Friday, November 8, 2013

Children are Our Future, if they get out to vote

With 204,000 new jobs in October we saw a definite uptick in the economy despite the Tea Party shutdown of the Government. Some economists are saying that we might be approaching 'escape velocity', meaning that the economy could start to fly on its own producing real sustained growth. This might just be hype intended to convince the Federal Reserve to stop buying bonds as this would favor certain people in the financial markets. We'll know better after we see the November numbers.

There are complaints that half of these new jobs were minimum wage service, retail and temp jobs. Of course the other half were better paying jobs. A recovery has to start with as many people as possible getting a pay check. In the 1930s FDR began by putting men to work with shovels, today the Fed is trying to accomplish this by boosting consumer credit. This means an uptick in retail and service sectors will come first, so this could be a good indicator if an actual recovery has started.

Standard & Poors has downgraded France's credit rating for 'failing to take action' on their long term debt problem, except they did resolve their fiscal problems. They were actually downgraded for raising taxes on the rich. The billionaires that own S&P don't want the peasants catching on to the fact that the same things that fixed the economy in the 1930s, those New Deal policies that gave us steady growth and small deficits for 50 years, would work just fine now too.

There is actually a lot of pent up demand in the US after the 30 years of neglect initiated by Ronald Reagan. The three trillion dollars worth infrastructure repairs that are badly needed would put a lot of people work even without doing 21st century upgrades like the Chinese have been building. China owns half of the world's large construction cranes and produces half of the world's cement. Before Reagan, the US was like that, and it could be again. Instead the Republicans in the House alternate between passing bills to end ObamaCare and naming Post Offices after Reagan.

We could change that in 2014, in this recent election the Millennials turned out vote in bigger than expected numbers and they went for Democrats. Even Chris Christie with his big landslide lost the Millennial vote, the minimum wage increase passed on referendum in NJ even though it was opposed by Christie. Every year a new crop of Millennials turns 18, and they are the largest generation in history, out numbering even the Baby Boomers. Rush listeners continue to pass onto their reward every year, and they were demographic that has kept Republicans in business. At some point voter suppression and Gerrymandering won't be enough, and that could be the next election.

Twitter @BruceEnberg - send your favorite Millennial a retweet

Thursday, November 7, 2013

Best to wear a hat

New unemployment claims fell again last week and are starting approach the levels we saw just before the Tea Party Sedition movement knocked a sizeable hole in the economy. There were 28,000 Federal civilian employees drawing unemployment benefits last week which was 50,000 fewer than the week before. This adds to the $24b tab for the pointless government shutdown.

Federal employees will get back pay for their time off, plus the hourly employees will be getting overtime pay to catch up their work. Government contractors will doubtless be demanding compensation for the snafu conditions that occurred during our brief return to the Articles of Confederation when the Federal Government was basically voluntary.

The GDP grew at a 2.8% rate during the 3rd quarter, which is quite respectable for the Neo-Reagan Era. In the old days of the New Deal that level of growth would have been considered slow. However 0.8 points were attributed to inventory build up in anticipation of growth in the 4th quarter, and could cause a major pull back if that growth isn't realized.

The reason for the increased inventory is that major retailers are again extending credit in a big way for the first time since the Bush Crash in 2006, and the credit card companies are issuing high limit cards in anticipation of a big holiday shopping season.

This should have the effect of putting more people to work. The Federal Reserve's QE3 program of buying up bonds issued by banks as well as Treasuries from the open market is encouraging this creation of new consumer debt. This is inline with the Fed's mandate to keep unemployment down. Actual Federal policies on trade, manufacturing, energy, control of monopolies, and that sort of thing would work so much better, but we can barely keep crazy people in Tricorne hats from crashing civilization. So we're stuck with bankers trying to keep things going.

The stock market run-up has been making a lot of news, but it really isn't linked to the economy in any meaningful way. It's just a way skim money from people's retirement accounts, there will be another 'harvest' of wealth in the next couple of years. The billionaires will likely try to time a 80% drop in the markets to right before the 2016 elections. That is unless the Republicans are so pathetic by then that they can't make that a 'takeover' work, then it be a more subtle crash.

Oil prices have been drifting lower as the supply is simply getting to big for commodity traders to control. If the Dodd-Frank Act had been ever been implemented we would be paying under $2 for gas. Just as we did when the banks were forced to stop trading commodities during the credit freeze-up in late 2008. Obama has been complaining about the foot dragging from the commissions that have control over writing the regulations. The President actually has very little power to influence Federal commissioners. The idea is to keep people like Nixon from running things, so instead we have people like Dick Cheney running things with the promise seven figure corporate board seats when leaving government. Congress could step in, but then we're back to the crazy people who don't believe in government of any kind.

Twitter @BruceEnberg  I didn't cash in on the big Twitter IPO, of course if you can't buy the advance offering with the insiders, all you'll really get is Twitter droppings. Wear a hat, just not a Tricorne hat.

Monday, November 4, 2013

Bits & pieces

To be fair to Rand Paul and the accusations of plagiarism (actually it's cut & dried), he wouldn't know the difference between a right wing Wiki article and one of his speeches, since they are all written by the Heritage Foundation. Billionaire funded Heritage maintains a boiler room operation that constantly edits Wiki articles to reflect their made up version of history. They repeat the Rightwing's manufactured facts, improbable numbers, as well as colors and shapes that Disney used in Fantasia. 

Drone Strikes: Not to put to fine a point on it, but we've been doing this since the Marines landed on the Shores of Tripoli. It's just a matter of just how crazy of a guy you put in charge of the muskets that determines whether it's 'good and necessary' Foreign Policy or just War Crimes .
Judging from all the pictures that pop up on Google search, the Orca Whales seem to like ferries. Whales in general seen to be fascinated with boats that cross their territory, at least the ones without harpoon guns.