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Saturday, July 16, 2011

Could Hardly Have Been Worse

First, a Snarky Mark graph on LA port traffic:


Mark had done an earlier one of these that picked the downturn up in nearly real time, right at the beginning. I put this up because it proves that Mark is not just snark. I like Mark's graphs - they are about economic gravity. Maybe we need to make all those unemployed physicists out there handle the economics, because the current batch of economists seem on the main to be wandering around in a virtual world.

Now, although I like Mark's graphs I do not like their current content, so if I were really a Marxist, I would of course decide that Mark was the problem. But I am not, so I am forced not to rant about Mark but mourn the underlying economic realities which his graphs suggest. In fact, let me point out that if you do not like the extraordinarily unhappy economic realities I discuss, and you attempt to attack not my facts but my conclusions as being based on wrong-thinking, then you are the ideological Marxist.

But anyway, on to some more economic wrong-thinking:
AAAAHAHHHHHH,.Cue footage of screaming, running, buildings collapsing.
H.8. I will have some graphs later, but to sum up the June damage:

A) On a seasonally adjusted basis, June Other Deposits grew at the rate of 20% annualized. 20.1%, to be exact, but when the numbers are this large you can certainly dispose of the second digit, much less the third digit - it only improves accuracy.

B) The true excruciating extent of the consumer financial debacle can only be completely understood when one observes that revolving credit (CCs) grew in June at the annualized rate of 9.9%. Tragically, before yesterday's H.8 release I had been wondering if the marked growth in Other Deposits wouldn't redress the consumers position somewhat and provide us hope of a short recession. Well, that is not going to happen, because a lot of people are running up their credit cards to live, so the overall numbers are going the wrong way!

I need psychotherapy to deal with these numbers. Or alcohol. This is unmitigated financial disaster that is not unkinking itself. Believe me, there is no better living through consumer credit when you are getting 1% on your savings and paying 9-12% on your CCs, plus charging your monthly living costs on your CCs.

This, btw, explains why June's retail report was just flat, rather than declining as Other Deposits suggested. The difference is in credit. Which is not sustainable! Money - it flows like water. Like a flooded river, sometimes it flows over a nuclear plant. When that happens, it is not good.

Comments:
I post to thank you for the excellent perspective and education your blog provides.

The incompetence and chicanery on display in the run-up to, and since, the credit crisis have been quite remarkable.

Your perspective and views have been a refreshing, much needed, exception.
 
The thought of putting people who actually live in the real world, like physicists, in the seats of economists is attractive.

Or, we could ferret out one of the few economists who actually does live in the real world, Martin Feldstein, to replace mini-me at the Fed. At this point, anyone who hasn't learned the lesson that the head of the Fed should mot be chosen to please villainous Wall Street won't ever learn it. Let's end the Greenanke interregnum NOW, before any more damage is done to Americans.
 
"Now, although I like Mark's graphs I do not like their current content, so if I were really a Marxist, I would of course decide that Mark was the problem."

Why such gibberish? Surely you know that "shoot the messenger" and marxism are two distinct ideas? If you disagree, show me here where it says *anything* about shooting the messenger.

And it's a bit ironic that you bring up shooting the messenger, because that does appear to be what you are engaged in. One such message is that you seem to be for perpetual theft, and being for theft is immoral. We need a path that leads to a moral place, even if we can't just teleport ourselves there in an instant, and even if it means we have to accept some pain on the way. If we just keep going wherever the path of theft leads us, always doing whatever seems easiest in the short-term, we will never reach that moral place.


"In fact, let me point out that if you do not like the extraordinarily unhappy economic realities I discuss, and you attempt to attack not my facts but my conclusions as being based on wrong-thinking, then you are the ideological Marxist."

More gibberish? Marxism is not about engaging in invalid debating tactics. Again, feel free to show me on the marxism page where it says they are. (Marxists may be illogical and therefore engage in invalid debating tactics, but that is not what marxists believe marxism is about.)

And you are drawing a false dichotomy here. An argument consists of both facts and reasoning. Countering an argument can consist of showing that the facts are wrong (or unsupported) or the reasoning is wrong. It can also include introducing additional facts or reasoning that leads to a different conclusion. So it is invalid to suggest that the only way to counter an argument is to attack its facts.

You also appear to be misrepresenting exactly what is being attacked. If someone were to just say "you're wrong" and did not attack your facts or your reasoning and did not provide other facts or reasoning leading to a contradictory conclusion, *that* would simply be attacking your conclusion. If you want to accuse someone of that, then show where it has been done. (Anytime someone makes an unsupported step in their argument and you believe the step is invalid, you should call them on it. If they are an honest debater then they will correct the flaw or retract that part of their argument, or at least acknowledge the flaw and indicate they are working on rectifying it. But don't just run around saying "hey, you made unsupported steps in your argument" without specifying exactly what those steps are and in what way they are unsupported, otherwise you are engaged in that which you accuse the other.)

Note that unless your conclusion is that "X said Y", holding up a piece of paper written by X that says "Y" doesn't prove your case. If your case involves showing that "Y" is true, then such a paper is useless by itself unless it also provides the argument X uses to come to conclusion Y. When X provides *no* argument, and you still try to use such a paper as a "fact", then that part of your argument is flawed. The correct thing to do is acknowledge the flaw and remove that piece from your argument, not attack the messenger who informed you of the flaw.
 
foo is confusing Marxism with Marxists. Since crabby Karl didn’t live long enough to see his theory fail, he didn’t have the opportunity explain why it failed. Current Marxists cannot blame their philosophy for what it does not explain.

Extended beyond their philosophical underpinnings, Marxists tend to blame unpredicted outcomes on those who make the outcomes known instead of acknowledging the inutility of Marxism itself.
 
Given the disparity between the Administration-Media line about recovery and the data about real economic activity (moving boxes), there must be some good opportunities for shorting.

Which companies have a high share price based on inventory builds and hopes that shipping volume is returning to the exponential curve? When the buyers do not show up as planned, and margins get further squeezed, I would like to cash in.
 
Also, I think there's a subtle point you may be missing.

Let's say X writes a paper that claims "Y" and backs it with argument "Z". When you cite that paper as evidence that "Y" is true, what you are really doing is invoking their argument "Z". You are basically asserting that you believe "Z" is a sound argument that supports claim "Y".

Now what if a paper by X claims "Y", and does not back it with any argument, but *does* appear to back it with a certain philosophy? If you cite the paper in that case, you can't be invoking X's argument as X gave no argument, so one is left to conclude that you are invoking X's philosophy, and that you are asserting that you believe X's philosophy supports claim "Y".

And that is what I meant when I said:

"When you use them to support your position, you are by transitivity invoking Marxism to support your position (even if that was not your intent)."

Note that the part in parenthesis was included because there is also the possibility that a) you don't have the necessary logic skills to realize such an invocation is implied, or b) you do have such skills but simply missed the application of that logic in this particular instance, or c) you interpreted (I would argue misinterpreted) their paper as appealing to some other philosophy or argument.


If you think the above quoted statement means I said or implied you are a marxist, you are mistaken. ("intentionally invoking marxism" != "being marxist" != "unintentionally invoking marxism"; though "intentionally invoking marxism" does imply sympathy with at least some aspects of marxism.)


Logic, she can be a bitch, but she's *my* bitch. :-)
 
"foo is confusing Marxism with Marxists."

"an advocate of Marxism" is an accepted meaning of marxist. And this claim of yours is just a diversion -- your real beef is with the question "what is 'true' marxism".


"Since crabby Karl didn't live long enough to see his theory fail, he didn't have the opportunity explain why it failed.

You can say that current marxism isn't what Marx himself would have evolved marxism into (and therefore not "true marxism"), but why should I care what marxism would be in some hypothetical alternate reality? It is marxism in this reality we have to deal with.


"Extended beyond their philosophical underpinnings, Marxists tend to blame unpredicted outcomes on those who make the outcomes known"

So you claim. So MOM appears to have claimed (or maybe she was just confused, I don't really know). Where is your evidence of this claim?

The major trend I see from collectivists and central-planners in response to failure is (quoting myself from here):
- we need the "right" (smart/wise/kind/whatever) central planners
- the central planners need more power/resources so they can do what needs to be done


For example, from the wikipedia marxism page:

Many of these self-proclaimed Marxist nations (often styled People's Republics) eventually became authoritarian states, with stagnating economies. This caused some debate about whether Marxism was doomed in practise or these nations were in fact not led by "true Marxists". Critics of Marxism speculated that perhaps Marxist ideology itself was to blame for the nations' various problems. Followers of the currents within Marxism which opposed Stalin, principally cohered around Leon Trotsky, tended to locate the failure at the level of the failure of world revolution: for communism to have succeeded, they argue, it needed to encompass all the international trading relationships that capitalism had previously developed.

Note that the above supports both parts of my claim: "not led by 'true Marxists'" means not the "right" central planners. "needed to encompass all the international trading relationships that capitalism had previously developed" means not enough power/resources to do what needs to be done.


"Given the disparity between the Administration-Media line about recovery and the data about real economic activity (moving boxes), there must be some good opportunities for shorting."

Yes and no. The problem is that the fed has been propping up stock prices. So if you have gone short (in response to poor fundamentals) you have likely been taken to the cleaners as the stock prices continue to defy gravity (being tied to Ben's helicopter and all). There's a well known expression which is "don't fight the fed" (because you can't win that fight). Some of us are just waiting for the fed to learn that it shouldn't fight the real economy, because the fed can't win that fight.
 
MOM,

Thanks for the chart plug!

"Mark had done an earlier one of these that picked the downturn up in nearly real time, right at the beginning."

For those interested, here it is.

November 19, 2007
Los Angeles and Long Beach Trade

Inbound traffic continues to deteriorate. Perhaps it is time to stick a fork in the consumer. I think we're done.

Note that this was a month before the official recession began in December 2007.

We haven't seen that level of detioriation yet, but we are definitely seeing stagnation (and that's NOT good).

My word verifcation is summeal.

I think it's what you get when you add up what inflation is once again doing to our consumer.
 
Oops. I made up a new word.

I meant deterioration!
 
Foo - before Social Security, it wasn't that rare for elderly people to starve to death.

If you honestly believe that we can just default on SS altogether for the poorest people, then you don't believe in property rights.

You also might want to sit down and contemplate the full meaning of the concept of "natural rights", because when someone owes you money and you are starving to death, one's concept of rights tends to become very focused.

Also, please go and take another look at another of Mark's graphs here.

We don't have jobs for those people either.

My paternal grandparents got out from Germany during the earlier 20s to France, and from there hopped a boat to the US. They got here in 29. It was still a lot better than what was happening in Germany....

They were honest people. There were no jobs. My grandmother did the worst kind of scutwork to survive (twelve hours of scrubbing hospitals). While their children were young, my grandfather stayed at home and took care of them. He didn't exactly interact with them very much - my father was something of an autistic genius who really only learned to interact with people after he met my mother. At night, my grandfather ran liquor.

People starved, Foo. You are too far away from want to understand what you are recommending.

My better half - Chief Metal Heart No-Nag was born in central America. He didn't immigrate to the US until he was in his 20s.

When he was 16, he walked 50 miles to buy a bag of rotten corn because of a famine.

You are totally clueless. We are in a depression. Let's try not to make it great.
 
MOM,

My college degree'd girlfriend is back in college as an attempt to find stable job opportunities long-term (health care).

She's technically not unemployed of course, even though by any measure we'd use in this household she is.

In other news, I've added a bonus 4th chart to show how ineffective monetary policy has been to solve our cargo trade deficit problem. If we're really going to try to use inflation to fix it, we've got an amazingly long way to go.
 
My girlfriend is actually worse off than unemployed.

Not only has she not had a job for more than 2 years but she is also paying skyrocketing tuition costs (partly because many, many others are doing the same) in her 40's.

April 28, 2010
College Enrollment Rate at Record High

Note the first comment and the heckle of that comment moments later.

"Supply and demand dictates that when more of something is consumed then the price must fall. In the case of education the costs go up even though consumption is rising." - Robert, Washington DC

Washington, DC? Doesn't that just figure? No wonder our economy is messed up.

"Hmmm. I guess I did not receive the same elite private education that Robert did. I think am paying far too much for gasoline these days. Following Robert's observation, I would like to encourage all readers to please consume more oil so that price I pay will fall. Thank you in advance for your contribution." - Disappointed

Amazingly, the debate continued. I'll spare you the gory details.
 
"Foo - before Social Security, it wasn't that rare for elderly people to starve to death."

First, how many people actually starved to death? I'm not finding any *credible* data saying that there was any kind of mass deaths in the USA. (Hunger, yes. Mass deaths, not so much. I am seeing data indicating large migrations due to the dust bowl though.) And note I'm only talking about the USA -- other countries with *collectivist* governments such as the Ukraine apparently had deaths in the millions. (There is an infamous Russian who denies the deaths in Russia and claims that the same "bad reasoning" would result in the conclusion that there were many deaths in the USA -- but not only does the guy not appear credible, he doesn't actually claim such deaths happened. But a lot of people on the internet are repeating his numbers and claiming they did happen.)

Second, as I have indicated, things have changed since then. For example:
* We no longer believe that "the rain follows the plow" and we know a bit more about soil conservation these days, so we're not likely to create another dust bowl. (But then again, there are the global warming loonies...)
* Productivity has gone up greatly, including in the areas of food production and distribution.

Furthermore, I have been calling for measures which would avoid depressions:
* End the leveraging of our currency (e.g., via fractional reserve banking) so we don't get the kind of credit recession that happened in 1929.
* End government interference in the economy (in our lives really) so recessions don't get dragged out into depressions and so the giant drag on our economy that government currently causes goes away.


"If you honestly believe that we can just default on SS altogether for the poorest people, then you don't believe in property rights."

If the theft *never* ends, then we will *never* really have property rights. Furthermore you are clearly appealing to an invalid definition of "property rights" (one where being robbed by X somehow justifies turning around and robbing from Y). We could end the "you paid in" deception (that leads to the erroneous idea that not getting "your share" of stolen loot is somehow "default") right now by getting rid of the SS tax and raising more general revenues instead.


"You also might want to sit down and contemplate the full meaning of the concept of "natural rights", because when someone owes you money and you are starving to death, one's concept of rights tends to become very focused."

And to whom exactly do I owe money? I owe no one. I have no unpaid loans. I have made no unfulfilled promises. There are people who think that they are my masters and that I am their slave, that I "owe" people simply because I have been born, but I reject all such claims on my life.

Negative rights are the natural rights we should be able to expect from society. Positive rights can not be expected from society -- to assert them on society is to create slavery.
 
"Also, please go and take another look at another of Mark's graphs here. We don't have jobs for those people either."

See above (and my many other posts). I want all of the government interference that messes up our economy to go away so we don't get into messes like we have now. I want minimum wage and other government interference that makes many people unemployable to go away. I want the interference that keeps people from starting small businesses to go away. I want the regulations that large corporations use to destroy their smaller competitors to go away. (That won't stop all bad economic outcomes. Manias can still happen, but will be more limited to the idiots that voluntarily participate. And inventory recessions can still happen, but they will not be made worse by government interference.)


"There were no jobs. My grandmother did the worst kind of scutwork to survive (twelve hours of scrubbing hospitals)."

Do you even listen to yourself? There were no jobs, but your grandmother had a job. (For those too lazy to look it up, "scutwork" means "tasks that are tedious and monotonous or trivial and menial". In other words MOM is complaining that the work was boring.) And riddle me this -- if someone has to do that same job today, how much more productive would they be? Would they be on their hands and knees scrubbing with a rag, or would they be using some kind of power cleaner? Would it take them the same 12 hours to accomplish the same amount of cleaning, or [gasp] have things changed since then?


"People starved, Foo. You are too far away from want to understand what you are recommending."

First, I've basically already addressed this above.

Second, people are starving *now* in Africa. Do we all therefore owe them? Are we compelled to give them more and more resources until none of them goes hungry? And if not, why not? Where is your passion for the Africans? If it is OK to steal from people in New York to pay for people to eat in Missouri, why is it not OK to steal from people in the USA to pay for people to eat in Africa? (Never mind that some of this theft already goes on in the form of foreign aid -- it's obviously "not nearly enough" because Africans are still starving.) In fact, shouldn't we in the USA be stealing from France so we can give to Africa?


"My better half - Chief Metal Heart No-Nag was born in central America. He didn't immigrate to the US until he was in his 20s. When he was 16, he walked 50 miles to buy a bag of rotten corn because of a famine."

Arguments about how bad it was outside of the USA don't really count. The USA is one of the only (if not *the* only) countries founded on the ideals of liberty. People suffer in many other countries directly *because* they are not free to take care of themselves as they see fit. You can't validly use such countries as arguments *against* liberty. If anything, such countries are arguments *for* liberty.


"We are in a depression. Let's try not to make it great."

And how is my suggestion that we start getting government to stop destroying and stealing wealth *now* so we can get rid of SS in some number of *decades* supposed to turn the current depression into a great depression?

"We" have spent ourselves into a giant hole. We are going to have to work and save to dig our way out. It *will* be painful. Getting government out of the way so we are free to work and save as we each see fit is about the only thing that will reduce the total pain.
 
Foo - 79 year olds are not free to work and save.

You're blathering. There is no freedom without a law that protects property. There can be no law that protects property when people are starving.

What are you going to do with a 79 year old shoplifter. Jail him? Then his three hots and a cot are going to cost more than 20K a year. Take him out and shoot him?

Without charity, there is no rule of law.
 
"Foo - 79 year olds are not free to work and save."

Try actually reading what I wrote:

we start getting government to stop destroying and stealing wealth *now* so we can get rid of SS in some number of *decades*

That 79 year old will be long-since dead before SS is gone.

To flesh out the idea a bit more: Say the phase-out mechanism of choice is to regularly increase the eligibility age. (I am not saying this is the best way -- I'm just giving an off-the-cuff example.) Let's say the exact mechanism is to, every N years (where N >= 2), raise the eligibility age by 1 year. (Note that such less-than-unity increases in eligibility age would mean that a current 79 year old, or any person who is or becomes retired and on SS, gets SS until they are dead, no matter how long they live.)

As I said, step #1 is to first make it much easier to save (e.g., get rid of the fed and inflation, means-test SS and reduce taxes as much as the subsequent SS savings permit, and do some of the other stuff I've talked about). At first the 'N' you use might need to be kind of large (because you are starting from the current situation where most people don't have significant savings, so getting rid of inflation does not help them as much immediately -- though it does immediately encourage people to start saving, as does the knowledge that SS is going to be slowly phased out). As the years and decades progress people will have more accumulated savings and therefore derive more benefit from the lack of inflation and 'N' can be reduced. There is a virtuous cycle here too: As people consume less SS (because they are using more of their own savings), less taxes need to be taken in to pay for SS, and therefore people get to keep more of their income, which they can then use to increase their savings rate.


"There is no freedom without a law that protects property."

That is what I have been saying. Stop the theft!
 
"There can be no law that protects property when people are starving."

You are pretending that humans are animals so you can justify theft. Tell me, what actually happened (in the USA) during the Great Depression when many people were going hungry? Did they all turn on each other? Did law and civilization collapse? No. People worked harder. Neighbor helped neighbor. People (for the most part, all periods have their exceptions) acted like the humans that they are.

And due to our productivity increases, we are not likely to ever again see a situation as grim as the Great Depression. If we can't behave as well as they did, it will not because the situation is worse, it will be because we are.


"What are you going to do with a 79 year old shoplifter."

The same as any other shoplifter.


"Jail him? Then his three hots and a cot are going to cost more than 20K a year. Take him out and shoot him?"

We may need some kind of a ward-of-the-state system (not out of charity to the wards, but to protect the property owners who would otherwise be the target of their trouble). But being a ward of the state would be had at a high cost. There are no gifts for wards -- anything they receive is tracked and they owe it. So long as they owe one penny they do not get to vote, and they may not be afforded all the other rights of non-wards either. If they want food that *isn't* injected with various harmless substances that taste foul, if they want a cot that is the least bit comfortable, then they will have to get someone with decent credit (family, friend, a charity, whatever) to cosign their debt. (Combine that with a decent rate of interest and maybe these things can even be revenue neutral.) No one will choose to be a ward unless they have no other option. (And I would downgrade prisons similarly -- never treat criminals better than non-criminals.)

Alternatively, we could just give him a one-way trip to Africa (which I hear is very cheap if you pack them into cargo holds). You don't seem to care so much if people starve there.


"Without charity, there is no rule of law."

Where have I *ever* said there's anything wrong with charity? It's *theft* that I am against.

Charity != Theft

And you know it too. You just can't bring yourself to say "Without theft, there is no rule of law" because that would be so obviously wrong that even *you* couldn't overlook it.
 
"Foo - 79 year olds are not free to work and save."

Food stamps. Welfare. That way they don't get to pontificate about entitlements while living off our backs because of their voting all these years to allow the Govt to empty the 'lockbox', run up the debt and generally spend the country into oblivion.

"You're blathering."

People only hurl insults when they can't think of a rebuttal.

"There is no freedom without a law that protects property."

True.

"There can be no law that protects property when people are starving."

Greedy boomers! Of course there can be. And I repeat, food stamps.
 
No, not food stamps. Commodities. Food stamps benefit the grocers and the food processors. That means they get a cut and less actually food gets in the hands of the people that need it. (It's true that they lose choice when they get commodities, but I guess that's the trade off.)

It will be much worse if we get in a depression now than then. People have a lot greater sense of entitlement now and damn few skills to feed themselves. Fewer people farm or have the option to go back and live with relatives on a farm (which is what my maternal grandfather did during the depression.) Remember that argument that we had to have illegals in the country to do those jobs that Americans won't do, like pick fruit? Folks back in the Great Depression were used to doing anything they could to make a living.

The folks that are going to suffer the most are the middle class, a most clueless group of sheep willing to give up liberty in exchange for security. The 24% unemployed young people are already trying to come up with ways, illegal and legal, to scrape by in today's economy. They'll make out.

(And by the way Foo, could you please come out to WA state and make DNR's life a living hell? We have no hope of ever getting rid of them, given that political climate out here.)
 
"People only hurl insults when they can't think of a rebuttal."

You might want to learn to tell the difference between comments aimed at a person (jerks, clueless) and comments aimed at an argument (gibberish, blathering). Comments aimed at an argument (especially when accompanied by some argument supporting that comment) don't qualify as insults.

Her rebuttal was made in the two sentences immediately following her "blathering" comment:

There is no freedom without a law that protects property. There can be no law that protects property when people are starving.

I consider this a partial "breakthrough". MOM is now considering what it means for the state to provide welfare (or whatever you want to call it) as a means to prevent crime (and therefore preserve rights) rather than (erroneously) as charity.

I could have brought this idea here quite a while ago (many threads back), and already had in a different forum. But on this forum I was waiting for the "theft is charity" meme to start to break down -- and it's been showing signs of crumbling (even if she did revert to it a bit in her last post).

I still think there are problems with using welfare (or perhaps my suggestion might be called "debtfare") to bribe people to not commit crime. Yes, it gets rid of the sense of entitlement (so long as people remember that the purpose of the program is to keep crime down and *never* for the state to provide charity). But there is also a moral hazard here, and that is that people who want better welfare conditions may go out and commit crimes as an alternative to protesting -- as a way to argue that the welfare is not enough -- that there needs to be more of it (nicer accommodations, better food, whatever).

Because of these problems, it might turn out to be necessary to modify my suggestion such that if someone commits a crime, is found guilty, goes to "debtfare" jail, and their resources run out (what they had that was theirs when they were arrested is gone, whatever they have managed to work for while in jail is gone, and no one with decent credit is willing to cosign a loan for them to get more resources), then it's time to kick them out of the country.
 
The folks that are going to suffer the most are the middle class, a most clueless group of sheep willing to give up liberty in exchange for security. The 24% unemployed young people are already trying to come up with ways, illegal and legal, to scrape by in today's economy. They'll make out.
===========
Personally, I think the group that will suffer the most are the boomers, and I don't have any sympathy. They either took all the money on offer from the Govt over the last 40 years, or they voted in the aggregate to allow it. Thank goodness more and more millenials are coming of age each year, eventually we might be able to outvote the "Me" generation.

Regarding the young people coming up with ways, yes, I agree, I already see it going on. Boomers aren't going to get much benefit from it in tax revenue to replace what they've blown through, though - not much income to tax.

foo, "You're blathering" is directed at a person - it's a contraction for "You are blathering" - especially in a post addressed to a person by name. If MOM is attacking the argument then perhaps "That argument is just blather." would have been better.

I leave you with another thought, this time about the two-tier pension arrangements developing at some companies. One acquaintance of mine speculated as to what would happen when there were enough younger workers with defined-contribution plans to outvote the retired boomers with defined-benefit plans when it comes to annual increases that might put a company's existence at risk. It's not just SS...
 
“Without charity, there is no rule of law.”

Not sure I can subscribe to that maxim. I suspect our differences are about rule of law vs. an orderly and stable society.

And since foo is entirely tl;dr, perhaps the notion that coercion cannot produce charity was touched on.

If the 19th Century saw the old starving to death in U.S. territory, the rule of law still held. Less pleasant, and sometimes cruel, but the rule of law is about the law, not about comfort and kindness.

Social order is threatened when the young and able are starving to death. If they cannot take up tools of production they will take up tools of theft. The old who have not saved and cannot earn are no threat.

Providing the old with some level of food & shelter is a luxury that can be afforded when a socio-economic system has accumulated some level of wealth.

The current society has wealth sufficient to prevent the aged from starving without jeopardizing continuing growth (we don’t have to feed granny the seed corn). The arguments are about how much comfort we provide the old and who is responsible for providing it.

Even if we foolishly decide that gov’t is the primary provider, then who decides where to draw the luxury line? Why not permit granny unlimited foie gras and medical treatments? Who can determine when that noble aim begins to nibble at the seed corn?

Once we affirm a claim of positive rights, there is no limit to our duty to each other. The end is Dachau.
 
You know, we all need to stop talking about the powerless people. Paying for "them" is not the problem at all!

This kind of stuff is:

http://cryptome.org/eyeball/keating/keating-battle.htm

Look at the stupidity and waste at a little outpost in Afghanistan. Notice the nice virgin plywood used to construct the US camp. Wonder why the prices of plywood doubled once we got into these "wars"? I watched it happen.
Say goodbye to your ability to build a cheap house in America.
Why does the Army not use crappy OSB? They abandon ALL these bases eventually anyway. Read the report.

Multiply the waste of life and materials (blown up Army vehicles etc.) at all the other little bases. This is where the "cash" has been going.

Also notice from that report...barely any mention of casualties on the enemy side. 300 Afghans attacked that little base!
Seems they attacked and got away unharmed. We are not getting our fiat dollar's worth when we spend on these military misadventures.

Notice also how we are guarding little routes in and out of Pakistan. Are we just mall cops or something? What does this little "trade route' have to do with 9/11 and "terror"?


My point is....redirect the spending from these "misadventures" and spend it at home if anything. Then the time to collapse from fiat "cash" could be pushed WAY out into the future. No fighting and rioting in the streets.

Taxes do not "pay" for these military actions. It's all electronic cash created from thin air paid to military industries.

War is EXCEEDINGLY expensive. This will be the way the US collapses.

Don't starve Grandma just to buy another Humvee that's going to be blown up and left in the hills of Afghanistan anyway....

Sick country we live in.
 
Is foo commenting as anonymous, too?

Also, is foo long-winded or what?

foo. MaxedOutMama knows what she's talking about, which is economics, and you don't.

She has been (rather patiently) pointing out where you are mistaken in your ignorance. Please use this chance to learn.
 
Last Anon - I am so heartsick about the wars that I cannot bear to address them. It is not just the expense - it is that as far as I can see, we are killing people for no good reason.

Needless to say it is also expensive, but if there were a justification for it the expense might be worth it. If there is not, it is madness.
 
J in Japan - I thank you for your intention, but please don't tromp all over Foo. I think Foo does understand economics, but that Foo does not understand human nature under stress, so Foo doesn't realize the necessary end result of the interplay between the economics Foo suggests and the human beings who would be subjected to it.

That would be tragedy, and in the end it would eke out the worst possible result.

However we are all going to take our lumps for past bad choices. No question about it.

I would like to write a post about all the SS misconceptions. For example, it is not true that Baby Boomers have not funded their retirements. By any reasonable standard, they have, but our resources have been so mismanaged that we will have to adjust sharply.

Starving Granny is going to end up killing off a lot of young people; not starving Granny is going to take a strong focus on preserving the ability to grow the economy during Granny's old age. Foo's contribution here is valuable because we will have to struggle to preserve growth, and the best way to do that is flattening marginal tax rates and broadening the tax base.

So Foo is part of the solution, even if I am appalled at the idea of acquiring colonies and dumping the Lebensunwertigen there. I also think Foo does not understand that all the ill or disabled young will go also, once we decide on that course.
 
"Is foo commenting as anonymous, too?"

No, every comment by me on this blog is tagged 'foo'.


"Also, is foo long-winded or what?"

I put in what I think is required to present a convincing case. To do any less than that would not be engaging in debate, but simply hurling opinions. (Unfortunately "hurling opinions" pretty much sums up your entire post.)


"foo. MaxedOutMama knows what she's talking about, which is economics, and you don't."

If you are not going to back up your claims, you may as well not open your mouth because you are contributing nothing to the discussion. (Unbacked praise is acceptable -- praise MOM all you like. But unbacked smack-talk is pointless.)


"you are mistaken in your ignorance."

More claims backed by nothing.


"Please use this chance to learn."

I am. But there is a big difference between true learning (seeking out truths and filtering out untruths), and blindly accepting everything you are told. What you are really suggesting is that I do the latter. (Nevermind that the latter leads to contradiction the second you start listening to more than one source.)


Now, I hope *you* use this chance to learn, and that the next time you choose to participate it is in a more constructive fashion.
 
"Foo does not understand human nature under stress, so Foo doesn't realize the necessary end result of the interplay between the economics Foo suggests and the human beings who would be subjected to it"

I'm still waiting for you to provide a consistent and convincing case... (I'll be watching for it in your future writings.)


"That would be tragedy, and in the end it would eke out the worst possible result."

Yes, because the USA, where at least pre-FDR the ideals of liberty and property rights were probably held up better (with obvious exceptions -- e.g., Lincoln and bank fraud) than anywhere else in the world obviously turned out to be the worst place in the world.


"For example, it is not true that Baby Boomers have not funded their retirements. By any reasonable standard, they have, but our resources have been so mismanaged that we will have to adjust sharply."

No one is paying in to fund their own retirements -- it's just a combination of getting robbed by those collecting entitlements, and being taken for suckers as general revenue was mislabeled "SS tax" while the money all got spent like the general revenue it really was.

You can't put money in a jar labeled "Hawaiian Vacation Fund" and then take the money out just as fast and spend it on other stuff, and then say you actually paid into your Hawaiian Vacation Fund. (Oh but, eh, by "any reasonable standard, they have" - their resources were just, er, mismanaged, by them, so um, off to Hawaii they go!?!?)


"Starving Granny is going to end up killing off a lot of young people"

So when I suggest that "We may need some kind of a ward-of-the-state system" that provides free food/shelter/clothing, that is somehow "Starving Granny"?

And you are making a rather melodramatic claim here with nothing backing up that claim.


"grow the economy"

Note that in a sound economic system (with a stable population) growth should neither be required nor counted on -- otherwise you have something like a ponzi or speculative/defined-benefits scheme. In fact, a sound economic system should not over-react to a bit of economic shrinkage either. (Morally and economically sound growth is always desirable though.)


"flattening marginal tax rates and broadening the tax base"

So far I think the best solution I've heard is a flat sales tax that applies to everything with a "give away" to everyone to compensate them for the taxes someone on a subsistence income would run into. And I would throw in an export tariff (to match the effective import tariff created by the sales tax) just to keep the trade situation fair (i.e., so as to not tempt other countries into adding their own import tariffs -- which would cost us just us much but without giving us any of the tariff revenue).


"I am appalled at the idea of acquiring colonies and dumping the Lebensunwertigen there."

Who said we acquire colonies? Maybe we send them to Mexico (kind of a tit-for-tat), or drop them off on the African coast. There are all kinds of options. (They would be warned that returning to the USA would be a death sentence, so you don't have to worry about lots of them scrambling back over the border -- or if they do they will keep their noses *very* clean because their next encounter with the cops could turn out to be their last.)


"I also think Foo does not understand that all the ill or disabled young will go also, once we decide on that course."

If you want to make that case, then make it, don't just claim it.
 
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