text:
« The TechnoSponge | Main | Carbonara »
Taxation and Recession
On October 23, 2009, I wrote that if the Bush tax cuts were allowed to expire at the end of 2010, the US would experience another recession. That ultimatum is now squarely facing the US economy, and I have a few assorted thoughts on some major areas that are being under-discussed.
a) I find it revealing that leftists are quick to parrot some memorized garbage about why taxes should rise back to what they were during the Clinton era, yet the same leftists have no interest in returning to the spending levels of the Clinton era. I am perfectly fine with returning to Clinton-era tax brackets if we also return to Clinton-era spending. Any takers? Come on, any takers?
(crickets chirping as leftists flee to avoid having to address the contradiction between wanting Clinton-era tax levels but not Clinton-era spending levels).
If cornered, a leftist will change the subject and say that the Iraq War is the reason spending is high (note that this does not address the point of why they do not wish to return to Clinton-era spending levels). However, contrary to leftist propaganda, the Iraq War actually cost less than the Obama stimulus, as per the chart below from the Washington Examiner. In fact, exclude the Iraq War, and the budget deficit was all but erased by 2007. At least the Iraq War was ultimately successful. But from 2011 onwards, the deficit is set to widen further if the tax rates rise. GDP will shrink below the current projections, causing tax revenue to shrink despite the higher rate of taxation. Republicans winning a few seats in the 2010 Congressional election may halt the tax increase, but will not reduce spending, as Republicans are far too politically uncreative to overturn this increased spending.
b) How a person feels about the capital gains tax is an intoxicating test of how true to free market principles a person is. The fact that capital gains are far more concentrated among the wealthy than wage income is drives socialists into a crazed frenzy that will have them vehemently demanding that capital gains be taxed at 80% or more. However, raising the tax rate of capital gains is the way to inflict the greatest economic damage for the least increase (in fact, often a decrease) in tax revenue. This is simply because of the fact that capital is highly mobile. Russia, China, and India all have long-term capital gains tax rates of 0%, and short term rates no higher than 15%. By contrast, the US long term rate in states like New York and California currently approaches 25%, will rise to 30% with the expiry of the Bush tax cuts, and rise further to 34% under an Obamacare supplemental tax. Capital, thus, finds a better climate in Russia, China, and India than in the US, and trillions of dollars have already departed from the US. Who won the Cold War again? Or rather, is that the wrong question, with the right question being "Where has the traveling disease of socialism migrated towards?".
There should be no capital gains tax at all. This is for the simple reason that if a person sells an appreciated asset, and then pays a capital gains tax, they no longer can buy back the same asset that they had just sold. For those who screech about the 'rich' making too much, remember that taxing capital gains makes them invest less, which means they will employ fewer people. Everyone is either employed by a rich person, or sells to people employed by a rich person, so punitive capital gains taxes always trickle down to people who are not rich.
c) This brings us to the original question of a new recession in 2011. Since the technical definition of a recession is quite limited, it is easy to concoct a 'stimulus' that pulls demand forward, causes a technical 'end' to the recession (in Q309 in the most recent case), and then is concluded by a lengthy hangover that comes perilously close to a new recession in its own right, discussed under the term of a 'double dip'. All of this is a greatly distracted discussion.
The most important measure of economic health, jobs, has not only not seen any recovery since the end of the prior recession in Q309, but is destined to languish through the end of 2011 and possibly much later. This chart from Calculated Risk (click to enlarge) shows that only has the current recession been deeper than all others in the last 60 years, but it has kept jobs at a very low level for over a year. Not only has this recession extended the vertical axis in this chart, but it is certainly destined to extend the horizontal axis as well (unless you believe that 8 million jobs will be created in the next 18 months). So aside from mention of a 'double dip', this recession is already at least 3 times worse than the average post-war recession. There is no chance of a full recovery to breakeven in the remaining 18 months of the existing horizontal axis of this chart, and it is improbable even by 2013, extending the employment recession to a full 6 years at least. The Techno-sponge keeps liquidity lower than policy-makers realize it is, and a rise in tax rates could dry up what little trickle of job growth is currently being seen.
d) Socialism is much more rigged in favor of the ultrawealthy than capitalism is. This is because in capitalism, there is continuous churn in the ranks of the wealthy, and anyone can be displaced by a new technology or new business model. Everyone has a chance to rise, and everyone at the top needs to continue to compete to stay in place.
In socialism, however, only the ultrawealthy can afford to bypass the oppressive rules placed on everyone else (by hiring lawyers, bribing judges and government officials, etc.). The ultrawealthy thus can erect a wall between them and the rest, and make it nearly impossible for an upper-middle-class person to become wealthy on the merit of innovation or business savvy. Hence, any attempt to create a socialist utopia ends up making it easy for the ultrawealthy to build large moats around their incumbent positions.
e) Let me also add a dash of gender psychology here, and explain why many men are capitalistic, while many women are socialistic. As explained before, female hypergamy dictates that women are biologically driven to share their genes with only the best possible man, and women would rather share a top man with other women than have a lesser man all to themselves. If it is clear that the men at the top will remain there (socialism), there is much less risk in the decision-making process for women. In a capitalistic environment, the men at the top today may not be there in a decade, and there is a far riskier 'stockpicking' aspect to choosing which man's genes are going to have long-term value. Thus is further complicated by the fact that a 'valuable' man in the past usually was so due to fighting skill and capacity for violence, while a 'valuable' man today is one with analytical/entrepreneurial skill, which was not easily monetized in the past. But the human brain does not evolve as fast as it needs to, and if you wonder why a serial killer immediately gets love letters from a large number of women (including educated, married women), but the founders of Google and Facebook do not, this is why. The serial killer has proven himself to be a 'valuable' man as per metrics women are evolved to respond to, that were determinants of male power, before modern society existed. By appearing in the media for having been a serial killer, has received a resounding stamp of validation on his credentials, and is certified as an apex male.
Along the same vein, women are also driven to extract resources from lesser men while cutting them off from the better things that society has to offer. Thus, I find it necessary to mention that of all the socialist policies that are obstructing market forces and preventing job creation, organized misandry is a greatly overlooked one. 'Feminist' groups like NOW have lobbied for stimulus dollars to be diverted towards themselves, and away from areas where fewer women work (such as infrastructure and manufacturing). Passage of the 2009 'stimulus' immediately led to an unprecedented chasm between male and female unemployment rates. This sort of shameless vote-purchasing and disenfranchisement of men, zealously enacted by Democrats and almost as zealously condoned by whiteknighting Republicans, will prove to be very corrosive to the long-term economic health of the US economy. This is where Republicans are fatally flawed - they completely fail to see how they themselves undermine their own goals. I will have much more to say on this before election day.
These five thoughts, though not quite related to each other, have been overlooked among the oceans of ink expended in commentary about the current malaise. Perhaps we are on the brink of a breaking point, where government wastage will soon cause visible declines in quality of life, where overburdening productive workers (men in particular) causes a long overdue backlash, and where the little-understood technological deflation quickens in the absence of much-needed liquidity injections. Let us see how far this unique blend of government incompetence and corruption can go.
Eight Ways to Supercharge the US Economy
September 01, 2010 in Economics, Political Debate, Politics | Permalink
Somewhat short on novelty here this time, sorry - and a bit long on cheap political angling. Not that your points about deficit spending and the hype about Iraq spending as a justification for a tax hike aren't correct, it's just that your post reads like a rant rather than the intriguing, rational set of predictions or new insights based on data kind of post that you usually interest us with. When I want talk radio, I'll listen to talk radio.
Moreover I think you have oversimplified much of the economic thought that's been put into play with the current situation other than a generic capital gains tax reduction (which I agree would be warranted - but who's to say that it would miraculously cure the short term problems facing the economy right now, which seem to include continued weak household credit, continued deleveraging, an AD shortfall, along with some structural issues) and a non sequitur reference to the (minor) effects of feminist lobbying on fiscal stimulus (as if other lobbying is not more notable or dangerous). Besides it seems an outright expiration of the Bush tax cuts - without any sort of extension - seems very much politically unlikely and out of bounds of even White House initiatives. Even before the midterm elections (which will only help the cause), Congress is weighing in on small-business tax cuts. I think much of this hype will turn out to very much unwarranted...
Posted by: R.B. | September 02, 2010 at 03:54 AM
R.B., you seem like the mindless moderate type; you object to partisan analysis and conclusions, and not because you allege them to be wrong. They are inappropriate, because they are not 'moderate,' or 'centrist.' The mindless moderate type always believes that solutions will come from the center, and that both the left and right are wrong. Any extreme stance is wrong by virtue of it being extreme.
Mindless moderates may suffer from being weak of will (not wanting to offend anyone), or the arrogance that they are divinely above it all, and that both parties or wrong. Or they are whores, who try to curry favor with as maximum an audience as possible. You'll see this with every pundit that tries to claim the middle ground. They will say that our current ills owe equally to both sides.
Posted by: Basil Ransom | September 02, 2010 at 12:38 PM
Basil, I agree - mindless centrism, along with mindless liberalism or mindless conservativism - is inappropriate in policy and debate. Imagine conducting science in that way - where we would suddenly have to find ourselves squarely in the middle of, say quantum mechanics and general relativity just for the sake of reconciliation. Mindless!
Your second paragraph is a lovely little Nietzschean bit of prose, but it reads much more like a defense of the political role of figures such as Palin, Limbaugh, Olberman, DailyKos etc. (who are ultimately necessary, as you note, to advancing an overall cause) than of the Futurist. I will venture to say, however, most readers would be disappointed in a departure from the brilliant, data driven, and thoughtful approach that G.K. took (even with unabashedly conservative viewpoints, such as misandry in society, immigration, etc.) than rehashing ideas that are, as I said, somewhat short on novelty and new evidence, and long on unnecessary political angling to make up for it (a weird turn, in my opinion, since by no means does The Futurist have the viewership network of, say, Glenn Beck or Palin - why would such a post ever resonate in the small readership built up on the innovation of posts such as the "Techno-Sponge"?).
Either way, I have no problem with this short, isolated post - I just hope the blog quality as a whole keeps its essence.
Posted by: R.B. | September 02, 2010 at 01:46 PM
I don't have much to say on the appropriateness of this post. I agree it ties a bunch of stuff together that I'm not sure belong together, but...eh. The Futurist has fewer posts and less rehash than most sites.
Depressions and recessions are as much psychological as they are economic. After the initial downturn, fear and uncertainty are big motivators. Fools forget that government injects uncertainty into everything they touch. They don't have to play be the rules, and can be easily swayed by foolish ideas and mob mentality.
Imagine a football game with the players versus a team of referees and you start to get the picture. At first everyone plays sorta fair. Then the team of referees start calling fouls when there are none, and making up new rules on the spot. Eventually the players will sit on the bench and refuse to come out.
We have the grave misfortune of having a president determined to be transformative at the worst possible moment in our history.
The best thing Obama could have done was say he will keep all Bush policies and initiatives in place until the economy fully recovered. The policies, good or bad, are much less important than the perception of stability. The worst thing he could do was exactly what he did. Start a debate over illegal immigration (what will my work force look like?). Start a debate over taxes (will he or won't he extend the Bush tax cuts?). Transform health care (What will my future costs be?). Cap and Trade and clean energy (Can I get electricity? At what cost?). Massive stimulus spending (Hey, maybe I should invest in this pet project...or maybe that one....). Throw in a little hostile business rhetoric for good measure.
I would argue that having someone, anyone with the title of "Pay Czar" in your government is as damaging to the economic recovery than whether tax rates are set 5% lower or higher. Yes, tax rates and interest rates are important over the log term, but uncertainty will prevent anyone from investing no matter what the levels are set at.
Look a Germany. What did they do in response to the crises? Keep the rules stable, keep taxes stable, keep the currency stable, control spending. The results speak for themselves.
I think things will actually improve once the Democrats are swept from congress, simply because there will be a perceived check on Obama's transformative desires. Political deadlock would actually help the economy.
Posted by: Geoman | September 02, 2010 at 04:22 PM
OK, I made some minor tweaks that greatly improved the logical flow of the article.
R.B.,
There is some validity to your points, but you somehow missed the part where I slam Republicans for their lack of political creativity, and tendency to be whiteknights. Long-time readers know that there are few who I slam more brutally than whiteknights/pedestalizers.
Posted by: The Futurist | September 02, 2010 at 10:38 PM
Great post, thread.
Yes, it is a mix economics and politics.
Geoman is correct in his statement: Depressions and recessions are as much psychological as they are economic. I predict that the psychology, mood will darken soon.
I continue to ascert that politics and economics are two sides of the same coin. Bad politics make bad economics. Bad economics make bad politics, etc.
Bad politics and bad economics trash technological applications and developments.
Politics from the fall 2010 elections that elect Republicans will add to the general decline because there will be gridlock in 2011 with a hint of fiscal austerity with less stimulus programs. Obama and the Democrats stimulus programs were not effective and added to the nation's debt, so they will not be missed in 2011. But, gridlock with Republicans will not help either. Politics in 2011 and 2012 will not rescue the economy from the major trends causing America's decline.
Americans incomes available for consumer spending is declining and will continue to decline. In widely accepted economics, consumer spending is about 70% of GDP. Declines mean no growth or declining GDP from the current level in 2011 and 2012.
Sarah will be President in 2012. This will consolidate power in the Republicans with the new Congress in 2013. But, I am a doomer. By then, the accumilated debt and Dollar printing will bring the START of a Dollar crisis which judging by the currency crisis of the USSR Rubble and British Pound will take a year or more to play out badly.
Immediately, the economy is declining after the peak in spending from the stimulus created by government actions such as the housing tax credits, etc. Already, auto sales have severly declined as have housing starts and mortgage applications for new home purchases.
The mood will darken soon. By the end of October the psychology will be dark, hopelessness will be a common feeling.
Posted by: jeffolie | September 03, 2010 at 01:43 PM
Besides the expiring Bush Tax Cuts another reason exists for declining available income for consumer spending. It is not labelled a tax by some but now Obama's administration has made the argument that the mandated health insurance premiums are a tax thus superceding State's lawsuits that would deny Obama's mandated insurance. Either way this is labelled, new insurance premiums reduce income available for consumer spending. Some premiums have been raised now, immediately.
NEW YORK (CNNMoney.com) -- American workers are taking yet another blow to their wallets this year -- a whopping 14% jump in costs to insure their families.
http://money.cnn.com/2010/09/02/news/economy/kaiser_employer_benefits_report_2010/index.htm
If you don't mind, I am going to slam in some recommendations of my own right here.
The following ideas assume that the Republicans take the House and make inroads in the Senate in November:
(1) Defund the federal government agencies, excepting only the military, across the board by 10% in 2011.
(2) Pass legislation declaring a 2 year payroll tax and 2 year corporate income tax holiday. Inform Obeyme that if he vetoes the legislation, the federal agencies (EPA, DoE, DoA, etc.) will all be defunded another 10% for a total of 20% defunding — and he will have to manage the layoffs and pay cuts. My guess is he will sign. At which point corporations have a reason to start hiring again — without more jobs nothing else will solve it.
(3) Raise the eligibility retirement age for Social Security by 6 months every year until it reaches 75, then stop. However, first raise it to 70 in 2011.
(4) Legislate that no Social Security funds will be available to non-citizens, period, as of 2011.
(5) Defund Obamacare, and legislatively remove it (Obeyme won't sign, but fine, being unfunded it can't go into effect and he will be gone in 2012, and the next President can sign it — and it becomes a great campaign message against the Democrats).
(6) Legislate that all long distance (assume this to be defined as 50K miles per year) road freight traffic must convert to run on natural gas by 2017. That's all 18 wheelers and many of the high usage (FedEx, UPS, local delivery service) vehicles. This will reduce our demand on oil sharply, with two strategic benefits: (a) natural gas is cheap and we produce it domestically and (b) we will reduce oil imports enough that we should be able to get by with only importing from this hemisphere (goodbye House of Saud).
(7) Legislatively overturn EPA mandates on nuclear power and declare that the Federal government will cover all insurance risk for the next 100 nuclear power plants built, and that for every nuclear power plant brought online before 2018 the Federal government will pay the operating company ONE BILLION DOLLARS in gold. Simultaneously inform the EPA that if they obstruct this at all they will be defunded by 50%. Advantage — nuclear power plant construction employs a LOT of people — and a lot of blue collar and union work. Electricians, metal work, pipe fitters, concrete work, roads, building, you name it. Lots of jobs would be created AND due to NERC requirements none of them would be illegals OR foreign contractors. And operating the plants would permit retiring the coal fired plants, thus actually cleaning up the environment. Everyone wins.
The above is the 7 point SunSword plan to getting the debt cut, reducing the size of the federal government, dealing with the Social Security problem, cutting down Obamacare, and cranking employment by cutting corporate taxes and payroll taxes while building nuke plants (and cleaning the environment by retiring coal fired plants), AND cutting our dependence on foreign oil while increasing usage of domestic natural gas (also leading to more jobs).
Posted by: SunSword | September 03, 2010 at 02:30 PM
Sunsword,
Extreme, but...
3+4 - probably some form of means testing as well.
5)I'd replace Obamacare with something designed to reduce the growth of medical costs. We can argue over what that might be.
6) This would have the added benefit of incentivizing natural gas powered cars as well. Maybe throw some money into building the gas line from Alaska - a $20 billion investment with a reduction in regulatory hurdles and limitations on lawsuits would have that project up and running in no time. It worked for the Trans Alaska pipeline, it can work now.
7) Too extreme. I don't think you need to monetarily incentivize nuclear power plant construction, just get the hurdles out of the way. My suggestion is to have three or four fully approved designs, and anyone following those designs is exempt from all further regulatory review. There are many communities out there that would fight to have a nuclear power plant nearby. The insurance idea is nice, and would essentially cost the federal government nothing.
For the waste, set up a parking lot at the Yucca Flats facility for dry cask storage and take all dry cask waste from across the country there. Then build a recycling plant and recycle the 90% of the "waste" back into reactor fuel. Problem more or less solved.
Your second paragraph is a lovely little Nietzschean bit of prose, but it reads much more like a defense of the political role of figures such as Palin, Limbaugh, Olberman, DailyKos etc.
Posted by: Replica jerseys | September 03, 2010 at 06:39 PM
The Futurist et al,
An interesting post and comments. While I agree with most points it is worth noting that you are not the people in control. This is not an attack but a sobering thought that these excellent ideas will not be put into action.
So rather than talk about what 'you' would do, lets talk about what everyone could do. Are there any signs of any of the things mentioned in the above posts actually happening?
I'm not from the USA but I do know that a lot of the world is dependant on the USA. You are fast approaching breaking point and the right things are not being done. You mention converting all long haul traffic to gas but instead a corrupt deal between the government and GM has championed the electric car. We all know that electric cars will not be viable UNTIL we give up our addiction to oil. So why didn't the government leave GM to fail? Extreme but reasonable enough.
The internet is full of people that think they could put the world right but those same people are sitting on their asses not doing anything about it but post their ideas on-line where a few people will see them.
Government can no longer be held accountable for peoples lives, they are too bloated and corrupt. If we continue down this path of ignorance then there will be no future that we all talk and think about. It is not up to the government to lead us any more it is for the people. Now i'm not some fool that thinks we don't need government, what i'm saying we don't need the current governments.
I'm guilt of all of the above but the world is fast approaching a critical point in our history. Every body thinks they are alive at a 'special' time in history and its true because what happens now effects the future.
Something has to give sooner or later.
Posted by: Anapaest | September 04, 2010 at 09:20 AM
The Futurist,,
Ah yes - your article and your intentions are much clearer now - and I agree, I did overlook your criticism for inaction on the part of Republicans on spending cuts and on some members for "white-knighting."
Concerning some more long term trends in economics and politics - what do you think about the two following underappreciated patterns and their long term effect on the economy. I haven't yet had much time to articulate a better written or better evidenced or more insightful treatise on these - but I'm hoping you have some thoughts already?:
a) Fast acceleration of technological unemployment: Middle-class, low-skilled jobs were the first to go in our recession - and employers don't seem to want them back. This has not been observed in such a scale before, and once productivity goes up, it sticks. In the boom years such workers were acceptable to keep - and on an aggregate scale such workers are vital for consumption and AD (why else is our recovery so weak?) - but structurally most of these jobs are just glut for companies in favor of off-shoring or technological investment. Technology, as we know is accelerating, exponential, and self feeding change - in other words - this is just the beginning.
Evidence for this include increasing income inequality and the fact that the highly skilled workers have held jobs surprisingly well in the current crisis (unemployment among college educated is 4%). Across the board, menial jobs - and even some high skilled ones (such as a second or third opinion in radiology or routine contract drafting) - are being off-shored (through improved communications technology) or being replaced with other technology -soon, even "technical" tasks that really just involve familiarity with certain unintuitive technologies (i.e. questions such as - "Update this certain information on the given website with this certain information - I have no idea how these things work!" or "Here are some equations I came up with - get Mathematica to do this." - essentially translating human to computer) will be killed off with the advent of natural language processing in computers a la Wolfram Alpha. Future jobs will demand - currently seen on a visibly drastic scale - the best of humanity: the adaptable traits of leadership, intelligence, creativity, insight, and adaptability itself - not merely "sticky" skills that, over time, will be gobbled up by productivity gains. Whether we are up to it in the long term is the big question.
What are the short - mid term solutions to this? As you have noted - a very underappreciated solution is simply immigration reform - the hoops and ladders that highly skilled foreigners go through to get a work visa or citizenship is ridiculous in the current state (it seems only us first/second generation Indians and the like really appreciate this…) - especially compared to the incentives for illegals to enter the country. Nevertheless these diminished figures have had high yields - if affirmative action were not in favor against Asians figures have reported that around 39/40% of students of all "elite" schools would be Asian - the vast majority being first/second generation immigrants. Just take a look at the names of the math (USAMO) and science winners (USAPHO/Siemens) for high schools - it's been staggering and quality in these very highly skilled arenas have only increased for the US in recent years despite educational decline for the whole of the country. One could also increase the international intake for public schools - the many stay in the US after college in addition to paying higher fees.
Nevertheless this doesn't help those in the US without motivated/high skilled parents (although I think an argument could be made that lots of highly skilled immigrant children will improve the quality of US education by virtue of peer role modeling - but I have no data for this…) in the long term. Other than simple education reform (perhaps focusing on much more general intelligence, problem solving, and creativity fostering than what amounts to "vocational" or "rote" given that acceleration change might soon render many college level jobs useless too without sufficient variability and mobility of skills from job to job) it seems like a tough cookie to crack.
It's tempting to think about the very long term (i.e. 30-40+ years) possible advent of technology chipping away at all but the most highly skilled and highly creative humans, where I can't begin to imagine the form of our "economy" at that stage - but alas I'm getting ahead of myself… =)
b) Communications Impact on Democracy: I feel the political situation will deteriorate further for the following reason:
Short-term allure of brief mass media appeal versus long-term policy initiatives that yield. Why does Palin get more attention than Obama? Twitter. Only joking, but the facts are that communications have made our time scales much shorter - answers, punditry, input, explanations, rabble-rousing etc. are expected within the time span of minutes, not days or weeks, for relatively insignificant short term problems. This is a problem facing business and other leaders (with in-and-out CEOs with guaranteed bonuses for short term gains having little incentive to promote long term growth) as well as policy makers - but policy makers screw things up for us much more. This is amplified by ever increasing longer election campaign cycles. Why am I not pulling this out of my ass? Look around you - instead of policy engineers we have identity politics a la Palin, Obama, etc. who would rather spend time cashing in on local and short term sensations in the media such as a proposed mosque in New York City rather than actually thinking and deliberating important issues - such as, you know, the *economy* or other long term policy. Here is a eyebrow raising expose on just how screwed up the Senate is: (http://www.newyorker.com/reporting/2010/08/09/100809fa_fact_packer?currentPage=all ) Solution?: I see slightly longer term limits as one - if at least to counteract longer election cycles. However, this is also very risky - for example, we would be screwed if we had to wait another year for Republicans to make gains in favor of the economy.
In general I see government incompetence on both sides only increasing - at least the conservatives propose to protect America from politicians through decentralization and minimal government impact overall - but it's hard to say. Will we go from tweeting senators and presidents to tweeting governors - making the problem worse from centralized chaos to decentralized chaos. I'd like to believe the real national force - business and innovation - will lead the US to the right path without anyone screwing it up, but who knows.
a) Fast acceleration of technological unemployment:
This is a subject I brought up in the recent 'Carnival of Creative Destruction', just two posts back. High unemployment coupled with high productivity gains will now be the norm.
Indians and Chinese are the only ones for whom a Greencard has such a high waiting list, since the US govt. stupidly assigns a quota of 10,000 greencards per year to each country irrespective of size. So while Luxembourg does not even use the greencards assigned to it, India and China have waits of decades through basic application, causing H1-B to be the only other avenue, where the wait is a relatively 'shorter' 6 years.
Solution?: I see slightly longer term limits as one - if at least to counteract longer election cycles.
Well, no. If anything, the Senate has a big problem because of incumbents being there too long.
Web 2.0 mediums impacting politics has much less of an effect on the US than on countries like Iran, where the regime cannot get away with the same things it could get away with in 1979.
It is possible that Democracy undergoes near-fatal tests every century or so, due to too much vote-bank politics pushing the existing order to a breaking point.
Annapest,
Are there any signs of any of the things mentioned in the above posts actually happening?
For the most part, no.
Read the 'Eight Ways to Supercharge the US Economy' article, if you have not already. Over there, I state that there is no shortage of good ideas, but there is no chance of the governance industry implementing them.
It is important to realize that the 'government' is just an industry like any other, that seeks to maximize its revenue and power. Unlike other industries, however, the governance industry does not face easy competition, or accountability.
The Futurist,
I see that as a valid point. This could also be said about the church in the middle ages.
So you have established that no necessary changes are being made. You have also established the fact that the government industry is corrupt.
Linking this with technology we can safely assume that this sector is safe from any real impact regardless of whatever the current crisis may be. The industry is safe because it is the key to power and makes a lot of money. The government industry will move to where the money and power lies.
The real crisis here is not if we will see amazing technological advancement, the issue is how much will society pay for it.
Our future will be full of many more evils than good.
Posted by: Anapaest | September 04, 2010 at 05:11 PM
The Futurist wrote:
"It is important to realize that the 'government' is just an industry like any other, that seeks to maximize its revenue and power. Unlike other industries, however, the governance industry does not face easy competition, or accountability."
I mostly agree.
In 2008, I predicted 'the politics of the backlash of 2010' which now where a populist label of the Tea Party. I predicted economic and political gridlock because Democrats would be unseated.
I was correct.
Governance is slightly less in favor because Democrats failed to help Americans economically and consumer spending is declining even though government is supplementing income via borrowed and printed money.
No revolution is in sight. Governance in America is safe for 2011.
Governance in Europe is not safe. By the end of summer of 2011, Europe's government will face a crisis as consumer spending in Europe is declining fast. The Dollar will be supported by the European crisis as a safe haven alternative to the Euro during the late 2011 crisis.
America is safe in 2010. The States will have massive layoffs a year from now in late 2011. Cities, States, Counties will run out of tricks to avoid large scale layoff by then and a Republican dominated House of Representative will block all large scale Democrat leadership programs but allow small business tax credits in late 2011.
"...65% Fear Double-Dip, 71% Say US is Fundamentally Broken, Net 32%..."
Expect to Reduce Spending Fear, politics, economy = Oct massacre
Americans fear the immediate economic results.
I continue with my long prediction that 'hopelessness will be a common feeling by the end of October'.
I am not making a new stock market prediction. I continue to predict that declining stock prices will be just one part of many parts leading to 'hopelessness will be a common feeling by the end of October'.
65% Fear Double-Dip, 71% Say US is Fundamentally Broken, Net 32% Expect to Reduce Spending
It is quite clear the US economy is sliding back towards recession, if not still in it. The average consumer understands that, yet the average economist doesn't.
How is it that the average consumer has a better grip on the economy that the average economist? Regardless of the answer, here are some interesting survey results from Americans Fear "Double Dip" Recession & European Financial Problems.
•92% say the US is still in recession
•65% fear a 'double dip' recession
•57% are fearful about running out of money in the next year
•44% could easily see their family slipping into bankruptcy if things get worse
•42% say they will spend less money than they did over the last 3 months, while just 10% will spend more. 48% report their personal spending will likely stay even
•09% say the US is in a 1930s style economic depression
•72% say Europe's financial problems likely to hurt US
•42% say that they or their spouse has had wages or salary reduced
•34% say they or their spouse lost their job or has been laid off
•33% have taken on more hours or another job to try and make ends meet
•28% dipped into a planned retirement account like an IRA or 401K because they needed the money
•09% have had their house foreclosed on
•08% had their child delay college (or graduate school) or drop out to save money
•20% expect their personal finances will recover by the end of 2011, 27% say after the end of 2011, 24% say their personal finances won't ever fully recover
"Attitudes towards the current economic climate should be very concerning for those who sell consumers goods and services. The perception that the economy is likely slowing down again is leading consumers to tighten their belts and keep their wallets and purses closed. Consumer marketers will need to figure out how to best dial up the perceived value of what they are selling in order to stay on track", said Bradley Honan of StrategyOne.
For a discussion of whether or not the recession has ended, please see NBER Likely to say "Recession Ended" July 2009; Assessing the Real Time Probability US Back in Recession
At this juncture, the debate as to whether the recession has ended or not is actually moot. The pertinent factor is: If there was a recovery, it now seems over.
Looking ahead, attitudes rule. With consumer spending weak and weakening, and now that the stimulus has run its course, the odds the 3rd and/or 4th quarter GDP numbers will be negative are quite high, as are the odds of double digit unemployment numbers by the end of the year..
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Posted by: jeffolie | September 09, 2010 at 10:58 AM
Hello Futurist,,
While I take more time than most here to digest and understand your post, I truly appreciate the work you do and the lively, engaging back-and-forth between you and other posters here.
I realize this is slightly off topic, but an old classmate recently posted this: http://www.slate.com/id/2266174/slideshow/2266174/fs/0//entry/2266218/?ref=nf on his FB page, and I could not help thinking that this was nothing more than statistics used to further the idea of class-warfare with the tired and trite claim that "the rich get richer, and the poor get poorer" and it's the work of evil, white Republican males. I would very much like to hear your thoughts, however brief, on this.
Thanks kindly, Gang of One
Posted by: Gang of One | September 11, 2010 at 08:43 AM
China=kids w/US Grannies
Why more kids are raised by Granny
Granny raising kids=American women want kids, Gone Viral Family, broke ass men, mancession, jobs gone to China
Having kids is still popular in America. Female Movie Stars are leading the American culture by adopting and having many kids. Having kids is still popular in America. America's birth rate could easily mirror negative birth rate countries if women in America change the culture that puts having children on a pedestal.
Men are no longer trusted to be good providers nor kept around by women in American resulting in mothers dumping their kids on Granny to provide care giving.
The current 3 year decline has accelerated Grannies raising kids. Women kept working while men accounted for 80% of the job losses. The 'mancession' started slowly long ago in the 1970s with blue collar, manufacturing jobs going to China when Nixon opened and 'The West' including Europe changed to crush organized labor and end the Brenton Woods agreement in what is now called Globalism by critics and free trade by others.
Slowly over the last 40 years and now very quickly in the last 3 years, women decided not to keep broke ass men but to keep having children. I rant and called this 'the American Family Gone Viral' where children rarely reach the age of 18 with their biological father as the husband to their care giver. American women behave like viruses in that they attach temporarily with men, reproduce and then move on to a different man.
America is different compared to the declining birth rates in Japan, Europe and Russia where populations are shrinking. Women there do not want kids nor to be with aging relatives. American Black women and Mexican women in America want kids and have many kids compared to White or Asian American women. Proportionally, more grandparents as primary caregivers for their grandchildren are African-American or Hispanic than Caucasian BECAUSE of the lack of low skilled jobs in America that have GONE TO CHINA.
More US Children Being Raised By A Grandparent
Approximately 10% of American children live with a grandparent, according to a new report by the Pew Research Center, which analyzed U.S. Census Bureau data. Over the last ten years, the number of children living with a grandparent has been steadily increasing, with a slight acceleration during 2007-2008 when the recession hit.
The report adds that approximately 41% of children who live with a grandparent(s), 2.9 million in total, are being primarily raised by that grandparent. This figure has also been progressively growing over the last ten years, with a spike during 2007-2008 when the figure rose 6%.
Grandparents as primary caregivers are more common among Afro-American and Hispanic families than among Caucasians. However, since the recession, the numbers among white families has been rising the fastest. (In the USA, the term "Hispanic" tends to refer to Latin Americans excluding Brazil and other non-Spanish speaking countries, but not those from Spain. In the UK "Hispanic" refers to anybody from a Spanish-speaking country, including Spain.)
In 2007-2008 the number of white grandparents who were also the principle caregiver rose by 9%, the report informs, compared to 2% among African-American and 0% among Hispanic families.
About 49% of kids who are raised by grandparents also live with a single parent; 43% of them have no parent at home, while 8% have a caregiver grandparent as well as both parents at home.
80% of American seniors (aged 65+) have grandchildren, while just over half of all 50 to 64 year-olds do so too.
In 2000 about 2.4 million grandparents were their grandchildren's primary caregiver, in 2008 the number rose to 2.6 million; a significant proportion of that increase occurred from 2007 to 2008.
Among the grandparents in America who are primary caregivers for their grandchildren:
24% are African-American
18% are Hispanic
3% are Asian
Proportionally, more grandparents as primary caregivers for their grandchildren are African-American or Hispanic than Caucasian. However, there was a 19% increase in the number of Caucasian grandparents who were their grandchild's primary caregiver from 2000 to 2008.
18% of grandparents who take care of children live below the poverty line, while nearly half have total household incomes between 1 and 3 times the poverty line.
67% of caregiving grandparents are less than 60 years old, and 13% are under 45.
62% of caregiving grandparents are women, two-thirds are married, and 34% are not married.
"Since the Start of the Great Recession, More Children Raised by Grandparents"
By Gretchen Livingston and Kim Parker, Pew Research Center
Gang of One,
Two things :
a) The charts in your link conveniently end in 2008, because the Obama data would destroy the whole set of claims being made.
b) As the main article explains, socialism is much more rigged in favor of the super-rich than capitalism is. The widening divergence is due to attempts to institute socialism, rather than the opposite that is being claimed.
I am in the commercial real estate industry and the banks have been looking the other way on loans for a while and I think this will be the next big explosion to the US economy next year no matter who takes over in congress this winter.
The big question, IMO for next year is not only the Bush tax cuts expiring, but will the R's have enough majorities to repeal all of the damage the far left have inflicted BESIDES the Healthcare disaster? The financial reg bill needs to be repealed as well as defunding entire agencies that are out of control and imposing damaging policies that are out to destroy our system.
The wasteful spending in government is right now funding, with grant money, all of the favorite far left groups causes through HUD, OSHA, HSA, DEA, tec. All of these agencies need to be defunded at least 50% and all Grant monies need to be stopped immeadiately! This and the fact that federal and state unions need to be abolished and pensions need to be means tested and retirement ages raised for every government employee.
The last, and in my mind most important thing that needs to be done to make politicians think twice about pulling the type of unconstitutional stunts that the left have pulled off the past 18 months is to start;
1) impeachment processes on the executive branch based on any number of offences (taking over a public company-GM and firing the chief executive and breaking a contract to investors illegally to save union pay or suing a state-AZ TWICE for trying to protect their borders, their are many more but those would work fine)
2) start trial proceedings on Nancy Pelosi for failing her oath to protect the constitution by forcing through unconstitutional healthcare illegally through procedural tricks AND SEND HER TO JAIL.
(or you could take them both out based on Obama's lack of constitutional ability to hold office, that she was a signator of his eligibility to be qualified, based on the fact his father was a Kenyan citizen and British subject and not eligible to be president since both parents were not american citizens, no matter WHERE he was born)
The ruling class don't think there are any consequenses to their power grabbing behavior and throwing some of these rats in jail will make them think twice about ever trying it again.
Never has the US faced such criminal elements that have attempted to hijack our constitutional republic as is going on right now and is exactly why the founders had placed the eligibility requirement that both parents be citizens for someone to be qualified to be president.
Sorry, this is about the future, but we gotta get the world straightened out from the mess we're heading for or the future won't be very poitive.
Posted by: Vinny | September 11, 2010 at 04:06 PM
Thank you for taking the time to look at that and respond. I truly appreciate it, sir!
jeffolie predicts....no grow in 2011 & 2012
I have been calling the FIRE industries (Financial, Insurance, Real Estate plus others such as Big Pharma, Big & Little Energy) Globalists and Italian styled Fascists that work hand in hand with Government (Obama, Bush & CONgress) as parasites..
Italian styled Fascists are a significant problem and there are other problems such as the loss of manufacturing in the West (starting with Nixon opening manufacturing jobs to China and the end of the Brenton Woods agreement).
Long term these significant problems have removed Americans from living a better life style. Growth from innovation barely exists before it is sent offshore, overseas.
For a variety of reasons, I continue to predict no grow in 2011 & 2012 in America.
Charles Smith wrote a critical piece reflecting the current winners with big houses:
What "The 25 Most Expensive Homes" Reveal About the U.S. Economy
"The 25 Most Expensive Homes in Hawaii" reflect an economy based on financial speculation whose wealth is concentrated in a parasitic financial sector.
The glossy Mid-Pacific yuppie advert vehicle Honolulu Magazine recently ran a cover story of irresistable real-estate pornography titled "The 25 Most Expensive Homes in Hawaii" that unintentionally revealed the true nature of the U.S. economy.
The homes, valued in the $30 million range, were typically located in exclusive coastline enclaves: no big surprises in either the locations or the bubble-economy valuations.
What might surprise anyone who still clings to the quaint belief that America's great wealth is generated from actually producing goods or services of global value is who owns the vast majority of these villas: investment bankers and hedge fund managers.
A grand total of three of the 25 made their wealth in technology--software, computers, etc. One Japanese multinational (Toyota) made the list (unsurprising, considering Hawaii's decades-long appeal to wealthy Japanese), as did one Japanese female whose source of wealth wasn't identified. There was one artistic outlier, and the rest were all financial parasites: investment bankers, hedge fund managers or other denizens of the speculative FIRE (finance, real estate, insurance) economy which has come to dominate profits and wealth accumulation in the U.S.
In years past, the list would probably have been dominated by people who made fortunes in energy, technology or some innovative business with global reach. While it is likely that robber-barons would have been heavily represented in The Gilded Age (1880s-1890s), at least the businesses represented--railroads, mining, trade, etc.--offered widespread benefits in the real economy to citizens in the form of jobs and new goods, resource and services.
Financial parasites, in contrast, skim fortunes from the real economy. Hedge funds are restricted to the top 2% or so of U.S. households, so the gains skimmed from manipulation and speculation act to further concentrate the already high concentrations of wealth in the U.S.
While it can be argued that "financial services" creates jobs just like technology, railroads, etc., the entire industry is fundamentally parasitic in nature: the credit- real estate bubble revealed that its widely-heralded "innovations" were essentially embezzlements and frauds taken mainstream.
As millions of now-underwater homeowners discovered, the "wealth" created by highly leveraged, debt-based speculative "innovations" was illusory except for the billions of dollars of commissions and fees generated by the churn and stripmining of assets on a global scale.
Beneath the bogus propaganda of "free market capitalism" is an economy in which the real money is skimmed day in and day out without risk or benefit to the real economy. Investment banks generate profits of $100 million a day without interference of mere probability, which would suggest an occasional losing day.
Vast industries practice a highly-refined type of crony capitalism which can be characterized as "Federalized entrepreneurship," in which a revolving-door between captured regulators and goverment managers and private cartels insure a highly profitable "partnership" channels profits to the National Security State contractors, the sickcare cartels (insurance, pharmaceuticals, etc.) and other industries dependent on Federal largesse.
At the top of this foul heap of phony capitalism--in effect, a partnership of the State, a monopoly with exclusive power to collect trillions in taxes and borrow trillions more, and corporate cartels which act as monopoly-capital in their industry--rests the ultimate parasites of the financial "industry": producing nothing but skimmed profits for the Plutocracy and its loyal army of high-caste technocrats, enforcers and factotums.
The $30 million estates in Hawaii are second or third homes. My sources on the Kona Coast report that the Kona airport is congested with private jets, and recent buyers of $10 million+ homes along the Kona Coast of the Big Island are simply adding the homes to their private portfolios of homes to enjoy a few weeks out of the year.
Beneath the real-estate pornography of bloated McMansion estates lies the ugly subtext of what the list reveals about the nature of wealth creation and concentration in the hollowed-out, credit-dependent, financial-speculation dominated U.S. economy.
Those touting the regenerative powers of U.S. "innovation" and the U.S. economy should ponder who can afford $30 million third homes, and what their great wealth has added to the citizenry of the U.S.
If you drive around these enclaves, what you find is a modern Plantation economy of the sort I have described in Survival+ and in previous entries: an economy fundamentally based on extraction and the domination of the State-corporate partnership.
http://oftwominds.com/blog.html#jump
My longtime 'hopelessness...end of October' reasoning included declining housing as just one part of many parts that would result in this feeling.
Home Prices Drop in 36 States; Beazer Warns on Orders; 8 Million Foreclosure-Bound Homes to Hit the Market; Prices to Stagnate for a Decade Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
Losing the home...
Banks have stepped up their processing and now are putting more families out of their homes...the current word used is "repossessed":
The nation's banks repossessed a record number of homes in August, according to industry sources. RealtyTrac, an online foreclosure sale site, will release its monthly numbers on Thursday, but sources there confirm the number of repossessions will come in just shy of 100,000 for the month.
That is the highest since the site began tracking in 2005. July's repossession number was the second highest on record. The last highest was 93,777 in May of 2010.
Notices of Default, which are the first step in the foreclosure process, are up slightly but mostly thanks to a jump in California, where the numbers had been artificially low of late, as banks tried to modify borrowers.
"With respect to the NOD increase, I think it is the modification redefault wave beginning to build and new modifications slowing to a trickle, indicating banks have lost their primary borrower re-leveraging tool," says mortgage industry consultant Mark Hanson.
Yeah, it's about time the loan modification redefault wave hit – in the end they'll look back at that effort as one that only helped the banks to "extend and pretend" another nine months.
http://timiacono.com/
http://www.independent.co.uk/news/science/revenge-of-the-nerds-should-we-listen-to-futurists-or-are-they-leading-us-towards-lsquonerdocalypsersquo-2073910.html
Posted by: Reader | September 16, 2010 at 05:57 AM
Taking money away from consumer spending is wrong in this economy. The poverty rate in the United States rose to 14.3% in 2009, the highest since 1994, up from 13.2% in 2008, the Census Bureau reported Thursday. A record 43.6 million Americans were in poverty last year.
'Wealth' grew.
The 'wealthy grew'.
"...."Millionaire Population Soars – Again." ... the number of American households with investible assets of $1 million or more rose 8% in the 12 months ended in June."
The rich have 'investible assets', not the middle class nor lower classes.
As the ranks of 'the wealthy' grew, the average guy never recovered and the country remains in a 'regular depression'.
The newest 'Small Business' tax stimulus will not likely result in much new hiring because it is aimed mostly at spending the largest portion of the money on capital expenses that often mean few jobs, temporary jobs and mostly computers made overseas.
Duly noted in a research piece by Merrill Lynch, the wealth gap continues to widen, poverty grows:
The following article caught our attention on the Wall Street Journal Online, "Millionaire Population Soars – Again." The Wall Street Journal is reporting on a survey performed by Phoenix Marketing International's Affluent Market Practice. According to the survey, the number of American households with investible assets of $1 million or more rose 8% in the 12 months ended in June. In total, according to this survey, there are more than 5.55 million US households with investible assets of $1 million or more. The millionaire count has now returned to 2006 levels, but is still below the peak reached in 2007 of 5.97 million.
In stark contrast to the previous article, the Census Bureau released its annual snapshot of American living standards. The Census Bureau found that the fraction of Americans living in poverty rose sharply to 14.3% in 2009, up from 13.2% previously. This is the highest level since 1994. In total, 43.6 million Americans were living in poverty last year. To read more, check out the Wall Street Journal Online article, "Poverty Rate Rises To 14.3%."
The Census snapshot also indicated that the gap between the best-off and worst-off Americans widened a bit more in 2009, a long-standing trend, but not by much. The top fifth of households accounted for 50.3% of all pre-tax income; the bottom two-fifths got 12%. In 1999, the top fifth claimed 49.4% and the bottom got 12.5% of the income. Have a look at page A1 of the WSJ, "Lost Decade for Family Income."
I hope to have more on the Census Bureau's just-released report early next week, as it's chock full of good data (as will be today's release of the Fed's Flow of Funds). Suffice to say the news is not good; it is saddening to see the poverty rate on the rise and engulf almost 44 million Americans..
http://www.ritholtz.com/blog/
The Stock Market
Tuesday, Sept 21st likely will complete the rise in the indexes to the top of their trading range that has persisted for over 1 year.
I am not sure but it seems likely that stocks will trade from Tuesday through Friday in a sideways interday range. I am not sure what the top of the range will be but it seems likely that the DJIA will pop up and over 10,700, the S&P up and over 1130, etc. A chance remains that a short squeeze will jump the DJIA to 11250, S&P 1200, etc. One should stay with the trend until the trend rolls over. Using a moving average can keep you from making the mistake of shorting in a rising market but bring whipsaws. If the markets jump, then the next likely topping area and time period is in the first week of October because seasonality studies show that institutional investors tend to push money into the markets at the beginning of the month and the near middle of the month.
Small investors have a mental disconnect between the stock market and the economy. The economy has rolled over according to the NEWS and mainstream media financial press as reporting on housing and consumer confidence now are in decline. The stock market does not always move in the same direction as the economy as reported by the NEWS and mainstream media financial press. The stock market is not the economy and small investors do not understand this.
There is some relationship between the economy and stocks but it is not simple. Final Demand, Consumer Spending impact MERELY SOME earnings and MERELY SOME corporations bottom lines. The supply and demand for stock is complex and not apparent to small investors. Small investors no longer dominate the markets. For example: 25% of the days volume in one minute after the close:
"...1 Billion NYSE Share Spike After Close..."
Stock market crashs do hurt middle class families but not always directly and immediately. Most direct individual ownership of stocks is in the upper 10% of Americans. Indirectly, stock market crashs impact pensions, insurance investments, government investments, banks. For example, prolonged market declines in countries result in layoffs, unemployment as in Japan and isolated situations such as Argentina, etc.
America's 10 year secular sideways stockmarket has impacted the middle class indirectly by now requiring State and Local governments to give more money to retirement systems.
Government replaced financial support and income once coming from profitable small businesses and corporations providing jobs. This is not as indirect as it seems regarding stock markets because long and intermediate stock market price is somewhat related to earnings, profits and the general economy. The shift to government replacing financial support and income once coming from profitable small businesses and corporations providing jobs will COLLAPSE THE ENTIRE FINANCIAL SYSTEM in time.
The political changes from unseating Democrats and electing some Republicans will change nothing. I have predicted since 2008 that there would be economic and political gridlock in 2011 & 2012 because of 'the politics of the backlash in 2010".
The system will continue forward and increasingly lower Americans standard of living including health care until the Dollar crisis brings insolvency which will be horrible.
American styled capitalism became Italian styled Fascism. The stock market reflects this as money flows have changed..
The latest GEAB estimates US GDP, after deducting the increase in Federal debt, is down 30% from the onset of the crisis and the ratio of public debt to GDP, so figured, is now 113%. (That's very near the level in Greece. It makes a lot of sense to compute it this way, too.)
They're recommending precious metals, particularly gold, real estate to live in and I think other cheap real estate (probably not in the US, but that was perhaps only implied - don't remember).
They believe the dollar's going to fall against the Euro as awareness dawns on how risky the US has become due to political stalemate on the one hand and instability on the other.
They also believe a debate over the deficit will become a central controversy even as political gridlock prevents any solution. The US will enter into a difficult austerity phase, but nothing effective will happen until 2013.
They do not expect the US to resort to military solutions to its problems. The US will be turning inward. (This is similar to the Great Depression, where trouble struck after economies emerged from the depression.)
The feds (government and reserve) are powerless and the Fed knows it.
GEAB N°47 is available! The Global systemic crisis – Spring 2011: Welcome to the United States of Austerity / Towards a very serious breakdown of the world economic and financial system
- Public announcement GEAB N°47 (September 16, 2010) -
"...The coming months will reveal a simple, yet especially painful reality: the Western economy, and in particular that of the United States, never really came out of recession...the U.S. housing market remains depressed at historically low levels and will resume its fall from the fourth quarter 2010 ...the first half of 2011 will dictate that the US economy take an unprecedented dose of austerity...beginning Spring 2011...plunging the planet...
"...And, won back by the Republicans or even the extremists, these voters will help to further cripple the Obama administration and Congress (which will probably swing to the Republicans), only pushing the country into a tragic gridlock just when all the signals turn red again. This expression of widespread anger will in addition, from December onwards, collide with the release of the Deficit Commission report set up by President Obama, which will automatically place the issue of deficits at the heart of public debate at the beginning of 2011.
"....ECB has made it clear it thought that a new policy of stimulation through an increase in US deficits would be suicidal for the United States. Already China, whilst saying it would do nothing to rush things, spends its time selling US assets to buy Japanese ones (reflected in the historic level of the Yen / Dollar rate of exchange).
"...an electorate sick and tired of Washington and Wall Street, heavy reliance on federal funding of the entire US economy and the Fed's impotence against a backdrop of growing international reluctance to finance US deficits will combine to push the country into austerity....the United States cannot afford a new stimulus (26). Rather than a multidecade collapse like the Japanese situation, many decision makers will be tempted by shock therapy ... this same therapy that, with the IMF, the United States recommended to Latin American, Asian and Eastern European countries.
"...This is normally a good reason for the rating agencies, always so quick to see the straw in the eye of most countries in the world, to threaten the United States with a strong downside rerating if they not implement a comprehensive austerity plan as quickly as possible. But anyway, for LEAP/E2020, due to the internal and external conditions in the country described above, it is really in spring 2011 that the United States has an appointment with austerity, an appointment that the rest of the world will impose if it is paralyzed politically.
"....Until then, it is likely that the Fed will try a new series of « unconventional » measures ( a technical term meaning « desperate attempts ») to try and prevent arriving there because, at this stage, one thing is certain concerning the consequences of the United States entering a large-scale programme of austerity: that will be financial and monetary chaos in the markets accustomed for decades to the exact opposite, that's to say, US waste; and an internal economic and social shock unparalleled since the 1930s...."
http://www.leap2020.eu/GEAB-N-47-is-avai....very_a5168.html
I predict a different path to a Global systemic crisis because I do not think American politicans will repeat the European choice of austerity.
GEAB declares the Spring 2011 will have Obama and CONgress pick and voluntarily enter federal government austerity. This is wrong. I agree on 'gridlock' only.
I expect American Austerity will be happening only on the State and Local government levels when October 2011 forces very large layoffs. Gridlock at the federal level will limit rescues of State and Local government to insignificant funding of very selected groups of State and Local government employees.
I expect European Austerity will bring the crisis to Europe by the end of Summer of 2011 and result in governance problems in Europe not America.
I expect America to struggle with a continued 'regular depression' in 2011 & 2012 because the FED will continue to look good, pretend and extend compared to the European Central Bank's austerity..
Protectionism, Anti China
This has the potential to be an economic/political game changer.
If Democrats run with the ads and political campaigns against Republicans that accuse Republicans of shipping jobs overseas, then the 'free trade' policies may change.
I have often posted that men have lost the manufacturing jobs and impacted the structure of the American family. The term of Mancession is often used.
If men were able to get jobs again, then America might recover.
ad: GOP=jobs overseas
Will this become common Democratic political campaign strategy?
Democratic ads seek to link GOP candidates to movement of jobs from US to other countries.
WASHINGTON (AP) — Businessman Randy Altschuler had barely won a Republican primary for Congress when New York Democratic Rep. Tim Bishop unleashed a television ad christening him an "outsourcing pioneer" who sent jobs overseas while millions of Americans struggle.
"The company is really about Sri Lanka, the Philippines, wherever we could find the best talent," Altschuler is shown saying in the commercial, while ominous music plays in the background. In case viewers miss the point, an announcer adds that Altschuler "made millions outsourcing jobs."
The 39-year-old first-time political candidate stands out for having spoken candidly on camera about the benefit of foreign workers. But with Democrats struggling for political traction on the economy in midterm elections, candidates in all regions of the country are accusing Republicans of having personally sent jobs overseas or at least protecting companies that do.
These attacks come when the public seems increasingly disenchanted with the Democrats' ability to manage the economy, an issue that pervades the midterm elections.
In a recent AP-GfK survey, 46 percent of those surveyed said they trusted Republicans to do a better job of handling the economy, and 41 percent chose the Democrats. As recently as January, Democrats held a nine-point advantage on the issue, and two years ago, support on the economy helped President Barack Obama win the White House.
But a deep recession, followed by a grudging economic recovery, has left unemployment at just under 10 percent nationally and significantly higher in some areas.
In many parts of the country, "people think their jobs have gone overseas with a lot of basis in fact," says Steve Murphy, a Democratic campaign consultant.
Adds Pete Brodnitz, a Democratic pollster, "People are trying to figure out what happened to our economy and how do we improve our economy," adding that in their view "you have to get back to policies that really encourage manufacturing in America and making things in America."
In California, where unemployment stood at 12.3 percent in July, Sen. Barbara Boxer recently began running a commercial that says Republican candidate Carly Fiorina laid off 30,000 workers while she was CEO of computer giant Hewlett-Packard.
"When you're talking about massive layoffs, which we did, perhaps the work needs to be done somewhere else," Fiorina says in the ad. The announcer adds, "Fiorina shipped jobs to China, and while Californians lost their jobs, Fiorina tripled her salary, bought a million dollar yacht and five corporate jets."
In Ohio, where joblessness was most recently calculated at 10.3 percent, Democratic Gov. Ted Strickland is wielding a similar club against Republican challenger John Kasich. An ad that started running statewide in late August shows Nilda Ramos of Lorain, Ohio, saying her husband was laid off in 2006 from a job he had held for 22 years at Invacare, a manufacturer of wheelchairs and other medical equipment.
"John Kasich sat on Invacare's board as a director and signed off on jobs being outsourced and sent to China and Mexico," she says. "I believe they sent those jobs overseas so they could make more profit."
Republicans generally respond by pointing out that the economy has deteriorated during Obama's administration, and by accusing their attackers of supporting job-killing policies in Congress.
"Congressman Tim Bishop needs to stop lying," said Rob Ryan, a senior communications adviser to Altschuler. "He knows it's a fact that Randy Altschuler has created well over 700 jobs for hardworking Americans. Tim Bishop is the real outsourcer in this race. He's voted for the big spending, high taxing, job killing policies" of Obama and the Democratic leaders of Congress.
Andrea Saul, a spokesman for Fiorina, said that in Boxer's time in Congress, she has "voted for more than $1 trillion in higher taxes on hardworking Americans, championed job-killing legislation that cripples small businesses and voted to increase our debt to historic levels."
Kasich's spokesman, Rob Nichols, said that with his ad, "Ted Strickland's hypocrisy is reaching new heights. After using taxpayers' money to outsource Ohioans' jobs to El Salvador and twice voting to give China special trade status, he turns around and makes his fourth negative attack ad about these very same things." The governor is a former member of Congress.
Several Democrats said they first noticed the potential political significance of job outsourcing for this year's campaign to fill a vacancy for a House seat in southwestern Pennsylvania.
"We used it very hard and it was very effective," said Democratic Rep. Mark Critz. His victory in April was widely viewed as a mild upset, and Republicans privately say his opponent responded slowly and ineffectively to the attack.
In the wake of Critz' election, Democratic campaign committees commissioned surveys to measure the impact of the issue nationally, and have urged individual candidates to incorporate it into their campaigns, according to several officials who spoke on condition of anonymity. They declined to be identified because they said they were not authorized to discuss campaign strategy.
They said the surveys found that an allegation of outsourcing was most effective when leveled against a candidate who had a personal connection to the migration of jobs overseas, as a businessman, for example.
In other cases, including races in Wisconsin, Illinois, Nevada, Virginia and elsewhere, Democrats have seized on a no-tax-increase pledge signed by Republican incumbents or candidates as evidence they want to protect breaks for companies that export jobs.
In still others, the allegation is that a Republican will support a new trade deal that promises to result in the loss of jobs overseas.
In a few cases, Democrats are trying a far softer approach. In the Syracuse, N.Y. area, Rep. Dan Maffei, D-N.Y., has aired a commercial that attacks no one.
Instead, the announcer says, "he wrote the bill that ends tax breaks for outsourcing and gives tax breaks to companies that stay in the U.S."
http://www.latimes.com/business/nationwo....0,3592289.story
Jeffolie -
If you took the sum total of whatever competence the Dems possess (politics, economics, you name it)and shoved it up an ant's ass it would rattle around like a BB in a boxcar.
Posted by: Zyndryl | September 20, 2010 at 03:14 PM
Zyndryl
Yes, Democrats are incompetent.
Yes, Republicans are incompetent.
Americans understand both are incompetent.
Because bad politics makes bad economics, Americans have extremely low hope of Democrats or Republicans fixing the economy.
I predicted this in 2008 as 'the politics of the backlash in 2010'. I predicted and continue to predict political and economy 'gridlock' with no economic growth in 2011 & 2012.
This is just more of the same, status quo for 2 more years with INCOMPETENT POLITICIANS. What is bad will continue such as more debt, personal bankruptcies, FED programs that fail to help average Americans.
This will result in more 'politics of the backlash' where Americans want change and expect government to fail. The most likely to vote are the TeaBaggers and thus I predict President Sarah will unseat Obama.
President Sarah is INCOMPETENT. She can read a script, focus on talking points, believes in God, and is sincerely pro-life. She is not smart and has proven to be incoherent in free flowing interviews. Sarah's politics will not change anything, the imbalances in government debt and inadequate tax collections will result in the START of a Dollar crisis after the 2012 elections.
Jeff, You obviously don't understand what's going on here, politically.
The public is SICK of the spending...ie. TEA PARTY
8 Republican moderates were TOSSED OUT and replaced with conservatives
People of this country are sick of the ruling class telling them what to do with their lives...S.I.C.K.
Obamunism was the perfect fire to light under, We The People
The R's will gain control of the house, where the money comes from to fund the government and they will first defund healthcare. Then they will cut or eliminate programs, as well as unspent funds in the stimulus slush fund, defund Czar appointments and set rules to constrain the FCC and EPA.
The re-distributionists will be thwarted.
Taxes will be cut. Jobs will be created.
If the R's don't follow Paul Ryan's roadmap and go back to the good ole' boys network they'll be toast too.
By the by, I can say say with some certainty that Sarah is not incompetent, at least no more so than any other politician, which, granted, is not saying all that much. And have you listened to Obama in free-flowing interviews, I mean the one's not edited for broadcast? Half of what he says is entirely nonsensical.
The beauty of "fixing" the economy is in order to do so the government needs to simply do LESS. Lower taxes, lower spending, stop supporting inefficient sectors, stop playing favorites. No more new initiatives, no more stimulus. The economy will then right itself.
Posted by: Geoman | September 22, 2010 at 08:59 AM
Bad politics makes bad economics on a macro scale. For example, Japan and the USSR.
Vinny,
Yes, the TeaBaggers are vigorous and likely to vote while the average American is less so.
Geoman,
You wrote: "Sarah is not incompetent, at least no more so than any other politician, which, granted, is not saying all that much.'
Sarah is more incompetent than the average American, but very sincere in her core beliefs of god and pro-life. Sarah was incoherent in various free flowing interview with the media. Sarah is not an idiot, moron, retard. But, she has displayed disorganized talking when not even being stressfully questioned. Her knowledge of geography, countries, and financial matters is incompetent. Sarah can learn and can be coached. Over the next 2 years, she will not likely embarass herself the way she already has because she has competent support.
The states unfunded pension liabilities are about 3 trillion.
To understand a trillion I'll quote futurist, Jack Uldrich...
If money were seconds.
- a million seconds ago was 12 days ago
- a billion seconds ago was 30 years ago
- a trillion seconds ago was 30,000 BC
states can't print money...this is about to end badly
"Sarah is not incompetent, at least no more so than any other politician, which, granted, is not saying all that much.'
I would say Sarah Palin is more competent than Obama.
But she is less competent than her peers, who are other State Governors, who have had years of a track record. So she is less qualified than a Governor who can point to an 8-year track record.
You assume that Obama has the same goals as most Americans, in which case he is indeed an incompetent boob. However, if his goal is to wreck the economy and expand government...then mission accomplished I say!
Otherwise...agreed.
Oh, I know that his goal is to institute socialism at all costs. But he is not even good at THAT. This is apparent from the number of other Democrats that are distancing themselves from him.
Posted by: The Futurist, | September 23, 2010 at 11:33 AM
Obama and CONgress's actions have enriched selected banks, insurance and real estate entities. Obama's apparent and well spoken socialism does not match his results where average Americans incomes declined and the upper income group increased. Progressives and blacks are disappointed and less likely to vote.
The Futurist wrote "Democrats that are distancing themselves from him." Even Jon Stewart of the Daily Show did a scathing comparison of his results against his promises. Much has been written of the enthusiam gap between dishearten Democrats and likely to vote TeaBaggers.
I repeat, the next 2 years will be political and economic federal fiscal gridlock. Nothing economically good will happen and there will be no American growth in 2011 & 2012. Mean while, Europe will flounder again by the end of the summer of 2011.
The FED stated it will provide further accomodation as needed which the market took to mean print more money as Quantitative Easing 2. The FED supports its owners who are banks plus the Treasury and federal agencies. It takes Obama and CONgress to actually drop money from helicopters on the average American. So, the Dollar declined a little this week which pissed off Japan which was trying to weaken its Yen. Average Americans are not supported by this type of FED support.
Isolated American States and Local governments are going to run out of budgetary tricks and have very large layoffs by the end of October of 2011. States can and do simply not pay vendors who are forced into bankruptcy such as in Illinois without the State declaring bankruptcy. Local governments often do not declare bankruptcy but also stop paying.
Vinny wrote:
"The states unfunded pension liabilities are about 3 trillion.'
Yes, but more tricks can be done with pensions. They will not soon exhaust their assets nor hit the wall of being unable to pay retirees. Isolated State and Local governments may not be able to contribute real money by the end of next year but they have been known to borrow their contributions to these pensions from the very same pension funds like a snake eating its tail.
Yes, the cult of Obama is not energized.
Exhausted Black Obama supporter
More than just Progressives are lacking enthusiam. Black women are 'done', 'exhausted' trying to support Obama.
Jesse Jackson Warns Obama
by Shushannah Walshe
The woman who told the president she was "exhausted" of trying to defend him is like a canary in the mine who must be heard, the reverend says. He tells The Daily Beast's Shushannah Walshe that Obama's advisers' "point of view is conditioned by their privileges and their point of view is conditioned by their experiences. Their point of view is from the top down. They see the world differently."
Velma Hart's impassioned plea to President Obama on Monday was a wakeup call not to take his most loyal supporters for granted. The president desperately needs his base to go to the polls in November, but Hart's exasperation revealed a clear disconnect with that core group of supporters. Tuesday's news that National Economic Council director Lawrence Summers is departing the administration may be a sign that Obama is realizing that his base is slipping away and he must take steps to reclaim it.
http://www.thedailybeast.com/blogs-and-s....elma-hart-back/
The Woman Who Shamed Obama
by Benjamin Sarlin
Velma Hart's phone is ringing off the hook. A day after the chief financial officer for the veterans' nonprofit AMVETS had a star turn as the voice of middle-class frustration at President Obama at a town hall forum, Hart is a certified political superstar. In an email Hart, who famously told the president she was "exhausted of defending you," told the Daily Beast that her schedule was suddenly "insane."
Hers was a swift ride into the stratosphere. "I'm one of your middle-class Americans," Hart told Obama, at the forum, sponsored by CNBC. "And quite frankly, I'm exhausted. Exhausted of defending you, defending your administration, defending the mantle of change that I voted for, and deeply disappointed with where we are right now. I've been told that I voted for a man who was going to change things in a meaningful way for the middle class. I'm one of those people, sir, and I'm waiting. And I don't feel it yet."
"I can't conceive of her saying anything relating to her own personal situation. I think she was speaking as an American about America," Cox said.
A day later, she was on the front page of the New York Post, being lionized by Time magazine as "Velma the CFO"—and drawing comparisons to Joe the Plumber.
• Obama's Velma Hart ProblemHart sought to dispel any suggestion that she might be a GOP plant, telling reporters afterwards that her criticism was meant to be constructive; she "100%" supported Obama, she said. Nonetheless she made clear she wasn't satisfied with the president's answer and said she feared that the cost of putting her daughter through college paired with declining home values threatened her family's financial standing. "You can have all the hope in the world, but it has to be backed by action. It's been a long time since I had to make decisions about grocery purchases," Hart told the Post.
So who is this overnight sensation, and how did she come by her view?
John Cox, a longtime friend, said that Hart's attitude is not new; her question fit right in line with their own conversations about the president.
"I understood it completely and broke out laughing when I heard [her question] because I knew exactly what she was saying," Cox said. The two had talked together about how "we care for [Obama], we want him to succeed, we voted for him, but we're running out of patience."
Cox says Hart is not particularly ideological; other than her support for Obama, he says, he has no idea who she's voted for. But her tone was vintage Velma, he adds.
"Her candor with him is very much in keeping with who she is," he said. "She's a very honest person and she would not pull punches, she would say what she feels, and I think that is what endears her to so many people."
Hart has a significant profile in the nonprofit world. In addition to her position with AMVETS, she's secretary at the Alliance for Nonprofit Management. She also recently served a term as chair of the 22,000-member American Society of Association Executives, an organization that aids trade associations, philanthropic foundations, and nonprofits.
"It's a big deal," says Bruce Butterfield, president of the Forbes Group and a fellow at ASAE. "[ASAE] is the biggest professional organization in the association sector in the world and it takes time to get to the top."
John Graham, the president of ASAE, said he shot Hart an e-mail congratulating her on that "heartfelt" moment with Obama after the town hall.
"She's a very genuine, authentic person and what you see is what you get," he said. "I think that's what people saw, it was very much Velma Hart."
Both Graham and Cox said they were surprised to hear reports from the Post indicating that Hart was under financial pressure. Both suggested that her comments to Obama about returning to the "hot dogs-and-beans" time of her life were more likely about the broader middle class.
"I can't conceive of her saying anything relating to her own personal situation. I think she was speaking as an American about America," Cox said. "It would be totally out of character to make a personal reference."
So i think Obama will continue the tax cut for middle class american only, would this prevent a another recession or not?
Posted by: joobi | September 26, 2010 at 04:41 PM
Another recession has started with the peak of 'consumer spending' in July which accounts for about '70%' of the economy as the economists would have you believe.
For most Americans there was no recovery as proven by 8 straight months of ever increasing banks 'reposessing', putting families out of homes; plus, food stamp usage is up every month for the last year.
But, recessions vs growth are labelled by the main stream economists and hence the main stream media by a private agency. This does NOT measure the change in the average American's standard of living.
The tax cut remains in place for now and expires at the end of the calendar year.
The decline for the average American continues.
"...national economic activity weakened notably in August..."
If you like or accept main stream economists statements, then you should agree with me that by the end of July was the 'consumer spending' and 'recovery' peak.
Today's release of the Chicago Federal Reserve National Activity Index (CFNAI) indicated that national economic activity weakened notably in August with the index declining to -0.53 from a revised -0.11 in July while the three month moving average declined to -0.42.
The CFNAI is a weighted average of 85 indicators of national economic activity collected into four overall categories of "production and income", "employment, unemployment and income", "personal consumption and housing" and "sales, orders and inventories".
The Chicago Fed regards a value of zero for the total index as indicating that the national economy is expanding at its historical trend rate while a negative value indicates below average growth.
A value at or below -0.70 for the three month moving average of the national activity index (CFNAI-MA3) indicates that the national economy has either just entered or continues in recession.
It's important to note that at -0.43 the current three month average index value is indicating extremely weak growth near the recessionary level of -0.70.
http://paper-money.blogspot.com/
The new currency war has now started.
New FED printing, QE2 -not IF, it is TACTICS - new currency war
The internal debate at the FED is not if new printing will be used, the debate is over how much and how often. In other words, the new FED printing debate is all about TACTICS.
WSJ: Fed Weighs new QE Approach
by CalculatedRisk on 9/27/2010 06:20:00 ,
From Jon Hilsenrath at the WSJ: Fed Weighs New Tactics to Bolster Recovery
Rather than announcing massive bond purchases with a finite end, as they did in 2009 to shock the U.S. financial system back to life, Fed officials are weighing a more open-ended, smaller-scale program that they could adjust as the recovery unfolds.
Although QE2 isn't a done deal, I think it is very likely.
This article suggests two approaches: 1) a large scale purchase program ( longer-term Treasury securities), or 2) a smaller-scale program with the amounts set at each FOMC meeting.
In Fed Chairman Ben Bernanke's speech at Jackson Hole on Aug 27th, he seemed to favor the first approach:
The channels through which the Fed's purchases affect longer-term interest rates and financial conditions more generally have been subject to debate. I see the evidence as most favorable to the view that such purchases work primarily through the so-called portfolio balance channel, which holds that once short-term interest rates have reached zero, the Federal Reserve's purchases of longer-term securities affect financial conditions by changing the quantity and mix of financial assets held by the public. ...
The logic of the portfolio balance channel implies that the degree of accommodation delivered by the Federal Reserve's securities purchase program is determined primarily by the quantity and mix of securities the central bank holds or is anticipated to hold at a point in time (the "stock view"), rather than by the current pace of new purchases (the "flow view").
It is possible that they could do the smaller-scale program as a compromise (note: Hilsenrath clearly has great sources at the Fed). As I noted yesterday in Bernanke and QE2, there will be plenty of economic data between now and the two day meeting on November 2nd and 3rd, but the two key releases are the September employment report (to be released on October 8th) and the Q3 GDP advance estimate (to be released on October 29th). Barring a significant upside surprise in one or both of those reports, it appears likely that QE2 will arrive in November.
Now the question is how will they do QE2.
http://www.calculatedriskblog.com/
"A Currency War Has Broken Out"
I do not trade gold/silver. We have a gold/silver hoarde for the long term to wait out and get past the coming Dollar crisis. I am predicting this to START after 2012 but it does not matter because our hoarde is in place.
I still expect a significant decline in gold/silver but no longer expect to see silver anywhere near $7.00 because of the FED's recent, new and improved policy to 'provide further accomodations as needed' plus the move to end the 'apparent' proprietary trading desks in selected very bid banks.
I still hope for a decline in gold/silver but doubt silver will get down below $13.00 now.
Brazil Confirms What Everyone Knows: "A Currency War Has Broken Out"
From the FT: "An "international currency war" has broken out, according to Guido Mantega, Brazil's finance minister, as governments around the globe compete to lower their exchange rates to boost competitiveness." Welcome to the new frontline. It is being played out at every 500x levered FX trade station. No prisoners are taken as those wounded are immediately shot. And the incursions have now entered stocks and bonds. Trading any assets is now retaliation against a central bank somewhere (most typically at Liberty 33 or at the Marriner Eccles building) which is engaged in open warfare against the world's middle class. And yes, the Brazil Central Bank earlier announced that it was heading unto the breach, buying yet more dollars for 1.7094 reais at auction, and has bought as much as $1 billion USD each day for the past two weeks, putting the Japanese intervention from two weeks ago to shame.
From the FT:
Mr Mantega's comments in São Paulo on Monday follow a series of recent interventions by central banks, in Japan, South Korea and Taiwan in an effort to make their currencies cheaper. China, an export powerhouse, has continued to suppress the value of the renminbi, in spite of pressure from the US to allow it to rise, while officials from countries ranging from Singapore to Colombia have issued warnings over the strength of their currencies.
"We're in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness," Mr Mantega said. By publicly asserting the existence of a "currency war", Mr Mantega has admitted what many policymakers have been saying in private: a rising number of countries see a weaker exchange rate as a way to lift their economies.
A weaker exchange rate makes a country's exports cheaper, potentially boosting a key source of growth for economies battling to find growth as they emerge from the global downturn.
The proliferation of countries trying to manage their exchange rates down is also making it difficult to co-ordinate the issue in global economic forums.
In spite of Mr Mantega's recent aggressive public statements, however, Brazil has so far held back from taking any action other than intervening in the local currency spot market.
The central bank bought as much as $1bn a day for much of the past two weeks – about 10 times its daily average in recent months – but this was largely to absorb money entering the country to take part in last week's $67bn share issue by Petrobras, the national oil company.
We feel sad for the central banks, who apparently don't realize that in this war of attrition there are no losers, and the final outcome is the end of Keynesianism. We hope someone promptly discovers the FX equivalent of the nuke [LOL. like a game of thermonuclear war], and a global exchange occurs, as we, for one, can't wait for this most destructive experiment in economic fundamentalism to end already. .
http://www.zerohedge.com/article/brazil-....-has-broken-out
"Sarah is more incompetent than the average American"
They said the same or worse about Reagan. Also, has anyone seen Obambi talk w/o this teleprompter around?
I judge by policies and their outcomes, mostly. Obambi gets a total F in that dept. I dunno about what a Prez Sarah would be, but given how the Reps are being purged of the RINOs, she very well likely will be the nominee in '12 as things stand.
"So i think Obama will continue the tax cut for middle class american only, would this prevent a another recession or not?"
Really, Joobi? Because Congress just welched extending the Bush tax cuts just for 'the middle class'. Therefore, Joe Sixpack will get nailed.
And Obambi didn't seem to give a flying damn about it, either.
"...by the end of October is now true...
My long term jeffolie predicts for the feeling of hopelessness to be common by the end of October is now true before October even started.
The main stream Conference Board stated:
"...Consumer confidence in the U.S. economy remains "quite grim,"..."
http://www.marketwatch.com/story/septemb....0-09-28-1021310
Hopelessness is a common feeling on the Gulf Coast.
The Gulf Oil and Gulf Coast impact was added and stated as one part of many parts for my jeffolie end of October, hopelessness prediction.
I stated that emotional and financial stress would severely impact broadly accross the Gulf Coast.
Depression soars among Gulf residents after oil spill
http://news.yahoo.com/s/afp/20100928/ts_...._20100928180732
Hey, Futurist
Can't fine a 'contact me' link on this site so I am afraid I'll have to post this here.
I recommend this article: http://blogs.the-american-interest.com/wrm/2010/09/28/chitty-chitty-bang-bang-the-electric-car-industry-isnt-going-to-save-us/
It's right up your alley with regards to what you've written on the topic it is about.
Posted by: Zyndryl | September 30, 2010 at 09:33 AM
Here is even more evidence on hopelessness...
Nearly One in 10 Americans Depressed, Study Reveals
(AFP) - Nearly one in 10 Americans is depressed, and one in 30 meet the criteria for major depression, with the rate higher among the unemployed and those who can't work, a study said Thursday.
The findings were issued a week before U.S. National Depression Screening Day on October 7
http://www.myfoxny.com/dpps/news/nearly-....1001-fc_9897171
Posted by: jeffolie | October 01, 2010 at 03:38 PM
I continue with my same opinion of the TeaBaggers.
TeaBaggers are likely voters just as are Seniors. TeaBaggers are a small part of the population and will make a significant difference in close elections. TeaBaggers will grow in political power during 2011 & 2012 because during the coming 2 years of economic and political 'gridlock', Americans will seek to continue 'the politics of the backlash' against the incumbents including main stream Republican incumbents. TeaBagger do NOT have a political party of their own and are not Democrat voters but are willing to vote and are likely to actually turn out to vote for illusionary promises of smaller deficits, smaller debt and smaller government made by politicians that will lie to them.
Voters will come to hate and loathe government including the FED because 2 more years of failing private sector employment will force down Americans standard of living. Americans will be increasingly disgusted with incumbents and the government/FED's failures. Politicians that can sucessfully label themselves as outside of govenment will do well in 2012..
Posted by: jeffolie | October 03, 2010 at 10:39 AM
http://www.physorg.com/news204569793.html
Posted by: ReaderLon | October 05, 2010 at 01:13 PM
"...17% describe themselves as members of the Tea Party, up four points from late August. Twelve percent (12%)
"....But then, most Democrats think most members of the Tea Party movement are racist. Most Republicans and unaffiliated voters disagree.
"....Voters are now almost evenly divided in their views of the movement: 41% have a favorable opinion of the Tea Party; 40% view it unfavorably, and 19% are undecided.
http://www.rasmussenreports.com/public_c.... election_nears
jeffolie: "...Voters will come to hate and loathe government including the FED because 2 more years of failing private sector employment will force down Americans standard of living..."
Hate and loathing will come as average Americans struggle to pay for basics. Already food commodities are rising (in horribly politically managed countries this has become very bad) in America. Just this week gasoline rose 8 cents.
Food Stamp Nation With Massive Inflation
The number of people in the United States needing food stamps to survive is trending toward 45 million. Those living on fixed incomes or government assistance are being ravaged by exploding inflation. Year over year pork is up 68%, coffee 45%, sugar 24%, salmon 30%, oranges 35%, barley 32%, beef 23%, and the list goes on. U6 (unemployment) just soared to 17.1%, and as what Art Cashin calls "the tale of two economies" persists, it is leaving behind a trail of tears.
A global food crisis is brewing and with it massive inflation is arriving at a time when we have the most people on government assistance since the Great Depression.
When people recall the suffering 80 years ago in the last depression in the United States, we conjure up images of bread lines.
In the modern world, people push carts at Wal-marts across the country looking to purchase staples like baby formula and milk. This shopping often occurs near midnight at the end of each month, and for the first few hours after midnight Wal-mart's sales soar because the government assistance cards have been activated.
By "the tale of two economies," Cashin referred to the suffering that was happening on Main Street even as the stock market rallied. I don't care that the Dow has crossed 11,000 when so many families are living in motel rooms, cars, and tent cities. Now these families will be struggling to feed themselves and their children because of the irresponsibility of the central planners and bankers.
The question now becomes: In a civilized society, when will these central planners and bankers be held accountable for the destruction they have brought on the United States? It is time to end the culture of corruption if only because, as inflation explodes, the people simply cannot afford it anymore.
http://kingworldnews.com/kingworldnews/K...._Inflation.html
Voters hate outsourcing: now campaign issue
"... A recent NBC/Wall Street Journal poll found voters believe the shift of U.S. jobs to foreign countries was the biggest reason the economy has struggled....."
"... candidates in both parties have launched a wave of new attacks accusing their rivals of helping ship U.S. jobs overseas...."
Campaign taps fears about job outsourcing
LORAIN, Ohio (Reuters) – Hoping to tap into deep voter anxiety about unemployment and the stumbling economy, candidates in both parties have launched a wave of new attacks accusing their rivals of helping ship U.S. jobs overseas.
On the campaign trail and in television ads ahead of November 2 elections, dozens of Democrats have charged that Republicans support free-trade deals and tax breaks for corporations that cleared the way for the migration of U.S. jobs to foreign countries.
Republicans have countered with ads in 10 House of Representatives districts accusing Democrats of sponsoring jobs overseas by backing tax breaks for clean energy that mostly went to foreign companies in the $814 billion stimulus bill.
The raging ad war reflects the high stakes for both parties in a campaign dominated by the high unemployment rate. A recent NBC/Wall Street Journal poll found voters believe the shift of U.S. jobs to foreign countries was the biggest reason the economy has struggled.
It is a topic that resonates loudly in economically ravaged battleground states like Ohio, where unemployment exceeds the national average and ailing towns like Lorain have seen thousands of manufacturing jobs disappear.
"This is the big issue here," said Anthony Giardini, head of the Lorain Democratic Party and a lawyer who has represented companies and unions on both sides of the outsourcing battle.
Lorain County has suffered a series of major plant closures and cutbacks in recent years, with manufacturing jobs heading overseas and others moving to non-union areas while some companies shut down under pressure from foreign competition.
"We've lost a lot of our heavy industry," Giardini said. "Many of those jobs aren't coming back. All we want is as close to a level playing field as we can get and right now we can't get it."
In a nearly deserted shopping mall amid the empty lots and vacant storefronts of Lorain, voters said they worried the United States was falling behind economic rivals like China and India.
"The jobs are gone, the factories are closed. It's sad," said Jennifer Trimmel, an unemployed nurse from nearby Elyria. "People can't afford to buy the products that are made here so now we have to buy products that are made somewhere else."
The outsourcing issue could be a difference-maker in Ohio -- home to a half-dozen competitive House contests, a Senate race and a tight governor's election -- and other recession-weary states as Republicans fight to regain control of Congress.
A Reuters/Ipsos poll on Wednesday found voters think job creation will be the biggest task for Congress in 2011, and more than half believe a reduction in the national unemployment rate of 9.6 percent would be the best sign the economy is improving.
Television ads in dozens of campaigns from California to Pennsylvania have focused on outsourcing, with images of foreign workers illustrating the threat from rising economies like China.
"Sharron Angle -- a foreign worker's best friend," declared the narrator of an ad for Senate Democratic leader Harry Reid of Nevada. The ad said Angle, a Republican Tea Party favorite, supported tax breaks for companies that ship jobs overseas.
California Democratic Senator Barbara Boxer has attacked Republican rival Carly Fiorina for laying off employees and outsourcing thousands of jobs when she was the boss at Hewlett-Packard.
Fiorina, who called Boxer a hypocrite, challenged her to return any campaign contributions she has received from businesses that outsourced jobs.
Democrats have pressed the attack on outsourcing since last spring, when Mark Critz used the issue to help win a special House election in Pennsylvania.
Senate Democratic campaign committee spokeswoman Deirdre Murphy said Republicans "cannot be trusted to protect American jobs when they support policies that ship American jobs overseas or have a record of shipping jobs overseas themselves."
House Republicans have responded to the Democratic attacks with their own series of ads focusing on Democratic support for the economic stimulus bill, which they said included tax breaks for clean energy that mostly created foreign jobs.
"Jobs in China, not North Carolina," said an ad attacking Democratic Representative Mike McIntyre, complete with images of Tiananmen Square.
Republicans point to reports as much as 80 percent of the grants for renewable energy programs in the stimulus bill went to foreign companies with workers in China and South Korea.
"After months of falsely accusing Republicans of outsourcing, Democrats are clearly upset to discover that they are the only ones guilty of such a charge," Republican House campaign committee spokesman Paul Lindsay said.
OHIO FLASHPOINT
Ohio Democratic Governor Ted Strickland is seeking re-election and he and his Republican challenger, John Kasich, have battled fiercely over jobs and outsourcing. Strickland supporters greet Kasich at campaign rallies with signs reading "Kasich = Outsourcer."
Strickland aired an ad accusing Kasich of signing off on moving Ohio jobs overseas as a board member of Elyria-based medical equipment maker Invacare Corp. The ad, which featured a Lorain woman whose husband was laid off, drew criticism from the company and local business leaders.
Kasich's campaign called the ad "a cheap shot." Invacare said the move had bolstered its bottom line enough that it could ultimately hire more Ohio workers.
Democratic U.S. Representative Betty Sutton, who represents the Lorain area, was backed by an ad from the National Education Association accusing Republican challenger Tom Ganley of supporting outsourcing by signing an anti-tax pledge on corporations.
Ganley, a car dealer who poured millions of his own money into the race, called the attack "a bald-faced lie" and said Sutton had proved in Congress she had no idea how to create jobs.
Sutton, however, appears to be in good shape in her Democratic-leaning district. Ganley, who has denied a sexual harassment claim against him, has canceled his planned broadcast ads to focus on less expensive cable ads.
Many voters in the Democratic stronghold of Lorain said they were not sure either party had a solution for the region's dwindling job base.
Carla Ball, a restaurant worker whose unemployed husband has been working temporary jobs, said she did not blame President Barack Obama for the ailing economy but worried about the future for her four kids.
"What's it going to be like for them in a few years?" she said. "We live paycheck to paycheck now. The frustrating thing is that nothing seems to happen very fast.".
http://news.yahoo.com/s/nm/20101014/pl_nm/us_usa_elections_jobs
Hopelessness was the prediction.
I stated that there were many parts that would result in hopelessness becoming a common feeling...by the end of October.
My long term jeffolie predicts for the feeling of hopelessness to be common by the end of October came true before October started.
Politicans and the FED lie.
Consumers face the truth of their pocket book.
Consumers continue to feel hopelessness.
Food and gasoline prices increased while paychecks disappeared as layoffs continued. Everyone knows or hears of the layoffs and dread permeates the average American.
Consumer sentiment edges lower in October
(MarketWatch) -- The preliminary Reuters-University of Michigan consumer sentiment index edged lower in October, falling to 67.9. Economists polled by MarketWatch expected the index to rise to 69.8 in October from 68.2 last month.
[url]http://www.marketwatch.com/story/consumer-sentiment-edges-lower-in-october-2010-10-15[/url]
[url]http://www.marketwatch.com/story/septemb....0-09-28-1021310[/url]
[url]http://news.yahoo.com/s/afp/20100928/ts_...._20100928180732[/url]
[url]http://www.myfoxny.com/dpps/news/nearly-....1001-fc_9897171[/url]
More are feeling hopeless....
and they are starting to save more for dark times....
"....spending numbers either - at a 2010 low...."
ABC Weekly Consumer Confidence -47
The consumer is not fooled by this rally; they're seeing the food and gas price ramps instead, and dumped the index by two more points, from -45 last week.
They also probably remember 2007/08, when The Fed's policies did the same thing - trashed the dollar and ramped commodities - and the result.
There's no joy in the Gallup Consumer spending numbers either - at a 2010 low.
Don't buy the BS - it's all FX games in the market right now, as it was in late '07 and early '08, and we know how that worked out.
[url]http://market-ticker.org/[/url]
The professional pollsters did the door knocking and my neighbors are in a:
historic dark mood
I predicted...hopelessness
"...Californians are profoundly, even historically, pessimistic ..."
"....Californians' dark mood...Californians traditionally...optimistic breed...a land of new beginnings,...start fresh and create new ideas... "This long period of pessimism -- it's historic."
I predicted 'there would be many parts...':
"...Myriad factors feed into the public's discontent..."
Poll: Californians gloomier than ever about economy
By Darrell Smith, The Sacramento Bee
Californians' gloom over the present and future economy is at a level rarely seen, according to the latest Field Poll released Tuesday.
Californians are profoundly, even historically, pessimistic about the state's economy, their personal finances and job opportunities and have little faith that prospects will improve anytime soon, as voters confront sinking incomes, foreclosures and high unemployment.
"It's hard here. It's hard for everybody," said Danielle Craig, 48, of Davis. The Sacramento City College student and fast-food worker was interviewed for the latest Field Poll. "People are getting their unemployment cut off and figuring out how they're going to live."
The poll of registered California voters, completed Sept. 14-21, shows in stark terms the deep worry that many Californians feel.
93 percent, or nearly 19 of 20 voters, described the state as being in bad economic times.
Nine in 10 Californians say unemployment is a very serious problem -- the highest level ever recorded by the Field Poll -- while only 30 percent expect job opportunities to improve next year.
Less than a third of voters (29 percent) expect California's economy to improve in 2011.
More than half said their personal finances have declined over the past year, while just 30 percent expect to be better off financially over the next year.
Myriad factors feed into the public's discontent and reach back to the earliest days of the recession, said Field Poll director Mark DiCamillo.
Those include the 2008 troubles of financial institutions and the profound and continuing effects of the mortgage bubble on workers and families.
Craig of Davis mirrors Californians' anxiety and is emblematic of the struggles they face. She's a returning college student studying gerontology who wonders whether she'll have a job when she graduates in December 2011.
She's frustrated about the prolonged state budget fight and its effect on her friends and neighbors. Her college-age son moved back home and she is considering a move out of state.
"I'm hoping it'll be better once the budget is passed. Maybe with a new governor and Legislature, hopefully that will get things better and give a boost to the economy," Craig said. "Mortgages are going up, paychecks are going down. Honestly, I don't know if I'm going to stay in the state. But, there are people worse off than me. At least I have a job."
Californians' dark mood has settled like tule fog that won't lift, blanketing voters of every stripe.
"What's so striking is the length of time that they're so exceptionally pessimistic. It's longer than any previous period. There's a lengthening of that in this recession," DiCamillo said.
Two examples: In four counts since 2008, a majority of the state's voters told the Field Poll they were worse off financially than in the previous year. More than nine in 10 in the last three polls described the economy as being in bad shape.
James Daugherty, a 68-year-old retired Realtor from Magalia in Butte County, bemoaned the "socialistic direction" he believes the nation is taking and said the country and the Golden State are losing their way.
He recalled the night in 1969 he drove home from his job as a grocery manager in time to watch the moon landing.
"There was a feeling of accomplishment that you couldn't describe," he said. "We've lost that."
In a state that brought the world motion pictures, the electric guitar and the personal computer, the cloud that has blocked out Californians' almost instinctive optimism is new territory, DiCamillo said.
"One of the things that Californians have traditionally had, we're an optimistic breed. California was always seen as a land of new beginnings, a place where you could start fresh and create new ideas," DiCamillo said. "This long period of pessimism -- it's historic."
[url]http://www.presstelegram.com/ci_16260700....esstelegram.com[/url]
A happy wife is a happy life.
I just sent my women to Disneyland
I just kissed the wife and sent her plus 2 of my adult daughters off to the happiest place on earth for the day: Disneyland.
When my women are happy then my life is much better.
Stop calling people teabaggers unless you want to be called a douchebagger. 70% of people identify with the values of the teaparty, meaning lower taxes, less govt spending and regulations.
http://www.foxnews.com/politics/2010/09/30/fox-news-poll-voters-use-midterm-elections-send-message-white-house/
Socialist central planning rubs against the grain of what we stand for as a nation and is why european socialism will not take hold here. It goes against everything that is "american"
Posted by: vinny | October 16, 2010 at 04:59 PM
Just for you I will stop calling them TeaBaggers.
Vnny you are very wrong on the numbers of Tea Party self declared members and their approval. I posted this above and will repost it just for you:
You did not properly convey the fox news piece that exactly states:
"...It's important to note the new poll finds just 13 percent consider themselves "part of" the Tea Party movement.
Vinny "support the main issues the Tea Party has raised"is not the same as sharing the values of the Tea Party.
fox news and Rasmussen seem to find different results. I trust Rasmussen's result more than fox news.
While 57 percent say the Tea Party will not be a factor in their vote for Congress, fully 70 percent of voters support the "main issues the Tea Party has raised" -- calling for lower taxes, less government spending and less government regulation. That includes 49 percent of Democrats.
Those who will use their vote to make a statement on the Tea Party are more likely to cast their ballot as an expression of support for the movement rather than opposition (21-13 percent). It's important to note the new poll finds just 13 percent consider themselves "part of" the Tea Party movement.
Today, as announced the FED bought stocks and bonds. http://www.zerohedge.com/article/fes-posts-schedule-upcoming-pomos-it-withdraws-token-260-million-liquidity-tri-party-reverse
Today the markets responded to the added DEMAND created and championed by the FED.
This is NOT A FREE MARKET.
The sale of stuff to rich guy is soaring and expected to increase 20%. http://www.bloomberg.com/news/2010-10-18/luxury-goods-sales-may-reach-highest-level-globally-since-2007-bain-says.html This is simple the rich are getting richer. The rich are spending some of their gains in investments. While the middle class has 80% of its wealth in declining home equity the opposite is true for the rich that have 80% of their wealth in investment categories which are mostly stocks and bonds.
The FED/government are making the rich even richer while the middle class gets screwed. The ranks of the poor are growing as proven by every Food Stamp report showing the number of Americans getting on Food Stamps growing every single month.
Average Americans are starting to understanding the class warfare led by the FED/government and blame the FED/government.
This is the 'politics of the backlash' that I long predicted: the unseating of incumbents that produces GRIDLOCK in 2011 & 2012. It is not yet at the level of hate and loathing, but I predict hate and loathing of the FED/government by 2012..
Most lending institutions would be bankrupt if they marked to market the value of their collateral commercial and residential real estate. The FED/government will not let this happen as the FED/government manipulate the accounting rules to protect the Trillions in Mortgage Back Securities that now often are guaranteed or owned by by the FED/government..
Do you have any plan to write in-depth analysis on future of media and impact of new media on politics, culture and other areas of society?
In area of politics, when I examine elections of last few cycles (2004, 2006, 2008, 2010), it seems nature of politics is being changed in fundamental ways. Moreover it seems the change is slowly accelerating. I find it amusing when I encounter incidences where politicians with old understanding of media do not catch up to new reality and react surprisingly (e.g. Rep. Bob Etheridge). I think it's fascinating that new media play a major role in sustaining and growing citizen movements such as Tea Party.
In area of culture, I am watching carefully the impact of Google TV and similar products. Once average users can easily access internet contents through TV and production of films/programs become cheaper to the point where talented individuals have real chance of competing against major production companies, I think these two and other factors will impact culture in enormous ways.
I hope to read more of your thoughts on this topic.
Posted by: SpicyColdNoodle . | October 25, 2010 at 03:07 AM
everyone needs to take an hour and a half to watch this video
it was described as "the most paradigm shattering, liberty inspiring speeches"
http://blog.planetpreterist.com/index.php?itemid=2642
after the first 2 minutes you'll be hooked...this young kid has the wisdom of someone at least three times his age
let me know what you all think...
How anyone can seriously argue capital gains should be taxed at a different rate than income is ludicrous, they are in many ways the same thing and there are a myriad of ways of turning income into a capiatl gain and vice versa.
the whole idea just creates work for tax lawyers and accountants.
Posted by: shawfactor | December 28, 2010 at 05:43 AM
Shawfactor,
Sure, then lower income taxes down to a level where both income and cap gains are globally competitive (like 10%).
If China, India, and Russia have a 0% LT and 10% ST cap gains tax rate, then the US can't afford to be so much higher than them. So by your logic, US income taxes should also be lowered to around 10%.
Posted by: The Futurist | December 28, 2010 at 11:23 AM