By now most folks should know that the Red/South states come in last in terms of education, jobs, income, and smarts by any measure. Now, we find out what that means.
It means that not only ain't they Dumb, Fat, and Happy, they are Dumb, Fat, Poor, Old..... and Sick. While being a Keynesian is orthogonal to Social Darwinism, this story inevitably leads to some pondering. How should we spend our health care dollars? If we spend like the Europeans do, we all live longer and healthier lives. If we continue the way we are, we end up funneling most of our health care dollars into the pockets of HMO's, Big Pharma, and BioTechs. I've been spending some time looking at BioTech/Pharma, and what I see is lots of money going into the pockets of Management in pursuit of multi-kilo buck life extending drugs (broadly defined).
What seems to be the norm is that some scientist or doctor does come up with a novel entity, but aimed at a really small segment of the unwell. The aim is to get as much money into the hands of management (million dollar payments are not uncommon), typically not the founders, scientists, or doctors. Then the FDA process goes on for some years. If the entity is blessed, then the kilo-buck payments begin. Whether any of that gets to the original investors...
The BioPharma traders are scared crapless of Obama. And well they should; the gravy train may well be over. What is not remembered is that, up until the 1970's (or thereabouts), most research was done on the public dime, and the compounds thus discovered were available to all. BigPharma didn't like that, so now we have massive expenditures on trivial (from a public health point of view) drugs in the hope of getting a massive payoff. From public funds, of course; MediCare and MediCaid. For-profit health insurers won't pay for this stuff.
So, we the intelligent and healthy will be stuck paying the bill to keep these self-abusing knuckleheads alive for a few more months. Is this anyway to run a railroad?
01 July 2009
29 June 2009
Now ya can keep them black folk out
5-4, of course, but the Supremes have just made de facto discrimination legal again.
What a country.
What a country.
19 June 2009
Lies, Damn Lies, and Statistics
That old saying, "figures don't lie, but liars figure" sound familiar?
When the news appeared that the number of people on unemployment had dropped, and that this was a sign of better things happening in the economy, I had to avoid an upchuck. Phooey, I told anybody who would listen. All that happened was that more folks got tossed off unemployment (ran out of weeks) than came on. You can expect that this will continue for years. The liars will say that things are getting better. Yeah, right. And the bankers still flit around in their taxpayer subsidized jets.
The NYT ran the story today. Yup. More folks got tossed off than came on. Green shoots my sphincter.
When the news appeared that the number of people on unemployment had dropped, and that this was a sign of better things happening in the economy, I had to avoid an upchuck. Phooey, I told anybody who would listen. All that happened was that more folks got tossed off unemployment (ran out of weeks) than came on. You can expect that this will continue for years. The liars will say that things are getting better. Yeah, right. And the bankers still flit around in their taxpayer subsidized jets.
The NYT ran the story today. Yup. More folks got tossed off than came on. Green shoots my sphincter.
15 June 2009
Tapas
A few small bites today.
Notice that China is feverishly stimulating its domestic consumption? They have admitted, albeit with loud rectitude, that export (read: labor exploitative) based economies quickly collapse. They are admitting the truth: capitalists and consumers are co-dependent. For some years now, the Chinese (and American by proxy and directly) capitalists wagered that they could take all the growth for themselves. So long as they had American chumps running the government (and I am not convinced that Geithner/Bernanke aren't), they could dump their production here. Capitalists, not being particularly forward thinking, were shocked to discover that the proceeds of this game were dollars; bits of psuedopaper embedded as bytes in various computers. There is no post-industrial (well, at least no post-physical production) economy. Surprise, surprise. So, now China is embarking on building, to a greater extent at least, a self sufficient (closed world, as the economists like to call it) economy. They have learned that the only international trade which should exist is in natural resources; these exist only in some countries and have to be traded for production (or other resources on occasion) goods.
Why trade a bird in the hand for a fart in a whirlwind? The Chinese ain't dummies.
Folks who follow Iran for more than a few seconds, and without the blinders of Right Wingnuts, have known for years that the President of Iran is kind of like the Queen of England, or governor of Texas: a ceremonial gasbag with no institutional power. For those with short memories, the Right Wingnuts chose to ignore Ahmadinejad's "moderate" predecessors with the charge that the President of Iran was merely a figurehead. Once they got a boogie man to their liking, well now the President of Iran is a really important guy who has to be taken seriously. He's a real meany. So, today the Supreme Leader of Iran (you knew there is one, yes?) says that the voting will be looked into. There is good reason to let the populace have whatever pointless, powerless figurehead they want. The pointless, powerless figurehead makes no difference to him. Right Wingnuts are just do stupid and evil. Banana Republic El Jefes.
Finally, the end of the Joe Sixpack Bull Market. I missed it, alas, being to concerned with other things, like this blog. Ironic, I suppose. It is no accident that oil, and other commodity, prices are rising. The "markets" are expressions of localized (local can be in particular places in the real world, real time, or manmade of either; stock markets are the latter) inflation and deflation. As I write, the Big Money is going back into commodities. It never made much headway into the regular stock market, which is why the Calf Market (calf, little bull?) is over. Oh well. Unearned income should be taxed at confiscatory rates, just to discourage such sloth and exploitation of power. Real work, real pay. Works for me.
Notice that China is feverishly stimulating its domestic consumption? They have admitted, albeit with loud rectitude, that export (read: labor exploitative) based economies quickly collapse. They are admitting the truth: capitalists and consumers are co-dependent. For some years now, the Chinese (and American by proxy and directly) capitalists wagered that they could take all the growth for themselves. So long as they had American chumps running the government (and I am not convinced that Geithner/Bernanke aren't), they could dump their production here. Capitalists, not being particularly forward thinking, were shocked to discover that the proceeds of this game were dollars; bits of psuedopaper embedded as bytes in various computers. There is no post-industrial (well, at least no post-physical production) economy. Surprise, surprise. So, now China is embarking on building, to a greater extent at least, a self sufficient (closed world, as the economists like to call it) economy. They have learned that the only international trade which should exist is in natural resources; these exist only in some countries and have to be traded for production (or other resources on occasion) goods.
Why trade a bird in the hand for a fart in a whirlwind? The Chinese ain't dummies.
Folks who follow Iran for more than a few seconds, and without the blinders of Right Wingnuts, have known for years that the President of Iran is kind of like the Queen of England, or governor of Texas: a ceremonial gasbag with no institutional power. For those with short memories, the Right Wingnuts chose to ignore Ahmadinejad's "moderate" predecessors with the charge that the President of Iran was merely a figurehead. Once they got a boogie man to their liking, well now the President of Iran is a really important guy who has to be taken seriously. He's a real meany. So, today the Supreme Leader of Iran (you knew there is one, yes?) says that the voting will be looked into. There is good reason to let the populace have whatever pointless, powerless figurehead they want. The pointless, powerless figurehead makes no difference to him. Right Wingnuts are just do stupid and evil. Banana Republic El Jefes.
Finally, the end of the Joe Sixpack Bull Market. I missed it, alas, being to concerned with other things, like this blog. Ironic, I suppose. It is no accident that oil, and other commodity, prices are rising. The "markets" are expressions of localized (local can be in particular places in the real world, real time, or manmade of either; stock markets are the latter) inflation and deflation. As I write, the Big Money is going back into commodities. It never made much headway into the regular stock market, which is why the Calf Market (calf, little bull?) is over. Oh well. Unearned income should be taxed at confiscatory rates, just to discourage such sloth and exploitation of power. Real work, real pay. Works for me.
23 May 2009
Tiny Tim's Two Month Millionaires: evil is as evil does
Guess what happened when none of us (humble self ignominiously included) weren't looking? Tiny Timmy Geithner took that TARP money and created some (I don't know how many, only that I am not among them) millionaires. I am pretty certain that there aren't many NEW millionaires in the flock, just ones with new millions.
How did this happen, you ask? Well, I have the answer.
To recap. The banks were outed as 2008 proceeded, some going under, others graced with billions in taxpayer dollars. As the banks sank, they took more and more of the rest of the economy with them. In the financial markets, billions of dollars were withdrawn from stocks, plunging the DOW from 14,000 to 6,500. March 9 was the bottom.
From then to May 9, if one had $100,000 lying around dormant, one could become a millionaire. Just two months. Numbers of stocks rose 10 times or more in those two months. The ones I've found were in the self same financial services industry; not all though, Palm (of the Pilot, etc.) went up 9 times. The reason, I am convinced, is that the plunge was not justified on real economic terms. That is the crime. Little of this had to happen. Had the MegaBanks been treated just as RegularBanks are by the FDIC, there would not likely have been any contagion into the real economy. And no opportunity for those savvy enough to realize that the plunge was only temporary and artificial to get 10 times their money in two months.
Here is one example. The insurance company Conseco was at $.26 in March (the graph isn't clear enough to see which day it hit bottom, but it was about the 9th). About 9 May, it was at $3.90. More than 10 times, and you had a couple of weeks either side of 9 March to have bought at $.39.
Only folks who could toss away $100,000, or knew that the plunge was fake, actually pulled it off. And, you would have to sell off the stock, which would be about 500,000 shares, without blowing out the price. It would require some sophistication in trading to do that.
Was this a direct gift from Tiny Tim? Basically, yes. While the insurance companies are culpable, to a lesser extent than the banks and we await the commercial real estate shoe to drop, it is true that the prices spiked right after it was announced that some would be getting TARP funds. Conseco wasn't one of them, in fact. It looks like their plunge was collateral damage; their rise inevitable, once TARP and such got rolling.
Thanks Tim, from all of us who aren't new millionaires.
How did this happen, you ask? Well, I have the answer.
To recap. The banks were outed as 2008 proceeded, some going under, others graced with billions in taxpayer dollars. As the banks sank, they took more and more of the rest of the economy with them. In the financial markets, billions of dollars were withdrawn from stocks, plunging the DOW from 14,000 to 6,500. March 9 was the bottom.
From then to May 9, if one had $100,000 lying around dormant, one could become a millionaire. Just two months. Numbers of stocks rose 10 times or more in those two months. The ones I've found were in the self same financial services industry; not all though, Palm (of the Pilot, etc.) went up 9 times. The reason, I am convinced, is that the plunge was not justified on real economic terms. That is the crime. Little of this had to happen. Had the MegaBanks been treated just as RegularBanks are by the FDIC, there would not likely have been any contagion into the real economy. And no opportunity for those savvy enough to realize that the plunge was only temporary and artificial to get 10 times their money in two months.
Here is one example. The insurance company Conseco was at $.26 in March (the graph isn't clear enough to see which day it hit bottom, but it was about the 9th). About 9 May, it was at $3.90. More than 10 times, and you had a couple of weeks either side of 9 March to have bought at $.39.
Only folks who could toss away $100,000, or knew that the plunge was fake, actually pulled it off. And, you would have to sell off the stock, which would be about 500,000 shares, without blowing out the price. It would require some sophistication in trading to do that.
Was this a direct gift from Tiny Tim? Basically, yes. While the insurance companies are culpable, to a lesser extent than the banks and we await the commercial real estate shoe to drop, it is true that the prices spiked right after it was announced that some would be getting TARP funds. Conseco wasn't one of them, in fact. It looks like their plunge was collateral damage; their rise inevitable, once TARP and such got rolling.
Thanks Tim, from all of us who aren't new millionaires.
06 May 2009
(Un)Intended Consequences
We all know about the phrase, unintended consequences, yes? Give a hand up to a struggling capitalist, and he lays off half of his employees in order to maximize profit. What, you didn't make him promise in writing that he would use the hand up to hire more employees and not just pocket the money? Oh, you believed him when he *said* that's what he'd do with the money. Silly you.
These last couple of weeks have been rather giddy for some parts of the stock market. The recession is over, some say. (Reminds me of "Top Gear": "Some say his testicles are case hardened ball bearings. All we know is, he's called The Stig!" OK, I made part of that up.) Recalling "The Giant Pool of Money", there was all those trillions pulled out of stocks, just looking for someplace to earn lots of capital gains. According to today's NYT, the 30%-ish rise in the Dow 30 since the (may be) bottom about a month ago brings it to its historical average with respect to earnings. In other words, if you missed the rise, your boat won't get floated any time soon.
So, what are all those capitalists saying now that they have their hand ups? Mostly, that "we" can't afford to take care of the tribe. The archetype is seen in the GM/Chrysler rescues. The evil lies in the retirees and union workers, who have bankrupted the companies. The constant refrain is that "we" can't afford to pay their pensions and health insurance.
This is particularly pernicious with regard to the retirees. There hundreds of thousands of them according to a recent article. Nearly a million. So what happens to the "recovery" if these million folks lose most, if not all, of their income? Can you say Mumbai?
The perpetual refrain from the wingnut capitalists is that "we" can't afford to pay middle class wages, anymore. What they won't admit, because making most everybody else poorer makes them richer, is that soon enough the society falls apart. I suppose they've decided that they'll hightail it to Lichtenstein when the rioting starts.
But, the destruction of the blue collar (and increasingly, white collar) middle class isn't a case of unintended consequence. It's the whole point; very much intended. Remember the wingnuts rallying cry: "starve the beast", when Reagan sent the deficit soaring? Didn't work out, of course. Clinton, Bill fixed things up rather nicely by taxing the rich, which caused the economy to grow rather well. That last bit is a fact the wingnuts don't like to roam around loose.
There is an unintended consequence of killing the middle class, which is easily observed in India and China today: since neither country is a self-sufficient economy, both depend on the US, and to a lesser extent Europe, to absorb their output. India, in particular, needs the US multi-nationals to absorb its excess labour. That is a tale for another post. With regard to output, the destruction of the American middle class will shortly cause the collapse not only of American capital (without consumers to buy widgets, capital is worthless), but Chinese and Indian as well.
No matter what the wingnuts say, it really is a zero-sum game without real wealth creation. Wealth creation doesn't happen in the stock or real estate markets, increases there are just sector specific inflation. Or bubbles, if you will. Wealth creation happens when raw materials are extracted, manipulated into shape, and sold for more than the value of the materials, labour, and capital used to create the widget. That's why Apple is profitable; it turns raw materials into iPods and iPhones. Not my cup of chai, those, but very much so to many. The wealth created is in that transformation process. All other value increases, financial sector shenanigans being a prime transgressor, are just as ephemeral as cotton candy. And just as empty calories as your Mama used to pester you about.
These last couple of weeks have been rather giddy for some parts of the stock market. The recession is over, some say. (Reminds me of "Top Gear": "Some say his testicles are case hardened ball bearings. All we know is, he's called The Stig!" OK, I made part of that up.) Recalling "The Giant Pool of Money", there was all those trillions pulled out of stocks, just looking for someplace to earn lots of capital gains. According to today's NYT, the 30%-ish rise in the Dow 30 since the (may be) bottom about a month ago brings it to its historical average with respect to earnings. In other words, if you missed the rise, your boat won't get floated any time soon.
So, what are all those capitalists saying now that they have their hand ups? Mostly, that "we" can't afford to take care of the tribe. The archetype is seen in the GM/Chrysler rescues. The evil lies in the retirees and union workers, who have bankrupted the companies. The constant refrain is that "we" can't afford to pay their pensions and health insurance.
This is particularly pernicious with regard to the retirees. There hundreds of thousands of them according to a recent article. Nearly a million. So what happens to the "recovery" if these million folks lose most, if not all, of their income? Can you say Mumbai?
The perpetual refrain from the wingnut capitalists is that "we" can't afford to pay middle class wages, anymore. What they won't admit, because making most everybody else poorer makes them richer, is that soon enough the society falls apart. I suppose they've decided that they'll hightail it to Lichtenstein when the rioting starts.
But, the destruction of the blue collar (and increasingly, white collar) middle class isn't a case of unintended consequence. It's the whole point; very much intended. Remember the wingnuts rallying cry: "starve the beast", when Reagan sent the deficit soaring? Didn't work out, of course. Clinton, Bill fixed things up rather nicely by taxing the rich, which caused the economy to grow rather well. That last bit is a fact the wingnuts don't like to roam around loose.
There is an unintended consequence of killing the middle class, which is easily observed in India and China today: since neither country is a self-sufficient economy, both depend on the US, and to a lesser extent Europe, to absorb their output. India, in particular, needs the US multi-nationals to absorb its excess labour. That is a tale for another post. With regard to output, the destruction of the American middle class will shortly cause the collapse not only of American capital (without consumers to buy widgets, capital is worthless), but Chinese and Indian as well.
No matter what the wingnuts say, it really is a zero-sum game without real wealth creation. Wealth creation doesn't happen in the stock or real estate markets, increases there are just sector specific inflation. Or bubbles, if you will. Wealth creation happens when raw materials are extracted, manipulated into shape, and sold for more than the value of the materials, labour, and capital used to create the widget. That's why Apple is profitable; it turns raw materials into iPods and iPhones. Not my cup of chai, those, but very much so to many. The wealth created is in that transformation process. All other value increases, financial sector shenanigans being a prime transgressor, are just as ephemeral as cotton candy. And just as empty calories as your Mama used to pester you about.
04 May 2009
Dueling Banjos
Today's Times has Paul Krugman, Nobelist and all around smart guy versus Allen Meltzer, capitalist toady dueling flation. Krugman looks at the data and concludes (and not the only economist or financial journalist) that deflation, motivated by falling wages, is clearly on the horizon.
Krugman's argument, and mine since I started this endeavor, is that without a return to a true middle class median income, depressed economic conditions have to prevail. There is no other way. One can redefine normal full employment as 10%, but that doesn't make it normal or full employment.
Meltzer goes on and on about the evils of inflation, motivated by the government intervention in the banking meltdown. Phooey.
I'll leave it to you to figure out which is the sophisticated city guy, and which the inbred hillbilly. Read for yourselves, and decide.
Krugman's argument, and mine since I started this endeavor, is that without a return to a true middle class median income, depressed economic conditions have to prevail. There is no other way. One can redefine normal full employment as 10%, but that doesn't make it normal or full employment.
Meltzer goes on and on about the evils of inflation, motivated by the government intervention in the banking meltdown. Phooey.
I'll leave it to you to figure out which is the sophisticated city guy, and which the inbred hillbilly. Read for yourselves, and decide.
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