The Sky Isn’t Falling Quite Yet
Wednesday, December 17th, 2008So I put up a link that makes it seem like the United States is bankrupt–like bankrupt now. Turns out that the data The DC Examiner reported on is manipulated and essentially crap:
The United States of America is bankrupt. Don’t believe it? Consider this: Federal obligations now exceed the collective net worth of all Americans, according to the New York-based Peter G. Peterson Foundation. Washington politicians and bureaucrats have essentially mortgaged everything We the People own so they can keep spending our tax dollars like there’s no tomorrow.
The foundation’s grim calculations are based on Sept. 30 consolidated federal statements, which showed that Americans’ total household net worth, diminished by falling stock prices and home equity, is $56.5 trillion. But rising costs for unfunded social programs like Medicare, Medicaid and Social Security increased to $56.4 trillion – and that was before the more recent stock market crash, $700 billion bank bailout, and monster federal deficits chalked up in October and November.
“Given more recent developments, it’s clear that America now owes more than its citizens are worth,” said Foundation president David M. Walker, the former Comptroller-General of the United States who has been trying to warn Americans of the coming financial tsunami for years, to no avail. So, after Uncle Sam bails out bankers, Wall Street gamblers, carmakers and over-their-head homeowners, who’ll bail out Uncle Sam?
They palmed a card, actually two cards: the first one is they’re using household net worth … but that leaves out corporate net worth, so they’re ignoring, eg, Exxon. The second is that they’re comparing future obligations to pay with current assets, so it’s like saying you’re “bankrupt” because the total of your expected future living expenses exceeds your net worth.
I wrote about the same comparison in PJM early in the year — can’t link it usefully, PJM has hosed something — making the correct comparison of total US assets per person versus total US obligations per person, and it was about $300K assets vs $160K obligations, or over the whole population, about $90 trillion versus $48 trillion. Most of that wealth is real stuff — land, houses, factories, etc — and hasn’t gone away in the last year.
You know, things are bad enough right now. Much of the economic stall these days is because companies are just sitting and holding. That is, they aren’t taking risks to grow, expand and innovate because they don’t want their cash tied up if the whole shebang is going to implode. Well, it starts to become a self fulfilling prophecy.
There is no question that people have lived beyond their means and some have gone so far that they can’t get it back. It is going to take some time to correct this cultural problem. People are going to have to cut back and pay off debt.
There is no question that the banking industry and the people on Wall Street played with funny money and in some cases outright defrauded people. It is important to remember that stocks and funds are only as good as the businesses they back and the people who are in those businesses. The pressure to perform and profit at all costs creates an environment ripe for fraud.
Even with these problems, it does not help the economy or the American psyche to find problems where there aren’t any. This behavior causes more problems and its irresponsible.
Cross-posted at Right Wing News
Yes, America Is O-V-E-R Unions
Monday, December 15th, 2008When they helped the poor, abused, underpaid, overworked masses, unions made sense. Child laborers, sweat shops, and indentured servitude was just plain wrong.
We are soooo far from those days it’s not even funny.
Mexico, China, India, Indonesia, Malaysia, Thailand, Myanmar, all have to worry about worker exploitation. Other countries like Zimbabwe should just make it a priority to not kill people.
In America, we have problems but bad work conditions and maltreatment are not some of them. The Economist says:
The waning popularity of unions is not just a recent phenomena. The UAW unsuccessfully attempted to unionise my fellow students and me when I was in graduate school. They launched an impressive lobbying effort, playing on the left-wing tendencies of the students in the humanities and social sciences (not the economists of course, they didn’t even bother with us). At the time I figured things must be pretty bad for autoworkers if the UAW had to turn to graduate students for union dues.
But it’s not just the UAW that has fallen out of favour. Teachers unions are a popular target, too. They’re held responsible for perpetuating failure in public school systems by opposing accountability standards and performance pay. When New York City transit workers went on strike even the most left-leaning, upper-west-side-dwelling New Yorker wanted Roger Toussaint’s head. Now if the actors strike (just when we need entertainment the most for pete’s sake), I don’t anticipate them getting much sympathy either.
Unions remain too powerful in America to disappear anytime soon. But I wonder if this recession will have the opposite effect of the Depression, and may make unions less relevant.
Have some freaking perspective Union bosses and workers. When the average worker makes more per hour than an accountant or nurse or teacher, people feel a wee less sympathetic. When union benefits rob companies of maneuverability and productivity, the small businesses that support the big giants get frustrated. There are new products and innovations out there and the Unions strangle the life out of them because of their rules and regulations. When small business people pay huge taxes and expect to work until they’re 65 because 1) they love their work and 2) they have to, it rings hollow to hear some young 50 year old guy bitching because he might lose his pension benefits. Um, hello? Get a freaking job!
Anyway, union sympathy has come and gone. It will be a huge mistake if the Screen Actors Guild decides to strike, but I kinda hope they do. Hollywood sucks on a good day. There is no better time than now to break a union.
Cross-posted at RightWingNews
Is The Sky Really Falling?
Wednesday, December 10th, 2008When you’re a doctor, you see lots of patients. You also talk to other doctors who see lots of patients. And a very interesting thing is happening among both sets of people that I thought I’d share with you. I’m curious about your opinion. Many people are setting aside six months cash, on hand, out of the bank and also buying gold coins (marked and unmarked) and guns (registered and unregistered–remember New Orleans?). I had a friend tell me that her boyfriend who is a banker was thinking of pulling his cash out of the bank. A spokesman on Fox News said that a bomb shelter would be a good idea.
For quite some time, the press said the economic sky was falling and yet just a gander around indicated that the sky most definitely was NOT falling. People were eating out, shopping, driving new cars, etc. Around the time of the election and banking crisis, the numbers of home defaults rising, business seemed to be slowing, the market was up and down like a roller coaster and gas prices were sky high. People were feeling the squeeze. Still, the economy goes up and down, banks are insured, most people are doing the right thing. Talk of a next Great Depression sounded irresponsible.
Are we headed for a New Great Depression?
There comes a point where the absurd becomes absolutely rational, but no one wants to believe the evidence because the implications are so horrifying. It’s called denial. Denial can be as destructive as generalized anxiety and conspiracy theorizing. One extreme pretends that threats that do exist, don’t. The other extreme sees threats where there are none.
Have we reached an economic point where it is rational and sensible to have cash in a box, under the bed? Have we reached the place where some gold on hand would be helpful should everything tank? What do you think?
Cross-posted at RightWingNews
Jonah Goldberg On O.J. & Obama
Wednesday, December 10th, 2008Jonah Goldberg On O.J. & Obama
Race relations have improved.
Ode To An American Suicide Bomber
Tuesday, December 9th, 2008Ode To An American Suicide Bomber
Because they don’t get enough love.
“The Beginning A Long Struggle Of Worker Resistance”
Monday, December 8th, 2008“The beginning of a long struggle of worker resistance.”
Oh yes, because American working conditions are so 3rd world.
Aspberger Criminals
Wednesday, December 3rd, 2008Does it matter why a crime is committed? I mean, if the victim is dead or the merchandise is stolen, does it matter?
The law allows for things like falling asleep at the wheel. Clearly a sleeping person did not intend to murder with his car and yet the pedestrian is dead. Or the old person who, in confusion, pushes the gas instead of the brake when mowing down a group of people, like happened in New York.
So, what to do about a man with Aspberger’s who hacks into United States government computers because of his claimed obsession with UFOs. Here’s what happened says the Guardian:
McKinnon – who used the online name Solo – is accused of hacking into computers belonging to the Pentagon, Nasa and US armed forces in raids conducted between 2001 and 2002.
Prosecutors say he shut down thousands of machines and caused up to $700,000 worth of damage, while the 42-year-old claims he was searching for evidence of UFOs.
Since the incidence of Aspbergers is climbing, the problem of very smart, socially retarded people doing illegal activities for idealistic or obsessive reasons will increase. These same people would be abused mercilessly in prison as they have no social coping skills.
Additionally, once one person gets off because of a diagnosis such as this, all manner of criminal will attempt a similar defense. The fact is that many criminals suffer from diagnosable mental and biological illnesses that interfere with their cognition. Most, though, couple their poor decision making with wrathful violent action. This is almost never true in the case of people with Aspbergers, who are overwhelmingly introverted and passive, except on rare occasions.
I would like to see the government and businesses harness the natural gifts Asperger’s people possess. If the U.S. government were smart, they would hire this guy and put him to work looking for UFOs in the security agencies of China and Russia.
Top 50 American Philanthropists
Tuesday, December 2nd, 2008Top 50 American Philanthropists
George Soros buying elections is philanthropic?
Hitchens: India Our Ally
Monday, December 1st, 2008Hitchens: India Our Ally
From now on it’s BOMBAY, not Mumbai.
Dr. Melissa
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