Friday, March 4, 2016

Riding Crops and Jack Boots aren't just for Sex Dungeons anymore

Ho hum, another month, another quarter million new jobs. Obama's job creation streak is a new record by what, a year? You don't hear that on the news, and if it's talked about at all the Conservatives always say, 'but they're low paying jobs'. No actually they're replacing the same jobs lost by Bush, most pay pretty good. Of course the definition of 'pretty good' has been changing. 

The median wage of hourly workers is a little over $22/hour, meaning half of Americans make less than that. The problem is that by 1968 standards $22/hour should be the minimum wage, you know like the kid slinging burgers was making at the Golden Arches while the latest Beatles hit played on the AM radio. 

In 1968 we still ran a Trade Surplus, you know like China does now to the tune of $700 billion/year. We still had tariffs then like China does now, we'd had them from 1790. It was no secret in 1968 that the US oil shortage was a problem, in five years it would be a huge problem. Solar technology had been developed 50 years before, but no one that could understand the math was listened to. Jimmy Carter would make some inroads into people's thinking but Reagan would erase that. 

Today China adds more solar production each year than the US has built to this point in history. China pretty much does more of everything in a year than the US ever has.  It's to be expected, the US is a third world country. Okay the US is really populated by 300 million temporarily embarrassed millionaires. Or do you subtract the 47% who don't pay income taxes from that number because they're just lazy? Yeah, that guy is back and bashing Trump. 

You have to wonder why Trump scares the crap out of the Republicans? It's not the fascism, they're all cool with that, they could bring the Jack Boots and riding crops out from their Sex Dungeons.

Trump keeps saying Populist things like 35% tariffs, that's what scares them. He might turnout to be some sort of class traitor like FDR. Too bad Trump is so fucking crazy. Oh wait, we could all just vote for Bernie, he scares them even more.  

Twitter @BruceEnberg - Scaring the crap out of Conservatives is the Order of the Day.

Friday, February 19, 2016

Conservative Liberals and their love of Reaganomics

Those of us of certain age remember well the Reagan Democrats, mostly white guys with union cards who thought Reagan would be better at running the economy in their best interest. He'd cut their taxes, crack down on Welfare Queens, bring back the good old days, all that.   

Today we've got the liberal establishment that want the good old days of the Clinton Administration back and would prefer that those pesky Progressives stop rocking the boat. There are Republicans circling in the water after all. (be afraid, be very afraid) 

It's hard for them to actually criticize Progressive goals, it's always what they say they want for everyone, but like Reagan Democrats they seem to only want these things for themselves and just choose to believe that things can't be changed. They keep trying to knock down the standard bearer but that turned out to be harder than they thought, so mostly they've been concentrating on disparaging his supporters for refusing to listen to them and saying mean things. 

For the past week or so the big push has been to discredit Progressive economics as simply pie in the sky nonsense. An independent economist reviewed the Sanders plan & calculates that it would produce better than 5% growth in GDP. This has made certain so-called liberal economists gnash their teeth & pull out their hair. At least this is the story the NY Times is pushing and their resident economist Paul Krugman is dutifully agreeing with their editorial assessment. I always wondered about somethings Krugman would say, now I know.

Not that any of these so-called liberal economists have made any actual analysis Bernie's plan themselves. The gist of the ridicule they heap on Bernie revolves around the fact that they've been saying since the early 90s that this level of growth is impossible. With Reaganomics in full effect it has been. They compare it to Jeb Bush's ridiculous claims that he could guarantee 4% annual growth based solely on more tax cuts for the rich & because he had 4% growth as Governor of Florida during his brother's housing bubble. 

I would think liberals could see the difference between the Republican's schemes to capture more of our wealth by funneling money to themselves and a comprehensive plan to actually do again the things that built this country. I guess it's hard to tell the difference if you're being paid not to see it. 

Twitter @BruceEnberg - Where we see things as they are for free. 

Friday, November 6, 2015

Keystone is dead and the economy is off and running.

There were 271,000 new jobs created in October and the unemployment rate remains at 5%. Low gasoline prices have been driving up consumer spending and creating jobs. Obama has driven a stake through the heart of Keystone XL pipeline ensuring that oil from the northern tier states will continue to stay in the US instead being exported and that will keep the price down.

Right wing pundits have be saying that low gas prices don't translate into increased consumer spending, but an extensive study by JP Morgan Chase shows that the average consumer is spending 80% of what they save on gas. This translates into billions of dollars that actually goes into an increase in demand for goods and services which is where jobs actually come from. Conservatives continue to sputter about Supply Side job creation, those are what they call the job creators, even though this economic theory was first debunked nearly a century ago.

The death rate of middle aged Americans is up significantly, this is of course directly caused by the GOP war on the Middle Class. Russia experienced the exact same thing after the Soviet Union collapsed leaving the Oligarchs in charge. The numbers aren't anywhere near as bad here, but only because Obama has been able to hold the US oligarchs at bay for now.

Based on the 'runaway' growth of the US economy the Federal Reserve is hinting that they may start raising interest rates. Contrary to the Right Wing crazies bloviations, Obama doesn't control the Fed, he dis appoint the Chair, but she doesn't have any real say about interest rates. Those are set by a board of made up of bankers, and they're just been itching to raise rates from the first month with a increase in jobs. The only thing slowing them down is a practice of transparency started by Ben Bernanke and continued by his protege Janet Yellen. The weasels aren't willing to eat the chickens if everyone knows who exactly is doing it.

China has run out of storage space for oil and they're still buying oil to build up reserves, so the sea of oil we're swimming in is going to suddenly get much deeper when they let up on purchases and that will drive the oil price even lower.

The Rightwing crazies thought the economic Armageddon they've been jonesing for on Obama's watch had come because China has been "dumping" US debt and surprise, no one cares. There is plenty of demand for US debt and as economy improves that demand will only increase while the need for debt will continue to decline.

Predictions that China's economy is collapsing need to be contrasted with the fact China has just launched a yuan based worldwide payment system. Anyone doing business with China can simply use yuans and avoid the Money Changers down at the Temple that prefer make you convert back and forth to USD or Euros or whatever.  

Walmart has been forced to remove "Made in USA" logos from its websites, it seems China isn't a US state, who knew?

Twitter @BruceEnberg - I checked the map, there really isn't a US state called China. I guess that explains all the boarded up factories.

Friday, September 25, 2015

Is the GOP Clown Car a Volkswagen? It should be.

China marked its President's visit to the US by announcing a cap and trade program on the burning of carbon starting in 2017. Now the Right Wing Nut Jobs really can call Obama's Cap and Trade proposal a Commie Plot with some small measure of truth.

China's economic problems are likely to get somewhat worse, but it's hardly the global disaster the short sellers would like you to bet on. Literally bet on, Wall Street has instruments to sell you that will cover you against China's collapse for a small fee. Check out their Brooklyn Bridge penny stocks while you're at it.

It appears China's problem revolves around moving to a consumer driven economy, they have 600 million middle class to serve and are planning for 400 million more over the next 15 years.

A number of past officials in China have become absurdly rich 'investing' in the stock market and are facing long prison terms for corruption. They were also resisting the move to consumerism but that is rapidly coming to an end. So it's unclear what exactly they're being prosecuted for, corruption which is usually tolerated or for resisting the new Five Year Plan from Comrade Chairman. That's the real title of China's 'President', he's really just the Chairman of the 205 member Central Committee and they represent every major power base in China.

Speaking of dodgy investments, I hope you weren't too heavy into German car companies. It's not just Volkswagen that's coming under scrutiny, it seems you really can't build a small cheap diesel engine that violates the laws of physics. It's not difficult to clean the sulfur out of diesel exhaust, but it's too expensive for a small engine, VW and other companies claimed they had a magic way to do it involving computer control, except the computer was lying and cheating like a Conservative politician.

The scheme was simple, the factory designed test of exhaust output involved taking control of the onboard computer from the testing equipment, but that actually triggered the computer to run a secret program that leaned out the engine so it ran clean. Conveniently, no provision was made for also testing horsepower output as that went to zero. You can have clean car that goes slow or a dirty car that goes fast, VW was pretending you could have both at a cheap price. The fallout from this could kill the company.

VW only got caught because a small US environmental group was trying to collect data to promote clean diesel, not to prove it's not clean. They borrowed a exhaust gas tailpipe probe and not having a shop dynamo to run the car on, they loaded it in the trunk and went down the road. The onboard computer not being hooked to a dynamo had no idea it was time to cheat. Germans just don't understand that Americans don't always follow orders without question.

The final numbers for 2nd quarter GDP were a robust 3.9% growth. This is like we had before Reagan. Low gasoline prices are boosting consumer spending for housing and big ticket items. Factory numbers suggest there should be another small uptick for the 3rd quarter. Since Conservatives have run out of ways to drive up gas prices we could roll into the election year with what for these days passes for a truly booming economy.

Twitter @BruceEnberg - My new German computer says that I now have seven gazillion followers.

Monday, August 24, 2015

The ghost of 'Morning in America'

Today is being called Black Monday by Conservative types who are having a fit about the 4% drop in stockmarket. The scary news broadcasts are sure to mention how much the average 401(k) has lost, but they're careful to tell people not get out of the stock market as it always comes back. This is a bald faced lie as it concerns managed 401(k) accounts as they always burn through a big wad of your cash even when you're making money. When the market goes down you really feel it. If you're stuck in one of these traps put your money into an index fund so there are fewer fees and no losses from the fund manager trying to beat the market.

The last Black Monday was October 19, 1987 when the market dropped 22.6%, almost 6 times today's drop. Saint Reagan was in charge then so you don't hear anyone talk about that particular Monday. Reagan was cheerleading the switch to 401(k) but they were new and the amount lost was relatively small. Reagan didn't actually invent the 401(k), but he sure thought they were swell. The tradition of defined benefit pensions was converted to simply dumping your money into Wall Street. This was great for Ronnie's corporate buddies who were getting all manner corporate behavior de-criminalized, and they granted him Sainthood for it as he absolved them of all their sins.

Twitter @BruceEnberg - China is putting a lot of former high level officials in prison for corruption, we should import that instead of crap for Walmart.

Friday, August 14, 2015

"Was it over when the Germans bombed Pearl Harbor?"

China devaluing the yuan against the USD had everyone in a tizzy this week. Taking a 2% markdown in one day alone started a three day decline that ended Friday with China giving their currency a slight bump against the dollar. And China stated flatly that they will maintain this exchange rate. Mostly this devaluing against a strong dollar is a signal to China's own people that they will do what it takes to maintain their economy.

The usual suspects in Republican debates are screaming Currency War and China is about to crash the Dollar! Of course there is no way this is about to happen now, this isn't 2008. All the panic did push the price of gold up slightly or rather pause its decline. At some point the price of gold will get low enough that I'm going to treat myself to a solid gold can opener.

Right Wing trolls have been having a hard time coming up with new Talking Points, so they continue to use the old ones that are way past their 'lie by date'. Workforce Participation Rate is an oldy but a goody, they're now screaming about how it hasn't been this low since the early 70s. The fact is that the percentage of working adults over 16 and not in the military or an institution, began declining at the beginning of the 2000s as Baby Boomers began to retire.

The Right Wing's supplemental Talking Point is that the Workforce Participation shot way up under Reaganomics. Obama's economic numbers are better than Reagan's in any meaningful way and Obama didn't borrow current equivalent of $10t to give away to his cronies either. Of course Reagan could have never have won the Battle of Jutland without those four Iowa Class Battle Battleships and 250 ships he built to support them. (Jutland 1916 was last time battleships fought) And of course Reagan could have never have stopped the Soviet Nazis attack on Pearl Harbor without building the Star Wars missile defense system at the cost of $3t (adj dollars).

Oh yeah, the Job Participation Rate shooting up under Reagan. It was simply millions of women going to work even if they had young children because of Reagan's War on Middle Class wages. For those of you who don't remember the olden days before Reagan, it was common for married women to never work outside the home and with a union job not a difficult thing to do. Now only religious cultists observe that practice.

The current Job Participation rate for Prime Workers 25-55 years old has actually been climbing robustly since Obama put the brakes on the Bush Crash. Of course there have been no real gains in wages but it's up to Congress to reinstate the Hamilton Plan for Manufactures. It was originally enacted in 1792 and largely maintained until 1981 building America to the industrial juggernaut it once was. Now they want to take Hamilton off the money because nobody knows why he's there. China has actually been following his plan since 1981 has gone from building steam locomotives to being the number one world economy, maybe they'll put him on the ten yuan bill.

Twitter @BruceEnberg - where we flip the Right Wingers over and check their 'lie by date'.

Monday, July 13, 2015

The weekly Greek crisis.

We're approaching a final showdown on the Greek/Euro crisis, of course we have one of those every week. The rhetoric in press is really heating up as their past attempts to force a collapse of the Greek government have so far failed. The Greek people spoke resoundly in their referendum that they don't want to be slaves to bankers, so now the rumor being spread is that their government made no plans about what to do if they actually won the referendum. Supposedly the Greek PM has now accepted worse terms than they were offered before the public voted. I can't count how many times in the past this a similar claim has been made in the media.

A bit of reality. Most of the so-called bailout loans from the europeans have gone to pay europeans holding Greek debt and not to actually keep Greece going. Greece has already accepted far more austerity than they should have to balance their budget, so in reality they're not that dependent on more loans to keep going. As long as Greece doesn't feed the parasitic bankers it can actually do okay.

Greece is not a failed state, it can collect most of the taxes due and it still has an economy. Greece has currency controls in place to keep the bad guys from simply draining all the euros from its banks.

Even if Greece isn't in a position to print drachmas right away it could easily begin issuing IOUs to pay its bills. These would begin trading on the open market for euros to maintain Greece's currency needs at what ever discount rate someone is willing to pay for them. These IOUs would become a defacto currency with a flexible exchange rate. A separate 'currency' for trade would make Greek exports far more competitive and grow its economy. This is the only solution that can work. Simple math requires that austerity measures will always shrink the economy by a greater amount than the austerity 'saves'.

A long term solution depends on whether Germany is really determined to make Greece suffer as a demonstration of the power wielded by the Aryan Master Race, (oops, I meant "the hard working German tax payer"). Greece is really insignificant to the euro, but the bankers have been pulling the same con on several much larger countries that are watching how this plays out.

The Gold Bugs are beside themselves that the Greek Crisis hasn't caused that huge spike in gold prices they've been waiting for ever since the price tanked a couple of years ago. There's even talk that this is the end for gold as a hedge. I've always wondered why I keep hearing the slogan, "Obama has debased the dollar" from Conservatives. The dollar is at its strongest in 20 years and inflation is nonexistent. It took a long time before I found one of them that could actually explain their talking point. They think the dollar is debased because the price of gold went down. Yeah, gold 'buys' fewer dollars so they think Obama is suppressing the price of gold. They of course have no explanation for how Obama is doing this. According to the Gold Bugs you should buy lots of gold because it is above all government influence, that is until the crazy claims they make about gold turn out to not be true, then as with all things, it's Obama's fault.

Twitter @BruceEnberg - oil prices keep falling which will likely bring back $2.00 gasoline by Labor Day, the one thing Conservatives won't blame Obama for.

Friday, June 12, 2015

Bring your own Unicorn

House Democrats lead by Nancy Pelosi have nixed a key provision of Obama's free trade Bill effectively killing it for the time being. In reality it was the failure of Republicans to pass it as they control the House, so it's probably just their way of embarrassing Obama before doing their Corporate Masters bidding next week. Republicans seem to keep forgetting that Obama isn't running for a third term, and this will give Democrats a stick to beat job exporting Republicans with before next year's election.

Job creation was a robust 280,000 for May and the March number was revised upward by 32,000 to 116,000. Hourly wages rose by 8 cents to 24.96 and over the past year wages rose 2.3 percent. Considering that the minimum wage should be $22/hour these positive numbers are rather lackluster and simply reflect the 'success' of Reagan's war on the Middle Class.

Greece appears to be getting close to an actual showdown with its creditors because the sticking point being their refusal eliminate old age pensions. Bankers really don't like keeping people alive who can no longer work.

There's still time for the European Central Bank and the IMF to come to an agreement with Greece. That is unless they are really set on making an example them. Spain is only months from going with a similar populist political party set to sweep into power before year's end. So far there have been no real negotiations, simply a slander campaign in the media with the hopes that the bankers could destabilize the populist Syriza Party government.

The wildcard in all of this are the Chinese who have made moves suggesting they might be inclined to help Greece if they drop out of the euro. These days yuans spend as good as anything and China would just love becoming a major player in the Reserve Currency business by pushing the euro into 3rd place. Once Greece drops out of the euro there would be incentive for a line of debt ridden countries to bail out if China provides a soft landing.

Twitter @BruceEnberg - where we are always holding out hope for a Fascism Free world. Bring your own Unicorn.