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evilmonkeyboy
2014 Mar 10, 11:54am
Wow! Bush screwed us over :(
Bush massively increased the rate of national debt while Obama has reduced it. Clinton was actually able to decrease it.
favoritism in government spending and regulations favoring the rich while excluding the poor and middle class from competing fairly.
Well, it would surely help the poor and middle class compete more fairly if the minimum wage weren't so high and there was less spending on public education, law enforcement and public safety in general. Don't even get started on how repressed the working poor and middle class have been by welfare and unemployment. The warfare industry keeps hundreds of thousands of the underprivileged youth from competing against the kids of the aristocracy for jobs in the military. We should be ashamed.
Better education, better law enforcement and better public safety are not necessarily correlated to spending as percentage of local economy per se. Many rotten 3rd world shitholes spend a ton of money on "public safety." In fact, even in this country, high property tax (local taxes, mostly paying for "education" and "public safety") rates are usually correlated with run-down municipalities.
Welfare and high entrance threshold for 1st jobs (aka minimum wage) do combine to prevent kids and young adults from learning the proverbial "how to fish."
High minimum wage as a device to redirect the underprivileged youths to risk their lives and limbs in imperialistic foreign wars is all the more unethical. Empires benefit the super-rich while impoverish the middle-class: empires make capital investment in foreign lands more secure for the rich than otherwise would be, thereby bringing un-natural competition to the middle-class. There is nothing wrong with free-trade per se, however taxing the middle class to pay for an empire making investment overseas more secure and more profitable than they naturally would be is morally wrong and economically disastrous.
Bellingham Bill
2014 Mar 10, 3:39pm
If the 2001 tax cuts are unpaid for, they increase the debt.
Fed's fixing that now.
Bellingham Bill
2014 Mar 10, 3:46pm
The national debt itself (ex the Fed's $2T+ and SS's $2.7T) is money that should have been taxed or tariffed, not borrowed.
So debt sales allow taxpayers to buy down their future tax burdens, as the interest they receive on their bonds pays some of their taxes.
'course, with ZIRP, the good ol' days of 10% treasury yields are long gone.
http://research.stlouisfed.org/fred2/series/GS10
So in this way the big-ass national debt is mildly related to the income disparity thing.
But there are bigger flows involved here -- the $2T (each) housing and health care expenses, the $500B/yr trade deficit, corporate profits nearing $2T -- these are the systemic imbalances the right wing really needs to think long and hard about.
Ah, who am I kidding, they love the way things are going here.
Bellingham Bill
2014 Mar 10, 3:59pm
"The Fed can only control base rates, not market rates for mortgages"
http://research.stlouisfed.org/fred2/series/MBST
^ not chopped liver!
I'm not particularly bullish on housing, but not bearish either. I think the Yellen Fed will not taper any more, assuming the Yellen faction is in fact actually in control of policy.
We're so far from full-employment (10M jobs) that withdrawing Fed stimulus would be pretty bad.
I don't expect anything from Congress until 2017, but as long as the Fed continues what it's doing, I think we'll get continued mild improvement in employment and wages.
http://research.stlouisfed.org/fred2/graph/?g=sW7
(red is 'full employment')
tatupu70
2014 Mar 10, 11:24pm
What's to prevent a competing capitalist from offering the worker just a little
more and bid him away from the old scrooge?
Because there is an oversupply of labor. They don't have to pay more...
What's to prevent a competing capitalist from offering the worker just a little
more and bid him away from the old scrooge?
Because there is an oversupply of labor. They don't have to pay more...
In your dreams. Until you can find vast numbers of people willing to work for free, there is no over-abundance of labor. "Oversupply" is only possible for price points above market clearing rate. There is no such thing as oversupply without stating a price point. If you believe that there is an oversupply of labor at currently mandated legal minimum wage, then you are essentially arguing for lowering minimum wage.
What's even more important is actually relatively soft demand for labor as tax burden, debt burden, regulatory burden and uncertainty prevent entrepreneurs from bidding up labor like they did during the dot-com era not many years ago.
tatupu70
2014 Mar 10, 11:44pm
If you believe that there is an oversupply of labor at currently mandated legal
minimum wage, then you are essentially arguing for lowering minimum wage.
No, I'm arguing to reduce wealth disparity and change laws so that more labor is needed.
What's even more important is actually relatively soft demand for labor as
tax burden, debt burden, regulatory burden and uncertainty prevent entrepreneurs
from bidding up labor like they did during the dot-com era not many years
ago.
What's most important is lack of demand because income/wealth disparity are at near all time highs.
If you believe that there is an oversupply of labor at currently mandated legal
minimum wage, then you are essentially arguing for lowering minimum wage.No, I'm arguing to reduce wealth disparity and change laws so that more labor is needed.
Then you need to allow more entreprenuerial freedom, so that entrepreneurers can put labor to new ways of productive use, thereby creating the incentive to bid up labor prices, like Henry Ford did, like Andrew Carnegie did before him, and like the technology companies did in recent memory.
What's even more important is actually relatively soft demand for labor as
tax burden, debt burden, regulatory burden and uncertainty prevent entrepreneurs
from bidding up labor like they did during the dot-com era not many years
ago.What's most important is lack of demand because income/wealth disparity are at near all time highs.
The vast income and wealth disparities are largely the results of government interventions in the market place enriching incumbents at the expense of consumers and upstart competitors, as well as the "wealth effect" deliberately pursued by the FED's monetary policies. Only those wealthy enough to hold assets get to experience the "wealth effect" while those who do not have assets to be levitated just get the impoverishment by inflation.
tatupu70
2014 Mar 11, 12:10am
Then you need to allow more entreprenuerial freedom
Entreprenuerial freedom is not the issue. There is all sorts of capital available right now looking for a good idea. And don't start with all the regulation BS. The simple fact is that there are not enough consumers right now.
The vast income and wealth disparities are largely the results of government
interventions in the market place enriching incumbents at the expense of
consumers and upstart competitors, as well as the "wealth effect" deliberately
pursued by the FED's monetary policies. Only those wealthy enough to hold assets
get to experience the "wealth effect" while those who do not have assets to be
levitated just get the impoverishment by inflation.
Nope--increasing the money supply only speeds up the process. It's not the cause.
Then you need to allow more entreprenuerial freedom
Entreprenuerial freedom is not the issue. There is all sorts of capital available right now looking for a good idea. And don't start with all the regulation BS. The simple fact is that there are not enough consumers right now.
Are you saying population is declining? The population is increasing, so there are increasing number of consumers. The human want is infinite. If you think Qualified Demand is declining, then that's a driving force for even more entrepreneurship to come up with less expensive alternatives or alternatives that cost the same but can do more.
Crunch time is the best time for the upstarts have their chance to unseat the incumbents . . . that is, unless the government is paid by the incumbents to kneecap the upstarts and subsidize the incumbents. See sharing services like AirBnB and taxi by smartphone app bypassing city taxi medallions and the cities' response to them.
The vast income and wealth disparities are largely the results of government
interventions in the market place enriching incumbents at the expense of
consumers and upstart competitors, as well as the "wealth effect" deliberately
pursued by the FED's monetary policies. Only those wealthy enough to hold assets
get to experience the "wealth effect" while those who do not have assets to be
levitated just get the impoverishment by inflation.Nope--increasing the money supply only speeds up the process. It's not the cause
Increasing money supply literally subsidize the asset holders (the wealthy and the relatively well off) at the expense non-holders of assets (the poor and lower middle class, the renter class). The FED "Wealth Effect" is the primary driving force behind wealth disparity. Many of the wealthy would have been reduced drastically if not for FED bailout during crunch time.
tatupu70
2014 Mar 11, 2:48am
If you think Qualified Demand is declining,
ding, ding, ding.
then that's a driving force for even more entrepreneurship to come up with less
expensive alternatives or alternatives that cost the same but can do more.
When you have nothing, reducing price by 10% doesn't really help much.
Increasing money supply literally subsidize the asset holders
Not necessarily. It depends on how the new money is distributed and how the economy is structured.
Unfortunately, as many have pointed out here, the US is well on its way to becoming one of these 3rd world nations, except instead of toiling away in salt mines or the fields, people are toiling away in soulless cubicles in nondescript office buildings for a mere pittance, all the while hoping that someday they too will be able to live the American Dream...
At this rate, they'll be lucky to own a 2/1 in Bakersfield or Stockton California...
It's up to them to change it - voting for more of the same is not going to do it. Time to put the xbox aside and engage in real change, not 'hope and change' ;)
indigenous
2014 Mar 11, 3:23am
This is a great example of the difference between an inspired individual following his own purpose toward his own goals verses one that is subsidized by government.
Since most of you won't take the time to watch this video, it is the difference between Samuel Pierpont Langley and the Wright Brothers.
Unfortunately, as many have pointed out here, the US is well on its way to becoming one of these 3rd world nations, except instead of toiling away in salt mines or the fields, people are toiling away in soulless cubicles in nondescript office buildings for a mere pittance, all the while hoping that someday they too will be able to live the American Dream...
At this rate, they'll be lucky to own a 2/1 in Bakersfield or Stockton California...
It's up to them to change it - voting for more of the same is not going to do it. Time to put the xbox aside and engage in real change, not 'hope and change' ;)
Well they could vote, but that would be unlikely to really change anything. Unless of course they changed the law to allow foreigners to run for President. I would vote for Xi Jinping or Hu Jintao, two guys who know how to get the job done.
I'd even vote for Vladimir Putin over any of the clowns we have here, any day.
tatupu70
2014 Mar 11, 3:32am
The printing of new money is actually leading to American consumers being tapped
out.
No--the wealth disparity is leading to American consumers being tapped.
The printing of new money is actually leading to American consumers being tapped
out.
No--the wealth disparity is leading to American consumers being tapped.
When the source of money is from government officials up high, you always get increasing wealth/income disparity . . . just like in Haiti!
Political wealth redistribution came before money (before even human evolved; dogs and lions all have pecking order regarding who gets to eat first). The emergence of (sound) money served to restrain the arbitrary power of political fiat command: everyone being equal in front of money and law, both are set as objective existence not as one person's whim . The fiat money undermines the very function of money, substituting what essentially is a plantation scrip for real money.
tatupu70
2014 Mar 11, 3:52am
When the source of money is from government officials up high, you always get
increasing wealth/income disparity . . . just like in Haiti!
So all the other countries in Europe that have much lower disparity than the US--that's because they are on the gold standard? Or because the governments there don't interfere?
Is that your theory?
When the source of money is from government officials up high, you always get
increasing wealth/income disparity . . . just like in Haiti!
So all the other countries in Europe that have much lower disparity than the US--that's because they are on the gold standard? Or because the government's there don't interfere?
Is that your theory?
The alleged lower European disparity is largely due to measurement error: Europeans engage in more tax cheating and wealth concealment due to their high taxation rates. For example, the Swedish owner of IKEA keeps most his wealth in foundations.
It depends on how the new money is distributed and how the economy is structured.
--------------
How is new money distributed?
100 years ago, our currency didn't even exist. Now, there's an incalculable number of dollars circulating the globe.
Where did it come from?
How did it get to where it is today?
Bellingham Bill
2014 Mar 11, 4:34am
The question of USD hegemony is an interesting one.
What *would* happen if we can no longer run $500B/yr deficits?
http://research.stlouisfed.org/fred2/series/NETEXP
There's been big winners and losers in our current economy thanks to the rise of cheap imports. It's my thesis that landlords (via rising rents) have taken most of these savings over time, so the big loss of mfg jobs to get these imports is going to prove to be a shitty deal for most people.
rents are going to hit the 'third doubling' from the postwar period around 2020:
hanera
2014 Mar 11, 4:35am
US is well on its way to becoming one of these 3rd world nations,
More like both world moves towards 2nd world, a more equitable world where labor of same productivity/ competence receive similar pay regardless of nationality/ race/ culture/ sex/ sexual orientation/ religion/ geographical location, but seem like a degradation for nations claiming to be first world/ advanced economy. Post-war abundance for Americans where a janitor earns more than a professor in a third world nation, is an anomaly in history. Note: Choice of janitor and professor is not meant to be discriminatory but just to illustrate the skill difference to execute the job.
Why must incomes go up?
Why can cost of living, primarily housing, be allowed to find its level? (Crash back down to 1990's levels)
I see the much easier solution being the halving of housing costs.
If my 1040$ monthly mortgage were 520$, id be much better off. If my 1375 per month rent were instead 690$, id feel damned near wealthy. And that's with the same morre or less stagnant income I've enjoyed for the past decade.
We were poised to find out how it would have played out five+ years ago, when house prices were crashing. The usfedgov stepped in and threw everything and the kitchen sink at this "problem" to assure that housing prices retraced their parabolic rise to insanity.
Now the problem is supposedly the republicans fault for not handing out free money, so that people can pay ever higher rents? And it was all caused by not high enough taxes on labor??
That's a tangled web you be weaving,,,,
indigenous
2014 Mar 11, 5:28am
If your cornerstone is built on Say's Law--that pretty much says it all.
Since you are such an ardent critic of Says Law, what is it?
tatupu70
2014 Mar 11, 5:29am
Since you are such an ardent critic of Says Law, what is it?
I thought you already read up on it. You posted the mises.org version.
indigenous
2014 Mar 11, 5:40am
I thought you already read up on it. You posted the mises.org version
Yea I have looked at it before, anyway so what? Does that make it any less true?
Because a deflationary depression where real estate crashes down to 1990's levels will result in massive unemployment.
---------------
Why is a deflationary depression, the only way for real estate to return to its valuations of only 15 years ago??
I remember the 90s as pretty good times for everyone. Good employment, affordable cost of living.
Why would a housing market correction, require a 2nd great depression?
Bellingham Bill
2014 Mar 11, 5:45am
"democrats are just as bent on pushing debt as republicans."
http://research.stlouisfed.org/fred2/graph/?g=sXL
Democrats were responsible for stopping the debt growth of the 1980s.
Republicans voted against the tax rises required, and concern-trolled on top of it the Clinton tax increase would destroy the economy.
They, being wrong on absolutely everything, were wrong about that too.
As far as 'pushing debt', we must look at consumer debt too:
http://research.stlouisfed.org/fred2/graph/?g=sXN
shows very clearly the two great leverage events, the 1980s and the 2000s.
http://research.stlouisfed.org/fred2/graph/?g=sXO
shows the Bush era saw leverage rise 40%, under Obama it has risen 2%.
The GOP is against all tax rises, and they won't cut spending since that's how you lose elections.
Borrowing or printing are the remaining options for them.
Bellingham Bill
2014 Mar 11, 5:52am
What are the first steps?
get people to vote for economic issues rather than the moral issues that the GOP panders to.
Looks like the big anti-gay campaign is running out of steam for the GOP, after 10 years of them running that con.
There's still gun rights and criminalizing abortion for them to collect votes on but I think educating people on what the economic problems actually are will result in enough shift to the liberal side.
Thing is, I don't see anyone other than Bernie Sanders able to articulate what is economically wrong here.
Obama is beginning to make some noises that sound sorta good again, but there hasn't been a crystallization into concrete policy from him yet.
Dems have been center-right for a very long time now, since LBJ passed on.
Country needs some actual progressive education again.
Why must incomes go up?
Why can cost of living, primarily housing, be allowed to find its level? (Crash back down to 1990's levels)
I see the much easier solution being the halving of housing costs.
Agreed. And it will, usually never to previous lows as they keep printing and debasing the dollar. But, hey, good for the stock market ;)
Bellingham Bill
2014 Mar 11, 7:20am
talking to these people is like taking a call from a nuthouse.
hence my ignore list.
indigenous
2014 Mar 11, 7:30am
talking to these people is like taking a call from a nuthouse.
hence my ignore list.
said the ostrich...
bubblesitter
2014 Mar 11, 8:00am
Yep, this explains why the active listings are going off market. :)
tatupu70
2014 Mar 11, 8:06am
you can build new houses for less than $250K: that is about where the median price of a new home is in the US. That would be a price fall in California.
What about buying the land??? The problem is the places where people want to live are already built out and the land costs are similar to the building costs.
Heraclitusstudent
2014 Mar 11, 8:18am
What about buying the land??? The problem is the places where people want to live are already built out and the land costs are similar to the building costs.
The notion that the land is scarce and a cause for high prices is preposterous.
Phoenix and Las Vegas are in a middle of a desert.
Even the SF peninsula is half empty. Just hills with nothing on it, except maybe a few cows grazing. It's just forbidden to build there.
tatupu70
2014 Mar 11, 8:33am
The notion that the land is scarce and a cause for high prices is preposterous.
Phoenix and Las Vegas are in a middle of a desert.
Land isn't scarce. Land where people want to live is. Sure you can build in the outskirts of suburban Phoenix, Las Vegas or Chicago for that matter-but nobody wants a 2 hour commute to work every day. That's why the new starts aren't as high as you'd like. And why housing in the desirable areas keeps going up.
Heraclitusstudent
2014 Mar 11, 9:08am
Land isn't scarce. Land where people want to live is.
I repeat: The SF peninsula is half empty.
The bay area can be extended east with less than 1 hour commute. Places like Danville have a lot of space to build.
And new development can be planned: You can encourage companies to develop in other areas. Lots of people would be willing to leave elsewhere if its cheaper and they can get a job.
That's assuming there is someone in power that actually wants cheaper real-estate.
tatupu70
2014 Mar 11, 9:23am
I repeat: The SF peninsula is half empty.
The bay area can be extended east with less than 1 hour commute. Places like Danville have a lot of space to build.
I don't know that specific area.
And new development can be planned: You can encourage companies to develop in other areas. Lots of people would be willing to leave elsewhere if its cheaper and they can get a job.
Sure--but existing communities already do everything they can to lure jobs. What makes you think they would have any success in a new area?
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That’s a question I’m asking after reading some new housing data and real estate market studies out this week. The national numbers make it seem like we’re having a pretty good year for housing, which is one of the keys to overall economic growth in this country. (As Warren Buffett once told me, if you fix housing, you can fix the American economy.) And house prices did go up by a healthy 11.4 % in 2013, with the latest Case Shiller data showing an 8 –year high. So far, so good.
But two things concern me about the market right now. One, the new numbers are trailing indicators—house prices reflect where we have been, not where we are going. The second half of 2013 was weaker than the first, and the last few months of home sales in particular have been slack. That information will take about six months to trickle through into the official data, which is one of the reasons that the smart folks at Capital Economics believe that “2014 will mark a significant slow down in the pace of house price appreciation.†Despite the Fed’s “forward guidance†about keeping interest rates low for years to come, it will be interesting to see if the market buys it. The Fed can only control base rates, not market rates for mortgages, and if they start creeping back up, we may see a significant pull back in refinancing and mortgage applications as we did last summer. Less demand on that front would eventually mean lower prices.
But as in so many areas of the economy, the state of the market will depend very much on where you live. There’s a big, deep new study just out from the Conference Board’s Demand Institute, looking at the state of the housing recovery in 2200 cities around the country. That study finds that there’s a large and growing bifurcation in housing in America. The top 10 percent of cities in the country (ranked by the aggregate value of their owner occupied homes) now hold 52 percent of all housing wealth. Basically, we’ve got a 1 percent/99 percent phenomenon happening in housing, which has massive wealth implications for middle class Americans, who still hold the majority of their wealth in their homes.
http://time.com/9949/a-robust-housing-recovery-not-so-fast/
#housing