22 June 2017

Cruz Missile

Heard the Tedster on cable saying that the best part of the Senate ACA replacement was the allowance for NotInsurance plans that were outlawed by the ACA. Which caused the Right Wingnuts to decry the killing "choice". As if permitting insurance companies to scam the unwitting into paying for NotInsurance is a good thing.

The results of NotInsurance are easily seen:
1) those with it will end up in emergency rooms since nothing of note will be covered, and on the dole of the rest of us
2) siphoning those from even minimal real plans also siphons off real premiums, thus rising the premiums for the rest of us

Right Wingnuts, never saying so of course, want health insurance to be treated as just another consumer spend. Which it isn't. It's insurance, and thus only works if all are in the pool. Some degree of penalty for those who actively undermine the process is reasonable. But making such folks pay full price just turns insurance into another consumer spend. Which it isn't.

21 June 2017

Right, But For the Wrong Reason

Yet another story on the vampire loans, ARM. They've come back from the dead. What's interesting about the story is that it gets the reason for using ARM (from the house buyer's perspective, of course) completely wrong.

The folks who are the best for ARM are the Yuppy. Or, for that matter, anyone with strong expectations of rising income, especially above the expected inflation rate. If you're setting out to flip the house, as was the come-on which led to the Great Recession, then we'll just have another one. Those with rising incomes can chose to either flip or stay when the interest rate ratchets; everyone else has to sell, no matter what. We do all remember that was the proximate cause of the Crash. Don't we???? That CBS News would allow such a knucklehead to write such drivel is disturbing.
According to a study by the Federal Reserve, ARMs are a play on rising interest rates. When rates are low, as they have been for many years, homebuyers prefer a fixed-rate 30-year mortgage. But the Fed is gradually raising interest rates due to an improving U.S. economy.
[my emphasis]

Of course, this is nonsense. What matters in capital purchases, specifically consumer ones, is the monthly nut. Keep the nut (monthly mortgage plus fees) to some mythic percent, say 25% of gross income. Only those with rising incomes can withstand mortgage payment resets. Non-earned equity in that bungalow happens when the market value of the bungalow rises above the remaining mortgage value. Simple arithmetic. Just what the marginal flipper is expecting; a few years in a McMansion, then sell it out. Same as 2005. Some other simple arithmetic: what happens to capital values when interest rates rise? Class???? They fall, to match the implied return, which has gone up. What happens to house values as interest rates rise? Class??? They fall so as to keep the nut stable. So, what happens when ARM mortgages, held by those on stagnant or falling wages, rise? They all have to sell or be foreclosed. We've really have seen this movie before. Gad. So, for the house buyer, ARM in a time of rising rates is the absolutely worst time to sign on the dotted line. Except for the truly upwardly mobile. Given that the middle class is in rapid decline, what's the answer? Class???

18 June 2017

I Still Hate Neil Irwin, part the seventh

Yes, I still do. He "steals" my PINO meme with his piece today. Admittedly, he gets quotes, but hey; he's a highly paid reporter for the NYT, so he should. The lede:
The thing about populism is it usually involves doing things that are popular.

This is something that European nationalists and Latin American strongmen have long known. When they come to power, they aim to deliver concrete benefits to their supporters, even at the cost of their nations' long-term fiscal health.

What he does miss is that old bugaboo, the multiple sources of inflation:
The government would pay for it all with higher deficits. Free candy for everyone! The cost -- in the form of higher interest rates and perhaps inflation -- would come later.

Of course, only if the billionaires aren't required to pull some freight. Recall an earlier missive which showed that income tax started as a rich man's tax: they paid seven times as much as the lowest tier, and that tier was much above median.

Even if Donald J. Quisling did go about doing anything, it'd be based on shovelling money to the Billionaire Boys' Club. Real fiscal policy? Not until Hell freezes over.

He offers up quotes from a tome on Latin American populism, which tome concludes that wealth equalization (the only cogent point of populism, of course) must needs lead to catastrophe through the currency. However, comparing Latin American mini-economies (and their dependent currencies) to the USofA is silly. The US Buck is New Gold, mentioned in these missives many times, and, among other things, the USofA is thus obligated to spread its Bucks around the globe to keep the world's economy running. And, of course, since the US Buck is New Gold, we still get to say how much it's worth. Latin American tin horn dictators never could make such a claim for their paper money.
the populist movements of Latin America had often generated a disastrous boom-bust cycle

Shown here, in graphic detail more than once, is the depression laden 19th century USofA economy: even with a currency in specie (actually, because of it), economic life is mostly bad for most folks. We're supposed to be smarter than lower forms of life. There's something to be said for that scene in "2001" where the hominids break bones by the monolith. Monolith, gold, monolith, gold... Supportive fiscal policy isn't, by design, disastrous. If it were, we would still be in our Post-WWII Depression.

Gifts for the BBC:
Despite the president's talk of a bold $1 trillion infrastructure plan, there is not yet an actual legislative proposal, and the approach the administration has described relies heavily on tax credits to encourage private investment. That tends to limit the scope of any projects to those that can generate revenue to pay off investors.

13 June 2017

About That Duck

So, it looks like a duck, walks like a duck, and quacks like a duck. What is it? It's a Kim Jong-Don. Some readers took exception to that extreme epithet. Today's news that he's on the verge of firing Mueller, and that Dear Leader cabinet meeting yesterday was enough proof.

Fair's Fare

Mulvaney justified cutting the social safety net, and the scientific one too, by describing this budget as "taxpayer friendly". Clearly, a swipe at Romney's 47% diatribe.

Well, here's some factoids. The current income tax is the result of the 16th amendment. The first tax levels
Later that year, Congress enacted the Revenue Act of 1913. The tax ranged from 1% on income exceeding $3,000 to 7% on incomes exceeding $500,000.

Now, that's really progressive: 7 times higher for the rich. Moreover, the median income (to the nearest available year) was
According to a U.S. News and World Reports article comparing income in 1915 and 2015, "back in 1915 . . . you were doing about average if you were making $687 a year, according to the Census. That is, if you were a man. If you were a woman, cut that number by about half."

So, income tax didn't kick in until well above the 50th percentile. Way, way above. And that assumes the original used "average" as median rather than mean. Unlikely, so the median wage was almost certainly even less.

Any way you cut it, the 47% have been with us since the beginning of income taxation.

12 June 2017

Push Me, Pull You

One of the most predictable, and (of course) predicted, results of Brexit would be inflation. The UK gets a lot of widgets from the EU, and the Pound has dropped more than a bit (13%, as of the article). As mentioned many times in these missives, inflation has three forebears:
- demand pull
- cost push
- wage push

The Right Wingnuts always attribute any bit of inflation to the last, and always call for punitive measures on wages. Doesn't always work. Well, never. Volcker demonstrated that one could rid an economy of inflation by destroying the whole edifice, by going after wages.
Accelerating inflation may help explain the stunning electoral rebuke of Prime Minister Theresa May and her governing Conservative Party as well as the unexpected strengthening of the Labour Party in Thursday's parliamentary elections. Consumers are grappling with rising prices, and wages have not kept pace. The economy is weakening.

I wonder how the Tories will spin this direct cause-and-effect to greedy, lazy, takers in the wage earning sector? They should hire Ryan, I suppose.

In at least as stunning, recent news is that the Kansas legislature has passed tax increases over Brownback's veto (the article title is a play on Frank's "What's the Matter with Kansas", from some time ago). He and Pence were running neck-and-neck for most hated governors. Voodoo economics only works for the high priests. Once again, the Darwinian/Randian set don't care how their slice of the GDP pie gets bigger relative to the remaining. In fact, they seem to prefer that they get an increasing proportion of a shrinking pie. There's a neat sequence in a "Criminal Intent" episode (no claim to be the first such) I saw recently where Goren hounds the perp by comparing shoe size to junk size, and that those with itty bitty junk prefer petite woman. Makes the junk seem bigger. By comparison.
The cuts came. But the growth never did. As the rest of the country was growing at rates of just above 2 percent, Kansas grew at considerably slower rates, finally hitting just 0.2 percent in 2016. Revenues crashed. Spending was slashed, even on education: In March, the State Supreme Court ruled that state-level school spending was unconstitutionally low. The court is ideologically mixed, but its ruling was unanimous.

The 1% just want to feel their junk's bigger.

Could the hard right have met its Waterloo? One can only hope.

09 June 2017

Penny Wise is Pound Foolish

Here's a tweet that some have professed will lower drug prices. The notion, just use less. No.

The problem with drug prices, to some extent actually true, is that most of the price (the part which reflects cost recoupment only) goes to paying amortization of the R&D and approval tasks. The variable/marginal cost of 99.44% of drugs is in the noise. The chargeback from the CxO suits amounts to more.

So, no, using less will only *raise* the unit cost. Accounting is boring, but often correct.

07 June 2017

Minority Report

Much pundit bloviating, especially from the Left, over the last few weeks has centered on three subjects: the incompetence of Donald J. Quisling's governance, the lack of legislative accomplishment, and approval in the 30 percents. The conclusion? Donald J. Quisling isn't getting anything done. If you're any kind of quant or macro policy analyst (other than the au courant tsunami of customer manipulation applications), you would be quite wrong to feel complacent. Donald J. Quisling is doing some very bad things for both groups. The executive power of the president is nearly limitless; the executive order regime is only the most public enforcement. The reports of curtailing civil rights process in the agencies is one sub-rosa implementation. Dictatorship is so much easier than governing.

The whole point is that having a 30-ish percent approval is what Donald J. Quisling actually wants: the whole point of his position is not to govern the population, but to bilk the 99% to his benefit. And his other billionaire buddies.

So far as pure quants go, government data is disappearing, and when (not if) the economy goes in the crapper, BLS and Commerce and Census will be ordered to stop collecting and publishing data; just as already happened at EPA. The point, of course, is that dictators don't want real data out in the open to contradict them. The point of dictatorship is that
Nobody knows the system better than me, which is why I alone can fix it. I have seen firsthand how the system is rigged against our citizens

We can add to RINO and DINO, PINO where the 'P' stands for Populist. Donald J. Quisling has never been about supporting the lower classes, only pandering to them with God, Guns, and Abortion propaganda. He convinced 77,000 empty county shit kickers and was installed. He's all about implementing Leona's mantra:
We don't pay taxes. Only the little people pay taxes

Moreover, research going back to, at least, FDR has found that net Federal moolah flow is from Urban Blue states to Empty Red states. If you see that the "infrastructure" plan is mostly giving money and tax breaks to developers, and in Red state counties, rather than government led and managed projects affecting the largest populations, will you be convinced? How about bridges to nowhere?. Expect roads and bridges in the middle of North Dakota: from nowhere to nowhere. All the while taking from the 99% and giving to the 1%.

Will the shit kickers in the Empty States ever figure out they're cannon fodder for an autocrat? Don't bet on it.

02 June 2017

Thought For The Day - 2 June 2017

The drop in the unemployment rate comes as the labor force participation rate took a leg lower after having held steady -- and slightly increased -- over the last year or so. The labor force participation rate in May fell to 62.7%, down from 62.9% in April and 63% in March. The employment to population ratio also fell in May to 60% from 60.2% in April.

The number of Americans not in the labor force rose by 608,000.
-- Myles Udland/2 June 2017

That's from Yahoo Finance, and one might wonder how long we'll have to wait for Donald J. Quisling's tweet blaming Obambi for the fall in participation. Throwing more folks off of SSI!! That's the ticket.

01 June 2017

Thought For The Day, part the second - 1 June 2017

A second thought for the day, thanks to Donald J. Quisling.

Here's the "research" he quoted, justifying coitus interruptus climatus. When I heard the sound byte, I knew the numbers were bogus. Ya think?
"NERA" is shorthand for National Economic Research Associates, an economic consulting firm SourceWatch identifies as the entity that published a June 2011 report on behalf of coal industry front group American Coalition for Clean Coal Electricity (ACCCE). ACCCE's report concluded, "clean-air rules proposed by the Obama administration would cost utilities $17.8 billion annually and raise electricity rates 11.5 percent on average in 2016."

More alternative facts.

Thought For The Day - 1 June 2017

Ya think the shit kickers in West Virginia, and elsewhere, might be feeling a tad betrayed? Or, are they really so stupid that Guns, God, and Abortion will keep them loving Donald J. Quisling?
When Budget Director Mick Mulvaney assumed the podium in the White House briefing room last week and previewed the administration's 2018 budget, Heather Block's fears quickly turned to outrage.

Block, a 54-year-old former international aid worker from Lewes, Delaware, listened with growing anger as Mulvaney promised to slice $72 billion from Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) over the next ten years. The cuts are among $1.74 trillion in social welfare cuts proposed by the Trump administration, a sweeping plan that could kick people like Block off a program, known as SSDI, that keeps her financially afloat.
[my emphasis]

As mentioned more than once, West Virginia is the SSI capital of America. And these shit kickers voted for their deaths. Good on them.