Friday, September 27, 2013

Everything that you need to know about economics is in a Pyramid

On Tuesday we will all turn into pumpkins if the Republican controlled House doesn't pass the Senate budget bill. With this fiscal 'crisis' in mind, let's debunk the favorite talking point from the Conservatives: 'We can't afford that', or 'we're broke'. The reality check, the US prints its own money, unlike Greece that's dependent on the German Euro we can print our own, and as much as we need to make the economy work.

All money by definition is printed on something, even gold coins have their value stamped on them. The right-wing gold bugs are just nuts, gold has very little 'real' value. Ask the right-wingers who bought it a $825/oz under Reagan and are still waiting to see a profit. Adjusted for inflation, gold would need to be $2400/oz today for them to just break even, and that's with zero return on their investment.

As far as being able to 'afford' stuff, the government can buy anything that is available to buy. As long as it restrains itself to buying things that are actually in surplus there will be no inflation since the money is not competing for scarce goods.

When times are hard it's the government's responsibility to buy up surplus labor and surplus goods to re-energise the economy. In ancient Egypt they hired the surplus labor to build pyramids, that's why they were around for 6000 years. There is no Egyptian hieroglyph for 'austerity', if they really needed one, they used the one that also meant 'greedy idiot'. The glyph was depicted as a medium sized predator eating a small child, in modern English that translates into 'Fox News'.

The primary reason for the government to borrow money during economic downturns to take that money out the mattresses and put it to work in order to avoid panic spending later that could actually lead to runaway inflation. Another right-wing myth is that we've been borrowing money from China. China has never actually loaned us any money since our government has never spent any Chinese Yuans. China stopped buying Treasury bonds (using USDs) at the beginning of the Bush Great Depression in 2006.

It is true that the Federal Reserve is printing $85b a month in currency out of thin air to buy publicly traded treasury and mortgage bonds. But, that's basically what the Fed does all the time, only it normally loans it to banks instead of it being spent in this way. It's the Federal Reserve's job to add money to the economy, or sometimes take money out. Is it a perfect substitute for good government policies on trade, manufacturing, labor and so on? Hell no, but with Republicans controlling the House, it's all we have. It will keep the economy from collapsing at least through 2014. If you want to get through 2015, you'll need a few more good people in Congress like Elizabeth Warren and Alan Grayson.

Twitter @BruceEnberg - You don't need to walk like an Egyptian, just build like one.

Thursday, September 26, 2013

A road cone on the road to Hell

The new unemployment claims continue trending down with only 305,000 newly unemployed last week. The moving average is only 308,000 indicating that layoffs are actually staying fairly low. Home prices were up significantly last month, manufacturing orders were up slightly and consumer spending is up. Gasoline prices are down and expected to fall significantly over the next several months. This leads into a Christmas season with most retailers announcing more temp hiring than last year. Walmart that has been plagued with reports of understaffing has announced that they are reversing their trend of moving to part time workers and will move 35,000 people to full time positions.

While Sen Ted Cruz R-TX was pretending to filibuster ObamaCare the Texas Health Insurance Exchange announced some of the lowest policy rates in the country. Mainstream news stories based on information provided by Red State officials claiming higher rates would be the result of ObamaCare turned out to be false once the exchanges actually made rates public. Most of the 'state' exchanges are actually run by the Feds since the Republicans blocked participation by their individual state governments.

An orange tinted drunk is all that stands between us and economic Hellfire. Everyone is assuming there won't be a government default since the House Republican leadership has been reassuring Wall Street in private that such a thing can't happen. The likely scenario is that Speaker Boehner will use Democratic votes to pass the Senate bill at the last minute to avoid calamity. The only problem is that the Speaker has absolute say on whether a bill can come to the House Floor, and the guy isn't particularly stable. Oh well, we must assume that Obama has some contingency for dealing with this. There are things that he can do to at least buy time, don't mind the market crash and all that.

The Tea Bag caucus in the House is getting increasing arrogant in their defiance of the mandate found in Article One of the Constitution that Congress is to provide for the General Welfare. They don't even make any pretense of working for anybody but the handful of billionaires who pull their strings. They don't even bother to talk about the traditional hot button issues that consumes the right of God, guns and gays. It's all about slashing the budget, defunding ObamaCare and cutting taxes for the rich.

Their assumption is that they can simply keep their seats with Gerrymandering and voter suppression, but this isn't a sure thing. They are getting so far outside of reality that the average voter is starting to ask questions. Asking questions can lead to knowledge and even activism. The holy water and wooden stake equivalents that spell trouble for the evil right.

All Republicans really talk like tea baggers in private, the only difference is that these guys do it all the time, and the demographics that don't find this sort of talk amusing are in fact growing. The Millennium generation is larger than the Baby Boom generation and far larger than the Greatest generation that Republicans depend on for votes. Every year a slice of Republicans die off and are replaced with a much larger group of Millennials that are coming of age with a very skeptical view of Republican policy. This is the reason you even hear the Pope talking like Jesus, he's trying to build his base, and the Church has done its market research.

It just a matter of getting the Millennials to vote, if they were to come out in 2014 in the same numbers that they did in 2008, Democrats could take the House. That isn't as hard as it sounds with six years worth of new voters having come of age since 2008, and six years of Republicans gone. It's all about the numbers.

Twitter @BruceEnberg where I dispense even more numbers that Conservatives don't want to hear.

Wednesday, September 25, 2013

messing with your head

you might think that you have continuity as a 'person', since you remember the 'past', but those are just sketchy memories that your current brain activity strings together into what you perceive as conscious thought. 

Consider that the brain of a 'crazy' person is not significantly different from your own, everything you 'think' that you know is just an illusion created by your barely functioning brain. The fact that some of us agree on certain of these illusions in our current state of minimal consciousness doesn't make any of it 'real'. 

Monday, September 23, 2013

the Heisenberg principle isn't just for quantum physics

Only one week until the government shutdown because the tea baggers need to be in the spotlight for as long as possible. The thing is, we've been here before. An actual government shut down in the 90s was a disaster for the Republicans which makes seeing Newt Gingrich on the Sunday morning shows acting like an expert statesman all the more hilarious. People forget that he was run out of the Congress by Republicans. And the tea baggers have already tried this fiscal brinksmanship themselves, and failed miserably. This time around Obama isn't even pretending that he give them anything, not even the courtesy of pretending that they are his equals. That has got to so burn under their white sheets and hoods.

Round two will be the debt ceiling disaster, it's unclear exactly when that will happen. The TV schedule has it for October 15, but that's just a guess, or more likely it's all just for show. In reality, Obama can simply ignore the debt ceiling if he wants to, or he may wish to orchestrate the total humiliation of the Republicans with some sort of default. That's assuming the more mainstream Republicans won't simply join with Democrats and pass the legislation that is needed as they did the last time around.

ObamaCare starts to make affordable insurance policies available on October 1st through the State exchanges no matter what the Tea Baggers do. Today's Rightwing Talking Point is that the insurance companies are limiting choices on the new exchanges to keep premium costs down. In most states you never had more than three choices and often you really had only one choice for health insurance. The big difference with these exchanges is that what they tell you is in your policy actually is what you'll get. They can't cheat you anymore. No more dropping your coverage because you didn't disclose the acne medication that you took when you were 13, and the dozens of other dirty tricks they pulled are also outlawed.

The rightwing assumes that this will drive up their premiums because the insurance companies have to pay everybody else's claims. They just don't get that someday they will be the 'everybody else' who needs to stay out of bankruptcy. It's ironic that the long running TV series Breaking Bad will end just before ObamaCare makes obsolete its premise of a terminal cancer patient turning to crime in order to save his family from financial ruin.

In fact, treating everybody's medical needs in a timely, efficient and effective way costs half as much as the 'free market' insurance system we had previously. Well, actually that is the efficiency of a single payer system, but ObamaCare is at least half way toward that goal and has provisions for single payer to be implemented.  Twitter @BruceEnberg where I go all HeisEnberg on the Conservatives (Heisenberg is a Breaking Bad reference, just in case you've been living in a remote cabin with no communication on a Vermont mountain in order to hide from the DEA)