29 June 2015

Euro Mercantilism

Another phrase to call my own (I think): Euro Mercantilism. What the IMF and ECB, et al, are doing to Greece (and will next do to Portugal/Spain/Italy) is WWIII.
Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
["Pretty Boy Floyd", Woody Guthrie]

Krugman's requiem should be read.
To understand why I say this, you need to realize that most -- not all, but most -- of what you've heard about Greek profligacy and irresponsibility is false.
...
This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can't accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.

The purpose of war, of course, is to force out governance of a people and replace it with the victor's. Which is what Germany has set out to do. Portugal is likely next, but in due time Italy or Spain will be attacked. May be then France and the rest of the rich North will understand the gambit. Or may be not.

Also today, a bit of data regarding the power of having one's own currency:
Greece regularly devalued its old drachma, taking it to over 300 per dollar before it was replaced by the euro in 2002, from 30 to the dollar in the 1970s.

It's just such "shocks" that the industrial North, again mostly Germans and French, saw as avoidable with the Euro. Heads they win, tails the rest lose. What if Florida, New Mexico, and Arizona had been forced to go it alone in 2009? Or the banksters? Of course not. Follow the corp quarterlies, and the whining about "currency problem" is endless.

A cross-border currency without cross-border fiscalism could never work. Not even among "near" equals. Over time, the one with the slight edge will push ever more it's advantage. American Right Wingnuts, the Leona Crew, have been at it since Alzheimer Ronnie. They're playing the Long Con, and given politics is very short-sighted, that is their advantage.

28 June 2015

Horses and Barn Doors

Bolting the barn door after the horses have fled is a frequent American silliness. I found the latest when I went to find out about renewing my driving license. Turns out, there's now "verified" license for which one needs a boatload of documentation to get. What's the point, I asked curiously?

Well, beginning in 2017 an American won't be able to board a *domestic* flight without such an ID or valid passport. "You vill schow me you paypahs!!!!" Now, if the threat were, mostly, foreigners, then proving one's citizenship status might make some sense. Of course, the threat has always been, mostly, home grown, either Right Wingnuts (save for the Vietnam resistance era) or various religious citizen nutballs. Which we've just witnessed.

Recent data demonstrate, yet again. Politicians and corporations and ... continue to spout "data driven decision making" and such, but always revert to type: blind zealotry.

26 June 2015

What Roberts Did [update]

On further reflection, and realizing that leopards don't change their spots, I'm much more inclined to view Roberts' siding with the 5 as a major cynical move. Let me explain.

Roberts is just as vile as any one of the Three Stooges, but a tad slier. He knows that in order to implement the Right Wings' "only the little people pay taxes" strategy effectively, the implementers, i.e. The Supremes, must not be seen to do so obviously. This case could, and should, have been tossed on lack of standing grounds, since the complainant wasn't, and isn't, affected by the ACA. But that would have dragged things out a bit longer. Whether the Right Wing could have found a redneck with standing, is an open issue.

Once it was clear that 5 would deny, it costs him nothing to be the 6th. He gets to play grown-up amongst the juveniles. His original ruling is a bit murkier, given the vote. Nonetheless, Roberts hasn't morphed into a compassionate conservative. Reporting leading up to the decision made clear that work-arounds had already been developed to the exchange problem, anyway. Even if Roberts could have been the 5th against, it wouldn't have done the job of the Right Wing, killing ACA.

Linda Greenhouse is the NYT court reporter, and her take is worth a read. She doesn't see the cynicism as I do. One can't have everything.
But what would be truly indefensible, I believe the chief justice and Justice Kennedy came to understand, was the Supreme Court itself, if it bought a cynically manufactured and meritless argument and thus came to be perceived as a partisan tool.

Next time, subtlety.
[update]
I was off-line today until I submitted this in its various places. So the news on marriage just found me. All I can say, re:Roberts, is QED.

25 June 2015

The Tyranny of Average Cost, Part The Second

Surprise!! Roberts didn't join with the other wingnuts. I've read through the ruling, and there are genuflections to The Tyranny, even if not acknowledged.
The combination of these three reforms--insurance market regulations, a coverage mandate, and tax credits--enabled Massachusetts to drastically reduce its uninsured rate.

The quote is from the preamble, and sets out the crux of the matter: cover everyone, and charge equally. Note that this is in contravention to the scam being played by some auto insurance companies these days, where they spy on your driving and charge differently. The notion of insurance is shared risk, and when contravened, is little other than pre-paid consumption, not insurance. The companies call it BlahBlah Rating, but is nothing more than market segmentation to accrue consumers' surplus. Not what Adam Smith (the real one) had in mind.
The combination of no tax credits and an ineffective coverage requirement could well push a State's individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner.

24 June 2015

The Tyranny of Average Cost

When I concocted the phrase 'tyranny of average cost', I thought it was a new description. I've spent the last bit of time searching the innterTubes for that phrase, and nothing comes up. I suppose I should copyright it.

More to the point, there are a couple of pieces on Seeking Alpha, dealing with Apple. More, still, to the point, is that the argument is really about the problem of unit volume, price, and average cost. Seeking Alpha tends to have not the brightest bulbs in the candelabra. With tech and healthcare moving toward evermore capex, variable cost drops as a percent of total, and thus the vendor needs evermore volume to cover cost. Cheap Chinese hands don't mean much when the amount of labor in the widget is minuscule. As mentioned before: if only the X% can afford the Z widget, in short order, the X% won't be able to either because price rises on lowering volume. There's a reason a Chevy costs less than a Mercedes. There's also a reason so much headway has been made in medicine since the 1950s: (largely) universal employer based health coverage provided the funding, which funding didn't exist before then. The Right Wingnuts won't admit this, of course; they assert that only They deserve quality healthcare. Without widespread usage, even the X% couldn't float the boat.

Here
Here

23 June 2015

Dialing For Leprechauns

More than once in these musings, there's been talk of where The Giant Pool of Money (yet growing) goes to find above market risk-free returns. Subprime auto loans is one avenue mentioned here. Regular auto loans, now, too. But that latter is as much an effect of a whithering middle class as anything else. Most folks can no longer afford the monthly for a standard car at the (once) standard 3 year note, which is what I did with my Capri. That was some years ago, of course.
By comparison, 36-month loans were the norm in the 1970s and '80s, while more recently, five-year loans were common.

When will this blow up, too? Soon, in all likelihood. The thing about cars is that, with only a handful of exceptions and none in the near term, their value only depreciates. As the stories point out, you're underwater on the note from beginning to end with these Methuselah loans. Once again, The Giant Pool of sharks goes looking for chum, and finds it.

Here's the link to the FRED graph (click to see it all, if needed).

19 June 2015

The Hypocritic Oath

Back when the Euro idea was floated some, not enough, including humble self asserted that it was somewhere between a certain failure and just a cynical attempt by Germany (mostly) to take Europe back to the days of Mercantilism. You can go to the Wiki for more detail, but the essence of Mercantilism is that developed countries extract resources from poor countries and export over-priced goods to these poor countries. Sound familiar?

Why were we so sure the Euro would fail (on the assumption that Mercantilism doesn't equate to success)? For the simple reason that a monetary union divorced from a fiscal union can't work for all. It can, viz. Mercantilism, work for the rich countries, but at the expense of the poor countries. The Euro gave the Germans, and the French a bit less, the ability to export into the southern poor countries and get paid in a German controlled currency. Get it? If you keep track of the quarterlies here in the US, the weeping and wailing about all those other countries to which American multi-nationals export fiddling their currencies, is a major topic. Avoidance of such reciprocal power is what the Euro gave the Northerners. And they won't stand for the Greeks crying foul. That the poor southern countries bought the bill of goods sold by the Northerners and their own stupid politicians doesn't change the calculus.

Italy, or Spain (toss a Euro), is next in Germany's cross-hairs.

Now today's reporting gives us this:
In Germany especially, the fear is that providing new loans to Greece without extracting more spending cuts represents a fateful step toward a so-called transfer union, with wealthier nations providing handouts to Greece and other weaker countries. "If a small country can blackmail the other members into a transfer union without conditions and controls, the euro cannot survive," said Adam Lerrick, a sovereign debt expert at the American Enterprise Institute, a research organization based in Washington.

Too bad the writer, or editor, didn't tell the readers that the AEI is about as right wingnut as it gets. The AEI, as Germany, stands for economic exploitation of the weak. The hypocrisy of the AEI, and American right wingnuts generally, is that they come from the southern dependent states of America. Were the US only a monetary sovereign, like the Euro, all those Red states sucking at the teat of DC would get nothing. The developed North would be grinding the poor and stupid South under its bootheel. As should have happened after the Civil War. The losers have fiddled the electoral system to take control of the money spigot in Washington, sending moolah by the freightcar load to themselves. All while keeping most of their citizens ill fed, ill educated, and ill doctored.

And propagandizing poor whites that their problems stem not from the 1% taking advantage, but from equally poor darker folks. What happened in South Carolina isn't an outlier, but the purpose.