Originally Posted by XYMOX_4AD_84

For bear country, must have carbine with the following:

Looks like you're overcompensating for something.

Originally Posted by Classic-X'er

I found myself positioned between a mama bear and her two cubs. Mama bear was standing in front of me. Her two cubs were behind me. Gulp! I had a shotgun but I didn't have the ammo (buckshot) to stop a charging mama bear. Game plan if she charged me. Pepper her in face a few times hoping to sting her nose, get low and save the last shell for up close and personal. Fortunately, it didn't come to that. I let her cubs run by me. One stopped and sniffed my pant leg briefly on its way by me on its way to mama bear. The other squirted me by a few feet without stopping or acknowledging my presence. As soon as her cubs had cleared me, she grunted at her cubs and they took off together through the woods. Pretty wild experience.

WHOA!! Pucker-string time, huh??!! Yeah, you should have rubbed the ears of the one that sniffed your leg to show her how friendly you were!

Originally Posted by playwrite

And you certainly came up with quite a dent - killing the overtime exemption - brilliant! I like it! Before I start googling around to see why this hasn't happened (surely others have pushed this?), what is your take on it?

I didn't say kill it, just raise. it gets raised periodically (inflation and all that). Obama does plant to raise it and it is under review. It's just that it's year seven and it still hasn't happened. Also the figures I have seen suggest a pretty modest increase. I was just saying if you really wanted to make a statement your would go big, like $100K (they would make people sit up). It's like talking about a tariff, the policy is of questionable value, but talking about it is a very good thing.

My "theory of change" is quite different from that of Brian Rush. I think change comes from elites--I am more with Dave Kaiser on this. Right now I am working on a paper suggesting another reason for why elites were willing to bring about the Great Compression, when it meant many of them would lose wealth and power. According to data collected by Turchin the turnaround began about 1910 and was well underway by WW II. His explanation for the mechanism I think is lacking. His focus is that elite fear of revolution around 1920, when the country experienced a revolutionary zeitgeist*, led to the deporting of foreign "revolutionaries" and a series of laws to increasingly restrict immigration in the early 1920's. These laws reduced competition for jobs and helped to raise wages. He also points to business's willingness to consider wage increases (e.g. Ford's decision to double wages, and Hoovers voluntary program to maintain wages in the early years of the Great Depression). I agree with all this, but he does not provide a reason for why businessmen would suddenly think that it was a could idea to give workers above-market wages. Common sense, economic theory and established business practice is that the optimal wage for profits is the lowest wage (it's how businesses operate today). So why did they do it? My contribution is the idea that the economic experienced a capitalist crisis from 1970 to 1941, which manifested as a decline in capital productivity, that is economic output (end sales) produced per person per unit of capital. From 1871-1907 it had run at about 44, it then fell to the low 30's in the teens and twenties, reached a low in the mid-20's in the depths of the Depression and recovered to around 30 in the late 30's. It then soared to over 50 during WW II and settled out about 42 afterward, where it remained until 2000. Since then its been heading down and it now in the low 30's. It just so happens than income inequality was about at the same (high) level when productivity began to fall after 1907 and in the early 2000's. And inequality fell below this level in the 1930's, on back down., before capital productivity staged its recovery.

The explanation I give is that inequality puts more income in the hands of the rich, whose marginal propensity to spend is small, but who desire to invest their excess wealth in capital seeking a return that must be generated by sales to consumers who increasingly lacked the income necessary to purchase these sales, and so the productivity of capital must decrease.

Businessmen were aware that it was getting harder to sell all they produced. Installment credit was invented in the 1920's so as to allow workers to finance purchases, like businesses do. Marketing became a regular part of business school curricula at this time. In a 1926 book Ford proposed the idea that maintaining high wages could be a good policy for industrialists so as to ensure that workers had the money to be good consumers. In December 1929 Hoover held a meeting with industrialists to get them to maintain wages and full employment as much as possible during the beginning of the 1929-33 downturn. He had mixed success, wages fell only 6% over 1929-31 compared to 23% over 1920-22, whereas unemployment was worse, 16% in 1931 compared to 12% in 1921. It was JM Keynes, who famously put it all together in his General Theory, but businessmen had sensed some of it before. And government was even slower to act, not until WW II was stimulus of the magnitude necessary to pull the nation out of depression applied. But even then, stimulus could not have been what solved the capital productivity problem, because WW I had provided stimulus, which did not work.

The key was stimulus coupled with inflation control by wage/price controls that were specifically engineered to reduce economic inequality that solved the capital productivity problem. And it was the super-high tax rates and government-supported unionism that kept the system working until Democrats destroyed it in the 1960's (don't get me wrong, Republicans were bursting with enthusiasm for destroying that system, but I can understand them**).

What I do not explain in the paper is how the New Dealers elites came to be in the position where they would want to do what they did during WW II. For me I think it was virtual civil war. During the 3rd Great Awakening a rising elite of professionals created by Gilded Age prosperity "got religion" about the state of American society by the muckraking articles of the 1890's and the populist movement. These were those people who came be called progressives, social gospelers, good government types, some of whom found a home in the progressive wing of the Republican party. They were reformers who wanted to make the system work better for poor people out of a mixture of Christian charity and Bismarckian concern over populist disconnect. The first wave of progressive saw a number of reforms intended to make the system work better, which involved government taking a more active role in economic affairs. Departments of Commerce and Labor were established. The Federal Reserve and Income Tax were established. Women gained suffrage, child labor outlawed, and alcohol banned. When the Depression hit things were as bad as the nineties, if not worse. It looked as though they had accomplished nothing. And business had turned against the entire project. The visionary Henry Ford of the twenties was warring with his workers in the 1930's. I think New Deal progressives got radicalized by the experience and when they got the power to act during WW II decided to stick it to them.

So I look at conservatives like Ron Unz and think this guy might be cycle-equivalent to Henry Ford this time. Aren't sure who the Progressives are this time.

*British inequality showed a peaked around the 1810 just as America a century later, and both countries experienced revolutionary zeitgeist so there is a clear parallel here.

**This reminds me of something my wife's great grandma (b 1872) supposedly said. "I can't vote for Republicans--they don't understand poor people. I can't vote for Democrats, they have such silly ideas. All that's left is to vote socialist."

Originally Posted by nihilist moron

Looks like you're overcompensating for something.

That was pretty funny!

Originally Posted by TnT

WHOA!! Pucker-string time, huh??!! Yeah, you should have rubbed the ears of the one that sniffed your leg to show her how friendly you were!

Wait, that cub "squirted" Classic Xer - it bear world, that's a big Valentine!

Another year older and that cub might have tried mating Classic!

Different species, same idea -



Hubba-hubba!

Originally Posted by Mikebert

I didn't say kill it, just raise. it gets raised periodically (inflation and all that). Obama does plant to raise it and it is under review. It's just that it's year seven and it still hasn't happened. Also the figures I have seen suggest a pretty modest increase. I was just saying if you really wanted to make a statement your would go big, like $100K (they would make people sit up). It's like talking about a tariff, the policy is of questionable value, but talking about it is a very good thing.

My "theory of change" is quite different from that of Brian Rush. I think change comes from elites--I am more with Dave Kaiser on this. Right now I am working on a paper suggesting another reason for why elites were willing to bring about the Great Compression, when it meant many of them would lose wealth and power. According to data collected by Turchin the turnaround began about 1910 and was well underway by WW II. His explanation for the mechanism I think is lacking. His focus is that elite fear of revolution around 1920, when the country experienced a revolutionary zeitgeist*, led to the deporting of foreign "revolutionaries" and a series of laws to increasingly restrict immigration in the early 1920's. These laws reduced competition for jobs and helped to raise wages. He also points to business's willingness to consider wage increases (e.g. Ford's decision to double wages, and Hoovers voluntary program to maintain wages in the early years of the Great Depression). I agree with all this, but he does not provide a reason for why businessmen would suddenly think that it was a could idea to give workers above-market wages. Common sense, economic theory and established business practice is that the optimal wage for profits is the lowest wage (it's how businesses operate today). So why did they do it? My contribution is the idea that the economic experienced a capitalist crisis from 1970 to 1941, which manifested as a decline in capital productivity, that is economic output (end sales) produced per person per unit of capital. From 1871-1907 it had run at about 44, it then fell to the low 30's in the teens and twenties, reached a low in the mid-20's in the depths of the Depression and recovered to around 30 in the late 30's. It then soared to over 50 during WW II and settled out about 42 afterward, where it remained until 2000. Since then its been heading down and it now in the low 30's. It just so happens than income inequality was about at the same (high) level when productivity began to fall after 1907 and in the early 2000's. And inequality fell below this level in the 1930's, on back down., before capital productivity staged its recovery.

The explanation I give is that inequality puts more income in the hands of the rich, whose marginal propensity to spend is small, but who desire to invest their excess wealth in capital seeking a return that must be generated by sales to consumers who increasingly lacked the income necessary to purchase these sales, and so the productivity of capital must decrease.

Businessmen were aware that it was getting harder to sell all they produced. Installment credit was invented in the 1920's so as to allow workers to finance purchases, like businesses do. Marketing became a regular part of business school curricula at this time. In a 1926 book Ford proposed the idea that maintaining high wages could be a good policy for industrialists so as to ensure that workers had the money to be good consumers. In December 1929 Hoover held a meeting with industrialists to get them to maintain wages and full employment as much as possible during the beginning of the 1929-33 downturn. He had mixed success, wages fell only 6% over 1929-31 compared to 23% over 1920-22, whereas unemployment was worse, 16% in 1931 compared to 12% in 1921. It was JM Keynes, who famously put it all together in his General Theory, but businessmen had sensed some of it before. And government was even slower to act, not until WW II was stimulus of the magnitude necessary to pull the nation out of depression applied. But even then, stimulus could not have been what solved the capital productivity problem, because WW I had provided stimulus, which did not work.

The key was stimulus coupled with inflation control by wage/price controls that were specifically engineered to reduce economic inequality that solved the capital productivity problem. And it was the super-high tax rates and government-supported unionism that kept the system working until Democrats destroyed it in the 1960's (don't get me wrong, Republicans were bursting with enthusiasm for destroying that system, but I can understand them**).

What I do not explain in the paper is how the New Dealers elites came to be in the position where they would want to do what they did during WW II. For me I think it was virtual civil war. During the 3rd Great Awakening a rising elite of professionals created by Gilded Age prosperity "got religion" about the state of American society by the muckraking articles of the 1890's and the populist movement. These were those people who came be called progressives, social gospelers, good government types, some of whom found a home in the progressive wing of the Republican party. They were reformers who wanted to make the system work better for poor people out of a mixture of Christian charity and Bismarckian concern over populist disconnect. The first wave of progressive saw a number of reforms intended to make the system work better, which involved government taking a more active role in economic affairs. Departments of Commerce and Labor were established. The Federal Reserve and Income Tax were established. Women gained suffrage, child labor outlawed, and alcohol banned. When the Depression hit things were as bad as the nineties, if not worse. It looked as though they had accomplished nothing. And business had turned against the entire project. The visionary Henry Ford of the twenties was warring with his workers in the 1930's. I think New Deal progressives got radicalized by the experience and when they got the power to act during WW II decided to stick it to them.

So I look at conservatives like Ron Unz and think this guy might be cycle-equivalent to Henry Ford this time. Aren't sure who the Progressives are this time.

*British inequality showed a peaked around the 1810 just as America a century later, and both countries experienced revolutionary zeitgeist so there is a clear parallel here.

**This reminds me of something my wife's great grandma (b 1872) supposedly said. "I can't vote for Republicans--they don't understand poor people. I can't vote for Democrats, they have such silly ideas. All that's left is to vote socialist."

That's good stuff. You said "paper" where you explained - is that linkable somewhere?

Also, how did the Dems destroy the working system in the '60s?

Originally Posted by playwrite

That's good stuff. You said "paper" where you explained - is that linkable somewhere?

Also, how did the Dems destroy the working system in the '60s?

I assume Mikebert was referring to JFK's tax cut. Mike, correct me if I'm wrong.

Originally Posted by pbrower2a

Don't be fooled: your pooch licks you because you taste good. Mine especially loves my psoriasis. Very tasty!

Except for good behavior, dogs are about the most dangerous non-venomous predators for their size. They are everything that you fear in an enemy: power, strength, speed, agility, voraciousness, aggression, cunning, and organization. Unlike the other large carnivores they know us well for our clumsiness, sloth, and cowardice. Dogs have horrible teeth and claws; worst of all they can knock us down, which is a literal fall.

Dogs are nothing more than domesticated wolves. Yeah, they come in all shapes and sizes, but one can't entirely take the inner wolf out. My 93 pound lab is strong as an ox. He managed to pull me off the deck and onto some concrete landscaping bricks below when he wanted to get at a rabbit in yard. Luckily, nothing got broken. I just had a sprained shoulder. Of course labs are notorious cuddlers and make horrid watch dogs. He's smart also. If he wants water, he'll drop his water bowl and I always hear it. He also has a repertoire of barks/whines. There's a whine to be let out, a very obnoxious bark to be let back in, another whine for food. At the other end, he knows what "sit" and "stay" mean. As for cunning, yeah that also. He has this icky game called "get the hat". This is where he grabs my hat , goes into a play bow, and I have to try and grab the hat back. I have to get the hat before he starts shredding it.

A dog about half your size will defeat you in a fight. Do you think it a good idea to enter a house through a dog door? Do you really want to face an animal that suddenly changes from a loving pet into one of the most vicious killers in the animal world? Burglars are meat. A man's home is his castle, but it is his dog's jungle.

That would be my border collie. He's territorial and really doesn't care for strangers.

Feral dogs are dangerous because they are hungry. Figure that one of them can eat a fourth of its weight in one meal. One? You can handle it. Ten? You are meat.

That would be like a pack of wolves that don''t fear humans.

One good shot can dispatch one tiger, bear, lion, or leopard. You will need multiple shots to eliminate the menace of a hungry pack of feral dogs. Pepper spray against the delicate muzzles of several ravenous dogs will do the trick.

I slipped a habenero to my lab once. He kept sticking his tongue in and out like a snake. Habeneros are just a snack for me. This year, ghost peppers!

Originally Posted by The Wonkette

I assume Mikebert was referring to JFK's tax cut. Mike, correct me if I'm wrong.

Yes. High growth policy calls for low real interest rates and a favorable attitude towards labor, which is inherently inflationary. Inflation control is achieved by austerity through high tax rates and balanced budgets. It is difficult to maintain because elites chafe at the high taxes and politicians like to spend money to buy votes. Tax cuts were avoided during Eisenhower's presidency, but Kennedy opted for tax cuts with no offsetting spending reductions.

Most Republicans opposed the tax cut as economically unsound. In a nationwide radio and television address, Representative John W. Byrnes of Wisconsin, the ranking Republican on Ways and Means, called the Kennedy tax cut “an unprecedented gamble” with the economy and said it was like “playing Russian roulette with our destiny.” On Sept. 25, 1963, the final House vote was taken. The final vote in favor of the tax cut was 271 to 155, with 48 Republicans supporting it and 126 opposed. Among Democrats, 223 voted in favor, with 29 against.

Tax cuts were bad enough but Kennedy had already decided to get involved in Vietnam which would mean increased spending for the military. Johnson decided to ramp up the war effort and pass new entitlements in the aftermath of these tax cuts (sound familiar?). The result was deficits. Although modest by Reagan standards, they occurred in the latter portion of the business cycle, when Keynesian economics calls for surpluses. Low interest rate economies cannot tolerate even small deficits. Once even a bit of extra inflation appears it creates inflationary expectations, which can lead to more inflation. Congress should have restored the old tax rates when the war started in earnest. The decision to get both guns and butter set a precedent for fiscal irresponsibility that Republicans doubled down on as soon as economic policy shifted to inflation control by high interest rate in 1979-81.

Another way of looking at inflation control via interest rate is inflation control by putting people out of work. Such a policy is very friendly to wealth and is the natural preference of the party of capital. By refusing to maintain fiscal discipline, Democrats made boosting unemployment the only available way to control inflation. With this cost-free (to wealthholders) means to control inflation, Republicans were able to cut taxes and not worry about deficits, which they did with abandon as soon as they got the chance.

Wage growth stopped in 1973, probably as a result of the oil crisis and out-of-control inflation of the latter 1970's. When inflation subsided in the 1980's wage growth did not resume because now workers, rather than owners, paid the price for inflation control. This effective betrayal of the working class in favor of the moneyed elite by the party who is supposed to be their friend was likely a factor in the gradual exodus of Northern working class whites from the Democratic party. The crappy economic experience of working people and things like NAFTA led many to conclude that the parties were not really different where it counted (economics) and so you might as well vote for the party who won't take away your gun or kill babies.

Originally Posted by playwrite

That's good stuff. You said "paper" where you explained - is that linkable somewhere?

Eventually. I am still working on it. I submitted by first paper in March and haven't heard back from the reviewer so it could be a year before its published, assuming I finish it and it gets accepted.

Originally Posted by Mikebert

Yes. High growth policy calls for low real interest rates and a favorable attitude towards labor, which is inherently inflationary. Inflation control is achieved by austerity through high tax rates and balanced budgets. It is difficult to maintain because elites chafe at the high taxes and politicians like to spend money to buy votes. Tax cuts were avoided during Eisenhower's presidency, but Kennedy opted for tax cuts with no offsetting spending reductions.

Most Republicans opposed the tax cut as economically unsound. In a nationwide radio and television address, Representative John W. Byrnes of Wisconsin, the ranking Republican on Ways and Means, called the Kennedy tax cut “an unprecedented gamble” with the economy and said it was like “playing Russian roulette with our destiny.” On Sept. 25, 1963, the final House vote was taken. The final vote in favor of the tax cut was 271 to 155, with 48 Republicans supporting it and 126 opposed. Among Democrats, 223 voted in favor, with 29 against.

Tax cuts were bad enough but Kennedy had already decided to get involved in Vietnam which would mean increased spending for the military. Johnson decided to ramp up the war effort and pass new entitlements in the aftermath of these tax cuts (sound familiar?). The result was deficits. Although modest by Reagan standards, they occurred in the latter portion of the business cycle, when Keynesian economics calls for surpluses. Low interest rate economies cannot tolerate even small deficits. Once even a bit of extra inflation appears it creates inflationary expectations, which can lead to more inflation. Congress should have restored the old tax rates when the war started in earnest. The decision to get both guns and butter set a precedent for fiscal irresponsibility that Republicans doubled down on as soon as economic policy shifted to inflation control by high interest rate in 1979-81.

Another way of looking at inflation control via interest rate is inflation control by putting people out of work. Such a policy is very friendly to wealth and is the natural preference of the party of capital. By refusing to maintain fiscal discipline, Democrats made boosting unemployment the only available way to control inflation. With this cost-free (to wealthholders) means to control inflation, Republicans were able to cut taxes and not worry about deficits, which they did with abandon as soon as they got the chance.

Wage growth stopped in 1973, probably as a result of the oil crisis and out-of-control inflation of the latter 1970's. When inflation subsided in the 1980's wage growth did not resume because now workers, rather than owners, paid the price for inflation control. This effective betrayal of the working class in favor of the moneyed elite by the party who is supposed to be their friend was likely a factor in the gradual exodus of Northern working class whites from the Democratic party. The crappy economic experience of working people and things like NAFTA led many to conclude that the parties were not really different where it counted (economics) and so you might as well vote for the party who won't take away your gun or kill babies.

I understand this secondary thesis that Kennedy's 1960's tax cuts (top marginal rates from 90% to 70%) set the stage 20 years later for Reagan's larger 1980's tax cuts (70 to 28%), but I think its a bit of a stretch - akin to the notion that by accepting a glass of water gives justification for someone to pee on you. It also discounts too much the myriad of other things motivating the 1980s including the increasing craziness of the Right - they don't need no dead Kennedy for that!

Also, whether you raise interest rates or cut deficit spending (by raising fed taxes or cutting expenditures), the impact is a reduction in demand that then ultimately results in unemployment. Wages are 'sticky' (when was the last time everyone accepted a pay cut) so instead the impact is through layoffs and lack of hiring.

Also, contrary to widespread belief, inflation hasn't correlated with federal deficits very well for decades; it has correlated with energy, particularly oil, prices. That was true of the late 1970s inflation that was really about the oil embargo and made further evident by it coming to an end with natural gas deregulation and the unprecedented shift by utilities that nearly brought the House of Saud down - they'll never do that again. Volcker's drama was an unnecessary side show.

I think you're larger primary thesis of the rentier class elites swinging to and fro on allowing sufficient income share to labor (to, in turn, at times, provide sufficient demand and/or avoid revolution), doesn't need to be muddled-up by how they do that (i.e., raising interest rates, cutting their taxes while holding back or cutting spending on the masses, deregulation, bankster crime) - they'll figure out a way.

It's particularly bad form when the motivation is to enhance the credibility of a thesis by employing the cynical refrain of a lack of difference between parties - that's what gets you Iraqi invasions, massive financial fraud and crises, subjugation of women, and lack of medical care/education/infrastructure/R&D and every other investment in the future - it gets you an amygdala-dominated government. The best the amygdala-dominated have to offer society doesn't come close to the worst of the folks with fully-functioning cerebral lobes.

Originally Posted by playwrite

I understand this secondary thesis that Kennedy's 1960's tax cuts (top marginal rates from 90% to 70%) set the stage 20 years later for Reagan's larger 1980's tax cuts (70 to 28%), but I think its a bit of a stretch - akin to the notion that by accepting a glass of water gives justification for someone to pee on you. It also discounts too much the myriad of other things motivating the 1980s including the increasing craziness of the Right - they don't need no dead Kennedy for that!

I agree, what I was implying was the failure of a new generation of Democrats to properly manage the economy the New Dealers left them helped bring about a rebellion on the part of working and middle class whites who turned to the GOP under the charismatic Reagan.

Also, whether you raise interest rates or cut deficit spending (by raising fed taxes or cutting expenditures), the impact is a reduction in demand that then ultimately results in unemployment.

I disagree. You are implying that taking a dollar way from a rich person (higher taxes) cuts demand the same amount as taking a dollar away from a non-rich person. The latter has the higher marginal propensity to spend.

Raising interest rates is intended to discourage borrowing, slowing economic activity, leading to less hiring, slower wage growth etc. High top tax rates drain off funds from the investor class leaving them less money to bid up the price of assets. it doesn't affect decisions to borrow.

But the big difference between the two is how they affect financial behavior. Look at dividend yields during the 1950's through 1970's and compare them to Treasury rates. Huge premium. Now look at the 1980's and 1990's. Premium goes away. Why? Real interest rates were much higher in the seconded period. Return from capital is more or less fixed. So to increase realized return you have to lower the price of capital. With the Fed handling inflation, Congress was free to cut taxes, which they did. This put more money into investor's hands which increased demand for assets. This is not conducive to lowering the price of capital, and it did not go down, it went up in the 1980's and 1990's. Dividend yields fell below LT interest rates and more emphasis began to be placed on capital gains (speculation). Instead of investors today we have speculators, and so bubbles are the norm. Some of these will result in financial panic and so this is also going to become the norm. Finance became more lucrative than working in the real economy, and so finance grew as a fraction of the economy. Today we have a much bigger financial sector that is no more efficient that the financial sector a hundred years ago. All that extra activity just goes to extract money from the rest of the economy (those who actually make a product or perform a service) to the benefit of moneymen.

All these things coming post-Volcker are not adverse side effects, they are features. They way economic management is handled today is according to the conservative playbook, for the benefit of the moneyed class, which contains plenty of mandarins along with the business elites.

If you just analyze in terms of flows you are right. But when you consider what Keynes called 'animal spirits' then they work differently because they get processed differently. Typically economists don't pay much attention to the stock market in their thinking and modeling. But in a capitalist economy, capital plays the dominant role. Surely the market where capital is bought and sold matters.

Also, contrary to widespread belief, inflation hasn't correlated with federal deficits very well for decades; it has correlated with energy, particularly oil, prices.

Exactly my point. After 1979, deficits and inflation become uncoupled because the new policy is being used. This is why Republicans suddenly became tax-cut happy in the late 1970's, they could see the consensus shifting towards controlling inflation by high interest rate rather than high taxes. It's not like rich folks liked paying more taxes when their party supported tax increases in the 1930's and 1940's and objected to tax cuts in the 1960's. They believed it necessary for inflation control.

As for oil, well of course a price index is going to correlate with prices. You are assuming that energy price is an independent variable. It's sort of like people who argue that increasing the money supply faster than the economy grows causes prices to rise. It's true that the two are correlated, they have to be, that's simply the consequence of the mass balance: MV = PY. Since V is bounded while M, Y and P and Y are not, over a sufficiently long period of time P must be positively correlated with M/Y. But this says nothing about causality.

Volcker's drama was an unnecessary side show.

Well, it has had huge consequences most of them bad. Look at real interest rates for the 3 decades before 1980 and the two decades after. They essentially doubled. What happens to growth when the Fed has their foot on the brake all the time (1980-2000) compared to when they have it on the accelerator (before 1980)? You would expect higher growth when the pedal is to the metal, and that's what you got. Why did they take foot off the accelerator, because inflation was out of control.

The S&H way to look at it is when the Lost held the reins of power there was fiscal discipline, the postwar economy worked, interest rates could be at very stimulating levels without getting inflation. In the 1960's a new generation came to power and folks now wanted to have their cake and eat it too, and the New Deal order fell apart.

The cliodynamic way to look at it is the Progressives represented a new category of elites along with the capitalist or business elite. They often achieved their elite status through education and many people from the working class joined them using education, so I'll call them "mandarins". In a way they were the replacement for the old agrarian elites whom the capitalists had defeated in 1865. During the last 4T the two sets of elites went at it like they had last time except it was mandarins vs business elite instead of slaveowners vs. capitalists. Initially mandarins were middle class and often came from humbler roots. With time they became more like the business elite and so had similar interests (like not wanting to pay the high taxes an earlier generation of mandarins had assessed on the business elite).

It's particularly bad form when the motivation is to enhance the credibility of a thesis by employing the cynical refrain of a lack of difference between parties

I was talking about a perception. Working people I have talked to accept the description of the GOP as the party of the rich and so not on their side economically and yet vote for the GOP. They tell me that they vote the way they do because they don't see the Dems doing anything for them economically (they will cite NAFTA for example) so they vote on a narrow range of social issues like guns or abortion. They aren't saying Dems are the same as the GOP, they do lots more for the poor, but these folks aren't poor. And since they don't like liberal social positions they vote GOP. I live in West Michigan, its fairly red.

Originally Posted by Mikebert

I agree, what I was implying was the failure of a new generation of Democrats to properly manage the economy the New Dealers left them helped bring about a rebellion on the part of working and middle class whites who turned to the GOP under the charismatic Reagan.


I disagree. You are implying that taking a dollar way from a rich person (higher taxes) cuts demand the same amount as taking a dollar away from a non-rich person. The latter has the higher marginal propensity to spend.

Raising interest rates is intended to discourage borrowing, slowing economic activity, leading to less hiring, slower wage growth etc. High top tax rates drain off funds from the investor class leaving them less money to bid up the price of assets. it doesn't affect decisions to borrow.

But the big difference between the two is how they affect financial behavior. Look at dividend yields during the 1950's through 1970's and compare them to Treasury rates. Huge premium. Now look at the 1980's and 1990's. Premium goes away. Why? Real interest rates were much higher in the seconded period. Return from capital is more or less fixed. So to increase realized return you have to lower the price of capital. With the Fed handling inflation, Congress was free to cut taxes, which they did. This put more money into investor's hands which increased demand for assets. This is not conducive to lowering the price of capital, and it did not go down, it went up in the 1980's and 1990's. Dividend yields fell below LT interest rates and more emphasis began to be placed on capital gains (speculation). Instead of investors today we have speculators, and so bubbles are the norm. Some of these will result in financial panic and so this is also going to become the norm. Finance became more lucrative than working in the real economy, and so finance grew as a fraction of the economy. Today we have a much bigger financial sector that is no more efficient that the financial sector a hundred years ago. All that extra activity just goes to extract money from the rest of the economy (those who actually make a product or perform a service) to the benefit of moneymen.

All these things coming post-Volcker are not adverse side effects, they are features. They way economic management is handled today is according to the conservative playbook, for the benefit of the moneyed class, which contains plenty of mandarins along with the business elites.

If you just analyze in terms of flows you are right. But when you consider what Keynes called 'animal spirits' then they work differently because they get processed differently. Typically economists don't pay much attention to the stock market in their thinking and modeling. But in a capitalist economy, capital plays the dominant role. Surely the market where capital is bought and sold matters.


Exactly my point. After 1979, deficits and inflation become uncoupled because the new policy is being used. This is why Republicans suddenly became tax-cut happy in the late 1970's, they could see the consensus shifting towards controlling inflation by high interest rate rather than high taxes. It's not like rich folks liked paying more taxes when their party supported tax increases in the 1930's and 1940's and objected to tax cuts in the 1960's. They believed it necessary for inflation control.

As for oil, well of course a price index is going to correlate with prices. You are assuming that energy price is an independent variable. It's sort of like people who argue that increasing the money supply faster than the economy grows causes prices to rise. It's true that the two are correlated, they have to be, that's simply the consequence of the mass balance: MV = PY. Since V is bounded while M, Y and P and Y are not, over a sufficiently long period of time P must be positively correlated with M/Y. But this says nothing about causality.


Well, it has had huge consequences most of them bad. Look at real interest rates for the 3 decades before 1980 and the two decades after. They essentially doubled. What happens to growth when the Fed has their foot on the brake all the time (1980-2000) compared to when they have it on the accelerator (before 1980)? You would expect higher growth when the pedal is to the metal, and that's what you got. Why did they take foot off the accelerator, because inflation was out of control.

The S&H way to look at it is when the Lost held the reins of power there was fiscal discipline, the postwar economy worked, interest rates could be at very stimulating levels without getting inflation. In the 1960's a new generation came to power and folks now wanted to have their cake and eat it too, and the New Deal order fell apart.

The cliodynamic way to look at it is the Progressives represented a new category of elites along with the capitalist or business elite. They often achieved their elite status through education and many people from the working class joined them using education, so I'll call them "mandarins". In a way they were the replacement for the old agrarian elites whom the capitalists had defeated in 1865. During the last 4T the two sets of elites went at it like they had last time except it was mandarins vs business elite instead of slaveowners vs. capitalists. Initially mandarins were middle class and often came from humbler roots. With time they became more like the business elite and so had similar interests (like not wanting to pay the high taxes an earlier generation of mandarins had assessed on the business elite).


I was talking about a perception. Working people I have talked to accept the description of the GOP as the party of the rich and so not on their side economically and yet vote for the GOP. They tell me that they vote the way they do because they don't see the Dems doing anything for them economically (they will cite NAFTA for example) so they vote on a narrow range of social issues like guns or abortion. They aren't saying Dems are the same as the GOP, they do lots more for the poor, but these folks aren't poor. And since they don't like liberal social positions they vote GOP. I live in West Michigan, its fairly red.

Wow, that was a lot of clarification, and I am now on the same page with you. Thanks!

The lower propensity to spend by the rich and their pumping-up the financial sector with minimal socioeconomic benefit seems to be at the root of your thesis, and I can see it. I can see that those elements were greatly facilitated by not only Ray-gun's tax cuts you highlighted but also by his Laissez Faire regulatory approach. Who knew that his S&L Crisis was just a prelude to the much larger bankster crime of Bush's 00-00s financial meltdown - for much the same reasons. I think most people, the ones not completely dominated by their amygdala, can grasp this and there might be hope aka Elizabeth Warren. Any emergence of action based on that hope will never come from the Right; it has to come from the Left - just look at the voting ledgers on the rather lackluster Dodd-Frank and then all the attempts to squash it.

The tougher nut is convincing people of taxing/regulating more generalize savings. Most people believe their ownership of not only T-bills (and all the derived bank savings vehicles) but their ownership of equities or their homes in the secondary market represents "investment" - it's not, it is savings, which from a macro view is "dead money." Attempts to get that "dead money" reanimated (I'm still trying to get over the most recent Game of Thrones episode!) by taxing savings is tough enough, taxing "investment" is unAmerican. It's also muddled by the fact that most true investment is actually done by businesses and by the very wealthy through private equity (that's not to say that most of their wealth is also in savings) - how do you promote that true investment while taxing the dead money of savings of everyone else? Not going to happen - not even if Bernie Sanders was President.

In regard to energy prices, particularly oil, yes, I believe they are fundamentally independent supply-side factors. That was certainly the case with the Oil Embargo. Yes, the House of Saud nearly going under as a result makes them today very very cautious about being independent ever again; however, I'm sure that they remind not only US but Chinese officials of scenarios of ISIS takeover or war with Iran would independently and certainly wreck the world's economy. To a lesser degree (so far), fracking has become an independent supply-side element as well.

I recognize that pipsqueaks like ISIS and the off/on nature of places like Libya, Syria, Iran, Iraq, Russia will have their occasional roll the markets on monthly prices, but I'm certain that the really big players are not going to let independent supply shocks get too far out of hand ever again. Mix in the fracking and other extraction technologies as independent supply-side factors and I just don't see energy prices driving inflation anywhere for decades... and from there, solar, batteries, smart-grid, driverless cars are going to put a lid on energy prices for likely the rest of this century.

Moreover, we are increasingly in a world economy of oversupply on just about anything non-energy (Bird flu egg pricing being the current exception, but have you seen the price of bacon lately?). Sure, China and Third World middle class growth could have an upward aggregate demand effect, but is it enough to offset the rapidly increasing supply capacity from further automation that is simultaneously mitigating employment growth? And those populations are getting proportionally older. and outside of health care, less demanding.

Yes, the shift to using interest rates, rather than tax rates, to control inflation may disproportionately impact labor/employment. But, what if inflation is not even a factor? Would your thesis still be viable/relevant? How so? It seems to add greatly to explaining the past, but will it explain the future?

Lincoln Chafee announced he is running for president.

He has certain disadvantages. He is from a small state (former governor and senator from Rhode Island) and so is not a household name. As a former Republican, he is not likely to be seen, at least initially, as a challenge to Hillary R. Clinton from the Left, although there may be room for a moderate candidate (Jim Webb is also a former Republican though). He is running against Hillary's vote for the Iraq War, which seems a bit dated as an issue.

But he has an outstanding horoscope score, 20-6; although some of these points are from borderline weak aspects (wide orb).

So, if should catch on, he might be a strong challenger to Hillary. But Sanders has an even better score: 10-0. And Webb's score is also good. If these long shots do catch on, they could be a challenge for Hillary.

Originally Posted by playwrite

The lower propensity to spend by the rich and their pumping-up the financial sector with minimal socioeconomic benefit seems to be at the root of your thesis, and I can see it.

My thesis is the cycles in economic inequality reflect the waxing and waning of elites. The population of elites tends to rise faster than the general population. A rising number of elites means more 'extractors" per person and will be associated with rising inequality. At some point the system can no longer handle any more elites and their is intra-elite conflict, often violent. This process usually involves the collapse of the state and its replacement by a new one made up of the winners.

The process I described in the 1980's was simply the particular mechanism the growing elites used to extract the necessary wealth to be elites. It's not just a bunch of corporate executives. The policy choices made by the government elites in the 1970's and 1980's permitted a once-time accumulation of vast unearned wealth by suburban and exurban homeowners, and employees of Fortune 500 companies (i.e. those with retirement investment plans like 401(k) plans and their predecessors in the 1970's and 1980's). These gains came at the expense of working class people who saw a cessation of wage gains. Since the latter group is disproportionately black who can see just a bit of the ultimate source of the rage at Ferguson and elsewhere. The militarization of the police is both a response to, and an additional cause of this rage.

I can see that those elements were greatly facilitated by not only Ray-gun's tax cuts you highlighted but also by his Laissez Faire regulatory approach. Who knew that his S&L Crisis was just a prelude to the much larger bankster crime of Bush's 00-00s financial meltdown - for much the same reasons.

I think regulation is secondary. Financial crisis is a hardy perennial. If too-much wealth disparity exists, there will be financial crisis. Greed will find a way, it always does.

Most people believe their ownership of not only T-bills (and all the derived bank savings vehicles) but their ownership of equities or their homes in the secondary market represents "investment" - it's not, it is savings,

T-bills are savings. Equities are investment. Homes are assets that as a result of an artifact (see above) behaved like investments for quite a long time.

which from a macro view is "dead money."

The only one of these that represents dead money is the T-bills, which really are savings. Equity is capital, which is not dead. Just because one can use shares as a vehicle for speculation does not change this fact. One can use beanie babies as an object of speculation too, but its still a stuffed animal.

how do you promote that true investment

There is no need to do this. Think about it. What matters is whether an investment is sound. Performing an activity that you believe to be investment, but which is really speculation is unsound, even if it makes money.

What you call true invest will be made, unless the investor is distracted by all those speculations pretending to be investments. All that is needed for a sound investment to become a speculation is that the price is too high. The fundamental cause of the poorer economic performance since the 1980's and the appearance of financial crises is the mispricing of assets by excess demand. That is inflation, asset inflation. To get good growth the government should work to control asset inflation by keeping interest rates low and taxes on high incomes high. Then capital allocators (capitalists) can properly assess investment prospects and engage in what you call true investment a larger percentage of the time.

A paean for the "Undecided Voter."

The flight attendant comes down the aisle with her food cart and parks beside the "Undecided Voter." "Can I interest you in the chicken?" she asks.

"Or would you prefer the platter of shit with shards of broken glass in it?"

The "Undecided Voter" pauses for a long moment and then asks how the chicken is cooked.

~ David Sedaris, "The New Yorker," October 27, 2008.

Originally Posted by Mikebert

My thesis is the cycles in economic inequality reflect the waxing and waning of elites. The population of elites tends to rise faster than the general population. A rising number of elites means more 'extractors" per person and will be associated with rising inequality. At some point the system can no longer handle any more elites and their is intra-elite conflict, often violent. This process usually involves the collapse of the state and its replacement by a new one made up of the winners.

That might dove-tail with the generational theory. It is clear that some group of people -- big landowners, tycoons and financiers, mercenary intellectuals, the military, or organized crime -- will form a dominant, exploiter elite. In America, three of those elites clearly dominate America (big landowners, tycoons and financiers, and mercenary intellectuals) dominate political and economic life. the military (as senior officers) are clearly still under civilian control, so they are not the elite. Organized crime? It's hard to generalize about them. Mario Puzo wrote an excellent book about the Sicilian Mafia about 45 years ago, but that has its faults; it is dated; it does not well describe the Russian Mafia or street gangs. They probably have secret ties to the other elites and could become enforcers. I'd be especially wary of outlaw biker gangs who could be bought cheaply.

A sustainable social order might get along with one such elite directing a large part of the economic and political life to the detriment of everyone else -- but the one elite cannot control everything. Three or more can make life miserable for people not in those elites. We at least have three and (depending on the level of corruption and incompetence among our political leaders at the time) four if one counts crime syndicates. One thing is certain about the crime syndicates; nobody is going to get anything from them without hurting the rest of Humanity.

We Americans have three elites who act on the assumption that the duty of the rest of humanity is to suffer for their enrichment and indulgence. We work for them and we get their cast-offs as their alleged benefice and we work harder and longer for less so that they can have more stuff that they are willing to devolve to us because they tire of it or because those of us that they need still need food, shelter, and clothing. That is trickle-down economics at its near-crudest. To be cruder one would have to be a slave on a plantation before 1865 or in a fascist labor camp or Gulag.

Enough people accept trickle-down economics because they associate it with electronic gadgets and cable TV to divert them without challenging them intellectually. We all know the schlock -- 24-hour sports even as awful as Ultimate Fighting, round-the-clock celebrity circuses, pornography (if pay-per-view) at any given moment, the unending opportunity to shop into hock, and incessant pop culture made to fit the sensibilities of morons. But what happens if people want more in life? Perhaps fully enjoying their humanity by using their minds instead of being the viewers of the shadow play in the cave as depicted by Plato in his Republic?

Excess usually implies deficiencies elsewhere, and every generation gets a surfeit of something while missing something. To say that most adult lives consist of efforts to escape what one saw in excess in childhood and grasp ravenously what they missed in childhood may describe one aspect of the generational cycle.

The process I described in the 1980's was simply the particular mechanism the growing elites used to extract the necessary wealth to be elites. It's not just a bunch of corporate executives. The policy choices made by the government elites in the 1970's and 1980's permitted a once-time accumulation of vast unearned wealth by suburban and exurban homeowners, and employees of Fortune 500 companies (i.e. those with retirement investment plans like 401(k) plans and their predecessors in the 1970's and 1980's). These gains came at the expense of working class people who saw a cessation of wage gains. Since the latter group is disproportionately black who can see just a bit of the ultimate source of the rage at Ferguson and elsewhere. The militarization of the police is both a response to, and an additional cause of this rage.

The adults got it by depriving their children -- by ensuring that their kids would never get good-paying jobs, that they would be priced into housing with the typical amenities of slums, that bosses would get to reduce motivation to fear while economic opportunity got reduced to jobs offering the dignity associated with domestic service, and that we would have a boom-and-bust economy with booms that elites profiteer from but get rescued first when something goes awry ... Ronald Reagan promised that a rising tied would lift all boats. The problem is that most people do not have boats.

The three master classes are in complete solidarity on politics, and it is far to the Right. Dreadful pols like Tom Cotton, Scott Walker, Nathan Deal, and Paul LePage are the choices of the elites who would treat us as livestock at best and vermin at worst. The only virtue that I see in the Right is its restraint in pushing racism as a divide. Even "white privilege" costs something.

I think regulation is secondary. Financial crisis is a hardy perennial. If too-much wealth disparity exists, there will be financial crisis. Greed will find a way, it always does.

Speculative booms are themselves the disasters. They devour capital without creating value. As with the usual swindle in which a con artist offers something for nearly nothing, takes what is nearly nothing but real and then leaves the gulled investor with nothing, the harm comes from the swindle and not with the realization that one has been had. Unlike the usual swindle involving a con artist, the speculative boom takes the capital intended to create a New Era (a 1920s term for the Coolidge economy) of unprecedented prosperity from just about everyone (more prudent investments are priced out of competition) and ruins almost everyone.

People learn, and one clear lesson of the Double-Zero decade is "don't invest in real estate". Now, urban rents skyrocket for slum-like housing.

T-bills are savings. Equities are investment. Homes are assets that as a result of an artifact (see above) behaved like investments for quite a long time.

The right lesson of the Double-Zero decade, as of the period 1929-1932, was that speculative booms invariably fail catastrophically. Investments that do good for people do well for those who invest. The wrong lesson is that one can have another speculative boom and get out of it faster with others getting burned; the Republican party largely seems to have learned that lesson and try to sell it to us. In the 1930s people got the right lesson and went from seeking quick gain from highly-liquid investments that they put little effort into to low-yield, long-term investments (like small business) that they must toil in to make work and can't run from without enduring destitution.

Are we slower to learn? Hardly. We as a people know much more stuff because we are transfixed to the "telescreens" of Fahrenheit 451 and can't judge that what we know about the Kardashian sisters or see in Ultimate Fighting can do us no good. But we are more stressed out.

The only one of these that represents dead money is the T-bills, which really are savings. Equity is capital, which is not dead. Just because one can use shares as a vehicle for speculation does not change this fact. One can use beanie babies as an object of speculation too, but its still a stuffed animal.

As the bankers used to say -- always heed the three C's -- character, collateral, and conditions. If the character is bad, then the loan will fail. Housing lenders used to consider it a bad sign that a thirty-year-old factory worker was attending night school to study accounting because any career change would jeopardize a loan. That's how tight lending used to be. Collateral? if the collateral is useless, then the loan usually fails. That is why insurance that pays the lender in the event of a disaster is usually required as part of a loan. Conditions? Turning a single-family home into a business usually doesn't work so well.

There is no need to (promote 'true' investment). Think about it. What matters is whether an investment is sound. Performing an activity that you believe to be investment, but which is really speculation is unsound, even if it makes money.

Long-term, low yield, and heavy involvement by the investor is still safest. As Will Rogers said in the 1930s of the consequences of the meltdown of 1929-1932 people were more concerned with return on investment. Now they are concerned with return of their investment.

(True investment) will be made, unless the investor is distracted by all those speculations pretending to be investments. All that is needed for a sound investment to become a speculation is that the price is too high. The fundamental cause of the poorer economic performance since the 1980's and the appearance of financial crises is the mispricing of assets by excess demand. That is inflation, asset inflation. To get good growth the government should work to control asset inflation by keeping interest rates low and taxes on high incomes high. Then capital allocators (capitalists) can properly assess investment prospects and engage in what you call true investment a larger percentage of the time.

Something priced out of reach should be avoided. People with inordinate incomes have done so with the aid of special breaks that most such people have done little to earn. Inherited wealth? Cozy relationships with government regulators? The ability to con people? The ability to make other, more reasonable investments impossible?

Except for nature at its best (let us say Yosemite) and perhaps exceptional abilities beyond imitation (Mariah Carey's singing voice or the ability of Miguel Cabrera to hit a baseball with a bat), just about everything valuable is the result of some physical or intellectual labor. So it is whether the object is a castle, a loaf of bread, or the score of Brahms' Second Piano Concerto. Soon enough the hustlers, hucksters, and parasites will be seen for what they are. People will overthrow them or evade them successfully, and when either happens, then the game is done for people who have gotten inordinately rich by treating people badly.

Originally Posted by Mikebert

My thesis is the cycles in economic inequality reflect the waxing and waning of elites. The population of elites tends to rise faster than the general population. A rising number of elites means more 'extractors" per person and will be associated with rising inequality. At some point the system can no longer handle any more elites and their is intra-elite conflict, often violent. This process usually involves the collapse of the state and its replacement by a new one made up of the winners.

Plausible, but I hope it doesn't come to it.

I think when these revolution, anarchy, or apocalypse scenarios are put forward they're done so within a mindset of what is presented in a fiction book or movie which is always a relatively extremely small scale (needs to be to tell a story). I'm not sure anyone even has the capacity to fully grasp how this would come about in a 350 million population, $1.5 Trillion/year economy, extremely organized social order nation. That context makes me an evolutionist rather than revolutionist when examining realistic scenarios.

Originally Posted by Mikebert

The process I described in the 1980's was simply the particular mechanism the growing elites used to extract the necessary wealth to be elites. It's not just a bunch of corporate executives. The policy choices made by the government elites in the 1970's and 1980's permitted a once-time accumulation of vast unearned wealth by suburban and exurban homeowners, and employees of Fortune 500 companies (i.e. those with retirement investment plans like 401(k) plans and their predecessors in the 1970's and 1980's). These gains came at the expense of working class people who saw a cessation of wage gains. Since the latter group is disproportionately black who can see just a bit of the ultimate source of the rage at Ferguson and elsewhere. The militarization of the police is both a response to, and an additional cause of this rage.

I think this addition of middle/lower class differentiation muddles your elite thesis. There is hope for movement from lower to middle, and those in lower don't want change that is just as likely to bring everyone down to their economic level as it does to lift them. And there is a lot of New Deal that is addressing those low/middle issues - e.g. subsidies of home mortgages and 401Ks may have gone off the rails but there is still lots of good housing and tax policies that are supportive of lower as well as middle - we just need to evolve them more.

On the other hand, there is no hope for middle, even high middle (i.e., top 1-10%) to move into the elite status (top 0.1%) and even within the top 0.1%, there are more that don't "call the shots" than there are of the very select few that do. And right now, there isn't a damn thing going on to change that - there is where the real danger lies.

Originally Posted by Mikebert

I think regulation is secondary. Financial crisis is a hardy perennial. If too-much wealth disparity exists, there will be financial crisis. Greed will find a way, it always does.

I'm a Minsky Moment adherent - credit eventually gets extended to those who will not be paying it back to a point where the system collapses. It is only by regulation that Moment is mitigate, at least forestalled if not entirely eliminated, and it is hyper-regulation after the collapse that gets the system to be considered credit worthy again and up and running. We cannot have a modern economy without a credit system, and it does inherently come with your perennial crisis (Minsky's Moment) - it's the nature of the beast. BUT, it can be mitigated, forestalled and cleaned up once it occurs much more rapidly with regulation.

Originally Posted by Mikebert

T-bills are savings. Equities are investment. Homes are assets that as a result of an artifact (see above) behaved like investments for quite a long time.


The only one of these that represents dead money is the T-bills, which really are savings. Equity is capital, which is not dead. Just because one can use shares as a vehicle for speculation does not change this fact. One can use beanie babies as an object of speculation too, but its still a stuffed animal.


There is no need to do this. Think about it. What matters is whether an investment is sound. Performing an activity that you believe to be investment, but which is really speculation is unsound, even if it makes money.

What you call true invest will be made, unless the investor is distracted by all those speculations pretending to be investments. All that is needed for a sound investment to become a speculation is that the price is too high. The fundamental cause of the poorer economic performance since the 1980's and the appearance of financial crises is the mispricing of assets by excess demand. That is inflation, asset inflation. To get good growth the government should work to control asset inflation by keeping interest rates low and taxes on high incomes high. Then capital allocators (capitalists) can properly assess investment prospects and engage in what you call true investment a larger percentage of the time.

I'm using "investment" as spending that increases production/efficacy and grows the economy, employment and incomes. Equities when first offered, provide funds to a business entity for those purposes (or for taking the risks for those purposes); once in the secondary market, however, that 'paper' provides nothing to the company. Even if the company holds shares from their initial offering and it increases in value - that is a paper profit and cannot be used for investing until initially offered in the market and converted to cash for investment spending. Granted, it can be used as collateral on new loans for the purposes of investing, but that is new investment by the bank.

Housing is the same. The initial property sale reflects an investment in material and labor, but the second sale of the same property is just relying on inflation (including rent increases) and speculation - the house is as much a beanie baby as the beanie baby. With a house, you can invest in improvements but those are offset to some degree by the costs of just maintaining the property - so at least real estate has that over the beanie baby.

If you come at it from this perspective, then statements like -

What you call true invest will be made, unless the investor is distracted by all those speculations pretending to be investments.

- not only makes more sense but one can see clearer the subtlety of the issue, why most people are confused about their savings as investments.

Either way, I don't think it undermines your thesis of the elites.

I think a sense that something will change by revolution is more problematic. One can be a pessimist and assume then that nothing will change and possible even evolve into something worse than now. On the other hand, one can be an optimist, do everything possible to get Hillary elected in 2016 and 2020 and change the SCOTUS so as to mitigate much of the elites' plans (e.g. Citizens United; gerrymandering on steroids; changing one man, one vote; etc). If Ginsberg gets replaced by a Scalia clone, its pretty much game over in our lifetimes.

(E)ven as information technology has advanced to the point where most Americans have a computer in their pocket, our politics has gotten worse. Much worse. We're more connected than ever — yet our elected officials are more divided, less gets done, and voters are more angry than ever.

What ... proponents of electronic democracy didn't foresee was how technology can be used to divide and splinter us.


Take gerrymandering, the drawing of odd-shaped congressional districts to maximize the strength of one political party. It's a practice that has endured for more than a century. But now, mapping technology has advanced to the point where districts can be easily drawn to include (or eliminate) not just neighborhoods, but individual blocks and even houses. The result is completely partisan districts that vote the same way in every election. Republicans were so effective at gerrymandering congressional districts after the 2010 Census that most political forecasters think it's nearly impossible for Democrats to win the House until after the next round of redistricting in 2020.

Technology has also given unprecedented influence to insurgent forces in American politics. While American political history has plenty of examples of insurgent candidates challenging the political establishment, it's been very difficult for them to gain a strong, long-lasting foothold and actually win elections. As we saw in the rise of the Tea Party in 2010, it's now much easier to harness the power of the grassroots. Technology has reduced parties' traditional role as major gatekeepers of power. This has made it harder for parties to forge compromises and pull together governing coalitions.

But perhaps most important, technology has changed how campaigns reach out to voters, work with the press, and raise money. Candidates used to win elections by appealing to the ideological middle, the swing voters with less allegiance to any political party. Technology now makes it easier for candidates to mobilize their bases — typically the most ideologically committed voters — and make sure they get to the polls. Each successive election over the last decade or more has led to a more partisan Congress. There are very few lawmakers left who could legitimately be considered swing votes.

There's little doubt that technology has made our lives better in many ways. But it seems to be destroying our politics.

http://theweek.com/articles/560368/h...ican-democracy

Bush came out with his announcement and crouched it in terms of the economic nirvana he created as governor in Florida.

Problem is, this is now going viral -

http://www.washingtonpost.com/blogs/...ridas-economy/

A housing bubble made Jeb Bush look great — and then it tanked Florida’s economy

Just a month ago, he couldn't make up his mind about the Iraq Invasion

So great, now his campaigning will remind the voters both the worst foreign policy mistake and biggest economic disaster in a century.

Please, please, GOP let this guy emerge as your choice from the clown car.

I mean we certainly don't want to take on this guy -

Trump jumps in: The Donald's latest White House run is officially on

Now that guy scares us! We might have to counter with Gary Busey!

Remember I said Sanders has a good horoscope score of 10-0!
from newsmax:

Bernie Sanders Gaining on Clinton in New Hampshire
By Melanie Batley | Friday, 19 Jun 2015 08:55 AM

Vermont independent Sen. Bernie Sanders is surging in the race for the Democratic nomination and beginning to gain some traction in early primary states, according to The Hill.

Democratic front-runner Hillary Clinton still remains the favorite, but Sanders is finding some popularity in New Hampshire, particularly through his attacks on her.

"Primary voters in New Hampshire are looking around," Democratic strategist Brad Bannon told The Hill. "They at least want to shop around a little bit before buying. Based on that alone, it's probably time for the Clinton campaign to take Sanders seriously."

Some Democratic strategists say that it would be a mistake for the Clinton campaign to take on Sanders directly, believing it could rally his supporters and alienate the liberals she will need to lock up the nomination.

"They're not going to go after him publicly and it'd be wrong to do so," Democratic strategist Hank Sheinkopf, who worked on President Bill Clinton's 1996 re-election bid, told The Hill. "She needs to keep slogging along and make the kinds of policy arguments that will eventually make some of the uniqueness around Sanders dissipate."

Sanders, however, has begun his attacks on Clinton. The Hill said that Clinton has already moved toward Sanders on at least one position: She announced she would vote against giving President Barack Obama fast-track authority.

But those close to Clinton do not appear to be concerned about a Sanders candidacy yet. They believe he has a limited potential for support concentrated in the anti-establishment wing of the party.

"Everything can change, but as I see it today, he doesn't look to me to pose a material threat," Democratic strategist Chris Lehane, a Clinton White House veteran, told The Hill.

"I don't think he has the capacity to unite the different factions of the party beyond those who are naturally inclined to go against the establishment."

Nevertheless, a Suffolk University poll out this week put Sanders within 10 points of Clinton in New Hampshire.

A win in New Hampshire "would scare the hell out of the Clinton people," Bannon told The Hill.

"It's quite possible he's going to win a primary some place and will have the momentum," Sheinkopf told The Hill.

"He may do well in Iowa or New Hampshire. The question is, how do you deal with that? They need to be prepared to organize and surround him on the ground, and prepare a response without just going out and attacking him."


Read Latest Breaking News from Newsmax.com http://www.newsmax.com/Politics/bern...#ixzz3dWQriqGO

With today's outstanding SCOTUS decision on Obamacare ("SCOTUScare"), probable the ones breathing the greatest sigh of relief are the GOP Senators up for re-election in 2016.

These GOP Senators rode the T-bagger wave in 2016 in many states where Obama won both in '08 and '-12 and are considered the most vulnerable. In many of these states, such as OH, FL, VA, NC, 100s of thousands stood to lose their new insurance coverage if the SCOTUS had ruled otherwise and that would have effected the insurance rates for many many more as the insurance companies went into death spirals.

That is now fully understood by the media, but it is a dead issue with today's SCOTUS decision. But is it???

http://www.washingtonpost.com/blogs/...-on-obamacare/

Republicans still have an opening to take on Obamacare

The Supreme Court issued a major decision in favor of President Obama's health care law Thursday, but it likely won't be the end of the debate over the law commonly known as Obamacare.

A little-noticed provision in the Affordable Care Act could give conservative opponents a new chance to challenge the law, beginning in 2017.

The provision, known as Section 1332, could allow a Republican president to waive some of the main components of the law in conservative states that want to take a different approach to health policy, experts say. For residents of those states, the next president may even be able to throw out the controversial mandate that most Americans buy health insurance, though some experts say there would be practical obstacles to doing that.

"If there's a Republican administration, then I would imagine there would be a very generous interpretation of that provision to allow a number of states to go in a quite different direction," said Stuart M. Butler, a senior fellow at the Brookings Institution....

If both the baggers pick up on this 'opportunity' and campaign hard for it and the Dems pick up on it as bringing back the death spiral, it is likely to get heavy coverage by the now informed media and become again the potential big issue for several GOP senators (obviously a swing state issue at the Presidential level as well).

Todays' SCOTUS decision may have resulted in the worst political combination for those 2010 GOP Senators - affirmation of Obamacare as the law of then land and thus growing numbers of insured in 2015, but still the Sword of Damocles hanging over millions of those insured and thus those GOP Senators.

It's a fine day.

Former Florida Gov. Jeb Bush holds a narrow lead over real estate developer Donald Trump in New Hampshire, the first state to hold a primary, according to a CNN/WMUR poll.

Trump currently has the support of 11 percent of the state's Republican voters to Bush's 16 percent. They are followed by Rand Paul at 9 percent, Scott Walker at 8 percent, Carly Fiorina and Marco Rubio at 6 percent each, and Ben Carson and Chris Christie each at 5 percent.

Trump seems to be seen as a leader on economic issues, CNN reports.

According to the poll, here are the voters' favorites on particular issues:
Economy: Trump 19 percent, Bush 13 percent
International trade: Trump 27, Bush 14
Strongest leader: Trump 17, Bush 15
Least likely to act like a politician: Trump 46
Illegal immigration: Rick Perry 16, Trump and Bush 13, Rubio 11
Most likely to win in November: Bush 37, Trump 7
Embodies personal characteristics a president should have: Bush 19, Trump 8
Would never support: Trump 23, Bush and Christie 10
The poll of 1,010 adult New Hampshire residents was conducted from June 18-24. Results among likely Republican primary voters have a margin of error of plus or minus 4.9 percentage points.

Read Latest Breaking News from Newsmax.com http://www.newsmax.com/Newsfront/cnn...#ixzz3eBNtdRsz

Bernie Sanders Gaining on Clinton on New Hampshire: CNN/WMUR Poll
By Greg Richter | Thursday, 25 Jun 2015 08:10 PM

Vermont Sen. Bernie Sanders has made significant gains on former Secretary of State Hillary Clinton in New Hampshire, according to the latest CNN/WMUR poll.

Clinton leads Sanders 43 percent to 35 percent, according to the poll. But just two months ago, Clinton led the poll 51 percent to Sanders' 13 percent. But that poll also included Massachusetts Sen. Elizabeth Warren, who says she will not run. Warren pulled in 20 percent support in that poll.

The current poll did not include Warren as an option, likely adding to Sanders' leap.

"Hillary Clinton’s early numbers had been higher than they reasonably could have been expected to remain," University of New Hampshire political science professor Andrew Smith told WMUR. "Historically, New Hampshire has had about 40 percent of the Democratic voters be progressive voters. That has been the case going back to 1968 with Eugene McCarthy."

The poll also showed Clinton had a strong favorability rating at 74 percent (to 19 percent unfavorable) and led Sanders in several issues categories.

But she also registered as least honest in the Democratic field with 28 percent of respondents. Only 2 percent said Sanders was least honest.

Clinton "does have some difficulty with the trust issue, but the bigger problem is that she is not connecting with more of the anger, the motivated voters in the Democratic Party," Smith said.

The poll was conducted by the University of New Hampshire Survey Center from June 18 to 24 and included 360 likely 2016 Democratic primary voters. It has a margin of error of 5.2 percent.


Read Latest Breaking News from Newsmax.com http://www.newsmax.com/Newsfront/Ber...#ixzz3eBOlkUC2

While some Republicans are calling for a constitutional amendment to overturn today's decision, that is clearly hot air: It would take both a two-thirds majority in the House (how many blue-dog Democrat seats in the South and suburban Democrat seats outside the South are left for them to pick off?), and 38 states to ratify it (absolutely impossible).