patrick.net

COLLAPSE, BITCHEZ!!!

Stockman, another ex-Wall Streeter peddling lies to the peasants.

http://www.huffingtonpost.com/michael-s-lofgren/crackpot-realism_b_3034313.html

http://research.stlouisfed.org/fred2/graph/?g=hib

gov't spending / total wages in the country

doubt we'll see it go under 50% again

for one, social spending on boomers (SSA & Medicare) is going to balloon from here

theoretically a dollar of SSA should create more than $1 of jobs, but our economy is really broken in the velocity department:

http://research.stlouisfed.org/fred2/series/MZMV

mell says

It goes without saying, in fact, that the precarious plight of the Main Street consumer has been obfuscated by the manner in which the states unprecedented fiscal and monetary medications have distorted the incoming data and economic narrative.

That should be read again by every Patnet liberal, then over again, until it sinks in.
It's the same mechanism that erroneously credits Obama for doing dickall.

Vicente says

peddling lies to the peasants.

By pride comes nothing but strife,
But with the well-advised is wisdom.

http://www.youtube.com/embed/Brp_7XHuS0E

What's your solution CaptainShuddup ? Seems kind of easy to whine about Obama. These problems were decades in the making. Enlighten us, with just a few of your ideas on how to fix things.

CaptainShuddup says

The Keynesian polices of this administration is not only creating a floor for the poor, but they are excavating beneath their feet, in an effort to undermine them and send them straight to economic hell.

Agreed.

humanity says

Enlighten us, with just a few of your ideas on how to fix things.

Oh here we go again.
Remember how it was before we started playing with 'Funny money', all I propose is we do it, 'that way!' again.

That's a lot of gold for China then.

Maybe tracking our trade deficits in gold, would force some interesting changes. I'm not smart enough to know whether those changes would be good for the poor though. Maybe you could put up some massive protectionist walls too. Forget globalization, maybe even get behind rebuilding communism in certain parts of the world.

It's a big interconnected puzzle, but it's nice that simplicity is the armchair quarterback's friend.

I mean a time after the gold standard and right before the Keynesians kicked in high gear, around late 90's, just right before it was called "the global economy".

That was the sweet spot, where all corruption was prosecuted, investors were protected by the government, and not raided to pay high corporate executives,
shady investors went to jail, inflation and deflation ebbed and flowed by the whims of the consumer, rather than the Fed playing "one for you QE for me".
Back when a dollar was just a dollar, before Greenspan created the notion, that for every dollar a bank has, they have ten dollars in credit. Back when banks paid interest on savings accounts and even more for CD and Money Market accounts. A time when banks earned money on interest paid, rather than low to 0 interest loans, and then constantly going to the FED with hat in hand.
A time where it was in the Governments best interest to limit(to an extent) on the reach of big business, or at least make sure they weren't actively trying to crush all small businesses, by dumping their merchandise bellow cost, then when all of the small business competition is gone and then they are the monopolies, they are free to not only raise prices, but also have all of the products manufactured over seas. I mean come on, we just bitched at China for doing the same thing, dumping solar panels, at least they should have been commended.
Most importantly a time where consumer, grain, and livestock commodities weren't played and rigged so much to the point, that the wealthy class has to keep raising prices on the dinner menu, so they get their financial freak on.
It was in the government's best interest to keep energy prices affordable, so we didn't end up with what we have today. Inflation/Tax/Price pressure on every single item traded, and every job in Ameirca, is hinging on where the price of Oil goes next.

OH and a time when no President would ever get away with operating with out a budget, whether it balanced or not.

You were making some sense up to and not including about here

CaptainShuddup says

before Greenspan created the notion, that for every dollar a bank has, they have ten dollars in credit.

after that, not so much.

I think the steps in the negative direction we took in 2001 - 2004 were more the fault of the president, than the ones taken since the crash of 2008. But I'm with you, that monetary games being played (by the fed) now are very dangerous.

Back when banks paid interest on savings accounts and even more for CD...
I was going through some old files to make room for new tax documents last night -- shredding and purging. At any rate, I almost did a spit take when I saw the interest rate on an old CD I once had over two decades ago: 9.25%.

EBGuy says

I almost did a spit take when I saw the interest rate on an old CD I once had over two decades ago: 9.25%.

Yup! But that was when homeowners in Ameirca were paying the growth of America. They paid 10 to 12% in interest on a loan and banks paid savers a chunk of that back to savers, who saved in their bank. People planning for the future did it by saving, not playing the 401K casino.
Interest on Savings account accrues on all of the money you have. Unlike stocks Where your shares may go up in value, but that only means you'll need even more money to buy more shares. Money in the bank grows exponentially, there is no "Oh fuck" moment, when the Newsies invent a new crisis, for the Bankers to take bigger bites out of your stocks worth.

CaptainShuddup says

Well my clueless friend, unlike YOU, I actually know poor people. I've known them all my life. They have never had less than they do right now. Just because Obama says he's doing things, just so you can gush and say "what a guy, what a guy", the poor are getting shit. Funny you mention Social Security in your list, when it is the liberals right now in Washington, and echoed by the collective Patlib, to end Social Security. And more over, SSI has always been there, it's what Obama is doing to it, today that is the travesty. And you call it an accomplishment?

Yep.

CaptainShuddup says

People don't want unemployment insurance, with out an effective jobs policy that will actually create jobs. Instead they are enticed to extend UEI so far to the point, that every HR department hiring manager in the US, deems them unemployable for life. Because they took the dole for 18 months, while sitting on their asses eating bonbons and watching soap operas.

Nice fucking guy, Obama doomed an entire generation to entitlements for life, because there's not a company in the world that would hire them with a ten foot pole.

Well said.

Maybe it's because I don't know anything about Stockman, and therefore don't know which "side" I'm supposed to be on, but I thought the article was brilliant. Seems like you're all still trying to reduce everything to partisan talking points, when what's happening to this country goes so far beyond that.

Homeboy says

Seems like you're all still trying to reduce everything to partisan talking points...

Oh that's just a new Liberal talking point to shut everybody up, when the other side is making too much sense.

The Professor says

At what point did the money become funny?

Nixon closing the gold window, yes.

http://en.wikipedia.org/wiki/Nixon_Shock

http://research.stlouisfed.org/fred2/series/CPIAUCNS

Homeboy says

Maybe it's because I don't know anything about Stockman, and therefore don't know which "side" I'm supposed to be on, but I thought the article was brilliant.

The article was full of shit. It did hit nicely on the "Kunstler" themes of EVERYTHING IS GOING TO SHIT and here's plausible-sounding reasons.

Starting from the use of Keynes in the title and as a strawman.

Reaganites love talking about Keynes, but their grasp of ANY economic school of thought is about ankle-deep.

Vicente says

The article was full of shit.

What, specifically, was untrue in the article?

It did hit nicely on the "Kunstler" themes of EVERYTHING IS GOING TO SHIT and here's plausible-sounding reasons.

I don't see any similarity at all between the two. Stockman didn't say everything went to shit; he says the economy went to shit, and he's right. Do me a favor - go find yourself a chart of the distribution of wealth in the United States over time, and then tell me things haven't gone to shit.

Starting from the use of Keynes in the title and as a strawman.

Reaganites love talking about Keynes, but their grasp of ANY economic school of thought is about ankle-deep.

I'll tell you who's full of shit - Keynsians. I consider myself a liberal, but I draw the line at licking the ass of people who gave all my money away to Wall Street just because you think I'm "supposed" to. Fuck that.

I saw Stockman on The Daily Show tonight. He didn't say a single word I didn't agree with. Stewart started out the interview obviously thinking he was going to do battle with Stockman, and by the end, they were both in complete agreement.

You can slap all the superficial labels on it you like, but he makes a lot of sense.

When did liberals decide to start defending crony capitalism, anyway? That's not the kind of liberal I want to be.

I disagree with Wall Street worship as well.

BUT he did seem to have some concept that regulation and taxes should "store nuts for the winter". Sounds like a grown up idea but something nobody in power in last 30+ years remembers.

Was Alan Greenspan a Keynesian? Plenty of crony capitalist enablers style themselves as libertarians, randists, and others who all spit on Keynes.

Vicente says

Was Alan Greenspan a Keynesian? Plenty of crony capitalist enablers style themselves as libertarians, randists, and others who all spit on Keynes.

All you can do is cry about crony capitalism when most of the Keynesian money went straight into the pockets of the people that you so despise. Instead, acknowledge that the Keynesian method failed because of human nature and look for alternatives. The more money/credit you make available, the more crony capitalism thrives. Sure, you can try to reign in on that with higher taxes, but money has a tendency to evade and since a lot of people who benefited form the spending are in your camp as well, it will be very hard to progress with any significant taxation (rich democrats and republicans alike have their money offshore). Meanwhile the budget is fucked because you became dependent on spending and the kids are fucked as well. We are all responsible for this shit, not some wealthy boogeyman who exclusively votes republican. Time to confess.

Shorter mell: We conservatives are too powerful to get your way so give up and go with the system we want.

Bellingham Bill says

Shorter mell: We conservatives are too powerful to get your way so give up and go with the system we want.

Do you really believe that? How do you reconcile this with the enormous social equality momentum in the US and the fact the diminishing secular influence of religion and the sorry state the republican party is in? Doesn't seem to me that conservatives are in charge. Or maybe they have made the right moves and became all socially liberal but still want to exploit the poor, who knows? I think that everybody that can get in on the gravy train will get in, no matter what their political thinking is. Money, the great equalizer :)

Vicente says

Stockman, another ex-Wall Streeter peddling lies to the peasants.

Yes, he’s a truth-teller. And truth hurts, flushing out his enemies. Why? They’re sucking trillions from Americans. So you hate him. Counterattack. Big mistake. Don’t dismiss David Stockman. He’s no Kim Jong-Un blow-hard.

http://www.marketwatch.com/story/critical-warning-no-13-stockmans-apocalypse-2013-04-06?link=MW_story_investinginsight

What Keynesian means to the middle class:

(1)You go to work and work hard...
Rich:do more with less resources
Poor:Sit home and wait for the mailman

(2)You buy an over priced house, in a buyers market, and take on an imprudent Mortgage from the bank.

Bank get to already spend money on future interest payments, you have yet to make.
Rich get to buy your house for pennies on the dollar, when you get foreclosed.
Poor gets government subsidy to pay rent to the guy that bought your house, for pennies on the dollar.

(3)You go back to (1)

Bigbubbabear says

Don’t dismiss David Stockman.

Why not?

I mean I'm not down with WORSHIP of any pundit.

Way back in the 80's Stockman worked in the Reagan WhiteHouse.

Stockman eventually had a Come To Jesus moment when he realized that Reaganism wasn't working. He admitted as such. I admire him for that. However this doesn't mean I think everything that comes out of the man's mouth is right. He spent 17 years doing what? Inventing a new heart? No, he was raping and plundering on Wall Street, which makes him suspect in my book. His 2-year stint at Collins and Aikman, he skated out with plenty of money in his pocket and the company went into Chapter 11.

Another example of this is Peter Schiff, who was right about the Housing Collapse but completely wrong on his decoupling nonsense. Should I have stuck with Peter because he was right once? Nope.

Vicente says

I disagree with Wall Street worship as well.

BUT he did seem to have some concept that regulation and taxes should "store nuts for the winter". Sounds like a grown up idea but something nobody in power in last 30+ years remembers.

Was Alan Greenspan a Keynesian? Plenty of crony capitalist enablers style themselves as libertarians, randists, and others who all spit on Keynes.

There you go with the labels again. Who gives a shit what label you put on something? I care whether the idea is sound. Stockman went on the Daily Show and said Glass Steagall should never have been repealed, that banks should not be in the stock market gambling business, that GS and Morgan Stanley were running the treasury, and that we shouldn't have bailed them out. He said "The world would function just fine without Goldman Sachs".

Which one of those things do you disagree with?

Homeboy says

Which one of those things do you disagree with?

I agree until you get down to the "no bailouts".

Yes we shouldn't have lit the house on fire. Let's not do that again. However letting the house burn down to "teach a lesson" isn't good either. Although if I were emperor, the execs and bondholders would have taken a haircut to demonstrate pain must be shared.

Where was Stockman when Glass-Steagall was being repealed? Did he write any editorials about it then?

Vicente says

Way back in the 80's Stockman worked in the Reagan WhiteHouse.

Stockman eventually had a Come To Jesus moment when he realized that Reaganism wasn't working. He admitted as such. I admire him for that. However this doesn't mean I think everything that comes out of the man's mouth is right. He spent 17 years doing what? Inventing a new heart? No, he was raping and plundering on Wall Street, which makes him suspect in my book. His 2-year stint at Collins and Aikman, he skated out with plenty of money in his pocket and the company went into Chapter 11.

But YOU seem to think everything that comes out of the man's mouth is WRONG, only because he used to work for Reagan. We should consider the IDEAS.

mell says

How do you reconcile this with the enormous social equality momentum

aha haa ahaha

mell says

the diminishing secular influence of religion and the sorry state the republican party is in

Fiscal conservatives need social conservatives votes and bodies on the ground to retain the Republicans in control of the House and be competitive every 4 years.

This means the social conservatives -- ie religious nutjobs -- have to get with the new program and stop overtly hating the gays and perhaps women, thought the latter is going to be a harder row to hoe for them.

The bottom line is if you aren't concerned about this graph:

http://research.stlouisfed.org/fred2/series/GINIALLRH

you're either too stupid to understand it or your ideology has made you defective

robertoaribas says

It didn't have to be that way, but that seems to be what some on this thread are proposing as a morally superior system... go figure!

Word. Not just morally, but generally superior, too.

Hey Spain, Greece, lots of quarters of austerity. Where the boom at?

Not bailing out the banks was fine. We have a process for throwing out the dirty water from the tub without throwing out the baby; it's called bankruptcy.

The government could have created a temporary bankruptcy division (100% and explicitly constitutional) to wind up Bank of America, Citigroup, CIT, etc. and sell good assets to more conservative regional and local banks, and made the investors eat the trash.

Instead, everybody was forced to trade cash for trash, and then the banks decided not to lend the money they got, but instead make a greater share of their income from banking fees.

Damned if I can't find this great chart I saw a while back about the relative income of banks shifting from loans to money from fees, but here's an article targeted at bank managers about emphasizing fees:
http://www.independentbanker.org/issues-a-operations/206-revenues/908-measuring-fee-income-success

From Forbes, a bit about seeking to smack the poor with fees:
http://www.forbes.com/sites/halahtouryalai/2012/04/26/how-banks-are-getting-richer-off-the-poor/

Bellingham Bill says

This means the social conservatives -- ie religious nutjobs -- have to get with the new program and stop overtly hating the gays and perhaps women, thought the latter is going to be a harder row to hoe for them.

Now that's what I call a good conspiracy theory!

Homeboy says

We should consider the IDEAS.

Unless the ideas are shit.

I orginally opposed the bailouts and contacted my representative on the matter. Yes I was one of those guys bugging his facebook pals to write Congress to vote NO as well. I wrote a lot about it.

However, I changed my mind lately. The SENSIBLE thing to do was
1) stabilize the system
2) re-enact Glass Steagall.

This was no S&L debacle, the sums involved and counterparty obligations were far too large and globalized banks created another problem. Now all we need to do is re-enact Glass Steagall, so get Stockman cracking on THAT instead of peddling his "well we SHOULD have let the megabanks bankrupt" as that ship has already sailed.

Vicente says

Unless the ideas are shit.

You mean like printing money and bailouts instead of prosecutions?

And that ties in with the Keynesian money printing scheme. It is easier if the same rules apply for everybody to the most extend possible, so we should not let entities create fiat money while we put people behind bars for doing the same thing. This is obviously a gross simplification but I stand by the general gist of it and it can be applied to drones, illegal police or attorney general action (fast and furious anyone?), wiretapping, etc.

robertoaribas says

Allowing a systemic failure of the banking system, and the resultant fear causing cash runs on actually solid institutions, resulting in their failures, and the closings of viable businesses that couldn't get the cash they needed... Well, that is what made the great depression great.

It didn't have to be that way, but that seems to be what some on this thread are proposing as a morally superior system... go figure!

I reject your premise that allowing Goldman Sachs to fail would have caused a "systemic failure of the banking system". I reject your premise that runs on banks would have caused a systemic failure. (For one thing, they didn't have deposit insurance then. For another, it would have been possible for the government to take over insolvent banks and shut them down in an orderly fashion, bailing out depositors rather than just giving trillions of dollars in cash to bank execs to do whatever they pleased with.) I reject your assertion that you know for a fact exactly why events unfolded the way they did during the Great Depression, and that you know for a fact that the exact same thing would have happened if we didn't completely bail out Wall Street with no strings attached. I reject your false dilemna that our only two choices were giving Wall Street whatever they wanted, or an exact repeat of the Great Depression. And lastly, I reject your bullshit strawman that any of us are advocating such an event.

Vicente says

Now all we need to do is re-enact Glass Steagall, so get Stockman cracking on THAT instead of peddling his "well we SHOULD have let the megabanks bankrupt" as that ship has already sailed.

He already said so on TV last night, and I told you as much. Are you unable to read?

Bellingham Bill says

Fiscal conservatives need social conservatives votes and bodies on the ground to retain the Republicans in control of the House and be competitive every 4 years.

I agree, except I would replace "Fiscal conservatives" with Republicans, because if history is any guide, republicans are less fiscally conservative than democrats.

Republicans talk a good game now, because they're trying to create a political wedge between themselves and Obama. I guess it's smart politics. Try to convince the idiot masses that the increased deficits are Obama's fault, rather than the result of a GDP that is so much lower than projected GDP (and tax revenues) when all of the current spending was put in motion.

Not that any of the dimbulbs would read this, but:
http://www.huffingtonpost.com/bob-cesca/repeat-after-me-obama-cut_b_1955561.html

As I've documented before, the CBO reported in January, 2009 that the federal budget deficit for that fiscal year, which began on October 1, 2008, was already $1.2 trillion. President Obama's additional '09 spending added another $200 billion to the deficit, bringing the total to $1.412 trillion. Unprecedented and huge, but given the enormity of the financial crisis and the depth of the recession, there weren't many other options on the table. Add two wars into the mix and there you go.

But since then, deficit spending has dropped precipitously. Why? Chiefly because President Obama signed the Statutory Pay-As-You-Go Act in February, 2010, which mandates that new spending be offset with spending cuts or new revenue. Yes, a Democratic president and a Democratic Congress passed this legislation. Guess how many congressional Republicans voted for the law. Zero. Not one. Perhaps during this week's debate, Vice President Biden could ask Rep. Paul Ryan who voted against the bill.