Relevant and even prescient commentary on news, politics and the economy.

Hacked Netflix: A Sort of Modest Analogy

I don’t have the patience to sit on the couch and just stare at the tube like a lot of people seem to enjoy doing. I do however watch movies while exercising or doing chores. The result is that I start and stop whatever I am watching frequently, and there are times it might take me a week or more to watch a movie. That makes Netflix perfect for me.


A couple of weeks ago my Netflix account was hacked. The first indication was that the default language for my account kept changing from English to Portuguese or Spanish. Since I am almost as likely to watch a foreign language movie than an English language one, it took me a few days to realize what was going on. And what was going on was that people were accessing my account from Brazil, Peru, Mexico, Columbia, Spain, etc. It got a bit irritating – occasionally my son or I (the two authorized users on the account) had trouble getting on. Eventually one of the unauthorized users helpfully went into my account selections and upped the number of screens that can be on simultaneously from two to four (for an added $2 a month charged to my credit card).


So I changed my password… and it didn’t stop. I changed the email address associated with my account… and it didn’t stop. I am trying to isolate the problem scientifically now, first to determine whether the problem is on my end, and if so, where the leak is happening. I am running an experiment to try to determine whether somehow, someone can read information off of my computer/router/etc. After all, if that is the case, I have bigger problems than people messing with my Netflix account.

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by Dale Coberly


The  Republicans have opened a new assault on Social Security.  At present all I know about it is what I read  in a Talking Points Memo by Tierney Sneed   Key House GOPer Introduces Bill With Major Cuts To Social Security .

The trouble with Sneed’s article is that she does not appear to know what she is talking about.  She just wrote down what some “experts” told her with no idea what the words mean.

For example, she says,

“A 65 year-old at the top of the scale, a $118,500 average earner, would see his benefits cut by 25% when he retired, compared to the current law, and that reduction would grow to 55 percent compared to current law by the time the retiree was 85 years old.”

Well, which is he, “at the top of the scale”  or an “average earner”?

The point is probably trivial but I point it out so you will be on your guard if you read her article.

Additionally she quotes Paul Van de Water,  who is someone who actually knows that Social Security can be fixed entirely and forever by simply raising the payrolll tax one tenth of one percent per year until the balance between wage growth and growth in the cost of retirement is restored.  But somehow she doesn’t bother to mention this,  or maybe Van De Water forgot to mention it because he favors a “tax the rich” solution…  without understanding that that will turn Social Security into welfare as we knew it, and lead to its ultimate destruction by those rich who would then be paying for it.

Social Security has succeeded because Roosevelt insisted it be paid for by the workers who would get the benefits, “so no damn politician can take it away from them.”

But the damn politicians keep lying and journalists keep repeating the lies without spending ten minutes thinking about them.

The basic “facts” about the Republican proposal, introduced by Texas Congressman Sam Johnson appear to be :

gradually raise the retirement age from 67 to 69. 

This amounts to a benefit cut of about 10%,  but that’s not the worst of it.  Raising the retirement age is simply a death sentence for people whose health is not up to working another two years, or won’t live to collect benefits for more than a few years after they retire.

change the cost of living adjustment to reduce real benefits as the retiree gets older.

This is called a “technical adjustment.”  They can pretend that the CPI is too generous and know that most people won’t understand the scam.

the size of initial benefits will be cut for most workers by catastrophic amounts.

This turns Social Security into a straight welfare plan.  Most people will be paying for benefits they will never get. The very poorest are promised a larger benefit for awhile…  until the bogus cost of living adjustment, and increased retirement age do their work.  Moreover it is not clear what happens to “the rich”  who lose their “side income” as they get older.  And of course there is always the fun of going to the welfare office every month  to prove that you don’t have any hidden assets.

Meanwhile, the CRFB  (Committee for a Responsible Federal Budget). an organization dedicated to the destruction of Social Security by misrepresenting the facts, is playing cute games like “use our calculator to find out how old you will be when SS runs out of funds.”

But SS will never run out of funds as long as the workers are allowed to pay… in advance…for their own benefits. With no change at all in SS, SS will pay 80% of “scheduled benefits,”  but this is 80% of scheduled benefits which meanwhile have grown 25% in real value.  So the GOP “plan to save SS” is out and out theft.

CRFB has another cute game: “use our calculator to design your own plan to save social security.”  But when I used their calculator it did  not allow “increase the payroll contribution by one tenth percent (for each the worker and the employer) per year for twenty years.

There are other ways to accomplish the same end, but this seemed to be the simplest way to fit the CRFB “calculator.”   Someone with more time and a newer browser might want to try seeing what they get.  But look at small per year increases in payroll contribution.  For example, I think a 0.4% increase (combined), about two dollars per week for each the worker and the employer,  should solve the problem in ten years,  but I haven’t done the numbers on that myself.

Meanwhile, something that calls itself “the Bipartisan Policy Center, says “Ultimately, we are going to need something that’s a little more balanced between benefits saving and revenue changes in order to get a proposal that could pass Congress and get approved by the president,” said Shai Akabas, director fiscal policy at the Bipartisan Policy Center.”

It’s hard to see how much cuts (“benefit savings”) make sense to balance a dollar a week increase in the payroll tax (revenue changes),  but that’s the kind of thinking that “Bipartisan” gets you.  “Hey folks,  we can save you a dollar a week just by gutting Social Security so it becomes meaningless as insurance so workers can retire at a reasonable age.”

I am getting too discouraged.  As long as no one is working to tell the people how this will work for them,  we are just going to stand around like sheep and watch them cut our throats.

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Paolo Gentiloni

Foreign minister Paolo Gentiloni has been asked to attempt to form a government. He is a rather bland establishment figure who has two interesting histories. First, back in the day, Italy (then a monarchy) didn’t get along with the pope (they fought a war with a famous battle at the pious gate (no ti sto kiddando per niente). Popes told faithful Italians to boycott elections. This tended to help the relative left (which had radical ideas such as universal suffrage). This ended with the Patto Gentiloni signed in the Palazzo Gentiloni by some people including a Gentiloni. Thus the Gentiloni family is very related to the participation of Catholics in Italian politics.

On the other hand (and maybe making up for this) Paolo Gentiloni himself has a far left past. This is true of an amazing fraction of Italians of his generation. He used to hang out with people who were expelled from the Italian Communist party for left wing deviation from the party line (I think they were the last people ever expelled from the rapidly democratizing party).

He also once said that no one who has been trained as an economist can be really left wing. This was meant as criticism of economics not leftism.

So his ancestor has a history with the ancestor of the old center-right Christian Democratic party and he personally has been far left. Thus there must be some innate dullness which makes my reaction to his surprise appointment one of mild pleasure. He’s not really left wing anymore, but, by the standards of 2016, he’s a raging red.

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Comic Book Hayek:The Planners Promise Utopia

In his neo-Confederate “Mein Kampf,” Whither Solid SouthCharles Wallace Collins quoted a full paragraph from Hayek’s The Road to Serfdom regarding the emptying out of the meaning of words.

My instinct would be not to condemn Hayek for the politics of those who quote him. Even the Devil quotes Shakespeare.

But after taking another look at the Look magazine comic book edition of Hayek’s tome, I realized that Collins’s depiction of full employment as a sinister Stalinist plot was, after all, remarkably faithful to the comic-book version of Hayek’s argument. With only a little digging, one can readily infer that what the comic book refers to as “The Plan” is a policy also known as full employment (or, if you want to get specific, William Beveridge’s Full Employment in a Free Society). “Planners” translates as cartoon Hayek’s alias for Keynesian economists and their political acolytes.

To be sure, Hayek’s sole reference to full employment in the book is unobjectionable — even estimable… almost:

That no single purpose must be allowed in peace to have absolute preference over all others applies even to the one aim which everybody now agrees comes in the front rank: the conquest of unemployment. There can be no doubt that this must be the goal of our greatest endeavour; even so, it does not mean that such an aim should be allowed to dominate us to the exclusion of everything else, that, as the glib phrase runs, it must be accomplished “at any price”. It is, in fact, in this field that the fascination of vague but popular phrases like “full employment” may well lead to extremely short-sighted measures, and where the categorical and irresponsible “it must be done at all cost” of the single-minded idealist is likely to do the greatest harm.

Yes, single-minded pursuit at all costs of any nebulous objective will no doubt be short-sighted and possibly harmful. But is that really what “the planners” were advocating?

Hayek elaborated his views on full employment policy in a 1945 review of Beveridge’s Full Employment in a Free Society, in which he glibly characterized Keynes’s theory of employment as “all that was needed to maintain employment permanently at a maximum was to secure an adequate volume of spending of some kind.”

Beveridge, Hayek confided, was “an out-and-out planner” who proposed to deal with the difficulty of fluctuating private investment “by abolishing private investment as we knew it.” You see, single-minded pursuit of any nebulous objective will likely be short-sighted and even harmful unless that objective is the preservation of the accustomed liberties of the owners of private property, in which case it must be done at all cost!

Further insight into Hayek’s objection to Keynesian full-employment policy can be found in The Constitution of Liberty. The problem with full employment is those damn unions. On this matter, he quoted Jacob Viner with approval:

The sixty-four dollar question with respect to the relations between unemployment and full employment policy is what to do if a policy to guarantee full employment leads to chronic upward pressure on money wages through the operation of collective bargaining.


…it is a matter of serious concern whether under modern conditions, even in a socialist country if it adheres to democratic political procedures, employment can always be maintained at a high level without recourse to inflation, overt or disguised, or if maintained whether it will not itself induce an inflationary wage spiral through the operation of collective bargaining

Sharing Viner’s anxiety about those damn unions inducing an inflationary wage spiral “through the operation of collective bargaining” was Professor W, H, Hutt, author of the Theory of Collective Bargaining, who “[s]hortly after the General Theory appeared… argued that it was a specific for inflation.”

Hutt, whose earlier book on collective bargaining “analysed [and heralded] the position of the Classical economists on the relation between unions and wage determination,” had his own plan for full employment. It appeared in The South African Journal of Economics in September, 1945 under the title “Full Employment and the Future of Industry.” I am posting a large excerpt from Hutt’s eccentric full employment “plan” here because it makes explicit principles that are tacit in the neo-liberal pursuit of “non-inflationary growth”:

Full employment and a prosperous industry might yet be achieved if what I propose to call the three “basic principles of employment” determine our planning.

The first basic principle is as follows. Productive resources of all kinds, including labour, can be fully employed when the prices of the services they render are sufficiently low to enable the people’s existing purchasing power to absorb the full flow of the product. 

To this must be added the second basic principle of employment. When the prices of productive service have been thus adjusted to permit full employment, the flow of purchasing power, in the form of wages and the return to property is maximised


The assertion that unemployment is “voluntary” and can be cured by reducing wages is the classical assumption that Keynes challenged in the theory of unemployment. Hutt’s second principle, that full employment, achieved by wage cuts, will maximize the total of wages, profit and rent thus would be not be likely to command “more or less universal assent,” as Hutt claimed. But even if it did, Hutt’s stress on maximizing a total, regardless of distribution of that total between wages and profits, is peculiar. Why would workers be eager to work more hours for less pay just to generate higher profits? Hutt’s principles could only gain “more or less universal assent” if they were sufficiently opaque that no one could figure out what he was getting at, which Hutt’s subsequent exposition makes highly unlikely.

Hutt’s proposed full employment plan consisted of extending the hours of work, postponing retirement and encouraging married women to stay in the work force. He advertised his idea as a reverse lump-of-labor strategy. Instead of insisting — as contemporary economists do — that immigrants (older workers, automation or imports) don’t take jobs, Hutt boasted they create jobs, specifically because they keep wages sufficiently low and thus maximize total returns to property and wages combined. He may have been wrong but he was consistent. Nor did he conceal his antagonism toward trade unions and collective bargaining behind hollow platitudes about inclusive growth.

The U.S. has been following Hutt-like policies for decades now and the results are in:

For the 117 million U.S. adults in the bottom half of the income distribution, growth has been non-existent for a generation while at the top of the ladder it has been extraordinarily strong.

Or perhaps Hutt was right and what has held back those at the bottom of the income distribution is that wages have not been sufficiently low to insure full employment and thus to maximize total returns to labor and capital. The incontestable thing about Hutt’s theory is that no matter how low wages go, it will always be possible to claim that they didn’t go sufficiently low enough to enable people’s purchasing power to absorb the full flow of their services.


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Just Rumor(s) Today in Detroit

– Chrysler Fiat sold the car division sans Jeep, MiniVan and Trucks to the Chinese. They also closed production on Chrysler 200 and Dodge Dart June of this year. It will be the first time Chrysler/Dodge have not had Cars if this is true. 200 (UF) and Dodge Dart (PF) never did met forecast so it closing down production for these two cars is not a surprise. Overall, cars were not a Chrysler strong suit. Trucks and Jeeps were followed up by MiniVans.

– Yazaki (Tier 1) in Canton Michigan supposedly laid off 150 at Corporate Headquarters which is about a 10% workforce reduction. Yazaki is about $20 billion in size and a Japanese company.

I heard it from pretty good sources; but, one never knows. We will have to see if it is real or not. I wonder if Trump/Congress will intercede for this one?

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“America Belongs to White Men”

A Leading Intellectual according to Trump’s Chief Strategist Steve Bannon and founder of the Alt-Right, Richard Spencer “We won . . . .” I am playing the entire newscast rather than just the abbreviated version of the speech which is popping up all over. Sorry about the commercial. This took place at Texas A&M at the same time the University was holding a Unity meeting


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From Full Employment To “Inclusive Growth”

This is the third of three posts on full employment. The unifying thread is that “full employment” has always been a political and not an economic problem. The first two posts were The Electoral College, White Supremacy and Full Employment as “Reign of Terror” and Full Employment and the Myth of the General Strike.

Employing Sorel’s distinction between myth and utopia, full employment has always been a utopia. But it is a utopia long abandoned by economists, who have substituted the totem of economic growth for the utopia of full employment.

The term “full employment” did not appear in the speech given yesterday (December 5) by Mark Carney, Governor of the Bank of England. Instead, he mentioned the term “inclusive growth” six times.

“The cry for more inclusive growth starts with a crisis of growth itself.”

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