the Air Vent

Because the world needs another opinion

Symptoms in America

Posted by Jeff Id on March 13, 2010

I’m back from the trade shows and fully exhausted.   This time I was in St. Louis during a time when Barack Hussein visited.  I’m told he discussed health care and there were dueling protests between two distinctly different classes of individual on either side of the street.  St. Louis is not in good condition by the way, we were in the nice part of town and it was frightening to say the least.

Anyway, this is a political commentary and not a good one so if you don’t like my conservative vent’s — sorry – don’t read it.   I will be working on temperature data tomorrow today now but I learned something this week and it needs to be said by someone.    First, there is a definite but slight recovery in in industry at this moment.  Good news.

The second, is that industry is absolutely angry at what BHO and the extremists in charge are doing.  Now understand, these include rank and file union and non-union workers, equipment builders, sales people, engineers, corporate heads and owners alike.  The warriors of capitalism who provide and feed the world.  This IS your food, it IS the funding which drives your banking jobs, health care and the rest.  These are the people who know what it takes to get a job done, how to build a power line, what is required to move product, plumb a building, fill a pothole, how proper equipment is made.

They are universally afraid, and have learned a lesson from this economy which is unstated in media.

Recently the Tea Party movement has been marginalized by the MSM, however the extreme political hacks of the MSM haven’t figured out what the movement is OR why they have lost nearly all their viewers.   The point is that the ‘tea party’ movement is not a group, it is a symptom.  They don’t need a new party to divide them as the media is trying to sell.  They are America, and the politicians had better start listening.

The same industry which has powered the world has been pushed right to its limit by both the wall street Republican and somewhat more culpable Democrat power brokers.  It’s at the brink of collapse and there is a palpable fear in industry.  We are right at the edge of loosing America.   It’s far closer than you think, and these bankers and socialists owe humanity a greater debt for their blatant corruption than any humans have ever owed to a population. I write that in the face of mass murders of history which defy any concept of imagination, because these corrupt people have nearly destroyed, and are STILL working hard to destroy, the only bastion of freedom on Earth.  The only hope for long term success for humanity.  If you think this will not, in time, translate into massive widespread poverty,  you and I disagree, and you are not paying attention.

Despite what our wonderful friends around the world have, America used to be, and in many ways still is the most free.  Despite what the Euromedia would tell you, it’s no coincidence that the most free country is the most wealthy.  I won’t get into the sophist arguments they make.  The statistical odds that the freest country was accidentally the wealthiest,  as our schools and media have convinced the younger generation, are astronomically low.  When you consider the politics of other leading countries,  the odds are even more extreme, freedom and capitalism lead to success.  No, no, some of you technical types say.  We need a balance of regulation and freedom, you are of course right, but the balance was tipped many, many years ago.  It takes a long time in business and government for corruption and control to lead to destruction –  there is a time lag longer than slow witted voters can realize.   Some of you point out an occasional socialist country which has good sounding personal incomes, yet miss the fact that the people can’t spend it because of massive taxation and that they make their money selling something to freer countries which are the primary customers.  That whole complex line of argument pushing socialist utopia’s, is bull.

The industrial utility companies in America are working for ‘green’ solutions to the brink of their abilities, but their resources have been pushed to the limit.  They cannot get loans from banks anymore because the taxpayer stolen ‘stimulus money’ was given as payoffs to unions and 501’s actively working in the wrong directions.  Very few loan’s and grants are given for “green” whatever, so companies work with cash only.  Industry wide, the layoffs have been massive, even in surviving stronger companies. Hybrid trucks are junk and the companies don’t have the technology to do more, they don’t have the finances to invest more because of the massive disturbance of new regulation combined with the economic collapse.  They ARE at their limit.  Very little money is being spent on true development, while much is spent on advertising non-functional green solutions.  The power brokers know their policies have this dampening effect on true result because they talk to business, yet small minded people in universities and government labs, fully isolated from realities of  business, advocate for it.  What’s more, the inner city minorities, who have long been on government money without recognition of the trap, have fully bought into it.

If stability of regulation is not offered to industry, we will crush the good companies which have given us (and the whole damn world) this luxurious lifestyle.  Of course stability requires a retraction or at the very least, dramatically slowed implementation of the green push (which will probably not come).

The situation in America is so insane that media will advertise numbers like 1 in 4 children in America don’t know where their next meal is coming from, at the exact same time that the president’s wife is advertising for her battle against fat children campaign.  Both claims are lies, I’ve never met a starving kid here in my 41 years, and Obama’s program is simply expanding a union. A modified quote which has bearing and which all the actually fat yet somehow starving Americans should remember:

—  It was exactly that pattern, people lived as usual; then “tomorrow there was war” (a famous Russian movie).

Sudden loss of food, income and quality of life doesn’t happen rarely people, it happens regularly.  Sure there is not always a war, but sometimes there is.

Compared to history, our recent times have been blessed more than any previous.  If you consider that, it would be astoundingly foolish to expect our situation to NOT collapse and mass starvation and poverty to NOT happen at some point.  Our only tiny chance is stability of regulation achieved through minimal manipulation by power brokers, rapid change is the enemy of prosperity.   We need to back away from the two footed jump into mass socialism and the false ‘green’ living.  If you care about your children at all,  we must allow industry to build, hire, profit. If it’s done, they will again be able to focus on improved technology instead of false green solutions.

It all means that we need the opposite of what our government is doing, and you should understand — the government power brokers know it.  They know they are doing the opposite of what is needed for us, and you should be asking, why would they do that?

Industry hates the green push, at the same time they are attempting to embrace it.  They fear what is coming, it was palpable at the trade shows, and view the whole situation in our now dictator-style government as a disaster.  They know that passing the socialist act for America (aka health care reform) is a massive power-grabbing cost-adding weapon against freedom.

From my perspective, it is as as dangerous and foolish a weapon as anything ever invented, but launch it they will, if they are allowed.


127 Responses to “Symptoms in America”

  1. Pops said

    [Jeff: please lose the apostrophes in your plurals. Please also lose the apostrophe in “it’s” when you mean the possessive rather than the contraction “it is”.] REPLY, I only found one instance where I made a mistake. Of course I know the rule, it’s those damned commas that get me.

    I wholeheartedly agree with what you’ve said. What is going on today looks very much like the subversion that was being prepared by the old Soviet Union not so many years ago. Lest anyone accuse me of being a wild-eyed conspiracy theorist, let me point out that I make no claim as to who or what might be motivating our rapid slide into oblivion, just that what is happening looks precisely like what the old Soviets promised would happen, and what they spent a lot of time and money preparing. I don’t know if there is some body or power behind the scenes, orchestrating events, or if it is simply an unfortunate series of coincidences, a rogue wave or a perfect storm. But we are seeing multifaceted attacks that will have the end result of the collapse of the US government. That matches up quite nicely to the strategy of creating chaos, and then stepping in and grabbing power amidst the chaos.

    Is Obama an agent of subversion, a sleeper who has been called onto the stage now that it’s time to act? I can’t say because I don’t know. What I do know is that we know little or nothing of his early life. We know he has surrounded himself with people who were once domestic terrorists, and who are now radical Mao-quoting leftists. We know he is a master of Chicago-style political corruption. And we know he is doing all the wrong things.

    Is it too late? It’s hard to see how we can possibly back away from the precipice at this late stage. We’ve gone so far down the wrong road in so many fundamental ways. Our kids are raised in daycare centers and the propaganda mills we call public schools. Do they share our values? Do we even know? Do we ourselves have the right values? Do we care about honesty, morality, and fidelity? We’ve abandoned God. We care more about our own creature comforts than we do about taking care of our neighbors, foolishly pushing onto government the role of caretaker. We’ve let institutions of higher education go to the (socialist) dogs.

    I hope we can survive, but it will take all of us working together for a common goal. That goal should be freedom combined with character, the only unbeatable combination. Freedom without character cannot work, and character without freedom is rather pointless.

    The partisan bickering has to stop. A lot of the bickering results from so many of us having succumbed to the siren song of omnipotent government that we think will solve all of our problems for us. There is a right and a wrong in all of this, and if the good folks who are currently fighting for the wrong side don’t come to their senses there can be little hope. I don’t think we can do it without them. We need to unite against the few who are pushing us to the edge of the cliff.

    From the perspective of climate science, we need all good scientists to understand that a few have poisoned the well. Come out and refute the “consensus” nonsense. Yes, risk losing your funding and standing. If we all do it together, we can get rid of the vermin that are destroying everything. If we don’t and allow the charade to continue, we may not recover in time.

  2. Michael D Smith said

    Hey Jeff, sounds like you need a tea party to go to… I’ve never been to one, but since you live in Morris, I thought I’d pass this along. There is a tea party in Homer Glen (near Orland Park) on April 10 at 11:00 AM… Hope I get to meet you. Mike S.

  3. Bad Andrew said

    “The point is that the ‘tea party’ movement is not a group, it is a symptom. They don’t need a new party to divide them as the media is trying to sell. They are America, and the politicians had better start listening.”

    As a veteran Tea Partier, I say if this means you are ready to party, I say welcome aboard, JeffID!🙂

    Andrew

  4. timetochooseagain said

    It has been shown over and over again that economic freedom correlates very strongly with wealth.

    But perhaps scarier is that wealth is also strongly correlated with CO2 emissions-more or less a proxy for fossil fuel use. That politicians think they can deconvolve that relationship strikes me as arrogance unparalleled in history.

  5. Ruhroh said

    Yeah, I’ll bet a remake of that classic movie “1984” would be a box office smash hit.

    RR

  6. Jeff—This is coming at your fine comments from another angle. It’s an excerpt from an article I wrote a few weeks ago on the statistical bigness of government.

    Government is certainly too big, but when we get to the actual numbers, what are we talking about?

    An October 6, 2006, article in the Washington Post by Christopher Lee, “Big Government gets Bigger,” states that 14.6 million people work for the federal government.

    This includes civil servants, military personnel, groups that obtain federal grants, postal employees, and—here is a key—those people who work for companies that are federally funded contractors.

    When we go to the 2008 Census, we discover that 5.2 million Americans work full or part-time for state governments. 14.4 million people work full or part time for local governments. Total: 19.6 million.

    Add 19.6 (state and local) and 14.6 (federal), and you get 34.2 million people who work for the government.

    According to the US Census Bureau, the population of the US is 308,676,685.

    Roughly speaking, this means there is one government employee for every nine people in the US.

    A few days ago, I was working on another article, and I wrote: “The goal of the governments of all modern industrial societies is: everyone works for the government.”

    I had no idea how close we were, in the US.

    The US Census Bureau states that, in July 1776, there were 2.5 million people living in the 13 colonies. If we applied the present 1:9 ratio, it would mean 277,777 people would have been working for governments in those colonies. Forget about England and King George—I think that alone would have been enough to foment a revolution. I’m sure of it.

    UPDATE #1: Several readers have pointed out that there are more people who, in some sense, work for government than I tallied. They also stated that military personnel shouldn’t be counted. If we subtract military, these new additions would more than offset the subtraction.

    For example, the Census figures on numbers of state and local government employees do not include people who work for private contractors that are state-or-local-government-funded. Including those people would inflate the total considerably. Then we have the millions of government workers who are retired and are on government pensions. Then we could conceivably count all the employees who work for those companies the federal government has bailed out. Then we have all the people in the US who are on welfare. Some have suggested counting illegal aliens who are afforded government protection despite laws to the contrary. Finally, without stretching it, we could say that every bread winner who works, in some form, for government in America forms a small net of immediate family members who are financially sustained by that salary—and should be added to the rolls as well. The enormity of all this is eye-opening, isn’t it?

    UPDATE#2: Roughly a quarter of the US population is made up of people under the age of 20. So if we’re talking about adults, and we probably should be, since they are most of the citizens who vote and hold the overwhelming number of long-term jobs, my figure of 1 person in 9 working for the government would turn out to be 1 person in 7. And this new figure doesn’t factor in all the add-ons I mentioned above in UPDATE #1. If I did factor those people in, would the ratio move to 1 in 6? 1 in 5?

    The millions and millions and millions of people in the US who work for, or are financially dependent on, government in a very significant way, view the private sector and its vitality and importance through a special lens. They can never fully appreciate what the private sector has given us and continues to give us.

    Cap and trade, the national health plan—these and other current proposals would continue to swell the ranks of actual government employees, of course.

    Government has shown itself to be a spreading fungus. And government achieves brainwashing by simple personnel placement. Nice, neat, easy. You work for government, you support its actions.

    As we know, the Constitution was framed with the intention of limiting the power of government. The Founders knew all too well what could and would happen if that power was unleashed. In my opinion, they never envisioned the government would be able to bring so many people under its umbrella.

  7. I just came back from a conference this week, too. I was dismayed by how much energy was being focussed on how to get their share for ARRA funds. That, and bogus “Green IT” marketing fluff.

    That’s definitely not a sign of economic vigour in the private sector.

  8. gallopingcamel said

    Jeff, you are so right. The correlation between personal freedoms and economic success is astounding. Just take a look at the latest rankings:

    http://www.heritage.org/index/ranking.aspx

    The USA is ranked 8th; while that is pretty good, we have fallen a few places in the last 20 years, while Ireland has risen rapidly.

    How can a “communist” jurisdiction lead the rankings? My understanding is that Hong Kong is still free even under its new ChiCom owners.

  9. Jeff Id said

    #8 I suspect that the poll includes money transfer and personal wealth as primary considerations. Hong Kong doesn’t tax business profit — at all. That is why so many us companies are based in hong kong. They then hire accountants in droves to negotiate with the US – IRS for the value of imported goods to determine the US profit which is taxable.

  10. TerryMN said

    re Jeff, #1 (OT/pedantic/whatever, sorry)…

    …vent’s, utopia’s, 501’s, loan’s – should be plural, not possessive – wasted pixels.🙂

    I completely agree with the rant, btw.

  11. Tom Fuller said

    Token liberal bleat here–(Hiya Jeff, hope the trip went well)–I wonder exactly what BHO has or has not done, in your opinion, to make St. Louis the way it is and put the companies you looked at the way they are. What Democratic policies have done this?

    Barack Obama, regardless of what Hannity says, is a pragmatic centrist. Look at how he’s leaving Cap and Trade alone at this point. He needs healthcare as it was his signature campaign promise, but look at how many compromises he’s been willing to make to get it through. I think you guys are barking up the wrong tree.

    Believe it or not, part of the problem lies with Republicans, and I’m not even blaming them. Do you remember when a Secretary of State (Kissinger?) said that when he needed something from Europe he didn’t know who to call? When Obama needs something from Republicans, who does he call?

    Obama’s a liberal, but he’s not as liberal as I am–stay on the sane side of these discussions–you make too many good points to veer off… and be grateful I didn’t get elected😉

  12. May I ask — are all industries equally suffering? In particular, do people from the oil sector complain? My expectation is that, unlike others, they should not be having tough times. Russian government, for one, has recently been gladly reporting how the national gold reserves and monetary reserves are growing, together with the oil prices…

    There is a good analogy with animals. Animals breathe to deliver oxygen to their cells. Oxygen is vital to decompose food and make use of the energy it contains. However, breathing (i.e., mechanical movement of some parts of the body) itself involves an energetic cost. We spend energy to expand and compress our lungs, for example.

    It is clear that the animal body can normally function if only breathing costs are significantly smaller that the total energy budget. If all energy is spent to breathing — nothing is left to any other activities, including growth, development, sex, reproduction, parental care, territory defense… So breathing costs in animals, including humans, are typically in the order of 1% of the total energy budget.

    The same with hydrocarbons. They are as essential for the developed world as the air for living beings. They fuel all civilization’s activities. But energy expenditures should be small, like breathing costs! That is, the civilization does not live to pay for energy with the goods it produces. It lives to develop, to thrive, and uses energy for that. When the energy costs rise above a certain limit, the economics inevitably disintegrates.

    This is a graph for annual energy expenditures in the U.S. until 2005 (the accompanying text here). Plotted together with annual GDP increment and total energy consumption. It is very clear that the rise of energy costs above 10% of GDP in the 1980s has destabilized the economics. There was no “green insanity” at those times.

    The recent crisis year(s) are not shown in the graph, but with oil barrel approaching 200 USD at times (compared to approx. 55 USD for the year 2005), this has undoubtedly been a tremendous blow to the real sector. The current ~80 USD/barrel are likely to be economically intolerable either. In my view, without seriously analyzing what is going on with the energy, and where these barrel dollars go, it is not possible to find ways out.

    Another question of great interest to me is how the conservatives evaluate the fact that while the business, industry and economics are so close to a deep crisis in the U.S., the world leader in science and technology, graduates from Near-Eastern universities make a 15:1 proportion of priests to engineers? And in these countries luxurious and otherwise absolutely economically unthinkable facilities (like alpine ski resorts in deserts) continue to be built amidst a world economic crisis. Is it considered normal market system? Are religious leaders so much more economically competitive than engineers?

  13. carl said

    Isn’t socialism Obama is selling and expanding, it’s fascism Mussolini style……….ie Big corps run the govt and the country by getting the laws and regs they want and avoiding the ones that would kill their profits and force them to act responsibly. This is not new, we have had several President’s and admins do this, Obama is but a continuation of it. Only socialism going on is the socialization of losses while profits are privatized. The “Health Care Reform” is nothing more than a protection scheme for big medical, big pharma, and big insurance…..this is not socialism. Obama is also firmly onboard with expanding military power, less rights for citizens, and zero prosecution for anything. We have about 5-6000 banks that are functionally insolvent BY LAW !!! Think about that. Checked the losses for banks actually closed by the FDIC lately? They typically run around 37-45% or more, yes this means these banks were claiming assets at values more than 35% of what they are actually worth. Cooking the books is official US policy now and the tax payer pays for the losses. Health care and union support is a drop in the bucket compared to what the Obama admin and Congress is doing with the finance industry. It’s the biggest looting and transfer of wealth in world history and it is happening now and it is all “legal” LOL. Yes it will eventually collapse, all ponzi schemes do. As far as the rising ranks of govt employees, that is about to collapse as well. We have about 40-46 states, 30 of which are currently functionally bankrupt and borrowing, that are going to or already have found themselves unable to fund their govt payrolls and service mandates. I don’t think the federal govt will or can do much about this, not under our Constitution anyway….as if it matters, sometimes it does and sometimes not. What we are going thru right now is the classic over extension endgame of your typical empire and lifecycle of democracy. What follows isn’t going to be pretty or pleasant.

  14. This is link to the graph in the above post:
    http://www.bioticregulation.ru/common/img/usgdp.gif

  15. timetochooseagain said

    13-Technically the term for Mussolini’s economic policies is Corporatism, but yeah, that’s exactly what’s going on right now.

    It’s also know as political capitalism.

  16. Squidly said

    @ #11 Tom Fuller

    You have it wrong Tom. The problem is not Democrat/Republican at all. You are just projecting more partisanship. This is not a partisan problem. Both parties ARE the problem. Progressive’s ARE the problem! Doesn’t matter the party, there are Progressive’s in both parties, just a few more in the Democrat party is all.

    I would also like to remind those here, that we have (as a country) been down the very road before. This is nothing new. These things have been tried before. Perhaps the scariest thing this time is, the Progressive’s are much closer this time to pulling it all off. And as far as BHO, you couldn’t be more wrong. BHO is a HUGE problem. He is NO centrist. He is a wolf in sheep’s clothing. He is as false and fake as anyone could be manufactured to be. He will look you straight in the eye and lie his ass off for his agenda. The evidence of this is simply OVERWHELMING. Tom, open your eyes man! I find it difficult to believe you could be this blind.

  17. Jeff Id said

    #12, Anastassia,

    Industries are not suffering equally in America, today industries which are government supported such as ambulance and fire trucks are down only about 10% from before and complaining about limited budgets. At the same time recreational boating (which was a huge business in the US) had dropped 90% down to 10% of previous business levels. Currently it’s rebounded to about 30-40 percent of 2007. The shock was massive. Light duty trailers used by small plumbing and construction firms dropped to under 20% of normal, utility trucks were down about 50% or more. These are the people who were in charge of repairing and servicing everything in the US.

    as far as this question:

    Another question of great interest to me is how the conservatives evaluate the fact that while the business, industry and economics are so close to a deep crisis in the U.S., the world leader in science and technology, graduates from Near-Eastern universities make a 15:1 proportion of priests to engineers?

    The countries you refer to are the oil production countries where low incomes can be 200,000 USD/year. It’s pretty clear how a country like this is very dependent on an external purchasing source to sustain their economy. Middle eastern priests, are obviously a load on an easily gained money flow created by pumping black stuff from the ground. Their economy can support it in it’s current configuration, if the oil stops, there will be trouble. China is similar, they export cheap labor suppressing the value of their own buying power to do so. Rules prevent West China from modernizing, forcing $0.25/hour peasants to travel East for $1-2/hour jobs. Because they are so reliant on exports, if China were its own market, they would collapse back to what they were 50 years ago.

    This is similar to the Hong Kong situation where little is actually produced there anymore, but the taxation policy is favorable for basing large corporations headquarters and allows a huge dollar flow rate. Hong Kong thrives on brokering near free labor of the Western Chinese peasants to the rest of the world. In HK, they have the English, engineering and business knowledge to be proper intermediaries to the world. They have modern hospitals, airport, buildings and lifestyles. It’s like Chicago over there, I’ve traveled there many times and enjoy it very much. The food is so good, it will break your tongue. I ate a meal at an Italian restaurant in the Shangri La hotel there that I will never forget. Shenzhen (adjacent to Hong Kong) is far less favorable for large business ownership, it appears to be growing in modernness but is an entirely different lifestyle where appearance trumps function. Hospitals are lousy, govt. is more corrupt, business dealings are very questionable — this sort of thing. Shanghai though, is more than just appearance. They’ve really started to achieve a proper foundation.

    Interesting graph you linked, it gave me some things to consider.

    #11, Obama didn’t make St. Louis, welfare policy,and theft by bankers did. As far as Republicans, you won’t get much disagreement from me. I do strongly disagree that Obama has a centrist view of anything but that wouldn’t surprise you.

    BTW, feel free to blast away at me for my views, after a year and a half of blogging, I’m used to being told I’m wrong. Also, my favorite thing about your posts is your honesty. You have never pretended to be anything else than what you are. I don’t mind disagreement.

  18. Squidly said

    #13 carl

    BHO and this administration, the “Progressive’s”, are definitely NOT Fascist. They are in fact Marxist/Communist. Keep your eyes open and you will begin (we already are) to see this play out. Just as during the late 1930’s and 1940’s, you will begin to see the Fascist’s step forward to battle the Communist’s. Glenn Beck actually illustrates this best. Fascism and Communism are both on the left end of the political scale (total government control), where the right end of the scale is total anarchy. Communism is the left track on the left end of the scale, and Fascism is the right track of the left end of the scale. They are both on the total government end of the scale, one is just up and the other down (or, one is left and one is right) but both on the left side of the government control scale. This is precisely why this is NOT a partisan issue. Either way, we don’t want to be at that end of the scale! The ideal position, and where our founders placed us (post Constitution), is just a little ways down the road from anarchy. Just enough control to keep things together. No less, no more. Presently, we are very far down that track to the left end, and closing in on the terminal (end of the line).

    I have a tremendous amount of faith in all of you, all of us! I do not believe that the Progressive movement will succeed this time either. At the end of the day, we all share the same goal. We want to be happy! And the end of the scale to the left, cannot achieve this goal, but neither can the end of the scale to the right. We must has some control, but just enough to allow the democratic/capitalist/free market systems to work, and no more. This is a proven concept, just as Fascism and Communism are proven failed concepts. History clearly shows these things.

  19. carl said

    @16

    100% correct and true

    also many many “republicans” or “conservatives” are the problem, they are just as onboard with expanded govt as anyone else

    GW Bush was claimed to be conservative and republican but yet he expanded govt by more than any of his predecessors….this pattern is long in the tooth, each successive admin has done so regardless of “party” or what they campaigned for.

    Wanna fix it? stop electing idiots that have their own interests above yours and serving the country……and yes this wipes out about 99% of Congress and every POTUS for decades. We Americans got what we voted for, not the govt’s fault people are suckers and will buy anything even if it is wrong or stupid. There’s a handful of really honest and well meaning people in govt, they can be counted on two hands, two of which ran for POTUS last go round, take note neither made it past the primaries. Most don’t even need to be told who they are, it’s obvious. They did well in the debates, problem is they aren’t willing to whore themselves to corporate interests and bribery. Obama like his predecessors is a first class corporate whore, he can and will sell out the people to keep corporations happy. Universal Healthcare and single payer could have been reality already……too bad Obama cut backroom deals preventing it with big pharma and big insurance, Congress did too, never believe the dog and pony show they present publicly unless they also say all the stuff they never say publicly too. This is one good way to judge candidates, it’s what they do not say that is even more important that what they do say. Some obvious actions have rhetoric that comes with it. For example if one wanted to clean up the banking fraud and financial fraud the govt would have to talk about and hire tons of forensic accountants, prosecutions would happen. This is pretty obvious stuff. The new report about Lehman brothers lays it all out, rampant fraud all the way to the top of the food chain….will anything come of it? NOPE. Game set and match, it’s over.

    how many criminal and treasonous President’s and admins does this nation need to go thru before it wakes up???? based on our history I am guessing all of them

  20. carl said

    @ 18

    Glenn Beck is a fool and an idiot. He is an entertainer not an educator or a historian. His views on real conservatives bears this out.

    sorry but Marxism diverges from Fascism when its the corporations in control of what the govt does, not the other way around……..it does matter which tail wags which dog

  21. Garry said

    “They are America, and the politicians had better start listening.”

    The American public has been dumbed-down for 25+ years and lives in a sleepy stupor.

    Politicians will always steal whatever they are allowed to steal.

  22. teapartyjim said

    This voter is MAD AS HELL! http://tinyurl.com/teadoff

  23. Squidly said

    #19, #20

    I mostly agree with you Carl. At the end of the day, the American people have nobody to blame but themselves. How is it that Reid, Pelosi, Boxer, Frank and many others, been in office for so very long? But again, this is not partisan either, there are just as many in the Republican party that are the same. John McCain for example, although a very honorable man in my opinion, he is a Progressive. He is one of the problems, not a solution. We would still be traveling down this same road if McCain were President, just on the other side of the road.

    I disagree with you about Beck, he is no idiot, but he is an entertainer. His show is entertainment, not news. Like anything presented in the media, all forms of media, one has to use his/her own brain and weed out the BS. There are however, some messages that Beck presents that are undeniable. My brief and convoluted explanation of Beck’s vision of Progression, left and right, up and down, is but one good example. This is undeniable and easily verifiable. History clearly shows these things.

    It is time for American’s to once again become American’s. Stand up to the fights, and fight for the reason’s why we live here. Fight for the reason’s why others come here. These fights will go on for eternity and we must accept our responsibility to continue to fight these fights for the rest of our lives. Progressive’s will always exist, and they will always push us to the total government end of the scale. This will not ever change. We must never relax, ever. We must realize that, whether Republican or Democrat, we ultimately share the same fundamental ideals, it is just the subtle differences that set us apart. We are not that far apart!

    I have a few very good friends where I work. And an interesting thing has occurred to us during this past year. We all have come closer together than I have ever been with coworkers and friends. We have argued with vigorously with one another over politics. Many of my coworkers are Democrat’s, I am neither, but I am conservative. The interesting thing that has happened to us this past year is, we quite arguing. Why? Because we have finally realized that our only problem has been communications, not ideologies. Once we figured out the communications problem, almost all other problems disappeared. We occasionally have subtle differences in approach to solutions, but by in large, we agree on almost everything. I suspect that this situation is not unique. I believe that the vast majority of American’s are exactly like this. The vast majority of us are not progressives. We all need to come together and realize that it is freedom, liberty and the pursuit of happiness that we all are striving for. We all need to come together and work together to ensure the preservation of this pursuit. This is a never ending job that we must all share in, together!

  24. Mark T said

    Tom Fuller said
    March 13, 2010 at 1:46 pm

    Token liberal bleat here–(Hiya Jeff, hope the trip went well)–I wonder exactly what BHO has or has not done, in your opinion, to make St. Louis the way it is and put the companies you looked at the way they are. What Democratic policies have done this?

    St. Louis has been ruled by democratic leaders for years, and the level of corruption has been astounding. The population of St. Louis has shrunk from a high of about 850,000 to the paltry 354,000 of the last census estimate. Nobody wants to live in St. Louis for fear of crime – it has one of the highest murder rates in the country (world, even), as well as one of the highest violent crime rates in general. Police were originally required to live within the city limits but that restriction had to be lifted because they were not able to keep the force staffed. St. Louis is a shameful example of what corruption and a dependence on welfare can do to a city.

    What Obama has not done to improve conditions in St. Louis is the same as what he has not done to improve conditions in the rest of the nation: simply encourage pro-capitalist ideals and drop this insane spending spree which will inevitably be followed by even more oppressive taxation than we currently have. You cannot spend your way out of a recession, which is a concept that has been proven repeatedly, and just as often ignored, by the numerous attempts to do so throughout history.

    Barack Obama, regardless of what Hannity says, is a pragmatic centrist.

    Nonsense. He’s a Marxist and only appears as a centrist because his perceived stranglehold on political power is slipping away. If you use that same logic, Reagan was a socialist for signing off on the largest tax increase in US history.

    Politicians, in general, always appear centrist simply because they have no choice but to compromise for fear of losing their support base. Obama is indeed the socialist Hannity claims he is – he’s just not able to implement the policies he would like to for fear of losing all the power he thought he had. If it were not for the fact that the vast majority of the US is strongly in favor of capitalism as a basis for our economy, we would be full-tilt on the way to something much more European than we are with Obama happily leading the way taxing and spending our nation into oblivion.

    Republicans are better in this regard only in their speeches, btw. Few politicians are able to gain power by biting off the hand that feeds them. Ron Paul is probably the only legitimate capitalist (an Austrian, no less) in Washington, and everybody thinks he’s a kook.

    Jeff Id said
    March 13, 2010 at 2:50 pm

    #11, Obama didn’t make St. Louis, welfare policy,and theft by bankers did.

    Corruption, not really bankers per se. St. Louis government is ridiculously corrupt (or at least, it was when I left). This is a situation that has persisted for quite some time. I do not venture into the city often when I visit, save the occasional visit to the many attractions in the downtown area that are worthwhile. I had a hand in installing the IMAX theater under the St. Louis Arch, btw.

    Keep in mind, Jeff: corruption cannot exist without regulation. If there are no government regulations, there are no reasons for any business to even attempt to influence a government employee for it buys them nothing in return. Every regulation enacted by the government is a potential avenue for corruption so the “balance” needs to start weighing heavily in the direction of zero regulations if you ever expect to root out corruption.

    Mark

  25. Mark T said

    I intended to emphasize elected leaders instead of government employees in that last paragraph, though either is corruptible in the sense that favors can be bought from even your local DMV worker-bee. Generally speaking, however, it is the laws that are passed, those that further restrict our freedoms and economy, as a result of corruption, that are the most harmful.

    Mark

  26. Gary said

    #11 – Tom
    I think you’re missing the forest for the trees here. Once the Health Care bill passes the government will control the final lever it needs to manipulate citizens to where it wants them to go. It’s a fallacy to think this is about making/keeping people well. If it were about health, then we would be dealing with the issues one-by-one rather than rolling them up into a huge unknown bill that has to be passed so we can know what’s in it. We’d do inter-state offering of insurance, we’d do malpractice tort reform, we’d do covering the uninsured who want to be but can’t afford it, we’d do reasonable pharmaceutical industry regulation, etc. But we don’t because the power-brokers want power not health. Fixing problems is not on the agenda. Problems are only the tool to get something else. It was naivete in November 2008 that got us here. Continued naivete will only make it worse.

  27. Squidly said

    #24 Mart T

    Very well said. I agree with you completely.

  28. Lastcalls said

    I have had the good fortune to live in 5 countries on 3 continents, and the USA was one of them. Unfortunately, it is no longer the most free country in the world and has not been for a number of years. It makes no difference which political party is in charge, the foundations were laid sometime ago for more and more power to be exercised by central government at the expense of the individual states and the individual citizen. Personal freedom must be sacrificed for security is the rallying call by which the constitution has been trampled upon, and it has been the conservative element that has led the charge. Instilling fear into the citizenry in order to manipulate votes is not new. Sad to say it has worked. The only thing to fear is fear itself. Right. And that was said by probably the most socialist president in US history. Remember that a trojan horse’s exterior holds no clues to what it holds. Nixon was able to establish diplomatic ties with China precisely because he was a Republican. A Democrat would not have been able to because of charges that he would be attempting to open up one world government. The biggest loss of personal freedom in American history has come under a Republican government using security as the fear factor to enable that power grab. The citizenry have been so successfully brainwashed that any relaxation of security laws will lead to those brainwashed citizens screaming for even stricter laws. Thus lambs are led to the slaughter by the shepherds.

  29. Squidly said

    #26 Gary

    You could not be more accurate. The health care legislation is simply a vehicle to an ends. It is not, and never was about “health”. There are simply too many contradictions within this legislation that clearly show this. There are too many contradictions within the drive behind this legislation that also clearly show this. By in large, the vast majority of American’s see these things, and they don’t like it. Nevertheless, the pursuit goes on. Why? Why would this drive continue with such vigor? Because they (government) needs it. It is the leverage that they so desperately need to ensure a firm stranglehold around the necks of all American’s. If this legislation were ever to come to fruition, it would give government unprecedented control over almost every aspect of all American’s lives. Irreversibly. If you don’t think that future politicians will take further advantage and excrete further controls, then I have a nice piece of property to sell you on the moon.

  30. jknapp said

    Sorry, but you guys have it all wrong. We get the politicians and leaders we ask for and deserve. Large parts of the American public believe that the government can support them at the expense of others, and we elect politicians of both parties, Democrats and Republicans, that promise us that.

    Welfare was once seen as charity that was given to the poor among us. For example social security, and yes folks that is charity, was for a very small portion of the population paid for the people producing. Now, it is paid to everybody. And, no you didn’t “invest” in Soc Sec to get a retirement. You paid to support people who recieved the money while you were working and now you are demanding that you get your charity too.

    Another example, tax deductions for home mortgages. “Charity” for the middle class. It doesn’t increse home ownership, it is just one group of citizens getting something from the government at the expense of others.

    Corporate taxes are just people saying that someone else pay instead of them. Even though in reality it is the customers of the corporation, often the very taxpayers who think they got a break, who are paying.

    Reduced capital gains taxes are just us, I’ll include myself here, demanding that someone else’s income should be taxed more than mine.

    Look at medicare, our elderly are the richest segment of the population, yet we give medicare to virtually everybody above a certain age. (Of course it might be necessary to hide some of that wealth, which isn’t hard to do.) Taxing our producers and our children to support possibly the richest people the world has ever seen.

    All throughout the country people are clammering for the government to give them something at the expense of someone else. This is true for bankers, car manufacturers, unions, home owners, investors, importers, exporters, welfare recipients, old people, parents of school age children, etc. Offhand, I can’t think of any group, that isn’t trying to use government to give them a bigger piece of the pie.

    Is it any wonder that our legislators do exactly that? If they don’t they won’t be legislators.

    Just another quick example, in the last few months how many “fiscally conservative” Republicans have you heard saying that the Health Care bill is another big government program and at the same time decrying the proposed 1/2 trillion cut in Medicare? See the contradiction? A “fiscally conservative” politician is one who wants to give goverment largesse to his constituency group instead of someone else’s. And that is what the voters demand of them.

    So until people stand up and say, “We demand that the government get out of the business of picking winners and losers.” Things aren’t going to change. And it isn’t the politicians fault. We have to look in the mirror to see who is to blame.

    Health care is going to go through in some form because a huge number of people are saying that it costs them too much for health care and they demand that someone else pay for it. Many of those people are in the middle class. It is stalling right now because many in that same middle class have become convinced, correctly, that they will be the ones paying for others and they demand to be convinced that someone else will help pay for their health care costs, hence all the extra taxes on “cadillac plans”, “medical devices”, and exemptions such as for union plans, and Nebraska and Florida, etc.

    By the way, I don’t see this happening, even if we have an economic meltdown. People will just demand that the government protect them from the meltdown, digging the hole deeper. In addition, if the system is to petition the government for economic gain, if you don’t do that you are left out, you lose. It is not rational to step outside of the “everybody demands government charity” system.

    And that’s my rant, however confuded it is.

    “We have met the enemy and he is us.”

  31. […] dictators inspire the left, Symptoms left in USA, The left’s slaughter solution, IPCC whitewash continues, Authoritive left […]

  32. jknapp said

    Correction to my previous rant. The “I don’t see this happening…” was meant to refer to people demanding the government get out of the picking business.

  33. R Shearer said

    It’s insane to think that a bigger government can do anything better. Everything it touches is destroyed. They try to scare us into believing that H1N1 will kill millions, and yet when they can’t even deliver vacine in time, it turns out to be the mildest flu season in ages.

  34. RomanM said

    If you think about all this crap it will just get you mad, Jeff. That’s why I tend to stick to the math stuff.😉

    Go get the new version of the temperature combining R script – it will speed up your stuff a lot and make your life kinder and gentler…

  35. kim said

    With nose in the air
    His utopia is Hell.
    One Term President.
    =========

  36. cbullitt said

    Three Legs of the USSA triad:
    Carbon Taxes–control of Everything you do;
    Government “Healthcare”–to control everything else;
    Unrestricted immigration–to ensure a larger uneducated and dependent population to vote for more Socialism.

    Hmmmmm, is there anyone we know with an agenda that includes all three?

  37. Mark said

    and then Atlas shrugged …

  38. heresy101 said

    Jeff, as probably the only socialist that is replying, there are far too many labels being thrown around and not enough analysis of what needs to be done. After starting to follow the Climategate scandal in November I read many more “right wing ideas” than before and find it ironic that I agree with Rush Limbaugh on AGW. But, every idiot is right once in awhile.

    Too many readers miss that Obama is not a “socialist” but is a shill for Gore and Goldman Sachs. He is still pushing the next bubble of cap and trade. If the Democrats can pass their windfall benefits for the health insurance industry, cap and trade will be back in play. They have gutted the single payer (you and your doctor making medical decisions) that would have been so much better than Canada. We could spend 10% of GDP vs the 8% that is spent in Canada and have no queues and save about 4% of GDP in medical spending to invest in growing the economy.

    As for the green industry, Wall Street and the banks are cutting it off at the knees. Peak oil is here (not to speak of the George Bush’s terrorist friends in Saudia Arabia) and we need to become energy independent. Boone Pickens has his own dog in the race but utilizing natural gas can end a large part of the oil addiction that will lead to cleaner air and positive balance of trade. Wind and geothermal are key players in renewable energy that are cost effective now; unlike solar.

    The economy has two major parts that need to be addressed independent from ideology. Most of the natural monopolies and mature industries need to be nationalized or at least controlled by citizens.
    Working for public power (and private power in the past) gives me insight into electricity. Public power is doing a much more economic approach to the delivery of electricity and benefits are returned to cities to lower taxes or make regions more competitive because of lower power costs. Private power companies need to be bought out and converted to municipal utilities or municipal utility districts such as SMUD. In the internet world, there is no longer competition needed but only capital investment. To bring fiber to the home and business requires a monopoly and huge capital investment that only Google or the government can provide. Let Wall Street provide the capital for investment to municipal electric and/or fiber companies to roll out the fiber. Everything that I have read is that everyone loves FIOS (Verizon fiber) but despises Verizon as a despicable monopoly over which they have no control. For cell phones either let Verizon, T-Mobile, Sprint, and ATT compete or create three government monopolies using compete. On this one, I am for the private companies because the technology hasn’t proven itself yet (GSM, WIMAX, or CDMA).

    The government should be in basic research for new technologies of the future and a way needs to be found for a portion of the future profits come back to the public and the education institutions where the new technologies were developed. There would be no reason to charge tuition (or at least a token tuition) if only 10% of the benefits of the research funded by you and I was reinvested in education.

    Social security is a hobby horse of the right and their pundits but the U.S. Basically owns or should have a perpetual retirement income. FNMA and FMAC now hold 70% (?) of the mortgages but they are being sold to private “investors” (aka crooked banks and hedge funds). Making loans at 5% (eg) and having a funds rate set to inflation of 3% would more than fund social security in addition to the 6% payment by workers and employers being invested in housing. A 5% interest rate would double the investment that would more than cover social security obligations. Of course, there couldn’t be the Greenspan fraud and shenanigans that went on under his watch. Loans would have to be made only to those that could repay them (most of hard working Americans) but the greedy banks would get no involvement in this.

    Another task that is required is to claw back the funds Bush (yes Bush) and Obama gave to the banks and hedge funds. A five year 75% tax on incomes over $1 million would recover some of the TARP funds. The money must be dedicated to creating jobs. How? Reduce the work week to 30 or 32 hours and employ 25% more people. The tax from the TARP tax would go to US companies that had investment and 75% jobs in the US (no Walmart’s and India outsourcers) to pay 50% of the wages for hiring the 25% reduction in hours. Besides the stimulus in the recreation and vacation industry, more people would have money (wages to spend). Those that got jobs would be required to save 6% (increasing investment). After the five years the productivity likely would have increased enough to make the changes permanent. If changes weren’t enough in 5 years, I wouldn’t have heartburn in extending to 10 years to recover as many TARP funds as possible.

    Areas of the economy that are monopolies would be controlled by citizens through government, BUT areas that are ripe and really need capitalist investment such as new energy, biotech, nanotech, medical technologies, etc would be open for true entrepreneurs to invest in and get rich thereby making society wealthier.

    Finally, would all those that oppose Obama’s giveaway on healthcare object if we all paid 6% of our income into a fund that had 3% overhead (ie Medicare) from which our doctors submitted bills for care that they (and us deemed) necessary. After submitting to my doctor’s knife 6 times, I suspect when the rubber met the road with no ideology, there would be little disagreement.

  39. #17 Jeff

    The countries you refer to are the oil production countries where low incomes can be 200,000 USD/year. It’s pretty clear how a country like this is very dependent on an external purchasing source to sustain their economy. Middle eastern priests, are obviously a load on an easily gained money flow created by pumping black stuff from the ground. Their economy can support it in it’s current configuration, if the oil stops, there will be trouble.

    The oil that is being sold to the world from the region is mined by ~1% population. The rest just have low incomes at ~200,000 USD/year. A few hundred thousand mine oil, hundred million do nothing. But for there to be wealth, it is necessary that somewhere people work and produce goods and services. Thus, the Middle eastern priests per capita are a ~200,000 USD/year load on the economy of those who produce all the goods consumed by the oil-supported population. (Another such load is, to ever growing degree, the Russian population, where the decline of domestic industries (other than mining where, similarly, a tiny 1.8% of the population are occupied) closely followed the rise of oil export incomes.)

    But the situation is worse than that and the fact that the U.S. does not import that much oil from that region (is it true, btw, I have not studied this issue) does not help. Since the oil price is, globally, one for all, the domestic oil mining companies within the developed world can do the same — to employ a (relatively) tiny number of workers, and get an unproportionately high price from the society for oil. For this reason even when the U.S. took control over the oil mining in Iraq, no persistent fall in oil prices followed. In terms of cost, oil is currently very cheap indeed as RB recently pointed out, but it is sold at outrageous prices. Effectively, as far as oil is concerned, there is no market economy. There is a monopoly over a life essential that elevates prices up to the very life-tolerable limit and strangles the economic and technological development.

    The accompanying text for that graph and sources for the data are here: http://www.bioticregulation.ru/life/life8-4.php. The analysis was done in the end of 2007.

  40. Phillip Bratby said

    There is a series on the BBC called “Seven Ages of Britain”. Today’s programme is part 6 of 7 called “Age of Empire (1770 – 1911)”. Quote from the write-up:

    “This story of the British Empire shows how it descended from a spirit of adventure and inspiration into the moral bankruptcy of a self-serving bureaucratic machine”.

    Sums up the USA today perhaps?

  41. Tim L said

    please read but do not go into the deep end…..

    [audio src="http://podcast.jvim.com/audio/1009.mp3" /]

    there are some amazing similarities.
    main page link:
    http://jvim.com/

    for those who wanted the possible people.
    http://en.wikipedia.org/wiki/Illuminati
    http://en.wikipedia.org/wiki/Builderburg

    we are in decline no doubt about it.
    can we chart this in some way?
    loss of freedom?
    loss of personal value?
    loss of morals?
    loss of family time?
    loss of I.Q. points across the public?
    loss of common sense?
    increase of arrogance?
    increase of diffiance?

    Tim L

  42. Mark T said

    Hehe, socialists simply don’t understand basic economic theory.

    Mark

  43. STEPHEN PARKER said

    Don’t buy stocks, don’t buy pensions.Do not give your money to the bankers. Buy food producing land, and a rifle

  44. M. Simon said

    Obama was raised by Marxists. He had a strong relationship with Frank Marshall Davis, a communist, and his father (who he spent a few days with – but idolized) was a Communist. He said in his book (Dreams) he preferred Marxist Professors.

    What is happening is not an accident. Our compliant media reported none of this. You could find it on blogs. If you looked. I personally wrote a lot about it.

    What is happening is only a surprise to those not paying attention.

    I have been a Tea Party Person since before there was a Tea Party. Before the Rick Santelli rant. If you want to help spread the word may I suggest The Tea Party Difference.

  45. dribble said

    JeffID, “Industries are not suffering equally in America, today industries which are government supported such as ambulance and fire trucks are down only about 10% from before and complaining about limited budgets. At the same time recreational boating (which was a huge business in the US) had dropped 90% down to 10% of previous business levels”

    One should probably should also mention the government funded military industry which is probably doing okay as well at the moment. Nothing like military Keynesianism to boost the economy. I don’t find this to be a problem until it all gets out of hand and they start dropping bombs on people in the name of freedom.

  46. - said

    “Despite what the Euromedia would tell you, it’s no coincidence that the most free country is the most wealthy.”

    Yes, that is truly so. But 1% of the American population posses 90% of the wealth in America, so my guess is that the average American family is way poorer than the average family in ( what you called socialistic) Scandinavian countries or Germany.

    Oh, and the current unemployment rate in the US is 10%? I believe that it is around 4% here.

    What amaze me and continues to amaze me, is that the rich in the US has such success with their propaganda, that many average Joes continue to vote for the GOP, which promotes the interests of the rich and the industry on behalf of the rest 99%. The rich are getting richer, but the average guy can’t afford basic services as health care.

    I can only say that I am proud to live in a society where freedom means freedom for all. Where everyone can get an education for free (students are paid to study and there is no fees), where everyone has access to free health care, where nobody starves and almost none are homeless. And for those who want to work to get more, there is also freedom. We kill nobody, we have very few in prisons and the crime rate is low. Where we don’t torture people, where detained people have the right to have his case proven in the court of law, where corruption is among the lowest in the world. A recent study has shown that the social mobility is higher in Denmark than in the US. So the American dream is more likely to come true if you live in Denmark than in the US, and you won’t starve if it don’t come true. Frequently we to the list as the best country to live in and the list of most happy nations.

    The list where we in Scandinavia is better is about endless.

    You may call it socialist, but then I would say you does not know about political ideologies. I don’t care what we are called. I am just proud to live in a country where freedom is for everyone, no matter who they are, and not only means the freedom of the 1% rich to exploit the rest of the population to become even richer.

    I’ll have none of that. My dinner would not taste good, if I know that people in the same country as me starve for no good reason. I would be ashamed to live in a country where people die or suffer from diseases that can be cured, but are not because we who have enough are too greedy. I would be ashamed to have a nice house, while others are homeless.

    I would be ashamed that such things happens in my country, just so the rich can get richer. Is that justice? Is that freedom? Is that equality? Only for the rich.

    It seems as the poor 99% just bent over for the rich 1%. Hmm, is that the worlds smartest nation or the worlds dumbest, I wonder.

  47. Sleeper said

    Re: – (Mar 14 09:06), -Said

    After reading your comment, it is obvious that, in regards to the “free” education you received, you got what you paid for. One happy little mind-numbed government robot.

  48. Jeff Id said

    “so my guess is that the average American family is way poorer than the average family in ( what you called socialistic) Scandinavian countries or Germany.”

    My neighbors are below average in america, they have 6 cars in their driveway, several motorcycles and are on their second 52″ tv this year. The first broke when the grandkids hit it with the WII remote. I’ve been to Germany– your guess is wrong.

    Currently our unemployment rate is the result of a huge theft of money by banks and power-brokers in Washington. It’s the greatest theft in the history of mankind and it is destroying America. In the midst of this government created disaster, the government is stealing our freedoms to save us.

    Also, your understanding of why people vote for the GOP is the standard fare pushed by the powerbrokers of government. The fact that one percent pays most of the tax is true, but that’s because the one percent own and run companies to create that money. If the government owned the companies, the one percent would not. Would we be better off?

    Here are a few stories from America you won’t get from the news

    – Those that rent this house to me own three different houses, a boat, five cars, and live on the water. He is a crane operator.

    – Our limo service for our company came from india 20 years ago, he owns three houses two paid off, including a brand new 6 bedroom in arizona, five cars including several 100,000 limos, and the only thing he’s done is run 2-5 cars around Chicago since he came to the US.

    – I have a friend in the detroit area, an extremely devastated region. He lost his logistics job more than a year ago. The government here has simply placed him on unemployment – for the whole time. Currently he’s living at home, owns two houses (renting one) and looking for work. Not bad for under 40 in a below average middle class job. I hope he finds work soon.

    These are the average americans, not the wealthy ones. These are the poor you describe.

    I would be ashamed to have a nice house, while others are homeless.

    You have bought into the propaganda of the euromedia. The media is promoting socialism in the face of truth. Like climate science, if you base your opinions on lies and exaggerations, your conclusions will be wrong.

    I’m sure though that we will never agree because you have made several over the top comments.

    I’ll have none of that. My dinner would not taste good, if I know that people in the same country as me starve for no good reason.

    I’ve never seen a starving person in the US. There must be some somewhere, but I’ve never seen them.

    I would be ashamed to have a nice house, while others are homeless.

    This must be the lie that we have piles of homeless in the streets? The homeless in the US are often so by choice b/c there is plenty of free housing and medical care for them. Some people choose to not work.

    Oh, and the current unemployment rate in the US is 10%? I believe that it is around 4% here.

    The US number is false too, its actually higher. This is the first time in my life or my parent’s life where unemployment was this large. I wonder what changed?

    With all the BS in your comment, you probably believe we don’t treat sick people in our hospitals if they don’t have insurance. You probably think that it’s some kind of random event that our technologies exceeded the world or that people travel from everywhere to go to our ‘paid’ schools. You may even think that it’s an accident that our medical industry doesn’t have huge lines or doesn’t reject people who have bad habits. Perhaps the Canadian premier preferred the weather in our hospitals and that’s why he came here.

    I had a nice Sushi dinner this week in St. Louis. The restaurant had a line of ‘poor’ people who were clearly on welfare who were waiting in line for their fresh take out sushi flown in daily, my dinner tasted fine.

    I’m sorry for the frustration, but I’ve been to Europe and was appalled at the venom toward our lifestyles. I don’t care if you prefer socialism, but at least you could consider that there is a motivation for your information sources to push false claims about America.

    Also, the GOP voter is not the ‘average joe’ as you say. In fact, the GOP is the more educated voter, although plenty of PhD’s support both parties, this is also propaganda. Why do you think the Democrat party want’s to import so many illegal aliens and allow them to vote? Why is it that the inner cities are the primary source of voters for the Democrats?

    I’ve gone on too long and your understanding is too wrong to fix, unfortunately there are far too many people like you who have fallen for the BS spouted by the euromedia.

  49. Lastcalls said

    Living standards in the US have been steadily decreasing for a number of years. This will continue while the end of empire drags along pulling down the nation with it. There’s not a lot that can be done. This site would be better off concentrating on the science or lack thereof re so-called climate change. Ranting tends to confirm suspicions that poliical groupies are nutters.

  50. RB said

    With all due respect, Jeff, I think the real problem lies here:
    http://www.businessinsider.com/henry-blodget-a-quick-reminder-heres-the-real-problem-2010-3

    Regional banks can’t lend because of all the crappy commercial real estate loans they made, the over-indebted consumer has started to clean up his balance sheet and so on .. the cycle doesn’t turn around until balance sheets become healthy again and that takes years, same as happened in the 1930s or has been happening in Japan. When people started to tap at increasing amounts into their home equity ATM, the cycle had gone too far in the direction of people living well beyond their means. And time has proved that banking is not an industry that does well with low regulation – same as in the 1930s, the S&L bust in the 90s and the most recent episode. As Paul Volcker said, the only useful innovation from financial deregulation has been the ATM.

  51. gallopingcamel said

    Jeff Id,
    Thanks for putting -said in his place. I am a European who emigrated here leaving a responsible job supervising 520 people for a much more junior job. In the process my salary tripled so I was paying more in income tax than I was earning in Europe.

    Of course that was 30 years ago but can you blame me for loving the USA?

  52. - said

    I’ll ignore your rude comments and unsubstantiated speculations.

    “The fact that one percent pays most of the tax is true, but that’s because the one percent own and run companies to create that money.”

    I didn’t write anything about taxes. Please read what I wrote.

    Would the companies perform worse if the companies ownership was divided to lets say 20-30% of the population?

    And while we’re discussing the success of the economy, please tell me how the foreign dept pr. capita in the US is faring compared to Scandinavia and Germany. Oh and the public debt while we’re at it.

    “If the government owned the companies, the one percent would not. Would we be better off?”

    The government does not own many companies here in Scandinavia, nor in Germany. The private sector owns and run most of the companies here. I think you’re thinking about the former USSR and not northern Europe.

    “These are the average americans, not the wealthy ones. These are the poor you describe.”

    On your blog you are after the science, but I see that it is not so when you deal with this. The people you know can by no means be extrapolated to cover the whole population of the US and you should know better than to use a few examples.

    What I have seen in the US is that you may own more stuff, but most is of a poor quality and basically cheap China imports if not shitty American stuff. This while many families are two-four paychecks away from a foreclosure notice of a house made of plywood. What where the houses made of you saw in Germany? Plywood?

    “I’ve never seen a starving person in the US. There must be some somewhere, but I’ve never seen them.”

    Can you tell a starving person just be looking at people? Why does people in the US need foodstamps and food lines? Because they can pay themsleves?

    “The homeless in the US are often so by choice b/c there is plenty of free housing and medical care for them. Some people choose to not work.”

    So in the most rich society on earth, people CHOSE to live on the street?

    I wonder why people don’t do that here, if it is so much fun having all of your belongings in a shopping cart.

    “With all the BS in your comment, you probably believe we don’t treat sick people in our hospitals if they don’t have insurance.”

    Out of 230 mio. americans, 40 mio. or so have no health insurance. Will they be treated for leukemia if so diagnosed? If all have access to healthcare in the US, can you then explain what the issue of the 40 mio. people not having it is all about?

    “I don’t care if you prefer socialism”

    As I wrote. I am no socialist. Socialism was something of the former USSR. Get you’re fact straight before you accuse people of things you do not know what mean.

    “In fact, the GOP is the more educated voter, although plenty of PhD’s support both parties, this is also propaganda.”

    Naturally you can back this claim with statistics I assume?

    My guess is that there is a strong correlation between how religious people are and if they wote on GOP. I also think there is a strong correlation between income and voting for GOP. But of cause, that is just a guess.

    I have duly noted that you didn’t respond to my criticism about the lack of personal freedom and justice.

    Jeff, I think you should stick to debunking the climate science, as this does you no good.

  53. Jeff Id said

    Jeff, I think you should stick to debunking the climate science, as this does you no good.–On that we agree

    Out of 230 mio. americans, 40 mio. or so have no health insurance. Will they be treated for leukemia if so diagnosed? If all have access to healthcare in the US, can you then explain what the issue of the 40 mio. people not having it is all about

    First, your numbers are complete bullshit, unless you’re counting the illegal aliens – who come here for free lukemia treatment. I’ve got a family who is heavily into the medical profession. You have no clue what you are talking about. In Illinois the state covers everything once you’re below a certain income level already.

    Would the companies perform worse if the companies ownership was divided to lets say 20-30% of the population?

    Yes, because they wouldn’t exist. Nor would the technology which has powered this world to the level of lifestyle you have.

    I didn’t write anything about taxes. Please read what I wrote.

    I know you didn’t write about taxes, I did, that’s where the 1 percent number comes from. What you don’t realize is that in the US tax law, company taxes in most cases are not separate from individual taxes. When I file, the income from my company is considered my own income, even if it goes into buying equipment or something else that is expensed/depreciated over time. I am a one-percenter but rent a house and only have only two cars. Yet this year I will again pay at the one percent, top-level of taxes.

    As I wrote above, the media has polluted your facts to the point where you don’t know what you’re talking about. They do have a political horse in the race and way too many of our European friends have fallen for the lies.

    For instance, there are very very few homeless in the US- but they are allowed to be homeless if they want to. I’ve met a few and they flat tell you, this is the lifestyle they prefer. No bills, no work, no problems other than looking for their next meal. If you take free government housing and are not disabled, they push you to go look for jobs. I imagine in your country, their lifestyle is illegal but don’t know.

    It’s not for me to tell them they must live one way or another, and if they want there is plenty of free government housing. Half of detroit doesn’t bother working. My upstairs neighbors in college had a huge TV were overweight and hadn’t bothered to look for a job in 20 years. You are wrong about a lot of things, as we all are, but you can add America and conservatism to your list.

  54. Jeff Id said

    Can you tell a starving person just be looking at people? Why does people in the US need foodstamps and food lines? Because they can pay themsleves?

    You can tell starving people because they have less than two chins and their stomachs don’t stick out three feet. Food cards are free government food. They are money, if it were green money would that help you feel better about your own dinner.

    This conversation is silly, as I said before, you don’t have correct facts. It’s like arguing that temperature hasn’t gone up, when it clearly has. Of course, if you don’t bother looking for the facts, you can say the globe hasn’t warmed with a straight face.

  55. - said

    “This conversation is silly, as I said before, you don’t have correct facts.”

    And neither do you about Europe, political ideologies, business or the economy, so I guess the discussion is kind of futile and I’ll put it to rest for my part. Good fun anyway.

    Anyhow, keep up the good work on the climate issue.

  56. Bad Andrew said

    “It’s like arguing that temperature hasn’t gone up, when it clearly has.”

    JeffId, as much as I agree with you on most things, without getting very specific about what you mean by this, it’s kind of amusing.

    You can also say:

    “It’s like arguing that temperature hasn’t gone DOWN, when it clearly has.”

    Andrew

  57. Jeff Id said

    #56, haha. Good stuff.

    Off topic from your point. Have you seen the latest numbers at Lucia’s, turns out it’s really hot outside. Bishop has a good video on his site too – an interview with Lindzen.

  58. Bad Andrew said

    Yes, I look at tAV, The Blackboard, and Bishop’s blog as part of my daily internet fix.

    I haven’t watched the Lindzen video yet. I’ve taken quite a fancy to the British wit at Bishop’s, though.😉

    Andrew

  59. Jeff Id said

    #55, I made no points about Europe, only America and the fact that too many Europeans have a skewed view created by media propaganda. I think your comments have borne out my point well enough.

    As far as business and the economy, I’ve run one business or another with partners for the past 15 years, never lost one and continue to feed myself and my family just fine. Currently in our small company, about 70 people are employed through my and my partners efforts – all with health insurance. We’ve received national recognition for our performance more than once. So I wonder, when do you think I will understand anything about business or the economy?

    I’m glad you like the climate stuff, but from my perspective it is not any different than the rest.

  60. M. Simon said

    So in the most rich society on earth, people CHOSE to live on the street?

    Yep. Some folks don’t want the obligations that living in a regular place brings. I was once that way. I enjoyed it. No phone bills, no electric bills, no rent bills. And the garbage cans of America are full of the most wonderful food. Want steak? The back of the steak house has plenty.

    Now I admit it requires a certain lack of squeamishness. Which is why not many do it. But it gave me the freedom to get educated in free libraries.

    America is a wonderful country!!!!!

  61. M. Simon said

    I might add that I was able to work my way up from bench technician to aerospace engineer. Without a college degree.

    America is a wonderful country.

  62. M. Simon said

    Illinois huh? Contact me if you want some really low cost help. (I’m semi-retired and would like to be less so). I live in Rockford.

  63. M. Simon said

    Heresy,

    You can get an MRI at a hospital for about $2,000 or you can go to a Doc In A Box type clinic and get one for $500.

    Innovation will lower medical costs in America – if the government doesn’t squash it.

    Government is about limiting innovation to protect the ins (who can buy government) from the outs.

  64. […] Symptoms in America « the Air Vent […]

  65. actually thoughtful said

    These are the people who know what it takes to get a job done, how to build a power line, what is required to move product, plumb a building, fill a pothole, how proper equipment is made.

    They are universally afraid, and have learned a lesson from this economy which is unstated in media.

    As one of the current builders of this great nation (a licensed plumber, to be precise), let me assure you that you are wrong to say “universally afraid.” I was very afraid in 2000. And terrified and deeply, deeply sad in 2004. At this point the biggest problem we have is that Obama is just not a progressive. He is a middle-of-the-roader. The kind of guy of whom it is said “you must stand for something or you will fall for anything” – and the country suffers.

    But compare his policies to his predecessor. GWB will be remembered for starting two wars (BIG government spending – but somehow approved by the rank and file “conservative”) and driving the nation into the worst recession in 80 years. BHO will be remembered for pulling us back from the economic brink (ALREADY done). And hopefully for starting us on the path towards universal health care and mitigating the worst of climate change.

    I note there is little discussion here of the insidious power of corporations to drive a nation to its knees. I agree that big government is not a good thing. But it pales in comparison to the spectre of soulless corporations, driven only by profit, pulling the strings of that government (for those of you who somehow missed it – that is our current situation).

    Ironically I agree with the sentiment that says – buy land and guns. But I would add – control your own energy and water supply.

    Tom

  66. Niels A Nielsen said

    I think Jeff Id is exactly right about the anti-American propaganda of the European Media. And of course the average family in the US is way richer than than the average Danish, Swedish or German family (Norway is a special case – OIL) by about one third:

    http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

    For a more detailed look see her:

    http://pwt.econ.upenn.edu/php_site/pwt_index.php

    You will notice that eg Denmark, Sweden, the bulk of European countries are losing wealth compared to the US.

    Another set of sad statistics to look at are the fertility rates. The Amercan fertility rate is able to sustain the population (fertility rate of 2.1) while mothers of more than one child are becoming rare in Europe.

    The gloomy picture Mark Steyn is painting in his book “America Alone: The End of the World as We Know It” is hard to ignore. I’m a proud Dane and I hope with all my heart and I also think that the peoples of Europe will eventually find the strength and courage to relearn their cultural roots and fight off the dire threats that they now face. Or Amerca will truly be alone and Europe – once a close ally of its grown-up son at the other side of the pond – an islamized economically devastated dwarf.

    The US will survive as a free, democratic country. Will Europe? I’m not so sure.

  67. Mark T said

    actually thoughtful said
    March 14, 2010 at 3:36 pm

    At this point the biggest problem we have is that Obama is just not a progressive. He is a middle-of-the-roader.

    Bullshit. You’re just another ideologue whos understanding of politics is as bad as his understanding of climate.

    The kind of guy of whom it is said “you must stand for something or you will fall for anything” – and the country suffers.

    What nonsense. Obama has no principles. He is a pragmatist of the worst sort. He thinks if he can will it, it will happen.

    GWB will be remembered for starting two wars (BIG government spending – but somehow approved by the rank and file “conservative”)

    GWB did go to war twice, but you’d really be ignoring history if you claimed he “started” both. I know of know rank and file conservative that approves of his spending, btw. My guess is that you really don’t know any conservatives, and thus are simply making that point up based on what you hear from the clearly liberal media bias.

    and driving the nation into the worst recession in 80 years.

    Hate to burst your bubble but your knowledge of economic theory is as poor as the other two I mentioned already. GWB had nothing to do with the current economic crisis. In general, Presidents have very little impact on the economy. The House and Senate have a much larger role, but theirs is still a minor player. The Fed and its ability to arbitrarily adjust interest rates is the key player here.

    BHO will be remembered for pulling us back from the economic brink (ALREADY done).

    He has done nothing of the sort. So far, the majority of money that has been spent in some idiotic attempt at spending our way out of the recession (even Keynes realized that this doesn’t work) was actually Bush money, so you have to give him credit FIRST if you want to make any claim like this. But in the real world, one that does not parrot the liberal media as if they are some sort of beacon of truth, the economy has not “recovered from the brink of disaster” even remotely. If it had, the unemployment rate would be dropping, not just the official numbers, but the real numbers too (the official numbers don’t count those who have run out of insurance and still can’t find a job). The interest rates are again being held too low, artificially, which only serves to further devalue what money we have already, making us even poorer as Obama claims “recovery!” and uneducated stooges such as yourself mindlessly chant “Yes we can!”

    And hopefully for starting us on the path towards universal health care and mitigating the worst of climate change.

    Yeah, there ya go. These two will be the nails in the coffin that prove what has to be reproved every couple of decades or so after the libtard economic policies repeatedly screw up the economy.

    I note there is little discussion here of the insidious power of corporations to drive a nation to its knees. I agree that big government is not a good thing. But it pales in comparison to the spectre of soulless corporations, driven only by profit, pulling the strings of that government (for those of you who somehow missed it – that is our current situation).

    Hehe, I had to figure you’d throw this in.

    Um, hate to tell you, but those evil, soulless corporations employee PEOPLE, not devils nor demons. People like you, those without a clue about reality of economics, don’t seem to understand that people run corporations. Those corporations don’t make decisions on their own, either, and that “greed” that you so hate is the reason you can afford to live the way you do. Those same people, I should note, earn salaries paid for by the corporations and then go on to buy goods and services made and delivered by the corporations. Most of the people employed in the US work for some sort of corporation, and most of them are small businesses too, which even further refutes your nonsensical claims.

    Furthermore, those evil corporations could not pull the strings of government if liberals such as yourself didn’t insist on giving them the power to do so. Your fault, not mine. Man up and quit blaming everyone else for the problems YOU created and shut up in the mean time. I’m getting tired of people like you crying about the problems YOU made. If government did not have the means to influence business, business would have no reason to control the government and, hence, there could be no corruption.

    This is the type of person you want posting articles on your website, Jeff? Tsk.

    Mark

  68. Mark T said

    ^Niels A Nielsen

    If I’m not mistaken, Sweden also has a rather large logging industry that helps maintain its lifestyle. Oil is not totally sustainable – Norway’s fields will run out, eventually, but I don’t know about logging. In the US, we are planting more than we are using, so that cash cow may last. All of the Scandinavian countries have very large trade surpluses, too, which certainly helps. From what I understand, they are backing down on many of their cradle to grave support programs because even they cannot afford to continue them. Such economies depend largely on the state of those buying their products and services, i.e., their trade surplus, because socialism cannot support itself, and when the rest of the world is in dire straits, they follow suit.

    Oh, and -said, you should check your numbers. In Sweden the unemployment is 8%, in Finland it is 8.5%. In Denmark and Norway, their unemployment rates are 4.2% and 3.3% respectively, but Denmark only has 5 million people (and Norway is an oil exporter), making your comparison to the US rather disingenuous. Scandinavian countries as a whole only have 25 milliion or so, or about 4% of that of the US.

    Do people like you really post this crap thinking the rest of us are so totally ignorant of facts and the ability to research them that we would just accept your proclamations as if they had some merit? Really, people often make claims assuming others think like they do. That’s also why liberals always assume the rest of the population is devoid of principles (evil corporations, indeed): because they are themselves. It never occurs to them that not everyone thinks the same as they do.

    Mark

  69. Mark T said

    “or about 4% of that of the US.”

    That should be 8%.

    Mark

  70. actually thoughtful said

    Also, regarding starvation in America. That is probably overstated. However if you think there is no poverty in America, you have either never been to the South or you had your eyes closed.

    Not starvation, but notable malnutrition. There is indeed hunger in America.

    All of that said, I’d rather be poor in this country than most others. But the notion that the “average” family in the USA has 6 cars and two 52″ TVs is absolute nonsense. The author of that comment usually sets much higher intellectual standards for himself.

  71. Mark T said

    The Stimulus Scam.

    http://mises.org/daily/4158

    “Fabricating bogus economic growth is highly appealing to policy makers because they can easily produce such “growth” by wasteful consumption for war, welfare, and all kinds of popular government programs. Each stimulus package at first incites irrational jubilation but leaves behind a wasteland of failed projects and frustrated expectations. This mental discouragement of investors and consumers will linger on for years after the boom has ended.”

    Politicians know this, but they are afraid to face the solution for fear of losing votes. It is a dangerous cycle, one that just might bankrupt us this time around.

    Mark

  72. Mark T said

    actually thoughtful said
    March 14, 2010 at 5:05 pm

    The author of that comment usually sets much higher intellectual standards for himself.

    Hypocrite.

    You are right in some sense, however, as I’m not sure why he listens to you in the first place.

    Mark

  73. TGSG said

    It is a dangerous cycle, one that just might bankrupt us this time around.

    Some would say we are there already, but are very very good at hiding it from the masses.

  74. Philemon said

    “Odd this neurotic tendency in the American businessman. Can you account for it? No? I can. Too much coffee.”

    “Coffee?”

    “That and the New Deal. Over in America, it appears, life for the businessman is one long series of large cups of coffee, punctuated with shocks from the New Deal. He drinks a quart of coffee, and gets a nasty surprise from the New Deal. To pull himself together, he drinks another quart of coffee, and along comes another nasty surprise from the New Deal. He staggers off, calling feebly for more coffee, and… Well, you see what I mean. Vicious circle. No nervous system could stand it.”

    -P.G. Wodehouse, Joy in the Morning, 1947.

  75. RB said

    You guys should cheer up on the future. Buffett, when he bought his train company, called it an ‘all-in bet on the future of America.’

  76. curious said

    IMO The view from the UK isn’t much better – check out p12 of this .pdf to see the gap between income and expenditure of HM Gov.:

    http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapter1_237.pdf

    I’m no economist but I find it hard to see how we are going to get back on a level playing field here. There has been IMO a massive shift of liability from the private sector to the public sector through the banking crash. I think they (Govs) took the view that they had to prop things up rather than face the music. I don’t have the figures but my guess is the UK consumer economy has been running on cheap credit and the books have been balanced by the asset value gains in the property sector. These asset gains have only been possible with easy money supply allowing silly salary multiples on mortgages. Right now property values seem to have hit bottom but IMO they are not going up any time soon with unemployment up and newly restricted mortgage supply. The interest rates are being kept low to stop widespread bankruptcy and foreclosure. Against all this the banking industry still manages to justify multimillion salaries and bonuses – to my mind this is “load” in all its outrageous glory! The uk stock market has been recovering but I think this is possibly due to the firesale prices being irresistible to those (overseas?) investors with liquid assets.

    One thing which I think will keep the new low carbon economy model on the agenda even if CO2 driven warming is debunked is the renewal it will drive in product specification. IMO demand is stagnating – again I don’t have the figures to hand but I think this is something Germany has struggled with for a while – so a new technical paradigm gives a way forward to new consumption and production.

    In these discussions so far I’ve not seen much mention of the role of energy. My simple view is that cheap available energy is what is being converted into wealth – the actual value added by the sweat of a man’s brow is reducing all the time. Knowledge and skills are worth something but these are not available as bulk commodities – IMO the example of Jeff’s pal getting rich driving limos backs this up. If it weren’t for cheap gasoline I don’t see how this could happen. In the uk we have had a negative balance of trade since ’97 and we have been net importers of oil and gas since ’05. My understanding is that the UKCS reserves situation is such that this is only going to get worse.

    So what to do? What price social stability? Or does Gov. set itself up to make sure it can handle any dissent? I welcome more informed views from others, especially with regard to the productive side of the uk economy – for years we have been told how critical the financial sector is to us and it just seems to have been smoke and mirrors.

  77. RB said

    And Buffett’s purchase is a bet on coal as well.

  78. Mark T said

    TGSG said
    March 14, 2010 at 5:13 pm

    Some would say we are there already, but are very very good at hiding it from the masses.

    Well, at over $3 T in debt, I’d say we aren’t really even trying to hide it – lots of people are really just plain stupid enough to believe it when they are told otherwise. How anyone can call an overnight (figuratively) doubling of the national debt “recovery” is beyond me.

    Mark

  79. Sleeper said

    By the way, this year, for the first time, Social Security will start cashing in government IOUs to meet its obligations to retirees. About $30 billion. IOW, the sh*t has hit the fan.

  80. kuhnkat said

    Jeff Id,

    YUP!!!

    GallopingCamel,

    China?? Hong Kong??

    Think Fascism, another twisted implementation of Socialism slightly different from Communism. The Chinese apparently realised that being leaders of backwards peasants grubbing in rice fields isn’t much fun.

  81. J Thomason said

    From several visits to St. Louis over the last few years, I agree that there are some very scary places there, but the ‘nice’ spots are actually very nice.

    I agree with pretty much all you wrote about the US economically, but wanted to add a little something regarding the comparison between the US and Europe. (Interesting that -said neglected to include Greece, Spain, Portugal, etc. isn’t it?).

    Europe AND the US have been on irresponsible spending sprees for pretty much my entire life (42, BTW). There are really two important differences in our respective financial outlooks:

    1. They have far, far fewer children and young adults as a percentage of population than we do.
    2. They have promised more benefits to everyone.

    The US is in a terrible predicament. Unfortunately Europe is about to run off a cliff and even if they slammed on the brakes right this second they don’t have enough time to stop … and they are still pushing down on the accelerator (though, to be fair, so are Obama and the Dems here).

    A growing number of Americans are realizing the situation we are in, which is why the Tea Parties are gaining such traction. However Europeans are STILL largely in complete denial, as demonstrated by the protests in Greece in response to a proposal to inject some small iota of fiscal sanity. Who do these idiots think are going to be paying for their “free” medical care and lavish retirement benefits in 10 or 15 years when there will be something like 2 workers (or less!) for every retiree??

    PS I think that the US should open it’s borders to nearly unlimited immigration from Europe again, and let their overtaxed workers – let me stress WORKERS – in so that they can keep most of the money they earn, and not have their parents and grandparents take 70-80% off the top. I can imagine the shrieks and howls from -said and his brethren already.

  82. Tim L said

    LOL this hit the mark nicely…. AND ……. IS WHY we are here in the first place! “tax without representation” 1776?

    I think that the US should open it’s borders to nearly unlimited immigration from Europe again, and let their overtaxed workers – let me stress WORKERS – in so that they can keep most of the money they earn, and not have their parents and grandparents take 70-80% off the top. I can imagine the shrieks and howls from -said and his brethren already.

  83. michel said

    A sad post, and one that does nothing for the cause of realism about climate. When we read people talking about Barack Hussein, we know we are in the presence of wild fantasies rather than serious political thought.

    It is true that America is in very difficult times. A number of things have coincided in very unfortunate ways – the capture of the regulatory apparatus by the financial services industry, the imperial overstretch, the collapse of traditional education. For this or other reasons, we have also seen a poisoning of the political debate, complete with wild accusations (such as the Barack Hussein stuff) and equivalent ravings from the left.

    The fact is, the US is being governed by people who are doing their best. Bush was, Obama is. But the context in which they are doing their best is difficult at best, impossible at times.

    Engaging in wild hysterical rantings masquerading as thought does not help this. What is needed is calm, and analysis, and education.

  84. Mark T said

    Nonsense, Michel, unless you mean “doing their very best to transform
    the US into their vision of .” While it is true that POTUS is supposed to “lead” us, and we certainly don’t want somebody that simply follows the polls down the majority path, whomever we elect should have his peoples’ desires in mind during the execution of said job. We have not had that in 200 years.

    Engaging in wild hysterical rantings masquerading as thought does not help this. What is needed is calm, and analysis, and education.

    It is only hysterical because you do not agree.

    Mark

  85. Mark T said

    That should have been “…their vison of [insert ideology here].” I used the angle brackets and they got chopped.

    Mark

  86. DeWitt Payne said

    Re: michel (Mar 15 04:45),

    – the capture of the regulatory apparatus by the financial services industry,

    So was Barney Frank and his ilk demanding that banks make bad home loans, which Fannie and Freddy would then buy up, part of this so-called capture? In fact, Frank still thinks that Fannie and Freddy should be encouraging bad home loans. Was the Fed pumping out money hand over fist after the dot com collapse part of this capture? The financial service industry had to do something with all that money. They’re still being whipsawed by being told on one hand that they need to build up their balance sheets and on the other hand they’re not making enough loans. The bond rating agencies are, to all intents and purposes, government licensed. So when they issued AAA ratings for the financial instruments, what were banks supposed to do? The people who saw this coming, like the WSJ editorial board railing against the growth of F & F for nearly a decade, were ignored. There is no reason, other than rose colored glasses hindsight, to believe that any conceivable regulatory apparatus would have prevented the crisis given the political situation at the time. The Fed still has a fundamental conflict of interest caused by the Humphrey-Hawkins Act. You can’t control the value of the currency and maintain full employment.

  87. RB said

    Fannie and Freddy may have been forced to make some bad loans, but nobody forced banks to make bad loans in Commercial Real Estate and nobody forced investment banks to make subprime loans. Small business is hurting because the CRE bust has rendered small banks unable to lend money . Besides, the most egregious problems were not caused by Fannie and Freddie. Fannie and Freddie were actually contracting well before the explosion in privately issued asset-backed securities at the peak of the housing boom due to limits imposed by regulators subsequent to the accounting scandals. In the later years of the housing boom, private sector loans dominated . And here’s the thing, they weren’t required by the CRA to make those loans.
    What’s more, only commercial banks and thrifts must follow CRA rules. The investment banks don’t, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.

    The rise of Fannie and Freddie is in itself an interesting story, since they rose to fill in the gap created by the S&L bust subsequent to Reagan’s deregulation of the S&L industry.

    In summary, I think Fannie and Freddie were part of the crisis but not central to the factors triggering the collapse. A lot of different things have to come together for a collapse of this magnitude. These include the demand for yield in an environment of low interest rates and private sector filling in for the reduction of MBS issuance by Fannie/Freddie, regulatory failure by the Fed, skewed incentives and poor assumptions by financial industry, repeal of Glass-Steagall, the overtapped overlevered consumer living well beyond his means and reaching a tipping point for debt levels..

  88. RB said

    Let me add that Fannie and Freddie were indeed forced and are being forced to make terrible loans after the bust i.e. post 2007.

  89. DeWitt Payne said

    Re: RB (Mar 15 13:18),

    Reagan’s deregulation of the S&L industry

    Congress passed the Depository Institutions Deregulation and Monetary Control Act in 1980. It’s a little hard to blame Reagan for something that started before he took office. The Garn-St.Germain act was passed in 1982 with wide bi-partisan support, as can be seen by the parties of the co-sponsors. Hindsight is wonderful, but the actions that now seem obviously wrong were wildly popular at the time. No federal regulatory agency is truly independent of politics. The won’t pull the plug or take away the punch bowl. The only way to get people to exercise due diligence is to not bail them out when things go wrong. Unfortunately, that’s not going to happen either. The S&L debacle was made a lot worse by raising the deposit insurance level to $100,000 from $40,000 (St. Germain, again), allowing the weaker institutions to attempt to get well by doubling down on their bad bets.

  90. RB said

    “The won’t pull the plug or take away the punch bowl. ”

    I think this is where the problem lies – nobody will take away the punch bowl. And this is what gets the financial industry to exploit the system because they know that “when the patient is in the ER, now is not the time to talk about moral hazard.” I have sympathies with the second part because many who were not responsible for the crisis in the first place are the ones to suffer but I do believe that it implies that regulatory agencies should be tough ‘before the fact’ which looks to be wishful thinking so far. I doubt that booms and busts can ever be prevented, but one can look at a few seemingly successful outcomes: the consumer financial protection agency seems to have worked pretty well for Canada whose banking system has withstood the crisis much better.
    About people exercising due diligence, I think it is a little difficult without a base level set – most people conduct home purchases very few times and therefore lack the expertise that a professional dealing on an everyday basis has. With regards to the bond ratings agencies, I think it was more an issue of conflicts of interest wherein ratings agencies are paid by the issuers of the bonds. Pension funds who bought AAA rated subprime CDOs should have known better to distinguish between prime and subprime of whatever kind and did their own due diligence, but the hunger for yield overwhelmed them. Investment banks did provide them a book’s worth of footnotes and caveats, when professionals don’t read them, it’s hard to expect amateurs to, in my opinion of course.

  91. RB said

    On the direct link between deregulation and wage distortion in the financial sector. Financiers do appear to be overpaid and their industry size is too large as a proportion of the GDP .

  92. Kenneth Fritsch said

    Anastassia @ Post 12:

    The same with hydrocarbons. They are as essential for the developed world as the air for living beings. They fuel all civilization’s activities. But energy expenditures should be small, like breathing costs! That is, the civilization does not live to pay for energy with the goods it produces. It lives to develop, to thrive, and uses energy for that. When the energy costs rise above a certain limit, the economics inevitably disintegrates.

    Anastassia, I have read your paper and comments on the oil industry and I am struck by what appears to be your application of the labor theory of value to the price/cost of energy where you somehow mysteriously relate the labor used to “mine” the raw product to the end cost of energy. You have good company in being wrong about the labor theory of value in Karl Marx, Adam Smith and David Ricardo. While Smith and Ricardo got a number of things right otherwise and Marx got a lot things wrong, you as a physicist should not feel bad in not understanding economics.

    You appear fixated on the oil business. The price of oil without the intervention of government is determined by what the consumer is willing to pay for it in a free Market and how that customer values it.

    Surely you see the folly in having, let us say, a raw material that is mined and processed in a controlled economy where the government subsidizes an otherwise unprofitable enterprise and sees to it the labor is paid inflated wages. Now the portion of the labor costs for that mined product is very high. Would that keep you from worrying about the percentage of labor involved? Would you worry about the waste and inefficiencies given that the government would subsidize cost of the product to keep the prices low and artificially boost demand?

    When you say arbitrarily that energy cost should be low like breathing costs, I do not think you are being apolitical as you claim you are. I also think you should consider what is meant by scarce resources.

  93. Kenneth Fritsch said

    The Fed still has a fundamental conflict of interest caused by the Humphrey-Hawkins Act. You can’t control the value of the currency and maintain full employment.

    DeWitt, what you say here is symptomatic of what I think Jeff ID perhaps incorrectly reacts as to as a sudden crisis in politics. We have had unrealistic political approaches for some time in this country and this is one that I have always thought was one of the most egregious. For the Fed to succeed in their chartered mission would require their ability to foresee, and rather accurately, the future economic developments. If we had the ability to do that we would have those with that knowledge getting very wealthy with that (unshared) information. So what does the Fed do? It pretends that it’s driving of the business cycle in exaggerated amplitudes of bust and boom shows its efficacy when in fact it shows its failure. Did we hear any mea culpa from helicopter Ben about the Feds part in the recent economic bust?

    Where I do agree with Jeff in his thread, if I interpret what he says correctly, is that the unrealism of the politicians in recent times has gotten even more unrealistic and their so-called remedies even more of a phantom nature. I am thinking here of the tremendous debt that we are building at an accelerated rate.

    The most disturbing of all is not the politicians – as they are doing what politicians have been doing for time immortal- but rather the prevailing intelligentsia and their apparent biases for big government clouding any reasonable views or criticisms of what the politicians are doing. They are coming close to being irrelevant.

  94. RB said

    Simply from a duration of recession view, the pre-World War I era was not different from the post-World War II era. We did also have the Depressions of 1819-1821, 1837-1844, 1873-1877/1896. Therefore, one could say that the pre-Fed era was no better either. That leaves the question of the usefulness of the Fed. The alternative is for the entire country to be dependent on powerful entities in the private sector when the bust eventually comes – as with the incident leading to the creation of the Fed i.e. J.P. Morgan, post Panic of 1907. Pick yer poison indeed ..

  95. kan said

    Jeff – you are correct. No business is making any decisions or plans right now regarding growth or expansion. No one knows what the hell to expect. This economy will NOT recover until the rules of the game stabilize. Business can deal with lots of stupid things: high taxes, inflation, deflation,(not well, but they can). Neurotic behavior by the government is NOT one of them.

    As for RB comments about regional banks suffering from from bad commercial real estate. Nope, not most of them – they are suffering from a schizophrenic government that one minutes demands they lend money, at the same time calling them criminals. I know, I have 1500 of them for customers. They have no idea what the government is going to do next. You do not make a bet when the rules of the game can change after you place the bet. That is how you lose, and lose fast.

  96. kan said

    Regarding Buffet – follow the bouncing ball

    Buffets buys into Goldman Sachs ($5B)
    Buffet supports Obaman for Pres.
    AIG get bailed out completely.
    AIG creditors get paid off at %100 (not quite what GM creditors get)
    Goldman Sachs is one of AIG’s largest creditors

    Sloping at the trough.

  97. Kenneth #92

    You appear fixed on oil business.

    I am very much interested in what is going on and I am using my brain cells to find the ends. I do not mind being called incompetent (kind of used to that while advancing our physical stuff on the climate arena) and the like, but forgive me if I risk to insist that the problem is considerably more complex than the conventional dichotomy Free Market/ Governmental Regulation.

    I am surprised that speaking of the crisis here people have not mentioned the extraordinarily high oil prices that “coincided” (?) with the crisis. Consider that in 2005 the oil price was 55 USD/barrel and people in U.S. paid about 8% of GDP for it, then in 2008 it suddenly rose to 180 USD/barrel, which would mean tripling this percentage. Now imagine an oil-dependent business (in fact, all businesses in the real sector are) like, e.g., recreational boating. Suddenly their energy expenditures grow to 25%. They have some bank loan — they cannot return it now. Their loan is now considered as “bad” — by definition, the bank should not have issued that loan, as it was not returned. The pyramid of such “bad” loans starts falling… Do you really think the unprecedented high oil prices simply “coincided” with the crisis?

    The price of oil without the intervention of government is determined by what the consumer is willing to pay for it in a free Market and how that customer values it.

    The key word here is “willing to pay” or “has no other option”. If the product in question is a more fashionable cell phone compared to what I now have — then there is indeed a reasonable process of price formation. Those companies who have invested more labor and intelligence into their product, will be favored by the free market price formation. If the product in question is a life essential, the seller can elevate the prices to the limit of the consumer’s (economic) viability — the consumer will pay. This is what happens with the oil (the same would happen if somebody privatized and were selling the air). The point is that I can live without a more fashionable cell phone. But I (and anybody) cannot live without oil in the modern world. We will literally die.

    Surely you see the folly in having, let us say, a raw material that is mined and processed in a controlled economy where the government subsidizes an otherwise unprofitable enterprise and sees to it the labor is paid inflated wages. Now the portion of the labor costs for that mined product is very high. Would that keep you from worrying about the percentage of labor involved? Would you worry about the waste and inefficiencies given that the government would subsidize cost of the product to keep the prices low and artificially boost demand?

    Kenneth, I do not quite understand this question. As I told, Russian oil (and other raw resources) is mined by a tiny proportion of Russian population. Suppose that the Russian mines are owned by the U.S. government, and these Russian workers are paid governmental salaries as governmental U.S. employees (still making a very minor proportion of the latter, btw). The price of oil drastically drops. (You no longer need to feed with the oil money all the entire Russian population which is not engaged in economically competitive activities). The cheap oil is delivered to the U.S. market, and the recreational boat company suddenly notices that the energy expenditures to drive its boats become just negligible — not 25%, not 7%, but just miniscule. What sort of inefficiencies are you talking about? Won’t that give a boost to all the economy? To building, boating, motor car production, technology development? This is equivalent to a dramatic relaxation of a very significant taxation, but with no detrimental effect for the American people. This is what could be done with the mines in Iraq, but was not done.

    That will be a bit of a blow to the Russian population, which will have to remember that it is necessary to develop, to do something rather than to degrade driving towards the 15:1 priests/engineers proportion (which we are now doing, using the oil money of the developed world). Really, for us this oil is a curse.

    Now, instead, you want to persuade me that it is very efficient that the developed world, namely those businesses that are the flesh and blood of the world economy, those that created the modern living standards, are suffocated by the ever threatening oil prices, all in order to sustain populations of economically incompetitive lazybones?

    Jon Rappoport at #6 calculated the percentage of U.S. governmental employees at over 10% of the population. This gave me another angle to the problem. Indeed, suppose radically that these people are a “load” (this may not be completely true, but this seems to be a premise welcomed by the conservatives). Suppose now that the government is not functioning as a kind of thing-in-itself but is (unsurprisingly) controlled by some “big corps” (this is a premise welcomed by the liberals, as I see). If so, apparently oil companies are among those “big corps” (why should not they be?) — and then it is clear how they feed the “load” of governmental workers. They take exra dollars for oil from the recreational boat company, using the fact that this company cannot live without oil, and then use these dollars to feed the government that in turn supports them and their right to take extra dollars from the boat company. All other businesses are left to die. That is why I asked Jeff if all the businesses are suffering equally.

    As Steven McIntyre once said, “my attitude is much more nuanced”.

  98. Jeff Id said

    Anastassia,

    Kenneth enjoys a good discussion so expect a reply. I was a bit surprised by his angle, perhaps because your work is too sophisticated to be considered a minor event. It is blogland tho and he’s honest and will do fine.

    Regarding your premise about conservatives and liberals, there needs to be some further explanation of views. It is clear to many of us conservatives that the US government has been taken control of by external forces. Plenty of other govt’s succumbed long ago. Liberals in the US hate big corporations for this, as do those whom are true conservatives, it’s just that liberals in the US don’t like individuals achieving power without achieving popular consent. Conservatives, don’t like the corruption of policy accorded big business.

    Govt. workers are not a load of the magnitude that lawyers are but rather they are a load in that they don’t need to work as hard as private workers and they are paid far more. The US has an evil little secret to success that the rest of the world hasn’t gotten clearly, we work harder than the rest. How silly is that! On average, the US worker used to put in more time, used to work harder for more result, all because if you succeeded you can keep your result. It’s not the government’s to take from you, they have no right. It’s not your neighbors privilege to have their health insurance paid by you, it’s not their right. Such a cold and evil sounding system, with such beautiful results.

    What European’s don’t get, is that even when the US system doesn’t work for you, you have the option stand up and try again. There was far too much potential in the US for people, now it’s being stolen from us by greedy power brokers and an evil government. I’m not saying it always worked, but most of the time it did.

  99. michel said

    It is correct to say that the cause of the crash and situation was not limited to the capture of the regulatory apparatus by the financial services industry. There also has been, as the poster pointed out, misconduct of the federal agencies. It is also true that credit bubbles always have been, and this one is no exception, the creations of government.

    America is in a very difficult situation. It is losing superpower status, as all superpowers through history have done, owing to imperial overstretch, the increasing power of special interests, the hollowing out of the economy which accompanies the late stages of imperial overstretch. Mancur Olson has given a brilliant and convincing account of how it is that long periods of stability and prosperity give ever increasing power to special interest groups; that has happened.

    The problem is that it is to their advantage to impose costs on the nation which are many times, often many thousands of times, the benefits they receive from the measures. As long as its net positive to them, they don’t care. As the long period of stability and prosperity continues, these things multiply and slow growth, and the disadvantages fall unevenly, which leads to increasingly bitter competition between groups and social conflict.

    The long period in which it seemed to the ruling class in America that capability was infinite gave rise to great complacency in the face of this. It induced a state of mind in which every unacceptable development could be greeted with a ‘so what?’ and the building of another carrier. The proposals on cap and trade only make sense against a background of infinite resources, and determination of special interests to capture benefits regardless of the costs their favored measure imposes on society.

    So there is no doubt that what is needed is education and reform, real change, a complete reappraisal of goals and methods, and a pruning of the government apparatus and of entitlements. Clean up Detroit, and get an education system which delivers 100% literacy and numeracy.

    But these things are very difficult to achieve without great social disruption and conflict. The Spanish empire, which was staffed by intelligent men, reached its zenith at a time when the cultural flowering was also at its peak. They could find no way to stop the long catastrophe of the 80 years war before it wrecked the country. The British went through Thatcherism, but it was only an interlude and big state overstretch is back in spades now. Everyone can see that its not working, but they cannot seem to find an alternative.

    All the same, the Barack Hussein fulminations are not a contribution to solving the problem. The only solution is not that sort of paranoid drivel, it is to arrive at, and publicize and educate, with a clear diagnosis and some specific solutions. That is the only way a country can get through it. So I would suggest for starters, a random list of a few things to focus on. Stop the bailouts. Withdraw the troops. Reinstate Glass-Steagal. Cut the deficit by both raising taxes and cutting programs. Get education out of the hands of the teachers unions. Get health insurance out of the hands of the financial services industry.

    But whatever, do your own list, but get the debate out of the level of ‘Barack Hussein’ and conspiracies, and onto a level of what is to be done, now.

  100. RB said

    Anastassia,
    I think there is some merit to the point that supply-demand factors work for oil too. The supply-demand curves for oil are very steep which is why the price of oil is very volatile. In the short run, demand is not elastic. In the medium term, supply rises to meet the increased demand and results in a substantial lowering of price. Throughout the oil spike, inventories never rose, if I remember correctly. It is telling that in such a depressed worlwide economy, oil is at $80 per barrel. Oil price is not determined by the lowest cost of extraction but by the marginal producer. For countries such as Iran and Venezuela, with heavy social spending programs based on oil prices, only a $75-80 makes sense.
    http://www.tutor2u.net/economics/presentations/worldoilmarket/player.html
    There just wasn’t any spare capacity going around during the rise to the $147 top in oil prices.

    I think some of the newer, more expensive

  101. RB said

    I meant to say that peak oil is about ‘peak cheap oil’ as oil becomes harder to extract and the newer projects need high oil prices to justify investment, can’t locate the numbers, but it’s the marginal cost of extraction that determines the oil price.

    http://online.wsj.com/article/SB123808291973348921.html

  102. DeWitt Payne said

    Re: RB (Mar 16 10:21),

    The problem is that with the high volatility of oil prices, projects like the development of the oil field off the coast of Brazil have been put on hold. Qatar only built one of their planned gas-to-liquid plants. IIRC, it takes ten to twenty years to fully develop an oil field, probably longer for a deep water field when there only about a dozen deep water drilling rigs in the world. Meanwhile, production has peaked for a lot of the major oil fields. So while there may be supply in the long run, in the short run there could be a massive crunch.

  103. Kenneth Fritsch said

    Anastassia @ post #97:

    I must admit here and now that I do not follow your arguments on oil production. Perhaps you will need to offer what you see as some possible remedies to the problem as you see it and then we can talk about the validity of those arguments.

    Agricultural products – as in the food we eat – are rather essential to life. In the US we produce food for this nation and others with very little labor content and that content is getting smaller all the time. It could be even more efficient without government interference. What is so sacrosanct about the number of people producing the essentials of life? You appear to me to be making a round about argument about the cost of energy by also invoking the small percent of the population involved in “mining” it.

    The higher cost of energy, using the conventional sources, will get us to using it more efficiently and/or finding/using newer sources much quicker than would some government subsidy that allows us to go our merry ways until we suddenly realize we have crisis. Price is what gives us a reality check each and every day and is based on a whole complex list of issues (some more objective and some subjective, at least over the short runs) and certainly not on what a talented and articulate Russian physicist tells us it should be or wishes it to be.

  104. Layman Lurker said

    #100 RB

    I agree with much of what you say, however, one must take into account the political and economic dynamics of the OPEC cartel (like the incentives to cheat on quotas). If the cartel starts to break down, the low cost producers may respond by increasing supply and allowing price to drop below the costs of the marginal producer. I also suspect that stable cartels can also use oil price signals to constrain and control the growth of refining capacity.

  105. RB said

    Apparently Russia would like something higher than $75 as well for its global ambitions. LL, yes, it does look like the OPEC cartel is constantly looking at what price is sustainable for the world economy. There is ample evidence that oil shocks create recessions.

  106. Kenneth Fritsch said

    We did also have the Depressions of 1819-1821, 1837-1844, 1873-1877/1896. Therefore, one could say that the pre-Fed era was no better either.

    Even without a Federal Reserve, governments, prior to the Fed’s being established, were able to inflate the money supply and to suspend payment in specie on occasion and had fractional reserve bank paper. We also had fiat money with the Continental, as in not worth a Continental, and Greenbacks that the Union issued to finance the Civil War. The Confederates also issued fiat money during the Civil War.

    In some cases expansion of bank notes and deposits were tied directly to the amount of state government bonds which a bank had invested in.

    All the establishment of the Fed and the use of fiat money did was lose the less than perfect constraints of the past monetary systems such as the gold standard. We now have a Fed chairman talking about inflating at all costs and using the example of a helicopter drop of money to make his point.

  107. RB said

    Compared to post-war recessions, we are currently in an atypical recession arising from debt deflationary mechanisms. Post-war recessions have usually been triggered by a surge in inflation leading to interest rate hikes and credit tightening. If one hoped to have a body to pull away the punch bowl, better perhaps with the semi-autonomous Fed than with Congress. Looks like there are some lines of convergence here of conservatives with liberals on what ails America .

  108. Kenneth Fritsch said

    That congressional control of the monetary system would be worse does make the Fed the only alternative or even a good alternative. The Fed has had a real problem with transparency recently with the bailouts even though Bernanke likes to ascribe more transparency to the Fed decision making process. The Fed has been busy excusing itself from any responsible part in the housing bubble and the end results. They correctly get abused by congress for those items.

    Government control and intervention in the monetary and financial systems has been pushed by governments and those who would profit from easy money in the US since the founding. We had Hamilton at the beginning and Lincoln and his policies somewhere in the middle. It has always been an unholy alliance of government and those financial and industrial interests that would profit from cheap money, i.e. the first at the trough before the effects of inflation really kicks in.

    Lets see how Bernanke handles the next part of the process to avoid high inflation or a double dip recession. He is so much smarter than then those running the Bank of Japan (he has told us all that already) that he will obviously avoid the problems that that nation has had doing what to me seems much like Bernanke and the Fed and the Obama administration have been doing.

    When will the replies to the effect “Yeah, it may be bad, but it would be the end of the world had we not done what we did” end. That appraoch gets a little old and bit forever unrepentant and never responsible.

  109. Philemon said

    By definition, fractional reserve banking must be unstable as it creates more claims to money than there is money to meet those claims. Or, in other words, it is confusing money, the means to discharge debt, with debt.

    We know fractional reserve banking can exist without explicit government backing, but it tends to collapse quickly once the word gets out and the bank runs start, or sometimes even earlier when the notes start getting heavily discounted.

    Unfortunately, the bankers, not liking the situation of discounting, runs, etc., got the idea of Central Banking, whereby the government backs a cartel of bankers, and the Central Bank is ready to step in to prevent a run on any member bank, thereby, supposedly, ensuring that the inflated debt never comes due for settlement. Government also finds its own operations can be financed far beyond what direct taxes would support.

    So, the banks win because they make money on volume and spreads, and the banks must inflate in tandem or go out of business. Governments win because they can finance far more patronage than otherwise.

  110. M. Simon said

    Philemon said
    March 16, 2010 at 8:40 pm

    The points you make are true. However, a fractional reserve economy can grow faster than a non-fractional reserve economy if the debt issued is properly collateralized.

    Where it get out of whack is when false values are assigned to the collateral or if there is no collateral.

    Of course small mismatches are not a big problem. But big mismatches can ruin the economy. This can also happen in a non-fractional reserve economy.

    Spain’s New World Gold ruined their economy. More money in circulation without a commensurate increase in goods.

    There is no perfect system.

  111. RB #100

    Oil price is not determined by the lowest cost of extraction but by the marginal producer.

    This has been my point throughout. This marginal producer determines it without a concern about economic growth of the consumers.

    Indeed,

    For countries such as Iran and Venezuela, with heavy social spending programs based on oil prices, only a $75-80 makes sense.

    and (#105)

    Apparently Russia would like something higher than $75 as well for its global ambitions.

    and finally

    the OPEC cartel is constantly looking at what price is sustainable for the world economy.

    This is truly generous from the OPEC side, to show so much care. So it is the OPEC cartel that decides, via oil price formation, how much the recreational boat company in the U.S. can take from its budget for development (buying new boats, employing a scientific lab to construct new ones, exploring new routes, etc.). A little bit of miscalculation from their side — and the General Motors are begging to be saved! This is like having a slave and decide how to feed him “sustainably” — for him to be able to work, but not become too strong to think of something on his own.

    Indeed, Kenneth, the oil prices are telling. They are telling that the developed world has to pay for the social programs of Hugo Chavez, for “nobody knows what they are doing there” in Iran, and, increasingly, for the Russian philosophy “work is not wolf, it will not go to the woods” (meaning that there is plenty of time when you could do your work, no need to bother right now).

    Our analysis was published as a preprint of our institute, which is an official publication sent over to all major scientific libraries of the country. This is to say that one can easily attest that our work has a submission date of 27.12.2007, which is conspicuously before the crisis broke out. At that time, based on the latest available data from the U.S. Energy Information Agency, we wrote that “this indicates that current energy expenditures (7% GDP in U.S.A., ~10% GDP on a global scale) represent the permissible threshold, beyond which economics starts to disintegrate.” The last year for which the data were available at that time was 2005, with oil price at around 55 USD/barrel.

    When oil prices started growing steadily, we were just waiting to see which forms the crisis would take; it was absolutely clear to us, based on our own calculations, that there was an explosive loss of economic stability to be expected shortly. I am not sure that the majority of professional economists foresaw the crisis.

    What I am doing here is offering the twopence of our analysis to people who do not think the situation is easy or trivial. Having no whatsoever control over the oil prices that make at least ~10% contribution to the country’s expenditures, the attempts to stabilize the U.S. economy by attenuating, with a meaningful face, the decimals of interest rates do not look scientifically justified.

  112. Kenneth @ post #103:

    Kenneth, if you read the paper, we specifically paid attention to the food sector as it is indeed another life essential and, while fixed on oil, made a special note on it. In the U.S. 0.4% working population are occupied in mining, and 1.6% (four times that number) in agriculture, fishing and forestry. (Note that the global averages would be close to 0.7% and 35% (!), respectively.) If an average American pays at least 10% of his expenditures for food (do not know the exact sum) and if all this money went to the farmers, then the farmers would form a group of much higher than average wealth. From all I know, this is not the case. This is because this money remain within the distributive network (i.e. they “feed” the wholesale and retail sellers of food products). This is a much more numerous group of working population, it is also very economically active. There is therefore a difference between giving money away to social programs of unresolved efficiency in foreign or one’s own country or paying money to an economically active and competitive group of citizens.

    However, even here there are problems. This group features some (healthy?) economic greed and appears to share too little of the consumer’s money with the primary producers (the farmers). The latter are more occupied with basic hard work than with marketing. This is why there is constantly this need and outcry for the state protection of farmers, which looks like something counter-intuitive. Especially in Russia it is very evident how the biggest fortunes are made in but a few years in food retail systems, while the local farmers balance on the verge of survival.

  113. RB said

    Anastassia,
    Jim Hamilton of UC San Diego called out this risk, he’s even presented a paper on this subsequently:
    http://www.econbrowser.com/archives/2008/06/the_oil_shock_o.html
    Anirvan Banerji of ECRI called the recession in advance in 2000 because of the oil spike – he called it the Katona effect.
    http://www.thestreet.com/p/pf/comment/spincycle/1076978.html

  114. Kenneth Fritsch said

    Hugo Chavez, whose policies I detest, is a separate issue – as is what the oil producers do with the money they are paid for it. Hugo Chavez benefits from the high price of oil but does not control it. It allows him, like so many other governments do, to spend beyond his means in order to gain political support. That is likely to have a bad ending, but the pricing of oil should not be based on what those who profit from it do with that money – unless, of course, you are hard into command economies and militarily attempting to get global conformance to your ideas.

    All commodity prices fluctuate rather widely:
    http://www.indexmundi.com/commodities/
    and certainly the high price levels of a couple of years ago were signaling a continuation of a booming global economy both worldwide and particularly in China – with some temporary spikes due to items related to weather and world unrest. When that boom went bust with the bursting of the housing bubble we saw oil and other commodity prices come back down. The current betting, and the price of oil, seem to be that we will have a resuming of economic growth in the near future, but that remains to be seen.

    As an aside I do have to chuckle when I hear that the high prices of oil and energy will do great damage to our economy and then hear the near same exact people talking about raising the taxes on energy (gasoline) in order to wean the consumers off from it. Would not a price increase without the added tax do the same? And why is it bad in one case and good in another. Perhaps it is better for our government to waste it than a foreign one or better for both governments to get their cuts and decide how it is best spent for their respective citizens.

    Here is break out of the costs that go into a gallon of gasoline:

    http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/primer_on_gasoline_prices/html/petbro.html

    Anastassia, I continue to have a difficult time following your arguments. Give us your best shot at what you see as a solution, or at least a mitigation, to the problems that you site.

  115. RB said

    Pigovian taxes can be designed to be revenue-neutral i.e. tax-and-dividend etc.

  116. RB said

    On the conservative history behind cap-and-trade for sulfur emissions.

  117. RB said

    Anastassia,
    I think I see where you are coming from – these are, if I may extend the argument, very similar to liberal concerns in America such as this and this .

  118. Kenneth Fritsch said

    Pigovian, from Arthur Pigou, but otherwise well named for the animal in that a government can invoke a market inefficiency and feast on the rationalized tax revenues. In the process we get an outcome that is highly politicized and never discussed by the economists, who theorize these “solutions”, as government failure to correct a market failure – because well, it just sounds so good in theory.

  119. Kenneth Fritsch said

    http://www.econbrowser.com/archives/2008/06/the_oil_shock_o.html

    Let us see now when you get an economic boom the price of oil and other commodities will tend to rise – no surprise there. When we get a bust those prices will tend to decline -again no surprise. The oil prices are not following the economy, but the other way around?? Hmmm.

  120. Let me quote Jeff’s words at #98

    Govt. workers are not a load of the magnitude that lawyers are but rather they are a load in that they don’t need to work as hard as private workers and they are paid far more. The US has an evil little secret to success that the rest of the world hasn’t gotten clearly, we work harder than the rest. … On average, the US worker used to put in more time, used to work harder for more result, all because if you succeeded you can keep your result. It’s not the government’s to take from you, they have no right.

    Market economy versus planned economy is presumed to do exactly that: preserve the right of those who work “to keep the result”. The harder you work, the more intelligent you are, the wealthier you become. On the contrary, in the planned economy those who do not work have approximately as much as those who do, because the govt. takes from those who work and distributes evenly over all.

    My point has been that the current situation with oil produces the same or worse effect than the planned economy.

    Imagine a planet similar to ours but where air is owned by one nation. This nation does nothing, but just owns the air. It let other people breathe, but takes the products of their work in return — cars, TVs, modern medicines, everything. The living standard of the nation is high. This nation is aggressive and ready to defend its ownership over air. It keeps a good army and is keen about ideological fight. The population of this nation is 10% of global population. On such a planet every nine citizens in ten have the line AIR in their list of expenditures. And they all pay for the air, in total 10% of what they produce. Note that among workers some are very rich like Bill Gates, some can be relatively poor (so #117 of RB is not relevant to what I am saying) — but they all give away 10% to the air owner.

    My point is that on another planet, otherwise identical, but where breathing is free, the economic growth will be faster. People who work hard “can keep their result” in full. They do not give away 10% each year to support an alien population which just owns something the workers cannot live without.

    Change air for oil, and you get to the core of my point.

    Interestingly, there has been a similar precedent in the human history where ownership per se, ownership without work, stood in the way of economic progress and was abolished. It was the ownership over human beings — slavery. When it became clear that free people work better (and they really do), the property right over slaves ceased to be respected; the slavery was abolished world over and legally prohibited. This quite severe “regulation” not only did not impede economic progress, but greatly facilitated it. Although it has to be admitted that the understanding that that was indeed a progressive change was not equally quick with all people.

  121. Kenneth Fritsch said

    Anastassia, a word of advice: stick to physics. Air is not a scarce resource whereas oil is and thus making your analogy deeply flawed.

    I have asked you to provide some suggested solutions to the problems with oil production as you see it and it would appear that you are proposing we somehow make oil as free as the air we breathe.

    Slavery has nothing do to with the price of oil other than one should be able to enjoy the fruits of ones labor and/or investments/abilities/or just plain good fortunes and slavery is, of course, a counter to those basic claims to individual freedoms.

    This quite severe “regulation” not only did not impede economic progress, but greatly facilitated it. Although it has to be admitted that the understanding that that was indeed a progressive change was not equally quick with all people.

    Anastassia, your comment above is a God awful mixed metaphor. I have never heard the basic individual freedoms expressed as a regulation much less a severe one. Upholding the freedom of speech is a regulation? And as far as the granting of individual rights to all and eliminating slavery not being equally quick with all people, I whole heartily agree. After outlawing slavery, we have had both the involuntary military draft and confiscatory taxes (subtle forms of slavery).

  122. Jeff Id said

    “My point has been that the current situation with oil produces the same or worse effect than the planned economy.”

    So far this has been proven wrong about a hundred times in recent earth history, I’m regularly amazed to find people who still believe in it. The reason is that I sure as hell am not going to put in the hours I currently do, and the huge effort I do, if the progressives just take it away and give it to inner city people who have been brainwashed by public schools and a culture of laziness. Owning my own ‘green’ company, keeps me up late, calling, planning and working to make a better product. If they simply take my money, it’s not even close to worth it. I would probably just write novels and work a high pay, low hour, low stress, government job or something. I’m not kidding, I will not put in these hours.

    Just the fallout from a market economy has lifted our poor to a level which most countries consider middle class or better. There is a ton of propaganda being sold to the world about no-insurance, starving children, widespread poverty. Honestly, in 41 years here, I have never met a starving person in the US – it’s a flat lie. There are poor people, but most of them are horribly lazy and just sit home all day collect checks, look for ways to declare disability and watch their flat screen TV’s.

    I have been to China and the situation is different there, I saw a lot of truly emaciated people. There is food, housing and more dollars of free health care here than anywhere in the world. We have 30 million immigrants who don’t pay taxes that go to our emergency rooms all the time and even get into our public schools. The democrats want the illegals because they vote, and having little understanding of our history and language, they vote for free government money. The democrats need the lies to push their policies on us.

    I’m frustrated that our freedom is being stolen from us by the people in charge.

    Currently, it’s the corruption and the subversive rule making which is destroying the system, not the Marxist mantra. America has enough oil in the ground to force oil to be a market economy, outside forces are preventing the usage of it. The same is true for coal and nuclear electricity.

    Anyway that’s my view.

    America is far from perfect, there are too many special interests, we have a judicial system which is highly corrupted that people haven’t even begun discussing, the cops have turned it into a profit center and there are plenty of ways to improve health care here.

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