If we think a healthy wall street is the answer, try the unemployment lines. The distance of the Wall street economy and the Main street economy is growing in leaps and bounds.
It is a simple situation. With Wall street, it is profit, loss and growth.
With Main street, it is jobs, unemployment, underemployment and starvation. Here in Northern Idaho we have people, a large group of folks here are geared for survival. Still, families are living in cars, abandoned vans and moldering old barns. Forest service campgrounds are no longer seasonal campgrounds for the family outings. They are now, lifeline's for the homeless.
The cause is simple. Back in the day, protective terrifies were an isolationist way to keep us from the follies of European and eastern messes, while allowing our economy to grow within.
That lasted until the powerful unions decided that their blue collar workers belonged in the middle class, whatever that was. Welders,machinists and such demanded wages that were non-competitive in the international marketplace.
The next step was for manufacturers, who answerable to their stockholders, found cheaper labor in the orient, Mexico and India. OK, one problem solved. Consumer products such as TVs, computers, steel beams, ET AL, were being produced by countries that hired labor at slavery wages, thence shipping out the U.S. work force.
We are now into the 5th year of great depression two. Not double dip, but a continuation of the original. Wall street is starting to slow down. Why? The law of unintended consequences. With all of this cheaper stuff produced in China,someone overlooked that without jobs, the thriving U.S. market could not survive without consumers. of which many had no longer any purchasing power. Free trade, turned out to be anything but free.
Sunday, October 30, 2011
Monday, May 23, 2011
Changing Directions. Full speed behind.
A couple of days ago, the white house released a statement suggesting that the Premier of Israel and our president had a frank discussion. In political terms that means they didn't bring guns to the table with them. Netanyahu then publicly called out the president on national TV. It turns out that while nation building seems to be part of the agenda, Israel isn't willing to do that by emasculation of their country.
By declaring the pre-1967 boundaries as the only legitimate borders, Obama overlooked a great deal of history. First, the 1948 borders were not set by any international body. It was an armistice line. both sides had run out of gas at that point. At no time did Israel agree to 1948 as permanent. There is no realistic way, short of annihilating Israel, that they would live without Jeruselem. When they were attacked, and you must remember, none of the wars from 1948 through today were started by Israel. One of the natural misfortunes of war, is that when you lose, sometimes you lose territory as well. That the Moslem community built their temple on top of the ruins of the Jewish temple was an act of deliberate blasphemy toward their cousins.
There is ample historic precedence for losing land. After world war 1, Turkey, through the Ottoman Empire, lost huge amounts of land, which was divvied up by Britain into the modern day middle east countries. Some glaring error of judgement happened in that act. For one, they eliminated Kurdistan, dividing it up between Syria, Turkey, Iran and Iraq. Following WW11, both Japan and Germany lost land. I could extend this thread out to infinity and I would have written a history book. I think the former examples will suffice.
Then we come to the historical Palestine, which was not a defined country at all. The west bank was part of Jordan, (awarded by the British) and Egypt who owned the Sinai as well as Gaza. The future borders of Israel were not when awarded statehood, clearly defined. Israel shouldn't have to give away a damned thing until all of the other conquered lands are given back, including the potion of Russia that used to be Poland. Of course in that case we may have to give the south back as well, but perhaps since it was part of the union to begin with, we'll get a pass on that one.
Given that when the Hebrews left Egypt, they found the ten commandments which serves today in most of the civilized world as a basis for common law, and they were awarded the "Promised land, which they held until Rome kicked them out. Jesus was baptised in the Jordan River. West Bank) All over the world every year, the chant, "Jerusalem, next year," is heard. (I don't think I got that exactly right. Perhaps someone can give me that quote accurately.)
So then. To sum up, our president, after sixty-three years of support as part of our foreign policy, has indeed kicked Israel under the bus. But Wait! There's more! Two days later, realizing that he had defecated in his own mess kit he reversed himself, stating that everyone were friends and he was misquoted and misunderstood. Well Mr. president, thais has happened wa too many times for you to retain any semblance of credibility. I sincerely hope you enjoy your retirement party.
By declaring the pre-1967 boundaries as the only legitimate borders, Obama overlooked a great deal of history. First, the 1948 borders were not set by any international body. It was an armistice line. both sides had run out of gas at that point. At no time did Israel agree to 1948 as permanent. There is no realistic way, short of annihilating Israel, that they would live without Jeruselem. When they were attacked, and you must remember, none of the wars from 1948 through today were started by Israel. One of the natural misfortunes of war, is that when you lose, sometimes you lose territory as well. That the Moslem community built their temple on top of the ruins of the Jewish temple was an act of deliberate blasphemy toward their cousins.
There is ample historic precedence for losing land. After world war 1, Turkey, through the Ottoman Empire, lost huge amounts of land, which was divvied up by Britain into the modern day middle east countries. Some glaring error of judgement happened in that act. For one, they eliminated Kurdistan, dividing it up between Syria, Turkey, Iran and Iraq. Following WW11, both Japan and Germany lost land. I could extend this thread out to infinity and I would have written a history book. I think the former examples will suffice.
Then we come to the historical Palestine, which was not a defined country at all. The west bank was part of Jordan, (awarded by the British) and Egypt who owned the Sinai as well as Gaza. The future borders of Israel were not when awarded statehood, clearly defined. Israel shouldn't have to give away a damned thing until all of the other conquered lands are given back, including the potion of Russia that used to be Poland. Of course in that case we may have to give the south back as well, but perhaps since it was part of the union to begin with, we'll get a pass on that one.
Given that when the Hebrews left Egypt, they found the ten commandments which serves today in most of the civilized world as a basis for common law, and they were awarded the "Promised land, which they held until Rome kicked them out. Jesus was baptised in the Jordan River. West Bank) All over the world every year, the chant, "Jerusalem, next year," is heard. (I don't think I got that exactly right. Perhaps someone can give me that quote accurately.)
So then. To sum up, our president, after sixty-three years of support as part of our foreign policy, has indeed kicked Israel under the bus. But Wait! There's more! Two days later, realizing that he had defecated in his own mess kit he reversed himself, stating that everyone were friends and he was misquoted and misunderstood. Well Mr. president, thais has happened wa too many times for you to retain any semblance of credibility. I sincerely hope you enjoy your retirement party.
Sunday, May 8, 2011
Economic Causes & Solutions
In order to fix a problem you have to understand what caused it. Our economic situation is now called the "Great Recession," to separate the dialogue from the original "Great Depression."
Originally, it is thought that rampant speculation in the stock market, along with low margin requirements started the whole thing. People were gambling on an out of control upswing in the stock market, but gambling with money they didn't own. When the market started to fall, margin calls went out to the investors. That meant they had to finish paying what they bought the stocks for in cash. The vast majority of stockholders couldn't do that, and the market plunged even further. Ergo, the crash of 1929. What most people today do not understand is that the depth of the depression didn't hit until 1932 and 1933. It wasn't until the U.S. started to crank up the industrial side to tool up for what loomed as the second world War that the depression was finally but slowly on it's way out.
Starting in 1929, it didn't really end until early 1939. Ten miserable years in which literally thousands of Americans starved. If it hadn't been for the fact that most in our country lived on either family farms, or at least acreage they could convert into food production, even more would have succumbed.
The post depression years were filled with two things. The first, World War two, the second many band aids were applied to regulate the economy so that this would never happen again. I'm not going to get blatantly into partisanship more than I have to here, but still, many will on both sides of the dogmatics crowd, think I have.
First, laws were passed so that Banks were limited to the state they were chartered in. Secondly, limitations were applied to percentages of stocks could be borrowed on margin. Another, and perhaps the most serious was the separation by law, of investment houses from commercial banks. Keep this paragraph in mind, as we revisit the subject again. These laws have all been overturned.
During the Forties and 50's, the era I grew up in, there weren't many safety nets, as they are popularly called. Old people were on county welfare, a system that kept starvation away, but didn't stop the roof from leaking. Social Security was introduced in 1937, started in January 1938, but payouts started in 1942, just four years after it's inception. By rushing into payments that hadn't accrued in this what was called an insurance program, negative cash flow started right from the beginning.
For those of you with computers, here is the short history of Social Security:
http://www.ssa.gov/history/briefhistory3.html.
Over the years, Politicians ran for office, generally promising a chicken in every pot and the government would provide the pot. Citizens ran for office, country, state, and federal, by promising to deliver things. Benefits, housing, jobs, etc. and they are still doing it today. Obviously, in a system whereby a politician is elected by what he or she can deliver, the ones that promised the most were usually elected. If they produced what they promised, they were usually re-elected as well. What the dumbed down populous didn't think about, was that when benefits ere delivered, they paid for them, not the "Government."
Taxes began to rise, as did the benefits. We have arrived to this, the second great depression because we wanted more from government than they could deliver, yet they continued to promise these things to the point over the years, and as new generations appeared, until we stopped paying attention to our history, or that history was altered to fit special interests.
While the industrial revolution was taking place, several social adjustments were as well. Unions organized, and sweat shops, child labor and such began to disappear. Wages went up and conditions improved, but like everything in life, the pendulum swings and with government, it usually swings hard past the original intents. Good old American know how and industrious workers managed through increased productivity. Manufacturers modernized their factories, and labor became more efficient.
We finally came to a point where the union movement had virtually taken over manufacturing in this country by pricing it's labor beyond what efficiency could absorb. When that happened, U.S productivity no longer could hold off the developing countries, some of which while we were not looking had become more developed than our selves, yet with economies that did not match ours. Their labor was less costly, mostly because their society had not gone the same route as we. People were living in sub-standard housing, even mud huts, but they were eating and educating their children who now are our scientist and engineers that were brought here because we weren't filling that gap through our own efforts.
We are in a declining civilization. We have all heard of "The Rise and Fall of Europe," but most assumed wrongly that it couldn't happen here. Over thousand of years civilisations have appeared, bloomed in wealth, then passed by by stronger countries, perished. We are a spoiled nation that demands that when tax revenues fall short, government support all of the programs that we have become accustomed to. Child care, Kindergarten, pre-school, none of which existed during my childhood.
Inflation took away the ability for most mothers to stay at home, and even with two incomes we aren't where we were when mom left home to work. During 1967-68 social security annual maximum payments stopped at $4400 per year. I passed that in the first quarter. Today social security is in trouble because it was mismanaged from the beginning. If private retirement funds were run the way our government runs it they would have been jailed long ago.
Our congress, when having to fund a war, borrows the money from Social Security trust fund. A trust fund that exists in name only, as it has been drained away. Most high tech jobs have gone elsewhere and will stay off shore until either the countries that have our business now, bring their economy up to ours, or wages in this country dip to the levels of theirs.
While wall street celebrates increasing profits those profits were obtained from goods and services produced by foreigners, not our over priced labor force. Some have indignantly asked me, "why can't our laborers become middle class too." The answer is they can't and still have our over all economy survive. As in other countries, many without a middle class, the rich get richer and the poor, poorer. Cheaper commodities won't cure anything if our average citizen can't afford to buy them at any price. Look for our illegal immigrant problem to solve itself. soon there will be an Exodus back to where they came from. Our day has passed, through greed and a history of lying office holders. Hire honest people and we'll maybe, just maybe get back to where we want to be.
Of all states, according to a study just published in the AARP newsletter and based on stats from the Center on Budget and policy priorities, the stats of interest are as follows. These are projected deficits by state, percentage wise for 2012:
Idaho at 3.9 billion, one of only three states with deficits less than 5%. Nevada, home of our senate leader, leads the deficit parade with 45.2 billion, followed by New Jersey at 37.4 billion. Texas with 31.5 billion top the front runners. Washington State is at 16.2 % and California at 29.3 as is Oregon at 25%. The winner on the low end is Indiana, led by former budget director in the Bush administration, Governor Mitch Daniels at an even 2%. Perhaps the Republican Party should be looking at Daniels instead of the glamour kings of the party. At least Daniels knows how to roll up his sleeves and do the business of governing without the demagoguery that plagues us all.
Originally, it is thought that rampant speculation in the stock market, along with low margin requirements started the whole thing. People were gambling on an out of control upswing in the stock market, but gambling with money they didn't own. When the market started to fall, margin calls went out to the investors. That meant they had to finish paying what they bought the stocks for in cash. The vast majority of stockholders couldn't do that, and the market plunged even further. Ergo, the crash of 1929. What most people today do not understand is that the depth of the depression didn't hit until 1932 and 1933. It wasn't until the U.S. started to crank up the industrial side to tool up for what loomed as the second world War that the depression was finally but slowly on it's way out.
Starting in 1929, it didn't really end until early 1939. Ten miserable years in which literally thousands of Americans starved. If it hadn't been for the fact that most in our country lived on either family farms, or at least acreage they could convert into food production, even more would have succumbed.
The post depression years were filled with two things. The first, World War two, the second many band aids were applied to regulate the economy so that this would never happen again. I'm not going to get blatantly into partisanship more than I have to here, but still, many will on both sides of the dogmatics crowd, think I have.
First, laws were passed so that Banks were limited to the state they were chartered in. Secondly, limitations were applied to percentages of stocks could be borrowed on margin. Another, and perhaps the most serious was the separation by law, of investment houses from commercial banks. Keep this paragraph in mind, as we revisit the subject again. These laws have all been overturned.
During the Forties and 50's, the era I grew up in, there weren't many safety nets, as they are popularly called. Old people were on county welfare, a system that kept starvation away, but didn't stop the roof from leaking. Social Security was introduced in 1937, started in January 1938, but payouts started in 1942, just four years after it's inception. By rushing into payments that hadn't accrued in this what was called an insurance program, negative cash flow started right from the beginning.
For those of you with computers, here is the short history of Social Security:
http://www.ssa.gov/history/briefhistory3.html.
Over the years, Politicians ran for office, generally promising a chicken in every pot and the government would provide the pot. Citizens ran for office, country, state, and federal, by promising to deliver things. Benefits, housing, jobs, etc. and they are still doing it today. Obviously, in a system whereby a politician is elected by what he or she can deliver, the ones that promised the most were usually elected. If they produced what they promised, they were usually re-elected as well. What the dumbed down populous didn't think about, was that when benefits ere delivered, they paid for them, not the "Government."
Taxes began to rise, as did the benefits. We have arrived to this, the second great depression because we wanted more from government than they could deliver, yet they continued to promise these things to the point over the years, and as new generations appeared, until we stopped paying attention to our history, or that history was altered to fit special interests.
While the industrial revolution was taking place, several social adjustments were as well. Unions organized, and sweat shops, child labor and such began to disappear. Wages went up and conditions improved, but like everything in life, the pendulum swings and with government, it usually swings hard past the original intents. Good old American know how and industrious workers managed through increased productivity. Manufacturers modernized their factories, and labor became more efficient.
We finally came to a point where the union movement had virtually taken over manufacturing in this country by pricing it's labor beyond what efficiency could absorb. When that happened, U.S productivity no longer could hold off the developing countries, some of which while we were not looking had become more developed than our selves, yet with economies that did not match ours. Their labor was less costly, mostly because their society had not gone the same route as we. People were living in sub-standard housing, even mud huts, but they were eating and educating their children who now are our scientist and engineers that were brought here because we weren't filling that gap through our own efforts.
We are in a declining civilization. We have all heard of "The Rise and Fall of Europe," but most assumed wrongly that it couldn't happen here. Over thousand of years civilisations have appeared, bloomed in wealth, then passed by by stronger countries, perished. We are a spoiled nation that demands that when tax revenues fall short, government support all of the programs that we have become accustomed to. Child care, Kindergarten, pre-school, none of which existed during my childhood.
Inflation took away the ability for most mothers to stay at home, and even with two incomes we aren't where we were when mom left home to work. During 1967-68 social security annual maximum payments stopped at $4400 per year. I passed that in the first quarter. Today social security is in trouble because it was mismanaged from the beginning. If private retirement funds were run the way our government runs it they would have been jailed long ago.
Our congress, when having to fund a war, borrows the money from Social Security trust fund. A trust fund that exists in name only, as it has been drained away. Most high tech jobs have gone elsewhere and will stay off shore until either the countries that have our business now, bring their economy up to ours, or wages in this country dip to the levels of theirs.
While wall street celebrates increasing profits those profits were obtained from goods and services produced by foreigners, not our over priced labor force. Some have indignantly asked me, "why can't our laborers become middle class too." The answer is they can't and still have our over all economy survive. As in other countries, many without a middle class, the rich get richer and the poor, poorer. Cheaper commodities won't cure anything if our average citizen can't afford to buy them at any price. Look for our illegal immigrant problem to solve itself. soon there will be an Exodus back to where they came from. Our day has passed, through greed and a history of lying office holders. Hire honest people and we'll maybe, just maybe get back to where we want to be.
Of all states, according to a study just published in the AARP newsletter and based on stats from the Center on Budget and policy priorities, the stats of interest are as follows. These are projected deficits by state, percentage wise for 2012:
Idaho at 3.9 billion, one of only three states with deficits less than 5%. Nevada, home of our senate leader, leads the deficit parade with 45.2 billion, followed by New Jersey at 37.4 billion. Texas with 31.5 billion top the front runners. Washington State is at 16.2 % and California at 29.3 as is Oregon at 25%. The winner on the low end is Indiana, led by former budget director in the Bush administration, Governor Mitch Daniels at an even 2%. Perhaps the Republican Party should be looking at Daniels instead of the glamour kings of the party. At least Daniels knows how to roll up his sleeves and do the business of governing without the demagoguery that plagues us all.
Sunday, April 17, 2011
I have worried and preached against our industries going off shore for quite some time. In the case that currently is going to bite the consumers on the butt, is auto parts. Most Japanese cars, such as Toyota, Honda, Subaru,Mazda and Nissan assembly lines have either been shut down for lack of parts, or severely curtailed. Even American cars get many electronic and other parts from Japan. Soon the aircraft industry will be similarly hit, since Boeing gets many assemblies from Japan.
Years ago, in the interest of saving money, manufacturers in the United States began shipping electronic components off shore. It has been years since any television sets have been manufactured here. All but a few electronic components, such as micro-chips are gone. Sent to Japan and other oriental places like Taiwan or Singapore.
This and other manufacturing areas is known as putting all of your eggs in one basket, to coin an old phrase. This is a wake-up call to the US government as well as the industries affected. When trees can be shipped to Japan, and milled there cheaper than here, something is wrong. When iron ore can be shipped to Japan, processed into steel, then shipped back to the US market and sold cheaper than our own steel mills, something is wrong.
Currently, according the the Philadelphia Inquirer, and published in the Spokesman-Review, car dealers of many makes are not bargaining with buyers. It's full price or walk.
If we ever get into another war in the Orient, and some fear with China, our supply lines will be compromised in a way that defeated Japan in World War 11. Even without war, a country can blackmail us with the withholding of strategic materials, which could strangle our economy. We had better tool backup for these many items or float through the world at the mercy of others. We used to use Tariffs to even the playing fields until free market became a religious mantra. We are not supporting jobs for Americans with high wages, we are just eliminating their jobs when their labor no longer is competitive.
Practically every consumer item purchased in this country is made in China. Our national debt, for the most part is owned by China. We, in fact have become a third world country by skipping what made us great. In the quest to bring everyone into at least middle income classes, we have eliminated our ability to compete with lower incomes in other countries. We need to use this example of a natural disaster, to rethink how we do business with the rest of the world. My definition of "third world," is that country or area that sells their raw materials to an industrial country for manufacturing. We fit that model.
Ask yourself how many steel workers are employed today compared to 30 years ago. How about the aforementioned electronic industry, here where most were invented. We need to control imports and live within our own economy like we used to when times were much brighter. Are we to be lemmings, heading for the inevitable cliff? Or are we going to fight for REAL change.
Years ago, in the interest of saving money, manufacturers in the United States began shipping electronic components off shore. It has been years since any television sets have been manufactured here. All but a few electronic components, such as micro-chips are gone. Sent to Japan and other oriental places like Taiwan or Singapore.
This and other manufacturing areas is known as putting all of your eggs in one basket, to coin an old phrase. This is a wake-up call to the US government as well as the industries affected. When trees can be shipped to Japan, and milled there cheaper than here, something is wrong. When iron ore can be shipped to Japan, processed into steel, then shipped back to the US market and sold cheaper than our own steel mills, something is wrong.
Currently, according the the Philadelphia Inquirer, and published in the Spokesman-Review, car dealers of many makes are not bargaining with buyers. It's full price or walk.
If we ever get into another war in the Orient, and some fear with China, our supply lines will be compromised in a way that defeated Japan in World War 11. Even without war, a country can blackmail us with the withholding of strategic materials, which could strangle our economy. We had better tool backup for these many items or float through the world at the mercy of others. We used to use Tariffs to even the playing fields until free market became a religious mantra. We are not supporting jobs for Americans with high wages, we are just eliminating their jobs when their labor no longer is competitive.
Practically every consumer item purchased in this country is made in China. Our national debt, for the most part is owned by China. We, in fact have become a third world country by skipping what made us great. In the quest to bring everyone into at least middle income classes, we have eliminated our ability to compete with lower incomes in other countries. We need to use this example of a natural disaster, to rethink how we do business with the rest of the world. My definition of "third world," is that country or area that sells their raw materials to an industrial country for manufacturing. We fit that model.
Ask yourself how many steel workers are employed today compared to 30 years ago. How about the aforementioned electronic industry, here where most were invented. We need to control imports and live within our own economy like we used to when times were much brighter. Are we to be lemmings, heading for the inevitable cliff? Or are we going to fight for REAL change.
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