Tuesday, September 7, 2010

SAR #10250

We used to call it murder, not 'targeted killing'.

Nickel and Dime:  The President has called for a $50 billion long-term public works program dedicated to the four R's – roads, rails, runways and re-election.  Two things: The Republicans are not going to let it pass.   And back in the 1930's Roosevelt's New Deal cost about $50 billion, which was a lot of money then.  And it wasn't enough.

Missing Accomplice:  After seven years of US occupation following the invasion that toppled Saddam Hussein, Iraq essentially has no infrastructure, little electricity and less sewerage and potable water.  Six months after a nation-wide election there is still no legitimate government. Oh, and tens, if not hundreds, of billions of reconstruction funds are missing.  Shocked.  Awesome.

Chocolates?  According to French-speaking politicians in Belgium, the Walloons and their Dutch speaking Flemish partners are going to get divorced.  It's been about 180 years since they were united in a British/French-backed shotgun wedding.  It's all about the money, of course.

Lies, Damned Lies & Headlines:  “Finally, People Are Calling For A REAL Housing-Market Fix: Letting Prices Fall”   Who are these “people”? And the story is mendacious, too, claiming that letting house prices fall “doesn't punish savers, investors, renters, and (future) house buyers.” Maybe not, but it certainly will crucify home owners and mortgage holders, force even more underwater houses onto the market, and destroy even more house-based equity.  Not to mention the immense bailout the taxpayers will have to give Fannie and Freddie.  Trading ownership of existing houses does nothing to revive the economy, it simply puts new suckers on the hook for houses with falling prices.  Pull the other one, it's got bells on it.

There's an Echo In Here:   “It’s all downhill from here.”  Paul Krugman

Noted: Saudi Aramco has raised its official selling prices for all grades of crude oil to all customers, beginning in October.  Demand?   Supply?

Dead On Arrival:  Obama's proposed $200 billion two-year tax cut allowing businesses to write off 100% of new investment in plant and equipment may please the Republicans, but why would manufacturers facing years of slack demand (because their customers have no jobs and thus no money) build even more over-capacity?  Yes, it's a chicken/egg question.  This one's an egg.

Bees' Needs:  Research in the Rocky Mountains has documented a near 50% decline in pollination levels.  Some of the “missing” pollination comes from the previously documented decline in bees, but much of it seems to be due to a climate-driven mismatch between the times when flowers open and when bees emerge from hibernation.

You Are There:  The only thing that saved us the last time around was World War II.  This time I say we go for the deficit spending without the casualties.

Switcheroo:  While the West has been watching Russia maneuver over natural gas supplies to Europe, they are ready – after a decade of negotiation and two years of construction – to start delivering gas to China. Who needs an army if you can “project influence” through a pipeline?

Smoking Mirrors:  US climate negotiator Todd Stern says that even though the US has been unable to pass legislation reducing carbon dioxide emissions, the US will meet its target of a 17% reduction in CO2 emissions by 2020.  He did not explainhow this would happen.  I guess the recession is going to drag on.

Observed:  “America is no longer a land of equality, and it is largely because our democratic system no longer promotes the welfare of the greatest possible number.”   Somehow we've come to regularly support policies that are good for the rich and very bad for the rest of us.  “What de Tocqueville underestimated was the power of money in modern politics.”


rjs said...

ckm: what would you suggest we do with the housing situation? all they can do is extend & pretend, but reality will catch up eventually...here's a 120 year chart of home prices adjusted for inflation; we still have a long way to go to get to the historical mean...

a few days back, you noted in Supply and Demand: About 76% of the job growth this year has been in jobs that paid below $15 an hour.
with the median home price still north of $190,000, there wont be many of these newly re-employed being able to afford homes at those prices...

on bees needs, i have already written to Dr Thomson who authored that study...
i think he jumped to the wrong conclusion...ive kept bees since the 70s and they always first fly when the temps go over 45F, and the bumblebees are always out before the honeybees...climate change would affect the bees as much as it does the glacier lilies...

CKMichaelson said...

rjs - On housing - I really have no idea what we should do about the overpriced housing, except let it collpase - revert tot he mean - retreat to sanity. Something like that.

But having absolutely no enthusiasm for the suffering that the pending fall in house prices is going to bring, I'm in St. Augustine's camp here "...but not yet."

My real complaint with the article was not the idea of letting house prices fall - the will and need no help from us to do so - but rather with the goody-two-shoes carpola about what a nice experience it will be. It will not. It will be crushing.

Sure, someday, years later, a sounder economy may arise out of the ashes, but getting there is not going to be pleasant.

As for wages and the supply/demand for houses - I'm not sure that all the hula-hoops manufactured ever got sold.

And Dr. Thomson may have saved his conclusions by including the mis-timed emergence of other pollinating insects as part of the problem.

& g'morning to you, too.


Anonymous said...

RE: You Are There

I think all discussion of the large spending of WWII as a stimulus that I have read misses what really caused the post war boom. All the major economies of the the day were destroyed leaving the unscathed USA as the only real manufacturer. If massive stimulus via war production was a effective as people are saying, then how do they explain Post-War England?


CKMichaelson said...

RBM - Wasn't it a case of first the one (deficit spending during the war which lead to the construction and expansion of manufacturing capacity) and the destruction of productive ability in most of the rest of the Northern Hemisphere, which allowed the over-capacity of the war machine to convert to fulfilling the demand of markets opened by bombing.

The first pulled us out of the Depression, the second pretty well kept us from falling back into a Second Dip Depression as Johnny Came Marching Home.

Eventually labor was able to wrest enough from the corporations so that they, too, could consume the output of US factories.

But eventually the factories could produce more than the workers could consume, so we invented consumer credit and ...

It just goes round and round.


Gegner said...

If I may be so bold I share your puzzlement over the proposed 'fix' for the housing markets (not that there should be any such thing.)

Not to be a wise guy but if we boil away the 'false claims' what we really have here is a mental problem!

The 'stack of lumber' should be free (as opposed to being an 'income stream' for a bank (the banking system I should add.)

Bizarrely (to most of you raised with capitalist beliefs) the way to 'straighten out' our current disaster is to expand the number of things that are 'free'

Housing and healthcare are just two on a much longer list.

Scrape away all the 'claims of ownership' and you're left with the fact that Mother Nature doesn't have a cash register...if you want to scrape a little more, you'd find ALL MONEY is 'funny'.

I roar (with laughter) when they say we 'can't afford' this or that. It's an excuse!

Sadly, boil away the 'illusions' and what you have left is a massive 'mental problem...'