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

Chris Hayes, Why don’t you have me on as a guest?

On October 2, 2013 Chris Hayes had on Larry Kudlow to discuss the economics of the government shut down.  All I can say is, I could not believe he was the one Chris went to for insight.  Maybe he had to because, you know, Kudlow is related to him via the network they work at.  But really, Chris could you not get your bosses to understand how someone like Kudlow professing on your show does harm to your identity and thus the relationship you have with your viewers?  

Let me be clear, my impression of you and your show is that you strive to deal in facts.  I have seen you have people of the conservative ideology on, but they have seemed to be people who use facts interpreted via their ideology.  That’s a conversation.  But Kudlow promoting “supply side”?  I mean is anyone in the real world even using this phrase anymore? 

My hope with this post is that  our good readers will post corrections to Kudlow and note why your guest is completely full of crap thus giving you a little help and cover as I’m going with the idea that your boss made you do it.  But more importantly, your viewers deserve not having to have this crap pushed at them.  I have found people know the Kudlow view of the economy is baloney, but the don’t know why it is baloney and you having him on only makes their angst worse. 

Let me get to it: Do you really believe your viewers bought this nonsense?  Do you believe your viewers do not know it is nonsense?

 

Visit NBCNews.com for breaking news, world news, and news about the economy

 

Do you really want to promote and by virtue of it being on your show endorse the idea that the problem with our economy is businesses being taxed too much AND Obamacare?

 

Visit NBCNews.com for breaking news, world news, and news about the economy

Considering the following, you have been used man.

 

Visit NBCNews.com for breaking news, world news, and news about the economy

 In the end, you confirm you are with him… regarding the need for the economy to grow.  But, I think most people will only hear that you are with him.  Not good.  Not good for you, not good for this nation.

So, please contact us here at Angry Bear.  Anyone of us are more than capable of explaining the mess this economy is in and why the Kudlow’s of the world no longer have any credibility. 

Oh, to you MSNBC  what the hell is the matter with you?  Is Kudlow loosing his audience so you figure putting him on with Chris will boost his cred? 

 

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The Lone Star Strategy or The House that Conservatives built

Having heard Senator Sander’s discussion on the floor, I thought the outing of the republican vision for this nation in total should be preserved on the net in writing.  People hear bits and piece but never put the entire picture together.   Maybe reading the list will help people picture the finished house the conservative mind is working overtime to build.

It’s like the HGTV show Property Brothers.  I am always amazed at the inability of the people to see the potential results when they are shown a property that has the foundation needed to realize their desire of what a home should have and be. The new home owners have presented a list of wants.  They are unable to see how their wants fit with the properties shown.  Then the brothers show them the CAD visuals and the people get it.  Yet even during the building out of the project, the new owners struggle with accepting the completion will be what they envisioned and saw in the plans.

We’ll, here is the version of what the conservatives (not just republicans, but the libertarians and New Democrats) have in their minds for an ideal America. As you read it, keep in mind what you would like to see in the house, what you would like to have it feel like :

1. An orderly transition to individual private retirement accounts and the elimination of Social Security.

2. Privatization of Veterans health care.

3. Abolish all federal agencies who’s activities are not enumerated in the constitution including the department of education and the department of energy.

4. Oppose mandatory kindergarten

5. Abolish the EPA

6. Abolish the 16th amendment and thus get rid of the IRS to be replaced with a national, state collected sales tax.

7. Abolish the capital gains tax and estate tax.

8. Repeal the minimum wage.

If you are struggling with what this list means regarding the way your house will look, the way your house will flow as you walk in it you best start talking to people who might be able to help you imagine it.  You might want to ask these planners/builders exactly what the results will be and do not let them speak in generalities.

If this plan is not what you are envisioning, then you best inform the designers and builders.   There will not be a CAD plan presented so that you can have an idea of what this list results in, there will only be the reality of the list as the door is opened to this new home.

To help you imagine the experience of living in a home based on the above list of requirements I present Bill Moyers essay of 9/27/2013:  Joblessness is killing us

Bill Moyers Essay: Joblessness is Killing Us | Moyers & Company | BillMoyers.com.

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Do investors really not get it regarding US paying it’s debt?

A question has been nagging me. First, does the rest of the world not get that the republicans are playing a game with the US’ bank account? Does anyone really believe that the US won’t pay as in the renter just skipped out the back door? Or maybe I should say; as in the capital venture company just loaded up the latest purchase with debt, pocketed that money and filed bankruptcy?

Really, the US won’t pay it’s bills? Oh no, the nation is going Detroit?

It’s a game folks. Don’t play it. If you don’t play it then the republicans have no threat because the financial world is not really threatened.

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Oh no, Walmart is not doing well? Danger, danger Economy Sucks! Not according to the flower shop.

Before this last recession, readers of a long time here might recall that I used my flower shop as a barometer for the economy.  I noted that things were not doing well as our sales had started to decline in August of 2006.    The smart boys and girls called it December 2008 as starting December 2007.

Well, today it seems some people are getting concerned.    I guess Macy’s did not do so well either.   And these smart ones are holding their breath for tomorrow’s Target numbers. 

The analysis?  It’s either the retailers have lost their way but, as noted not likely or the consumer is getting smart and not over spending or and this one just kills me: “The economy is in collapse. That’s what’s going on.”

Really?  The economy is in collapse? 

Disregard the government data. Jobs and GDP and all the rest are at best inaccurate measures of the economy and at worst flat out corrupt. Walmart is capitalism writ large. .. When Walmart misses estimates, it can only mean one of two things: either Walmart or the American economy is weaker than anyone thought.

Yup, that’s what it is the corrupt government numbers are not to be trusted.  Walmart et al are sucking big air right now and that means the economy is going down.  I mean, it certainly couldn’t be the consumer having wised up and got the message of stagnate or declining wages while working whacked out hours and accomplishing little other than having stopped the dehydration. 

I got news for these “smart ones”.  The flower shop says things are holding their own.  It’s not growing, but it’s looking like the first year since 2006 that we will stay even and maybe even up a bit.

“I don’t think we’re in a recession right now, but I think there’s a 50 percent chance we’ll be in one next year,” Davidowitz shouts, and there’s nothing the government is going to be able to do about it. “We’ve spent all the money, we’ve borrowed all the money, and we’re in the tank.”

Who do you believe?  My flower shop and Spencer’s job analysis with Ed’s explanations or Walmart and the “smart ones”?

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According to The Onion: Congress Fiercely Divided Over Completely Blank Bill

We interrupt our daily coverage for this moment of humor:  Congress Fiercely Divided Over Completely Blank Bill That Says And Does Nothing

WASHINGTON—A blank piece of legislation that says nothing, does nothing, and contains no text whatsoever has been the source of heated debate in Washington this week, and has sharply divided Congress along partisan lines, Beltway sources confirmed Thursday.

Known as S.0000, the bill, which doesn’t have sponsors, co-sponsors, or an author, has reportedly drawn starkly contrasting opinions from legislators in both the Senate and House of Representatives, and has paved the way for a major legislative battle in coming months.

“At a time when millions of Americans are still struggling, we simply cannot afford this kind of devil-may-care federal policy,” said Senate Minority Leader Mitch McConnell (R-KY), angrily waving the blank stack of papers in front of reporters. “We will not risk leading the American people into further hardship simply so the Obama administration can once again do whatever they please, regardless of the consequences. As it is now, the bill is both short-sighted and utterly irresponsible.”

“Frankly, we need to get back to the negotiating table and make some major changes before members of my party would even consider putting this up for a vote,” McConnell continued. “And if my friends on the other side of the aisle try push it through, well, they’ll pay the consequences at the ballot box.”..

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My take on the NSA, Privacy and Protection

Let me just say, I’m no lawyer and what follows is not legal scholarship.

Of all the reading and listening I have done regarding the spying by our government via electronic data collection and storage, I have found nothing that specifically gets at the issue for me as to why it’s not a good thing.  This is mostly because the common response to defending such activity by our government falls into a couple of very broad moral concepts that are part of our cultural upbringing.  One is trust in the source of your protection. The other is self acknowledgment as being a morally conscious person.

Trust in the source of your protection is simply an aspect of experiencing parenting that is then extended to relationships external to the parent relationship as we mature.  The other, self acknowledgment as being morally conscious is culturally learned.

Thus we get “trust the government with protecting us” such that the data collection is not a problem and “don’t worry if you are not doing anything wrong” as simple answers to why this entire NSA issues is a none issue.   These answers have settled nothing.

Lack of trust creates all sorts of problems individually and for society. I’m not going to go there in this post.  I’m not going to go there because it seems this nation does not respond anymore to lists of harms and dangers and thus make corrective policy to preserve our sanity.  Just consider that we are continuing to pollute ourselves into extinction.  Or consider that there has been very little mentioned of the new directive that turns all government employees into untrusted co-workers as a means to stop the government secretes from becoming known.  Do we really think that the motivation for turning someone in will always be altruistic and not be for other selfish motives?  Here is a tip, racism is not dead, selfishness has become the dominate personality of a large swath of US citizens and greed is simply one expression of selfishness.  Oh yeah, we’re the government so why can I not know?

The trust your government issue has been discussed mostly by noting that one’s representative of their own ideology will not be in power at all times.  It is the idea that you can not trust your source of protection if it is not of you. This is quite the conundrum for all the ideological identities to resolve such that all can trust their source of protection, in this instance: government.  That source being the same for all ideological parties which have been taught to trust this source.

For me the real issue and concern is found in the morally conscious person argument.  It is the argument that suggest you have nothing to fear if you are doing nothing wrong.

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Defining Rich VII: Explaining Income inequality in pictures

I had my hair cut last week.  It’s a big event as it happens about twice per year.  While there I always get into political conversations with the lady cutting my hair.  This time, as often it was the economy.  Her position still is that the individual citizens collecting welfare are effecting her income.  We’ve discussed this before.  So, I used my simple math of $100 dollars and 100 people and 9% to the 1 person and the remaining 99 splitting what remains.  I then note the current split of 24% to the 1 and the 99 splitting what is left.  Easy?

Unfortunately, it did not resolve the issue.  Her question was: You don’t think the welfare people are effecting this?  So, I asked her to explain to me just how someone collecting welfare (we are not talking corporate welfare) could be the cause of her lack of share of the overall income?  This is not a laughing matter.  It shows just how strongly the conflation has been made of associating the indigent population as the cause of ones financial condition, namely the money in their pocket.

This got me thinking.  Maybe numbers are just not enough.  Maybe using 100 dollars and the fact that after the 1 gets about $9 as of 1978 the other 99 get $0.92.  Shift the split and it’s $24 vs $0.77.   How is that relative to a median income of today?  And here I’ve been thinking I was keeping it simple.

So, I have upped the numbers.  $10 million.  100 people.  This produces the following:

$10 Million 9% Share 24% Share
The 1 Inc. $900,000.00 $2,400,000.00
The 99 Inc. $91,919.00 $76,768.00

That is quite the shift of the 1’s income.  In fact it is a 166.7% increase simply due to changing how the pie is cut.  The rest of the people, the 99 get 16.5% less.  No one worked harder, no one worked less.  We just cut the pie differently.

It is that simple.  It is that fundamental.

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Oh hail the Great Cactus

Looking for some back articles and wanting to try out posting with our new setup I found this one by Mike Kimel (formally known as Cactus) from July, 2010.   It is always fun to look back.*

He presents his data and argument regarding where we’re going and concludes:

This time, I’m not as comfortable; given where and how the Fed has been putting Money I just don’t see increases in the real money supply as being quite as effective as normal. The money is going to fill in a big hole the financial industry created in its collective balance sheet, and isn’t necessarily leading to a lot of additional spending. Furthermore, with all the talk of austerity, it wouldn’t be surprising if the Federal Government starts cutting back on spending.

Given that the weight of the evidence seems almost equally balanced on both sides, this little thing tips it slightly for me: unless and until the Fed starts removing money from the system, I don’t think we’re going into a second dip. But given the Federal Government’s current policies, I don’t expect much more than mediocre growth for the next few quarters either.

Hey Cactus, you thinking of doing a hedge fund by any chance? : )

*Read the post and then the comments to get the greatest fun factor effect.

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Three guesses on where chaining the CPI came from

It’s history lesson time again.

An awful lot of talk and writing about the chained CPI has been focused on the results of its implementation on Social Security. Using this formula for figuring the cost of living ends up reducing the money citizens will receive in their SS checks. One of our commenters, Denis Drew labeled it the Cascading CPI. That’s pretty much how I see it because the formula is all about suggesting that accounting for people substituting lower priced items (lower price includes technical improvements) for the higher priced items (higher price includes earlier versions in a products history) they used to purchase means their quality of life has not changed. The only way to make such an argument seem reasonable is if the concept of “quality” has no meaning in the market place. However, if “quality” accounts for something when purchasing a specified level of living, then the accounting is not of inflation but of deflation, and deflation now has to be considered to float on either side of the zero, being positive or negative. There is no concept of inflation in economics anymore.
What I’m suggesting here is that the chained CPI reasoning is a massive amount of conflation. When I start seeing concepts and perceptions being conflated, I get suspicious and start asking questions. Usually the first question is what’s behind the promotion of the conflation. What’s the history and in that possibly will I find the intention? And, as I taught my daughter, life is intention.
Using Mr. Peabody’s WABAC machine we set the dial for 1995. Ever heard of the Boskin Commission?  Its formal name: “Advisory Commission to Study the Consumer Price Index”. It was created on the order of the Senate Finance Committee. The Senate majority leader then was: Bob Dole followed by Trent Lott. William V Roth Jr. was the chair of the committee. 
This was the time of Newt Gingrich and the “Contract with America”.  The contract included social security reform. It also included welfare reform. (Clinton gave them that part of the contract.) Both were under the Fiscal Responsibility Act. You know, balance the budget rhetoric. Specifically:  An amendment to the Constitution that would require a balanced budget unless sanctioned by a three-fifths vote in both houses of Congress…

Gee, 3/5 of congress or 60 votes, what’s the difference now?

Boskin is Michael Boskin. He is this man. Rather accomplished. Held and holds some very influential positions.
He is also this man.

In 1993, Bill Clinton enacted an economic program centered around some public investment, coupled with deficit reduction with higher taxes on the rich. Boskin was very, very sure it would fail. In a Journal op-ed entered into the Congressional Record by grateful Republicans, he accused Clinton’s administration of “fundamental distrust of free enterprise.” He made a series of predictions: “The new spending programs will grow more than projected, revenue growth will be disappointing, the economy will slow, and the program will reduce the deficit much less than expected.”
Boskin repeated his prophecies of doom in a summerlong media blitz. Boskin labeled Clinton’s plan “clearly contractionary,” insisted the projected revenue would only raise 30 percent as much as forecast by dampening the incentive of the rich, insisted it would “take an economy that might have grown at 3 or 4 percent and cause it to grow more slowly,” and insisted anybody who believed in it would “Flunk Economics 101.”
With that setting here is some history by way of Fredrick Sheehan by way of The Big Picture blog: 
In the early 1990s, Senator Patrick Moynihan from New York warned his fellow legislators about rising social security commitments. Then the worm crawled out of his hole, so to speak. Federal Reserve Chairman Alan Greenspan testified before the Senate and House Budget Committee on January 10, 1995. He told the Committee the inflation rate was probably overestimated by 0.5% to 1.5%.
If Greenspan was correct, this was a godsend. Social security payments are increased each year at an inflation rate calculated by the federal government: the change in the Consumer Price Index (CPI). If the CPI could be increased at a lower rate in the future, benefits would rise more slowly, without Congressional action. This would reduce government spending and delight politicians, who knew of the looming crisis in social security but did not want to imperil their careers by reducing benefits, or, in this case, by cutting the rate at which social security benefits were raised each year.

The Boskin Commission was duly formed. Michael Boskin was the right man for the job. He had served as chairman of the President’s Council of Economic Advisers (CEA) from 1989 to 1993, a post previously held by such government functionaries as Arthur Burns and Alan Greenspan.
I’m starting to get a feeling here. “The fix is in” kind of feeling. Mr. Sheehan offers this quote: Greg Mankiw, chairman of George W. Bush’s Council of Economic Advisers from 2001-2003, said at the time “the debate about the CPI was really a political debate about how, and by how much, to cut real entitlements.”
From an article in the Atlantic, 1997 by Thomas L. Palley titled: How to Rewrite Economic History.
The commission is itself a delicious example of such bias: All its members were on record prior to the establishment of the commission as believing the CPI to be overstated. At the same time, the commission took no evidence from such well-known economists as Janet Norwood, a former head of the Bureau of Labor Statistics, and Dean Baker, of the Economic Policy Institute, who believe that the CPI provides a reasonable reading of inflation. In effect, the commission took account of all the evidence of overstatement of inflation by the CPI and downplayed the evidence of potential understatement.
I would say the fix was in. It has just been a matter of time and timing as to when the final promise made in the Contract with America would find its way into policy. The Democrats implemented the welfare the Republicans wanted and now they are going to give them the Social Security. All of it can be summed up in the Contract ultimate goal: An amendment to the Constitution that would require a balanced budget unless sanctioned by a three-fifths vote in both houses of Congress…
The article, besides being a good review of the commission’s report points out the ramifications of accepting an argument that the CPI has been miscalculated for years (similar to Dean Baker’s points).
If cost-of-living inflation has been overstated, then the growth of the economy and real wages has been much higher than previously reported. The commission has thus solved the problem of stagnating wages, which is now revealed to be a mere fiction. Far from experiencing a “silent depression,” the commission implicitly claims, American families have never had it so good.
If inflation, wages, and income have all been misstated, years of research have been conducted using incorrect data. Thus much of this research, which purportedly confirmed the profession’s theoretical claims, is no longer valid.
Lowering the CPI inflation rate would therefore affect income-tax exemptions and push many middle-class families into higher tax brackets. Adopting the Boskin Commission’s findings would be tantamount to imposing a tax hike that would particularly affect lower- and middle-income families.
Both Democrats and Republicans have been keen to see its recommendations adopted, because they provide a potentially uncontroversial way to achieve deficit reduction. Raising taxes is unpopular, and little discretionary government spending is left to be cut. Restating the CPI as a measure of cost-of-living inflation offers an easy way to lower Social Security payments through reduced COLAs and raise tax revenues through reduced exemptions. The hope is that the CPI can be presented as an apolitical and boring technical issue that voters won’t notice.
Revising the CPI would get the Republicans off the hook of deficit reduction, while simultaneously advancing the interests of business. This, however, would occur at the expense of working Americans and the elderly. Revising the CPI would get the Democrats off the same hook, but at the cost of another shameful desertion of the constituencies they claim to represent.
I told you there is no concept known as inflation in economics anymore.
What we have been living with Obama is very clear now. There is only the conservative ideology in play within our government. It’s just a matter of degree and time in setting up the play as to when a given policy  will be implemented to achieve another phase of the goal.  Right now, it looks pretty much like the official implementation of chained CPI pretty much puts the final cog in the conservative economic machine of social order.
I asked in 2008 if Obama’s appointment of Jason Furman was a qid pro quo for the DLC/Clinton et al keeping the money issues while Obama gets to be president.  We have our answer for sure. There is no need to ask anymore as to the reasoning behind the policies and offers in negotiations that is Obama. It is what he wants. We are living the continual implementation of the conservative economic and thus social ideology that came in with Reagan and fully came out with Gingrich and The Contract with America. 
And that my dear readers is where the idea for chaining the CPI came from; yesterday and today.
PS:
It is not just the pain that will be experienced by all of us (you’ll get old too) with the chained CPI, it is the fact that voting away from conservative economics has not lead us away from conservative economics since Reagan.  Regardless of the party of the president or the majority of congress, the nation has not been able to achieve an ideological shift.  That is a true signal of a problem with our form of democracy.

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