Guest Post: The Way Out Of Our Economic Mess
By Terry Coxon, Casey Research
"A rock and a hard place" is a long-running theme of Casey Research publications. It refers to the dilemma the US government has wandered into with its continued policy of rescue inflation. The "rock" is what will happen if the Fed pauses for long in printing still more money – the collapse of an economy burdened by an accumulation of mistakes that rescue inflation has been keeping at bay. The "hard place" is the disruptive price inflation that becomes more likely (and likely more severe) with every new dollar the Fed prints to keep the effects of those mistakes suppressed.
When the dollar was cut loose from the gold standard in 1971, the Federal Reserve was freed to create as much new money as it saw fit, whenever it saw fit. Enabled, it turned with enthusiasm to doing what central bankers imagine they are supposed to do – eliminate downturns in the economy. The Fed fancied itself as being on the answering end of a 911 system: whenever the financial markets signaled distress, whenever the economy came down with the flutters, the Federal Reserve would dispatch a van, an ambulance, a fire engine or even an assault vehicle, whatever seemed right but in every case full of cash.
To most people, rescue inflation was entirely agreeable. It made their world more comfortable and seemed to make it safer. Comfortable, yes. Safer, no. The pernicious but entirely welcome effect of rescue inflation was to cover up mistakes and keep them going. It allowed people – especially people handling other people's money – to make progressively bigger mistakes. Lending on implausible mortgages and buying securities tied to those mortgages are the most recent examples, follies that required decades of training.
Rescue inflation allowed everyone to get away with everything. The assurance that a high-speed vehicle with flashing lights on top would always arrive in time let individuals pay for houses with a little cash and a big mortgage. It let corporate managers rely on borrowing heavily, rather than selling stock, to raise capital. It let investors cheerfully accumulate junk bonds. And it let banks hire and set loose bright young minds to design financial gizmos with astounding leverage guaranteed to deliver excellently profitable results for so long as the economy continued on its excellent and guaranteed way. All of those hang-glider stunts seemed safe because if at any point the prices of the assets underlying anyone’s commitment failed to rise... a Federal Reserve rescue inflation vehicle would surely dash to the scene. That’s what FedVans are for.
And rescue inflation let the politicians dodge the consequences of their own thoughtlessness. The economic drag of the tax rules the politicians found convenient to enact and the effects that deficit spending has on economic growth and on living standards were obscured by the ready supply of that all-purpose balm and lubricant, new money.
But problems that are hidden don't go away; they accumulate; and they grow. Answering its most recent 911 call (the one that rang in 2008), the Fed dispatched an entire fleet of trucks stuffed with cash. It increased the money supply by 40%, yet today the economy is barely staggering forward. At this point, creating more cash might buy some time, but it can't buy a solution.
The problem, unless you think there isn’t one, seems impossible to solve. But rather than dismissing the possibility of a way out, it would be more circumspect to consider how the economy might in fact navigate between the rock and the hard place. That won't happen simply because we've found a way for it to happen. The White House hasn’t called me in a long time. But if we understand what it would take to slip past the rock and the hard place, we can judge how likely such a passage is.
The economy doesn't need anyone to fix it. It's all that fixing for the last 40 years that is the problem. Unmolested, the economy will right itself. The only thing needed is for the Great Molester, the government, to surrender to a serious regimen of behavior modification and let the economy operate without suffocating interference. Then it would be able to shed its problems – not painlessly but quickly and with a minimum of pain. Here's the protocol.
Bring out your dead. Even after catching the trillions in bailout money thrown at them, some financial institutions remain under water – closer to the surface than before but still snorkeling. Let them go. Release them from their zombie state. Bless them with the peace of zero assistance and the promise of unbeing. Paying the dead to mimic the living casts a blight on all the banks that are competently managed, and it leaves trillions of dollars of capital to be allocated by hired hands who've shown by their performance that their talents call them to some other line of work.
And give up on mouth-to-mouth for the biggest corpse of all. Stop trying to prop up housing prices by financing the banking system's huge inventory of foreclosed property and by funding programs to slow the foreclosure rate. The housing market won’t recover its health until prices reach a market-clearing level.
Stop the acknowledged deficits now. That means cutting federal spending drastically. There's already unanimous lip service for doing so, but even if there were a genuine resolve to do it, there are an infinite number of ways to go about it. A clean starting point would be to revert to the last Clinton budget, which would almost certainly require getting by on one war at a time. Stopping the deficits is essential to allowing the economy to heal itself because it slows the wasting of resources and because it eliminates the fear of higher tax rates, which is a fear that retards business investment.
Make tax rules a little less stupid. The two most mischievous features of the Internal Revenue Code are the double-taxation of corporate profits and the deduction for home mortgage interest. The former is a powerful and dangerous invitation for high debt-to-equity ratios; make dividends tax-deductible for the paying company, and the problem goes away. The deductibility of mortgage interest has operated as an amplifier for everything the government does to encourage overinvestment in housing. Yes, eliminating the mortgage deduction will be another blow to the housing market, but since we're committed to bringing out the dead, let’s think about cremating the remains.
Stabilize tax rules. High tax rates are bad enough for the economy. Not knowing what next year's tax rates are going to be is much worse. It paralyzes business decisions. Make the current rates "permanent" in the sense that it would take further legislation to change them.
Reduce the legal minimum wage to zero. Minimum wage laws are convenient for labor unions whose members are somewhat skilled, but they toss the unskilled into the economic dumpster. A minimum wage law effectively prohibits the unskilled and inexperienced from working by pricing them out of the market. It’s an unemployment guarantee program for millions of the economically weakest people in the country. I’d miss the minimum wage, because there is nothing that shouts louder that government uses the poor as human shields to protect the state. But to let the economy recover, let it go.
Destrangulate. Repeal the Sarbanes-Oxley law and its weird spawn, Dodd-Frank. Repeal Obamacare. Allow individual states to license drugs without waiting on the FDA. End all prohibitions on insider trading. Charge banks for FDIC insurance at rates tied to a balance sheet formula – and then free them to make their own lending decisions. (You might like even more deregulation than that, but we're not building utopia, we're only trying to avoid camping in dystopia.)
Euthanasia for Social Security and Medicare. Raise the eligibility age by one month every year. The unfunded net liabilities for those programs (variously estimated at $60 trillion to $80 trillion) will evaporate, and everyone who has been counting on impossible promises being kept will have plenty of time to come to terms with reality.
That would do it, and that or something similar is what it would take. The economy might need a year or so for the dust to settle. A certain number of mental breakdowns would be provoked by the trashing of heart-felt assumptions, but for the other 99.9999999% of us, the Greater Depression would be canceled.
It's not politically impossible. Everyone, politician and politician-afflicted alike, is capable of a 180-degree course change when fear and pain become great enough. It's not impossible at all. And unicorns aren’t impossible. Typically, they get started when a pony is fighting a cowlick.
At the just-concluded Casey/Sprott Summit When Money Dies, the all-star faculty unanimously agreed that the US economy is in dire straits… and will be for a while. But there are ways to protect your assets and profit from this crisis. Listen to John Hathaway, Mike Maloney, Richard Hanley, Doug Casey, Chris Martenson, and many more expert speakers on more than 20 hours of audio recordings – incl. their best stock picks and hands-on investment advice. Learn more.
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"Between a rock and a hard place"
Yep, that's us; we're the "Wile E. Coyote" economy...
http://www.youtube.com/watch?v=hz65AOjabtM
"Between a rock and a hard place"
A better analogy is picture your testicles between two rocks, and the rocks are forcefully coming together.
trick question, there is no solution....let markets and economies regress back to means, start over. If not for us, for our children and their children.
There is a solution - get fiecally nationalistic - Do an Iceland - have a national referendum as to whether you continue pay off interest to your foreign creditors on debt so huge it will never be paid back or default , declare bankruptcy and press reset
The ominous tone of CNBC World this evening from guest after guest spelling it out in great detail, the complete and total economic collapse of world economies, I thought they were a televised version of Zero Hedge almost.
Perhaps they're just trying to cover their asses not to look so stupid up against the likes of the ZH crowd.
Maybe I missed it but I don't think he mentions marking assets to market price.....instead of the current book fudging mark to fantasy that the TBTF's use. That alone would be a huge first step.
i'd rather picture your testicles in that situation. :o )
Look at what Bob Wenzel at EconomicPolicyJournal.com is saying- he's the only "bull" out there right now, because he clearly sees the effect of the monetary inflation.
Have you wondered why the numbers have been "better than expected" in some areas by the Keynesian shills? Why the market seems to be defying gravity, despite the babdbadBAD news from EU, China, etc.? Why real estate is rising (nominally) in some regions?
The money the FED has been pumping for the last few years is finally making its way into the US (and EURO) markets, and although it will be a small (tiny) boom, the next few months of data will show a (marginal) recovery. The Wall St shills will use it as evidence that "our government/FED is working!" while the reality is that it is merely the result of new money entering the system. Look at the real estate/rental prices in SanFran, or the hiring data in NoCal. Look at the "mild" recovery in bigbiz numbers.
The Bernank has printed so much fucking money, and some of it is finally leaking into the "real world" and inflation is going to heat up HARD! The EUCB is printing hard now too. The Chinese CB has been doing it for a decade...and it's hitting them now.
The crash is coming. It's like a junkie that found a stash of Oxy in his mom's medicine cabinet, and has shared them with his friends. They've all put off the withdrawal for a few days, but once those last pills are snorted then the whole group is going to crash HARD.
The next few months, maybe even into the spring, are going to be sweeeeeeeeeeetttttttt for the .01% and their dupes in the stock market. The S&P might even bounce 30% or so, based on hopium.
But once it crashes, and one of their buddies (China, EU, Japan?) crashes, then it's all over for the rest.
I follow EPJ and so am familiar with the money supply/boomlet position. I'm not really bought into it though. Seems to me that all depends on what is actually done with the excess $$ and what role inflation plays. With so much uncertainty and fear in the equation it just seems like quite the stretch to call any real bubble blowing. Time will tell though.
The bubble is already blown--United States Bonds
Things are getting so bad don't be surprised if they decide to close the banks on Monday.
"Unlimited cash for banks"
Hmmm...who said this on Bloomberg?
I guess the more the financials get their ratings cut, the more free cash they get?
PMs are going to the moon, then.
Printing races are ready, set...
Speaking of ratings, below junk should be a 'totally crap' category (which most fall in to).
walkin' on air
sure make Social Security further and further away, while they are required to pay thru higher taxes annd less service the public employees, who also receive their pensions and defined benefits at much earlier ages and most of it is PAID by the private sector......
so, terry, basically you want to really institute austerity here in america...
good luck....
Not to step out of line, sir, but did you not train/educate to send men into the core of human phobia? When any soldier under your command asked you point blank, "Will I live to see my little girl?" what did you say? There is only one response.
The simple truth is that there is going to be a price paid. Not everyone is going to go home. With training, and a little luck, we might get to see the other side, but I don't think everyone is going home the same. Stop expecting anything other than the hell that is coming.
I mean these words in terms of earning power, standard of living, and consumption.
I hate to sound like an ass, but I read a lot of history these days. I don't think I know what is coming, but I have tried to understand it. I don't think I am prepared, but I am steadily adjusting to compensate (food/lifestyle/spending/etc). I may not "go home" and I may not "be the same", but I can assure you, sir, I will give them fucking hell before I get packed in a bag.
So spare me the austerity cry baby shit.
Regards,
Cooter
Austerity = Darwinism at work. If you overspend in the past you have to underspend from now on to balance it out. Austerity therefore will be in full swing like it or not.
yes, good cooter, i did train men for war, and i was very good at it,i had very good teachers, who learned in thecrucible of vietnam....
i served the masters of commerce....till i knew better...
my observation had nothing to do with my personal feelings...just with what i see in the streets of the cities...it hasnt even gotten bad yet, austerity...and there already protesting...
greece is a good example of austerity, only, the greeks do not have nearly the amount of weapons americans have...yeah, something bad comes this way...
no crying here cooter, just observations...
i try not to make battles here personal, for this just so damn educational, the hedge. as a wise ZH'er told once, this is not face book....
p.s. sedley butler was right....
thank you, more food for thought...
Ah, I got'cha sir. My gift and I suppose my curse, is I don't read things like regular folks. I tend to miss some of the obvious and tend to catch some of the not so obvious. Pays my rent real good, so I can't complain. Doesn't make me lots of friends though.
I kind of feel that folks know its coming, but the most of the comfortable have their head up their ass. The middle class and the not-really upper class are in for a rude awakening me thinks. They don't have the mental plumbing to handle what is coming down the pipe. I shudder to think what urban settings will be like in the not-so-distant future. I bailed as fast as I could; moved to Alaska in my car with nothing else! Best damn thing I ever did my whole life.
I think rural America is going to hang in there just fine. I feel sorry for domestic forces (criminal or otherwise) that show up in armed counties trying to project influence. Small towns are going to be a real rough ride for any outsiders.
I really feel this is what "fast and furious" was all about. The big miscalculation though is that fire power is less than experience/training. Urban will be hellish if things go bad, but rural areas are going to be the opposite. That said, I wouldn't live near a border state for anything.
Not to be pedantic, but its Smedley Butler. Buy his book and read it. Short, sweet, and spot on. We are a modern day colonial power, old story.
Toss this in your reading pile. One of the best PDFs I got off ZH:
http://esocap.com/uploads/files/Dying%20of%20Money.pdf
I found this really good insight (even if almost 100 years old) regarding how wall street works:
http://www.trading-naked.com/library/jesse_livermore.pdf
NOTE: Save both PDFs now, they don't last long on the web.
Lastly, head over to KWN and pull down all the Jim Rickards interviews (~40 something of them in total). One of the best free monetary policy educations you can get for free. JR calls it like it is, has great insights, and is a hell of a communicator. I got my head screwed on straight and I learn stuff from him on a regular basis.
Lastly, I recommend you high tail your ass to Alaska. Biggest state in the union. Smallest population. Heaven if you like the outdoors. Stick to the SouthEast, the weather is nice. I carry on about it here at my blog.
http://allthefederales.blogspot.com/2011/04/why-alaska.html
**carries on**
Cooter
cooter, i would love to go alaska, but my obligation here, plus other factors, will keep me here in the city. yeah, i know, not the best choice....
i am already livin' the SHTF senario, and have contigencies in place, believe it or not, im probably going to do alright...
just food for thought, cooter, NORTHCOM is fully up and running, even has combat units under its operational control, namely the 1st brigade,3rd infantry division. i would advise you to look up the above units, espeasally equipment. field artillery, tanks, bradleys...all to help for civil unrest in america. this is going to be interesting....
I made a sort-of mistake when I signed up army back in '92. I should have gone O instead of E. My brother retired O from the USMC and my sister went to Kings Point. I understand now that autism runs in my family. I was an odd duck growing up and I didn't have a clue about how anything worked. I joined based on an opinon of a teacher I had and liked (in addition to my passion for constituional freedoms/rights).
In hind sight I should have done full time instead of reserve. I honestly believe if I had pulled the right gig in the Navy or the AF, I would have been career and of far greater value to our nation. I just fucked up picking my MOS and commitment. Young and stupid, not much more to it.
Civvy, I ended up a software engineer and I am really damn good at what I do. I can't handle stupid. I go off on bosses/clients/whatever when they get full-retard. I found my groove. I understand now how I fit in and what I can offer/do, just getting older I guess.
Crazy as it sounds, I looked at re-upping here in AK at close to 40 years old. I just don't have the opportunities I need to make a difference. I got sucked in via a Navy InfoWarfare officer gig, but it turns out its based in Anchorage (1k miles away). There is an ANG gig in town, but its MP type stuff. I am too old to fold deck chairs. If I had a good O spot up here ANG that let me offer what I got to offer, I would take it in a heart beat. But I am closing in on 40 and I only got to offer what I got to offer.
Just be safe brother. It is all about neighbors; take care of each other. You know the drill better than I.
Drop me a line at my moniker at gee mail dot com some time if you make it up this way. I am in state next Feb. I hope to start hiking to fish once it doesn't cost me an arm and a leg. My Zanotti is on back order for many months, so hunting is on hold for a bit til I can work things out with my old man as far as getting my guns up here.
Regards,
Cooter
Well said, sir.
Appreciate the links. Alaska is one possibility. I like the idea of being dispersed all over the u.s.
Redundant systems, if everybody is in one place - that place just became a target. Spread out and survive.
"I may not "go home" and I may not "be the same", but I can assure you, sir, I will give them fucking hell before I get packed in a bag."
Well spoken, and I believe said with sincerity. Sounds like you have the right idea. I too fear what will come, especially since I am young and have a hard time picturing the lost decades that may be ahead of me. I know my generation will have to sort out this mess and pay dearly for the losses. At the same time, I am glad I am young, as I have little to lose.
" I don't think I know what is coming, but I have tried to understand it. I don't think I am prepared, but I am steadily adjusting to compensate (food/lifestyle/spending/etc). "
I don't think anyone ever really feels prepared. But just knowing what is ahead is priceless, IMO. I too am realizing how little I need, and that has been a blessing. I have re-discovered the joy of books and spent two hours today watching a rainstorm move across the horizon. Its the little things. Not all of the "austerity" has to be a bad thing.
"At the same time, I am glad I am young, as I have little to lose"
Allow me to correct this statment:
"I am glad I am young, as I have no idea what and how much I could lose."
Stay safe, stay strong.
Make tax rules less stupid by not taking one's property in the first place.
Even simpler:
1) Liberty
2) Transparency
3) .gov keeps hands off! No bailouts, no welfare, no intrusion.
Then the USA comes roaring back!
You forgot:
4) Shoot unemployed, starving, rioting looters...
5) Kill sick, obese and anyone over 70... that will surely save a lot in medicare and social security
And don't forget about the rest of us - not shot because we are too old, sick or fat - living our lives in cut-throat competition (with each other and with asia) just so we can consume our way out of the crisis, and to keep capitalism going forever!!!
...and speaking of liberty and .gov hands off : RON PAUL 2012 !
most ppl criticize the fiscal & monetary stimulus of 08-09, without addressing the mechanism used for the distribution of capital. Namely wallstreet, and too big to fail banks.
The big banks, a hydra of retail & investment banking, are notorious for obscuring, or overlooking risk for short term quick profits from financial engineering, instead of investing in low risk, productive enterprises. So capital has been misalllocated to the non real, speculative parts of the economy, while the real economy is starving for fresh capital. This can in part explain the failure of the stimulus programs to create jobs, and/or the same level of output, prior to the financial collapse.
So any more stimulus using a broken mechanism, like the current financial structures, processes, and incentive schemes, in the banking system, will lead to further misallocation. And once again tax payers will need to bail out the banks.
Keep in mind that FDR nationalized the banks, cleansing them of their financial inefficiencies, and myopia for quick risky returns, before applying his stimulus programs. So the mechanism woould once again distribute capital to the productive parts of US economy.
#occupywallstreet
That's right, dipshit - take the power from the bankers and give it to the government. Problem fixed. You're a fucking idiot.
oh yeah, and the better solution is to let the investment side of banks continue to pour capital into speculative plays so they can cash out from big bonuses and stock options, instead of having the retail side loan out capital to small, productive businesses, but having lower ROI.
yeah that's a brilliant idea. Ignore the productive part of the economy. How are you going to get a higher national income, if the US becomes less productive over time? Higher national income correlates with higher wages for the median worker.
your solution is to watch the world burn, while licking yoru bar of gold, like it was a petitle 100lb street hooker.
I still believe in government, becuase I've studied history, and know governments can function to life everyone up.
governments can function, if everyone wasn't so polarized by their ideologies, thereby limiting policy options.
Oh, of course governments can function --- and it's what they do when they function that is precisely the problem.
Government is nothing but a disease masquerading as its own cure.
Throw off your self-imposed mental shackles and see the abomination of government (i.e., institutionalized coercion) for what it really is: slavery to sociopaths.
you do know what happens when you lose the leviathon, that is government, or nation states, don't you?
societies tend to degenerate into tribalism.
Or they "degenerate" into liberty, as the early USA did --- for a while. Too short a while.
oh--early US liberty--the great libertarian period when women were considered property, yall had slaves, and murderously stealing land from the Natives, and Mexican, was the norm That US liberty? The liberty where, if you were male and white, it made right.
yes.. let's bring that version of liberty back.
I see that your historical ignorance and crippled logic is on par with your intellectual bankruptcy.
It is nothing but a strawman argument, and a logical absurdity, to suggest that because one desires to live in society significantly more free than that of today's, as the early USA certainly was, that one therefore desires to turn back the clock and recreate that exact society down to the last jot and tittle. We need to move forward to liberty --- not backward to the past, however freer it may have been.
Please go back to Logic 101.
errr.. did you not read the part about woman being treated as property and slavery? Those conditions existed in the early US. If you were male, and white you had freedoms. Everyone else did not. And you didn't have a Christian name, oh lord help you.
So if you're going to appeal to the idllyic early US, I wanted to remind you of the material conditions of other parts of US society, then.
ok let's move forward.. let me ask you this hypothetical moral question:
let's assume for a minute advance human cloning is possible. This is the future afterall. Should you be able to human clone yourself, and use (its) body parts to regenerate your own, due to old age, or the accidents of life, but killing, or maiming it, in the process?
subtext: if a human organism. through cloning, becomes property, can you use it for your own purpose? Or is liberty innate to the human condition, so that would be taboo, or 'illegal'. It seems to me that there will be an eventual conflict between property, and liberty, once advance human cloning comes to be.
I refuse to allow you to divert the topic of discussion.
I said that the early USA was demonstrably, even vastly, freer than our society today --- and if you were honest, or had an inkling of a clue about American history, you would have to agree. Notice that I did NOT say that it was perfect, or that some members of that society were treated abominably, because they were. But for the overwhelming majority of citizens, it was almost an anarchy (i.e., without government, i.e., without institutionalized coercion) than the near-total police state into which we are degenerating today.
BTW, your human cloning question is irrelevant to the discussion --- whether produced by natural birth or cloning, a human is a human is a human, so such a person would have every right that any other human has.
yes, but in that hypothetical, and likely future world, the human(oid) is property, and as a libertarian, shouldn't you support property rights? Thus the owner can do what s(he) pleases.
And what of life or death events? Like if the owner need the clone's heart to live, or else the owner dies (yes this question is loaded).
So in the case of clone v. owner, you would side with the clone?
There's no right or wrong answer. I was interested in your logic. And I do forsee a time in the near future when a possible contradiction between liberty, and property arises, and will need to be addressed.
The "contradiction" is entirely within your own mind --- I fail to see it whatsoever.
A clone would no more be "property" than any other baby would be; the method of conception is irrelevant to the status of the individual as a human.
Not to be the creepy, pedantic, autistic ZH freak-a-zoid, but I found your profile/history quite interesting. I expected a troll profile, but you are around (officially) about as long as I am.
So, I felt I needed to look closer, maybe you are real, and maybe I am missing your point. I am here to learn and I really like a good contrary opinion. So, I ripped through your last 20 posts or so, via your profile, and I must say its ... curious. Very curious.
My history is very consistent, for those so inclined. However, you seem to waffle from semi-cognizant posts to out-there-bat-shit-crazy, depending on the thread. There were a few posts were your position was reduced to "..." and nothing more.
I think you have more than one face. Maybe, a worker bee face to earn some street cred, then you suck up an 8 ball and go nutso like tonight.
What say ye?
Regards,
Cooter
We always supposed that Johnny Bravo (MasterBates), the notorious gold-hating troll, was more than one person. Posts were too close together and overlapping for one person to have actually done the writing and posting. Who can say?
dr, have you seen the film 'Never Let Me Go'? it totally plays around with this subject
it's kinda great ;- )
That's a stupid question, since organs can be cloned on organ-shaped biodegradable scaffolds. You don't need to clone a whole human just to produce a kidney; that would be unbelievably expensive, pointless, and wasteful.
Why is it that in any discussion of liberty, someone chimes in and compares freedom to converting humans into expendable meat sacks?
Freedom = slavery, right?
Keep the wealth and power amongst the many. The middle class. I think this is what the forefathers intended. TBTF will fail every time. Humans can't handle that type of responsibility. Just look at how our elections and political system operates. We elect our representatives to represent us th majority, yet they represent the few instead of the many. Jefferson told us not to make this mistake. Rothchild said...if you make this mistake...I can defeat any standing army. What will be coming is what we deserve.
Small thinkers like Dem's who need to be told what to do descend into tribalism and howling mobs. People like me build communities, alliances and systems to take care of people like you. Once taken care of you slither your way into power because we are too damn busy to care then real .gov takes hold and the cycle begins anew..
unfortunately, dr, governments, like 100 lb petite street hookers, get ugly, worn out and irreparable.
Casey Research rocks. Too bad that there is almost zero chance that any of these suggestions will ever be implemented...
big legislative agenda from the casey/sprott "summit"
"Let go of the minimum wage"
Maybe you don't know of the fact that all organisms, espeically mammals like us, are inheritedly selfish.
Would you do your research for $2.23 an hour, 40 hours a week?
The minimum wage law does nothing ot solve the problem, either for or against, because we all know the cat is out of the bag, now: Inflation has made the USD worth shit. The only thread it is hanging by is tghe fact it is the world's reserve currency, which is grossly over-leveraged.
That why I hate hearing those say suggesting austerity is the way out of this. It isn't. YOu are ignoring the SIMPLEST of math: The inflation is outpacing the growth of the country. That is an unsustainable model for ANY ideology.
Hey dumbass, did it ever occur to you if I had a business and offered $1/hr for a clerk position it would never fill? My business would starve because I didn't offer enough money. So, doesn't it follow I pay what the market will accept?
Did it also occur to you I might create jobs at below minimum wage and, if available, folks might take them? If so, that is someone sitting unemployed that suddenly has a chance to make something. But maybe the numbers don't work at the current minimum wage level, so I stomach the loss in business and drive on.
Get it yet?
You see, the position is worth what its worth. Minimum wages are price controls. Price controls never work. Rome tried it. Didn't work. Nixon tried it. Didn't work.
The real lesson is ... if you don't like making shit money doing shit work then get some skills that are worth more.
And before you give me some hard luck BS story, I cut firewood to heat my home growing up in a rural setting. I volenteered for school money and worked my way through school. So, suck it (for less than minimum wage).
Regards,
Cooter
Lol. No more trees for firewood these days. They cut them all down to build McMansions.
No shortage of trees up here in Alaska. My town has about 30k people. I think its a hundred miles or such before the next community. No roads, so take a boat or a plane. Pretty ride, nothing but nature the whole way.
Oh, yeah, you meant in the really broad global sense of deforestation. Or something.
Just to point out the obvious, trees capture SOLAR energy, store it chemically, which is why you can burn wood for heat. Coal? Same thing, just a few million years in between. Oil? Same thing. Hydro-electric power? Same thing.
(If you can't figure it out - rain comes from the sun heating water sources - evaporating the water which overcomes gravity - vapors that later cool/condense and falls from the sky - hydro is solar energy)
In all cases, the sun provides the original energy.
Dumb ass fuck tard.
Regards,
Cooter
maybe Apollo will help us pay off the debt
No trees? HAHA, you are funny.
Someone must be from Los Angeles.......
Roughly 30% of the United States is forested. Most of the decline of forest land, according to many sources including dept of forestry, is due not to harvest for lumber, but rather to the fact that much has been converted to agricultural land.
Trees are a crop. Lumber companies plant for future harvest. Unfortunately, because the gov't manages a lot of the forest lands and does not allow any cutting, many of the forests have massive wildfires and burn. Also, incentives to plant are minimal because there is no private property interest.
If you want to see how "few" trees there are in the U.S. I suggest you take a flight over the Pacific Northwest and look out the window.
I logged in to 1up you. Nice diatribe.
Even Ford realized there was no point in mass producing his vehicles if there was no one around who could afford one.
An international minimum wage (combined with sound money policies) would be far more effective than any race back to the early days of the industrial revolution.
Yes Ford realized there needed to be someone who could afford to buy his cars. That's why he paid his workers twice the going rate. An international minimun wage? That statement suggests stupidity.
Hey, I never said it would be easy. But then lots of things worth doing aren't, Homer.
It's not worth doing and not easy. Just think of the kind of international laws and international enforcement it would require. Either you believe in some kind of world order, or just don't think. I hope it's the latter.
Right, I forgot I was posting on ZH where if you`re not promoting post apocalyptic homesteading on a PM placer mine, which you defend vehemently by shooting dead any non-white (or white, depending on your perspective) that comes into range, then the only conclusion that can be automatically jumped to is that you simply must be advocating some sort of dismal global authouritarian Marxian dystopia... there is/never was/ can never ever never forever be any middle ground where sovereign nations make multilateral agreements that all involved parties consider binding. Oh, yet somehow contract law is the only immutable truth that should dictate anyone's sense of honour and actions, I should add. Well, either that or you're 'stupid'; for no other reason than some duped pigheaded zealot who views his precious putative rote as fact doesn't agree with you, lol.
What a bunch of extremist drama queens.
Your fervent defense of minimum wage laws, which any REAL (i.e., free market) economic thinker knows are wrong-headed, economically distorting and completely counterproductive, despite all the feel-good, muddle-headed warm 'n fuzzies they give their statist supporters, is enough to make me realize that you are still trapped in the status-quo and statist mindset. Get back to us when you wake up from the statist nightmare; until then, enjoy voting for 'bammy one more time (assuming he gets the nomination).
And that personal attack proves you right again Akak, just because you always say so.
Suggests, no. Proves vast oceans of ignorance in economics, yes..
Narf narf. Ignorance of reality is you Econ 101 types praying at the Mankiwian altar
...Even Ford realized there was no point in mass producing his vehicles if there was no one around who could afford one...
I keep hearing this stupid fucking argument. Do you think you can run a company at a profit by just selling your products to your own workers?
Let's examine what happens when you pay your workers higher wages. You have to raise the price of your product... which makes your product less affordable. Thus you sell fewer cars, not more. He was harming the creation of wealth, not helping it, by paying his employees higher than market rates.
I should also add that until Ford came along, cars were a luxury item, so his mass-produced vehicles were much cheaper, and he could afford to be generous. Once he had competition, which could and did hire workers at market rates, Ford would have gone out of business if he'd carried on paying his workers extra.
Paying his workers higher than market rates may have made him feel good, and earned their loyalty, but it had nothing to do with making his cars more affordable - the cars' final price had to reflect labor costs.
Do you think somehow everyone would be richer if we paid more for steel? Or oil? Just because the people receiving that additional money would have more to spend? How long have you been coming to ZH? Wake the fuck up.
Well thought-out and well said, BigJim.
This GoinFawr, isn't at all, when it comes to basic economic thinking.
Thanks.
I was so outraged by the mindlessness of this oft-repeated claim I wound up using more expletives than I intended.
So, my apologies, GoinFawr, but really... by now you should know better than to repeat such tripe.
Your fluffer might be keeping you right hard, but that hardly means you`re keeping on the side of right.
No apology necessary for the strong words, if I was thin skinned I certainly wouldn`t be hanging around ZH, lol!
You may possbily be thick skinned, but you are certainly thick headed.
For having hung around ZH for quite a while, you apparently still have yet to learn the basics of honest, free-market economics.
Oh Snap!
And you sir, having spent far too much time hanging around ZH spouting your 'anarcho capitalist unicorn that shits rainbows and skittles' ideology, have apparently yet to learn the basics of reality; not to mention historical precedence.
Oh, now THAT is rich, an economic (if not more broadly committed) statist talking about historical precedence! If there is one thing the bolsters, however feebly, the coercive, statist mindset, it is an ignorance of history, particularly monetary and economic history. As witnessed, for example, by the massive flocks of sheep currently being scared/herded into the "safety" of US Treasuries and the fiat US dollar by the historically unprecedented (and absurd) so-called "threat of deflation", when ALL historical precedence points to a deeply and unsustainably indebted government such as ours eventually debasing or destroying their fiat currency, instead of seeing their currency appreciate in value as a result of dealing with that overwhelming debt.
Erm, I have repeatedly provided examples of successful mixed economies, that exist today. I am certainly willing to consider examples of any 'anarcho capitalist' systems that exist, or have ever existed (with a half life of over 30 seconds IE).
You don't have to 'love' something that is necessary or inevitable, but you might have to accept it to some degree if you want to function in the real world instead of dreaming of 'fantasy island'.
It's too bad you're having such a bad day in the markets, but please stop taking it out on me. It must be all the 'regulations' and 'onerous civil oversight' that is the cause.
Re: your "successful" mixed economies, one can argue that there are also a fair number of "successful" dictatorships in history as well; I guess it all depends on what your definition of "successful" actually is. "Successful" compared to what?
Like all statists, however, you routinely fail to see, or even consider, all possibilities, or the unseen alternatives to your "successes". Your so-called "successful mixed economies" would in all likelihood have been even greater successes were they freer and less statist/coercive.
I am not content to live in one of the "freest" or "most successful" prison camps in the world.
Sigh, 'successful' in terms of their degree of employment, standard of living, literacy rates, political involvement, fiscal responsibility, how they treat those they consider the least of their populations, social mobility, longevity, access to quality healthcare, civil liberties, the application of the rule of law to all, etc etc. You know, the criteria anyone with access to a dictionary would use to define 'success' when referring to a nation.
'So-called' indeud. I wonder if the majority of the residents of those nations I've mentioned feel the same way you do.
So essentially you've nothing then to back up your conjecture but theory, no practical applications to speak of whatsoever. Zero, zilch, nix, naught, nothing, nada; just your utopian pipe dream.
I' think I'll continue to look to existing, real world examples for solutions, rather than your half baked assertions, thanks.
[Would you do your research for $2.23 an hour, 40 hours a week?]
What a moronic statement. If the minimum wage were zero, why don't you tell us exactly how many people would work below their cost of labor production and below their expected future return on the investment of that work?
Of course the answer is zero, not even slaves are worked at that rate, only perhaps political prisoners. In a free country you only work if it is worthwhile to work. Lack of a minimum wage does not mean anyone will be forced to work for zero, anymore than if you raised the minimum wage to $1 million an hour anyone would find work at that rate. At any given moment and location there is a natural minimum wage that is far above zero and varies by person, not by government dictate.
Right now I work on a project that is literally brining me about a dollar an hour. Why would I do that? Because I can eventually expand that business into one where I get paid even when I am not working, essentially making my pay per hour potentially limitless. With a true minimum wage, I couldn't even afford to work for myself right now.
In short, the minimum wage doesn't increase average wages, it simply decreases total employment. Nobody works for free or below thir base sustenance levels, unless perhaps they are an idiot progressive to stupid to calculate the fixed cost of their own labor.
Sounds to me he wants to be Donald Trump's Treasury Secretary. Where is the China bashing?
It seems Casey Research needs to do some more real time home work; 50 years of ' I have a dream' now go tell the millions upon millions they can't dream. No the Socialist will use this crisis to create another dream. Wake up Casey this isn't Kansas.
-----now go tell the millions upon millions they can't dream----
Let them dream...... Just put a small temporary tax on dreaming...
I have to ask, because that word 'socialism' keeps coming up on ZH, but y'all must be referring to something else... I mean, Segestan, would you consider Norway to fit that bill?
If so:
http://www.guardian.co.uk/news/datablog/2010/may/27/debt-deficit-oecd-countries-data
the table that link contains tells a success story... isn't it considered wise to learn from functioning examples, rather than, say, flogging a dead horse?
(FWIW, I would call Norway a 'mixed economy', but even that seems to get ignorantly plastered with the same Stalinesque mustaches every time by derperate (sic) zealots determined to perpetuate ideological misconceptions by monkey hammering square pegs into round holes)
When the luck of their geography runs out then their socialism will die and it will be seen for what it truly was, a selfish waste of natural resources so the present could have all their wants satisfied, future generations be damned.
And that's just wishful thinking on your part.
Call me when it happens, until then you've got nothing but hubris and everyone knows it. Eg. How did Norway fare in late 2008?
Their Sovereign Wealth Fund seems to be doing just fine.
Last time I checked Norway has been around a fuck of a lot longer than some NA nations that don't need any mentioning.
'Luck of geography', what a load of malarkey, as if the US didn't have a much higher ratio of natural resources per capita, before you allowed them all to be appropriated by a handful of plutocrats, lol.
norway is a good country, strong and stable. good social cohesion, but there is a price. iits a bit dull. the us is many things and i wouldnt want to live there(i have spent one year over there) but it is never boring
this may sound stupid but i doubt that hip hop could have devoloped in any other land, it makes me wonder if its not worth all the misery and violence, when it produces new and vibrant art forms
try more sex in Norway...to reactivate the spice pump without making it into sex war. Being bored in life is like not having imagination. In the middle ages, when women's perfume first became "sexy" and being a 'virgin mary' was no longer the thing to be in civil society, they invented courteous love, fin amor. It was sex and yet consideration for each other. The way to go to avoid boredom. Not saying it has to be mindless porn...which is degrading for both sexes. With women's freedom today in this domain, you'd think that we now have a level table to being sexually happy as we can pick and chose partners and still have a stable family. If you allow the same freedom to your legit partner. I don't understand the regressionary trend in current civilization. We have every thing to be happy and more. And yet we are living the greatest material and moral crisis since eighty years!
You Norwegians should show us the way now. But please be less bored.
Nice post hoc. (the fallacy)
BTW, the economy here in Alberta is a lot like that of Norway, just smaller. Commodity (oil) and machinery (oil industry) are their main exports and the MASSIVE revenues possible in that sector fund the government's programs. Government revenues set their watch to the price of oil. The state loooooooves the oil patch but the economy depends on high oil prices. (Thankfully those will mostly continue to go up. For as long as I'm living here, anyway.)
Watch for oil prices to drop right around the time your Premier decides to revamp your provincial royalty rates (or vice versa). Wait a sec, you just got a new PC leader! And with a provincial election coming up to boot... what's your take on her? True blue or red shoed?
And you're right, I concede that it doesn't follow that Norway faring better than most in the latter part of 2008 was a result of tct's hubris; OTOH only a pedant would have read it that way.
Look Socrates, any rhetorical clumsiness on my part aside, the point is clear to anyone who frequents this site:
-on ZH the word `socialism` is invariably denigrated out of hand as a failed ideology, even though more often than not the detractor is really just misnomering Stalinism/authoritarianism.
-All who do this consider `Yerapeein` politics `socialist` as a rule, and would certainly include the Norwegian system in this category.
-Norway is the very antonym of a `failed` state, by almost any metric you can conceive.
All clear now?