April 10, 2012

Rush to judgement - Nobody read the link

On Saturday I posted a link to the following, and used the same headline that appeared in the article: "Happy Easter, Bilderbergers".

http://hat4uk.wordpress.com/2012/04/06/happy-easter-bilderbergers-heres-a-little-problem-for-you-to-think-about/

Someone alerted and a jury voted 5 to 1 to hide the post. No juror stated a reason for his/her vote. The alerter's comment was as follows:

"Discussions of Bilderberger topics are prohibited by the admins in the TOS and are Conspiracy Theory posts, by definition."

The only problem here is that the article does not discuss Bilderberger topics aside from a passing putdown of several world domination conspiracy groups. The article is a serious discussion of the prospect on "'indeflation’ which is based on two simple principles: that there will be price inflation, but asset deflation: that consumables would cost more, and investments/housing/pensions would be worth less "

It's pretty obvious to me that no one - not the alerter and at least 5 members on the jury - bothered to read the article at the link, and instead reacted solely to the use of the word "Bilderbergers' in the title of my post.

Has it really come to that? I've been a member of this discussion board for nearly twelve years. When I first joined it was a different place, with thoughtful posts about issues of concern to Democrats who were feeling marginalized by the DNC.

Times change, and this board has changed with them. Nowadays it's sort of like cable internet, with each self-identified group and subgroup having its own channel. Once in a great while you can find a thoughtful original post buried among the fifteen or so threads speculating on George Zimmerman, or the Latest Breaking thread carrying a story that's three days old and has already been 'broken' five times.

My subscription expires this August. I won't be renewing. The people and the atmosphere that made DU an exciting and interesting place to be are gone, and it's time for me to go, too.

April 7, 2012

Stimulus?

Monetarily, destroying savings and dampening the desire to save is easily accomplished through ZIRP and a negative real rate of interest.  Those evil oil speculators were not so evil in the early days of QE 2.0 when the Fed was trying to stoke inflationary “expectations” to try to generate “modest” negative real interest rates.  In addition to making savings unappealing, ZIRP also, in the minds of central bankers/planners, increases borrowing activity (the trope that low interest rates are stimulative is still widely circulated and believed despite now years of empirical evidence to the contrary).  Finally, there is the “wealth effect” of rising asset prices through the enhanced speculation that I mentioned in the beginning.  Each of these measures is undertaken with the expressed understanding that they will “stimulate the economy”.

But each and every one of those monetary means to the quantitative ends are financial economy measures.  There is no direct pipeline into the real economy.  Philosophically, these central measures are dependent on the idea that financial risk-taking leads to real economy risk-taking.  It is an unquestioned pillar of modern economics and monetary science that encouraging “risky” behavior in the financial economy encourages and promotes “risky” behavior in the real economy.  Again, risk in the financial economy is believed to be a perfect (or near perfect) substitute for real economy risk.  By getting people to act on these financial impulses, getting money to flow in the financial economy, it is believed that this will eventually lead to real economy activity.

<snip>

Rather than leading to a self-sustaining recovery process where financial economy risk-taking leads to beneficial real economy processes, the enlarging financial economy, with its “easy” money returns, draws more and more resources into each bubble, away from where those resources would be far more useful and sustaining.  Financial engineering just does not compliment the real economy as intended.  In reality, asset bubbles are far more like vortices than bubbles.  They draw in more and more formerly useful material and leave destruction in their wake, and a system that can afford less and less the imbalances that these vortices inevitably lead to.

<snip>

In the end analysis, monetarism has the entire process backwards.  The demand for money and credit should be as a result of success in the real economy, not the method for creating activity there.  Consumption itself should be an offshoot of economic success, not the goal of generic activity.

There's a ton of comments on this piece, some stupid, some brilliant. The one that will stick with me is this:

You have oil, you have a century of growth.
You don't  have oil, you don't have any growth.  
It's not rocket science

.

nuff said
http://www.zerohedge.com/news/jeff-snider-explains-why-unexpected-back-right-schedule?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

April 7, 2012

The Impossibility of Defense Cuts

Apparently the thing we need to keep ourselves safe is a fast, lightweight ship that can sweep mines, launch helicopters, fight submarines, and perform other assorted duties—but can’t withstand heavy combat. I don’t claim to know if we really need the Littoral Combat Ship to ensure our national security. According to an article in the Times, John McCain—the Republican Party’s last presidential nominees and one of the Navy’s more famous veterans—is critical, although other Republicans and the administration are in favor of it.

I do know that the Littoral Combat Ship is a classic example of why it’s so hard to reduce budget deficits. You have local politicians who want the jobs. You have a large group of representatives who are reflexively pro-military and will vote for anything the Pentagon wants, and even things the Pentagon doesn’t want.

http://baselinescenario.com/2012/04/06/impossibility-of-defense-cuts/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

April 5, 2012

Why Saudi Arabia is losing its power to calm the oil markets

In the old days, whenever oil prices got bumpy, the United States could ask Saudi Arabia to pump out more crude and calm the markets. But that’s increasingly no longer the case. Saudi production is struggling to keep up with rising demand in places like China. What’s more, as Jim Krane reports today, Saudi Arabia is growing so fast that it’s consuming its own oil at a shocking rate:
With domestic electricity demand rising 10% per year in Saudi Arabia, the kingdom now devours more than a quarter of its oil production.

Ah..OK..I get it. So now when the Saudis start their nuclear program it will be solely for peaceful, energy-producing purposes. You know...like the Iranians.

http://www.washingtonpost.com/blogs/ezra-klein/post/why-saudi-arabia-is-losing-its-power-to-calm-the-oil-markets/2012/04/04/gIQABRklvS_blog.html?wprss=rss_ezra-klein

April 3, 2012

Time to cut the Pentagon budget

Here’s an idea: Rather than focus on wounding domestic programs that help people and families, communities and businesses, let’s cut where elected officials have maneuvering room: the Pentagon budget. Each year, Congress appropriates more than half of discretionary spending to the Department of Defense, wars and nuclear weapons spending. Even without deficit reduction pressure, this overspending takes dollars away from needed domestic priorities that strengthen our economy and ensure that America can compete in the world marketplace. This isn’t making our nation more secure. As chair of the Joint Chiefs of Staff Gen. Dempsey put it, “It makes no sense at all for us as a nation to have an extraordinarily capable military instrument of power if we are economically disadvantaged around the world.”

Wow! That's a really amazing statement for him to make.

http://thehill.com/blogs/congress-blog/economy-a-budget/219531-time-to-cut-the-pentagon-budget

April 3, 2012

Stiglitz: The Invisible Hand is Invisible Because It Isn’t There

Stiglitz says that “most Americans don’t realize that we are no longer the country of opportunity that we think of ourselves, that America today has less equality of opportunity than any of the other advanced industrial countries.” He points out how many like to say that our economy is doing well because GDP is growing, but that “if you’re going to be judging how well an economy is doing, clearly I think the key metric that one wants to focus on is what is happening to the living standards of most citizens.” He says that most Americans don’t realize how bad we’re doing, including the fact that “the median income of a full-time male worker today is the same as it was in 1968,” and “if you look at median household income it is the same today as it was a decade and a half ago.”

http://www.newdeal20.org/2012/04/02/stiglitz-the-invisible-hand-is-invisible-because-it-isnt-there-75639/

March 31, 2012

Lieberman, Santorum and Hagee

The unholy alliance.

March 29, 2012

USS Enterprise in Piraeus: Wellcome (sic), American Dollar!

The very first American nuclear powered aircraft carrier “Enterprise” anchored off shore of Palaio Faliro, south of Athens, on Wednesday morning. The USS Entreprise, the longest naval vessel of the world, is on its last deployment after 53 successful years on duty.



http://www.keeptalkinggreece.com/2012/03/28/uss-enterprise-in-piraeus-wellcome-american-dollar/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+KeepTalkingGreece+%28Keep+Talking+Greece%29

March 28, 2012

The Economic Question at the Core of the Individual Mandate

The theory that health care is a consumer good like any other commercial product and that health care markets work like other markets is pure fantasy, at odds with everything we know about how health care is actually consumed. Health care markets violate the fundamental tenets of market economics…

Health care is a public good, not a commodity. The reason that other developed countries spend so much less on health care, and cover all their people and deliver higher health quality care, is that these countries recognize this fact. As a public good, health care must be made available on an equitable basis to all, and prices and supply must be regulated. In the rest of the developed world, almost everyone has their health coverage supplied by the government or by a regulated nonprofit insurer, and the coverage comes with very low out-of-pocket costs. In other words, other developed countries follow the exact opposite course recommended by conservatives and achieve systems that are much more efficient economically.

http://www.newdeal20.org/2012/03/27/the-economic-question-at-the-core-of-the-individual-mandate-75194/