I bought an '87 toyota truck that will continue to run as long as gas, duct tape and baling wire are available.
I'm working on my gardening skills and improving the soil by composting. The summer bugs in central Arizona are amazing and tomatoes are difficult, but there are a lot of things that will grow OK in 110 degree heat.
I may or may not have some savings in non-traditional forms, but if I had such savings they definitely would not be found at my house.
Stuff like that.
When i see Bernake now, i get this picture of Don Knotts playing a Mr. Limpet character being played by the channeling of jerry Lewis... trying to be the Dr. Kavorkian of the economy, yet for some bumbling reasons just cant kill it off , more like Chevy Chase in European Vacation and he keeps running over Eric Idol.....
got it
Not one cent, the problem of the paradox of thrift goes beyond the simple explanation in Krugman.
When I refer to money going to sleep, that is the paradox of thrift. Private capital no longer wishes to venture out for a possible profit, so it shrinks from risk by sitting in a bank, which buys treasuries because private enterprise is not operating.
The only rational course a government can pursue is to borrow the money and spend it. The choices on which to spend it are limited, and the funds will not be available forever, so the government can choose to fund permanent changes in a society with the resting capital at excrutiatingly cheap rates.
When rates rise organically due to an increase in demand for funds, then your deleveraging will be complete, and the system's income will have expanded sufficiently to encourage investment. Right now we have insufficient income, and without the government's willingness to borrow those sleeping funds, we would be much worse off.
Someday this war's gonna end...
Man falling into vat of chocolate == Smothers Bros
citizen Allen..
rememebr the good old days when the term VC was on the end of everyone's tongue......
Um, is anyone else getting "mailbox unavailable" for Cathy's address?
dawg-
summed up my thoughts exactly on Krugman.....last night's thread I didn't do a very good job of it. It was late...
Ciao
MS
OT: I had never looked at Wiki's investment page; not too bad really:
C
Dollar cliff diving...Ben must be jumping for joy.
So yes, we are Japan.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
So, instead of complaining that none of this works, Rob Dawg, maybe one should be grateful for a crappy, but manageable outcome, should we manage to achieve it, rather than the worse case of the 1930s.
That outlook would make Schumpeter proud.
The only real hope we have is that we have successfully transitioned to new economic modes under crisis before, and emerged with a high standard of living. When this is demonstrably over, that will be the real litmus test of success.
Right now, we are just enjoying that pause that refreshes, as I posited six months ago.
Someday this war's gonna end...
Don Knotts + 1
I like the Krugman shuffle.
You move it to The Left
And you go for yourself
You move back to The Right
Yeah if it takes all night
Now take it kinda slow
With a whole lot of soul
Don't move it too fast
Just make it last
Yea!
Yea!
Yea!
Do the Krugman Shuffle.
Dollar cliff diving...Ben must be jumping for joy.
~shill
I am beginning to wonder if this isnt really what they want... decreasing dollars and lots of inflation... Seems to be the only possible way to keep the asset classes afloat... I'd prefer to see reasonable priced housing and 2$/gallon gas but who am I to blow against the wind....
Allen,
IMHO, Japan is relevant to the point that what helped them was nopt available in the 30's and is not available now. That ingredient is the rest of the world economies. Other countries couldn't help us in the 30's as we had fiscally advanced so far beyond.... and now, they are all in the sinking same life boat as us, only our hole is bigger.... Japan while broke and "messed up" had other developed nations that could assist in the recovery and import export as well as investment.... Japan also retreated from foreign RE investment of the 80's... just my HO...
Citizen AllenM (profile) wrote on Thu, 7/9/2009 - 2:23 pm
So yes, we are Japan.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
Gonna be a shame when the central state loses the ability to raise funds.
nades, from 2 threads ago..."
"Last I checked my BP was 90-60..."
Havent we told you about taking Viagra while taking Nitrates for chest pains, as this may result in an..........
More OT (many sorry's, bowing, humble, somewhat sad)
Check out the 5 year Baltic Index in terms of economic recovery:
http://www.wikinvest.com/stock/Baltic_Dry_Index_-BDI(BALDRY)
The BDI is one of the purest leading indicators of economic activity. It measures the demand to move raw materials and precursors to production, as well as the supply of ships available to move this cargo
This helps explain the jobless recovery, which has no new jobs, no spending, nothing........
Now, come on, Economy
Don't fall down on me now
Just move it right here
To the Krugman Shuffle
Yeah yeah yeah
Do the Krugman Shuffle.
But I like everything to have a blue tint to it....
(was it actually true that V tinted peoples vision blue?)
Citizen AllenM (profile) wrote on Thu, 7/9/2009 - 11:23 am
So yes, we are Japan.
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
So, instead of complaining that none of this works, Rob Dawg, maybe one should be grateful for a crappy, but manageable outcome, should we manage to achieve it, rather than the worse case of the 1930s.
What makes you think this is the outcome? I see no sustainable economic model going forward from the present state. Even if this is the new economy we purchased it by pulling forward the future economy for years to come through crushing taxes and debt.
made mine blurry.... made everything larger as well LOL
My new name will hence forth be Blue Teats (is that OT too). Wait, that could be a new painting, gotta go...
The Krugman Shuffle
When me & my friends go D.C. town.
We can't sit still we can't sit down.
We don't like to fight and we don't like to scuffle.
But we dance all night doing the Krugman Shuffle.
CHORUS:
Hey Ben, Hey Ben (Hey Ben, Hey Ben) nyah nyah....
But we never miss a chance, we get up and dance
doing the Krugman Shuffle.
Well me & my friends love Larry & Ben.
We love Paulie's brother Barry & his sister Bair.
It's such a delight to boogie and scare.
Dancin' all night doing the Krugman Shuffle.
CHORUS:
LEAD:
Me & my friends we all love to see.
Comedy classics on talking heads TV.
Those knuckle heads, oh they get in a scuffle.
They push & they shove doing the Krugman Shuffle.
CHORUS:
We do the Krugman Shuffle
Even if this is the new economy we purchased it by pulling forward the future economy for years to come through crushing taxes and debt.
I take issue with the taxes now, debt yep, but he has committed our future wealth with current debt on non fiscally responsible programs with only the promiss of this time will be different...
taxes , oh they will come...
That smug btch Erin makes my skin crawl. nuff said.
RD,
We need to meet downtown and have a drink one day...
We must have different definitions of "rational."
Note that Krugman does not allow for sleeping money because he says that savings always equals investment.
If so, however, then his argument about falling demand makes no sense:
Krugman: " Still, my sense is that the big reason for declining business investment, at least, is simply the fact that consumer demand has fallen — which is paradox of thrift in action."
Now he forgets that he just told us that government debt offset private savings and Keynesianism says that should maintain aggregate demand.
FD,
You are correct. The taxes will be what holds down the economy in the future. I wasn't clear.
good catch NOC
good catch NOC
Bernanke discusses the Constitution!
YouTube - Barney Fife and the Preamble to the Constitution
The number of US companies featured in a emminent business magazine's annual list of the world's top 500 global companies fell to its lowest level ever, Fortune magazine has said, while more Chinese firms appeared than ever before.
Signaling the effects of the devastating financial crisis on the US economy, a non-US firm topped the list for the first time in over a decade, with Anglo-Dutch energy giant Royal Dutch Shell coming in first.
BEIJING (AP) -- China surpassed the United States as the world's biggest auto market for the first half of 2009 after June sales soared 36.5 percent from a year earlier, according to data reported Thursday.
China's vehicle sales in June rose to 1.14 million, the second-highest month to date after April's 1.15 million units, the China Association of Automobile Manufacturers said. Passenger car sales hit a monthly record of 872,900 units.
...a non-US firm topped the list for the first time in over a decade, with Anglo-Dutch energy giant Royal Dutch Shell coming in first.
Wait until they have to book the loses for their tanker borne arbitrage play on oil.
God Dam* enough already with the pork...shi*
WASHINGTON - Sweeping healthcare legislation working its way through Congress is more than an effort to provide insurance to millions of Americans without coverage. Tucked within is a provision that could provide billions of dollars for walking paths, streetlights, jungle gyms, and even farmers’ markets.
The add-ons - characterized as part of a broad effort to improve the nation’s health “infrastructure’’ - appear in House and Senate versions of the bill.
Critics argue the provision is a thinly disguised effort to insert pork-barrel spending into a bill that has been widely portrayed to the public as dealing with expanding health coverage and cutting medical costs. A leading critic, Senator Mike Enzi, a Wyoming Republican, ridicules the local projects, asking: “How can Democrats justify the wasteful spending in this bill?’’
But advocates, including Senator Edward M. Kennedy of Massachusetts, defend the proposed spending as a necessary way to promote healthier lives and, in the long run, cut medical costs. “These are not public works grants; they are community transformation grants,’’ said Anthony Coley, a spokesman for Kennedy, chairman of the Senate health committee whose healthcare bill includes the projects.
All your ham-hocked belong to us
So, instead of complaining that none of this works, Rob Dawg, maybe one should be grateful for a crappy, but manageable outcome, should we manage to achieve it, rather than the worse case of the 1930s.
That outlook would make Schumpeter proud.
Err, what? Are we thinking about the same Schumpeter? He of 'creative destruction' being the driving force behind capitalism?
Japan didn't allow for creative destruction. IMO, that's a big part of why they haven't been able to climb out of their hole, 26 years after falling in. Propping up zombie banks with trillions of yen, throwing trillions more at the construction lobby to build eight-lane highways to nowhere, protecting their aging keiretsu with import tariffs - the list goes on.
And what have we thrown our first couple of trillion dollars at? Propping up our very own zombie banks and larding up our "stimulus" bills with hundreds of billions in government-sanctioned pork.
If that's not the polar opposite of a Schumpeterian approach to the crisis, I'd have a hard time thinking of one.
@Dawg - I'm glad I'm not the only one with Springsteen in my head when I heard the "Krugman Shuffle"
What Ifind interesting is that nobody takes the opposite case with the Japanese lost decade- it could have been much worse- just like the 1930s.
I'd been saying that here from the beginning - few starved and not even a lot of them lost jobs or homes [some did & remained 'invisible' due to the peculiarities of Japanese culture but not many]... Incomes stagnated & profits collapsed. Not the end of the world.
That tidbit is always lost on the 'we are japan crowd'.
Comrade Coinz (homepage, profile) wrote on Thu, 7/9/2009 - 12:42 pm
mp wrote (previous thread):
Why isn't anyone talking about what they're doing in response to this environment?
I am increasing my income by 10%, stacking cash and coinz, and paying off debts faster. What are you doing?
Hording cash and cash equivalents, trimmed 401k/IRA investment to a minimum, spending more time with close family, trying to stay in touch with more friends and spread the occasional article or informed opinion (especially to younger friends in or just out of college), gotten more involved in volunteering and helping to organize a benefit event for a local food pantry. Call me a sucker, but I have a moral issue with shorting and speculation in general, and like to sleep at night and try to minimize the role "the market" has to play in my life.
As people realize the real costs of all this crap we're doing and the huge sums of nonexistent money being casually thrown around, things are not going to be pleasant to put it mildly.
Grave-robbing making a comeback:
"Four cemetery workers have been charged with dismembering bodies after police found what they called "startling and revolting" conditions at a historic cemetery near Chicago.
Cook County Sheriff Tom Dart says workers at the Burr Oak Cemetery in Alsip allegedly dug up more than 100 graves, dumped the bodies into unmarked mass graves and resold the plots to unsuspecting members of the public."
dryfly (profile) wrote (in reply to...) on Thu, 7/9/2009 - 2:54 pm replyIgnore user
"What Ifind interesting ......"
Interesting? Why....
I once taught a German Shepard to bark in Spanish.
Alien abductors have me probe them.
I once buried a time capsule full of things that haven't happened yet.
Now that's some dead money.
Gonna be a shame when the central state loses the ability to raise funds.
Byz - it isn't gonna happen THIS cycle. This cycle we borrowed in dollars and pay it back in dollars and can just print to pay it back. It is the NEXT cycle when we hit the wall - when our future creditors refuse to lend us in our own currency.
That day might be soon approaching.
When I looks in the mirror there's never a reflection because I am only 1 of a kind.
I can defeat anyone in a game of chess without making any moves.
The President of a country once took a bullet for me on a failed attempt.
On every continent in the world, there is a sandwich named after me.
I don’t believe in using oven mitts, nor potholders.
My cereal never gets soggy. It sits there, staying crispy, just for me.
My pillow talk is years ahead of it’s time.
I have never lost a sock.
If I disagrees with you, it is because you are wrong.
I'm a lover, not a fighter, but I'm also a fighter, so don’t get any ideas.
Fiduciary Doodie (profile) wrote on Thu, 7/9/2009 - 1:58 pm
I once buried a time capsule full of things that haven't happened yet.
We borrowed money from a future that hasn't happened yet. Hopefully not enough that the future we borrowed from no longer exists. That is always the tricky part with temporal monetary mechanics.
This while S&P is warning on weakness in Argentina's economy:
Argentina bourse, banks to close Friday due to flu
BUENOS AIRES, July 8 (Reuters) - Argentine financial markets and banks will close on Friday as part of government efforts to fight an outbreak of the H1N1 flu strain that has killed 70 people, officials said on Wednesday.
The government stopped short of declaring a national holiday on Friday, but it gave civil servants the day off and encouraged private companies and other institutions to do the same.
Argentina has a national holiday on Thursday.
The stock exchange, the main bond market and banks will remain closed, officials at the bourses and leading banking associations said.
President Cristina Fernandez has sought to halt the spread of the virus in the Southern Hemisphere winter by closing schools, giving pregnant workers extended leave and allocating emergency funding.
Local theaters have decided to temporarily shut their doors, while Brazilian airline Gol (GOLL4.SA) said on Wednesday it had seen a sharp drop in passengers on flights to Argentina.
Buenos Aires and its suburbs have been worst affected by the outbreak of the H1N1 virus, which emerged in Mexico earlier this year.
Argentina bourse, banks to close Friday due to flu
| Reuters
The President of a country once took a bullet for me
Does Doodie Do Requests?
my charm is so contagious; vaccines have been created for it.
Years ago I built a city out of blocks. Today, over six thousand people live and work there.
I am the only man to ever ace a Rorschach test
If I were to give you directions, you'd never get lost and you'd arrive at least 5 minutes early.
My legend precedes me, the way lightning precedes thunder.
FD - does your hubris get hubris?
LOL
I can speak French, in Russian.
I have written proof that the bermuda triangle is actually a parallelogram
I once put myself up as collateral
People hang on my every word... even the prepositions.
I can disarm you with my looks, or my hands, either way
my reputation is expanding faster than the universe.
I once had an awkward moment, just to see how it feels.
I live vicariously... through myself.
Doodie == Dos Equis
The taxes will be what holds down the economy in the future.
I think the bad debt (mal-investments) will hold the eCONomy down in the future. But at least our efforts to preserve that bad debt will be good for wall st.
I am so respected, even my enemies put me as their emergency contact number ..
yep love em all...broward...
I get a kick out of those commercials too. I love the Bermuda triangle one.
man, todays dow looks like the results of my ECG stress test last week.....
Give me a break.
SEC to call for Calif. IOUs treated as securities
"A regulated market for the IOUs "makes it even more advantageous" for individuals holding them, who could sell them at a fair price, Maco said. The price they receive may be discounted in accordance with the market's perception of the risk of the state repaying the notes, but it would be an orderly market price, he said."
IOU
FD doesn't eat honey, he chews bees.
When FD swims, he doesn't get wet, the water gets FD.
Apple plays FD 99 cents every time he listens to a song.
FD can kill two stones with one bird.
...
-and everything was working so well "before"?
Mark D,
With plenty of oversight and strict trading rules I am sure....
good ones Nate!
We must have different definitions of "rational."
Note that Krugman does not allow for sleeping money because he says that savings always equals investment.
If so, however, then his argument about falling demand makes no sense:
Krugman: " Still, my sense is that the big reason for declining business investment, at least, is simply the fact that consumer demand has fallen — which is paradox of thrift in action."
Now he forgets that he just told us that government debt offset private savings and Keynesianism says that should maintain aggregate demand.
Good post...
Thats why I come here....
Cheers!
..............
Kung.Fu.Panda....
That story is sad but hopefully it puts a little light on how idiotic graves really are....
Those are pretty good... I think you made them up right?
(I also get a huge kick out of those commercials)
July 9 (Bloomberg) -- Leaders of the world’s biggest developed and emerging nations avoided a debate over the dollar’s role in the global economy as they agreed not to devalue their currencies to promote their exports.
With officials from Brazil, India, China and Russia pushing consideration of alternative reserve currencies, their joint statement’s language on foreign exchange echoed an agreement at an April summit of the Group of 20.
The leaders agreed to “refrain from competitive devaluations of our currencies,” according to the statement released after their meeting today at the G-8 summit in L’Aquila, Italy. They also agreed to “promote a stable and well-functioning international monetary system.”
dryfly (profile) wrote (in reply to...) on Thu, 7/9/2009 - 2:58 pm
Byz - it isn't gonna happen THIS cycle. This cycle we borrowed in dollars and pay it back in dollars and can just print to pay it back. It is the NEXT cycle when we hit the wall - when our future creditors refuse to lend us in our own currency.
It sounds like the dividing point in your "cycles" is when the creditors clear their throats.
That day might be soon approaching.
I think it's instructive that Kreditanstalt went bankrupt because the state of Austria could not afford to bail it out.
This is still a young crisis, we haven't see severe issues among the sovereigns yet. I do not worry too much about what America's creditors want to do, I am worried about what they are impelled to do.
This crisis has a very long way left to run -- the decision to spend til u win on all front guarantees it will have the maximum possible duration -- and most of the players in it have a lot less fuel than there is fight.
When the 300MM people who are currently living in the US expire and if they all got graves with an aggregate size of 8' x 10' it is approximately equal to the size of Rhode Island... OK Sorry for the rant... I'm done now.... (At least I feel better that its after the Pig!
)
"A regulated market for the IOUs "makes it even more advantageous"
IOU == positive change.
hahaha.
"There's always an excuse, a variable left out of the formula, an exigent event, changing circumstance, on an on"
As ever in the intellectual life of human beings. We're limited. The history of the world - all worlds - begins with inexplicable zero entropy. It's been downhill ever since.
I've never been a fan of seasonal adjustments, and today shows exactly why.
Seasonally adjusted, this week we came in at -565,000 vs. -617,000 last week
Not seasonally adjusted, this week was -577,506 vs. -559,894
This week's adjustment was +12,506, making the number look better
Last week's adjustment was -57,106
In one week, the seasonal adjustment swing was nearly 70,000 claims. Wow!!!
What happened since the bubble bursting in Japan (1990) didn't/doesn't get much news coverage but I remember hearing in the early 90's from a Japanese CSI that things in Japan were as bad as seen in American news (rape, murder, etc). I would guess that things have deteriorated since then.
As for the survivors, the fureetaa's (non-permanently employed 20's and 30's) are (semi-)permanent underclass of the 21st century. They cannot get full-time jobs even though most of them want to (age discrimination is pretty strong there). They were starting to see a light at the end of the tunnel last year when some of the fureetaa's were getting full time jobs. Unfortunately the light turned into a speeding train last fall when the orders (and economy) fell off the cliff in Japan.
My guess is that things will be worse for US for the next decade than Japan's 90's and 00's. But Japan would suffer more than the US in the 10's (because Japan is so dependent on trade and all her trading partners are and will continue to struggle).
JMHO
DannyHSDad (homepage, profile) wrote
JMHO
Well-stated, and I am largely in agreement.
Since this is a "Tanta" thread, every time someone says they've been "pigged", I think how much she would have HATED that -- she felt that every thread deserved to live as long as the topic had more life. Just having an angry hoarde switch from most recent thread to the next led to chaos -- as we see here.
I don't hate to say it folks -- she was right. I despise the fact that threads die when a new thread starts. It's the ADHD syndrome of the CR commentariat. And it's sad.
Fight the pig.