Friday, September 3, 2010

SAR #10246

Nowadays almost anyone can go from riches to rags.

State of Play:  Republicans want to make all the tax cuts permanent, adding nearly $4 trillion to the national debt over the next decade,  $400 billion a year.  Wonder what we could do with that money if we didn’t give it to the richest 1%?   The Democrats, needing cash for their re-election campaigns, are likely, once more, to sacrifice principle for principal.

Supply and Demand:  About 35% of the jobs lost in the last two years paid below $15 an hour.  About 76% of the job growth this year has been in jobs that paid below $15 an hour.  Not counting bonuses.

Seriously Folks....  Karl Case, of Case-Shiller house-price fame, says “It's a great time to buy a house.”  Think of it as an investment, he says, having become famous for tracking the collapse of housing as an investment.  You can write off the mortgage interest against your income, assuming you have some income.  The capital gains will be excluded from taxation – if there ever are any gains.  You can write the losses off and that'll offset a lot of your taxable unemployment benefits.  Plus if the market tanks again, or further, you'll still have a place to live...  if you don't get foreclosed on.

Yawn:  Initial claims for unemployment benefits were 472,000 this week, another week of statistically meaningless wandering in the 475,000 range, ditto for the 4-week moving average, which at 485,500 was pretty much unmoved.

Quote of the Day:  “It seems that there are a large number of Americans who either can't spend a lot of money right now or who are very hesitant to do so.”

Small Change:  Pending sales of existing houses climbed a little in July from June's record low rate.  But keep in mind that sales of existing houses may help banks, but they do little for the overall economy compared to building a new house.

Success Secret:  CEOs who engage in the greatest number layoffs are rewarded with the highest levels of pay and bonuses.  Laying off workers to increase profits is the American Way.

Mounting Range:  In discussing our oil dependency, the question is not “How much oil is there in the ground?”  The question is  “ How much economically viable oil is there left to produce?”  If $85 a barrel oil kills the economy, it does not matter how much $147 a barrel oil there is.   And when it takes the energy equivalent of a barrel of oil to produce a barrel of oil... the party's over.

Futility:  Lowering tax rates will not create jobs.  Companies do not spend money to create jobs unless there are profits to be had, and they do not see any on the horizons.  The cheap loans that are available are going to mergers and acquisitions, which will lead to more consolidation, more factories built abroad, more layoffs at home.  The Fed's quantitative easing is just making these depredations easier.

Definition:  Politics is “the process by which groups of people make collective decisions” that deprive another, weaker, group, of their cash and civil rights.  This process is generally accompanied by rhetoric to the effect that this is for the betterment of the group being fleeced.


mistah charley, ph.d. said...

Don't worry, be peaceful - even if civilisation collapses

While Thich Nhat Hanh believes that change is possible, he has also come to accept the possibility that this civilisation may collapse. He refers to the spiritual principle that by truly letting go of the 'need' to save the planet from climate change, it can paradoxically help do just that.

"Without collective awakening the catastrophe will come," he warns. "Civilisations have been destroyed many times and this civilisation is no different. It can be destroyed. We can think of time in terms of millions of years and life will resume little by little. The cosmos operates for us very urgently, but geological time is different.

"If you meditate on that, you will not go crazy. You accept that this civilisation could be abolished and life will begin later on after a few thousand years because that is something that has happened in the history of this planet. When you have peace in yourself and accept, then you are calm enough to do something, but if you are carried by despair there is no hope."

rjs said...

think mr case read that 76% of new jobs pay less than $15hr when he recommended investing in homes at a median price north of $190,000?

Anonymous said...

RE: Futility

Reducing the corporate tax rate here in the United States would have the effect of creating more jobs. However, in order to make it a more tacit understanding between governments and corporations I would tie the lowering of taxes directly to moving manufacturing back home.

Of course that would really upset the Chinese and we need them to finance our adventuring military.


CKMichaelson said...

RBM - What sort of magic is there in lowering the tax rate on corporations, when corporations in the US pretty much do not pay taxes? What, other than an emotional commitment to the idea, data shows a relationship between corporate tax cuts and increased employment?

Corporations moved overseas for cheaper labor - taxes had nothing to do with it, and labor costs are far more important to corporations than easily avoidable taxes.

"Cut corporate taxes now" may be a nice chant, but it's closer to a baseless rant. Corporations are in it for the profits, profits come from sales, sales come from customers with cash, customers get cash from jobs, jobs are created by deamnd - not by tax cuts.

Can't manage (nor legislate) your way to a profit, gotta sell your way to a profit.