Wednesday, November 13, 2013

SAR #13317

Economically we depend on perpetual growth, which just isn't possible.

Go Away: Sometimes it is hard to remember that it's a free country. Today, for instance. It is difficult not to wish that 'Liberal' columnist Richard Cohen and the Washington Post should both be sent to a small island somewhere”. My gag reflex is working just fine.

Petty Cash: J&J, which just got through forking over $9 billion for doing Bad Things , will now be shelling out more than $4 billion to make thousands of defective hip implants go away. Don't worry, the business plan sets aside money for these kinds of inconveniences.

Friendly Fire: Remember the smugness with which America and Israel let it be known that they had created a vicious piece of malware called Stuxnet and Stuxnet had disrupted Iran's nuclear reactors? What if it didn't stop there? What if Stuxnet's creators forgot to put a kill switch into the program? What if Stuxnet now threatens nuclear reactors around the world and even the computers in the International Space Station? Do you think “Oops” and “Sorry about that.” will make everything okay?

Fruit of the Poisonous Tree: Fiscal austerity probably subtracted 1.5% to 2.0% from GDP growth in 2013, and the foolish government shutdown probably subtracted a little more. All in the name of growth. Just the name.

Bum's Rush: Now it's the NYTimes shilling for the TPP, urging Obama to deliver the country to the tender mercies of international corporations, claiming that “it is time for the administration to cut some deals, crack some heads and open up those Asian markets.” Except the Asian markets are already open and have been for years. What TPP will do is undermine the sovereign protections offered to US citizens.

Handicappping: The money quote: "All colleges have the goal of admitting the best students they possibly can at the best price they possibly can.” They want good students, sure, but they prefer good prospects who want them, too. And they check to see how you rank them (specifically on the Free Application for Federal Student Aid) before they rank you. And maybe, just maybe, how much aid you are offered may depend on how highly you rank the institution making the offer. So, does she like me and is she easy?

Letting The Air Out: QE was supposed to be a short-term program to prop up assets enough to get a little expansionary inflation going. It has turned out not to be short-term and not to get much expansionary inflation going, either. It has kept attention away from the deflation in the real economy – seen the price of oil lately? The US monetary base is now 450% higher than 5 years ago and not a bit of inflation anywhere. There's a message in there and it has nothing to do with economic growth, the recovery or any real support for 'tapering' down the ongoing level of QE. The longer this goes on, the longer it will have to go on. Welcome to the QE trap or, as it'll be called later on, the Long March Backward.

Porn O'Graph: Squint. Down there at the end, that's the recovery.

The Parting Shot:


Drew Dowdell said...

Unless China, Korea, and Japan no longer count as Asia, then no, Asian markets are NOT open. Not even close.

If the U.S. put reciprocal trade clauses in place on those three countries; making the tarriffs the same, making the import inspection requirements the same, making the import restrictions the same, making the company ownership requirements the same... those three countries would be running off to the WTO to tattle on the U.S. right away.

I'm not in favor of the TPP, but your assertion that the big Asian markets are open and have been for years doesn't pass the smell test.

Robert Lowrey said...

"Economically we depend on perpetual growth, which just isn't possible."

"the absolute asininity of the IMF/EU/ECB austerity nonsense".

Like Paul Krugman, you carp but make no sense. Anti-austerity programs, those advocated by PK, for example, ALL depend on the perpetual growth paradigm you so rightfully assail, in order to make good on the funny money created to halt the plunge in employment.

Lies, whether promulgated by politicians or journalists, are insidious, because they make promises that we all know can't be fulfilled.

Charles Kingsley Michaelson, III said...

Thanks, Drew, I stand (or rather sit here) corrected.

There is nothing special about Krugman's economics that makes endless growth his private domain. All lending of money at interest presumes growth to get paid back both principal and interest. [Yes, there's the special case where the interest comes out of the seed-corn - and that's deflation and won't last long.]

Krugman, while believing in taxation through inflation, also believes in endless growth - it is during the periods of growth following the PK stimulus that the money borrowed/created for the stimulus would be paid back. That politicians would never do the paying back part - see George W and the Tax Cuts - is politics and not economics.

All money is created - how you can tell the funny stuff from the not funny stuff is a mystery to me.

Austerity programs are asinine not becasue they relate to endless growth in any way, but because they do not work and only are imposed to transfer the economic pain, mostly attributable to banks and high finance, from the rich to the poor.

Austerity has done a fine job in Ireland (as long as you don't look at the losses and suffering imposed and the deep hole they are still in), Portugal (a disaster zone), Spain (still collapsing) and Greece (where social dissolution is becoming an established fact).

Oh, and austerity (in the form of cuts to social programs, unemployment insurance, food stamps, infrastructure spending and laying off government workers) isn't doing the citizens of the US any favors either.

If I must chose between starving today (austerity) or eating today and worrying about compound interest payments tomorrow, eating today wins hands down.

Anonymous said...

The Parting Shot:

I use a wheelbarrow quite often hauling wood, seaweed,etc. Save your back and get a two wheeled one, no worry about balancing that HEAVY load.

---Geezer without a sore back.