Friday, July 22, 2011

Winning the bout on points

As I've pointed out before Obama is not stupid. He's moved up smartly in the polls by offering to do what most Americans have become convinced by the Republicans and their corporate media that the people want. The Republicans don't dare accept this, as the reality of such a "victory" would ensure a Democratic sweep in Congress and Obama would probably be re-elected anyway.

The Tea Baggers continue to chant blood, blood but Boner has slipped between the ropes and run toward the exit. The gang of six or seven is trying to work out a draw but Obama controls the ring and since he's ahead he doesn't need to take a draw. The sports broadcasters say it's not fair of Obama to trash talk his opponents so he's winning unfairly as if that was in the rules. 

The old boxer in Obama's corner has come out and said Obama can claim a victory with the 14th Amendment when time runs out and as a former champ his words carry weight and can't be ignored. All that remains is for Obama to claim the big belt.

Wednesday, July 20, 2011

Pax Americana and other ancient history or start the Way Back Machine, Sherman. We're going out.

“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard…” John Fitzgerald Kennedy 9/12/1962.  On July 20, 1969 two Americans landed on the Moon.

Less than 39 years after Kennedy’s words the last American space shuttle will land and be put in a museum, not because it’s worn out, not because we have something better but because we are simply no longer a first world nation. The plan for the foreseeable future is to pay the Russians to transport two teams of Astronauts to the ISS each year. We’re creating jobs in Russia… Houston we have a problem.

You can argue that such things are a waste of money but you can’t find anything that hasn’t been affected by the technology the space program developed. Doing something hard always leads to innovation, historically this motivation was sometimes warfare but not always. Building massive pyramids is an early example of government spending pushing innovation but the Egyptians weren’t the first to do this, in fact this was common practice.

The Romans took this government driven innovation model to a massive scale building water systems, roads, massive arenas and on and on. They called it Pax Romana or the Roman Peace that lasted about 200 years where innovation and building replaced war. This was often a hard sell for the Emperors who had to keep their own neo-con Senators and Roman Legion/industrial complex in check. Somebody always wants to conquer the world for personal profit, no matter the real cost. They regularly issued new coins with the Emperor on one side and “Pax” on the other to promote the “wealth“ of peace.

Pax Americana has had its moments but the run ended ten years ago when we entered a permanent state of war against the “barbarians”. Our aqueducts and roads are crumbling but the villas for the elite class are ever bigger. American innovation is rapidly becoming a thing of the past, there is only enough money (after providing villa for the rich) to hammer plowshares into swords and the coins never say “Pax“ on the back.

You can take the kids to museums to see artifacts from the glory of Rome and you’ll be able to see the last of America’s glory there too. Best go now while the museums are still open.

PS Today is also the tenth anniversary of Bush’s first day of deficit. 50 billion in Treasury bonds were sold on this day to cover the budget sort fall created by a massive tax rebate that really just masked a tax cut for the rich, the middle class had their “rebate” subtracted from their tax refund the following year. Bush always liked a practical joke. That 50 billion would be enough to fund the food stamp program even at today’s level for ten years.

Tuesday, July 19, 2011

Estate Planning in the Neo-Feudal Age

The newsertainment programs this morning were obsessed with the new all time high set by gold yesterday which they attributed to fear over the debt crisis. They made much of gold being over $1600/oz but didn’t mention that it had been over 1600 a couple of months ago before falling back by more than a $100 and true to form it fell back by one percent today.

The investment analysts were out in force to tell everybody to sell gold and buy stocks as stocks have done so much better over the last 25 years. They didn’t mention that over the past ten years stocks are up only twenty percent and gold is up 500%. Keep in mind that the actual market for investment gold is very small. So small that just Glenn Beck convincing a relatively small number of paranoid millionaires to shift some part of their holding to gold would be enough to drive the market. The University of Texas has put a billion dollars of its portfolio into bullion that it keeps in a vault. (though they probably weren’t suckered by Glenn Beck and Goldline)

The truth is gold is a terrible investment although not as likely to fall through the floor as stocks. Stocks are just pieces of paper with no real tie to anything tangible. The replacement value of the companies’ assets in the DOW 30 at current prices are only worth half the value of their stock. You tell me if that’s a safe investment. Historically all stock market lows have gone down to ¼ of replacement value. (If you can’t do the math, that’s 1500 points or an eighth of what you think you have now).

Gold on the other hand will always have substantial value but it’s a commodity and no currency is tied to it anymore. There has also been a real mining boom especially in China so you can expect gold to drop sharply at some point. Most people don’t think that will happen anytime soon, but you’d need a crystal ball to that know for sure.

The Libertarians want to issue gold coins but to monetize all the USD in circulation into the available metal would require gold to be valued at something on the order $10,000/oz. This is how they rationalize that gold will keep going up and up and up. Don’t hold your breath. Did I mention gold fell sharply today?

So what do you put your money into? If you have a lot of money you could jump in on the farm land boom. Unlike gold they aren’t mining any new farm land and it does generate an income (and no you don’t need to become a farmer, most land is now rented to the local corporate backed farmer). In the long run though you can expect that all the land will be corporate owned so don’t make any real plans for financial security, they will get your wealth in the end. The founders warned against bankers and corporations using successive rounds of inflation and deflation to capture all the wealth. They passed laws 220 years ago and again in the New Deal to keep that from happening, but all of that has been repealed over the past 30 years.

So you aren’t in the top 1/10 of one percent and you want to leave some wealth to your grandchildren, what do you do? You can just do nothing and hope the popular revolution goes your way. You might better buy stocks.

Political action and educating the public are the only viable options. There are progressive candidates to work for. If you still have money then you need to get serious about contributing, hanging onto your money won‘t work in the long run. If the rich have already cleaned you out then you need to work for change. Work like the lives of your grandchildren depend on it.

Sunday, July 17, 2011

Doubling down on crazy

Republicans are getting closer to either admitting they work exclusively for a small handful of rich people or are just the party of those people who shout at clouds. Obama has put more budget cuts on the table than the majority of Republican voters are comfortable with and if they realized what it will really cost them they will be far less comfortable. In return Obama asked for the closing of a few loopholes the super rich enjoy, things no small or even medium sized business gets to take as deduction on taxes.

The Republican response is to trot out the same old talking points and even Republicans voters are starting to catch on. This is why Obama was able to raise record contributions and half were from new donors.

Trickle down from the rich, growth from austerity, cutting taxes raises revenue. Anybody with an IQ above room temperature should see these as obvious lies. Even if they sound appealing in the hypothetical (something for nothing by magic always is) and you picture yourself in the same boat with the millionaires who tell you these things so why would they lie, well the results of the last thirty years should be proof enough.

Thirty years ago there were no billionaires and now you have Wall Street pirates with multi-billion annual incomes and they pay 15% tax. The solution to the lack of jobs that all the Republican candidates are putting forth is to cut their taxes to zero. Taxes aren't for the job creators, after all taxes are for people who work for a living.

The fact is that the rich haven't stopped paying for government, they just pay for it from buying Treasuries. The  trillions in revenue shortfall that we've had since the Bush tax cuts took effect has been made up by the rich. What else are they going to do with that much money? Create jobs? Please!

The rich don't want this problem fixed because it's not a problem. They just want to take public assets as payment until they own it all. Great scam if nobody catches on. But hey, once they own it all it will start to trickle down to the rest of us, won't it? "But, but, I've voted Republican all my life, why do I have to go live in a camp?"