Saturday, May 21, 2011

Weekends beside the Lake of Fire

I trust all the people who follow this blog were left behind. You notice they always feel the need to threaten horrible consequences for those who don't rise up to heaven with them. They could just leave but then this would be heaven.

It's fascinating how they always prey on people's fear of being left alone when in reality the people who qualify as believers in their eyes are so few that they could disappear and nobody would notice. Airplanes wouldn't be falling from the skies and there wouldn't be crashed cars everywhere, just peace on earth.

The framers of the Constitution had a serious debate on whether or not to include freedom of religion in the First Amendment or to regulate it like in England. The English Civil War was long over but the lessons weren't lost on the people with any education. The augment that held sway was that the crazies mostly lived in little colonies and the rest of the country was in the grips of the Liberal Enlightenment and religion would fade away as it had with the framers.

They didn't anticipate that concentrated wealth would find it useful to gin up religion to further their own goals, much as a certain Roman Emperor found it useful to embrace the Paulist branch of Christianity and it was on to the Dark Ages. At the turn of the last Millennium the faithful were so sure it was the end times that they didn't plant any crops. The people who threw away their life savings to spread the word of the Rapture that didn't happen today won't starve as we heathens will be obliged to feed them. We should tax the churches to pay for mental healthcare but we won't. Maybe after the next civil war.

Friday, May 20, 2011

Digging a ditch instead of a hole

Weekly unemployment claims are continuing to trend down, the spike in claims a couple of weeks ago has been blamed on an unusual number of schools all having spring break at the same time. Last month saw 244,000 new jobs created (according to a survey of employers). This may or may not have included the 62,000 people Mickey D’s hired for the summer season. Most of these people won’t end up with permanent jobs even if they want to push burgers and high fructose corn syrup for the rest of their lives.

McDonalds has no incentive to pay very well since nearly a million people applied for a job that barely pays more than minimum wage.  The real minimum wage should be 12-14 dollars/hour to match what it would buy when it was first set to 25 cents/hour in 1938. This number also matches up to the minimum wage of the early sixties when McDonalds was first going nationwide.

Way back in those days McDonalds hired mostly high school kids and it was a really good job since it paid much more than minimum wage (can you imagine such a job paying the equivalent of $18/hour today?) (only the cool kids and jocks got hired and you could pay for college working there) And it was hard to get a McDonalds franchise since they weren’t building one on every corner. That all changed under Reagan who created a guaranteed low wage workforce in post union America and the “fries with that?” service economy was born.
2009 grads who are two years into the American Dream find that 22% are still unemployed and 23% have jobs that don’t require a degree (fries with that?). That is almost half of the graduating class that may well have wasted four years and tens of thousands of dollars that they can’t ever get out of paying back unless they die. The median income of the class of 2009 is only 30,000/year, so it’s no wonder that 57% of college students and their parents rate colleges as doing only fair or poor in providing good value for the cost of a college degree. McDonalds doesn’t need to hire high school kids anymore, they can get college grads and grandmothers. (granddad is greeter at the Walmart)

And the 30,000 a year that a 2009 college grad makes works out to a little more than $14/hour or the equivalent of the minimum wage a ditch digger with a shovel made in 1938. We’ve been told that we no longer want those dirty manufacturing jobs, but jobs that take a college degree are being outsourced to India, the Philippines and China even faster than factory jobs and they bring in H1b visa workers to drive down American wages on other jobs. Some people have been back to the community college four times to retrain after being outsourced.

Employers used to pay for this retraining but no more, almost no one who was laid off in the last three years has gotten employer paid retraining. The government has little incentive to force employers to do this since colleges are full to capacity with people paying for it themselves and you wouldn’t want to tax the job “creators” anyway.

That ditch digging job that paid 25 cents/hour might not seem like much but it was in fact a productive job, it accomplished something for the good of society and created real wealth. The “fries with that” jobs produce exactly nothing but move a lot of high fructose corn syrup. Health experts predict that one third of today’s kids will develop type II diabetes in their lifetime. But hey, that’s more jobs in the medical field that pay pretty good. A win, win for the service economy.

Wednesday, May 18, 2011

It's only a Crime if done by a Criminal

Everybody knows Ben Stein, crotchety old lawyer and sometimes actor that comes out on a regular basis to lecture the peasants on how good they have it and remind them that this is only because of the genius and hard work of the rich among us. He pretends to know a lot about economics and business but really just pushes the talking points that come down from the think tanks funded by the Koch Brothers.

Stein came to prominence in Republican circles as a speech writer for Nixon and Ford. He has always maintained that Nixon having been driven from office was a disaster and that the “evidence” from Deep Throat was simply made up by Woodward and Bernstein. He has maintained this stance even after a senior FBI official was identified as the source.

Ben knows what his job is and he has sprung into action to defend the alleged rapist Dominique Strauss-Kahn describing his treatment as “shameful” (how dare they put him in a common jail), Stein is careful to point out that he has never met the man. This didn’t stop him from writing an 8 point defense of him based largely on the fact that DSK comes from a class of people that should be treated better. He also points out that the alleged victim of the rape is a maid and while most hotel maids that Ben has known have been fine hard working people some have been “complete lunatics” who stole from Ben on many occasions.

The other 7 points are equally filled with absurd arguments that revolve around “proving” that the rich guy innocent but lets look at just one point,  “2.) In life, events tend to follow patterns. People who commit crimes tend to be criminals, for example. Can anyone tell me any economists who have been convicted of violent sex crimes? Can anyone tell me of any heads of nonprofit international economic entities who have ever been charged and convicted of violent sexual crimes? Is it likely that just by chance this hotel maid found the only one in this category? Maybe Mr. Strauss-Kahn is guilty but if so, he is one of a kind, and criminals are not usually one of a kind.”

Stein asserts as a logical premise that no other economist has ever been convicted of violent sex crimes so it couldn’t have happened this time because it has never happened before. The fact is that violent sex crimes committed by strangers are relatively rare and international economists with this kind of power are a very small number. This one event will doubtless spike the percentage of indicted economists to a high multiple compared to the general population.

Where Stein says, “Is it likely that just by chance this hotel maid found the only one in this category?”  Well, I don’t think she was looking for a rapist but was simply in the wrong place at the wrong time. But is Stein just stupid or is it the old Nixon speech writer using a statement to “telegraph” an idea? [she was looking for it].  “events tend to follow patterns. People who commit crimes tend to be criminals” [she does this all the time]

This is of course the modus operandi of the people in Stein’s business. Create the illusion that the rich sociopaths can do no wrong and the poor are just opportunists always out to take advantage. After all the rich were chosen by god to rule over us so by definition it can’t be a crime. Nothing Ben Stein’s masters do to the rest of us are crimes and don’t you forget it.

Stein's original article

Tuesday, May 17, 2011

More of those interesting times you've heard about

Economists had predicted an upturn in new home construction and instead it fell by 11%. These are the same economists that had no problem with the housing bubble during the Bush Administration or how the bubble was being driven by the large banks that were sucking trillions from the economy. You may jump to the conclusion that economists are stupid, well some are, but most simply are paid to say what their employers want to hear said in public. Instead of being the watch dogs of the economy, it’s really more of a public relations job that requires a lot of advanced math.

In the aftermath of the housing bubble/mortgage crisis the Dept of Housing and Urban Development has created a report for the DOJ on the recent activities of the top five mortgage service companies. The document is said to read like veritable indictments against Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. The report details various frauds against the government to the tune of 30 billion dollars. Mostly it involves how the banks creatively valued mortgages that they received bailouts on but other offenses as well.

The word is that the government is seeking a ten billion dollar settlement from these too big to fail banks. Besides letting them keep 2/3 of what they stole from taxpayers, don’t hold your breath for anybody to go to jail. In fact the government could invoke the False Claims Act and recoup three to one as a penalty or 90 billion instead of 30, but if past practice holds, don’t hold your breath for that either. The DOJ is largely populated with holdovers from the Bush Crime Family and the AG comes from the same corporate background that he doubtless intends to return to. That is the cynical view, we’ll see what really happens.

The shake up at the IMF is getting somewhat complicated. This would be the place to mention Arnold Schwarzenegger’s qualifications for the job but the top job normally goes to a European and the deputy is an American (maybe Arnold could do both). The current Deputy Governor had already announced before the DSK indictment that he is leaving in August so Obama will appoint them both but who?

There had been talk for some time that the job should go to somebody from one of the emerging markets instead of a European as is traditional but the Europeans want have the number two spot at least, of course they aren‘t in the best position to dictate policy at the moment and it‘s up to Obama. Coincidently, Chuck Schumer introduced a bill in March that would exempt 200 sub-cabinet jobs from the Advise and Consent rules of the Senate, including appointments to the IMF. Some on the right aren’t too happy about this streamlining of government but Schumer’s co-sponsors include republicans Alexander (TN), Brown (MA), Collins (ME), Johanns (NE), Kyl (AZ), Lugar (IN) and Minority Leader McConnell (KY) so it could pass.

After holding up all these appointments they may simply wash their hands of it as it looks like Obama will be re-elected unopposed by any serious candidate now that Newt has shot himself in the foot by pointing out that the Ryan budget was social engineering from the right. (the social engineers on the right aren’t happy so Michelle Bachman is now the front runner)

There is also talk that Obama will make some major recess appointments over the Memorial Day break including elevating Elizabeth Warren to head the Consumer Financial Protection Bureau that see has been creating. The Republicans tried to eliminate her salary during the last budget hostage taking session. We’ll just have to wait and see how this shakes out but this all could be “interesting“, in the way of Chinese curse “may you live in interesting times“.

Monday, May 16, 2011


Dominique Strauss-Kahn, a man so important that in most of the world he’s known simply as DSK. Not exactly a household name in the US but we haven’t been reduced to begging for a handout like the other third world countries where he could rape one of the servants and nobody would notice. He jumped the gun a little, we don‘t know our place here. Any jet setting right-winger could have told to just hop down to the Dominican Republic if he needed a little taste of the good life.

Conspiracy theories abound that somebody took him out to send a message or to grab power for themselves. Indeed there are a number of people who could potentially gain from him spending the next 5-15 years as in a dank cell. Most of these people normally just arrange a plane crash or send in somebody to shoot you in the head instead of such a convoluted plot to frame a guy for a felony but maybe they just wanted to have a little fun with him. 

Or maybe DSK is just socio-path, okay there isn’t any maybe about it, people like him are all socio-paths. Raping, looting and pillaging is what gets them hot and they do it everyday to whole countries. He just couldn’t resist doing it in person. It seems ex-Senator John Ensign (R-NV) was of the same persuasion as it turns out his widely reported “affair” with a staffer was really rape by extortion and he’s likely to do prison time for the cover up. 

Senate Minority Leader Mitch McConnell has snubbed the Tea Party by giving Ensign’s plum committee appointments to anybody but Tea Party favorites even strong arming a reluctant Senator to take an extra committee post. He also bypassed Rand Paul to give a Finance Committee seat to someone with even less seniority. 

We hit the debt ceiling today and now we are now operating the United States of America by robbing Peter to pay Paul. The Treasury is using a number of tricks normally reserved for Republicans to cook the books. They’ve stopped paying into pension plans and are emptying the trust funds. They also have a cool hundred billion on deposit over the Federal Reserve, you know, an account they didn’t tell the husband about. (Lucy, you’ve got some splan’n to do!)

One thing about this that is a concern is that they aren’t really going to stop borrowing because Treasuries are constantly coming due and payable so new ones will be sold to reissue the debt. This could trigger a sudden rise in interest rates and spiral out of control rather quickly. If the US had to start paying 17% like during the Reagan years it would be a problem, on 14 trillion that’s 2.38 trillion or more than the current budget. Even the normal 5% interest is 700 billion a year or more than the official Pentagon budget. They’ve been paying far less, averaging only 200 billion per year or less than 2%, some Treasury bonds are paying negative interest (the buyer is paying for the privilege of having a safe haven). 

The Republicans have a point that this is getting out of hand but of course this has been their game plan all along. The thing is that maybe the maid won’t put up with being raped this time. Maybe Obama will use his new standing as a man of action to do something “strategic” like raising taxes on the rich instead of borrowing from them. After we can’t go to the IMF for a loan, the guy that writes the checks is in jail.