Saturday, January 29, 2011

SAR #11029

Second Law of Thermodynamics: Things get steadily worse.

Without Comment:  “Joe Biden: Mubarak's no dictator, shouldn't step down...”

Kill Switch:  Egypt, in an Internet first, shut down the internet within the country, exercising the same power Obama wants, and for the same reason. Syria, too, has shut down all international internet services. Jordanians have hit the streets lobbying for certain changes in their governance, as have the Albanians. International politicians (and bankers) are afraid the unreasonable thirst for freedom may spread with rising food costs.

Shhh, Don't Scare the Children:  CNBC anchor implies US must support dictators to keep cheap oil flowing.

Really Gross:  The US GDP for 4Q2010 increase at an annualized rate of 3.2%. Private inventories fell 3.70%, while personal consumption increased 4.4%. The US economy is slowly reviving and at this rate will get back to normal employment levels in 8 or 9 years.

Good Question:  “Why Is Warren Buffett Keeping $34 Billion In Cash?”  It's the economy, Stupid.

Test Tube:  As a microcosm of GOP/Tea Party effects on government, NY's Nassau County is instructive. Voters in the rich county thought the Tea Party's promise of smaller government and lower taxes was just the thing, so they elected Edward Mangano to do the deed. He promptly slashed taxes, but found the community really didn't want services slashed. The county even had to borrow money to pay tax refunds This week the state stepped in and appointed some adults to try to straighten out the mess caused when reality refuses to read the memo.

Drill, Baby, Drill:  Exxon has drilled an oil well a record 7.13 miles horizontally. One reason oil's not $12 a barrel any more.

Stepping on Cracks:  There's a GOP meme running around that is getting play as though it were true – the one about Social Security needing immediate life saving surgery. Cuts now to avoid cuts later, they say. The AP, for example, ran this bit: “Sick and getting sicker, Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037”. This is disingenuous at best. We planned for this back in Reagen's day. And after 2037 it will not be “drained”. With absolutely no changes to the program, SS will continue to pay out at least 78% of the benefits scheduled, which are higher than today's benefits. Remember the bit about repeating big lies until they're accepted? Go Team!

Clip & Save:  French President Sarkozy: France, Germany “will never let the euro fail”.

Going With the Floe:  The water flowing between Greenland and Norway has warmed 3.5ºF in the last century and is now 2.5ºF warmer than during the Medieval Warm Period (900 – 1300 CE), which affected the climate in Northern Europe and northern North America.

Easy Come, Easy Go:  Most experts agree that the rapid rise in the world's population was facilitated (allowed? made possible?) by the rapid increase in oil production. It will work that way in reverse, too.

Goodthink:  Republicans think statutory rape isn't really rape, and under their guidelines a 13 year-old impregnated by her father would not be eligible for Medicaid assistance. Also, no money from a tax-exempt health savings account could be used for such an abortion. Payments made out of pocket for such an operation would not be tax-deductible and if your health insurance would pay for it, then the cost of that health insurance is not deductible. This idea, much like the putative 13-year old, doesn't stand a chance. But it does tell you what Republican priorities are.

'Nuff Said:  “Unemployment Rate To Remain Above 9 Percent Through 2011, Will Remain Above 'Natural Rate' Until 2016: CBO”

Da Dah Don Dah:  The FBI, in an attempt to educate the public, has made mass raids across the US, targeting those who may have taken part in the “Operation Payback" cyber-attacks in defense of WikiLeaks. The bureau said suspects, if charged, could face up to 10 years in prison. Goodness knows how long they could be disappeared before they are actually brought to trial.

Porn O'Graph:  Real GDP growth, sort of, (or not down isn't up).


mistah charley, ph.d. said...

Bruce Cockburn - The Trouble with Normal (It always gets worse)

Derek Rogerson said...

Erin Burnett did not make the statement or imply that USA must support dictators, that is a complete falsehood (watch the vid).

She did tell everyone the truth, which is that things will change for the USA if change comes in the Middle East.

kwark said...

RE 'Nuff Said: I'm afraid that it's difficult to place much faith in projections by the Congressional Budget Office. Particularly when they, perforce, must use the so-called "data" on current employment provided by the administration. On the other hand, like a stopped clock is correct twice a day, the CBO MAY be correct but only because millions of additional people will fall-out of the workforce pool.

Anonymous said...

you're demonstrably wrong: you would have merited from reading chas. hughes smith's four part series on exactly the 'nuts and bolts' of this issue. here's a link to one salient column addressing the fact that SS is *insolvent Now*... read the whole series: available at the bottom of the page.

no offense meant: everyone gets it wrong once in a while...


CKMichaelson said...

Rhone - Well, someone is certainly insolvent, but it is the organization that borrowed all that money from the other bunch and now cannot pay it back unless it gets more income from its customers.

Now substitute, USA, Social Security, and Taxpayers where appropriate.


lineside said...

ck, re nassau county:
The Nassau County Interim Finance Authority has been in place since 2000, evidence of a fiscal mess that has been simmering a long time. To blame Mangano for Nassau's mess would be like blaming Obama for the Iraq war.

Nassau already has the 2nd highest property taxes of any county in the entire country. Services are nothing exceptional. But the public employee salary and benefit packages are sweet! For example, from

* $108,132 after 8 years
* 12% Night Differential
* *These salaries do not include overtime earnings, shift differential, holiday pay and uniform allowance.
* 10 paid holidays annually for the first two years increasing to 12 thereafter 18-26 sick days annually
* Health/Dental/Optical Plan premiums fully paid by Nassau County
* 20 Year Non-Contributory 50% Retirement

Yup, no doubt taxes should be raised to improve this package.


CKMichaelson said...

Even though the topic was paying enough taxes to pay for the services, not the salary structure for county employees, Lineside is right, "the public employee salary and benefit packages are sweet" - but only if you live somewhere else, for example in my home town, where the average cop makes $51,400 and lives in a house worth $132,000 (many are my neighbors). Not if you are a cop in Nassau County where the average house goes for $560,000 and the cost of living is 142% of the state average.

The rule the Tea Party and a lot of other folks need to learn is that you have to pay to play. You want to live in an wealthy, expensive community, expect to be treated as though you were wealthy and could afford to pay for the privilege. You want poor services and low taxes, move to the rural deep south.


lineside said...

CK, Nassau not too long ago used to be affordable, for all walks of life. Solid middle class area.

What's made it unaffordable for many are the following: housing bubble (popped); Wall Street compensation bubble, which has driven up prices in NYC suburbs including Nassau (not popped), and public sector comp and benefits bubble (not popped).

I just can't get a handle on the argument that we need to give public sector employees ever-more-goldplated comp and benefit packages (already lifetime pension and benefits after just 20 years' service) in order that they may afford to live in a high-cost area. This approach (as municipalities all over the country are beginning to realize) drives an unsustainable feedback loop. If it were allowed to prevail universally, every zip code in the country would eventually become unaffordable.

How about this instead: make it possible for public sector employees (and everybody else) to afford living in a high cost area by LOWERING the cost of living (apologies for the caps). In Nassau's case, toward that end, one bubble has been popped, but there are still two to go (see second paragraph above).


CKMichaelson said...

lineside - The problem is getting down from the tiger. I suspect that before too long all of these little problems will be dissolved into one big collapse. But before we get there I'd like some clarification in the discussion - is it "public employees" or just the police and fire folks? My wife's family are firemen. And for their entire working lives they all had 'second' jobs that were pretty much full time. And they all get good retirement pay and good health packages. I've got a couple of nephews who are cops - one a chief in a mid-sized city. Ditto.

On the other hand, my wife is a teacher. Two MS degrees. Makes $21.50 an hour after 25 years.

How politicians came to reward some - but only some - public servants so generously is more a study of politics than economics. And what the politicians get away with - and not just in the matter of police pay - is the responsibility of the voters. Just like Egypt, we get the masters we put up with and they do what they need to stay in power only as long as we put up with it.

But even if you limited your disdain for public employees to pay scales for first responders the discussion would be difficult. Just how much is running into a burning building worth when it is your burning building, with your children in it? How much would you charge to do the same job?

I agree the pension plans for P/F are ruinous. But the discussion was about current salary, not pensions. Pensions are part of the way young men are lured into dangerous occupations.

But in terms of "high cost of living" - the cops have to live where they work. So if you want to have cops and firemen, you have to pay them. How much safety can you afford? How much police protection will you be able to afford when you are 76 and there are crowds in the street? At your door?
As for the 'other' category of public employees studies repeatedly show that for the level of experience and education they are uniformly underpaid compared to their private sector equivalents. But to blame any city's cost of living on the cops is ridiculous. What is the ratio of cops and firemen to the population?


lineside said...


To answer your question, a fireman running into a burning building to save my child would be worth infinity to me. But we can't pay firemen infinity, or any other amount beyond that which is affordable, because of my feelings for my child.

I would point out that I didn't "blame any city's cost of living on the cops" at all.
I purposefully confined my comments to Nassau County, because I recognize that the same situation may not exist where other people, including yourself, live. I suggested three primary sources of the high cost of living there, and yes, one of them is spiraling public sector costs, which includes the salaries and benefits of policemen. P.S., I'm even more agitated about the other two bubbles than I am the public sector, but those are different discussions.

Regular folks in Nassau's private sector (store clerks, plumbers, mechanics, etc.) also need to be able to afford to live where they work! They have already been stretched to their limit by the exorbitant property taxes supporting the county's bloated public sector. In electing Mangano, they said "enough". We'll see if he (or NIFA, if it proceeds with its takeover of the county's finances) can somehow fix the mess. Whoever it is, they have their work cut out for them.