Factories in China are booming, and the country produces some 8 million college graduates yearly. Many of these graduates, however, are unemployed. Why? They feel factory work is beneath them.
Sound familiar?
Austerity is self-defeating. It causes pain only to those most in need of help.
Republicans made the rounds of the Sunday talk shows lamenting the lack of progress and accusing President Obama of stonewalling legislative proposals.
Say what?
Hint for good writing: Seeing the text is not enough. Readers need to hear the words. Syntactically, a sentence may be constructed correctly, but if it doesn't scan, readers won't hear it.
First class postage just went up, to 46 cents for a stamp. In the past ten years, the cost of mailing a letter has risen by more than 30 percent, and the number of letters carried by the U.S. Postal Service has dropped in half.
Economics 101: The Law of Supply and Demand has not been repealed. When the price goes up, sales go down, and customers seek alternatives. In this case, email.
Monday, January 28, 2013
Sunday, January 27, 2013
Shameless
"Divide and conquer" may work in a military campaign, but in modern politics division leads to self-defeat.
"Transparent" only begins to describe the blatantly obvious divisive tactics of today's radical right in America. Rather than seek compromise and accommodation to achieve economic health for all Americans, they preach righteous platitudes on how their path is the only correct and possible one.
Their leaders cite "makers and takers," speaking to the haves and ignoring the have-nots, thus dividing the country. They forget the words in the pledge of all Americans: "one nation ... indivisible." And they ignore Abraham Lincoln's warning that "a house divided against itself cannot stand," not seeing the irony that even as they seed division, Lincoln was quoting the Bible (Matthew 12:25).
When you preach to the choir, you don't need evidence. They have already accepted your Truths.
When you talk only to yourself, you can persuade yourself of anything. It's called rationalizing.
When you find yourself in a hole, stop digging.
In American democracy, we have an obligation to question authority. But to block solely for the sake of blocking creates a poison that sickens the body politic. The Republican Party has become the Party of No.
To criticize is useful, but it's better to offer viable alternatives and be willing to cooperate, compromise and accommodate.
Otherwise, you start walking the path to oblivion.
"Transparent" only begins to describe the blatantly obvious divisive tactics of today's radical right in America. Rather than seek compromise and accommodation to achieve economic health for all Americans, they preach righteous platitudes on how their path is the only correct and possible one.
Their leaders cite "makers and takers," speaking to the haves and ignoring the have-nots, thus dividing the country. They forget the words in the pledge of all Americans: "one nation ... indivisible." And they ignore Abraham Lincoln's warning that "a house divided against itself cannot stand," not seeing the irony that even as they seed division, Lincoln was quoting the Bible (Matthew 12:25).
When you preach to the choir, you don't need evidence. They have already accepted your Truths.
When you talk only to yourself, you can persuade yourself of anything. It's called rationalizing.
When you find yourself in a hole, stop digging.
In American democracy, we have an obligation to question authority. But to block solely for the sake of blocking creates a poison that sickens the body politic. The Republican Party has become the Party of No.
To criticize is useful, but it's better to offer viable alternatives and be willing to cooperate, compromise and accommodate.
Otherwise, you start walking the path to oblivion.
Debt Politics
It's a problem because I say so.
"We've got trouble, right here in River City." -- The Music Man
We hear a lot of warning talk about a dangerously high national debt, and because it's so high it's essential that the country use austere measures to reduce it. Let's take a look at some numbers.
Using a ratio of debt to GDP is one way to measure the significance of a nation's debt, and whether it's a problem. In the U.S., the ratio has risen from 35 percent in 2000 to 60 percent in 2009, and now is heading towards 75 percent. Is this a problem? During a recession, no, because government borrows to stimulate the economy for the benefit of its citizens.
Meanwhile, other countries have even higher ratios of debt to GDP. The ratio in Canada, for example, is 84 percent. In France, 86 percent; Germany, 82 percent; and the UK, 86 percent. Throughout the European Union, the number is 82 percent, even as the recommended ratio is 60 percent, according to Eurostat, which deals with data for Europe. Some nations, admittedly those with serious fiscal issues, have even higher ratios. Ireland's debt to GDP ratio is 108 percent; Greece posts a 165 percent mark; and Japan, a soaring 208 percent. Spain, however, has a debt to GDP ratio of 69 percent, below that of the U.S. Booming China reports a ratio of just 43 percent, while Mexico lists 37 percent.
(Statistics are gathered by Eurostat and the CIA, and are posted on the Wikipedia web site.)
Given that wide a range of numbers in major nations, from 37 percent in Mexico to more than 200 percent in Japan, why all the fuss? Does it mean that America is about to topple under the weight of its debt, even though healthy Germany owes more, relative to its output, than the U.S.? Or that Japan, which owes twice as much as it produces, is about to fall apart? And does it mean that Mexico, which is in debt to the tune of only 37 percent of its GDP, is healthy?
Think on it. There are too many other factors involved for any one data point to be as significant as some politicians claim.
"We've got trouble, right here in River City." -- The Music Man
We hear a lot of warning talk about a dangerously high national debt, and because it's so high it's essential that the country use austere measures to reduce it. Let's take a look at some numbers.
Using a ratio of debt to GDP is one way to measure the significance of a nation's debt, and whether it's a problem. In the U.S., the ratio has risen from 35 percent in 2000 to 60 percent in 2009, and now is heading towards 75 percent. Is this a problem? During a recession, no, because government borrows to stimulate the economy for the benefit of its citizens.
Meanwhile, other countries have even higher ratios of debt to GDP. The ratio in Canada, for example, is 84 percent. In France, 86 percent; Germany, 82 percent; and the UK, 86 percent. Throughout the European Union, the number is 82 percent, even as the recommended ratio is 60 percent, according to Eurostat, which deals with data for Europe. Some nations, admittedly those with serious fiscal issues, have even higher ratios. Ireland's debt to GDP ratio is 108 percent; Greece posts a 165 percent mark; and Japan, a soaring 208 percent. Spain, however, has a debt to GDP ratio of 69 percent, below that of the U.S. Booming China reports a ratio of just 43 percent, while Mexico lists 37 percent.
(Statistics are gathered by Eurostat and the CIA, and are posted on the Wikipedia web site.)
Given that wide a range of numbers in major nations, from 37 percent in Mexico to more than 200 percent in Japan, why all the fuss? Does it mean that America is about to topple under the weight of its debt, even though healthy Germany owes more, relative to its output, than the U.S.? Or that Japan, which owes twice as much as it produces, is about to fall apart? And does it mean that Mexico, which is in debt to the tune of only 37 percent of its GDP, is healthy?
Think on it. There are too many other factors involved for any one data point to be as significant as some politicians claim.
Wednesday, January 23, 2013
Bumpy Road Ahead
Economists rarely make negative forecasts, partly because they become self-fulfilling prophecies. Even when they do forecast downturns, the predictions are surrounded by ifs.
The International Monetary Fund, for example, said today that global growth "will strengthen gradually" this year, as economic constraints "start to ease." That said, the IMF quickly adds a but, pointing out that "downside risks remain significant." As noted here last Sunday, we're not there yet, and there are still bumps on the road to economic recovery.
China and India are booming, leading the world with growth forecasts of 8.2 percent and 5.9 percent, the IMF said. The euro area is still struggling, however, with a high risk of more recession -- Germany and France, while healthy, face growth rates of less than 1 percent, with Italy and Spain still showing negative GDP growth. (GDP measures Growth Domestic Product, the value of all goods and services produced in a nation or area.)
U.S. recovery will slow, according to the IMF report, to 2.0 percent from 2.3 percent last year. Canada and the UK, moreover, are also in float mode -- both below 2 percent.
In short, the developing countries are developing big time, while the so-called advanced economies are stalled. And while "acute crisis risks" are lower, potential problems remain, the agency added in its CYA way.
So the recovery road may be less rough, but it's not yet smooth. Government policies can continue to help, but this is no time to say the crisis is over.
Washington made that mistake 76 years ago.
The International Monetary Fund, for example, said today that global growth "will strengthen gradually" this year, as economic constraints "start to ease." That said, the IMF quickly adds a but, pointing out that "downside risks remain significant." As noted here last Sunday, we're not there yet, and there are still bumps on the road to economic recovery.
China and India are booming, leading the world with growth forecasts of 8.2 percent and 5.9 percent, the IMF said. The euro area is still struggling, however, with a high risk of more recession -- Germany and France, while healthy, face growth rates of less than 1 percent, with Italy and Spain still showing negative GDP growth. (GDP measures Growth Domestic Product, the value of all goods and services produced in a nation or area.)
U.S. recovery will slow, according to the IMF report, to 2.0 percent from 2.3 percent last year. Canada and the UK, moreover, are also in float mode -- both below 2 percent.
In short, the developing countries are developing big time, while the so-called advanced economies are stalled. And while "acute crisis risks" are lower, potential problems remain, the agency added in its CYA way.
So the recovery road may be less rough, but it's not yet smooth. Government policies can continue to help, but this is no time to say the crisis is over.
Washington made that mistake 76 years ago.
Sunday, January 20, 2013
Recession and Recovery
Are we there yet?
The U.S. economy began to recede in December 2007, and bottomed out the following year, officially ending in June 2009. Recovery, however, was complicated by failures among major financial institutions and further stalled by a bust in the housing bubble.
Although a technical definition would say the recession ended when an upturn began, others would say recovery is not complete until the economy reaches the point where it was when the downturn began.
Think of it as a cycle, pictured as what artists like to call a fever line graph.
Meanwhile, there are intermittent ups and downs while the economy is still in a trough. Call it sputtering. Recessions begin when growth tops out at the top of a cycle and heads downward on the graph line until it bottoms out in a trough and then heads upward, indicating the start of recovery. One issue to deal with, however, is the length of the trough. The view from here is that the American economy is still sputtering in the trough of a business cycle.
Some drivers of the overall economy are, indeed, zooming along, showing excellent growth and pulling up the GDP data with them. (GDP, or Gross Domestic Product, measures the total value of all products and services within a nation.) Other industry segments, however, are still in a ditch, sputtering and stuttering as they attempt to get rolling again, and on the high road to economic success.
Housing, for example, has begun to recover, showing a jump in building permits of about 30 percent for 2012, and housing starts rising by some 28 percent, according to government figures.
Auto sales are up sharply, and industry employment is up, but wages and hours worked are steady -- off slightly, in fact.
The technology sector is doing well, thanks partly to the fascination with gadgetry and the appeal of owning the latest "big thing."
The unemployment rate has been relatively steady, hovering around the 8 percent mark for most of last year, and ending December 2012 at 7.8 percent. It spent most of 2009 on the rise, topping out at 10 percent in October of that year, four months after the recession officially ended.
So while politicians and some economists proclaim the end of the Great Recession, try telling that to the college graduates who can't find work, or to those who were laid off and are still out of work after many months of searching. How long is this so-called trough, they ask?
All in all, we're not yet out of the ditch. The shadow of the Great Recession is still upon us, and entering its sixth year.
Will government intervention during Barack Obama's second term refuel the economic engine? Or will the Anti-Keynesian backers of a fully free market persuade everyone to be patient until the economic illness fades?
Stay tuned, and hope that this Great Recession doesn't end the way the Great Depression did -- with another Great War.
The U.S. economy began to recede in December 2007, and bottomed out the following year, officially ending in June 2009. Recovery, however, was complicated by failures among major financial institutions and further stalled by a bust in the housing bubble.
Although a technical definition would say the recession ended when an upturn began, others would say recovery is not complete until the economy reaches the point where it was when the downturn began.
Think of it as a cycle, pictured as what artists like to call a fever line graph.
Meanwhile, there are intermittent ups and downs while the economy is still in a trough. Call it sputtering. Recessions begin when growth tops out at the top of a cycle and heads downward on the graph line until it bottoms out in a trough and then heads upward, indicating the start of recovery. One issue to deal with, however, is the length of the trough. The view from here is that the American economy is still sputtering in the trough of a business cycle.
Some drivers of the overall economy are, indeed, zooming along, showing excellent growth and pulling up the GDP data with them. (GDP, or Gross Domestic Product, measures the total value of all products and services within a nation.) Other industry segments, however, are still in a ditch, sputtering and stuttering as they attempt to get rolling again, and on the high road to economic success.
Housing, for example, has begun to recover, showing a jump in building permits of about 30 percent for 2012, and housing starts rising by some 28 percent, according to government figures.
Auto sales are up sharply, and industry employment is up, but wages and hours worked are steady -- off slightly, in fact.
The technology sector is doing well, thanks partly to the fascination with gadgetry and the appeal of owning the latest "big thing."
The unemployment rate has been relatively steady, hovering around the 8 percent mark for most of last year, and ending December 2012 at 7.8 percent. It spent most of 2009 on the rise, topping out at 10 percent in October of that year, four months after the recession officially ended.
So while politicians and some economists proclaim the end of the Great Recession, try telling that to the college graduates who can't find work, or to those who were laid off and are still out of work after many months of searching. How long is this so-called trough, they ask?
All in all, we're not yet out of the ditch. The shadow of the Great Recession is still upon us, and entering its sixth year.
Will government intervention during Barack Obama's second term refuel the economic engine? Or will the Anti-Keynesian backers of a fully free market persuade everyone to be patient until the economic illness fades?
Stay tuned, and hope that this Great Recession doesn't end the way the Great Depression did -- with another Great War.
Saturday, January 19, 2013
National Debt "Crisis"
When is a crisis not a crisis?
When you owe the money to yourself
Concern about the rising national debt is in some ways a false worry, largely because much of the so-called "national debt" is money held in trust by one government agency for use by another; Social Security and Medicare funds, for example. Another major portion is in government bonds, held by still more government agencies or by American citizens. Moreover, these bonds are denominated in dollars, so the government can easily eliminate the bond debt simply by printing more dollars. Or the Federal Reserve can punch a big hole in the debt load through its Open Market Operations, in which it buys and sells government bonds, thereby injecting or taking out dollars from circulation. In essence, the "debt" is just transferred from one government agency to another, so it's not really the kind of debt that can bankrupt a government.
The only way a nation can go bankrupt is for a major part of its debt to be held by foreigners, and the outsiders call in the debt. But much of the American national debt is moving back and forth between government agencies, and isn't held by foreigners at all. So the TV ad that shows Orientals claiming they "own" the U.S. is a false worry, misleading because very little of the national debt is held by foreigners. And calling in the debt would be pointless, since the Treasury could simply print more dollars to pay off the debt. That, however, would inflate the overall supply of dollars and result in higher prices. If wages do not follow the rise, more expensive imports would be less affordable and Americans would buy less stuff from foreign firms.
As for other American assets owned by foreigners, recall the sale of a part-interest in Rockefeller Center to a Japanese firm some years ago. The firm did, indeed, own a share of the real estate, but it was not as if the buildings were to be dismantled and reassembled in Yokohama. That didn't happen. What did happen, however, was the market value of the real estate tumbled a few years later, and the investors lost on the deal. So the cash -- as well as the buildings -- remained in Manhattan.
Economists have long known and taught that the national debt actually means little, since most of it is money we owe to ourselves. Yes, the number is high -- $16.4 trillion, at last count. But so is the overall economy, at $15.8 trillion. In last year's third quarter, the economy grew at an annual rate of more than 3 percent. Fourth quarter data are due out January 30.
A family can have an income of $100,000 yearly, and live in a house with a mortgage of $300,000. They are in debt, but not in trouble. Unless, of course, the main source of income stops. But a family is not a government, and does not have the ability to manipulate the money supply as does the U.S. Treasury or the Federal Reserve. A family cannot (legally) print more money to pay down its debt. A government can. The bigger question is, should it? The answer is that governments often do, and we all live with the consequence of a larger money supply, which brings higher wages ... and prices.
When you owe the money to yourself
Concern about the rising national debt is in some ways a false worry, largely because much of the so-called "national debt" is money held in trust by one government agency for use by another; Social Security and Medicare funds, for example. Another major portion is in government bonds, held by still more government agencies or by American citizens. Moreover, these bonds are denominated in dollars, so the government can easily eliminate the bond debt simply by printing more dollars. Or the Federal Reserve can punch a big hole in the debt load through its Open Market Operations, in which it buys and sells government bonds, thereby injecting or taking out dollars from circulation. In essence, the "debt" is just transferred from one government agency to another, so it's not really the kind of debt that can bankrupt a government.
The only way a nation can go bankrupt is for a major part of its debt to be held by foreigners, and the outsiders call in the debt. But much of the American national debt is moving back and forth between government agencies, and isn't held by foreigners at all. So the TV ad that shows Orientals claiming they "own" the U.S. is a false worry, misleading because very little of the national debt is held by foreigners. And calling in the debt would be pointless, since the Treasury could simply print more dollars to pay off the debt. That, however, would inflate the overall supply of dollars and result in higher prices. If wages do not follow the rise, more expensive imports would be less affordable and Americans would buy less stuff from foreign firms.
As for other American assets owned by foreigners, recall the sale of a part-interest in Rockefeller Center to a Japanese firm some years ago. The firm did, indeed, own a share of the real estate, but it was not as if the buildings were to be dismantled and reassembled in Yokohama. That didn't happen. What did happen, however, was the market value of the real estate tumbled a few years later, and the investors lost on the deal. So the cash -- as well as the buildings -- remained in Manhattan.
Economists have long known and taught that the national debt actually means little, since most of it is money we owe to ourselves. Yes, the number is high -- $16.4 trillion, at last count. But so is the overall economy, at $15.8 trillion. In last year's third quarter, the economy grew at an annual rate of more than 3 percent. Fourth quarter data are due out January 30.
A family can have an income of $100,000 yearly, and live in a house with a mortgage of $300,000. They are in debt, but not in trouble. Unless, of course, the main source of income stops. But a family is not a government, and does not have the ability to manipulate the money supply as does the U.S. Treasury or the Federal Reserve. A family cannot (legally) print more money to pay down its debt. A government can. The bigger question is, should it? The answer is that governments often do, and we all live with the consequence of a larger money supply, which brings higher wages ... and prices.
Tuesday, January 15, 2013
GDP
Is the Great Recession really over? Or is the economic malaise spreading like the flu?
With the exception of China's explosive growth in Gross Domestic Product -- up 7.4 percent in the third quarter, with a prediction of jumping to 8 percent in the second half of this year, according to the Peoples' Daily -- other nations are anemic or down. In France, fourth quarter GDP is off by 0.1 percent, Germany reported a dip of 0.5 percent, the UK down by 0.3 percent, and Canada barely up by 0.1 percent in the third quarter and likely less in the fourth quarter.
The U.S. Commerce Department has not yet reported GDP growth for the fourth quarter. It was up by 3.1 percent in the third quarter, well above the 2 percent estimated in October. But with such variation across the world and the interconnectedness of international economies, that wide a range indicates turbulence that, if not resolved, will bring a storm.
Canada is America's largest trading partner, and economic performance there is very slow. Even healthy Germany is sneezing.
The danger is that the economic virus, like the flu, will spread to the U.S. And when the U.S. economy sneezes, the rest of the world catches a cold.
With the exception of China's explosive growth in Gross Domestic Product -- up 7.4 percent in the third quarter, with a prediction of jumping to 8 percent in the second half of this year, according to the Peoples' Daily -- other nations are anemic or down. In France, fourth quarter GDP is off by 0.1 percent, Germany reported a dip of 0.5 percent, the UK down by 0.3 percent, and Canada barely up by 0.1 percent in the third quarter and likely less in the fourth quarter.
The U.S. Commerce Department has not yet reported GDP growth for the fourth quarter. It was up by 3.1 percent in the third quarter, well above the 2 percent estimated in October. But with such variation across the world and the interconnectedness of international economies, that wide a range indicates turbulence that, if not resolved, will bring a storm.
Canada is America's largest trading partner, and economic performance there is very slow. Even healthy Germany is sneezing.
The danger is that the economic virus, like the flu, will spread to the U.S. And when the U.S. economy sneezes, the rest of the world catches a cold.
Monday, January 14, 2013
The Great Tragedy
"Maybe I should have saved those leftover dreams."
-- Johnny Burke, lyrics; Jimmy Van Heusen, music
A tragedy is a sad event. A great tragedy is a sad event that could have been avoided.
Just as the Great Depression of the 1930s could have been less extreme and could have ended sooner, so also the Great Recession of the last decade, if strong enough action had been taken by those charged with caring for the nation's economic health.
Moreover, it's an open question whether the Great Recession is over. Certainly, there have been signs of a recovery, but there is still a danger of relapse, and consequences could be worse than before. And therein lies the Great Tragedy -- that the relapse and collapse can be avoided.
How? By the designated economic caretakers agreeing on policies and putting them in place.
Unfortunately, the two sets of economic physicians are so far apart in their diagnoses of the illness as well as the treatment that there is little chance of consensus. Result: No treatment at all, and the illness worsens.
Libertarian economists insist that Keynes was wrong. Liberals maintain that something -- anything -- must be done, that doing nothing is not an option. On the contrary, the libertarians say, nothing is exactly what we should be doing. Leave the sheep alone, and they'll be happy, said the wolf.
Libertarians claim the right to be left alone. Nonetheless, when things go wrong, they accept government bailouts. And oil spill cleanup costs, aided by government funds, are claimed as tax deductions, as are fines levied against banks caught defrauding borrowers.
Heads I win, tails you lose.
All the while, those at the top of the economic food chain gorge on opportunities, enlarging their nest eggs in advance of a rainy day -- an attitude consistent with 19th Century economic thinking.
As for those without umbrellas, here comes that rainy day.
-- Johnny Burke, lyrics; Jimmy Van Heusen, music
A tragedy is a sad event. A great tragedy is a sad event that could have been avoided.
Just as the Great Depression of the 1930s could have been less extreme and could have ended sooner, so also the Great Recession of the last decade, if strong enough action had been taken by those charged with caring for the nation's economic health.
Moreover, it's an open question whether the Great Recession is over. Certainly, there have been signs of a recovery, but there is still a danger of relapse, and consequences could be worse than before. And therein lies the Great Tragedy -- that the relapse and collapse can be avoided.
How? By the designated economic caretakers agreeing on policies and putting them in place.
Unfortunately, the two sets of economic physicians are so far apart in their diagnoses of the illness as well as the treatment that there is little chance of consensus. Result: No treatment at all, and the illness worsens.
Libertarian economists insist that Keynes was wrong. Liberals maintain that something -- anything -- must be done, that doing nothing is not an option. On the contrary, the libertarians say, nothing is exactly what we should be doing. Leave the sheep alone, and they'll be happy, said the wolf.
Libertarians claim the right to be left alone. Nonetheless, when things go wrong, they accept government bailouts. And oil spill cleanup costs, aided by government funds, are claimed as tax deductions, as are fines levied against banks caught defrauding borrowers.
Heads I win, tails you lose.
All the while, those at the top of the economic food chain gorge on opportunities, enlarging their nest eggs in advance of a rainy day -- an attitude consistent with 19th Century economic thinking.
As for those without umbrellas, here comes that rainy day.
Saturday, January 12, 2013
Semantics
"My words mean just what I choose them to mean, neither more nor less." -- Humpty Dumpty
"A rose is a rose is a rose." -- Gertrude Stein
Words can sound good but mean little, especially when used in marketing or politics. Or they can mean much, depending on who is using them. If both sides of a position or issue use the same words to refer to the same concepts or ideas, even as they have different interpretations of those concepts, the words lose meaning.
For example, if both Libertarians and Progressives, Conservatives and Liberals, Republicans and Democrats, Corporate and Labor advocates all use words like "freedom" and "liberty," what do these words really mean if their users have so vehemently differing views?
"Patriotism" is another. Does it mean unquestioning obedience to a government, or does it carry the obligation to criticize that government when one disagrees?
Conservatives take "freedom" to mean the ability to do whatever is right for them, without government interference. To them, something like a minimum wage law blocks their freedom to pay as little to workers as they may, and the law interferes with the free market capitalist system. Workers, too, they say, lose their right to accept lower wages in order to compete for jobs in the free market.
Conversely, activists claim the right to organize a labor union, and government may try to interfere with their freedom of collective bargaining. Unions insist they must bargain collectively to negotiate better wages, since an individual worker is powerless against a larger, more tightly organized company.
Run through a list of organizations with the words "freedom" and "liberty" in their titles, and it can be hard to tell which are right-wing conservative and which are left-wing liberal, without a careful reading of the text of their documents.
Political rhetoric, too, is filled with buzzwords appealing to the emotions of listeners rather than to the thinking power of the audience. From Barry Goldwater's slogan, "In your heart you know he's right" to Barack Obama's "Yes, we can," political campaigns are carefully marketed to voters and demographic segments much as advertisers select words and phrases most likely to appeal.
The thing to do, however, is to examine more closely the words and their meanings, if any. The slogan, "In your heart, you know he's right" suggests that voters make their choices from emotion, not from thought. And the more recent Obama slogan, "Forward!" suggests ... what?
Politicians also use the words "freedom" and "liberty" to justify their intervention in the activities of other nations, maintaining they will bring these concepts to places where the residents supposedly don't have them. Whether they do or not is immaterial; the marketing is used to enlist home support for their otherwise undefined goals, as if using the buzzwords is definition enough.
"A rose is a rose is a rose." -- Gertrude Stein
Words can sound good but mean little, especially when used in marketing or politics. Or they can mean much, depending on who is using them. If both sides of a position or issue use the same words to refer to the same concepts or ideas, even as they have different interpretations of those concepts, the words lose meaning.
For example, if both Libertarians and Progressives, Conservatives and Liberals, Republicans and Democrats, Corporate and Labor advocates all use words like "freedom" and "liberty," what do these words really mean if their users have so vehemently differing views?
"Patriotism" is another. Does it mean unquestioning obedience to a government, or does it carry the obligation to criticize that government when one disagrees?
Conservatives take "freedom" to mean the ability to do whatever is right for them, without government interference. To them, something like a minimum wage law blocks their freedom to pay as little to workers as they may, and the law interferes with the free market capitalist system. Workers, too, they say, lose their right to accept lower wages in order to compete for jobs in the free market.
Conversely, activists claim the right to organize a labor union, and government may try to interfere with their freedom of collective bargaining. Unions insist they must bargain collectively to negotiate better wages, since an individual worker is powerless against a larger, more tightly organized company.
Run through a list of organizations with the words "freedom" and "liberty" in their titles, and it can be hard to tell which are right-wing conservative and which are left-wing liberal, without a careful reading of the text of their documents.
Political rhetoric, too, is filled with buzzwords appealing to the emotions of listeners rather than to the thinking power of the audience. From Barry Goldwater's slogan, "In your heart you know he's right" to Barack Obama's "Yes, we can," political campaigns are carefully marketed to voters and demographic segments much as advertisers select words and phrases most likely to appeal.
The thing to do, however, is to examine more closely the words and their meanings, if any. The slogan, "In your heart, you know he's right" suggests that voters make their choices from emotion, not from thought. And the more recent Obama slogan, "Forward!" suggests ... what?
Politicians also use the words "freedom" and "liberty" to justify their intervention in the activities of other nations, maintaining they will bring these concepts to places where the residents supposedly don't have them. Whether they do or not is immaterial; the marketing is used to enlist home support for their otherwise undefined goals, as if using the buzzwords is definition enough.
Gleanings
GLEANINGS of an Itinerant Speller: The web site econlib.org, run by the Library of Economics and Liberty, wrote of "pedaling ideas." Presumably the authors were all on bicycles as they peddled their concepts. And an online commenter wrote of those who would "change their mind." One envisions only one mind, with Vulcan members melding their own opinions into the organization viewpoint.
A TV news anchor spoke of a robbery "in broad daylight," as opposed to narrow daylight, and the the suspect "ran away on foot," rather than using elbows or knees.
HYPHEN MAVEN HAVEN -- A newspaper neglected to run spellcheck or have an editor read a Page One story, so this word break appeared: at the end of a line: "thei-rassets."
FORMULA -- The armed bandit rushed into the bank, brandished a revolver, vaulted the counter, scooped up the cash, stuffed it into a paper bag, and made good his escape on foot.
BUZZWORD BLUNDERING -- Good writers avoid these: Smoke billowed, poured from the building, sparked the blaze, in broad daylight, alleged suspect. The allegation, or charge, is not that the person is a suspect, but that the person is accused of being a robber, killer, or whatever.
The TV commercial boasted that the item was "made of genuine metal." Not to be confused with faux metal, of course.
A TV news anchor spoke of a robbery "in broad daylight," as opposed to narrow daylight, and the the suspect "ran away on foot," rather than using elbows or knees.
HYPHEN MAVEN HAVEN -- A newspaper neglected to run spellcheck or have an editor read a Page One story, so this word break appeared: at the end of a line: "thei-rassets."
FORMULA -- The armed bandit rushed into the bank, brandished a revolver, vaulted the counter, scooped up the cash, stuffed it into a paper bag, and made good his escape on foot.
BUZZWORD BLUNDERING -- Good writers avoid these: Smoke billowed, poured from the building, sparked the blaze, in broad daylight, alleged suspect. The allegation, or charge, is not that the person is a suspect, but that the person is accused of being a robber, killer, or whatever.
The TV commercial boasted that the item was "made of genuine metal." Not to be confused with faux metal, of course.
Friday, January 11, 2013
Verbosities
Meaningless lines we can do without:
SNOW JOB -- TV weather pitch: "How much snow will you get? That depends on where you are."
WHEN? -- "Only time will tell."
STEEP HAIRCUT -- "She agreed to sheer her locks." A cliff is sheer. To shear is to cut with large scissors. Shearing is what one does to sheep.
NEWS ITEMS: An Egyptian TV comic was sued by the government for insulting the nation's president.
COMMENT: In the U.S., this is general practice. We have the right to speak; we also have the right not to listen. However, we ignore those we disagree with at our peril. Meanwhile, we pay taxes for the right to complain about paying taxes.
Thomas Jefferson said that given the choice of newspapers without government or government without newspapers, he would take the former. However, this was while he was out of office. As President, he enacted the Sedition Act, which made it a criminal offense to criticize the government.
SNOW JOB -- TV weather pitch: "How much snow will you get? That depends on where you are."
WHEN? -- "Only time will tell."
STEEP HAIRCUT -- "She agreed to sheer her locks." A cliff is sheer. To shear is to cut with large scissors. Shearing is what one does to sheep.
NEWS ITEMS: An Egyptian TV comic was sued by the government for insulting the nation's president.
COMMENT: In the U.S., this is general practice. We have the right to speak; we also have the right not to listen. However, we ignore those we disagree with at our peril. Meanwhile, we pay taxes for the right to complain about paying taxes.
Thomas Jefferson said that given the choice of newspapers without government or government without newspapers, he would take the former. However, this was while he was out of office. As President, he enacted the Sedition Act, which made it a criminal offense to criticize the government.
Thursday, January 10, 2013
Trading Partners
They can have any kind of system they want, as long as it's just like ours and we win.
We hear a lot about the balance of trade and a supposed negative differential in payments. Oddly or ironically, the most noise comes from the free-market capitalism supporters of full competition. They're all for full and free competition -- provided, of course, that they win.
Of the top ten countries that do the most business with the U.S., four are Asian, three are European, and the remaining three are in the Americas.
Leading the list, however, is Canada. Government data show that our northern neighbor easily leads the pack, with the value of exports and imports totaling $515 billion through October. China is second, at $440 billion, Mexico is a close third, at $414 billion, and Japan and Germany rank fourth and fifth, at $181 billion and $130 billion, respectively.
The remaining five trade below the $100 billion level. They are the UK, South Korea, Brazil, France and Taiwan.
Over all, the U.S. imports more than it exports, according to the U.S. Census, which tracks the numbers. The ten countries listed account for 67.6 percent of imports and 62.4 percent of exports, or about two-thirds of all U.S. international trade.
We hear a lot about the balance of trade and a supposed negative differential in payments. Oddly or ironically, the most noise comes from the free-market capitalism supporters of full competition. They're all for full and free competition -- provided, of course, that they win.
Of the top ten countries that do the most business with the U.S., four are Asian, three are European, and the remaining three are in the Americas.
Leading the list, however, is Canada. Government data show that our northern neighbor easily leads the pack, with the value of exports and imports totaling $515 billion through October. China is second, at $440 billion, Mexico is a close third, at $414 billion, and Japan and Germany rank fourth and fifth, at $181 billion and $130 billion, respectively.
The remaining five trade below the $100 billion level. They are the UK, South Korea, Brazil, France and Taiwan.
Over all, the U.S. imports more than it exports, according to the U.S. Census, which tracks the numbers. The ten countries listed account for 67.6 percent of imports and 62.4 percent of exports, or about two-thirds of all U.S. international trade.
Wednesday, January 9, 2013
Money Supply
Quantitative easing is a euphemism for "more."
Buy now before the price goes up again.
By making more money available, the Federal Reserve hopes to encourage people to spend more, since they have more. And if the money supply grows faster than the economy in general, the result is higher prices.
Historically, "An acceleration of money growth in excess of real output growth has invariably produced inflation," according to Anna Schwartz, an economist at the National Bureau of Economic Research.
One narrow measure of the money supply is called M1, the amount of currency in circulation and in checking deposits. It rose from $1.84 trillion December 2011 to $2.17 trillion in December 2012 -- just last month.
Meanwhile, prices rise in response to a greater quantity of cash available. There is a lag, however, and experts exploit this lag as a way to jump-start a weak economy. But if the additional supply of money stops at the corporate and bank level to reinforce balance sheets, build up cash on hand, shore up stock prices and pay executive salaries and bonuses, and it does not flow on to consumers, the effort is futile.
The economy in general does not benefit and the cash is assimilated into the executive borg-room.
This does not necessarily mean the Fed should stop trying. The "trickle-down" theory so loved by conservatives can work if those at the top who benefit from the additional flow open their financial gates and let the new supply irrigate the economic fields.
Buy now before the price goes up again.
By making more money available, the Federal Reserve hopes to encourage people to spend more, since they have more. And if the money supply grows faster than the economy in general, the result is higher prices.
Historically, "An acceleration of money growth in excess of real output growth has invariably produced inflation," according to Anna Schwartz, an economist at the National Bureau of Economic Research.
One narrow measure of the money supply is called M1, the amount of currency in circulation and in checking deposits. It rose from $1.84 trillion December 2011 to $2.17 trillion in December 2012 -- just last month.
Meanwhile, prices rise in response to a greater quantity of cash available. There is a lag, however, and experts exploit this lag as a way to jump-start a weak economy. But if the additional supply of money stops at the corporate and bank level to reinforce balance sheets, build up cash on hand, shore up stock prices and pay executive salaries and bonuses, and it does not flow on to consumers, the effort is futile.
The economy in general does not benefit and the cash is assimilated into the executive borg-room.
This does not necessarily mean the Fed should stop trying. The "trickle-down" theory so loved by conservatives can work if those at the top who benefit from the additional flow open their financial gates and let the new supply irrigate the economic fields.
Tuesday, January 8, 2013
Advocates and Adversaries
Reporter: "Did you ever get the feeling when you're working on a story that someone is lying to you?"
Editor: "Of course. It happens all the time. Sometimes both sides are lying, but it's not our job to decide which. We report both sides and let the reader decide."
Some believe if you are not an advocate for their position, you are therefore an adversary. This attitude is found among business executives as well as among bellicose politicians.
"Those who are not with us, are against us," they say, "and they will be treated accordingly."
Good journalists, however, are neutral -- neither advocates nor adversaries. They ask the tough questions because they need to be asked, and a democratic society, whether republic or monarchy, needs neutral reporters.
That said, there are times when the pursuit of truth and justice demands advocates, and there is a place for advocacy journalism. If there is a wrong to be righted, corruption to be brought to light, or a danger to be exposed, it is journalism's duty to publicize these issues and embarrass those who fail to correct them.
Lawyers and journalists are alike in some ways. They both research, gather and transmit information, and both pursue truth and justice. Lawyers, however, are always advocates for their clients. Journalists do not have clients, and are advocates only for truth and justice. They are adversaries only to those who interfere with that.
Editor: "Of course. It happens all the time. Sometimes both sides are lying, but it's not our job to decide which. We report both sides and let the reader decide."
Some believe if you are not an advocate for their position, you are therefore an adversary. This attitude is found among business executives as well as among bellicose politicians.
"Those who are not with us, are against us," they say, "and they will be treated accordingly."
Good journalists, however, are neutral -- neither advocates nor adversaries. They ask the tough questions because they need to be asked, and a democratic society, whether republic or monarchy, needs neutral reporters.
That said, there are times when the pursuit of truth and justice demands advocates, and there is a place for advocacy journalism. If there is a wrong to be righted, corruption to be brought to light, or a danger to be exposed, it is journalism's duty to publicize these issues and embarrass those who fail to correct them.
Lawyers and journalists are alike in some ways. They both research, gather and transmit information, and both pursue truth and justice. Lawyers, however, are always advocates for their clients. Journalists do not have clients, and are advocates only for truth and justice. They are adversaries only to those who interfere with that.
Monday, January 7, 2013
Domino Dictum
A balanced budget is pointless when a nation is bankrupt.
"A country is not a company." -- Paul Krugman
Austerity mirrors the paradox of thrift.
Austerity means stop spending. But that's what caused the problem in the first place. If everyone saves, no one spends, and when no one -- including government -- spends, the economy fails.
In the UK, government officials are pushing for austerity, claiming government is like a household or a firm, and the proper way to return to fiscal health is to limit spending.
Germany, while still prospering, insists on austerity for other nations as a way to balance budgets and revive the economy.
Reduced spending, however, reduces the money flow. Reduced money flow means fewer jobs. Fewer jobs means less wages. Less wages means reduced spending. And so it goes.
In the abstract, the idea is enticing, and has the ring of truth, of an ideal answer. But the enticing idea of austerity, while it may work for a household or a firm, is toxic for a nation, and spreads its toxicity to other nations.
Trade in goods and services is essential in any economy, whether local, regional or international. If one link is broke, the chain cannot hold.
In the U.S., there is a groundswell building for government austerity to resolve the national budget dispute. But far from healing, national austerity further sickens, and mirrors the paradox of thrift.
What's needed is a planned infusion of government spending to keep the economy moving while the private sector of consumers and firms rebuild the confidence of health.
"A country is not a company." -- Paul Krugman
Austerity mirrors the paradox of thrift.
Austerity means stop spending. But that's what caused the problem in the first place. If everyone saves, no one spends, and when no one -- including government -- spends, the economy fails.
In the UK, government officials are pushing for austerity, claiming government is like a household or a firm, and the proper way to return to fiscal health is to limit spending.
Germany, while still prospering, insists on austerity for other nations as a way to balance budgets and revive the economy.
Reduced spending, however, reduces the money flow. Reduced money flow means fewer jobs. Fewer jobs means less wages. Less wages means reduced spending. And so it goes.
In the abstract, the idea is enticing, and has the ring of truth, of an ideal answer. But the enticing idea of austerity, while it may work for a household or a firm, is toxic for a nation, and spreads its toxicity to other nations.
Trade in goods and services is essential in any economy, whether local, regional or international. If one link is broke, the chain cannot hold.
In the U.S., there is a groundswell building for government austerity to resolve the national budget dispute. But far from healing, national austerity further sickens, and mirrors the paradox of thrift.
What's needed is a planned infusion of government spending to keep the economy moving while the private sector of consumers and firms rebuild the confidence of health.
Sunday, January 6, 2013
Apostate's Screed
There was a time when politics was called the art of the possible. Now it is the heart of the implausible, where each side insists theirs is the only right and possible way, and therefore the other side must yield.
Politic has become polemic, aided by news media unwilling or unable to wrack their own boat with questions that may offend their viewers and cost them rating points and thus advertising revenue dollars. Or they play to their audience demographic, echoing the perceived wisdom of the mass and thereby accelerating the move to a radical core of those who take the received message as reinforcement or background for their views, even as it is really just an echo.
Meanwhile, the workers in the journalistic vineyards who seek only the ripe fruit of truth are assailed for their efforts by those who want only their own grapes of wrath to be distilled into the toxic wine of radicalism.
Note to reporters and editors: When you are criticized by both sides, you know you've done your job.
Politic has become polemic, aided by news media unwilling or unable to wrack their own boat with questions that may offend their viewers and cost them rating points and thus advertising revenue dollars. Or they play to their audience demographic, echoing the perceived wisdom of the mass and thereby accelerating the move to a radical core of those who take the received message as reinforcement or background for their views, even as it is really just an echo.
Meanwhile, the workers in the journalistic vineyards who seek only the ripe fruit of truth are assailed for their efforts by those who want only their own grapes of wrath to be distilled into the toxic wine of radicalism.
Note to reporters and editors: When you are criticized by both sides, you know you've done your job.
Saturday, January 5, 2013
Mental Froth
When war becomes profitable, you'll see more of it.
He "must be fabulously wealthy, because there is always a war going on somewhere." -- G.B. Shaw, "Major Barbara."
In his farewell address, President Dwight D. Eisenhower warned of the dangers inherent in a military-industry complex.
Like any business, the goal of the munitions industry is to increase sales. The main way to do that is to sell more guns.
And if there doesn't happen to be a war going on, the answer is to start one. "You supply the pictures, and I'll supply the war" may not actually have been said by William Randolph Hearst to Frederic Remington in Cuba in 1897, but the purported exchange does illustrate the tendency of corporate titans to foment hostilities to sell more product -- in Hearst's case, more newspapers.
Today's industrial titans are more subtle, and have learned to employ media management experts to help manipulate public opinion into endorsing their positions.
It becomes reporters' and publishers' responsibility, therefore, to ask the tough questions and push for responsive answers, then to inform the public of government and corporate activities and the real goals and positions behind the propaganda.
Otherwise, reporters and publishers are part of the propaganda machine.
He "must be fabulously wealthy, because there is always a war going on somewhere." -- G.B. Shaw, "Major Barbara."
In his farewell address, President Dwight D. Eisenhower warned of the dangers inherent in a military-industry complex.
Like any business, the goal of the munitions industry is to increase sales. The main way to do that is to sell more guns.
And if there doesn't happen to be a war going on, the answer is to start one. "You supply the pictures, and I'll supply the war" may not actually have been said by William Randolph Hearst to Frederic Remington in Cuba in 1897, but the purported exchange does illustrate the tendency of corporate titans to foment hostilities to sell more product -- in Hearst's case, more newspapers.
Today's industrial titans are more subtle, and have learned to employ media management experts to help manipulate public opinion into endorsing their positions.
It becomes reporters' and publishers' responsibility, therefore, to ask the tough questions and push for responsive answers, then to inform the public of government and corporate activities and the real goals and positions behind the propaganda.
Otherwise, reporters and publishers are part of the propaganda machine.
Friday, January 4, 2013
Argot Rhythm
"Ignore the premise of the question."
-- Chief of Staff Leo McGarry on The West Wing.
Requirements for politicians:
Say "nucular," instead of "nuclear."
Stay "on message" regardless of fact or reality.
Demonize the opposition. What they say is propaganda; what we say is the real truth.
Use meaningless buzz words whenever possible.
Memorize these lines and use them often: "I was misquoted. What I really meant was..." Also, "This is another example of an attack by the media elite."
Drop names whenever possible, and claim close friendship with each.
Treat reporters as if they really are as smart as they think they are, while knowing deep inside that they are a pack of ignorant jackals out to hound you into a corner.
Always speak as if you're in a roundhouse. They can't corner you there.
The more you talk around an issue or question, the less likely you are to address it head-on. (See McGarry quote, above.)
Note to reporters: Treat politicians with the respect they deserve. It isn't much, but give it to them anyway.
Always quote them exactly. It's more fun to watch them hang themselves.
When they insist they were misquoted, expect your broadcast friends to roll the tape.
-- Chief of Staff Leo McGarry on The West Wing.
Requirements for politicians:
Say "nucular," instead of "nuclear."
Stay "on message" regardless of fact or reality.
Demonize the opposition. What they say is propaganda; what we say is the real truth.
Use meaningless buzz words whenever possible.
Memorize these lines and use them often: "I was misquoted. What I really meant was..." Also, "This is another example of an attack by the media elite."
Drop names whenever possible, and claim close friendship with each.
Treat reporters as if they really are as smart as they think they are, while knowing deep inside that they are a pack of ignorant jackals out to hound you into a corner.
Always speak as if you're in a roundhouse. They can't corner you there.
The more you talk around an issue or question, the less likely you are to address it head-on. (See McGarry quote, above.)
Note to reporters: Treat politicians with the respect they deserve. It isn't much, but give it to them anyway.
Always quote them exactly. It's more fun to watch them hang themselves.
When they insist they were misquoted, expect your broadcast friends to roll the tape.
"It's better to remain silent and be thought a fool than to speak and remove all doubt." -- Abraham Lincoln.
Wednesday, January 2, 2013
International Trading Post
Accounting 101: The books always balance.
The fuss over an imbalance of trade payments is at root over a temporary delay in paying bills.
On an international level, which is better? Being a creditor or being a debtor? Being a creditor means they owe us money. Being a debtor means we own them money -- but meanwhile, we have more stuff.
As a creditor nation, America sold more stuff to others, and they agreed to pay as they grew and prospered. As a debtor, America bought more stuff than we sold, partly because U.S. residents had more money. So we get the stuff, and by buying we help them prosper so they in turn will be able to buy more services and stuff from us.
Result: Both sides prosper. (See Adam Smith, The Wealth of Nations, founding textbook of Economics 101.)
To insist that one nation always be the supplier and thus the creditor assumes that the buyer will never run out of cash. This is an 18th Century mercantilist attitude -- whoever gets all the money wins. But if one side is broke, neither can play anymore, so both sides lose. Or if one buyer nation does go broke, we simply find another buyer.
In fact, mercantilism can only function in a colonialist setting. And colonialism is a form of theft, because the dominant nation takes more from the colony than it returns.
Too many people had, and still have, the notion that the goal is to win everything, no matter how or what or who gets hurt. And by impoverishing a colony and putting it into beggary, they win because the winner has all the stuff.
If the neighbor or colony falls into poverty, that's just tough luck, they lost and we win, the dominant merchants say. However, this is a shortsighted attitude, because poverty breeds resentment. And resentment breeds anger, which can lead to a move for independence and to take back by force what was really theirs all along.
Far better that all sides trade fairly, and in doing so all sides prosper. As everyone prospers, all bills are paid. Otherwise, collection agents in the guise of military units get in the act and war results.
The fuss over an imbalance of trade payments is at root over a temporary delay in paying bills.
On an international level, which is better? Being a creditor or being a debtor? Being a creditor means they owe us money. Being a debtor means we own them money -- but meanwhile, we have more stuff.
As a creditor nation, America sold more stuff to others, and they agreed to pay as they grew and prospered. As a debtor, America bought more stuff than we sold, partly because U.S. residents had more money. So we get the stuff, and by buying we help them prosper so they in turn will be able to buy more services and stuff from us.
Result: Both sides prosper. (See Adam Smith, The Wealth of Nations, founding textbook of Economics 101.)
To insist that one nation always be the supplier and thus the creditor assumes that the buyer will never run out of cash. This is an 18th Century mercantilist attitude -- whoever gets all the money wins. But if one side is broke, neither can play anymore, so both sides lose. Or if one buyer nation does go broke, we simply find another buyer.
In fact, mercantilism can only function in a colonialist setting. And colonialism is a form of theft, because the dominant nation takes more from the colony than it returns.
Too many people had, and still have, the notion that the goal is to win everything, no matter how or what or who gets hurt. And by impoverishing a colony and putting it into beggary, they win because the winner has all the stuff.
If the neighbor or colony falls into poverty, that's just tough luck, they lost and we win, the dominant merchants say. However, this is a shortsighted attitude, because poverty breeds resentment. And resentment breeds anger, which can lead to a move for independence and to take back by force what was really theirs all along.
Far better that all sides trade fairly, and in doing so all sides prosper. As everyone prospers, all bills are paid. Otherwise, collection agents in the guise of military units get in the act and war results.
Prime Rate
Wake up, Richard Cory. The revenue officers are coming.
"The public be damned. My loyalty is to my stockholders."
Time was, we often heard references to the prime rate for borrowing at interest. For corporate borrowers, it was something devoutly to be wished, and the aspiration of many borrowers to be rated so financially secure as to be eligible for such a preferential rate.
That was then. This is now. The old bankers' 3-4-5 dictum (Borrow at 3, lend at 4, be home by 5) no longer applies.
Banks borrow from depositors, the open market or government at near zero percent, then make few loans as they use the funds to shore up balance sheets and boost the company's stock price.
Fees became more important to financial executives than the safety and growth of client investments, whether in homes or in stocks and bonds. By emphasizing "loan products" and collecting fees each time they processed a financial "product," execs got rich, and glittered when they walked. They appeared to be gentlemen from sole to crown, well spoken, and imperiously trim in their acts and expectations.
In the end, the general public thought being ultra-rich was everything, the prime directive.
The fallacy was that many believed that what was good for Richard Cory was good for the country. In reality, what was good for Cory and his political allies was good only for them.
Soon, however, a young Lochinvar lawyer came out of the west, and of all the ambitious prosecutors, his case was best suited to capture media attention and public admiration.
Will he triumph against the moneyed class, with all their high-powered financial and legal resources able to perpetrate their message and manipulate print and broadcast venues -- paid and otherwise?
Stay tuned. Metaphorically, of course.
(With apologies to poets and folk singers worldwide.)
"The public be damned. My loyalty is to my stockholders."
-- William H. Vanderbilt
Time was, we often heard references to the prime rate for borrowing at interest. For corporate borrowers, it was something devoutly to be wished, and the aspiration of many borrowers to be rated so financially secure as to be eligible for such a preferential rate.
That was then. This is now. The old bankers' 3-4-5 dictum (Borrow at 3, lend at 4, be home by 5) no longer applies.
Banks borrow from depositors, the open market or government at near zero percent, then make few loans as they use the funds to shore up balance sheets and boost the company's stock price.
Fees became more important to financial executives than the safety and growth of client investments, whether in homes or in stocks and bonds. By emphasizing "loan products" and collecting fees each time they processed a financial "product," execs got rich, and glittered when they walked. They appeared to be gentlemen from sole to crown, well spoken, and imperiously trim in their acts and expectations.
In the end, the general public thought being ultra-rich was everything, the prime directive.
The fallacy was that many believed that what was good for Richard Cory was good for the country. In reality, what was good for Cory and his political allies was good only for them.
Soon, however, a young Lochinvar lawyer came out of the west, and of all the ambitious prosecutors, his case was best suited to capture media attention and public admiration.
Will he triumph against the moneyed class, with all their high-powered financial and legal resources able to perpetrate their message and manipulate print and broadcast venues -- paid and otherwise?
Stay tuned. Metaphorically, of course.
(With apologies to poets and folk singers worldwide.)
Tuesday, January 1, 2013
Much Ado About Taxes
"It's not how you won or lost. It's how you played the game."
"Winning isn't everything. It's the only thing." -- Vince Lombardi
News item: Seven NFL coaches fired after a losing season.
Add the Fiscal Cliff story to those about the Mayan Calendar
and the Millennium Bug as impending disasters that didn't happen.
The Mayan Calendar calculated mid-December, the Winter Solstice, as the end of a 5,125 year cycle, and the beginning of a new one. But fear-mongers took it to be the end of the world.
The Millennium Bug supposedly would crash all computers at the stroke of midnight Jan. 1, 2000. It was never specified which time zone, whether New York City EST, London GMT, or Hong Kong on the other side of the International Date Line, where it's already tomorrow, or anywhere else on the planet.
Congress sidestepped the fiscal molehill that could have brought many financial structures to their knees, mostly from fear. What became known as a "fiscal cliff" sent worries of imminent disaster ricocheting through the media and around the world, carrying monetary hysteria with it.
It was the latest example of the politics of fear that has infected much of the media, as political activists on both sides stoked the fires of controversy to gain some undefined advantage at the expense of the opposition.
The maneuvering had less to do with accomplishment than with advantage; less to do with getting something done than with making the other guy look bad; less to do with governing than with winning elections.
The bottom line is this: Unless you make more than $400,000 yearly (and few of us do), very little changes.
Except fees for your accountant.
-- Grantland Rice.
"Winning isn't everything. It's the only thing." -- Vince Lombardi
News item: Seven NFL coaches fired after a losing season.
Add the Fiscal Cliff story to those about the Mayan Calendar
and the Millennium Bug as impending disasters that didn't happen.
The Mayan Calendar calculated mid-December, the Winter Solstice, as the end of a 5,125 year cycle, and the beginning of a new one. But fear-mongers took it to be the end of the world.
The Millennium Bug supposedly would crash all computers at the stroke of midnight Jan. 1, 2000. It was never specified which time zone, whether New York City EST, London GMT, or Hong Kong on the other side of the International Date Line, where it's already tomorrow, or anywhere else on the planet.
Congress sidestepped the fiscal molehill that could have brought many financial structures to their knees, mostly from fear. What became known as a "fiscal cliff" sent worries of imminent disaster ricocheting through the media and around the world, carrying monetary hysteria with it.
It was the latest example of the politics of fear that has infected much of the media, as political activists on both sides stoked the fires of controversy to gain some undefined advantage at the expense of the opposition.
The maneuvering had less to do with accomplishment than with advantage; less to do with getting something done than with making the other guy look bad; less to do with governing than with winning elections.
The bottom line is this: Unless you make more than $400,000 yearly (and few of us do), very little changes.
Except fees for your accountant.
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