If that snake hadn't of consumated everyone of Reagan's fantasies, we wouldn't be anywhere near this mess. People trusted that sob to look out for the US on trade, and he threw this country under the bus.
Interest Rates [Credit] are the Cause and Consequence of the Explosion of Income/Wealth Disparities and, Hence, of the Inherent Instability of this Economy:
The Ominous Keynes' Liquidity Trap.
Origin of Economic Chaos.
that's not shit. They act like labor arbitrage just puts workers on a shelf and magically they don't lose their expertise, or teachers don't lose their expertise, or businesses don't lose their expertise.
There was a good segment on Lou Dobbs today on manufacturing. It hasn't been this low since 1942 and they were talking about how manufacturing needed new policy from D.C.
has decided to order the batteries for the Volt from LG Chem, which is a Korean company.
I remember a time when they would have turned to AC Delco for this.
All hop is not lost. I had a long, interesting conversation with one of my current profs about industrial policy.
We have had it in this country, but we are going to need to if we plan to get through this crisis.
That means that we can't cling to this belief that the "rise of the creative class" means that we can do development and design in this country, and offshore the actual process of manufacturing.
This is simply not the case.
We have to have a manufacturing base in this country. Our way of life is economically unsustainable without it.
how ignored manufacturing is, even at the university level and this has been going on for some time.
Well, if the Obama administration puts a nice "no tariff deal" after all to Korea, it would make even more sense for them to take over or partner with GM.
I suspect (although Japan as far as I know are the ones most advanced in battery technology) but I believe Korea isn't far behind, so that might also give a boost up on hybrids, alternative fuel vehicle design.
At least "no deal" period, we're going under isn't your post!
Middle, you should email Tonelson, economist, he also specializes in manufacturing sector and might be a good resource for you.
deal is dead, and that Hyundai has lined up as a suitor.
This makes sense.
The Korean automakers want to expand into pickup trucks. Chrysler provides a convenient launching pad.
As well, KORUS may be dead, which means that 25% tariff is still in place. But if they export components for final assembly in Chrysler plants, they may be able to get around it.
This is similar to how the Japanese automakers expanded in the US in the 70's and 80's.
Do the component work at home, ship the parts to the US for assembly. So the value is added in Korea, not the US.
And even better, a rival is taken out.
Things are going to be sketchy for Detroit for the next year or so.
Obama has made noises like he will come in with loans for Detroit. We'll see.
I'm not optimistic. And I don't need to tell you what the economic impact of Chrysler, GM, and Ford collapsing would be. Michigan, Ohio, Indiana, would all pounded.
Something like 1 in 5 jobs in these states relates directly to the auto industry, and the macro-effect of demand reduction would ensure people in totally unrelated sectors lose their jobs as well.
Even things like higher education could be affected, because a reduction in state revenue would mean that they have to start cutting budgets.
Getting my master's it always struck me just how fucking ignorant my classmates where to the role played by manufacturing and the auto industry in particular in keeping the US economy running.
They seriously believed that all the "greedy" UAW workers could lose their jobs, and it wouldn't put them in the street too.
But we know the irony of this.
Michigan is probably going to have 10% unemployment for the October numbers, and it's sad, because the BLS has been pulling statistical tricks to take the long term unemployed out of the labor force. Between the September and October numbers they reported that the US labor force shrunk by nearly a million workers. Does that make sense? Or, were they fucking with the numbers to make things look "less" bad.
Chrysler is cutting 5,000 by 12/31. GM just cut another 5,000. Even with the loans, these companies will never be the same again. We have thousands of unemployed white collar with grad and post grad degrees unable to find employment. Houses are not selling, foreclosures are mounting, and values are crashing. Bankruptcies, omg, and we are being told we haven't seen the worst of it, even with federal help. That sob Clinton destroyed MI economy, and then all those DFrs in DC did absolutely nothing but let MI die.
This is the House Education and Labor Committee, Chair George Miller.
Wow. Doesn't it seem better to demand corporations offer traditional pensions?
Seizing half of the money, akin to social security sure is not fair. If someone has a marriage deal, then the surviving spouse should get the rest. I mean if someone is ill, needs long term care, the status quo is the nursing home seizes all assets and leaves the health spouse out on the street (bet you didn't know that, if one needs a long term care facility, like a nursing home, it bankrupts the healthy surviving spouse!)
Doesn't seem to be anything but a downloadable video so far.
I just don't see deflation as much of a concern, not when there are unprecedented reflation efforts ongoing all over the world. That doesn't mean it will prevent a deep recession. It only means that both recession and inflation can happen at the same time (see 1973-1974 as an example).
economics, or supply-side economics does have it's place in a few instances but as a cure-all, obviously doesn't work.
I don't think this is conservatives. Conservatives have had their title bastardized just as much as liberals have for multinational corporate agenda purposes.
Even the term middle class and working families is being corrupted to really mean illegal immigrants. I've seen that as a tread recently.
Government can be the problem when government is corrupt, full of cronyism and inefficient.
Think about the Populist conservative. Now think about what has really been done with Taxpayer money, especially in the Bush administration. Can one blame them for thinking they don't want to hand over their hard earned money to go to no bid contractors or have billions disappear in Iraq and $750 billion go to feed executive bonuses and lord knows where?
If we had a concept of public service that was a high moral value again in the United States and they saw the United States actually getting something for their money, the attitude would probably change.
Actually, the green line shows M1 expanding at a 7-8% clip. It is only the "rate of expansion" that is declining.
Iirc, the sites that track a continued M3 have shown a reversal of the rapid decline, and an increase in the last couple of months.
I am tracking M1 instead of M3 because that is the indicator Mish found to work best with the Kasriel indicator (you can track the links back to his blog where he discusses this).
... and though M3 is not published, Broad Money is.
We have a monetary system where, in contradiction to the hydraulic analogies, the bulk of the money supply is created by actions of commercial banks that are not simple mechanical responses to Open Market Operations ...
... and where the actions of of the Open Market desk are driven by an interest rate policy, not by a quantity policy ...
... and where when a quantity-driven policy was attempted, it consistently failed to meet its goals.
So claiming to have monetary readings without rate information and Broad Money is back to the proverbial blind man feeling the tail of an elephant and saying an elephant is like a living fly-whisk.
Amazingly there are still dim bulbs out there advocating the 'conservative' Reich Wing economic agenda. You know....
'trickle down'...hey, is that stuff yellow...
'A rising tide lifts all boats'....ya gotta be able to afford a boat to take advantage of this myth...Ahnuld's 'Yacht Tax Exemption' will help if you live in CA.
And so on.
Look, the warped minds, bad math and self-interest which created the fabulous progress we've made economically for the last fifty years are still with us.
Be prepared to shoot the wounded when you visit other economics blogs.
There are still lots of zombies roaming the 'net. I recommend 'silver bullets' like Greenspan's admission that he doesn't know shit and quoting St. Ronnie about how 'government is the problem...'
If they literally put in some sort of PPP leveler into trade deals or some sort of exchange rate equalizer.
I imagine that would lead to disaster but otherwise this is what we get, MNCs hunting the globe to labor arbitrage, squeeze workers. I have to go do some reading on this fundamental problem. Surely some economist somewhere has proposed some solutions.
might lead Korean companies to restart plans to open a plant in Georgia, but it's not likely.
The Won is down 30% on the dollar over the past year. Which means that Korean auto profitability has skyrocketed. Japanese manufacturers face a different problem. The Yen has appreciated about 15% on the dollar over the past year. So Toyota has to eat an equivalent loss on each Prius engine they import from Japan.
They are going to be looking to cut costs, and one likely target is wages. Toyota has an aging workforce, and has sufficient cash reserves to implement a two-tier wage system, and offer buyouts to get rid of older workers before they start to become a burden.
About a year back a memo leaked from Toyota's Kentucky plant saying that the wanted to cut the prevailing wage from $27/hr to $12/hr over the next few years.
Obviously, the macro effect of that on the communities where Toyota is located is going to be dire. That would drive down demand in these communities and would touch off a downward spiral in employment.
China too has absurd tariffs on autos so this is one hell of a test.
I hope they don't back down, our auto industry is only on life support as it is.
I believe Korea is where a farmer literally committed suicide in martyrdom protest, so maybe they will deal with a trade on food tariffs to help Korean farmers.
But this is fairly amazing because the problem with China is they have a 25% tariff on US autos versus a negotiated complete tariff drop by Korea.
Still it's the cost of living which enables them to undercut US automakers, the PPP of a country, so maybe OA (Obama administration) can do something clever like some of the deals they made in the 80's to require foreign auto companies to manufacture in the United States. Not ideal since so many Japanese manufacturing are not unionized in the US but at least it forces the Koreans to employ US workers.
I'm really impressed, I honestly wasn't expecting something like this.
Neither S&P nor Moody's is ready to downgrade the United States of America. Don't forget however, that these were the guys who said it was OK to buy all those bum mortgage bonds.
In other words, if you believe these stupid ratings agencies more than your own common sense, and buy Treasury Bonds to support this stupid bailout, don't be surprised if the United States either prints so much money that paying you back will not even pay for your daily bread, or defaults altogether.
If that snake hadn't of consumated everyone of Reagan's fantasies, we wouldn't be anywhere near this mess. People trusted that sob to look out for the US on trade, and he threw this country under the bus.
Prepare for the New World Economic Order
Interest Rates [Credit] are the Cause and Consequence of the Explosion of Income/Wealth Disparities and, Hence, of the Inherent Instability of this Economy:
The Ominous Keynes' Liquidity Trap.
Origin of Economic Chaos.
Everyone Need an Economy, Don't They?
There Is One Solution That Works:
A Credit Free, Free Market Economy:
The New World Economic Order.
What Else?
The Only Goal of 1776 - Annuit Cœptis is to Implement It.
They Can Transfer Their Assets & Forget Their Liabilities.
Anyone Can Join But Still Needs to Ask for It.
http://www.17-76.net/
The Purpose Is to Provide Both a New Deal and a New Game.
It is NOT to Fix This Economy Which is Already Beyond Repair.
The Intention Is to Create a New Economy
With the Assets of the Old One Without its Liabilities.
Why Not Insure Against the Worst Case Scenario?
that's not shit. They act like labor arbitrage just puts workers on a shelf and magically they don't lose their expertise, or teachers don't lose their expertise, or businesses don't lose their expertise.
There was a good segment on Lou Dobbs today on manufacturing. It hasn't been this low since 1942 and they were talking about how manufacturing needed new policy from D.C.
has decided to order the batteries for the Volt from LG Chem, which is a Korean company.
I remember a time when they would have turned to AC Delco for this.
All hop is not lost. I had a long, interesting conversation with one of my current profs about industrial policy.
We have had it in this country, but we are going to need to if we plan to get through this crisis.
That means that we can't cling to this belief that the "rise of the creative class" means that we can do development and design in this country, and offshore the actual process of manufacturing.
This is simply not the case.
We have to have a manufacturing base in this country. Our way of life is economically unsustainable without it.
how ignored manufacturing is, even at the university level and this has been going on for some time.
Well, if the Obama administration puts a nice "no tariff deal" after all to Korea, it would make even more sense for them to take over or partner with GM.
I suspect (although Japan as far as I know are the ones most advanced in battery technology) but I believe Korea isn't far behind, so that might also give a boost up on hybrids, alternative fuel vehicle design.
At least "no deal" period, we're going under isn't your post!
Middle, you should email Tonelson, economist, he also specializes in manufacturing sector and might be a good resource for you.
deal is dead, and that Hyundai has lined up as a suitor.
This makes sense.
The Korean automakers want to expand into pickup trucks. Chrysler provides a convenient launching pad.
As well, KORUS may be dead, which means that 25% tariff is still in place. But if they export components for final assembly in Chrysler plants, they may be able to get around it.
This is similar to how the Japanese automakers expanded in the US in the 70's and 80's.
Do the component work at home, ship the parts to the US for assembly. So the value is added in Korea, not the US.
And even better, a rival is taken out.
Things are going to be sketchy for Detroit for the next year or so.
Obama has made noises like he will come in with loans for Detroit. We'll see.
I'm not optimistic. And I don't need to tell you what the economic impact of Chrysler, GM, and Ford collapsing would be. Michigan, Ohio, Indiana, would all pounded.
Something like 1 in 5 jobs in these states relates directly to the auto industry, and the macro-effect of demand reduction would ensure people in totally unrelated sectors lose their jobs as well.
Even things like higher education could be affected, because a reduction in state revenue would mean that they have to start cutting budgets.
Getting my master's it always struck me just how fucking ignorant my classmates where to the role played by manufacturing and the auto industry in particular in keeping the US economy running.
They seriously believed that all the "greedy" UAW workers could lose their jobs, and it wouldn't put them in the street too.
But we know the irony of this.
Michigan is probably going to have 10% unemployment for the October numbers, and it's sad, because the BLS has been pulling statistical tricks to take the long term unemployed out of the labor force. Between the September and October numbers they reported that the US labor force shrunk by nearly a million workers. Does that make sense? Or, were they fucking with the numbers to make things look "less" bad.
it's ground zero for most of the failed trade, labor, economic policies as well as foreclosures.
Why I sided with MI to count in the primary, they lead the nation in disaster.
Chrysler is cutting 5,000 by 12/31. GM just cut another 5,000. Even with the loans, these companies will never be the same again. We have thousands of unemployed white collar with grad and post grad degrees unable to find employment. Houses are not selling, foreclosures are mounting, and values are crashing. Bankruptcies, omg, and we are being told we haven't seen the worst of it, even with federal help. That sob Clinton destroyed MI economy, and then all those DFrs in DC did absolutely nothing but let MI die.
hearing
This is the House Education and Labor Committee, Chair George Miller.
Wow. Doesn't it seem better to demand corporations offer traditional pensions?
Seizing half of the money, akin to social security sure is not fair. If someone has a marriage deal, then the surviving spouse should get the rest. I mean if someone is ill, needs long term care, the status quo is the nursing home seizes all assets and leaves the health spouse out on the street (bet you didn't know that, if one needs a long term care facility, like a nursing home, it bankrupts the healthy surviving spouse!)
Doesn't seem to be anything but a downloadable video so far.
I just don't see deflation as much of a concern, not when there are unprecedented reflation efforts ongoing all over the world. That doesn't mean it will prevent a deep recession. It only means that both recession and inflation can happen at the same time (see 1973-1974 as an example).
economics, or supply-side economics does have it's place in a few instances but as a cure-all, obviously doesn't work.
I don't think this is conservatives. Conservatives have had their title bastardized just as much as liberals have for multinational corporate agenda purposes.
Even the term middle class and working families is being corrupted to really mean illegal immigrants. I've seen that as a tread recently.
Government can be the problem when government is corrupt, full of cronyism and inefficient.
Think about the Populist conservative. Now think about what has really been done with Taxpayer money, especially in the Bush administration. Can one blame them for thinking they don't want to hand over their hard earned money to go to no bid contractors or have billions disappear in Iraq and $750 billion go to feed executive bonuses and lord knows where?
If we had a concept of public service that was a high moral value again in the United States and they saw the United States actually getting something for their money, the attitude would probably change.
I was wondering about the history of M1 and it looks like the Economists View calculated it out, wrote up a nice post and even did a graph.
Actually, the green line shows M1 expanding at a 7-8% clip. It is only the "rate of expansion" that is declining.
Iirc, the sites that track a continued M3 have shown a reversal of the rapid decline, and an increase in the last couple of months.
I am tracking M1 instead of M3 because that is the indicator Mish found to work best with the Kasriel indicator (you can track the links back to his blog where he discusses this).
... and though M3 is not published, Broad Money is.
We have a monetary system where, in contradiction to the hydraulic analogies, the bulk of the money supply is created by actions of commercial banks that are not simple mechanical responses to Open Market Operations ...
... and where the actions of of the Open Market desk are driven by an interest rate policy, not by a quantity policy ...
... and where when a quantity-driven policy was attempted, it consistently failed to meet its goals.
So claiming to have monetary readings without rate information and Broad Money is back to the proverbial blind man feeling the tail of an elephant and saying an elephant is like a living fly-whisk.
Amazingly there are still dim bulbs out there advocating the 'conservative' Reich Wing economic agenda. You know....
'trickle down'...hey, is that stuff yellow...
'A rising tide lifts all boats'....ya gotta be able to afford a boat to take advantage of this myth...Ahnuld's 'Yacht Tax Exemption' will help if you live in CA.
And so on.
Look, the warped minds, bad math and self-interest which created the fabulous progress we've made economically for the last fifty years are still with us.
Be prepared to shoot the wounded when you visit other economics blogs.
There are still lots of zombies roaming the 'net. I recommend 'silver bullets' like Greenspan's admission that he doesn't know shit and quoting St. Ronnie about how 'government is the problem...'
Good hunting.
If they literally put in some sort of PPP leveler into trade deals or some sort of exchange rate equalizer.
I imagine that would lead to disaster but otherwise this is what we get, MNCs hunting the globe to labor arbitrage, squeeze workers. I have to go do some reading on this fundamental problem. Surely some economist somewhere has proposed some solutions.
might lead Korean companies to restart plans to open a plant in Georgia, but it's not likely.
The Won is down 30% on the dollar over the past year. Which means that Korean auto profitability has skyrocketed. Japanese manufacturers face a different problem. The Yen has appreciated about 15% on the dollar over the past year. So Toyota has to eat an equivalent loss on each Prius engine they import from Japan.
They are going to be looking to cut costs, and one likely target is wages. Toyota has an aging workforce, and has sufficient cash reserves to implement a two-tier wage system, and offer buyouts to get rid of older workers before they start to become a burden.
About a year back a memo leaked from Toyota's Kentucky plant saying that the wanted to cut the prevailing wage from $27/hr to $12/hr over the next few years.
Obviously, the macro effect of that on the communities where Toyota is located is going to be dire. That would drive down demand in these communities and would touch off a downward spiral in employment.
China too has absurd tariffs on autos so this is one hell of a test.
I hope they don't back down, our auto industry is only on life support as it is.
I believe Korea is where a farmer literally committed suicide in martyrdom protest, so maybe they will deal with a trade on food tariffs to help Korean farmers.
But this is fairly amazing because the problem with China is they have a 25% tariff on US autos versus a negotiated complete tariff drop by Korea.
Still it's the cost of living which enables them to undercut US automakers, the PPP of a country, so maybe OA (Obama administration) can do something clever like some of the deals they made in the 80's to require foreign auto companies to manufacture in the United States. Not ideal since so many Japanese manufacturing are not unionized in the US but at least it forces the Koreans to employ US workers.
I'm really impressed, I honestly wasn't expecting something like this.
This is so disappointing...
What can we do to stop this?
In other words, if you believe these stupid ratings agencies more than your own common sense, and buy Treasury Bonds to support this stupid bailout, don't be surprised if the United States either prints so much money that paying you back will not even pay for your daily bread, or defaults altogether.
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