One of the most pessimistic and grim signals that little light is at the end of the tunnel is the almost complete absence, of people who actually saw this financial crisis coming-- and there were many, in positions of power or anywhere near it.
The chance that the recent move to put two major, insightful critics of current policies on a CBO advisory panel in even a window dressing capacity is heartening. The chances that, they will be listened to is however very slim since most of them are far too honest about the government and Fed's true role in causing this mess.
Found out about this on Bearish News.
One of my biggest gripes with people like Sean Hannity and Rush Limbaugh is how rarely they interview true economists like Peter Schiff, Jim Rogers, Nouriel Roubini and Simon Johnson. This has let the statist media to imply that few intelegent educated experts agree with many of their views, when in fact hundreds of major economists and analysts are critical of current policy.
I actually, don't have cable, but from what I can tell, Glenn Beck does a much better job.
Thursday, April 30, 2009
Homestead: The Glory and Tragedy of an American Steel Town part 2
This is part two of a post originally on the Pittsburgh Arts: Digging Pitt blog
"The corporation was said Life in 1946, "the most fabulous giant yet produced by the industrial revolution." Steel was the basic metal on which the development of America, and the building and rebuilding of the post war world, depended. The steel making facilities in Germany and Japan had been destroyed in the war and those in Great Britain substantially damaged. since no other countries had had a sizable steel industry, the corporation and the rest of the American steel industry faced almost no competition. There were no steel imports to America and American companies dominated the export trade."
The result was astronomical profit and sleepy complacency. "In 1950, the corporation produced 31.4 million tons of steel, surpassing it's war time high of 30.8 million tons per year. It's workforce in 1950 reached 288,265, the highest level in it's history except for the war years. Profits were immense. In 1950, the corporation made 215 5 million (that was real money back then folks-- multiply by something like 20 to come up with what that equals today) three times 1946 earnings and the largest amount since 1917, during World War I, when earnings were 224 million."(Page 243)
In spite of a string of additional acquisitions, mostly of new plants built during the war and the clear intent to create a safe monopoly environment, U.S Steel's market share had dropped dramatically from the 65% it had at it's creation to 33% in 1950. The company's lazy nature breed competition from smaller American firms like Bethlehem and Republic and also soon from a few foreign competitors. The basic oxygen furnace was developed in Austria, but there was no need to worry and more than enough business to go around.
And, the workers and their union's shared the prosperity with substantial wage increases in the 1947 contracts as well as new efforts to study plant safety and provide worker health plans. The succeeding contracts grew ever more generous and the once militant union grew into a stagnant giant resembling the industry it operated in.
It seemed like the problems of production had been "solved" once and for all. The plants were looked at as giant money trees that could never die or fail and perhaps could bear fruit with little water or fertilizer. The big issue was sitting down and sharing all the fruit. Investment and invention were a dangerous, disruptive hassle, best left to somebody else. New foreign mills adopted continuous casting technologies and new management methods based on continuous improvement. In fact, most USS plants were running on obsolete equipment, but that wasn't seen as an important issue like providing higher and higher salaries and increasingly large health and pension benefits for which to little was set aside. The patient was fat, happy and terminally ill. The union and management wanted one thing--- stability and a nice even lifestyle free of change or strikes.
A new sick culture had developed in the mills."The notion of "getting it at the mill", was now a way of life---pencils:toilet paper; hammers, wrenches, pliers and screwdrivers; nickel, brass and other metals which could be sold to scrap dealers--- almost anything people wanted, they took, blue collar and white collar workers alike." Some workers slept on the job and golf became the universal path to success among management.
"The 1963 contract contained a new item-- an extended vacation plan that gave every worker with more than five years of service a thirteen week vacation with pay every five years. The plan was extremely costly and no other American industry had anything like it. But it was, for the most part, not questioned and highly praised." One worker called the situation in the early 1970's as " harvest mode". " Take everything out you can get and abandon the rest. And when you just take out and don't put anything back in, well pretty soon your holding pieces together with baling wire." The truth is that the company was eating it's seed corn leaving future workers to starve. The union's new goal was "total job security". The only path to anything close was producing the best possible products at at the lowest possible prices and it which hadn't been a priority in years.
A few years later when the reckoning came, both labour and management bent over backwards to act shocked at the company's condition and to shift the blame. Kind of looks like America today, doesn't it? We were in harvest mode for too long, most of our seed corn is gone and if we don't wake up we will starve.
"The corporation was said Life in 1946, "the most fabulous giant yet produced by the industrial revolution." Steel was the basic metal on which the development of America, and the building and rebuilding of the post war world, depended. The steel making facilities in Germany and Japan had been destroyed in the war and those in Great Britain substantially damaged. since no other countries had had a sizable steel industry, the corporation and the rest of the American steel industry faced almost no competition. There were no steel imports to America and American companies dominated the export trade."
The result was astronomical profit and sleepy complacency. "In 1950, the corporation produced 31.4 million tons of steel, surpassing it's war time high of 30.8 million tons per year. It's workforce in 1950 reached 288,265, the highest level in it's history except for the war years. Profits were immense. In 1950, the corporation made 215 5 million (that was real money back then folks-- multiply by something like 20 to come up with what that equals today) three times 1946 earnings and the largest amount since 1917, during World War I, when earnings were 224 million."(Page 243)
In spite of a string of additional acquisitions, mostly of new plants built during the war and the clear intent to create a safe monopoly environment, U.S Steel's market share had dropped dramatically from the 65% it had at it's creation to 33% in 1950. The company's lazy nature breed competition from smaller American firms like Bethlehem and Republic and also soon from a few foreign competitors. The basic oxygen furnace was developed in Austria, but there was no need to worry and more than enough business to go around.
And, the workers and their union's shared the prosperity with substantial wage increases in the 1947 contracts as well as new efforts to study plant safety and provide worker health plans. The succeeding contracts grew ever more generous and the once militant union grew into a stagnant giant resembling the industry it operated in.
It seemed like the problems of production had been "solved" once and for all. The plants were looked at as giant money trees that could never die or fail and perhaps could bear fruit with little water or fertilizer. The big issue was sitting down and sharing all the fruit. Investment and invention were a dangerous, disruptive hassle, best left to somebody else. New foreign mills adopted continuous casting technologies and new management methods based on continuous improvement. In fact, most USS plants were running on obsolete equipment, but that wasn't seen as an important issue like providing higher and higher salaries and increasingly large health and pension benefits for which to little was set aside. The patient was fat, happy and terminally ill. The union and management wanted one thing--- stability and a nice even lifestyle free of change or strikes.
A new sick culture had developed in the mills."The notion of "getting it at the mill", was now a way of life---pencils:toilet paper; hammers, wrenches, pliers and screwdrivers; nickel, brass and other metals which could be sold to scrap dealers--- almost anything people wanted, they took, blue collar and white collar workers alike." Some workers slept on the job and golf became the universal path to success among management.
"The 1963 contract contained a new item-- an extended vacation plan that gave every worker with more than five years of service a thirteen week vacation with pay every five years. The plan was extremely costly and no other American industry had anything like it. But it was, for the most part, not questioned and highly praised." One worker called the situation in the early 1970's as " harvest mode". " Take everything out you can get and abandon the rest. And when you just take out and don't put anything back in, well pretty soon your holding pieces together with baling wire." The truth is that the company was eating it's seed corn leaving future workers to starve. The union's new goal was "total job security". The only path to anything close was producing the best possible products at at the lowest possible prices and it which hadn't been a priority in years.
A few years later when the reckoning came, both labour and management bent over backwards to act shocked at the company's condition and to shift the blame. Kind of looks like America today, doesn't it? We were in harvest mode for too long, most of our seed corn is gone and if we don't wake up we will starve.
Tuesday, April 28, 2009
Homestead: The Glory and Tragedy of an American Steel Town
This was originally posted by me on Pittsburgh Arts: Digging Pitt last year. It seems very relevant to understanding the similar position the car industry is now in.
I had a long list of books related to the region's history and culture, I wanted to get around to reading. One of them that, I'm so glad I got around to was a 1992 book called Homestead: Tragedy of an American Steel Town. It was written by a the former labour and workplace corespondent of the NY Times during the tragic and tumultuous years between 1979 and 1986 which saw the death and near death of much of industrial America. The writer's deep association with the industry and committed work talking to people in the town over many years really pays off.
The first few chapters and the last are in some sense, not that interesting to me---The massive pain of catastrophic job loss in all it's devastation are laid out in painful detail. Several other chapter's paint a vivid picture of the incredibly tough and insanely dangerous life in one of the world's largest steel mills-- a place where the author estimates more than 1000 workers lost their lives in the the works more than 100 year history.
The middle of the book holds a somewhat more dry but clear and concise history of both the massive Homestead works and the company of which it was a central part-- U.S. Steel as well as the birth of the American labour movement.
While, Pittsburgh had been a central part of the American iron, glass and industrial history almost from it's birth, the scale of the massive industrial complexes in the Mon Valley that kicked off with Carnegie's Edgar Thomson works in Braddock in 1873 were unprecedented. Carnegie copied the new Bessemer process used by a few new English mills, to build a company marked by an almost brutally competitive nature, quick to innovate in new technologies, aggressive in sales and driven to be the lowest cost producer. Soon other mills followed, opened by both Carnegie and a host small host of other operators. The business was very tough on everyone and required massive amounts of upfront investments in fixed capital. Miscalculations in projected demand or disruptive new innovations can and did bankrupt many, but the potential profits were huge. Workers in a Carnegie Mill and most competitors worked 12 hour shifts, six or seven days a week. Not surprisingly, both the managers, investors and workers dreamed of an easier way.
Carnegie bought the new Homestead mill across the river from Braddock from it's financially strapped competitor and and in a few years new mills were built by Carnegie in nearby towns on the Mon as many of the smaller competing mills were bought out and consolidated into companies controlled by JP Morgan. The stage was set for a tragedy that few saw coming. Carnegie was ready to retire from the brutally competitive industry he had worked so hard to dominate through pricing and relentless innovation that Morgan's mills couldn't keep up with. " Although he was regarded as the archetype of the American capitalist, Morgan was in many ways not a capitalist.... as as Joseph Frazier Wall wrote: " He did not really believe in the free enterprise system.. Like most ardent socialists, he hated the waste, duplication and clutter of unrestricted competition". It was for this reason that he had been so intoxicated by Schwab's portrayal of a combined, efficient steel industry."
Morgan made Carnegie an offer of a massive payment in gold for Carnegie's mills to create a company controlling 65% of the existing industry and once and for all stop the unpredictable, competitive free for all and replace it with a stable comfortable and reliable business that would run almost as a perpetual machine. The deal was done and most of the rest of the book deals with the results. The combined company seemed indestructible and the only central issue seemed to be one of dividing the profits among the owners and also increasingly with the workers. Problem solved-- capitalism was just too much work!
"By 1936, the stagnation at U.S. Steel was such that Fortune magazine "recalled that the Corporation's policy had once been summarized as 'No inventions: no innovations'" (p. 132) and Charles M. Schwab reported that "the chairman of US Steel admitted to him that the Corporation, in fact, had missed every 'new thing' in steel" (p. 132). Under Carnegie's reign, Pittsburgh-based steel facilities had competed successfully against growing location-based advantages of other regions by relying on innovation, efficiency, and superior management. U.S. Steel under Gary did participate in the geographic dispersion of American steel-making but its "Pittsburgh Plus" pricing (an artificial attempt to exercise industry price discipline by linking prices across America to steel prices in Pittsburgh plus freight from Pittsburgh) led to a hobbling of the corporation's growth into new markets and eventually shrank the region in which Pittsburgh-area steel was competitive. Even in its infancy, U.S. Steel was an illustration of inertia and captivation by sunk-cost investments."
A further quote from an industry expert was even more honest about the results.
"Actually the operation of basic processes has not changed significantly in either theory or fundamental design of equipment in the past 75 years. While automobiles were being made better and cheaper with ever newer processes.... tonnage steel as distinguished from the specialty or the alloy steels grew neither cheaper or better"
Charles Ramsayer 1935
Much of the rest of the book deals with the struggles of workers to attain a larger and larger share of company output. In fact-- it sort of looks as if distribution of profits was the primary thing people thought about more and more as the years went on. The post WWII period ushered in what seemed like a golden age, culminating in what were increasingly cosy relations between workers and management. There was more than enough money to go around, seemingly little prospect of competition from abroad and no need to sweat. The company spent big-- but rarely, if ever took the lead and often built new plants and expansions with equipment that was obsolete from the start.
Anyway, great book, well worth reading. I hope to get back with more thoughts about it.
I had a long list of books related to the region's history and culture, I wanted to get around to reading. One of them that, I'm so glad I got around to was a 1992 book called Homestead: Tragedy of an American Steel Town. It was written by a the former labour and workplace corespondent of the NY Times during the tragic and tumultuous years between 1979 and 1986 which saw the death and near death of much of industrial America. The writer's deep association with the industry and committed work talking to people in the town over many years really pays off.
The first few chapters and the last are in some sense, not that interesting to me---The massive pain of catastrophic job loss in all it's devastation are laid out in painful detail. Several other chapter's paint a vivid picture of the incredibly tough and insanely dangerous life in one of the world's largest steel mills-- a place where the author estimates more than 1000 workers lost their lives in the the works more than 100 year history.
The middle of the book holds a somewhat more dry but clear and concise history of both the massive Homestead works and the company of which it was a central part-- U.S. Steel as well as the birth of the American labour movement.
While, Pittsburgh had been a central part of the American iron, glass and industrial history almost from it's birth, the scale of the massive industrial complexes in the Mon Valley that kicked off with Carnegie's Edgar Thomson works in Braddock in 1873 were unprecedented. Carnegie copied the new Bessemer process used by a few new English mills, to build a company marked by an almost brutally competitive nature, quick to innovate in new technologies, aggressive in sales and driven to be the lowest cost producer. Soon other mills followed, opened by both Carnegie and a host small host of other operators. The business was very tough on everyone and required massive amounts of upfront investments in fixed capital. Miscalculations in projected demand or disruptive new innovations can and did bankrupt many, but the potential profits were huge. Workers in a Carnegie Mill and most competitors worked 12 hour shifts, six or seven days a week. Not surprisingly, both the managers, investors and workers dreamed of an easier way.
Carnegie bought the new Homestead mill across the river from Braddock from it's financially strapped competitor and and in a few years new mills were built by Carnegie in nearby towns on the Mon as many of the smaller competing mills were bought out and consolidated into companies controlled by JP Morgan. The stage was set for a tragedy that few saw coming. Carnegie was ready to retire from the brutally competitive industry he had worked so hard to dominate through pricing and relentless innovation that Morgan's mills couldn't keep up with. " Although he was regarded as the archetype of the American capitalist, Morgan was in many ways not a capitalist.... as as Joseph Frazier Wall wrote: " He did not really believe in the free enterprise system.. Like most ardent socialists, he hated the waste, duplication and clutter of unrestricted competition". It was for this reason that he had been so intoxicated by Schwab's portrayal of a combined, efficient steel industry."
Morgan made Carnegie an offer of a massive payment in gold for Carnegie's mills to create a company controlling 65% of the existing industry and once and for all stop the unpredictable, competitive free for all and replace it with a stable comfortable and reliable business that would run almost as a perpetual machine. The deal was done and most of the rest of the book deals with the results. The combined company seemed indestructible and the only central issue seemed to be one of dividing the profits among the owners and also increasingly with the workers. Problem solved-- capitalism was just too much work!
"By 1936, the stagnation at U.S. Steel was such that Fortune magazine "recalled that the Corporation's policy had once been summarized as 'No inventions: no innovations'" (p. 132) and Charles M. Schwab reported that "the chairman of US Steel admitted to him that the Corporation, in fact, had missed every 'new thing' in steel" (p. 132). Under Carnegie's reign, Pittsburgh-based steel facilities had competed successfully against growing location-based advantages of other regions by relying on innovation, efficiency, and superior management. U.S. Steel under Gary did participate in the geographic dispersion of American steel-making but its "Pittsburgh Plus" pricing (an artificial attempt to exercise industry price discipline by linking prices across America to steel prices in Pittsburgh plus freight from Pittsburgh) led to a hobbling of the corporation's growth into new markets and eventually shrank the region in which Pittsburgh-area steel was competitive. Even in its infancy, U.S. Steel was an illustration of inertia and captivation by sunk-cost investments."
A further quote from an industry expert was even more honest about the results.
"Actually the operation of basic processes has not changed significantly in either theory or fundamental design of equipment in the past 75 years. While automobiles were being made better and cheaper with ever newer processes.... tonnage steel as distinguished from the specialty or the alloy steels grew neither cheaper or better"
Charles Ramsayer 1935
Much of the rest of the book deals with the struggles of workers to attain a larger and larger share of company output. In fact-- it sort of looks as if distribution of profits was the primary thing people thought about more and more as the years went on. The post WWII period ushered in what seemed like a golden age, culminating in what were increasingly cosy relations between workers and management. There was more than enough money to go around, seemingly little prospect of competition from abroad and no need to sweat. The company spent big-- but rarely, if ever took the lead and often built new plants and expansions with equipment that was obsolete from the start.
Anyway, great book, well worth reading. I hope to get back with more thoughts about it.
Some Thoughts About Religious Liberty
This post was orginally put on Tea Party Patriots in response to this statement,which I agree with. I have added to it a bit.
"Someone wrote in an earlier blog, "I was always taught that we were a Christian Nation that tolerated other religions, not a non-Christian Nation that does not tolerate Christians."
The truth is that we are neither. We are actually a non-Christian nation that does tolerate Christians because we have freedom of religion. "
I actually agree with your statement here. I will try to elaborate and clarify later.
Robin, I strongly agree with this "Islam is where christianity was 5oo years ago" Actually it's closer to where christianity was --700, 800 or 1000 yars ago, during the era widely known as the dark ages. What, happened in between? The rebirth and reintroduction of reason into western thought. America was the first and only nation built on the values of the enlightenment.
A few quotes from the founding period might help. All references to "self-evident truths", "nature", "laws of nature", and "nature's god" were based on the idea of a rational world, with absolute laws which could be understood by everyone. Count how many times the word reason was used by our founders.
Writings from the Lock, Franklin, Madison, Adams and Jefferson are filled with references to Aristotle, Cicero, Greek and Roman history as well as science and economic history. If the nation were exclusively based on christianity, the primary references would have been to the bible.
"Fix reason firmly in her seat, and call to her tribunal every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason, than that of blindfolded fear."
Thomas Jefferson
As our enemies have found we can reason like men, so now let us show them we can fight like men also.
Thomas Jefferson
Bodily decay is gloomy in prospect, but of all human contemplations the most abhorrent is body without mind.
Thomas Jefferson
"Enlighten the people generally, and tyranny and oppressions of body and mind will vanish like evil spirits at the dawn of day."
Thomas Jefferson
"Errors of opinion may be tolerated where reason is left free to combat it."
Thomas Jefferson
I am an Epicurean. I consider the genuine (not the imputed) doctrines of Epicurus as containing everything rational in moral philosophy which Greek and Roman leave to us.
Thomas Jefferson
"I have recently been examining all the known superstitions of the world, and do not find in our particular superstition (Christianity) one redeeming feature. They are all alike founded on fables and mythology. "
Thomas Jefferson
"I was bold in the pursuit of knowledge, never fearing to follow truth and reason to whatever results they led, and bearding every authority which stood in their way."
Thomas Jefferson
"In every country and every age, the priest had been hostile to Liberty."
Thomas Jefferson
"Information is the currency of democracy."
Thomas Jefferson
"It does me no injury for my neighbor to say there are twenty gods or no God."
Thomas Jefferson
"It is error alone which needs the support of government. Truth can stand by itself."
Thomas Jefferson
"Resort is had to ridicule only when reason is against us."
Thomas Jefferson
"The world is indebted for all triumphs which have been gained by reason and humanity over error and oppression."
Thomas Jefferson
"There is not a sprig of grass that shoots uninteresting to me."
Thomas Jefferson
"Distrust and caution are the parents of security." (as opposed to faith)
Benjamin Franklin
"Experience is a dear teacher, but fools will learn at no other.
Benjamin Franklin"
"He that lives upon hope will die fasting."
Benjamin Franklin
"Hear reason, or she'll make you feel her."
Benjamin Franklin
"If passion drives you, let reason hold the reins. "
Benjamin Franklin
"We are more thoroughly an enlightened people, with respect to our political interests, than perhaps any other under heaven. Every man among us reads, and is so easy in his circumstances as to have leisure for conversations of improvement and for acquiring information. "
Benjamin Franklin
"In the affairs of this world, men are saved not by faith, but by the want of it.
Benjamin Franklin"
Benjamin Franklin
While it is very true that many of our founders and the people who influenced them were Christians or at least believed in the probable existence of a "creator", this was not the defining characteristic they held in common. This element, above all others was a firm belief in a rational, knowable world and supreme commitment to reason.
It's hardly an accident that our country was born in the last decades of the period known as "The Enlightenment" which came after "The Renaissance". What was reborn during the these periods was not religion but a growing respect for the natural world, facts and the human ability to think and base decisions on rational judgement.
"Renaissance thinkers sought out learning from ancient texts, typically written in Latin or ancient Greek. Scholars scoured Europe's monastic searching for works of classical antiquity which had fallen into obscurity. In such texts they found a desire to improve and perfect their worldly knowledge; an entirely different sentiment to the transcendental spirituality stressed by medieval Christianity.They did not reject Christianity; quite the contrary, many of the Renaissance's greatest works were devoted to it, and the Church patronized many works of Renaissance art. However, a subtle shift took place in the way that intellectuals approached religion that was reflected in many other areas of cultural life."
The Enlightenment took this revolution further,and aimed at applying reason to all areas of life and politics. I think for example that a large part of the Reformation had to do with the idea that people could read and find truth in the bible on their own rather than listen to what the Pope said it meant.The rapid economic, scientific, medical and political benefits that came from thought became more and more obvious and cherished by society. This confidence in the minds ability to learn from nature and history gave true hope to our founders. Not a blind hope or "faith" that god would provide, but a faith in people's ability to learn and improve the world. This is why they believed in freedom.
Jefferson, for example was probably a Deist.
"Deism is a philosophical belief in the existence of a God on the basis of reason, and observation of the natural world alone. Deists generally reject the notion of supernatural revelation as a basis of truth and religious dogma. These views contrast with the dependence on divine revelation found in many Christian,[1] Islamic and Judaic teachings.
Deists typically reject most supernatural events (prophecy, miracles) and tend to assert that God (or "The Supreme Architect") has a plan for the universe which that Architect does not alter either by intervening in the affairs of human life or suspending the natural laws of the universe. What organized religions see as divine revelation and holy books, most deists see as interpretations made by other humans, rather than as authoritative sources.
Deism became prominent in the 17th and 18th centuries during the Age of Enlightenment, especially in the United Kingdom, France and the United States, mostly among those raised as Christians who found they could not believe in either a triune God, the divinity of Jesus, miracles, or the inerrancy of scriptures, but who did believe in one god. Initially it did not form any congregations, but in time deism strongly influenced other religious groups, such as Unitarianism and Universalism, which developed from it. It continues to this day in the form of classical deism and modern deism."
"Someone wrote in an earlier blog, "I was always taught that we were a Christian Nation that tolerated other religions, not a non-Christian Nation that does not tolerate Christians."
The truth is that we are neither. We are actually a non-Christian nation that does tolerate Christians because we have freedom of religion. "
I actually agree with your statement here. I will try to elaborate and clarify later.
Robin, I strongly agree with this "Islam is where christianity was 5oo years ago" Actually it's closer to where christianity was --700, 800 or 1000 yars ago, during the era widely known as the dark ages. What, happened in between? The rebirth and reintroduction of reason into western thought. America was the first and only nation built on the values of the enlightenment.
A few quotes from the founding period might help. All references to "self-evident truths", "nature", "laws of nature", and "nature's god" were based on the idea of a rational world, with absolute laws which could be understood by everyone. Count how many times the word reason was used by our founders.
Writings from the Lock, Franklin, Madison, Adams and Jefferson are filled with references to Aristotle, Cicero, Greek and Roman history as well as science and economic history. If the nation were exclusively based on christianity, the primary references would have been to the bible.
"Fix reason firmly in her seat, and call to her tribunal every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason, than that of blindfolded fear."
Thomas Jefferson
As our enemies have found we can reason like men, so now let us show them we can fight like men also.
Thomas Jefferson
Bodily decay is gloomy in prospect, but of all human contemplations the most abhorrent is body without mind.
Thomas Jefferson
"Enlighten the people generally, and tyranny and oppressions of body and mind will vanish like evil spirits at the dawn of day."
Thomas Jefferson
"Errors of opinion may be tolerated where reason is left free to combat it."
Thomas Jefferson
I am an Epicurean. I consider the genuine (not the imputed) doctrines of Epicurus as containing everything rational in moral philosophy which Greek and Roman leave to us.
Thomas Jefferson
"I have recently been examining all the known superstitions of the world, and do not find in our particular superstition (Christianity) one redeeming feature. They are all alike founded on fables and mythology. "
Thomas Jefferson
"I was bold in the pursuit of knowledge, never fearing to follow truth and reason to whatever results they led, and bearding every authority which stood in their way."
Thomas Jefferson
"In every country and every age, the priest had been hostile to Liberty."
Thomas Jefferson
"Information is the currency of democracy."
Thomas Jefferson
"It does me no injury for my neighbor to say there are twenty gods or no God."
Thomas Jefferson
"It is error alone which needs the support of government. Truth can stand by itself."
Thomas Jefferson
"Resort is had to ridicule only when reason is against us."
Thomas Jefferson
"The world is indebted for all triumphs which have been gained by reason and humanity over error and oppression."
Thomas Jefferson
"There is not a sprig of grass that shoots uninteresting to me."
Thomas Jefferson
"Distrust and caution are the parents of security." (as opposed to faith)
Benjamin Franklin
"Experience is a dear teacher, but fools will learn at no other.
Benjamin Franklin"
"He that lives upon hope will die fasting."
Benjamin Franklin
"Hear reason, or she'll make you feel her."
Benjamin Franklin
"If passion drives you, let reason hold the reins. "
Benjamin Franklin
"We are more thoroughly an enlightened people, with respect to our political interests, than perhaps any other under heaven. Every man among us reads, and is so easy in his circumstances as to have leisure for conversations of improvement and for acquiring information. "
Benjamin Franklin
"In the affairs of this world, men are saved not by faith, but by the want of it.
Benjamin Franklin"
Benjamin Franklin
While it is very true that many of our founders and the people who influenced them were Christians or at least believed in the probable existence of a "creator", this was not the defining characteristic they held in common. This element, above all others was a firm belief in a rational, knowable world and supreme commitment to reason.
It's hardly an accident that our country was born in the last decades of the period known as "The Enlightenment" which came after "The Renaissance". What was reborn during the these periods was not religion but a growing respect for the natural world, facts and the human ability to think and base decisions on rational judgement.
"Renaissance thinkers sought out learning from ancient texts, typically written in Latin or ancient Greek. Scholars scoured Europe's monastic searching for works of classical antiquity which had fallen into obscurity. In such texts they found a desire to improve and perfect their worldly knowledge; an entirely different sentiment to the transcendental spirituality stressed by medieval Christianity.They did not reject Christianity; quite the contrary, many of the Renaissance's greatest works were devoted to it, and the Church patronized many works of Renaissance art. However, a subtle shift took place in the way that intellectuals approached religion that was reflected in many other areas of cultural life."
The Enlightenment took this revolution further,and aimed at applying reason to all areas of life and politics. I think for example that a large part of the Reformation had to do with the idea that people could read and find truth in the bible on their own rather than listen to what the Pope said it meant.The rapid economic, scientific, medical and political benefits that came from thought became more and more obvious and cherished by society. This confidence in the minds ability to learn from nature and history gave true hope to our founders. Not a blind hope or "faith" that god would provide, but a faith in people's ability to learn and improve the world. This is why they believed in freedom.
Jefferson, for example was probably a Deist.
"Deism is a philosophical belief in the existence of a God on the basis of reason, and observation of the natural world alone. Deists generally reject the notion of supernatural revelation as a basis of truth and religious dogma. These views contrast with the dependence on divine revelation found in many Christian,[1] Islamic and Judaic teachings.
Deists typically reject most supernatural events (prophecy, miracles) and tend to assert that God (or "The Supreme Architect") has a plan for the universe which that Architect does not alter either by intervening in the affairs of human life or suspending the natural laws of the universe. What organized religions see as divine revelation and holy books, most deists see as interpretations made by other humans, rather than as authoritative sources.
Deism became prominent in the 17th and 18th centuries during the Age of Enlightenment, especially in the United Kingdom, France and the United States, mostly among those raised as Christians who found they could not believe in either a triune God, the divinity of Jesus, miracles, or the inerrancy of scriptures, but who did believe in one god. Initially it did not form any congregations, but in time deism strongly influenced other religious groups, such as Unitarianism and Universalism, which developed from it. It continues to this day in the form of classical deism and modern deism."
Why Do People Vote For Collectivists?
This post was originally posted on Tea Party Patriots.
One of the great mysteries in social and political science is that a large number of people who personally, experienced the failures and horrors of Collectivist rule still want more of it. This is obviously one of the reasons.
"In contrast, the enlargement of the state always means an attack on responsibility. Under a communist regime, self-responsibility is eliminated. The more a government intrudes into citizens’ lives, the less people feel a sense of responsibility for their actions. Bureaucrats do not typically have full responsibility for their actions. Politicians, central bankers, and judges do not pay for their mistakes. They experience a kind of immunity from bearing blame for the consequences of their actions during the time they are in power.
The same holds true for police officials, public surgeons, public school teachers, etc. All mistakes that are made by public employees are often paid for by others. The bill is paid by taxpayers, by people sent to jail mistakenly, by people killed in public hospitals, by Iraqi citizens, etc. Not even people who earn private salaries are fully responsible under the State. Under the larger and larger safety nets created by the state, firms get more and more dependant on public help in order to survive. Big companies lobby for subsidies, duties on imports, and other kinds of help. Banks and large industries such as airlines hope to be declared “too big to fail.”
Individuals are also less and less responsible. In Europe many people grow up with the idea that the State owes them something: jobs, health, free education, vacations, happiness, and deliverance from despair. People are led to believe that the State will always care about their problems and address their community concerns. People are made to believe that whatever they do (they lose their job, they get sick, they become depressed) the State will be there to help.
The perverse result of all this is that citizens no longer bear full responsibility for their actions. All this can be explained through the concept of the moral hazard. The mechanism works as follows: on the one hand the responsibility of public employees is transferred to everyone affected by their mistakes (among these, the taxpayers); on the other hand, taxpayers demand also for a shift of their responsibility to the State. Given the taxes they pay, they should get something back, shouldn't they?"
Needless, to say this places the costs of "society" on anyone who takes responsibility for anything.
One of the great mysteries in social and political science is that a large number of people who personally, experienced the failures and horrors of Collectivist rule still want more of it. This is obviously one of the reasons.
"In contrast, the enlargement of the state always means an attack on responsibility. Under a communist regime, self-responsibility is eliminated. The more a government intrudes into citizens’ lives, the less people feel a sense of responsibility for their actions. Bureaucrats do not typically have full responsibility for their actions. Politicians, central bankers, and judges do not pay for their mistakes. They experience a kind of immunity from bearing blame for the consequences of their actions during the time they are in power.
The same holds true for police officials, public surgeons, public school teachers, etc. All mistakes that are made by public employees are often paid for by others. The bill is paid by taxpayers, by people sent to jail mistakenly, by people killed in public hospitals, by Iraqi citizens, etc. Not even people who earn private salaries are fully responsible under the State. Under the larger and larger safety nets created by the state, firms get more and more dependant on public help in order to survive. Big companies lobby for subsidies, duties on imports, and other kinds of help. Banks and large industries such as airlines hope to be declared “too big to fail.”
Individuals are also less and less responsible. In Europe many people grow up with the idea that the State owes them something: jobs, health, free education, vacations, happiness, and deliverance from despair. People are led to believe that the State will always care about their problems and address their community concerns. People are made to believe that whatever they do (they lose their job, they get sick, they become depressed) the State will be there to help.
The perverse result of all this is that citizens no longer bear full responsibility for their actions. All this can be explained through the concept of the moral hazard. The mechanism works as follows: on the one hand the responsibility of public employees is transferred to everyone affected by their mistakes (among these, the taxpayers); on the other hand, taxpayers demand also for a shift of their responsibility to the State. Given the taxes they pay, they should get something back, shouldn't they?"
Needless, to say this places the costs of "society" on anyone who takes responsibility for anything.
Sunday, April 26, 2009
Peter Schiff Video Of The Week
Thankfully, Peter Schiff now has made his awesome weekly videos which were previously only availabe to subcribers available on Youtube.
The latest one dissects the contradictions underlying Obama's farcical bank "Stress Tests" as well as discussing the Illegal actions by Bernanke and company to blackmail a major company into commiting securities fraud.
Friday, April 24, 2009
Peter Schiff To Speak At End The FED Rally Tomorrow
I don't have time to do a more propper post on this issue. But as you may know, tomorrow there will be End The Fed protests at every Federal Reserve Bank In the country.
Peter Schiff will be the key note speaker for the NY event. He is an investor and adviser to Ron Paul and part of a rather large group of people, who correctly predicted the mess the FED was getting us into. Most of them were students of the Austrian School of economics.
Peter Schiff to speak this Saturday at NYC's "End The Fed" Rally
For years, Peter Schiff has consistently warned that the policies of the Federal Reserve would drive this country toward a monumental collapse. He also warned that the Fed would respond to the crisis by doubling down on previous mistakes. That day has arrived, and people across the country are trying to stop it.
This Saturday (4/25), rallies will be held simultaneously in Washington and all cities with a Federal Reserve branch. Peter will deliver the keynote address to the NYC Campaign for Liberty's "End The Fed" Rally at City Hall Park, Manhattan.
Much attention has been focused on last week's Tax Day Tea Parties. Those events showcased pent up frustration with runaway government, but also revealed some political partisanship that has been exploited by pro-regime pundits. This upcoming rally, however, has a clear and non-partisan goal: pass HR 1207. This bill, backed by more than 65 Congressman and introduced by Representative Ron Paul, would for the first time give Congress greater audit authority over the Federal Reserve and increase transparency at the central bank. Organizers of the rally believe that the more Americans understand about the Federal Reserve System, such as how its continual expansion of the money supply robs savers of their wealth, the more they will demand a return to real money.
Friends of Euro Pacific are urged to take time from their busy schedules to show their support. The campaign has posted a Meetup page for the event, but the basic details are as follows:
Saturday, April 25th
11:00AM
Assemble at the New York Federal Reserve building (33 Liberty St.)
March up Broadway
2:00PM
Arrive at City Hall Park
Guest Speakers
Keynote by Peter Schiff
Fascism Update : Bank America Forced To Buy Merrill Lynch
This might be a short post-- with a lot of typos and scant references. I work a lot online and it seems like four or five major government crimes or proposed crimes pop up each day.
I consider the word Fascism, to best describe the current flavor of our government.
"Other than nationalization of certain industries, private property was allowed, but property rights and private initiative were contingent upon service to the state.[154] For example, "an owner of agricultural land may be compelled to raise wheat instead of sheep and employ more labor than he would find profitable."[155] According to historian Tibor Ivan Berend, dirigisme was an inherent aspect of fascist economies.[156] The Labour Charter of 1927, promulgated by the Grand Council of Fascism, stated in article 7: "The corporative State considers private initiative, in the field of production, as the most efficient and useful instrument of the Nation", then goes on to say in article 9: "State intervention in economic production may take place only where private initiative is lacking or is insufficient, or when are at stakes the political interest of the State. This intervention may take the form of control, encouragement or direct management."[citation needed]
Fascists thought that private property should be regulated to ensure that "benefit to the community precedes benefit to the individual."[157] They also introduced price controls and other types of economic planning measures.[153]"
In order to understand this one needs to think about the nature of government power. The state, as we know has no money assets apart from the property and lives of it's citizens. What it does have is the ability to use force.
Our founders knew and feared this power and aimed it to be used to defend the lives and property of it's people against state or criminal aggression and to act as an impartial arbiter in legal disputes. The whole purpose and design of the Constitution was to do this.
Fascist's, like all collectivist's see the state as an end in itself that should not be restrained by law or any kind of absolute truth. Anything the leader or gang in charge want to do at any given moment is the law. They always know best. In a state in like this, it matters very little who technically owns anything since everyone does what they are told. Property becomes an illusion.
Here is an example of Fascism in action. And yes it happened during the Bush Administration.
"NEW YORK -- Federal Reserve Chairman Ben S. Bernanke and former Treasury Secretary Henry M. Paulson Jr. threatened to remove the management and board of Bank of America unless it acquired ailing investment house Merrill Lynch late last year, according documents released today by New York State Attorney General Andrew Cuomo."
Bank America had foolishly jumped at the chance to buy what it thought was cheap company, but was still in a period when it could back out of the deal, legally, if Merrill's numbers were much worse than expected--- which they were.
In steps Paulson to say, in effect-- it's an emergency and we are in charge -- the law and your shareholder's rights don't matter anymore.
"On Dec. 21, after Lewis told Paulson the bank still wanted to exit the merger, Paulson told Lewis its management and board would be replaced if the bank were to invoke the material event clause.
Secretary Paulson's threat swayed Lewis, Cuomo said in the letter.
According to Secretary Paulson, after he stated that the management and the Board could be removed, Lewis replied, 'that makes it simple. Let's deescalate,' " the letter states. "Lewis admits that Secretary Paulson's threat changed his mind about . . . terminating the deal."
Cuomo said Paulson has told him he made the threat at the request of Bernanke."
I consider the word Fascism, to best describe the current flavor of our government.
"Other than nationalization of certain industries, private property was allowed, but property rights and private initiative were contingent upon service to the state.[154] For example, "an owner of agricultural land may be compelled to raise wheat instead of sheep and employ more labor than he would find profitable."[155] According to historian Tibor Ivan Berend, dirigisme was an inherent aspect of fascist economies.[156] The Labour Charter of 1927, promulgated by the Grand Council of Fascism, stated in article 7: "The corporative State considers private initiative, in the field of production, as the most efficient and useful instrument of the Nation", then goes on to say in article 9: "State intervention in economic production may take place only where private initiative is lacking or is insufficient, or when are at stakes the political interest of the State. This intervention may take the form of control, encouragement or direct management."[citation needed]
Fascists thought that private property should be regulated to ensure that "benefit to the community precedes benefit to the individual."[157] They also introduced price controls and other types of economic planning measures.[153]"
In order to understand this one needs to think about the nature of government power. The state, as we know has no money assets apart from the property and lives of it's citizens. What it does have is the ability to use force.
Our founders knew and feared this power and aimed it to be used to defend the lives and property of it's people against state or criminal aggression and to act as an impartial arbiter in legal disputes. The whole purpose and design of the Constitution was to do this.
Fascist's, like all collectivist's see the state as an end in itself that should not be restrained by law or any kind of absolute truth. Anything the leader or gang in charge want to do at any given moment is the law. They always know best. In a state in like this, it matters very little who technically owns anything since everyone does what they are told. Property becomes an illusion.
Here is an example of Fascism in action. And yes it happened during the Bush Administration.
"NEW YORK -- Federal Reserve Chairman Ben S. Bernanke and former Treasury Secretary Henry M. Paulson Jr. threatened to remove the management and board of Bank of America unless it acquired ailing investment house Merrill Lynch late last year, according documents released today by New York State Attorney General Andrew Cuomo."
Bank America had foolishly jumped at the chance to buy what it thought was cheap company, but was still in a period when it could back out of the deal, legally, if Merrill's numbers were much worse than expected--- which they were.
In steps Paulson to say, in effect-- it's an emergency and we are in charge -- the law and your shareholder's rights don't matter anymore.
"On Dec. 21, after Lewis told Paulson the bank still wanted to exit the merger, Paulson told Lewis its management and board would be replaced if the bank were to invoke the material event clause.
Secretary Paulson's threat swayed Lewis, Cuomo said in the letter.
According to Secretary Paulson, after he stated that the management and the Board could be removed, Lewis replied, 'that makes it simple. Let's deescalate,' " the letter states. "Lewis admits that Secretary Paulson's threat changed his mind about . . . terminating the deal."
Cuomo said Paulson has told him he made the threat at the request of Bernanke."
Thursday, April 23, 2009
Some Thoughts About Government Unemployment Numbers
People woke yet again to see a very grim unemployment figure which surprised media and analysts on the upside. Anyone following these numbers closely would not have been fooled.
"WASHINGTON -- New jobless claims rose more than expected last week, while the number of workers continuing to filing claims for unemployment benefits topped 6.1 million.
Both figures are fresh evidence layoffs persist amid a weak job market that is not expected to rebound anytime soon.
The Labor Department said Thursday that initial claims for unemployment compensation rose to a seasonally adjusted 640,000, up from a revised 613,000 the previous week. That was slightly above analysts' expectations of 635,000. "
In fact, a strong pattern has developed of rosy numbers grabbing headlines while quietly being revised later with more truthful data.
BLS Job numbers always produce headlines and market impact when they come out while later revisions to the figures slip out later. During normal economic times these revisions are fairly minor. However, the fact that these figures are based upon historic trend estimates of economic activity creates very inaccurate figures during serious recessions.
This is very true now.
August 2008: Initially 84,000, revised to 175,000
September 2008: Initially 159,000, revised to 321,000
October 2008: Initially 240,000, revised to 380,000
November 2008: Initially 533,000, revised to 597,000
December 2008: Initially 524,000, revised to 681,000
January 2009: Initially 598,000, revised to 655,000
February 2009: Initially 651,000, as released today.
The biggest single distortion comes from the BLS's guestimate of the number of firms created and going out of business in a given period which preposterously assume that the ratio of new business starts and business deaths are the same during a serious recession as they were during "normal times".
What's probably going on is that the dismal layoff reports by large companies are far exceeded by even more drastic layoffs and closings among small businesses, most of which are not recieving handouts and favors and are looking foward to massive tax and regulatory burdens.
"WASHINGTON -- New jobless claims rose more than expected last week, while the number of workers continuing to filing claims for unemployment benefits topped 6.1 million.
Both figures are fresh evidence layoffs persist amid a weak job market that is not expected to rebound anytime soon.
The Labor Department said Thursday that initial claims for unemployment compensation rose to a seasonally adjusted 640,000, up from a revised 613,000 the previous week. That was slightly above analysts' expectations of 635,000. "
In fact, a strong pattern has developed of rosy numbers grabbing headlines while quietly being revised later with more truthful data.
BLS Job numbers always produce headlines and market impact when they come out while later revisions to the figures slip out later. During normal economic times these revisions are fairly minor. However, the fact that these figures are based upon historic trend estimates of economic activity creates very inaccurate figures during serious recessions.
This is very true now.
August 2008: Initially 84,000, revised to 175,000
September 2008: Initially 159,000, revised to 321,000
October 2008: Initially 240,000, revised to 380,000
November 2008: Initially 533,000, revised to 597,000
December 2008: Initially 524,000, revised to 681,000
January 2009: Initially 598,000, revised to 655,000
February 2009: Initially 651,000, as released today.
The biggest single distortion comes from the BLS's guestimate of the number of firms created and going out of business in a given period which preposterously assume that the ratio of new business starts and business deaths are the same during a serious recession as they were during "normal times".
What's probably going on is that the dismal layoff reports by large companies are far exceeded by even more drastic layoffs and closings among small businesses, most of which are not recieving handouts and favors and are looking foward to massive tax and regulatory burdens.
Wednesday, April 22, 2009
Freddie Mac CFO Found Dead
This has become a clearing house for "paranoid, right wing conspiracy theories" and this news should be grist for fertile minds.
"WASHINGTON (AP) -- David Kellermann, the acting chief financial officer of Freddie Mac, was found dead at his home Wednesday morning in what broadcast reports said was an apparent suicide.
WUSA-TV and WTOP Radio reported that David Kellermann was found dead in his Northern Virginia home. The 41-year-old Kellermann has been Freddie Mac's chief financial officer since September.
Sabrina Ruck, a Fairfax County police spokesman, confirmed to The Associated Press that Kellermann was dead, but she could not confirm that he committed suicide.
Kellermann's death is the latest blow to Freddie Mac, a government controlled company that owns or guarantees about 13 million home loans. CEO David Moffett resigned last month."
Will this Government Sponsored Enterprise ever be fully investigated? When has the government taken responsibility for anything?
"WASHINGTON (AP) -- David Kellermann, the acting chief financial officer of Freddie Mac, was found dead at his home Wednesday morning in what broadcast reports said was an apparent suicide.
WUSA-TV and WTOP Radio reported that David Kellermann was found dead in his Northern Virginia home. The 41-year-old Kellermann has been Freddie Mac's chief financial officer since September.
Sabrina Ruck, a Fairfax County police spokesman, confirmed to The Associated Press that Kellermann was dead, but she could not confirm that he committed suicide.
Kellermann's death is the latest blow to Freddie Mac, a government controlled company that owns or guarantees about 13 million home loans. CEO David Moffett resigned last month."
Will this Government Sponsored Enterprise ever be fully investigated? When has the government taken responsibility for anything?
Tuesday, April 21, 2009
A Genius From Harvard
I think most of you on here have given up on The New York Times as a source of objective facts or rational insight. One cannot deny however the window it gives to the minds of people currently in charge.
In the guise of a semi serious proposal, a prominent Harvard economist floated an idea , almost perfectly designed to toilet whatever limited confidence anyone could have in the value of our dollar and cause a panic of epic proportions.
The rub is that many people and companies after seeing the negative effects of their bad investments and often reckless consumer spending have decided to rebuild their balance sheets by saving. They understand that only rational investments which pay off in the future can be a possible way to future wealth. And they understand the extreme personal risk any person takes by spending money they don't have or taking on debts they can't repay.
Lucky for them, geniuses like Bernanke, Obama and their cheerleaders like Krugman and this guy are there to stop them. Already, Bernanke has dropped the Fed funds to almost zero, and engaged in the wholesale printing of money while it and other Federal agencies have purchased garbage bank assets, guaranteed toxic loans used HUD, and FHA, to pump out factory fresh bubble loans. (many of which default right away)
Meanwhile, Obama and the Democratic Congress have implemented a national debt explosion and an ever changing array of promised taxes and regulatory schemes almost sure to choke off market confidence and scare long term investors.
The latest concept is an attempt to force people to spend by proposing a scheme of outright government theft. Please, please, please-- take it seriously. This guy is seriously floating this idea in our so called-- paper of record.
"At one of my recent Harvard seminars, a graduate student proposed a clever scheme to do exactly that. (I will let the student remain anonymous. In case he ever wants to pursue a career as a central banker, having his name associated with this idea probably won’t help.)
Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.
That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 percent is better than losing 10.
Of course, some people might decide that at those rates, they would rather spend the money — for example, by buying a new car. But because expanding aggregate demand is precisely the goal of the interest rate cut, such an incentive isn’t a flaw — it’s a benefit."
He then of course quickly tries to run away from this explicit theft while endorsing a more subtle one-- inflation.
"If all of this seems too outlandish, there is a more prosaic way of obtaining negative interest rates: through inflation. Suppose that, looking ahead, the Fed commits itself to producing significant inflation. In this case, while nominal interest rates could remain at zero, real interest rates — interest rates measured in purchasing power — could become negative. If people were confident that they could repay their zero-interest loans in devalued dollars, they would have significant incentive to borrow and spend."
He seems to have gotten a lot of flack for this insanity and he defends his editorial here.
"If people are feeling poorer and want to save for the future, why should we stop them? Unless we think their additional saving is irrational, it seems best to try to funnel that saving into investment with the appropriate interest rate. And given the available investment opportunities, that interest rate might well be negative".( even he says there might not be that many good economic opportunities so you should invest in bad ones)
At no point does he appologize or even question the legal right of the government to steal the capital and savings of Americans and use them as rats in weird economic experiments.
Mish, who has a great economics blog has this to say.
"Even more galling than his blatant arrogance, Mankiw has no problems with theft. Because confiscating or expiring 10% of someone's money at will is theft of property, and would (at at least should) be a violation of the 5th amendment and due process of law. How anyone cannot see that is beyond me.
However, let's assume such a law was passed, and upheld by the courts. How would people react? Simple, they would pay off every debt they could as they would get an immediate 10% return on their money to do so! Thus credit would implode.
I repeat my call for Mankiw to resign or be fired. Mankiw is unfit to teach economics anywhere, let alone Harvard."
Was this Obama's economics teacher?
In the guise of a semi serious proposal, a prominent Harvard economist floated an idea , almost perfectly designed to toilet whatever limited confidence anyone could have in the value of our dollar and cause a panic of epic proportions.
The rub is that many people and companies after seeing the negative effects of their bad investments and often reckless consumer spending have decided to rebuild their balance sheets by saving. They understand that only rational investments which pay off in the future can be a possible way to future wealth. And they understand the extreme personal risk any person takes by spending money they don't have or taking on debts they can't repay.
Lucky for them, geniuses like Bernanke, Obama and their cheerleaders like Krugman and this guy are there to stop them. Already, Bernanke has dropped the Fed funds to almost zero, and engaged in the wholesale printing of money while it and other Federal agencies have purchased garbage bank assets, guaranteed toxic loans used HUD, and FHA, to pump out factory fresh bubble loans. (many of which default right away)
Meanwhile, Obama and the Democratic Congress have implemented a national debt explosion and an ever changing array of promised taxes and regulatory schemes almost sure to choke off market confidence and scare long term investors.
The latest concept is an attempt to force people to spend by proposing a scheme of outright government theft. Please, please, please-- take it seriously. This guy is seriously floating this idea in our so called-- paper of record.
"At one of my recent Harvard seminars, a graduate student proposed a clever scheme to do exactly that. (I will let the student remain anonymous. In case he ever wants to pursue a career as a central banker, having his name associated with this idea probably won’t help.)
Imagine that the Fed were to announce that, a year from today, it would pick a digit from zero to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.
That move would free the Fed to cut interest rates below zero. People would be delighted to lend money at negative 3 percent, since losing 3 percent is better than losing 10.
Of course, some people might decide that at those rates, they would rather spend the money — for example, by buying a new car. But because expanding aggregate demand is precisely the goal of the interest rate cut, such an incentive isn’t a flaw — it’s a benefit."
He then of course quickly tries to run away from this explicit theft while endorsing a more subtle one-- inflation.
"If all of this seems too outlandish, there is a more prosaic way of obtaining negative interest rates: through inflation. Suppose that, looking ahead, the Fed commits itself to producing significant inflation. In this case, while nominal interest rates could remain at zero, real interest rates — interest rates measured in purchasing power — could become negative. If people were confident that they could repay their zero-interest loans in devalued dollars, they would have significant incentive to borrow and spend."
He seems to have gotten a lot of flack for this insanity and he defends his editorial here.
"If people are feeling poorer and want to save for the future, why should we stop them? Unless we think their additional saving is irrational, it seems best to try to funnel that saving into investment with the appropriate interest rate. And given the available investment opportunities, that interest rate might well be negative".( even he says there might not be that many good economic opportunities so you should invest in bad ones)
At no point does he appologize or even question the legal right of the government to steal the capital and savings of Americans and use them as rats in weird economic experiments.
Mish, who has a great economics blog has this to say.
"Even more galling than his blatant arrogance, Mankiw has no problems with theft. Because confiscating or expiring 10% of someone's money at will is theft of property, and would (at at least should) be a violation of the 5th amendment and due process of law. How anyone cannot see that is beyond me.
However, let's assume such a law was passed, and upheld by the courts. How would people react? Simple, they would pay off every debt they could as they would get an immediate 10% return on their money to do so! Thus credit would implode.
I repeat my call for Mankiw to resign or be fired. Mankiw is unfit to teach economics anywhere, let alone Harvard."
Was this Obama's economics teacher?
Monday, April 20, 2009
Using The Other F-Word
One word that is popping up on signs at tea parties is Fascism and it clearly seems to have invoked more than a little fear on the traditional left. In spite of their common use of the word, they have gone to elaborate lengths to obscure it's true meaning and philisophical roots.
Study the meaning of this word. Go to the Wikipedia and you will see the similarities between Obama's current policies and Fascism. The founders of our country were true Liberals and opposed these ideas with their lives.
My last post about the PPIP program implied that many of Obama's policies and methods were not socialist, but corporatist or fascist.
Steve Malanga, who I think I remember from Crains, NY has written a great little primer on this. He correctly points out that corporatist policies often gain popularty in periods of crisis and are in fact attempts by elites and existing power bases to limit and resist change.Let's start with definitions.
Corporatism
"Historically, corporatism refers to a political or economic system in which power is held by civic assemblies that represent economic, industrial, agrarian, social, cultural, and/or professional groups. These civic assemblies are known as corporations (not the same as the legally incorporated business entities known as corporations, though some are such). Corporations are unelected bodies with an internal hierarchy; their purpose is to exert control over the social and economic life of their respective areas. Thus, for example, a steel corporation would be a cartel composed of all the business leaders in the steel industry, coming together to discuss a common policy on prices and wages. When the political and economic power of a country rests in the hands of such groups, then a corporatist system is in place."
I can't paste in the whole definition but corporatism works through a complex of "public/private partnerships which ossify power through force.
"Political scientists may also use the term corporatism to describe a practice whereby a state, through the process of licensing and regulating officially-incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority by establishing the state as the source of their legitimacy, as well as sometimes running them, either directly or indirectly through corporations. This usage is particularly common in the area of East Asian studies, and is sometimes also referred to as state corporatism."
Fascism
Fascism, can be described as a much broader ideology but fascist economic ideas are basically corporatist.
"The fascists opposed both international socialism and liberal capitalism, arguing that their views represented a third way. They claimed to provide a realistic economic alternative that was neither laissez-faire capitalism nor communism.[19] They favoured corporatism and class collaboration, believing that the existence of inequality and separate social classes was beneficial (contrary to the views of socialists).[20] Fascists argued that the state had a role in mediating relations between these classes (contrary to the views of liberal capitalists).[21]
An inherent aspect of fascist economies was economic dirigisme[22], meaning an economy where the government exerts strong directive influence, and effectively controls production and allocation of resources. In general, apart from the nationalizations of some industries, fascist economies were based on private property and private initiative, but these were contingent upon service to the state.[23]"
Getting to Malanga's piece
"But we are entering quite a different age right now, one in which the President of the United States and his hand-selected industrial overseers fire the chief executive of General Motors and chart the company’s next moves in order to preserve it. Conservative critics of the president have said that the government’s GM strategy is one of many examples of an America drifting toward socialism. But President Obama is not a socialist. If his agenda harks back to anything, it is to corporatism, the notion that elite groups of individuals molded together into committees or public-private boards can guide society and coordinate the economy from the top town and manage change by evolution, not revolution. It is a turn-of-the 20th century philosophy, updated for the dawn of the 21st century, which positions itself as an antidote to the kind of messy capitalism that has transformed the Fortune 500 and every corner of our economy in the last half century. To do so corporatism seeks to substitute the wisdom of the few for the hundreds of millions of individual actions and transactions of the many that set the direction of the economy from the bottom up."
I urge one to read and think about it and I leave with one last definition. Obama's ideas are in stark contrast those of our nation's founders.
Classical Liberalism
"Classical liberalism holds that individual rights are natural, inherent, or inalienable, and exist independently of government. Thomas Jefferson called these inalienable rights: "...rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law', because law is often but the tyrant’s will, and always so when it violates the rights of the individual."[25] For classical liberalism, rights are of a negative nature—rights that require that other individuals (and governments) refrain from interfering with individual liberty, whereas social liberalism (also called modern liberalism or welfare liberalism) holds that individuals have a right to be provided with certain benefits or services by others.[26] Unlike social liberals, classical liberals are "hostile to the welfare state."[9] They do not have an interest in material equality but only in "equality before the law."[27] Classical liberalism is critical of social liberalism and takes offense at group rights being pursued at the expense of individual rights.[28]"
Study the meaning of this word. Go to the Wikipedia and you will see the similarities between Obama's current policies and Fascism. The founders of our country were true Liberals and opposed these ideas with their lives.
My last post about the PPIP program implied that many of Obama's policies and methods were not socialist, but corporatist or fascist.
Steve Malanga, who I think I remember from Crains, NY has written a great little primer on this. He correctly points out that corporatist policies often gain popularty in periods of crisis and are in fact attempts by elites and existing power bases to limit and resist change.Let's start with definitions.
Corporatism
"Historically, corporatism refers to a political or economic system in which power is held by civic assemblies that represent economic, industrial, agrarian, social, cultural, and/or professional groups. These civic assemblies are known as corporations (not the same as the legally incorporated business entities known as corporations, though some are such). Corporations are unelected bodies with an internal hierarchy; their purpose is to exert control over the social and economic life of their respective areas. Thus, for example, a steel corporation would be a cartel composed of all the business leaders in the steel industry, coming together to discuss a common policy on prices and wages. When the political and economic power of a country rests in the hands of such groups, then a corporatist system is in place."
I can't paste in the whole definition but corporatism works through a complex of "public/private partnerships which ossify power through force.
"Political scientists may also use the term corporatism to describe a practice whereby a state, through the process of licensing and regulating officially-incorporated social, religious, economic, or popular organizations, effectively co-opts their leadership or circumscribes their ability to challenge state authority by establishing the state as the source of their legitimacy, as well as sometimes running them, either directly or indirectly through corporations. This usage is particularly common in the area of East Asian studies, and is sometimes also referred to as state corporatism."
Fascism
Fascism, can be described as a much broader ideology but fascist economic ideas are basically corporatist.
"The fascists opposed both international socialism and liberal capitalism, arguing that their views represented a third way. They claimed to provide a realistic economic alternative that was neither laissez-faire capitalism nor communism.[19] They favoured corporatism and class collaboration, believing that the existence of inequality and separate social classes was beneficial (contrary to the views of socialists).[20] Fascists argued that the state had a role in mediating relations between these classes (contrary to the views of liberal capitalists).[21]
An inherent aspect of fascist economies was economic dirigisme[22], meaning an economy where the government exerts strong directive influence, and effectively controls production and allocation of resources. In general, apart from the nationalizations of some industries, fascist economies were based on private property and private initiative, but these were contingent upon service to the state.[23]"
Getting to Malanga's piece
"But we are entering quite a different age right now, one in which the President of the United States and his hand-selected industrial overseers fire the chief executive of General Motors and chart the company’s next moves in order to preserve it. Conservative critics of the president have said that the government’s GM strategy is one of many examples of an America drifting toward socialism. But President Obama is not a socialist. If his agenda harks back to anything, it is to corporatism, the notion that elite groups of individuals molded together into committees or public-private boards can guide society and coordinate the economy from the top town and manage change by evolution, not revolution. It is a turn-of-the 20th century philosophy, updated for the dawn of the 21st century, which positions itself as an antidote to the kind of messy capitalism that has transformed the Fortune 500 and every corner of our economy in the last half century. To do so corporatism seeks to substitute the wisdom of the few for the hundreds of millions of individual actions and transactions of the many that set the direction of the economy from the bottom up."
I urge one to read and think about it and I leave with one last definition. Obama's ideas are in stark contrast those of our nation's founders.
Classical Liberalism
"Classical liberalism holds that individual rights are natural, inherent, or inalienable, and exist independently of government. Thomas Jefferson called these inalienable rights: "...rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law', because law is often but the tyrant’s will, and always so when it violates the rights of the individual."[25] For classical liberalism, rights are of a negative nature—rights that require that other individuals (and governments) refrain from interfering with individual liberty, whereas social liberalism (also called modern liberalism or welfare liberalism) holds that individuals have a right to be provided with certain benefits or services by others.[26] Unlike social liberals, classical liberals are "hostile to the welfare state."[9] They do not have an interest in material equality but only in "equality before the law."[27] Classical liberalism is critical of social liberalism and takes offense at group rights being pursued at the expense of individual rights.[28]"
Obama Plan Working, Unemployment Declines In Washington D.C.
Well, the latest unemployment stats show declines in Unemployment in D.C.
North Dakota and the District of Columbia registered rate
decreases, and 3 states had no change in their rate.
The news in the rest of the country was a bit worse.
"Regional and state unemployment rates were nearly all higher in
March. Over the year, jobless rates were up in all 50 states and the
District of Columbia. The national unemployment rate rose from 8.1
percent in February to 8.5 percent in March, which was 3.4 percent-
age points higher than in March 2008.
In March 2009, nonfarm payroll employment decreased in 48 states
and the District of Columbia and rose in 2 states. The largest over-
the-month employment decrease occurred in California (-62,100), fol-
lowed by Florida (-51,900), Texas (-47,100), North Carolina (-41,300),
Illinois (-39,600), and Ohio (-37,500). North Carolina experienced
the largest over-the-month percentage decrease in employment (-1.0
percent), followed by Idaho, Minnesota, and Washington (-0.9 percent
each) and Delaware, Nebraska, and Oregon (-0.8 percent each). The 2
states to show an over-the-month increase in employment were Mississippi
(+300 or less than +0.1 percent) and North Dakota (+300 or +0.1 percent).
Over the year, nonfarm employment decreased in 46 states and increased
in 4 states and the District of Columbia. The largest over-the-year
percentage decreases in employment occurred in Arizona (-7.0 percent),
Michigan (-6.4 percent), Florida, Nevada, and Oregon (-5.4 percent
each), and Idaho and North Carolina (-5.0 percent each). The over-
the-year percentage increases in employment occurred in the District
of Columbia (+0.8 percent), Alaska (+0.7 percent), North Dakota (+0.3
percent), and Louisiana and Wyoming (+0.2 percent each)."
Michigan ____________ 12.6%
Oregon _____________ 12.1%
South Carolina_________11.4%
California_____________11.2%
North Carolina_________10.8%
Rhode Island__________10.5%
Nevada______________10.4%
Indiana______________10%
The American Economic stats resemble those in third world statist countries. Growth in and near the capital city where the looters and connected thugs work to split wealth pillaged from the rest of the economy.
North Dakota and the District of Columbia registered rate
decreases, and 3 states had no change in their rate.
The news in the rest of the country was a bit worse.
"Regional and state unemployment rates were nearly all higher in
March. Over the year, jobless rates were up in all 50 states and the
District of Columbia. The national unemployment rate rose from 8.1
percent in February to 8.5 percent in March, which was 3.4 percent-
age points higher than in March 2008.
In March 2009, nonfarm payroll employment decreased in 48 states
and the District of Columbia and rose in 2 states. The largest over-
the-month employment decrease occurred in California (-62,100), fol-
lowed by Florida (-51,900), Texas (-47,100), North Carolina (-41,300),
Illinois (-39,600), and Ohio (-37,500). North Carolina experienced
the largest over-the-month percentage decrease in employment (-1.0
percent), followed by Idaho, Minnesota, and Washington (-0.9 percent
each) and Delaware, Nebraska, and Oregon (-0.8 percent each). The 2
states to show an over-the-month increase in employment were Mississippi
(+300 or less than +0.1 percent) and North Dakota (+300 or +0.1 percent).
Over the year, nonfarm employment decreased in 46 states and increased
in 4 states and the District of Columbia. The largest over-the-year
percentage decreases in employment occurred in Arizona (-7.0 percent),
Michigan (-6.4 percent), Florida, Nevada, and Oregon (-5.4 percent
each), and Idaho and North Carolina (-5.0 percent each). The over-
the-year percentage increases in employment occurred in the District
of Columbia (+0.8 percent), Alaska (+0.7 percent), North Dakota (+0.3
percent), and Louisiana and Wyoming (+0.2 percent each)."
Michigan ____________ 12.6%
Oregon _____________ 12.1%
South Carolina_________11.4%
California_____________11.2%
North Carolina_________10.8%
Rhode Island__________10.5%
Nevada______________10.4%
Indiana______________10%
The American Economic stats resemble those in third world statist countries. Growth in and near the capital city where the looters and connected thugs work to split wealth pillaged from the rest of the economy.
Bailed Out Banks Find The Next Honey Pot
Critics of Geitner's most recent scheme to remove toxic assets from bank balance sheets, claimed it could create major problems. Some thought banks might go back into the market to buy back junk securities with the sole purpose of reselling them back to the government at a higher price.
According to the NY Post, this is already happening.
Traders are seeing surprising new demand for junk MBS, that few people would touch a few weeks ago. Some of the buyers are Bank Of America and Citi which owe their very existence to taxpayer bailouts and guarantees. Do they suddenly see a dramatic turnaround in mortgage default rates? (they are rising) Have home prices started to rise boosting the collateral behind the loans? (they are still falling)What new factor makes them suddenly so bullish-- aside from the new government player in the market. Do they think this new player will buy these securities for more than they are worth?
"One Wall Street trader told The Post that what's been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.
Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids."
The really weird thing is that the recent jump seems to be in loan classes like Atl-A and Option Arms which are expected to see increasing default rates.
Original source was a link from the Implodometer to this site.
According to the NY Post, this is already happening.
Traders are seeing surprising new demand for junk MBS, that few people would touch a few weeks ago. Some of the buyers are Bank Of America and Citi which owe their very existence to taxpayer bailouts and guarantees. Do they suddenly see a dramatic turnaround in mortgage default rates? (they are rising) Have home prices started to rise boosting the collateral behind the loans? (they are still falling)What new factor makes them suddenly so bullish-- aside from the new government player in the market. Do they think this new player will buy these securities for more than they are worth?
"One Wall Street trader told The Post that what's been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.
Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids."
The really weird thing is that the recent jump seems to be in loan classes like Atl-A and Option Arms which are expected to see increasing default rates.
Original source was a link from the Implodometer to this site.
Being Fair To Ford
I don't know how it happened, but a reporter from the NY Times did sympathetic story about Ford's proud but desperate struggle to survive, on it's own two feet and do what it has to get it's costs and financial situation in order without major government handouts.
The problem is that now it faces two major domestic rivals and a world of other car companies in which handouts and bailouts are the norm. Most likely they will have to throw in the towel and dance to Obama and the Car Czar's crazy tune.
"That was when the car market crashed and the auto companies began burning through huge amounts of cash. A month later, Mr. Mulally was in the spotlight — along with G.M.’s chairman, Rick Wagoner, and Chrysler’s chairman, Robert L. Nardelli — during Congressional hearings on Detroit’s financial woes.
Mr. Mulally said Ford never intended to ask for federal help but needed to support the industry during its crisis.
“From Day 1, we had no desire to access the government money,” he said.
Ford parted ways with G.M. and Chrysler in December, when its two rivals effectively came under government supervision as part of their loan agreements.
Last month, the presidential task force forced Mr. Wagoner to resign at G.M. and began an effort to replace the company’s board.
Meanwhile, Mr. Ford, whose great-grandfather founded the auto company, and Mr. Mulally continue to pursue their long-range turnaround plans."
Give up Ford and learn the lesson Obama and people like him are teaching us all. Failure is the new path to success.
The problem is that now it faces two major domestic rivals and a world of other car companies in which handouts and bailouts are the norm. Most likely they will have to throw in the towel and dance to Obama and the Car Czar's crazy tune.
"That was when the car market crashed and the auto companies began burning through huge amounts of cash. A month later, Mr. Mulally was in the spotlight — along with G.M.’s chairman, Rick Wagoner, and Chrysler’s chairman, Robert L. Nardelli — during Congressional hearings on Detroit’s financial woes.
Mr. Mulally said Ford never intended to ask for federal help but needed to support the industry during its crisis.
“From Day 1, we had no desire to access the government money,” he said.
Ford parted ways with G.M. and Chrysler in December, when its two rivals effectively came under government supervision as part of their loan agreements.
Last month, the presidential task force forced Mr. Wagoner to resign at G.M. and began an effort to replace the company’s board.
Meanwhile, Mr. Ford, whose great-grandfather founded the auto company, and Mr. Mulally continue to pursue their long-range turnaround plans."
Give up Ford and learn the lesson Obama and people like him are teaching us all. Failure is the new path to success.
PPIC And More FDIC Lies
I have to be honest here. I have had strong fears for years that America is sliding rapidly towards fascism or some form of totalitarian government.
One of the biggest myths about this type of regime is that one can spot it by proliferation and strength of it's laws. In fact, totalitarian states are places in which the law is the whim of the king or dictator. Our founders feared this situation and tied leaders to the law with very few "if's ands or buts". The president, legislators, police and government officials pledge allegance to the law. Emergency powers are very limited and for the most part were only for use during war.
In contrast, let's look at some fascist and pro fascist political views.
Carl Schmidt
"In 1921, Schmitt became a professor at the University of Greifswald, where he published his essay "Die Diktatur" ("On Dictatorship"), in which he discussed the foundations of the newly-established Weimar Republic, emphasising the office of the Reichspräsident. In this essay, Schmitt compared and contrasted what he saw as the effective and ineffective elements of the new constitution of his country. To him, the office of the president could be characterized as a comparatively effective element within the new constitution, because of the power granted to the president to declare a state of emergency. This power, which Schmitt discussed and implicitly praised as dictatorial, was seen as more effective, more in line with the underlying mentality of political power, than the comparatively slow and ineffective processes of legislative political power reached through parliamentary discussion and compromise.
Schmitt was at pains to remove what he saw as a squeamish taboo surrounding the concept of "dictatorship" and to show that, in his eyes, the concept is implicit whenever power is wielded through pathways outside the slow and rusty processes of parliamentary politics:
“If the constitution of a state is democratic, then every exceptional negation of democratic principles, every exercise of state power independent of the approval of the majority, can be called dictatorship.”[citation needed]
For Schmitt, every government capable of decisive action must include a dictatorial element within its constitution. Although the German concept of Ausnahmezustand is best translated as "state of emergency", it literally means state of exception which,according to Schmitt, frees the executive from any legal restraints to its power that would normally apply. The use of the term "exceptional" has to be underlined here: Schmitt defines sovereignty as the power to decide the instauration of state of exception, as Giorgio Agamben has noted. According to Agamben[1], Schmitt's conceptualization of the "state of exception" as belonging to the core-concept of sovereignty was a response to Walter Benjamin's concept of a "pure" or "revolutionary" violence, which didn't enter into any relationship whatsoever with right. Through the state of exception, Schmitt included all types of violence under right. According to Giorgio Agamben, this kind of violence, which necessarily bears a juridical value, is another example of the fusion of right to "bare life" (It. vita nuda, Grk. zoe) that transforms the juridical system into a "death machine," able to perform acts of pure violence as needed for self-legitimation, creating Homo sacer, a being that cannot be "murdered" or "sacrificed" but only killed.
Schmitt opposed what he called "chief constable dictature", or the declaration of a state of emergency in order to save the legal order (a temporary suspension of law, defined itself by moral or legal right): the state of emergency is limited (even if a posteriori, by law), to "sovereign dictature", in which law was suspended, as in the classical state of exception, not to "save the Constitution", but rather to create another Constitution. This is how he theorized Hitler's continual suspension of the legal constitutional order during the Third Reich (the Weimar Republic's Constitution was never abrogated, underlined Giorgio Agamben;[2][citation needed] rather, it was "suspended" for four years, first at February 28, 1933 Reichstag Fire Decree, with the suspension renewed every four years, implying a -- continual -- state of emergency)."
Benito Mussolini (actual quote)
"The foundation of Fascism is the conception of the State, its character, its duty, and its aim. Fascism conceives of the State as an absolute, in comparison with which all individuals or groups are relative, only to be conceived of in their relation to the State. The conception of the Liberal State is not that of a directing force, guiding the play and development, both material and spiritual, of a collective body, but merely a force limited to the function of recording results: on the other hand, the Fascist State is itself conscious and has itself a will and a personality -- thus it may be called the "ethic" State....
...The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential; the deciding power in this question cannot be the individual, but the State alone.... "
I won't go on endlessly about this, power unlimited by law is the defining aspect of all tyrany. At it's most exteme we have the Fuhrer Principle.
"The ideology of the Führerprinzip sees each organization as a hierarchy of leaders, where every leader (Führer, in German) has absolute responsibility in his own area, demands absolute obedience from those below him and answers only to his superiors. The supreme leader, Adolf Hitler, answered to no one. Giorgio Agamben has argued that Hitler saw himself as an incarnation of auctoritas, and as the living law itself. The Führerprinzip paralleled the functionality of military organizations, which continue to use a similar authority structure today. The justification for the civil use of the Führerprinzip was that unquestioning obedience to superiors supposedly produced order and prosperity in which those deemed 'worthy' would share."
We all should know, the checks put in place by our system to control state power. Congress debates and makes clear laws, the president and the executive branch carry them out and the Supreme court makes sure they conform to the "supreme law" of the constitution which of course can be changed. The whole process places difficult, slow and messy roadblocks in the path of those who "just want to get things done", in times of crisis or "emergency".
Listing all the recent "emergency measures" of dubious legality would take too long or might not be possible at all since many are secret. The recent PPIP plan is an example.
"In the fine print of Treasury Secretary Timothy F. Geithner’s plan to lend as much as $1 trillion to private investors to help them buy toxic assets from our nation’s banks, you’ll find some details of how the F.D.I.C is trying to stabilize the system by adding more risk, not less, to the system.
It’s going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisitions of toxic assets. The program, extraordinary in its size and scope, is the equivalent of TARP 2.0. Only this time, Congress didn’t get a chance to vote."http://dealbook.blogs.nytimes.com/2009/04/07/the-taxpayer-takes-the-risk-in-fdics-no-risk-insurance/#statute"
The action is a clear attempt to stuff evade the real risks and obligations being taken on by current and future taxpayers and also those who might lend the government money and to get around any need to appropriate more money.
One of the biggest myths about this type of regime is that one can spot it by proliferation and strength of it's laws. In fact, totalitarian states are places in which the law is the whim of the king or dictator. Our founders feared this situation and tied leaders to the law with very few "if's ands or buts". The president, legislators, police and government officials pledge allegance to the law. Emergency powers are very limited and for the most part were only for use during war.
In contrast, let's look at some fascist and pro fascist political views.
Carl Schmidt
"In 1921, Schmitt became a professor at the University of Greifswald, where he published his essay "Die Diktatur" ("On Dictatorship"), in which he discussed the foundations of the newly-established Weimar Republic, emphasising the office of the Reichspräsident. In this essay, Schmitt compared and contrasted what he saw as the effective and ineffective elements of the new constitution of his country. To him, the office of the president could be characterized as a comparatively effective element within the new constitution, because of the power granted to the president to declare a state of emergency. This power, which Schmitt discussed and implicitly praised as dictatorial, was seen as more effective, more in line with the underlying mentality of political power, than the comparatively slow and ineffective processes of legislative political power reached through parliamentary discussion and compromise.
Schmitt was at pains to remove what he saw as a squeamish taboo surrounding the concept of "dictatorship" and to show that, in his eyes, the concept is implicit whenever power is wielded through pathways outside the slow and rusty processes of parliamentary politics:
“If the constitution of a state is democratic, then every exceptional negation of democratic principles, every exercise of state power independent of the approval of the majority, can be called dictatorship.”[citation needed]
For Schmitt, every government capable of decisive action must include a dictatorial element within its constitution. Although the German concept of Ausnahmezustand is best translated as "state of emergency", it literally means state of exception which,according to Schmitt, frees the executive from any legal restraints to its power that would normally apply. The use of the term "exceptional" has to be underlined here: Schmitt defines sovereignty as the power to decide the instauration of state of exception, as Giorgio Agamben has noted. According to Agamben[1], Schmitt's conceptualization of the "state of exception" as belonging to the core-concept of sovereignty was a response to Walter Benjamin's concept of a "pure" or "revolutionary" violence, which didn't enter into any relationship whatsoever with right. Through the state of exception, Schmitt included all types of violence under right. According to Giorgio Agamben, this kind of violence, which necessarily bears a juridical value, is another example of the fusion of right to "bare life" (It. vita nuda, Grk. zoe) that transforms the juridical system into a "death machine," able to perform acts of pure violence as needed for self-legitimation, creating Homo sacer, a being that cannot be "murdered" or "sacrificed" but only killed.
Schmitt opposed what he called "chief constable dictature", or the declaration of a state of emergency in order to save the legal order (a temporary suspension of law, defined itself by moral or legal right): the state of emergency is limited (even if a posteriori, by law), to "sovereign dictature", in which law was suspended, as in the classical state of exception, not to "save the Constitution", but rather to create another Constitution. This is how he theorized Hitler's continual suspension of the legal constitutional order during the Third Reich (the Weimar Republic's Constitution was never abrogated, underlined Giorgio Agamben;[2][citation needed] rather, it was "suspended" for four years, first at February 28, 1933 Reichstag Fire Decree, with the suspension renewed every four years, implying a -- continual -- state of emergency)."
Benito Mussolini (actual quote)
"The foundation of Fascism is the conception of the State, its character, its duty, and its aim. Fascism conceives of the State as an absolute, in comparison with which all individuals or groups are relative, only to be conceived of in their relation to the State. The conception of the Liberal State is not that of a directing force, guiding the play and development, both material and spiritual, of a collective body, but merely a force limited to the function of recording results: on the other hand, the Fascist State is itself conscious and has itself a will and a personality -- thus it may be called the "ethic" State....
...The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential; the deciding power in this question cannot be the individual, but the State alone.... "
I won't go on endlessly about this, power unlimited by law is the defining aspect of all tyrany. At it's most exteme we have the Fuhrer Principle.
"The ideology of the Führerprinzip sees each organization as a hierarchy of leaders, where every leader (Führer, in German) has absolute responsibility in his own area, demands absolute obedience from those below him and answers only to his superiors. The supreme leader, Adolf Hitler, answered to no one. Giorgio Agamben has argued that Hitler saw himself as an incarnation of auctoritas, and as the living law itself. The Führerprinzip paralleled the functionality of military organizations, which continue to use a similar authority structure today. The justification for the civil use of the Führerprinzip was that unquestioning obedience to superiors supposedly produced order and prosperity in which those deemed 'worthy' would share."
We all should know, the checks put in place by our system to control state power. Congress debates and makes clear laws, the president and the executive branch carry them out and the Supreme court makes sure they conform to the "supreme law" of the constitution which of course can be changed. The whole process places difficult, slow and messy roadblocks in the path of those who "just want to get things done", in times of crisis or "emergency".
Listing all the recent "emergency measures" of dubious legality would take too long or might not be possible at all since many are secret. The recent PPIP plan is an example.
"In the fine print of Treasury Secretary Timothy F. Geithner’s plan to lend as much as $1 trillion to private investors to help them buy toxic assets from our nation’s banks, you’ll find some details of how the F.D.I.C is trying to stabilize the system by adding more risk, not less, to the system.
It’s going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisitions of toxic assets. The program, extraordinary in its size and scope, is the equivalent of TARP 2.0. Only this time, Congress didn’t get a chance to vote."http://dealbook.blogs.nytimes.com/2009/04/07/the-taxpayer-takes-the-risk-in-fdics-no-risk-insurance/#statute"
The action is a clear attempt to stuff evade the real risks and obligations being taken on by current and future taxpayers and also those who might lend the government money and to get around any need to appropriate more money.
Budget Fraud In Illinois
I want to say to start with that I am not a resident of Illinois, and I have very little direct knowledge of it's bugetary or accounting processes. I mostly brought it up because almost all state and local governments are "surprising" taxpayers with billions, if not trillions in liabilities that were never honestly revealed to taxpayers. I am also not an accountant.
Almost every state in the nation has a constitutionaly mandated balanced budget, which were almost surely enacted to prevent current citizens from heaping future unpaid liabilities on future taxpayers. Yet almost every state has created a web of unfunded liabilities through mechanism's aimed at hiding their true size. Red flag areas usually include -- insanely optimistic state pension fund projections which enable very low annual contributions; off budget entities( think Fannie Mae) such as turnpike, construction or prison "authorities" which issue debt with implied government backing and various "trust funds" with no real money in them.
"Citing an $11.5 budget deficit over the next two year in his budget address Illinois new governor, Pat Quinn, called for a 50% increase in the income tax rate and for cuts in state government spending. But would the Governor’s budget be truly balanced?
Two features of his budget lead me to believe the answer is no. The first is that he would lower this year’s contributions to pension systems by nearly $2.9 billion. He is assuming that Illinois will save billions of dollars in coming decades by cutting retirement benefits for new state employees. This is like someone planning to spend less in the future, so he will hold off paying his past bills for a while.
The other troubling feature of Gov. Quinn’s budget is the sweeping of special-purpose funds. Only in state government does moving money from one account to another count as revenue. This shell-game is played, because only six state funds are included in the state balanced budget requirement. Therefore if a “non-budgeted” fund has excess cash that it is accumulating for its “special-purpose,” then these funds can be moved to balance the “budgeted funds.” The personal analogy here is if you moved money from your savings account to your checking account."
Scams of this type are the reason real federal liabilities are about 4X larger than stated and are the main reason for the trillions in "surprise budget" shortfalls taxpayers accross the country now face.
Accounting is I think supposed to be about truth. Only by operating with numbers that are as truthful and accurate as posible can voters make informed decisions about government spending and taxes.
"To pretend he is balancing the budget the Governor is only including the amount he wants to pay into the pension plans. The amount is based on the money he wants to spend elsewhere in the budget, not the amount the pension and retirement health care plans’ actuaries calculated. To truly balance the budget the Governor must consider these costs as they are incurred, instead of continuing the shenanigans that just push these costs on to future taxpayers."
Almost every state in the nation has a constitutionaly mandated balanced budget, which were almost surely enacted to prevent current citizens from heaping future unpaid liabilities on future taxpayers. Yet almost every state has created a web of unfunded liabilities through mechanism's aimed at hiding their true size. Red flag areas usually include -- insanely optimistic state pension fund projections which enable very low annual contributions; off budget entities( think Fannie Mae) such as turnpike, construction or prison "authorities" which issue debt with implied government backing and various "trust funds" with no real money in them.
"Citing an $11.5 budget deficit over the next two year in his budget address Illinois new governor, Pat Quinn, called for a 50% increase in the income tax rate and for cuts in state government spending. But would the Governor’s budget be truly balanced?
Two features of his budget lead me to believe the answer is no. The first is that he would lower this year’s contributions to pension systems by nearly $2.9 billion. He is assuming that Illinois will save billions of dollars in coming decades by cutting retirement benefits for new state employees. This is like someone planning to spend less in the future, so he will hold off paying his past bills for a while.
The other troubling feature of Gov. Quinn’s budget is the sweeping of special-purpose funds. Only in state government does moving money from one account to another count as revenue. This shell-game is played, because only six state funds are included in the state balanced budget requirement. Therefore if a “non-budgeted” fund has excess cash that it is accumulating for its “special-purpose,” then these funds can be moved to balance the “budgeted funds.” The personal analogy here is if you moved money from your savings account to your checking account."
Scams of this type are the reason real federal liabilities are about 4X larger than stated and are the main reason for the trillions in "surprise budget" shortfalls taxpayers accross the country now face.
Accounting is I think supposed to be about truth. Only by operating with numbers that are as truthful and accurate as posible can voters make informed decisions about government spending and taxes.
"To pretend he is balancing the budget the Governor is only including the amount he wants to pay into the pension plans. The amount is based on the money he wants to spend elsewhere in the budget, not the amount the pension and retirement health care plans’ actuaries calculated. To truly balance the budget the Governor must consider these costs as they are incurred, instead of continuing the shenanigans that just push these costs on to future taxpayers."
Thursday, April 16, 2009
Obama Admits To Illegal And Unconstitutional Agenda
Obviously, I'm A guy so I''ll only post on here once in a while.
My previous posts, here, here, here and here are filled with dozens of quotes from the nation's founders, showed the pretty stark difference between their ideas and those that seem to drive most politicians today. Thes ideas were the basis of our Constitution, a document that is supposed to be the supreme law of the land.
In this Interview from 2001, Obama a legal scholar, admits openly that his goals to redistribute wealth are in conflict with the Constitution which was clearly designed to restrain government power. Little, we have seen since indicates things are different now.
I know that far to few American's on either party have bothered to obey or perhaps even read our Constitution and most have seen power as a tool to do whatever they wished, always in the firm confidence that they would always be the ones wielding it. I hope we have finally woken up.
My previous posts, here, here, here and here are filled with dozens of quotes from the nation's founders, showed the pretty stark difference between their ideas and those that seem to drive most politicians today. Thes ideas were the basis of our Constitution, a document that is supposed to be the supreme law of the land.
In this Interview from 2001, Obama a legal scholar, admits openly that his goals to redistribute wealth are in conflict with the Constitution which was clearly designed to restrain government power. Little, we have seen since indicates things are different now.
I know that far to few American's on either party have bothered to obey or perhaps even read our Constitution and most have seen power as a tool to do whatever they wished, always in the firm confidence that they would always be the ones wielding it. I hope we have finally woken up.
Wednesday, April 15, 2009
Statements From Potential Terrorists
If You strongly believe in these statements you are very likely oppossed to the policies of government today and might be a terrorist. How far we have come from the ideas the nation was founded on.
"A Bill of Rights is what the people are entitled to against every government, and what no just government should refuse, or rest on inference."
Thomas Jefferson
"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. "
Thomas Jefferson
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. "
Thomas Jefferson
All tyranny needs to gain a foothold is for people of good conscience to remain silent.
Thomas Jefferson
"All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression."
Thomas Jefferson
As our enemies have found we can reason like men, so now let us show them we can fight like men also.
Thomas Jefferson
Commerce with all nations, alliance with none, should be our motto.
Thomas Jefferson
Conquest is not in our principles. It is inconsistent with our government.
Thomas Jefferson
Delay is preferable to error.
Thomas Jefferson
"Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition."
Thomas Jefferson
"Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state. "
Thomas Jefferson
"Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories."
Thomas Jefferson
"Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny. "
Thomas Jefferson
"For a people who are free, and who mean to remain so, a well-organized and armed militia is their best security. "
Thomas Jefferson
"I have no fear that the result of our experiment will be that men may be trusted to govern themselves without a master."
Thomas Jefferson
"I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man. "
Thomas Jefferson
Find more videos like this on The 9.12 Project Network
"I own that I am not a friend to a very energetic government. It is always oppressive."
Thomas Jefferson
"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."
Thomas Jefferson
"I would rather be exposed to the inconveniences attending too much liberty than those attending too small a degree of it."
Thomas Jefferson
"Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong. "
Thomas Jefferson
In every country and every age, the priest had been hostile to Liberty.
Thomas Jefferson
"In matters of style, swim with the current; in matters of principle, stand like a rock."
Thomas Jefferson
"In truth, politeness is artificial good humor, it covers the natural want of it, and ends by rendering habitual a substitute nearly equivalent to the real virtue."
Thomas Jefferson
"It behooves every man who values liberty of conscience for himself, to resist invasions of it in the case of others: or their case may, by change of circumstances, become his own."
Thomas Jefferson
"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. "
Thomas Jefferson
"Leave no authority existing not responsible to the people."
Thomas Jefferson
"My reading of history convinces me that most bad government results from too much government."
Thomas Jefferson
"Never spend your money before you have earned it. "
Thomas Jefferson
"No free man shall ever be debarred the use of arms."
Thomas Jefferson
"Nothing is unchangeable but the inherent and unalienable rights of man. "
"A Bill of Rights is what the people are entitled to against every government, and what no just government should refuse, or rest on inference."
Thomas Jefferson
"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. "
Thomas Jefferson
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government. "
Thomas Jefferson
All tyranny needs to gain a foothold is for people of good conscience to remain silent.
Thomas Jefferson
"All, too, will bear in mind this sacred principle, that though the will of the majority is in all cases to prevail, that will to be rightful must be reasonable; that the minority possess their equal rights, which equal law must protect, and to violate would be oppression."
Thomas Jefferson
As our enemies have found we can reason like men, so now let us show them we can fight like men also.
Thomas Jefferson
Commerce with all nations, alliance with none, should be our motto.
Thomas Jefferson
Conquest is not in our principles. It is inconsistent with our government.
Thomas Jefferson
Delay is preferable to error.
Thomas Jefferson
"Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition."
Thomas Jefferson
"Every citizen should be a soldier. This was the case with the Greeks and Romans, and must be that of every free state. "
Thomas Jefferson
"Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories."
Thomas Jefferson
"Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny. "
Thomas Jefferson
"For a people who are free, and who mean to remain so, a well-organized and armed militia is their best security. "
Thomas Jefferson
"I have no fear that the result of our experiment will be that men may be trusted to govern themselves without a master."
Thomas Jefferson
"I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man. "
Thomas Jefferson
Find more videos like this on The 9.12 Project Network
"I own that I am not a friend to a very energetic government. It is always oppressive."
Thomas Jefferson
"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."
Thomas Jefferson
"I would rather be exposed to the inconveniences attending too much liberty than those attending too small a degree of it."
Thomas Jefferson
"Ignorance is preferable to error, and he is less remote from the truth who believes nothing than he who believes what is wrong. "
Thomas Jefferson
In every country and every age, the priest had been hostile to Liberty.
Thomas Jefferson
"In matters of style, swim with the current; in matters of principle, stand like a rock."
Thomas Jefferson
"In truth, politeness is artificial good humor, it covers the natural want of it, and ends by rendering habitual a substitute nearly equivalent to the real virtue."
Thomas Jefferson
"It behooves every man who values liberty of conscience for himself, to resist invasions of it in the case of others: or their case may, by change of circumstances, become his own."
Thomas Jefferson
"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world. "
Thomas Jefferson
"Leave no authority existing not responsible to the people."
Thomas Jefferson
"My reading of history convinces me that most bad government results from too much government."
Thomas Jefferson
"Never spend your money before you have earned it. "
Thomas Jefferson
"No free man shall ever be debarred the use of arms."
Thomas Jefferson
"Nothing is unchangeable but the inherent and unalienable rights of man. "
Sunday, April 12, 2009
Federal Budget Deficit Was A Record 192.3 Billion For March
"The Treasury Department said Friday that the budget deficit increased by $192.3 billion in March, and is near $1 trillion just halfway through the budget year, as costs of the financial bailout and recession mount"
Yes that's for one month.Obama predicts a full year deficit of "only 1.75 trillion" (Don't worry kids) but we are already at 956.8 billion and i think we are not halfway yet.
Time to put more "skin in the game folks".
Yes that's for one month.Obama predicts a full year deficit of "only 1.75 trillion" (Don't worry kids) but we are already at 956.8 billion and i think we are not halfway yet.
Time to put more "skin in the game folks".
Saturday, April 11, 2009
Find Out The True Numbers
I am not an accountant, but I have some knowledge of it.
True accounting is about trying to get an accurate picture of not just one's current"cash flow" but also all assets and liabilities. A person for example with $5000 in the bank, no job, negative home equity and a leaking roof in need of $40,000 in repairs would be called broke by an honest accountant. Suppose that person had also co-signed loans promising to bail out everyone else on the block.
Let's be honest, American's would likely not have bought into most of "free" gifts offered by the government, if they knew their true cost, to themselves and future generations.
Look up the film IOUSA on the internet, to get some idea of the real reality which has only gotten much worse since the film was made.
Here is an organization dedicated to exposing the ponzi frauds both our federal, state and local governments are running.
(No, printing monopoly money in your basement, like our federal government does doesn't make you rich either)
Friday, April 10, 2009
Hope And Change During German Simulus Program
See, the NY Times "Liberal" was right. Look at all those hopeful faces during Hitler's 1934 stimulus program.
NY Times Liberal Say's Fascism Ain't So Bad
I said in recent posts that not all of our so called liberals are advocating pure "socialism", but rather something that could be better described as Fascism. Almost none have said so honestly, untill now.
A few days ago a NY Times writer-- wrote this
"In the summer of 1933, just as they will do on Thursday, heads of government and their finance ministers met in London to talk about a global economic crisis. They accomplished little and went home to battle the crisis in their own ways.
More than any other country, Germany — Nazi Germany — then set out on a serious stimulus program. The government built up the military, expanded the autobahn, put up stadiums for the 1936 Berlin Olympics and built monuments to the Nazi Party across Munich and Berlin.
The economic benefits of this vast works program never flowed to most workers, because fascism doesn’t look kindly on collective bargaining. But Germany did escape the Great Depression faster than other countries. Corporate profits boomed, and unemployment sank (and not because of slave labor, which didn’t become widespread until later). Harold James, an economic historian, says that the young liberal economists studying under John Maynard Keynes in the 1930s began to debate whether Hitler had solved unemployment.
No sane person enjoys mixing nuance and Nazis, but this bit of economic history has a particular importance this week. In the run-up to the G-20 meeting, European leaders have resisted calls for more government spending. Last week, the European Union president, Mirek Topolanek, echoed a line from AC/DC — whom he had just heard in concert — and described the Obama administration’s stimulus plan as “a road to hell.”
The rest of his story painted a smiley face on an unspeakable evil that has killed millions and seemed to say we shouldn't be afraid of fascist ideas.
Perhaps the Czech Prime Minister has a better grip on reality and history after the hell his nation and Europe went through under both fascist-- and the Communist control. He knows the road to serfdom when he sees it.
Still think these people are Liberals????
A few days ago a NY Times writer-- wrote this
"In the summer of 1933, just as they will do on Thursday, heads of government and their finance ministers met in London to talk about a global economic crisis. They accomplished little and went home to battle the crisis in their own ways.
More than any other country, Germany — Nazi Germany — then set out on a serious stimulus program. The government built up the military, expanded the autobahn, put up stadiums for the 1936 Berlin Olympics and built monuments to the Nazi Party across Munich and Berlin.
The economic benefits of this vast works program never flowed to most workers, because fascism doesn’t look kindly on collective bargaining. But Germany did escape the Great Depression faster than other countries. Corporate profits boomed, and unemployment sank (and not because of slave labor, which didn’t become widespread until later). Harold James, an economic historian, says that the young liberal economists studying under John Maynard Keynes in the 1930s began to debate whether Hitler had solved unemployment.
No sane person enjoys mixing nuance and Nazis, but this bit of economic history has a particular importance this week. In the run-up to the G-20 meeting, European leaders have resisted calls for more government spending. Last week, the European Union president, Mirek Topolanek, echoed a line from AC/DC — whom he had just heard in concert — and described the Obama administration’s stimulus plan as “a road to hell.”
The rest of his story painted a smiley face on an unspeakable evil that has killed millions and seemed to say we shouldn't be afraid of fascist ideas.
Perhaps the Czech Prime Minister has a better grip on reality and history after the hell his nation and Europe went through under both fascist-- and the Communist control. He knows the road to serfdom when he sees it.
Still think these people are Liberals????
Monday, April 06, 2009
State Pensions For Criminals In New York
The Buffalo News has a story about the sacred protections for public pensions in New York State that even convicted criminals can't lose.
Other criminals mentioned included a Buffalo Detective serving 45 years in prison who gets a 40 thousand dollar pension; a convicted narcotics investigator with a 55,000 disability pension and a teacher convicted of sexual assault who collects 52,000 per year.
" Earlier this year, retired New York City police detectives Louis Eppolito, 60, and Stephen Caracappa, 67, were convicted of orchestrating murders for the mob while they were police officers.
Caracappa gets to keep his $63,000 a year pension. Eppolito gets to keep his $47,000 pension."
The majority of the listed people actually committed their crimes on the job.
Saturday, April 04, 2009
The Problem With BLS Numbers
BLS Job numbers always produce headlines and market impact when they come out while later revisions to the figures slip out later. During normal economic times these revisions are fairly minor. However, the fact that these figures are based upon historic trend estimates of economic activity creates very innaccurate figures during serious recessions.
This is very true now.
August 2008: Initially 84,000, revised to 175,000
September 2008: Initially 159,000, revised to 321,000
October 2008: Initially 240,000, revised to 380,000
November 2008: Initially 533,000, revised to 597,000
December 2008: Initially 524,000, revised to 681,000
January 2009: Initially 598,000, revised to 655,000
February 2009: Initially 651,000, as released today.
The biggest single distortion comes from the BLS's guestimate of the number of firms created and going out of business in a given period.
This is very true now.
August 2008: Initially 84,000, revised to 175,000
September 2008: Initially 159,000, revised to 321,000
October 2008: Initially 240,000, revised to 380,000
November 2008: Initially 533,000, revised to 597,000
December 2008: Initially 524,000, revised to 681,000
January 2009: Initially 598,000, revised to 655,000
February 2009: Initially 651,000, as released today.
The biggest single distortion comes from the BLS's guestimate of the number of firms created and going out of business in a given period.
Michigan Unemployment Rate Hit's 12.5%
This 12.5% number is the official U-3 measure. Combined measures of unemployment and underemployment in Michigan now are at 22.5%.
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