Gay Patriot Header Image

Democrat Mayor to Unemployed Blacks: Sucks to be you.

Black teen unemployment rate in Chicago: 92% (Not an exaggeration)

Democrat Mayor of Chicago: “Let’s give city jobs to illegal immigrants.”

Sorry Blacks. Illegals are hot, and you are not.

Thought for the day

We live in a world where the central bank (Fed) *rigs interest rates low, in order to rig debt levels and asset prices high* as they can possibly go.

I know it’s abstract and I comment on it ad nauseum, but I’m not sure it can be over-stressed. It has lots of bad effects.

  • You think homes are unaffordable, compared to (say) 20-40 years ago? Guess why home prices aren’t a good deal lower. (There are many reasons – but try guessing the biggest.)
  • Feel hopeless about your ever retiring? Take a guess why retirement income is hard to come by.
  • Feel like you struggle to make ends meet every month, while wealthy people (having lots of financial assets) keep doing better and better? One more guess why.
  • Feel like new, good jobs are impossible to come by? The Obama administration (including Obamacare) is a big drag, there. But the Fed doesn’t exactly help.
  • Feel like the stock market is a crazy bubble again? Feel like we learned nothing from the 2008 crisis, and our economy is still much too ‘financialized’ and debt-ridden? Again, many causes – but one guess as to the top cause…

Interest rates are the most important price in the economy. They should be set by the People in free markets. I see no reason to have a Politburo which plans them – and plans them badly, in ways that injure society.

Dumb People Talking About Gold

Posted by V the K at 7:05 pm - April 5, 2014.
Filed under: Depression 2.0,Economy,Random Thoughts

I am mainly posting this as palate cleanser between outbreaks of gay fascism (yeah, they’re only going to get worse after the Mozilla thing). Also, I want to see if it makes Jeff’s head explode.

YouTube Preview Image

And suddenly, HFT

I never knew that Casey Kasem was the voice of Shaggy. But I digress.

CBS recently did a good piece on High Frequency Trading (HFT), a means by which well-connected computers churn the stock markets and skim the cream. 15 minutes, here it is:

But a few things are odd about HFT as a story, or at least noteworthy.

First: the curious absence of government involvement. HFT has been going on for years (Zero Hedge started blogging it in 2009). Where have the vaunted government regulators been, all this time? Answer: Nowhere (until right now, as we’ll discuss in a minute).

The CBS piece praises Brad Katsuyama, a trader who figured out years ago how HFT works and founded a new exchange, IEX, to try to defeat HFT. That’s a great example of private enterprise being ahead of the regulators.

In fact, private enterprise has run circles around the regulators; first by creating HFT, then by being years ahead of government in working to defeat HFT. Could it be that government regulation isn’t effective? (cough)

The mainstream media’s absence from the HFT story until now (2014) is also striking. And that brings us to the second oddity: the timing of the CBS story. As if by magic, within days of its airing, we have also had announcements that the FBI will finally probe HFT. And that Goldman-Sachs will back IEX, the new HFT-free exchange. (Update: And the pr0n-watching SEC finally, also, investigating.)

I’m old enough to recognize a co-ordinated campaign. Granting that HFT is a real story, I still must speculate that the reason why HFT is suddenly on our collective lips, under investigation, etc., is because somebody powerful finds it convenient, at this time. (Where in the previous five years, they didn’t find it convenient.)

Who is that somebody? I don’t know. I did just note that Goldman-Sachs is rolling with the punches, at least. Over at Zero Hedge, they speculate that HFT is now being set up as the scapegoat for a coming stock market bubble-crash. The Federal Reserve is (by its QE, ZIRP and many other policies) the biggest market-rigger of all. The Fed has engineered the stock market bubble of the last five years. And, when that bubble bursts eventually, the Fed will want us all to blame something or someone else.

UPDATE: On CNBC, Katsuyama and a (truly obnoxious) pro-HFT guy get down-n-dirty. Good times.

This is who leads us

Posted by Jeff (ILoveCapitalism) at 11:21 am - April 1, 2014.
Filed under: Debt Crisis,Depression 2.0,Economy

Janet Yellen, who is President Obama’s new chair of the Federal Reserve Bank (Politburo that plans our economy), and who is thus the most powerful woman in the world, gave a speech yesterday where she bemoaned the fact that inflation isn’t high enough (in her view).

To humanize her speech, she told about three people who are long-term unemployed. If only there were enough inflation for these poor people to find jobs. It’s Yellen’s noble job to manipulate the economy until they can. But guess what? Two of the three have criminal records. Might that have anything to do with their unemployment?

One was Dorine Poole, who lost her job processing medical insurance claims when the recession hit.

“When employers started hiring again, two years of unemployment became a disqualification,” Yellen said in her speech yesterday to a community development conference in Chicago. “Even those needing her skills and employment preferred less-qualified workers without a long spell of unemployment.”

Poole was convicted of felony theft 20 years ago after she fell in with a “bad circle,” she said in a telephone interview…

Jermaine Brownlee, a skilled construction worker and apprentice plumber, “saw his wages drop sharply as he scrambled for odd jobs and temporary work,” Yellen said.

Brownlee said in a telephone interview that he was convicted of possession of heroin last year and currently is on parole.

OK, so was Yellen just caught by surprise? Did her speechwriter goof? Nope:

Yellen met personally with both people and knew about their records before the speech.

So basically, the most important person in our economy is determined to create inflation until she sees even the least employable people of all – namely, convicted criminals – in demand as employees. “Fasten your seatbelts; it’s going to be a bumpy night.”

CAVEAT: Lest the excitable accuse me of being a doomsday theorist (gasp!), I shall duly warn that in no way am I predicting instant hyperinflation as of tomorrow morning. In fact, for now, Yellen has officially adopted a less-inflationary stance as she “tapers” the Fed’s recent inflation-creating efforts. I have said “for now” and “officially”, because I think it’s Kabuki theater. As the Taper progresses over the next several months, it will cause markets to drop – whereupon Yellen will revert to full inflation-creating mode (gladly, under political cover). The point here, about her speech, is that it tips her hand.

A conversation I keep having with people

Posted by Jeff (ILoveCapitalism) at 3:58 pm - March 29, 2014.
Filed under: Debt Crisis,Depression 2.0,Economy

Other: How ’bout that economy?
Jeff: The U.S. dollar’s days are numbered. I don’t know when, but sometime in the next five years (and maybe even beginning as soon as this year), the dollar will be kicked out as the key world currency.
Other: That’s crazy. We’re Number One. Other countries need us to trade with.
Jeff: Not necessarily. In fact, it would be good for other countries to keep more goods for their own people, rather than sending them to us just for our crappy paper dollars.
Other: But dollars are how you, like, buy stuff. Countries will always need dollars.
Jeff: Why? They can set up payment and trade systems in their own currencies, without us. And stupid Obama is helping to push Russia, China and India together as we speak. That’s half the world.
Other: But Germany and Japan will stick with the U.S.
Jeff: Really? Why? Japan is a sinking ship. Germany isn’t, but Germany traditionally does business with Russia and China. They could wake up and re-align at any time.
Other: That’s crazy. Germany has been pro-U.S. for 70 years. They’ll never change.
Jeff: Hmm, why are you so sure?
Other: How ’bout them Niners? It’s been raining cats and dogs.

Now consider this news item: Bundesbank, PBOC in Pact to Turn Frankfurt Into Renminbi Hub.

Germany’s Bundesbank and the People’€™s Bank of China agreed to cooperate in the clearing and settling of payments in [China's] renminbi…

The central banks signed a memorandum of understanding in Berlin today…

“Frankfurt is one of Europe’s foremost financial centers and home to two central banks, making it a particularly suitable location,” said Joachim Nagel, a member of the Bundesbank’s executive board. “Renminbi clearing will strengthen the close economic and financial ties between Germany and the People’s Republic of China.”…

In a sign of closer economic ties between the two countries, China plans to open a fourth consulate in Germany…About 800 Chinese companies have bases in North Rhine-Westphalia, Germany’s industrial heartland…

German companies including Siemens AG, the country’s biggest engineering company, and Volkswagen AG are embracing the renminbi internally as a third currency for cross-border trade settlements…

This isn’t new; it’s a trend. China has been inking pacts with country after country in the last five years, so they can stop needing the U.S. dollar. That’s how and why the dollar is getting set for a fall.

I don’t think this trend has been reported much, in U.S. media. I try to spread the word, as I can. The U.S. has worsened its own problems in the last six years, and is moving toward some tough times. Get ready. Have your life in order: health & relationships fixed, debts paid, career solid. Also, don’t hide under a rock, but just in case things get really bad, consider maybe having some emergency supplies, gold and/or guns.

Don’t say you weren’t warned. Russia, China and India have problems too, but some (not all) of those problems stem from U.S. dominance and will be solved as they slowly re-organize the world in their favor.

Inflating the cost of retirement

Posted by Jeff (ILoveCapitalism) at 3:07 pm - March 24, 2014.
Filed under: Depression 2.0,Economy,Obama Incompetence

To retire, you need a regular income stream. For a lot of Americans, that’s Social Security. But many will tell you it’s not enough; plus you only get it in your 60s. What would it take for a person to retire on their own, today?

For that, you need investment income. Hopefully, you invest capital safely and live off the proceeds. Let’s take a lottery-ticket approach. Say you’re young (no Social Security for decades, and your principal needs to last, so no dipping into that). How much do you need to win in the lottery, to get $50,000/year of investment income?

This will be verrrry quick-and-dirty. Let’s simply assume that you keep your lottery winnings half in 5-year bank CDs, and half in a U.S. stock market index fund. I won’t bore you with the math. In brief, currently you’d get 1.55% from the 5-year CDs (per, and 1.88% from the S&P 500. It comes out to your needing roughly $2.9 million.

$2.9 million, just to yield $50,000/year. But what’s interesting is how this compares to times past.

  • 5 years ago (2009): the 5-year bank CD rate was around 3.5% (again per, and the S&P dividend yield was around 2.5%. You would have needed roughly $1.7 million.
  • 10 years ago (2004): the bank CD rate was around 3.5%, and the S&P dividend yield around 1.8%. You would have needed roughly $1.9 million.

Again, these numbers are just for a long-lived person to get themselves a $50,000 annual yield. A person in their 60s, collecting Social Security and/or dipping into their principal, would need rather less money. Especially if the stock market goes well (we know that always happens, right?) so they get some capital appreciation.

But here’s the point that applies to everyone: the kind of change we can see in the numbers.

  • Between 2004 and 2009, the cost of a $50,000 yield stayed roughly the same (going down 10% or so).
  • Between 2009 and today, the cost of a $50,000 yield has skyrocketed (up over 60%).

And that’s why tens of millions of Americans now feel like they can never retire. They can’t retire because the cost of getting X amount of retirement income (from bank CDs or stocks) has skyrocketed, in the last five years. Whatever their own “retirement number” was, big or small, suddenly they need much more. So they can’t retire, and keep working.

This is one dark side of market bubbles. The Federal Reserve’s ZIRP and “QE” policies are designed to make the financial markets go higher. A stock market bubble means, among other things, everyone paying more money for small (or nonexistent) yields. Higher bond markets mean lower bank CD yields. High real estate markets mean higher housing costs. The financial markets are roughly like your price tag for retirement. In the last few years, Obama/Bernanke/Yellen have pumped some giant inflation into them. It’s not a good thing.

And all of that is aside from the question of inflation in general: the fact that $50,000 today won’t buy you what it did 5 years ago. (Gasoline and medical costs, for example, are way up.) “Thanks, Obama!”

Obama, not fixing his Debt Bomb

Last week, President Obama released his new budget proposal, which in February he said would be the end of austerity. First let’s ask, what is meant by “austerity”? As a policy, was it ever tried?

As discussed by myself and others, “austerity” means tax hikes (not spending cuts) in practice. Lefties hurl the word “austerity” to demonize the idea of spending cuts. But few of the countries which left-liberals accused of cruel austerity in the last few years cut their overall government spending levels; the majority continued to increase spending. So spending cuts can’t explain those countries’ poor economic results. What can? Well, most of them raised taxes.

Clearly, we should end (or reverse) the tax hikes. That would be a great “end of austerity”. But Obama’s meaning is that we should undertake spending increases; which, for reasons touched on below, probably mean deficit increases.

Before going into Obama’s proposal, let’s review the current state of the U.S. budget. (more…)

The Full Faith and Credit of Our Monopoly Money

Posted by V the K at 6:51 pm - December 15, 2013.
Filed under: Depression 2.0,Economy

The Treasury Department appears to make a subtle concession of the impact of Obama’s massive public spending and Quantitative Easing policies on the value of the currency of the United States.


Why QE hurts the economy

Posted by Jeff (ILoveCapitalism) at 10:02 pm - November 21, 2013.
Filed under: Big Government Follies,Depression 2.0,Economy

Most of us know the term “QE” as the central bank’s euphemism for creating lots of new money, but if you are not sure, I have an explanation here.

Recently, President Obama nominated Janet Yellen as the new Fed chairman. She is expected to continue or increase QE. At her confirmation hearing, she said:

I consider it imperative that we do what we can to promote a very strong recovery. It’s important not to remove support [QE], especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases [QE]. Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.

Yellen’s comments are tragic because QE cannot and does not promote economic recovery. It does the opposite. Why is that?

Jobs come from something called the division of labor. It’s the fact that people can produce more when they specialize intelligently. A “job” is really a package of specialized tasks that an employer needs someone to do because the specialist can do more for less (or can help the whole organization to do more, etc.).

The superior productivity of specialized labor comes, in turn, from something called capital.

  • Productive capital is the accumulation of knowledge, tools, machines, organizations and infrastructure that enables human labor to be productively specialized.
  • And financial capital is the accumulation of money (cash, shareholders’ equity, savings, etc.) that will buy or develop productive capital and direct its motions.

It is crucial to understand that not all capital is created equal. It takes work, sacrifice, talent and vision to form productive capital. Capital can be invested badly (called malinvestment, which flourishes under QE and 0% interest rates). Thus, raw investment spending levels do not matter. Financially sustainable jobs come only from the capital which has been invested well, for productive success.

QE undermines productive capital. When Obama/Bernanke/Yellen print money, they devalue money; they make it buy less than it would otherwise. So the financial capital of successful business people doesn’t go as far. QE, and 0% interest rates, also kill the return on capital: the incentive to use it very carefully (productively). Thus, QE messes up the economy’s capital, making financial capital perversely less effective for good projects and more available for bad projects, a toxic mix that injures the division of labor (the creation of economically efficient, valuable jobs). It’s as if the economy is on a narcotic and gradually getting more stupid.

The way it looks to businesses is: They thought they had some good capital, but now their capital doesn’t go as far. Everywhere they look, costs are a little higher than projected (or much higher, in the final stages of QE). Simultaneously, at 0% interest their marginal (unproductive) projects look better than those projects are. For both reasons, businesses’ capital is wasted. It somehow doesn’t go as far on their good projects – at the same time they’re tending to either idle it, or blow it on bad projects.

Businesses then need to squeeze out greater financial profits just to maintain their capital base. They do it by hiring fewer people. Some businesses seem very healthy (high-profit) after their job cutbacks. But fewer new businesses are started, and the healthy ones tend to grow by merging with (or buying out) competitors, which lowers employment. The overall economy either stops growing, or grows in unhealthy directions. The unemployed survive on government aid (which is surprisingly plentiful), while stories abound of people who ‘score’ with speculative investments, which tend to rise.

Does all that sound like the world we live in? Yes! Remember: The price of gasoline, the stock market, and the welfare/disability rolls have all roughly doubled in Obama’s reign so far. While new jobs have been far harder to come by. QE enables (at least) those disparate effects.

To be clear, QE is not the only reason Obama’s recovery has been lame. Other Obama policies also increase the cost of employing people, and other costs that businesses face. But QE doesn’t help; it adds to the economy’s burdens.

If you can think of a country that has emerged into vibrant economic recovery because of their doing large-scale QE, please post it in the comments. I haven’t been able to think of an example. And Japan, which has been doing QE since the 1990s and now faces rising costs, clearly isn’t an example. Neither will we be one.

Recovery for the One Percent: Record inequality

To “celebrate” Dow 16000 and S&P 1800, both of which the stock market just hit intra-day, I’ve gathered a few links on rising economic inequality in the U.S. A few remarks first, to set context.

As a capitalist, I have no problem with inequality – when it comes about for the right reasons, that is, when sovereign consumers have awarded it by their actions in free markets. The problem is that, under President Obama, we have inequality for the wrong reasons.

Obama puts government in control of more and more of the economy, and he has the Federal Reserve bailing out the biggest players on Wall Street (as well as the government) and goosing the financial markets ever higher. That doesn’t come for free.

Whenever someone is bailed out, somebody else was “bailed in”; somebody else lost wealth (or purchasing power). Obama’s policies stealth-transfer it from the wages, pensions, savings and balance sheets of productive people to those who happen either to (1) receive government spending, or/and (2) own financial assets (stocks, bonds, etc.).

Many of those are productive people; but many are not and, in any event, everyone should have to earn wealth the real way, by pleasing their employer or their customers in the market. None merit bailouts. No one deserves government-orchestrated wealth transfers (stealthy or otherwise). No one.

I want small government, natural rights under Rule of Law, sound money and free markets because they are both moral and populist. They form the only moral social system (the only system that lets people be free and doesn’t steal from them, or enslave them). And, as a consequence of being moral, they form the only practical system where masses of deserving poor and middle-class people can and will get ahead.

The Big Lie of Leftism is that leftism somehow stands for the People, or the little guy. It doesn’t. As we see today with President Obama’s policies, producing a result of record inequality – for all the wrong reasons.

OK, now for some data. First, via Marc Faber and Zero Hedge, here is household net worth by wealth percentile:

household net worth by wealth percentile

You can see that, in the last six years, the share of wealth held by the bottom 75% has plunged from 12.7% to barely 10%. (more…)

Recovery for the One Percent (take 3)

I got onto this idea last May; for take one click here, and for take two click here. My key notion:

Even as I read about the stock market making new highs, I keep reading about more Americans on food stamps than ever before, more Americans quitting the workforce, old people who can’t get a decent income…business people who can’t start businesses…This is in Obama’s fifth year. Whom is Obama’s economic recovery for?…

Obama’s policies benefit the Big Government – Big Banking – Big Labor elites – in that order of seniority…[so] Why aren’t we all laughing in Obama supporters’ faces, when they pretend to stand for the People?…

Part of President Obama’s toolkit to benefit the One Percent is the Federal Reserve’s ‘Quantitative Easing’ policy, which I have explained (and slagged) many times; for example, here and here.

Nothing has changed since May. Now a former Federal Reserve official, Andrew Huszar, explains – and apologizes:

Confessions of a Quantitative Easer

I can only say: I’m sorry, America…I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

As I’ve been saying for years! Except that, even more than a Wall Street bailout, QE is also a Big Government bailout. Whether the Fed buys Wall Street’s mortgage bonds, U.S. Treasury bonds, or anything else, the new money sooner or later funds the government’s spending and deficits, including Obama’s $6 trillion (and rising) of additional U.S. debt.

Although Huszar’s piece neglects the Big Government angle (focusing almost exclusively on the Wall Street angle), it gives some interesting color and is worth reading in full.

UPDATE: If you prefer wonky video, CNBC interviews Huszar here.

U.S. minimum wage is high, already

If the “science” of economics has two consistent findings, they are:

  1. Rent control doesn’t work. It only leaves a city’s rental market more messed up and expensive than ever before. And,
  2. Raising the minimum wage is a great way to raise unemployment, denying jobs and hope to the poor, the young, and other relatively unskilled people.

Do left-liberals care? Noooooo. With their unreasoning devotion to Big Government as Fantasy-Mommy-Daddy Which Picks Our Food From Unicorn Bushes, they continually advocate both rent control and minimum wage hikes.

But the U.S. already has a fairly high minimum wage, as shown on this neat-o infographic from ZH:

Hourly minimum wages around the world, adjusted for Purchasing Power Parity

Note that Australia’s vaunted minimum wage is under $10, in real terms (adjusted for PPP). Add in the fact that Australia is actually a freer country than the U.S. – #3 for economic freedom, where the U.S. under Obama has sadly sunk to #10 – and a resource-producer for China, and one can see why Australia has not had more glaring damage from their minimum wage…yet.

I’m sure that Nancy Pelosi, Barbara Boxer and others will not rest until the U.S. is “Number One!” in minimum wage – and in unemployment.

Rigging the GDP statistics

Posted by Jeff (ILoveCapitalism) at 5:06 am - August 5, 2013.
Filed under: Debt Crisis,Depression 2.0,Economy,Liberal Lies

I’ve commented before on how the government has changed its methods over the years for calculating the economic stats, to make itself look better.

For example, consumer price inflation has been running about 8-9% per year under the 1980 method. I don’t claim the 1980 method is right; but the government claims only 1% CP inflation from its newer methods, and that number violates many people’s first-hand experience of rising prices and declining living standards.

Or with unemployment: by 1930s methods, it has been running 15-20%, which means we are already in the Great Depression 2.0. Again, I don’t view the older method as sacred; but that number fits many people’s experience better (as they have been forced into permanent unemployment, part-time work, etc.) than the government’s claim of 7.4% unemployment.

The people who change the statistical methods always have excellent-sounding reasons. There’s just one problem. Their changes always run in one direction, to make the government look better.

Somehow, they never adopt changes that could make things look worse. The latest example is GDP (Gross Domestic Product). Last week, the government published new data from new formulas for calculating GDP.

Guess what? The changes make the government look better. Suddenly, America’s GDP is supposed to be $550 billion higher. Which improves America’s debt-to-GDP ratio magically; that is, even though nothing has changed in reality.

But some of the changes they made are unreal, almost too silly to believe. The first ZH link above provides neutral-sounding descriptions from Bloomberg. Peter Schiff gave clearer and more colorful descriptions, in a preview back in April: (more…)

“4 in 5 in USA face near-poverty, no work’

Posted by Jeff (ILoveCapitalism) at 4:21 pm - August 2, 2013.
Filed under: Depression 2.0,Divider-in-Chief,Economy

…at some point in their lives. From an AP / USA Today article earlier this week:

Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives…

Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.

More than one angle here is worth exploring, and I may do so in future posts. But for now, I’ll try to keep it brief.

Most obvious (and important) is the simple failure of President Obama’s economic policies. It’s not a matter of giving him more time; he’s had more than four years. The problem is that his policies can never work, because they are the wrong policies.

As a committed leftist, the man simply does not understand how the real economy works, how the American middle class came to be, or what produces good jobs and rising living standards for large masses of people.

Obama gave a speech on the middle class this week which was as misguided as any he’s given, and which I may review later in more detail. For now, let’s just say that Obama’s Big Government, debt-inflating policies are the thing causing the conditions that he decries (rising wealth inequality, loss of manufacturing jobs, etc.).

Another possible angle, on the above article, is race – specifically, “the stupidity of race” (as I almost titled this post). Because it goes on to be fairly obsessed with race, saying: (more…)

Living in the present in challenging times

Several of my Facebook friends like to post inspirational and thought-provoking quotes on a regular basis.  Two or three of them have recently posted a quote which has been attributed to Lao Tzu which reads:

If you are depressed you are living in the past.
If you are anxious you are living in the future.
If you are at peace you are living in the present.

As someone who has lately been bouncing back and forth between these states of mind, I can appreciate the essential wisdom of the quote.  Most of my feelings of depression lately have been spurred on by my regrets about things I wish I had done differently in my life, and so in that regard, they are an instance of dwelling in the past.  Most of my anxiety stems from my concerns about where our country is headed under its current leadership (or lack thereof), and my feelings of uncertainty or even paralysis as to what is or should be the best path for me to take from this point forward.  The more I think about it, the more overwhelming the many different options start to become.

Partly because of the circumstances which have fueled both my recent feelings of depression and of anxiety, I also have to wonder whether or not the “living in the present” endorsed by the quote is really so desirable after all.  When things are going well, yes, that sounds ideal, but isn’t there the risk of a sort of complacency which can result in self-indulgence, lack of ambition and disengagement?
I thought of these points and more yesterday when Glenn Reynolds linked to a post by Sarah Hoyt entitled “If You Don’t Work, You Die.”  In the post, Hoyt reflects on the importance of what she refers to as envy and striving for growth and life, which, to my mind suggests a certain resistance to complacency.  She reflects on an experiment in Denver in the 1970s with a guaranteed minimum income and the finding that a certain segment of the population was content to live on it and to stop striving to better their lives, and she speculates that it is partly an inherited trait which had value in the conservation of social energy.  The part of the post that fascinated me the most was when she described herself in the following terms:
Some of us are broken.  We were given both envy and high principles.  We can’t even contemplate bringing others down to level things, but instead we work madly to increase our status.  (No, it’s not how I think about it, but it’s probably what’s going on in the back of the monkey brain.)  Most of humanity however is functional.  Give them enough to eat, and a place to live, and no matter how unvaried the diet and how small/terrible the place, most people will stay put.
It seems to me that she has hit on something crucial there because although I’m often tempted to focus on being content with things the way are, every so often something happens to jar me from that state of mind, either by making me feel depressed or anxious or by throwing me off balance completely with some new dream or hope.
I’d like to write more about the disruptive power and potential value of such dreams, but for the time being, I’d like to pose a question for our readers.   When we live in difficult and challenging times, how can one try to remain “in the present” without falling into complacency or without becoming disengaged from the sorts of issues and problems that threaten to make existence even more trying and difficult?

Today’s history lesson: Eighty years ago…

Posted by Jeff (ILoveCapitalism) at 2:54 pm - June 22, 2013.
Filed under: Big Government Follies,Debt Crisis,Depression 2.0

Via The Circle Bastiat. Franklin D. Roosevelt, greedy to increase his power over Americans’ economic lives, confiscated their gold bullion & currency. People who wanted to keep their own money (because gold and gold-backed notes had circulated as U.S. money, until then) were labeled “slackers” and “hoarders”, then prosecuted:

New York Times, 6/12/1933, on gold 'hoarders'
You can see a clearer, larger image of the article here. Those who cooperated received, for the most part, only partial compensation (paper dollars which Roosevelt then devalued, the next year).

Such a confiscation would have been unthinkable to America’s Founders. They revolted against King George III for less. Are property confiscations part of America’s future under Obama? Time will tell.

After establishing the Constitution, the Founders fixed the U.S. dollar as being just under 1/20 oz. of gold, because paper-money experiments during the Revolutionary war had taught them that sound money was a crucial element of a sound, free and prosperous society. That 1/20 oz. value guided the American economy for roughly 140 years, through the greatest net economic expansion in human history.

Beginning with Roosevelt (who, again, confiscated the gold dollars, then devalued the paper ones from an official gold value of 1/20 oz. to around 1/35 oz.), the dollar’s value has dwindled, as the government taxes us all covertly by printing more and more money.

Americans regained the right to own gold bullion in 1974, but the dollar has remained mere paper. On average (or with some ups and downs), its value continues to dwindle. The dollar’s market value in gold was roughly 1/250 oz. when Bush 43 took office, 1/800 oz. when Obama took office, and is near 1/1300 oz. today.

I believe that further depreciation is to come.

What’s up with the economy?

Posted by Jeff (ILoveCapitalism) at 2:41 pm - May 12, 2013.
Filed under: Depression 2.0,Economy

If the economy is getting better, why do so many people feel they’re struggling?

On the positive side: The official data say that we’ve had some growth in jobs. And, while the federal deficit is still high, it has begun to drop (due both to rising tax receipts, and the GOP’s insistence that we have at least some fiscal discipline). And the stock market is making new highs.

On the negative side: The growth in jobs is so anemic that if a Republican were president, the media would be screeching nonstop about the “jobless recovery”. And the stock market’s rise flies in the face of weakening fundamentals, suggesting that the rise is just a “bubble” process (or a process of inflation).

Moreover, as Peter Schiff writes, imports are dropping while real consumer costs rise, which fits a pattern of declining living standards (people having to spend more on necessities). His argument is long, but worth considering:

Tyson Foods…announced that although their top line sales revenue increased by almost 2% (roughly in line with U.S. GDP growth), operating margins collapsed by almost 50%, leading to a 43% decline in profit. Consumer shifts away from relatively higher priced/higher margin beef and pork products to lower cost/lower margin chicken products were to blame….

According to government statisticians, the Tyson announcement would reveal modest growth and low inflation. After all, revenue at the company grew and spending on their products had increased modestly. But rising prices were obscured by consumers purchasing lower quality products. Not only are consumers avoiding the beef and pork that they otherwise may have preferred, but they are opting out of the convenience of prepared foods…This is known as getting poorer.

The trend corresponds with the steady increase in the share of income that Americans devote to food and energy…in 2002 Americans spent about 17.8% of income on food and energy. In the first quarter of 2013 the share had risen…to 21.3% of income…In the poorest countries almost all of income is devoted to such things.

…[A sharp drop in imports has meant that] our trade deficit with China in March dropped by a whopping 23.6%…[but overall] personal spending [still rose] in March. If we are buying less stuff from abroad, where are Americans spending the extra money? …Americans are buying fewer Chinese products because they are spending more money on food, rent, utilities, healthcare, insurance, and other necessities that can’t be imported. Again, this is consistent with a falling standard of living…

The combination of these symptoms suggests that the extent to which people are being impoverished by accelerating inflation is not reflected in official government measurements. This explains why unemployment remains high even as GDP appears to rise…the unprecedented expansion of the money supply under the current Fed leadership is pushing up prices for stocks, bonds, real estate, and consumer goods. Market indices neatly capture the price increases for all of these categories except for the latter, which has been concealed by an overly adjusted CPI.

If consumer inflation data were reported more accurately, it would be revealed that much of the apparent growth is an illusion.

Name that Obama-era affliction

In a previous post, I wrote about Obamacare Schadenfreude, that feeling of amusement when some ardent supporters of Obamacare realize that that monstrous piece of legislation will have negative consequences for them or for causes about which they claim to care.  I was reminded of that post again yesterday when I heard that one of the authors of Obamacare, Max Baucus (D-Montana), complained that the implementation of Obamacare was going to be a “huge train-wreck coming down.”

Likewise, a little over a week ago, Jay Rockefeller (D-West Virginia) complained about the incomprehensible complexity of the law:  “‘I believe that the Affordable Care Act is probably the most complex piece of legislation ever passed by the United States Congress,’ he said, as quoted in the Washington Examiner. ‘Tax reform obviously has been huge, too, but up to this point it is just beyond comprehension.’”  My response to both Senators is simply to respond:  well, isn’t that just too bad.

Today, though, I’d rather write about another Obama-era affliction which I’ve been suffering with since late January 2009.    It is something akin to depression, and it is brought on or exacerbated by the daily outrages resulting from this administration’s policies.

Sometimes it boils up to anger which gives me more energy, but at other times I feel listless and unmotivated or even hopeless.  At times, I get by just focusing on the routines and necessary activities of my daily life, but sometimes even those feel like a burden.  Writing about the issues can be therapeutic, though there are many times when I’d rather not think about them at all.

So what to call this condition?  “Obamalaise” came to mind, but I think others have used that to describe the lingering weakness in our economy.

I also thought of “Obama Weltschmerz.”  That conveys the angst and depression, and I like the fact that, like Obamacare Schadenfreude, it uses a German word.  As I see it, the use of a German word helps to communicate my sense that Obama’s America feels like it’s headed towards the sort of economic collapse which characterized Weimar Germany.

Maybe that’s too dark.  “Obamanomie” communicates a sense of impending social instability and alienation.  That might get at the matter a little better, though it’s perhaps even more depressing to think about.

In any case, I know I’m not the only one suffering with this condition.  I suspect many of our readers are, too.  What would you call it?

Obama’s Salary Cut in Perspective

Posted by Bruce Carroll at 10:53 pm - April 3, 2013.
Filed under: Depression 2.0,Economy,Obama Arrogance

This is a pretty good website to illustrate how awesome it is that King Barack I is taking a whopping 5% pay cut.


-Bruce (@GayPatriot)