Is $4.00 a gallon the point where anxiety becomes fear?
Asked & Answered: The air was full of fertilizer this morning as blathering heads enthused about the latest ISM data. “Can a recovery be any more obvious? they asked. Well, if this was your grandfather’s economy, “no”, but back then more than 30% of jobs were industrial manufacturing jobs. Today it's about 10%. The unemployed are more numerous and have a much bigger impact on the economy. And another report predicts a significant increase in layoffs are underway. Not to mention the employment devastation being plotted in the state capitols.
Roughneck Humor: We're being warned that the disruption of much of Libya's 1.6 mbd oil output “threatens to make a serious dent in the less than 5 mbd” that OPEC can “swiftly” add to the market. Apparently the spare capacity is a lot less than 5 mbd if Libya's drop will make “a serious dent.”
Facts in a Certain Order: The average undergraduate student graduates college with $4,100 in credit card debt and $19,300 in student loans. Suicide is the second leading cause of death among college students.
Bullshit:The Bernank says that the increase in oil prices to $100 a barrel (and more like $120/Brent in the real world) is not inflationary. It's just high prices. “Inflation has declined, on balance, since the onset of the financial crisis...” he said, lying through his teeth. Bernanke was allowed to leave the Senate chamber without being handcuffed.
Opening Soon: According to Governor Walker and the Received Wisdom, castrating public employee unions and firing great bunches of the lazy slobs will create 250,000 jobs in Wisconsin within four years. Which would be a net gain of about 47.
Deficits: Yes, taxing the rich may not solve our deficit problems. But it sure wouldn't hurt, and it certainly should be part of the solution.
It's The Oil, Stupid: If the Iraq war was all about the oil, then we've fought them to a draw. Iraq's output has – after only 8 years – returned to pre-invasion levels. Of course they've had to start injecting water into the fields to boost production in their southern fields, usually a sign of declining reserves.
Silly Question: How did Gaddafi get exemptions from European and US Anti-Money Laundering rules? He was banking with Goldman and there were profits to be had.
We Regret... CENTCOM admits that it is using the social networks for nefarious purposes, but quickly adds that they are not targeting you. If you accidentally get caught up in whatever it is they are doing, relax. You're just collateral damage.
Remembering Tom Joad: If you believe half the media and most of the GOP, unions never did much good and are now passé. Sorry, mates, but you've no idea how bad things were then, nor how bad they are going to get for the working folks once the GOP and Koch brothers finish off the unions. I hope the struggle is just beginning, not ending, for it would be supremely foolish to expect the corporate-owned US government step in to defend workers. Without unions you would have no health benefits, no minimum wage, no 40 hour work week, no pee breaks or even a 5 day week. And without unions you will not have them long.
Envy: Chairman Bernanke complains that the GOP budget cuts could cost the economy 200,000 jobs. He's upset that they're doing better than he is.
Re-run: General Petraeus is once again "deeply sorry" that his soldiers have again killed civilians – this time nine boys, aged 12 and under, who were killed by helicopter gunships while gathering firewood,. Petraeus said he had ordered civilian casualties be kept "to the absolute minimum" - which seems to be a number somewhat higher than nine.
Porn O'Graph: Pie, an unjust desert.
6 comments:
Only $4 a gallon? Wow, if only. Try thinking about $9-10, because it could be on the way> At my local gas stations it is already there.
Well, Demetrius, I'm a Yank and that's the tipping point for our ball of wax. The assumption is that a lot of your $9-10 is taxes that go to support things like the public health system. We don't do taxes. (And my friends in San Francisco report they are already paying over $4.)
ckm
CKM, I much enjoy your blog (check it almost first thing in the morning), but I think your comments on Bernanke are too harsh and misleading. We are in a deflationary environment where workers and empty factories are sitting unexploited. There is a low level of spending relative to the productive capacity of the economy (actual GDP is much less than potential GDP).
Meanwhile, there is now a restriction in oil supplies, which is raising prices. Yes, this can cause inflation, but it is what I might call "cost push" inflation.
There is no "demand pull" inflation, however.
The two have very different policy implications.
I can't read Bernanke's mind (and I don't have time to read his comments), but I would guess that he is distinguishing these forms of inflation, due to the policy differences.
See also "Good Inflation, Bad Inflation" here:
http://krugman.blogs.nytimes.com/2011/02/25/good-inflation-bad-inflation/
There are different forms of inflation, with different policy implications.
I quite agree, Anony 10.45, the problem is that when I feel inflation it is not the same inflation that Dr. Bernanke talks about. Economists mostly talk about inflation as an increase in money, driving up prices of goods and labor.
I see inflation as gasoline up another 26 cents a gallon at the Grab&Run - price increases = inflation to the average Joe. That's why we don't believe the CPI - because we buy food and fuel. And all those gas station signs we see all day drive home the feeling that everything's going up.
Except house prices and wages.
So there is, and there isn't, inflation. Public figures should have a footnote placard they can wave to identify which inflation they are, or are not, talking about.
I also think that the Bernank's efforts to save wall street and the stock market has been misguided.
ckm
We don't do taxes.
I don't know about that. I did some calculations about moving to Silicon Valley and it appears that when one factors in stuff like property taxes, health care and the many, many smallish fees you lot is pretty much in league with Denmark!
fajensen - I'd not thought of it that way, but you are right - in comparing tax load we in the US must count the cost of our helathcare as part of the tax, else it is not an apples/apples thing.
ckm
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