The U.S. Economy: Stand by for more worse news

It really seems to me like the US would do well to get something to back its currency... or go back to a physical currency as opposed to a 'faith backed' currency... though I don't even know if such a measure would be possible right now.

 

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It is possible to go back to a gold or metal backed currency, but why? The current currency works well, and linking a currency to a commodity brings with it some significant risks and constraints to economic growth. That is why the world dumped commodity backed currencies many decades ago.

"The gold-standard mentality and the institutions it supported limited the ability
of governments and central banks to respond to adversity; they led to the adoption
of policies that made economic conditions worse instead of better. In response to
balance-of-payments de®cits and gold losses, governments could only restrict credit
with the goal of reducing domestic prices and costs until international balance was
restored. Critical to this process was the effort to reduce wages, the largest element
in costs. As the English economist F. C. Benham summarized the conventional
understanding in 1931," http://isites.harvard.edu/fs/docs/i... 27 - Trade Money and Finance/Eichengreen.pdf

 

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I dunno, I'm not economic expert

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It just seems that, well, having our money backed by "faith" when the world at large seems to be losing faith in us isn't working out too well for us heh.

 

Paul Krugman's calling for another $1 trillion in public debt - you know, to get our magical 'aggregate demand' up. See, America has a problem. It's flaccid and can't get It's aggregate demand up. Apparently, Dr. Krugman's got the cure - public debt and inflation. You know, because your life is oh so much better with an added 4% inflation. Interestingly enough, if Krugman get's his way, the average American Household income, inflation adjusted, will be just about where it was right before the Korean War. Only, now it's both parents working (and now most 35 year old 'children' are working and still living at home). Gee... if we try hard enough, maybe we can be like the Japanese? Karōshi for everyone!

Yippee for Keynesian Voodoo!

MOAR debt!
MOAR inflation!
MOAR Tax.

Less Civil Liberty.

MOAR State - It'll save us! O-blah-blah will save us! Hitlery will save us! Yes, we just need to hand over more money and power to the sociopaths in charge - maybe they can start another war killing women and children in Iraq. That'll make us some jobs. And think of all the good Slum-Lord jobs we can create by lifting minimum wage.

If ever there were a Land of the Free and Home of the Brave, it would be the good Ole' USSA.... You had your say, you pulled the magic lever to the Left or Right. Now, just shut the f*ck up and let your betters do the thinking for you (oh, and pay your labor tax).

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Well I am a bit of an expert by training and vocation. The economy is and always has been based on faith.

And the data doesn't support your contention that the world is losing faith in us. What makes you think it
is? Interest rates are and have been exceedingly low. Equity markets have been and continue to grow. Inflation has been and remains low. Unemployment is improving.

 

deleted

 

William White former chief economist of the Bank for International Settlements.

LOL ... thank the Gods we have Central Planners in our Central Government and our Central Bank with our Fiat Currency taking care of things for them.

$50 BILLION dollar a year sucked up into the so-called "Department of Education" - test scores have never been lower and most American don't even know what their civil rights are - perfect for a freedom hating society like ours.

$5 TRILLION on a couple more phony made-up wars, that we lost. That's great too. Moar jobs for the poor - as cannon fodder.
$5 TRILLION bailing out the criminal banks on the backs of the young. How wonderful.

Maybe in between $250,000.00/hour speaking 'engagements' Helicopter Ben could fly over here and dump some more debt onto what's left of the middle class bailing out the rich and maintaining the statuesque. How lovely.

Nice.

Well, we know where there's some money left - trillions and trillion are being 'hoarded' by the retiring babyboomer class. Gee.... I wonder, I wonder, do you think any politician could be eyeing those 'savings'? Hmmmmm..... a large unproductive segment of 'society' ripe for the picking. I mean 'for the good of society' mind you. Oh, I'm sure our wonderful Central Planners in our ultra-violent Central Government, the one institution who could 'legally' steal.... errrr 'tax' away their savings and stuff them into "Public Retirement Happy Factories" where the unproductive rent-seekers are made "Happy" (for the good of society) would never in a million years think of such a thing. Sure, they may make up phony wars and bomb women and children. But harm a single hair on a "Citizens" head. Never an a miiiiiiiilion years.

I hear Happy Retirement Factories are kind of like 'Indian" reservations only even happier.

LOL

Yes, good ole' American Fascism.

 

Social progress in 25 years as measured by ratio of 8th / 2nd deciles in 2009 verse 1883 (lower 2009 value of this ratio indicates wealth is becoming LESS concentrated and higher that wealth is concentrating. (I used 8th & 2nd as more typical than the extremes, but calculate any you wish with data at end of this post.)

Brazil: 11.18 / 2.08 = 5.375 in 2009 and in 2083, 10.57 / 1.80 = 5.872, better distribution by 9.25%
China: 12.88 / 2.98 = 4.322 in 2009 and in 2084, 12.43 / 2.98 = 4.171, worse distribution by 0.01%,
essentially no change but always significantly better than Brazil and slightly better if 2082 data used.
India: 11.25 / 4.85 = 2.320 in 2009 and in 2083, 11.70 / 4.92 = 2.378, better distribution by 2.50%

Brazil's remarkable advance is due to a wealth re-distribution program, called “Bolsa Familia,” which in last few years before 2009 (and continuing still even stronger) gave cash monthly to mainly rural families (about $100 for each child up to three) IF children stayed in school up to age 18 or graduated high school AND got all their free preventative vaccinations, etc.
Prior to this program rural girls wed or dropped out of school barely able to read to work at home. Boys would work the fields, also nearly illiterate and with minimal math skills. The typical rural family was self sufficient but lived outside the “cash economy.” Now they go to town and buy things, and that stimulates the economy, greatly via the “multiplier effect,” with increased tax revenue from the merchants, so much so that with reduced public heath costs, Bolsa Familia is now at least breaking even and soon these young educated people getting TAXED salaries in the cities will much more than “break even” - The boys are buying motor bikes and the girls factory made dresses, etc. A side effect is that farms are getting larger and more efficient on average. Fewer horse drawn plows, etc. Like China, Brazilians are urbanizing but not nearly as many. (Several million Chinese do so every month – why all those now vacant cities are needed. In a decade, China will and is building housing, schools and stores for a rapidly urbanizing population, greater than half the population of all America!)


Income or Consumption share by deciles (%) for three countries
2009:
lowest 2nd 3rd. 4th.. 5th.. 6th. 7th.. 8th.... 9th... highest
0.77 2.08 3.07 4.06 5.27 7.14 7.86 11.18 15.64 42.93 of Brazil
1.69 2.98 4.23 5.51 6.88 8.43 10.31 12.88 17.11 29.98 of China*
3.69 4.85 5.67 6.47 7.34 8.35 9.57 11.25 14.02 28.79 of India*

1983 or 1984 for China. (1983 data not available for China, So with 1984, China has one less year to change in.)
lowest 2nd 3rd. 4th.. 5th.. 6th. 7th.. 8th.... 9th.... highest
0.84 1.80 2.49 3.35 4.67 5.36 7.54 10.57 16.59 46.79 of Brazil
3.76 5.09 6.24 7.29 8.35 9.46 10.76 12.43 15.02 21.60 of China*
3.77 4.92 5.91 6.86 7.80 8.84 10.06 11.70 14.42 25.72 of India*

Income/consumption shares are based on estimated Lorenz curves. Households are ranked by income or consumption per person. Distributions are population weighted.
(*) Distribution is based on aggregated Lorenz curve
Above Data From: http://iresearch.worldbank.org/PovcalNet/index.htm?3 I think that final 3 is due to my choice of three countries to compare. USA is not an available choice, but it is well known that the middle class share of the income is rapidly shrinking. (See PROOF by US Census data in table below.) Top 1% get now almost half of the total income. Not even the top 10% in the three above have that. US has worst income distribution of almost all countries and wealth there is still concentrating following GWB's tax reductions for the already very rich (Incomes > $250,000 per year). Typically, they pay smaller fraction of their income in taxes than their secretaries and other servants do.
SUMMARY: US lacks in practice the progressive taxes NECESSARY to avoid wealth concentration now. Only those with income greater than $100,000 have made progress. Here is the data:

Year 1990 then 2009 US family income % distribution by income brackets in constant 2005 dollars:
Data below from: http://www.census.gov/compendia/statab/2012/tables/12s0695.pdf
......... <$15,000.. $15K to $24,999.. $25K to $34,999.. $35K to $49,999.. $50K to $74,999.. $75K to $99,999.. $100K or more
........... 8.7......... 9.4 .................... 10.3 .................. 15.6 ................... 22.5 ................. 14.6 ................... 19.1 (Line of 1990 data)
........... 8.7......... 9.1 .................... 10.0 .................. 13.8 ................... 19.4 ................. 13.5 ................... 25.6 (Line of 2009 data)
Change 0.0....... -3.2% ................. -2.9% .............. -11.5% .............. -15.6% .............. -7.5% ................ +34.0%
Constant dollars based on CPI-U-RS deflator. Families as of March of following year

SUMMARY: If you don't make more than $100,000 you are being screwed by the PTB as losing purchasing power, rapidly if part of the "middle class" (35K to 75K annual income). Plus you and YOUR CHILDREN are going deeper in debt (your share of the 17.5 Trillion, and still increasing now.) This is UNSUSTAINABLE* and will not be - Will collapse, with China becoming the world's leader; The yuan the reserve currency. If too unpleasant, stick your head back in the sand and ignore facts / reality, until the approaching Chinese Tiger bites your ass off.

* Also why "the recovery" is a government fiction. I.e. US economy (except for companies mainly selling to Asia) is based on Joe American's rapidly shrinking buying power (2/3 of it any way). The BLS's unemployment numbers are worse than fiction. - Are a complete lie, made low by not counting those who have not sought work in last month or so*** and treating part timers as if fully employed. So false is it that the Fed has just said the BLS's data is not a valid*** measure of the economy and will be ignored starting now!

** Even if just now giving up after more than year of active job seeking.
*** As I explained and predicted, especially at the end of post 670.

 

I had to wonder why you didn’t provide your sources for that quote you attributed to Mr. William White. It’s probably because you don’t have a credible source for those comments. You don’t want people to know that you sourced those quotes from specious sources which would be immediately recognized as such if you provided your sources. Reality should serve as a wakeup call to you Michael. But no, to you it is just another excuse to bury your head in the sand and invent more fiction.

Except none of that is true, it must be a bitch to need to invent fiction in order to justify you ideology.

https://ed.stanford.edu/news/poor-r...leading-about-us-performance-new-report-finds

http://voices.washingtonpost.com/class-struggle/2011/02/myth_of_declining_us_schools.html

Except there was nothing fiction about the “made-up wars” and there was nothing fiction about those airplanes which were run into the World Trade Center, the Pentagon and a pasture in Pennsylvania.

Again, if any of this were true, you might have a case. But it simply isn’t true. As has been explained to you umpteen times before the bailout really bailed out everyone by ensuring financial institutions could pay their debts. That kept countless businesses alive and billions of people employed. And the costs of the bailout was never anywhere near 5 trillion dollars. Initially it cost the government 400 billion dollars and banks have paid back all but 21 billion dollars – damn minor details again. It’s that old reality thing nipping at your heels again.
http://www.cbo.gov/sites/default/files/cbofiles/attachments/44256_TARP.pdf

The costs of not bailing out the banks would have been far greater than 21 billion dollars. Government revenues would have plummeted as more and more people lost their jobs, stop paying taxes and moved onto government support programs like unemployment insurance, food stamps, subsidized housing, etc., and businesses went into bankruptcy producing more in federal insurance claims like savings, pension and investment insurance. All of that would have devastated the nation's finances. The 21 billion dollar cost of the bailout pales in comparison to the trillions it would have cost the nation if it had failed to bailout the banks.

I thought you liked free markets. People have been making money doing speaking engagements for centuries. The Clintons and Bernanke get $250,000 per engagement. George Junior gets $100,000 per engagement. Lindsay Lohan gets $100,000 per engagement too. What is wrong with celebrity speeches or engagements? Does you free market philosophy not extend to speaking engagements?

Oh and where are those hoarded trillions? You want to confiscate the life savings of your parent’s generation? Are those your “free market” principals in action? And has been repeatedly pointed out to you the vast majority of the Baby Boomer generation is still working and will be working for some time. Yeah life is a bitch; we get old, infirm and die. Are you suggesting that we should cast the old and infirm out on the streets and let them die or better yet turn them into something like soylent green at least in death they would have some productive value? Is that what we should do with America's Greatest Generation, a generation which has been retired for some 30 years now? Here is some more unpleasant reality for you, Baby Boomers in conjunction with America’s Greatest generation have created the most geopolitically stable, most prosperous and most technologically advanced society man has ever known. All you have done is bitch and complain.

Since facts and reality are alien to you Michael, here are some facts for you. Anyone between the age of 46 and 65 is a Baby Boomer. Baby Boomers account for some 33% of the adult population. Baby Boomers are still working, except for those like me who have earned enough wealth and have chosen to retire early. http://www.cnn.com/interactive/2011/05/living/infographic.boomer/

It’s funny to hear you call those who do not subscribe to you so called libertarian ideology as fascists. You are the man advocating eliminating regulatory safe guards, those same safeguards which caused the recent banking crisis you like to rail about. You are the guy who advocates going back to the days of the robber barons where almost all political and economic power is vested in the hands of a few wealthy industrialists and financiers.

You are a either an ignorant fanatic or a demagogue Michael.

Demagogue:
"a political leader who tries to get support by making false claims and promises and using arguments based on emotion rather than reason" http://www.merriam-webster.com/dictionary/demagogue

 

Finanz und Wirtschaft

(A)
Iraqi's and the Iraqi government had nothing at all to do with 911.
Afghan's and the Afghanistan government ALSO had nothing at all to do with 911.

We Americans on the other hand are murdering women and children in both counties - welcome to Life in "Progressive" America.
We Americans are also destroying entire ecosystems in Iraq with our depleted uranium dust that we use to kill innocent women and children, mothers and fathers, teenagers and young adults, all who had absolutely NOTHING at all to do with 911. That's the America your generation built for us Joe. An America of spineless entitled morons.

My guess is, your generation will be remembered with disgust.
You'll be remembered as a greedy selfish generation of liars, cheaters and thieves, one whom lavished themselves at their children, their children and their children's expense. Oh, and you topped it off by leaving this planet polluted in your filth - possibly wiping out humanity itself, I suppose we'll have to wait and see how the ecosystems hold up under the weight of your sloth.

Anyway, you've normalized three generations to Progressive American Fascism.
So, let's see how you like what you created - - when it turns on you.

One could make an argument that, given you've stolen prosperity from your children's future, their taking it back is justifiable retribution.
You worship the State - let's see how you like a little 'redistribution' for the 'betterment of society'. Don't worry, it's only a matter of time now. Those 'free' roads aren't going to up and pay for themselves now are they?

(B)
PBS The true cost of the bank bailout
(NOTE: this was in September 3, 2010 - FOUR years ago)

(C)
Ask yourself this Joe, what's more important, the nation's integrity or your generation get's to keep your ill-gotten gains?
You do support the State don't you Joe? So if a vote is taken and your generation is 'taxed' of it's wealth to pay for your disposal - well, that's "Progress" Joe. Of course you'd support it. Out with the Old and In with the New. Progressive Fascism USSA.

The funniest part, is the Democrips and the Rethuglicans will be like a couple of wolves hovering over an unproductive ignorant flock of some of the dumbest sheeple this county has bred - what do you think they'll do Joe? All these entitled sheeple want what they want. The Government doesn't actually produce anything - so those wants will have to come from those that still have something worth stealing. Let's see, they can't sell more bonds on the young. They can't steal much more from overseas. They can't squeeze any more productivity out of you for the 'good of the State'. But, they can tax your assets. They can tax your income. They can pass a 'legal' means of stealing your wealth - it's called Progressive Income Tax. How does a 95% Progressive Income Tax on the aged sound to you Joe? Pretty good? Maybe you can reverse mortgage a slum-house or two, you know, to stay afloat........ for awhile.


Yeah, think's look nice waaay up there in the castle tower princess - that is, until the mob come and burn it down.

(D)
Those so-called 'safeguards' are rent-seeking Joe. They're not there to protect anything other than the rented-markets through State regulation. It's called Progressive Fascism and forms the basis of our so-called 'free' markets which are in actuality hyper-regulated. The reason there's hardly any worthwhile jobs and society looks like one bland shit-smear of chain stores from coast to coast is due to those 'safeguards'. Yeah, they make it so safe no one need to worry about ever starting their own business and can get in line with all the other cogs at the local chain store. In reality IF people really wanted those safeguards - then the free market would provide them by offering the service for a price. And people would pay that price because, as you say, they 'want' the added 'safeguard'.

(E)
Comically, you people complain about 'Libertarians' and if we don't like living like banking serfs under the guise of a 'free' Republic then we can move to Somalia. Maybe you need to take a look around you princess - much of the USSA looks WORSE and is MORE violent and dangerous compared with Somalia!

 

Free markets are made up of free-people who are free to interact and exchange goods and services with sound money under the law with property rights. That's not us Joe. We live in hyper-regulated markets, we use fiat currency, the State doesn't protect our private property - it steals it.

The so-called "Robber Barons" were NOTHING compared to the greed of your generation. The "Robber Barons" could, at most, offer you a job in their shitty factory - one that was obviously preferable to life on the farm. That's it. They couldn't take your property. They couldn't steal the money you made by taxing your labor and then giving it to themselves when they made bad investment decisions. They couldn't inflate away your money.

The Robber Barons were like Mother Teresa compared against the State. Did they nuke two Japanese civilian cities filled with young mothers and schools of innocent children? Did they start a phony war in Vietnam? Did they use depleted uranium against cities of civilians who had absolutely nothing at all to do with 911? No, they didn't. They owned some crummy factories - big f*cking deal.

The rich have never been richer Joe. What don't you get?
Never Been Richer.
The State is bailing out the rich - not the poor, the rich.

I swear you live so far up in La La land like a princess in her tower you don't see the society crumbling around you.


As I stated before, my advice is to have as little as possible to do with any public institutions as is humanly possible. Work within your community. Legally reassert your civil rights - what's left of them. Don't spank your children. Teach them to think logically - preferably in an alternate schooling format (hell, even secular homeschooling would be far better than a public schooling in obedience training). And then watch as the nation slowly sinks to third world status. If you're not on at least a 6 figure income, thanks to the State - you're probably never going to get anywhere in life and will die in debt and poor. Plan accordingly.

 

A speculative bubble has nothing to do with monetary policy. Throughout the centuries, even before the era of central banks, we have had many speculative bubbles. It’s a nice scape goat and appeals to the ignorant. That’s why demagogues do it.

So now you are moving the target. You included both Iraq along with Afghanistan in your previous post. No, Iraq didn’t have anything to do with 911. But it was invaded because it failed to cooperate with UN mandates and sanctions. But how is that relevant to your cause? It isn’t.

I opposed all of the shrub wars in Iraq (i.e. Bush I and Bush II). If you were serious about Iraq you would address the defects in our political system which led to a Bush I and Bush II presidency. But no, you don’t want to address those defects. In fact you want to add to them. You want to allow more big money into our political processes.

Oh, then what were they doing giving safe harbor to those that did? We have been down this road many times before. Denial is not a river in Egypt Michael. It is what you do every day and every minute of every hour to rationalize your irrational notions.

Then where are your proofs? America left Iraq years ago. The US is in the process of withdrawing troops from Afghanistan now.

As has been explained and proven to you numerous times before Michael, those depleted uranium rounds were used in the middle of remote deserts on Iraqi tanks and there were only a few hundred used. So how is it that that dust (which isn’t much) can kill innocent women and children, fathers, teenagers, et al. in the middle of cities? Where are your credible proofs? You have none.

Before you blame others for the ills you perceive, real or fiction, you really should take a long serious look at yourself.

What’s the matter Michael? Did your parents drop you on your head? If my generation is a “greedy selfish generation of liars, cheaters and thieves, one whom lavished themselves at their children, their children and their children's expense” as you have alleged, then where is your proof? Like everything else, you cannot define it any meaningful way much less prove it. You didn’t even know who we were before I told you in my last post. Like the many demagogues before you, details and facts just aren’t your gig.

My generation began Earth Day. My generation began environmental regulation. My generation created the Environmental Protection Agency which has cleaned up numerous toxic dumps. Like everything Michael your ideology is just not consistent with reality. And how is it that deregulation, the libertarian solution which you advocate, will cause less pollution and less environmental damage? The reason my generation began cleaning up the environment is because your unregulated ideology didn’t work. Rivers were spontaneously erupting into flames as a result of pollution. That doesn’t happen in the US today because of those very regulations you hate so much.

Except you don’t know what you are talking about.

Except those numbers are blatantly and demonstrably wrong, the cited TARP numbers are wrong, the stimulus numbers are wrong per my previous post and the list goes on. And much of the stimulus money was in the form of tax cuts - not spending. Additionally, these reporters included government insurance programs like Federal Deposit Insurance an insurance program which has existed since The Great Depression and assumed everything would default. They assumed every bank and every institution in the nation would default. They assumed everything that could go wrong, did go wrong. And that didn’t happen because of the measures taken by The Federal Reserve, Congress and the US Treasury like TARP, like the stimulus.

They speculated about the cost of a total economic collapse on existing government programs. It's like saying car insurance costs the issuing insurance company the maximum liability of all of its insurance contracts. It's like everyone with car insurance had an accident at the same time which resulted in the maximum liability for the insurance company. And of course we all know that wasn't the case with The Great Recession because of the bailout. The intellectually challenged might fall for this stupidity. Fortunately most people have at least half of a functional brain. A potential liability is not a cost. It's a potential liability. These potential liabilities have been around for almost a century, but they are never counted as cost until those liabilities are realized (e.g. until some bank goes into insolvency or somebody becomes unemployed, etc.).

If the banks were not bailed out, it would have cost the government much more than 12 trillion dollars. It would have been multiples of that 12 trillion dollar number. That is why the bailout and stimulus was so vital. Failure to bailout the banks and implement stimulus programs would have cost the nation several tens of trillions of dollars. That is what I have been saying all along. Government expenses would have soared because of these insurance programs and the demand for government services (e.g. security, fire, police, welfare, etc.) would have skyrocketed while simultaneously government revenues plummeted.

There is a term for this kind of reporting. It’s called yellow journalism. http://en.wikipedia.org/wiki/Yellow_journalism

And just what ill-gotten gains would those be, exactly? I have repeatedly asked you that question and you have repeatedly failed to answer.

LOL, well my generation has been taxed and continues to be taxed. Here is the unpleasant reality for you friend. When I was a child, the top marginal federal income tax rate was 94%. Today it is 39%. Americans today are taxed less now than at any time in the last 60+ years. Tax rates are at near historic lows. http://www.cbpp.org/cms/?fa=view&id=3151

Again Michael your notions are just not consistent with reality. And it isn’t like we haven’t had this discussion many times before. Your insistence on ignoring facts isn’t going to change them.

LOL

That is just more nonsensical libertarian demagoging. And personally, I prefer living in the US or in some other advanced economy as opposed to Somalia. And apparently you do too. You like to get up on your soapbox. But when the leather meets the road, you too prefer advanced economies to those primitive economic states which exercise your libertarian principals. You like the benefits of advanced economies; you just don’t want to pay the bills. If you really do like Somalia so much, why don’t you move there?

 

Well this is part of you problem. You don’t know what free markets are. You write about them, but you really have no idea what they are. For your edification, the definition follows:

“A free market is a market economy in which the forces of supply and demand are free of intervention by a government, price-setting monopolies, or other authority. A free market contrasts with a controlled market or regulated market, in which government intervenes in supply and demand through non-market methods such as laws creating barriers to market entry or directly setting prices. Although free markets are commonly associated with capitalism in contemporary usage and popular culture, free markets have been advocated by market anarchists, market socialists, proponents of cooperatives, and advocates of profit sharing.[1]” http://en.wikipedia.org/wiki/Free_market

Restaurants are heavily regulated, food is heavily regulated. But that doesn’t mean the markets for food isn’t free. As an example, the restaurant business is very competitive. Government isn’t restricting the supply of restaurants or doing anything resembling price setting. Government regulation is not synonymous with unfree markets. So that is part of your problem.

And actually, the state does protect property rights. If you don’t believe that, try to steal someone’s property and see who finds you and throws you in jail. I’ll give you a clue; it won’t be your Aunt Sally.

I think you are jealous and perhaps feeling the pangs of your own insecurities. Isn’t” greed is good your motto”? Isn’t it my right to acquire wealth consistent with our libertarian ideology? It is.

“In the Stanford Encyclopedia of Philosophy, libertarianism is defined as the moral view that agents initially fully own themselves and have certain moral powers to acquire property rights in external things.[17] Libertarian philosopher Roderick Long defines libertarianism as "any political position that advocates a radical redistribution of power from the coercive state to voluntary associations of free individuals", whether "voluntary association" takes the form of the free market or of communal co-operatives.[18] In the United States, the term libertarianism is often used as a synonym for combined economic and cultural liberalism while outside that country there is a strong tendency to associate libertarianism with anarchism”. http://en.wikipedia.org/wiki/Libertarianism

And by the way, all currency is fiat currency. Even gold and silver currencies are fiat currencies. You have two options in the currency realm, fiat currency and barter. And there is nothing unsound about the American Dollar. That is why everyone wants it and why it is used in virtually every nation in the world.

Oh, and just what is the “greed” of my generation and what makes it different from your generation? You have been repeatedly challenged on this and to date you been unable to back up your assertions. And where is your proof working in a factory was better than working on a farm? Do you know what either was like? I don’t think you do.

And yes robber barons could take your money, ever heard of the company store? And in addition to your money, they took your health and your labor and the labor and health of your children as well. And if you didn’t work, they would bring in the Pinkerton’s or some other thugs to beat you or shoot you and your family (e.g. the Ludlow Massacre, The Battle of Blair Mountain, the Homestead Strike, etc.). http://en.wikipedia.org/wiki/Ludlow_Massacre

Yeah all that child labor, sweat shop, 12 plus hour days six days a week, the unsafe labor conditions and all the pollution you like to complain about and blame others for were great. I don’t think so. But that is your dystopian utopia. They did more than just own some “crappy” factories. They also controlled markets. They were monopolists. I don’t think most people share your visions of libertarian nirvana and that is why libertarian remains a fringe ideology.

And robber barons were not attacked by Japan. Japan didn’t send an army to invade and occupy the lands of the robber barons. Had Japan done so, I am sure the robber barons would have no qualms about dropping a few nukes on WWII Japan.

Additionally, there was nothing funny about the War in Vietnam. You may not have liked the policies which led to and sustained US involvement in the Vietnam War, but that doesn’t mean the war wasn’t real or phony. I assure you it wasn’t. People really did fight and die in that war.

Yeah I get that. But the answer isn’t giving them more. The answer isn’t surrendering to the wealthiest. It lies in fixing the political system that allows and encourages rent seeking. And it requires some degree of income redistribution in order to keep the economy competitive and growing. Those are antithetical to your libertarian ideology.

I

I think you need to do a lot of introspection.

As I have told you before you are not going to eliminate power just by eliminating the state. You just create a power vacuum which will be filled by a robber baron that has no interest in you or your family. And you don’t have to look far to see examples of such around the world. When your car is broken, you fix your car. You don’t blow it up or try to fix your house and hope somehow that will fix your car. You fix what is broken.

In this case our government is broken and it needs to be fixed. We need to take the special interest money out of our politics. We need ethics in government. Our elected representatives should not be conflicted. Just as private employers don’t want the interests of their employees conflicted with those of the corporation; we should not want or tolerate elected representatives with conflicted interests (e.g. Billy Tauzin). The interests of our elected representatives should be wholly aligned with those of the people who voted for them.

And finally, we need better informed voters. In the information age, there is a lot of misinformation (e.g. Fox News, conservative internet, conservative talk radio, etc.) out there. We need better informed voters and we get that by restoring The Fairness Doctrine and eliminating special interest money.

 

But the rich are getting richer with rental units.

 

As I predicted, Fed has found the official unemployment of little value in measuring the health of the economy as it mainly reflect the labor force particiapation rate. both going down toether:

 

Your conclusion is not merited by the facts or the article you referenced. You are again drawing some illogical conclusions from articles and the data. The article you referenced speculated that the labor supply was becoming too low and would not be able to handle increased economic demand should that demand manifest itself. That has nothing to do with the Federal Reserve, nor does it mean the "official unemployment" is of little value. On the contrary, it means the "official unemployment rate" is of upmost importance. That is why the markets eagerly anticipate the release of the "official" monthly unemployment number.

What the author of the article you referenced is, though not by name, something called "full employment". It is the residual unemployment level needed in order to maintain a healthy economy. The Fed estimates full employment to occur when the "official unemployment rate" is between 4.5% to 5.5%. With an unemployment rate of 6.3% we could get to full unemployment rather quickly. That is why the Fed is ending its bond purchases. If the unemployment rate falls below the full employment rate, then the lack of labor becomes a constraint on economic growth. It doesn't mean that the "official unemployment rate" is meaningless as a measure of economic health - quite the contrary. This is another example of you taking 1+1 and coming up with 666.

PS: Full employment is one reason we need immigration reform.

http://en.wikipedia.org/wiki/Full_employment

 

I did not intend the article to support the idea I predicted months ago, that the Fed would need to place much less importance on the unemployment rate as it would soon fall below the Fed's 6.5% target for reasons not even related to unemployment because of the way the BLS defines that. The article I quoted, as I note in my introduction to it, only confirms that unemployment rate and work force participation rate decrease together.

I. e. I did NOT draw any conclusion about the usefulness of the BLS's unemployment rate from that article. I had noted months ago that the unemployment rate did not measure the true unemployment problem and gave several reasons why it was increasingly failing to do so. And then went on to predict that the Fed would be forced to abandon it 6.5% criteria that the economy no longer needed stimulus. (As it has.)

However, if you want evidence that others, much more well known than me, are saying exactly the same thing: that the Fed must pay little, certainly not special attention as it did with the 6.5% criteria, to the unemployment rate when judging the health of the economy here that is:

 

Great post Joe. Your understanding of the subject is superior and much appreciated when you share it with all of us. Except Michael. It's tough to be an ideologue and garner respect.

 

Here is the funny thing, in one sentence you issue a denial and in the next you double down on your claim that the “official” unemployment rate is unimportant and doesn’t reflect the health of the economy. That is crazy Billy T.

The 6.5% Fed unemployment rate target was not an ultimate target for the Fed but an indication of when the Fed would begin reversing its bond purchases. Additionally, there is nothing subversive or misleading about the “official” unemployment rate. The way the Bureau of Labor Statistics is very clear and very appropriate. The important number is the unemployment rate, and not the labor participation rate. That is why everyone pays a lot of attention to the unemployment rate, and not much attention to the labor participation rate. Conspiracy buffs, partisans (i.e. Republicans), and the uniformed like to put way too much into the labor force participation rate. The labor participation rate is falling because of demographic changes. It’s normal and expected. Labor force participation rate does not measure aggregate demand, the unemployment rate does and that is why the unemployment rate is more important and will always be important as a measure of economic health. The other important measure of economic health is GDP.


The unemployed rate is basically

Number of unemployed people/labor force

When unemployed people drop out of the labor force, they are subtracted from both the numerator and the dominator of that equation. The impact on the unemployment rate is nil.

This is another clear example of what I am talking about - a denial followed by a doubling down. You cannot have it both ways Billy T. And as I said before the 6.5% ”target” wasn’t a target but the unemployment rate at which the Fed would begin reducing its bond purchases and low and behold, contrary to your predictions, the Fed has begun to reduce its bond purchases.

Well, being more well-known isn’t saying much. The author you referenced to support your contention that the "official" unemployment measure is not a good measure of the economy, Matthew Yglesias, is a political blogger who has NO formal training in economics or business and is most well-known for the misspellings in his blogs.

Unfortunately most people have little understanding of economics or business and that makes it ripe material for the uninformed and the demagogues.