Saturday, February 16, 2013

Did you see the meteor? No redo for the dinosaurs

Initial unemployment claims dropped by 27,000 last week to 341,000. This is a number consistent with a steady recovery. There are indications that the housing market is moving up from the bottom. Home building has shown real signs of life. That was the goods news.

Bloomberg News is pushing hard on the rumor that Walmart's sales are collapsing as a result of the increase in FICA taxes workers must pay with the expiration of the Obama tax cut. This is a $1000 less spending money for a family making $50,000/year, this being slightly above the median family income. Walmart has been reporting declining revenue for a number of quarters, but they 'sort of' deny the Bloomberg story that is based on leaked Walmart internal email.

Walmart's woes have for some time been attributed to the shift of the every increasing mass of the working poor to a standard of living below Walmart pricing, this resulting in the boom of Dollar stores, food banks, charity thrift stores and such. Add to that the remaining middle class shifting back to their traditional retailers like Target. It's too early to tell if this is an actual economic problem as Bloomberg is making it out to be, or if this is just Walmart not being able to operate in urban markets. They can't dominate those retail markets with the sort of scorched earth policy that made them trillions in the more rural markets, where they simply eliminated all competitors.

Things in the EU are developing a potential ugly tinge with their decision to not rein in their predatory bankers. As I've pointed out in the past that the Euro has become nothing more than the new Deutschmark. Pretty much everybody else would be better off without the euro. Countries like Greece and Spain are simply being raped and looted, and the pain is spreading. At least one commentator that I respect is talking about WWIII being the end game of this mess in Europe. I think it's a bit early to say that with any certainty, but don't kid yourself that this can't happen.

The good news is that at least we have somebody in control of the nuclear football that isn't stupid, or a religious fanatic. Elections do matter. In case you haven't noticed, Obama hasn't stopped campaigning, the 2014 elections could well determine the fate of mankind. At least he grasps that, the rest of us had better as well. We aren't going to get a 'redo' on this. Waving tiny dinosaur arms in the air won't stop the asteroid once it's here.


Wednesday, February 13, 2013

Escaping Montreuil-sur-Mer

In what could become remembered as a historic event (really, it probably won't), President Obama's State of the Union speech laid out a bold proposal for dramatically reducing gun violence, overall crime, assaults against women and the preservation of marriage. He did all of this with one sentence, and the Republicans will fight him until the last billionaire to stop it. He wants to raise the minimum wage to $9/hour.

Yes, raising the minimum wage will have a dramatic effect on all of these things in ways no other legislation can. With Boner running the House, the leader of the Free World might has well asked for unicorns, it ain't gonna happen on the orange guy's watch. For Obama, it was strictly a political move. If he was seeking a policy based on economics and social justice, he would demand no less than $11/hour to get American back up to 1938 minimum wage standards.

A wage standard that propelled what was then a collapsed nation, a nearly failed state into the becoming economic powerhouse that took on the world at war and won, then dominated the planet for the next half century. Okay, okay, there were a few other things from the New Deal and the war planning of FDR that made a difference, but this was the foundation that it was all built upon. This is why the Republicans have fought against it so ferociously ever since.

Why did Obama only go halfway? It's because two dollars these days seems pretty small. Hell, I don't think Canada even bothers with dollar bills anymore, they have a real economy. Four dollars still sounds like real money to most Americans, most places it will still buy you a beer. Obama is trying to shame Republicans yet again, and he's gotten pretty good at it. Most people would rather have the clap than live next door to a Republican Congressman, penicillin won't clear up your member of Congress.

The fact is that the economic recovery is entirely dependent on people making enough to live on. New numbers out this week show that nearly half of Americans literally live paycheck to paycheck, of course a big fraction of those people aren't living paycheck to paycheck, they're steadily falling behind. There is a reason that the Republicans constantly obsess over 'wealth re-distribution', they've been redistributing it upward in a big way. New numbers show that since the Bush Crash the 99% at the bottom have lost ground, while the one percent have cashed in big time, especially the few dozen billionaire at the top. The 47% of Americans made famous by Romney have really taken a beating.

Rightwingers continue to chant the talking points provided to them by the billionaires, talking points that favor only the billionaires. They claim that the Minimum Wage should be zero, and then the job creators would be set free. The Walmart heirs by themselves now hold more wealth than the bottom 40% of Americans. Ironically those same 40% of people see Walmart as something good, even if it's becoming increasingly inaccessible to them.

Walmart employees don't shop there, they go to the Dollar store, the food bank and the charity thrift store. They collect food stamps and earned income rebates on their income tax returns, while their kids get subsidized school lunch so that they can eat a full meal once or twice a day. They get their healthcare from medicaid, if they're lucky enough to live in a state that doesn't steal that from them too.

The cities they live in give millions to Walmart while their police and fire departments go unfunded, and at the same time the working poor are targeted for municipal 'service' fees, and are subject to arbitrary fines to raise 'revenue' for local government. It's easy for a law abiding citizen to find themselves in a 'probation trap' because they can't afford a lawyer to fight a trumped up charge. They then make endless payments to local government in a Jean Valjean scenario where a single late payment to the corporation that acts for the court gets them years more of probation and mandatory 'administration' payments, when no actual crime was ever committed. That's if they're lucky enough to avoid being sentenced to Montreuil-sur-Mer, the corporate prison where your sentence can be extended to life for trivial offenses.

Yes, we can end Les Misérables, and Obama's words can put that in motion. But, Obama isn't going to do it for you. You must do it for yourselves. Now is the time: Liberté, égalité, fraternité. 

Monday, February 11, 2013

Green backs and can openers

The good news is that unemployment claims continue trending down indicating a slow but continuous recovery. The bad news is that it's being to look like the Republicans might allow the sequester to happen, and follow that up with refusing to raise the debt ceiling. Or perhaps they're simply going to milk it for propaganda in order to rile up their own base right up until the last minute, and then cave in. They're pushing hard to attach Obama's name to it, literally calling it the Obama-sequester at every opportunity. No matter that Speaker Boner bragged about getting everything he wanted when the Republicans created the sequester. Of course they expected to have control of the government by now so it wouldn't have been a problem.

Further evidence of the decline of the United States is that China has now passed the US to become the world's largest trader, with a combined total of exports and imports of nearly $4 trillion and $230 billion in trade surplus. The US isn't that far behind, except for the small problem of a $750 billion annual trade deficit.

In reality the US is even worse off than these numbers might suggest. China imports raw materials and exports manufactured goods, the US does just the opposite just like any third world country. Our biggest manufactured export is refined gasoline and other fuels with a full third of the product leaving the country while we pay prices based on the notion that there is a shortage, and we get to keep the pollution.

Another big chunk of US trade is from importing goods and then exporting them to the EU to get around the lack of trade agreements between South America and the EU. This of course contributes nothing to the US economy. 

The right-wing crazies are pushing hard on the notion that Obama is simply printing money to the point that China doesn't even want USDs anymore. The 'proof' they point to is that China won't sell us rare earth metals like lithium for batteries. Of course China won't sell to Japan, the EU or India either. So I guess the Yen, euro, and the rupee are also in trouble.

The fact is that Obama has no say in how much money is printed, only the privately owned Federal Reserve System has any say on the size of the money supply. The fact is that the Treasury could if authorized by Congress begin printing money again. The last Treasury notes were printed 50 years ago, with LBJ ending the practice in late November 1963, his first official act as President.

We would in theory be better off with a weaker dollar as it would cut down that 3/4 of a trillion dollar trade deficit, but with the USD being the favored reserve currency around the world that's a hard thing to do. We don't even have any idea how many dollars are in circulation outside the country, since the Federal Reserve stopped publishing the number back in 2006 when things started to go bad. So China has no problem with the USD as long as its trading partners with sell them a copper mine or an oil field in exchange for green backs. If the world ever decided to stop taking dollars then China could trade manufactured goods for what it needs, we can't.

We're in middle of taking a direct hit from a coronal mass ejection, that's billion of tons of ionized particles hitting the upper atmosphere. And while the Solar flare that produced it was impressive, this isn't the big one. If we're ever hit by a really big mass it will push the earth's magnetic field down to ground level, and that will be the end of the power grid, possibly for a generation. The good news is that NASA has a pair of satellites monitoring the sun and can give us some warning. The question is, can they isolate the power grid completely? It doesn't really sound like it, so you need to have a manual can opener just in case.