brainiac conspiracy

Got an Easy Answer For That

No.

Under the rules our leaders currently abide, the game is over and the oligarchs have won. The only way to change future outcomes is to change the rules of the game. I'm not sure how to best effect these changes, but mass mobilizations and general strikes might be a good place to start.

---Baron V

Today's Worst Persons

Team Democrat:

“This bill proves that by working across party lines we can reform programs to save taxpayer money while strengthening efforts to grow our economy,” said Senate Agriculture Committee chair Debbie Stabenow, a Michigan Democrat. The Senate is expected to pass the legislation later in the week [...]

Despite resistance from some corners of the Democratic Party, the Farm Bill cruised through the House and will likely face very little resistance in the Senate. House Minority Leader Nancy Pelosi, D-Calif., and Minority Whip Steny Hoyer, D-Md., both voted in favor of the legislation, along with 87 other Democrats.

Well, now we know that punishing the poor for the sins of the banks is a sign of bipartisanship in official Washington. Thanks for reminding me why I decided to leave the party.

---Baron V

It's Our Fault II

Following up on the previous, what I mean by this is an attitude that I took away from the speech. I know the President didn't mean it that way, but it's like this: There are millions of skilled professionals in all manner of trades---school teachers, construction workers, factory hands---who can't find work. Some of them have been performing their jobs for decades, and it's really not fair to lecture people on the need to re-train themselves for the "jobs of the 21st Century" because a bunch of criminal banks destroyed their businesses, cratered their local tax base, and stole their homes. Most people who lost their jobs in the recession did so through no fault of their own, so don't ask them pull up their own bootstraps. There's still a critical need for school teachers and construction workers and factory hands, after all, so push for a jobs program for them, and if the jobs simply can't be created, pay them a guaranteed annual income. We got big problems in this country. Little-ball solutions won't cut it.

The "MyRA" proposal---which is what exactly, a somewhat less risky 401(k)?---was even more offensive. If Social Security isn't enough to retire on, you expand Social Security, not supplement it with a program that the neediest people will never be able to access. That's because tens of millions of Americans are living from paycheck to paycheck. They can't afford to save for retirement because at the end of the month, they have no money to save. What good is this program going to be for them? As with 401(k)s, the only people who will get rich off it will be the fund managers who collect their quarterly fees.

Then again, this assumes that these are serious policy proposals and not some poll-tested talking points that will boost the overnight approval ratings. I know that sounds awfully cynical, but I can't think of any other reason why such ineffectual half-measures would be trotted out in a major policy speech except that the President's team either (a) knows that their time to change the outcome of the game has long since passed, or (b) they don't think we have a serious jobs/income problem.

---Baron V

The Crash That's Coming

Considering how studiously policymakers have avoided addressing the core causes of our last financial meltdown, I don't think it's a stretch to assume that one will happen again, and possibly quite soon. This time, things may even be worse since lowering interest rates to stimulate borrowing won't be an effective policy tool, there will probably no mood in the government for more quantitative easing, and as tax receipts will plummet and the deficit will rise, the wise men who govern us----given what we already know about them---will likely decide it means that more austerity needs to be imposed on the unruly masses. Don't know if this will be the policy move that finally triggers a wave of mass mobilizations and general strikes, but it's going to take something big like that to fend off the sociopaths and grifters who want to get their hands on the rest of what little money we have left to us.

---Baron V

Smart Guys

One thing that's amusing about the neoliberal Third Labels No Way types who dominate our fiscal policy debate is how they think our economy works, i.e., that in a low-tax, low-wage, deregulatory state like the one they prefer, that you can have both a thriving middle class and a thriving billionaire class. But in our market-driven economic system, where virtually every transaction creates winners and losers, and where a disproportionate number of transactions create no wealth whatsoever but are simply rent extractions, that just isn't possible. No such state has ever existed. Shit, even the Pope gets that.

Naturally, that's why we hippie leftists are the real "dead enders".

---Baron V

Today's Worst Persons

The Washington bipartisan persons:

A bipartisan group of lawmakers has reached agreement on legislation to help President Barack Obama win approval of trade deals, including a Pacific-region pact now in negotiation, a Senate aide said.

Leaders of the House Ways and Means Committee and Senate Finance Committee, which have jurisdiction over trade accords, agreed today on so-called fast-track legislation that would let the White House negotiate trade deals that Congress would approve through an up-or-down vote, without adding amendments, the person said.

Any member of Team Democrat who votes to fast-track this train wreck deserves to be primaried the next time they're up for re-election. This isn't about enforcing ideological purity---it's about salvaging what's left of our liberal democracy. If this thing passes, we might as well retire the Stars & Stripes, and replace it with something more appropriate to our times.

---Baron V

Why We Have Prisons

Besides protecting law-abiding citizens from criminals, they exist to remind those same criminals that there is a price to pay for violating the rules of a civil society, and that includes the loss of liberty. They're a necessary evil, in other words---otherwise, the criminals might start to think that they're entitled to commit crimes without interference, and that anyone who thinks otherwise is unfairly picking on them.

Snark aside, I think this confirms the long-held suspicion that our predatory financial system is under the control of a gang of incompetent sociopaths whose rackets need to be liquidated. Just an observation!

---Baron V

A Guaranteed Annual Income Would Solve a Lot of Problems

Among other things, it would be throwing a lifeline to the generation of younger Americans who are looking at a future spent in poverty because (1) there aren't enough jobs for them, and (2) the jobs that are available pay so miserably, their wages in many places don't even elevate workers above a state of homelessness. Speeches about income inequality and social mobility are inspiring, for sure, but concrete redistributionist policy prescriptions are even better. Maybe we could hear some one day?

---Baron V

Neoliberal Tough Love

Many unionized government employees don't participate in Social Security because they have their own state/municipal pensions instead---which means, of course, that they're not eligible to collect SSI once they reach retirement age. So what are people supposed to do when their pensions get stripped, they don't have Social Security to fall back on, and (in many cases) they're too elderly or enfeebled to return to the labor force? I know, our betters will remind us that they're only punishing us for our own good, that we've got to practice fiscal rectitude, with skin in the game and all that. But it doesn't do anything to address the looming poverty crisis that could sink the entire economy---and it only increases the likelihood that things are going to get worse.

---Baron V

Nothing Has Really Changed

Yes, I know we have new financial reform legislation with increased capital requirements, a consumer protection bureau, "living wills" for the banks, etc. But bigger picture, the people who failed spectacularly at their jobs and who crashed the global economy were, for the most part, allowed to stay at their jobs and to retain all of their failed enterprises. We insisted on regime change, and shutdowns of unprofitable divisions, at General Motors before we gave them money---why not at Goldman or JP Morgan? Worse yet, we have been supplying them with steady infusions of taxpayer cash for the past three years, which they've used----predictably---not to provide more liberal lines of credit to you and me but to inflate more asset bubbles. That's who they are, that's what they do, and that's why we should not be surprised that another crash is coming---it's built into the business model. As with health care, there has always been a simple and historically proven fix for this, and all that we have ever lacked is the political will to enact it.

---Baron V

Nothing Has Changed

As mentioned earlier, people are still in need of jobs, and money, and debt relief. Because

U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country's biggest banks.

The loans are a problem now because an increasing number are hitting their 10-year anniversary, at which point borrowers usually must start paying down the principal on the loans as well as the interest they had been paying all along.

More than $221 billion of these loans at the largest banks will hit this mark over the next four years, about 40 percent of the home equity lines of credit now outstanding.

I am guessing this means that there will be no "tapering," and that the money spigot will remain open since banks must never suffer the consequences of their bad business decisions. There will, however, be plenty of tapering for the rest of us. Matter of fact, it's already happening!

---Baron V

America's Friends in Freedom

They may do things a bit differently than we, but our policy goals are similar in scope and aim. We view crisis as an opportunity to impoverish old people, while they view crisis as an opportunity to impoverish the young. But the policy objective is essentially the same, as are our leaders' good intentions: Because we must be punished because it is bloody well good for us. Because if left to our own devices, we can't be trusted to be anything other than grifting little moochers:

Today it is still possible to leave school, sign on, find a flat, start claiming housing benefit and opt for a life on benefits. It's time for bold action here. We should ask, as we write our next manifesto, if that option should really exist at all. Instead we should give young people a clear, positive choice. Go to school. Go to college. Do an apprenticeship. Get a job. But choose the dole? We've got to offer something better than that.

---Baron V

Lies, Damned Lies, Austerity

Future historians will be left to explain how a generation of policymakers, economists, legislators and serious persons of all stripes conned themselves into believing that contractionary fiscal policy was, in fact, not contractionary but would make the pie higher for everyone. Most likely, it was due to the fact that some of them were stupid while others were simply corrupt, but one thing that will still need to be fully explicated is how we collectively allowed the same people who destroyed the world and impoverished millions to continue destroying fortunes and impoverishing people. This is not the way to promote a healthy social order, though it is a good way to dispense with liberal democracy.

---Baron V

Guessing We'll Compromise

If recent history is any guide, that is. No, Team Democrat won't trade off any of the Goldberg Act to get the debt ceiling raised, but I'm guessing we will probably see another crappy austerity trial balloon floated, hopefully not as bad as the current regime but likely so, in the name of common-sense consensus. Only the particulars will be different this time. (Chained CPI? Job-creator tax reform?) And, as always, the hostage-takers will collect their ransom, assure Team Democrat that everything is settled, then reappear the same time next year with yet another bomb threat. We've been riding this Ferris wheel for the last twenty years. You'd think our side would've learned the lesson by now.

---Baron V

Blessings of Freedom

In the birthplace of democracy, people know them better than anyone:

Malnourished children eventually gave the secret away amid reports nationwide of pupils fainting in schools. "Teachers were reporting cases of kids who had turned up at school with nothing more than rice or stale rusks for months," Mourtidou recalled.

I suppose you could point at news like this and conclude, "Well, see those people could help themselves out but they're all just greedy little moochers." And while there is doubtless a kernel of truth to that, I am guessing that at least some of those "businesses" are small- to medium-sized operations that are heavily dependent on tourists who aren't visiting anymore, and that many of them are not paying their taxes because they have simply run out of money. But meanwhile, the beatings will need to continue because somebody, somewhere, is making a good deal of money from them.

---Baron V

This Time For Sure

1. Impoverish people by cutting their wages and pensions.
2. Impose more hardship by raising the cost of nearly everything.
3. ???
4. Prosperity!

IMF technicians undertook a study to look at the effects of a 10-percent wage cut over two years accompanied by a reduction in social security contributions by one and two-thirds of a percent. It also examined broadening the base of the value-added tax (VAT) in two years, passing the now-reduced products, which have an 11-percent rate, into the general 21-percent category.

“The results, while subject to inherent limitations of the model, suggest the wage reduction, and associated fall in prices, would have a significant positive impact on economic growth and support the fiscal adjustment,” according to the study.

Whether they are greedy or stupid will be for future historians to decide, but there's little doubt by now that we are governed by people who seem to lack any ability at all to acknowledge other people's suffering, and the self-awareness needed to anticipate the consequences of policies that have already been tried and repeatedly failed. In a sane and rational world, we would call these people "sociopaths," but I guess we don't live in a sane and rational world.

---Baron V

Same Old Song And Dance

What could possibly go wrong here?

Now on solid footing, the investment groups should be able to tap new sources of financing---including packaging rental income streams into securities, similar to the way mortgages were bundled during the housing boom.

Many of those mortgage bonds went belly up in the subsequent crash. But analysts nonetheless see securitization as crucial for the nascent buy-to-rent industry.

In what would be the first such security, Blackstone Group is reportedly planning to bundle monthly rental payments on about 1,500 to 1,700 of the homes it owns in a deal valued at $240 million to $275 million, the Wall Street Journal reported earlier this week, citing anonymous sources. Deutsche Bank, a major packager of risky subprime loans during the housing bubble, would structure and market the rental bonds to investors.

And once they've finished blowing up the rentals market, they'll start investing in homeless shelters, where they can extract more money from us in exchange for a bowl of stone soup and a sleeping bag.

None of this Potemkin Recovery needed to happen. Mortgage refis, writedowns, debt forgiveness, etc., could and should have been a integral part of any bank bailout package. Our leaders were advised to do this because anyone with a lick of sense could figure out that there'd be no meaningful economic recovery until the housing market had been repaired, and trillions of unrecoverable debt wiped off the books. Our leaders, being the smartest guys in the room, however, ignored the grumblers, and now fewer people can afford to buy houses, and---now that there is upward pressure on rentals---fewer people will be able to rent them as well. One of these days, our job creators will figure out that they've priced of all their customers out of the market for their goods and services, but until that day, there's lots of money to be made, and no regulatory regime to put a stop to it. Here's hoping that President Nugent enjoys the crash he's going to inherit sometime near the end of the decade.

---Baron V

Econ For Morons

People can't buy stuff if they don't have any money. If they don't buy stuff, job creators can't make stuff to sell them. If they can't make stuff to sell, they can't keep their employees working, and if they can't keep the employees working, they have to send them home. How to fix? Give people more money so they can spend it on stuff. Raise the minimum wage, print more money and mail it out as stimulus checks, borrow it from your central bank, or raise taxes on rich people and redistribute the loot. There are all sorts of ways to create wealth beyond what the private sector can generate on its own. But whichever policy lever you choose to grasp, you need to get more money to people so they can spend it on stuff---because if you don't, they won't.

---Baron V

Many Reasons For Failure

Sure, racial politics/polarization played a big role in Detroit's downfall, but I think it's a bit one-dimensonal to pin its failures to this one social factor. True, white flight robbed the city of much of its tax base, but smart city planners could (and should) have recognized this and recalibrated urban policy to compensate for it, perhaps by designating enterprise zones and/or creating tax credits to attract new businesses to settle in the city and thereby broaden the economic base. But they didn't do that---casino gambling notwithstanding---and while America's economy grew more diversified throughout the '70s and '80s, Detroit's didn't. Instead, they kept relying on a single dominant industry to support the populace, even when it became glaringly apparent that this "industrial monoculture" was going to be inadequate to the task. They're starting to correct that imbalance now, but it's going to take many years before they reach a state of sustainability, and it likely will not come without a lot of pain and sacrifice.

---Baron V

Democracy in Action

It manifests itself in myriad ways, of course, but one crucial indicator of it is a healthy and continuous dialogue between the governors and the governed since the governors can't really give the citizens what they want unless the citizens are allowed to express their views. This helps promote comity between the people and their leaders, and promotes a harmonious social order:

Making his first visit to the country since the eruption of Europe's debt crisis in Athens almost four years ago, [Schäuble] was welcomed by around 4,000 riot police as Greek authorities mounted a draconian security operation.

With central boulevards cordoned off, protesters were prohibited from gathering outside the parliament building.

---Baron V