Economic Bombshells Muffled

George Rebane

Those getting their news from the lamestream regularly miss important aspects of recent developments.  Three particular items come to mind that will first affect our economy, and then perhaps impact our slide toward socialism.

The Republicrats have repealed the requirement for a national debt ceiling, thereby allowing the Treasury to continue borrowing with impunity to fund all the programs that the central planners have assigned to a growing leviathan (here).  For the Republicans it was a bell weather capitulation, baking in the notion that they are helpless to counter the truth that it takes both parties to ‘shut down government’ and/or ‘default on our nation’s debt and other Congressional commitments’.  This genie will not be put back in the bottle.   Perhaps Congress will give a lame try at again requiring it to approve all Treasury bond issuances.  Nevertheless, the slide toward fiscal oblivion and its aftermath is starting to accelerate.

President Hollande made an audacious statement to the French people that reflects today’s desperate attempts in the EU to walk back from too much socialism (here).  This hard left progressive was finally forced to cede a turn from Keynesianism and propose that supply side economics is in France’s future.  "We need to produce more, and better," Mr. Hollande told his country last month, while announcing plans to cut payroll taxes and rein in public spending. He added: "Action is therefore needed on supply. Yes, supply! This is not contradictory with demand. Supply even creates demand."  My, my, my.  Our lamestream, of course, completely missed this one.

A new redistributionist social contract is needed according to Dr William Galston of the progressive Brookings Institute.  Economists are now beginning to recognize the ‘Great Decoupling’ of wages from productivity that is caused by accelerating technology – a concept long familiar to RR readers.  Capital and labor used to fly in more or less tight formation – as productivity increased, so did wages because it was then the increased skill level of workers operating the new machinery that gave rise to increased productivity.  This is no longer true, and becoming less so as capital invests in new machines that are autonomous of the increasingly unskilled, uneducated, and redundant workforce.  This effect is two-edged since it has also brought about the QoL increases we all enjoy.  And Galston agrees with RR that continuing the same ol’ same ol’ policies of the Republicrats is not going to keep blood out of the gutters.

Galston’s punchline is that “the facts push me to a more radical conclusion: We cannot expect robust, sustainable economic growth unless we can figure out how average households can participate in the fruits of that growth, as they did in the postwar period. We need nothing less than a new norm—a revised social contract—that links compensation to productivity. And because we cannot return to the conditions that once sustained that link, we need new policies to bring it about.  Neither political party has come close to proposing anything of the sort, and the American people know it.”

But the rub is that the Left’s past solutions linking compensation to productivity have quashed productivity in the way they have compensated workers decoupled from punished productivity.  And he has yet to reveal what the government's "new policies" will be that impose this new “radical” and “revised social contract”.  We tremble in anticipation. (more here)

[Addendum]  I can’t close without informing readers about the latest from Reporters Without Borders who regularly publish the World Press Freedom Index.  While progressives continue their denial of the co-opted lamestream, the rankings data show that during 2013 the US has precipitously slipped 13 more steps in the WPFI, and now ranks 46th in the world (here).  This attests to the claim made here that American journalism in the large has pretty much become an unprincipled bought-and-paid-for profession of lackeys that deserves its place in the barrel with similarly motivated barristers and politicians.  Again, the lamestream has sent its best team of crickets to cover this important news for our increasingly uninformed public.

Comments

[George Rebane]

Speaking of economic foibles that really hit home, our AB-32, the legislative farce called California's Global Warming Solutions Act of 2006, has failed on every promise made in its name. In a desperate attempt to garner some success, it has now embarked on 'mission creep' into areas where it may garner an accolade or two from policies already in place. Russ Steele has reported on this in his review of the new AB-32 Scoping Plan Draft. You can read about this here, and Russ has promised to keep us apprised of all the other surprises that the CARB sleazebags are popping on the people of California.
http://sierrafoothillcommentary.com/2014/02/12/ab-32-mission-creep-now-smog-reduction-is-goal/

[Gregory]

"For the Republicans it was a bell weather capitulation, baking in the notion that they are helpless to counter the truth that it takes both parties to ‘shut down government’ and/or ‘default on our nation’s debt and other Congressional commitments’."

George, *if* the GOP can manage not to blow what may be a bellwether election and be in complete control of both houses of Congress this time next year, they will be able to win that fight in '15. It's a loser at this point and cooler heads are prevailing. This is not the time for another Cruz fiasco.

[Todd Juvinall]

The lamestream media did npt mention that "Schoolbus Nagin" was a democrat. So, once again the people of America are lied too by the so-called "journalists.

[George Rebane]

gregory 1048am - Point well made. But in spite of that logic, I draw attention to your *if*, and the missing *if* as in 'they will be able to win that fight in '15 *if* they decide to fight.' Right now there is no reason for undertaking such a fight, since then the whole of the Republican Congress will be blamed for shutting down government, defaults, etc. The Repubs have no strategy in place to overcome the Dems' established and demonstrated ability to lay unilateral blame. And with each passing day, the Repubs seem to have less of a stomach for engaging in the battle to save the nation's fisc. The accepted approach seems to be to stand back exhibiting a stern and principled mien, while continuing to vote with prevailing cooler heads for the SOS. And no cooler head has yet to identify a believable exit from this path to financial oblivion.

Meanwhile, the Dems and their dummies rejoice.

[fish]

George, *if* the GOP can manage not to blow what may be a bellwether election and be in complete control of both houses of Congress this time next year, they will be able to win that fight in '15. It's a loser at this point and cooler heads are prevailing. This is not the time for another Cruz fiasco.

That was my thought as well. The last thing the GOP needs at this point is more bad press from another wholly owned subsidiary of TEAM DEMOCRAT.....(pssst....this means the Old Guard media). Boehner was in a no win position and this will likely cost him the speakership (god willing) in the next congress.

[fish]

And no cooler head has yet to identify a believable exit from this path to financial oblivion.

Meanwhile, the Dems and their dummies rejoice.

I suspect, and I believe that you hold a similar position as well that we have passed the point of no return financially. Where we go from here is anybodies guess.

[fish]

...and in moderately uplifting news....

http://reason.com/blog/2014/02/13/federal-court-says-good-cause-requiremen#comment_4311336

[George Rebane]

fish 1112am - Yes, my long held and oft stated position has been that we have indeed passed the tipping point. There is no way that national debt will be either 1) limited, or 2) repaid in an orderly manner. Instead, it will be repudiated either through default, or most likely through 'monetization' of the debt - i.e. printing the dollar into oblivion.

[Russ Steele]

The Hill: No grassroots confidence left in GOP leadership

That sound you hear coming from Washington, D.C. is the white flag of surrender flapping in the breeze. The upper echelon of the Republican Congressional leadership has officially capitulated to liberalism.

It isn’t a productive use of time to ponder why this happened. Along the way the leadership lost its nerve, and has slowly and systematically retreated, to the point where they no longer remember what it truly means to lead a nation and advance a conservative agenda.

Read more HERE.

[Gregory]

"But in spite of that logic, I draw attention to your *if*, and the missing *if* as in 'they will be able to win that fight in '15 *if* they decide to fight.'"

I can't imagine a GOP coming off a winning Nov '14 not feeling their oats, especially if Obama comes out with a 'we got whupped' like Bush did when Pelosi & Reid firmly took over the Congress in '06. Then the problem will be the loose cannons (like Cruz, who, like that other first term senator of the past, Barack Obama, has no real experience actually getting anything done) not blowing it by going a bridge too far.

[fish]

There is no way that national debt will be either 1) limited, or 2) repaid in an orderly manner. Instead, it will be repudiated either through default, or most likely through 'monetization' of the debt - i.e. printing the dollar into oblivion.

Or if they want to try to have their cake and eat it too!

07 February 2014

They continue to prepare for us

[fish]

.....and as timely as my last post!

Although the nomenklaturist-in-residence assures us that governments don't do this sort of thing and to ever assume otherwise is crazy conspiratorial nonsense...there is this!

http://www.zerohedge.com/news/2014-02-13/tanks-are-rolling-post-devaluation-kazahkstan

[Gregory]

fish 11:17

More than moderately good news... it appears the 9th Circus (of all courts!) opinion is that California's good cause requirement (at least as interpreted by San Diego County) for CCW is unconstitutional. The opinion is long, but suspect this may be the opening for California to become a "must issue" state.

http://cdn.ca9.uscourts.gov/datastore/opinions/2014/02/12/1056971.pdf

[fish]

More than moderately good news...

Too early to tell...still better than I expected.

[Walt]

It looks like the 9TH Court has had a come to Jesus moment. They know they have been
the laughing stock of the appellate courts for decades, and are trying to look halfassed neutral for a change, and Constitution following.

[fish]

Toatlly and so deliciously off topic!

The irony.....it BURNS......!

http://reason.com/blog/2014/02/13/exene-cervenka-of-la-punks-x-moving-to-t

When You've lost the punk rock voter..........

[Walt]

See the news of the Blue Lead mine? This isn't going to sit well with the local claim jumpers. They are probably writing their BS and hit job pieces as I speak.
And just like the last hearing someone from "the ridge" will whine how they will be adversely affected by a mine just off Greenhorn Creek.
I'm sure the owners still have my employment application on file.

[Todd Juvinall]

George,
Did I read the WSJ article correctly? I think it said "if" the debt ceiling was removed not it has been?

[Todd Juvinall]

Oh, on my way beck to town I was listening to NPR for some reason and they did a whole segment on the "political" appointments to Ambassadorships. Seems there is way more now. Payoffs for donors., etc. Well, I listened intently and not once did those mental midgets at NPR say these appointments were Obama's. Not one mention! But true to course, the NPR idiot said "Congress" must be more involved! My goodness, we have lost the Republic!

[Walt]

Fish.. Seems the person is more Conservative than LIB... ( Old school DEM.??)
She like to see people pack'n heat.. (that's not a LIB trait)
I know of one or two Conservative " hippies of the day ",, Their great people.
They still have that hippie mindset and lifestyle.

[George Rebane]

ToddJ 520pm - Didn't see the "if" part you're referring to, but the point of the House legislation is that they caved to a debt ceiling increase without condition or recourse, thereby establishing the president's manifest 'right' to spend and borrow with no limit. We recall that the federal budget, on the rare occasions we now have one, also imposes no spending limit even if written with built in borrowing necessary to fund its stipulated amount. Congress and a willing administration can always spend more through a number of well-established devices.

Spending will not be controlled until there is an appropriate constitutional amendment mandating it to follow some measure of government revenues appropriately delayed. It should, of course, contain the usual national security exceptions. But that's nowhere on the horizon.

[Walt]

Todd.. And one hasn't even been to the country he's been "nominated" to represent us.
It's all about the cocktail parties and prestige. NOT that you have any clue about
foreran affairs. LIBS think "foreign affairs" means sleeping with the local women
that get snuck into the Embassy while the wife is back in the states.

[Todd Juvinall]

It appears the career foreign service people are not happy. I can't blame them. But since Obama thinks we have 57 state, my guess is he thinks Argentina is just another one.

George, I still think they will forfeit on the debt. It cannot be paid back and a "forever" interest payment to Chia will be unacceptable.

[Walt]

Sorry Todd,, After re rereading my last post, that didn't quite come out right.
I wasn't slamming YOUR knowledge of foreign affairs. I meant the people that bought the position.

[Account Deleted]

The fed govt's ever growing debt is only a part of this dire picture. We also have all sorts of muni and state govts that are broke or getting there quick. School districts all over are employing a strategy of refinancing their debt with idiot loans that will end up costing several times (some up to 10X) the original amount received. And the principle is often used for operating expenses, not capital improvement. The private and public pension promises loom large as well. What to do? Most pols are simply going for Plan A. Make sure the excrement doesn't contact the electric rotating device until they are out of office. There is still one more big happy plan that's a-coming. It's already been floated a couple of times recently. A fed govt run mandatory national retirement plan. The citizens 'invest' in the fed govt and the fed govt 'guarantees' a certain payout later. Of course the money you get later is worthless, but hey - it got the can down the road a bit and it proved that we 'cared'. It's a balancing act of making sure the collapse doesn't come until after the populace has been disarmed (literally) and mentally disarmed with more govt run crap schools and lots of free bread and circuses.

[George Rebane]

ToddJ 549pm - Haven't I said that for the last seven years, and even as recently as my 1127am in this comment stream?

ScottO 810pm - Can you tell us a bit more about the fed govt run mandatory national retirement plan? Who/when/what/...?

[Ben Emery]

Should I make reservations?

http://www.takepart.com/article/2014/02/12/yelp-reviews-lash-restaurant-owners-bigotry?cmpid=organic-share-email#.Uv2d2IQmrMc.email

[Ben Emery]

Fish,
Self Determination is what people want. A vote between bad choice A and bad choice B isn't really a choice.

South African Protests Target Broken Promises
http://www.nytimes.com/2014/02/14/world/africa/south-african-protests-target-broken-promises.html

[Todd Juvinall]

George, yes tou have been on top of all this debt and deficit stuff. It just seems to me there will be much more going on now that Yellen is the Chairman. I listened to here the other day in front of the House Committee and we are in deep shit.

[Walt]

George. I do believe Scott is referring to "O"'s new " MYIEA" ( my-ira)
Pretty much SSI on steroids. " your money" in Dear leader's pockets.

A Scott trade account works just fine for me, and does pretty much the same concept. ( until LIB overseer's find it
and say they can do a much better job of "investing" my money, and then when I need it will tell me just how much they deem I can get back... If any..)

[George Rebane]

Walt 911am - You may be right, that could be the MyRA that Obama introduced in his SOTU.

[Account Deleted]

Well, yes - the prez did make a mention of this, but there is more. So much more in store. The money in retirement accounts is right now estimated at about the same amount as our natl debt. Addicts are always looking for their next fix and if you're not treating the fed govt as an addict, you're not being realistic.
Here's Kalifornia's first step in the mud -
http://www.epi.org/publication/pm193-california-retirement-plan-national-model/
Voluntary, of course. Until it starts to go broke and then it will be declared such a success, that every one will be glad to be forced into it. Much like SS.
This article is a pretty good primer on the subject -
http://www.thenewamerican.com/usnews/politics/item/17508-obama-to-force-americans-to-buy-government-bonds
Another good article. Remember - this is already being done in other countries, so it's not just paranoia. Lefties always love to point to other failed, socialist countries as the way we should go.
http://www.economicpolicyjournal.com/2012/12/how-government-is-coming-after-your-ira.html
I can't remember who it was, but a French economist put it nicely - "You Americans are already a socialist country, but you refuse to pay for it" - or something like that.
By the time our dear leader makes his final departure on Marine One, our debt will be close to or equal to our annual GDP.
The 'rich' don't have the money to pay it off even if you took everything they have. The middle class producers will have to pay for this one way or another.
'Invest in America!' - 'Guaranteed retirement income!' Oh Boy!
What can go wrong?

[Russ Steele]

The President is visting California today and it is reported he will tie the states drought to anthropogenic global warming. Here is a Guest Post by Willis Eschenbach at Watts UP With That

In discussing President Obama’s latest boondoggle, the one billion (with a “b) dollar Climate Resilience Plan, The US Under-Assistant Minister of Scientific Silly Walks, John Holdren, wandered way off of the party line. The party line in question, of course, is …

“Although we can’t ascribe any given weather event to climate change, we still insist that blah blah blah …”

Perhaps Holdren’s teleprompter was broken, but anyhow, here’s what he said (emphasis mine):

During a call with reporters on Thursday evening, the assistant to the president on science and technology, John Holdren, said, without any doubt, the severe drought plaguing California and a number of other states across the country is tied to climate change.

Now, that quote was bad enough, since everyone from the IPCC to my cat agrees that

• There is no link between historical post-Little-Ice-Age warming and extreme weather, and

• Droughts are more common in colder times than in warmer times, and

• For the last decade and a half there’s been no statistically significant warming, certainly not enough to cause increased extreme weather.

• We have neither the understanding nor the information necessary to ascribe ANY single weather event to climate change, and we’re a long ways from having either one.

But despite Holdren going way off piste in his comment, it wasn’t truly of the quality needed for a quote of the week. It wasn’t concise enough for an epigram … or for an epitaph, for that matter.

However, just when it all looked hopeless, Holdren rallied, came back and captured the gold by uttering the deathless words that will ring forever in the halls of climate academe:

Weather practically everywhere is being caused by climate change.

There you have it, folks, Holdren’s Law of Climate Causation, all you need to know about droughts and such … weather practically everywhere is being caused by climate change.

Read the rest at the link above.

[fish]

Weather practically everywhere is being caused by climate change.

I sure envy the older guys here who were...ahem...privileged..... to live before climate change when it was always pleasant and 68 deg.

You guys owe us!

[Account Deleted]

Joe Bastardi correctly predicted the current weather patterns for this winter sometime last year in the fall. He looks at ocean temps in different regions and saw patterns last seen in the fifties. The tropical Pacific was COOLING and the amount of moisture that comes from that region is reduced. Hence - drier California and into the southwest. It's more complex than that, but the main point is that it's not unprecedented and it's not AGW. Unless you want to believe that global warming causes the ocean to cool. The blast of arctic air in the midwest and east and persistent high pressure in the west are also just recycling weather patterns that have occurred before as well. The Great Lakes are freezing over and I'm sure global warming is causing that as well. The lack of snow in Sochi isn't too surprising if you consider it's farther south than Venice and sits on the Black Sea. You can only go about 175 miles farther south and still be in Russia. California has been getting dryer and warmer ever since the blanket of ice sitting on top of us left and the great inland sea dried up. But our use of water is growing apace and we don't want any more bad reservoirs. Gee - guess what happens?

[Gregory]

Listening to NPR yesterday evening, their designated conservative (ok, well, David Brooks, who passes for conservative to the folks at NPR) turned a nice phrase... "guilty of practicing strategy":

" This was a onetime thing. John Boehner is guilty of practicing strategy. Some Tea Party people seem to want to put pedal to the medal on every single issue, run into brick walls until their head caves in, but John Boehner is not an idiot and there was no way they were going to get a majority on this. There was no way they were going to get popular support. If they fought an unwinnable fight, they would lose popular support. They were not going to win. There was nothing to gain. And therefore, the idea was just get it behind them and that's what he did. It was perfectly obvious politics and why everybody can't see that is a mystery to me."

[George Rebane]

re Gregory 233pm - and that is why we need more political parties in Congress, and government by a coalition of interests that prevents anyone from running rampant. The 'Boehner Republicans' will definitely shift toward the left in order to stay alive. But in doing so they will have to throw Tea Party principles under the bus. Perhaps the reciprocal point can be made about the Democrats (I hope).

[Gregory]

George, that isn't shifting to the left, it's pragmatic politics. He didn't have the votes, and pressing the point would not have even resulted in a Pyhrric victory... just a loss in more ways than one. In the end, it takes a majority to pass legislation.

A new party that splits the GOP in two won't help you. What would help the GOP is taking over the Senate, and tearing GOP candidates a new one would only help Reid & Obama in November.

Really, George, get over it. Accept it as the only practical strategy and make a resolution to only fight the fights that have a chance of a positive outcome, for you, not the other guys. *IF* the GOP takes the Senate in 2015, there will be plenty of chances to knock it up a notch.

[George Rebane]

Gregory 337pm - while I respect and even honor your viewpoint, I cannot accept it. According to my lights "pragmatic politics" for today's Repubs is a definite shift to the Left, and the ensuing catastrophe that such a shift guarantees. That is why we need two (or more) political parties to represent the broadened ideological spectrum of the country. You have missed my oft and forcefully stated point that our new multi-party landscape cannot start with, say, only the Repubs splitting. Any dunce can see that this is political suicide.

[fish]

Any dunce can see that this is political suicide.

In my estimation the act of suicide was committed by the Bush administration...there might have been a chance to right things then. Now the goal should be to survive what's coming and make sure the blame falls on TEAM PROGRESSIVE where it surely belongs. Bush may have pulled the trigger but the chamber was loaded long ago!

Dark days ahead!

[Gregory]

George, there is no honor in starting a fight one cannot win, especially if with that fight, the ability to win in the future is lessened.

The hands held were dealt over the last 3 elections; the last 3 for the Senate, the last one for the House and the Presidency. Especially given the sycophantic press Obama and Reid continue to enjoy, the hand the GOP was holding is a loser, and the cooler heads saw that. The fight you wanted to see would just snatch your victory from the jaws of defeat next November and perhaps the November after that.

[Gregory]

make that "snatch defeat from the jaws of victory"...

[Bill Tozer]

https://scontent-a.xx.fbcdn.net/hphotos-ash3/t1/1618409_10151892763780911_2013950962_n.png