Showing posts with label Recession. Show all posts
Showing posts with label Recession. Show all posts

Thursday, October 06, 2022

6: Recession

U.S. Aims to Turn Taiwan Into Giant Weapons Depot Officials say Taiwan needs to become a “porcupine” with enough weapons to hold out if the Chinese military blockades and invades it, even if Washington decides to send troops. ......... China has probably studied the strategic failure of Russia’s invasion of Ukraine .

I’ve Studied 13 Days of the Cuban Missile Crisis. This Is What I See When I Look at Putin. Two nuclear-armed states on a collision course with no obvious exit ramp. An erratic Russian leader using apocalyptic language — “if you want us to all meet in hell, it’s up to you.” ........ Even if we assume Mr. Putin is a rational actor who wishes to avoid nuclear annihilation, that is not necessarily reassuring. Contrary to popular belief, the biggest danger of nuclear war in October 1962 did not arise from the so-called eyeball-to-eyeball confrontation between Khrushchev and Kennedy but from

their inability to control events that they themselves had set in motion

. ........... there were times when both leaders were unaware of developments on the battlefield that assumed a logic and momentum of their own. ........... Khrushchev never authorized the shooting down of an American U-2 spy plane over Cuba by a Soviet missile on Oct. 27, 1962, the most dangerous day of the crisis. Kennedy was unaware that another U-2 strayed over Russian airspace the same day, triggering Soviet air defenses.

“There’s always some sonofabitch that doesn’t get the word,” was how he put it later.

........... A stray shell from either side could cause an accident at a nuclear power plant, spewing radioactive fallout over much of Europe. A bungled attempt by Russia to interdict Western military supplies to Ukraine could spill over into NATO countries like Poland, triggering an automatic U.S. response. A Russian decision to use tactical nuclear weapons against Ukrainian troop formations could escalate into a full-blown nuclear exchange with the United States. ......... the 1962 crisis should serve as a reminder of the limits of intelligence gathering. Kennedy was belatedly informed about the deployment of medium-range Soviet missiles to Cuba, but was left in the dark about other equally important matters. .......... He was unaware, for example, of the presence of nearly 100 Soviet tactical nuclear missiles in Cuba targeted on the Guantánamo naval base and a potential American invading force. The C.I.A. underestimated Soviet troop strength on the island and was unable to track the movement of any of the nuclear warheads. ............ What both Kennedy and Khrushchev did possess was an intuitive understanding of the peril confronting not just their own countries but the entire world if the crisis was allowed to escalate. That is why they maintained a back channel to communicate with each other privately (through the president’s brother, Attorney General Robert Kennedy, and the Soviet ambassador to Washington, Anatoly Dobrynin) even as they denounced each other publicly . .............. they acted swiftly to reach a compromise deal (kept secret for decades) that involved the dismantling of U.S. medium-range missiles in Turkey in exchange for a Soviet nuclear withdrawal from Cuba. ........... Like Kennedy, Khrushchev had experienced the horror of World War II. He knew that nuclear war would be many times more destructive. .......... Mr. Putin, by contrast, has chosen to raise the stakes at every critical point. Escalation has become his preferred tactic.
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Putin and M.B.S. Are Laughing at Us Putin and Saudi de facto ruler Crown Prince Mohammed bin Salman are also probably hoping that the soaring energy inflation unleashed since Russia’s invasion helps the Donald Trump-led Republicans to regain control of at least the House of Representatives in next month’s elections. That would be icing on the cake for both, who view Trump as a president who still loves black crude over green solar and knows how to look the other way when bad things happen to good people. ..........

this cast of brutes, bandits and useful idiots.

........ to ensure oil prices don’t retreat, but instead go back over $100 a barrel and stay there. ......... “Germany’s cabinet on Wednesday passed two decrees to prolong the operation of sizable hard coal-fired power generation plants up to March 31, 2024, and to bring back idled brown coal capacity up to June 30, 2023, to boost supply.” .........

All in all, Putin had a bad month in Ukraine — but a good month in the U.S. Congress.



A Year Under the Taliban A single year of extremist rule has turned life upside down for Afghans, especially women. A photographer who has long called the country home captured the jarring changes. ......... But then the militants ended education for girls after the sixth grade. Nilaab’s 13-year-old daughter, Arveey, cried every morning as she watched her younger sister, Raheel, 11, get ready for school. So Nilaab took Raheel out of school, too, until, she said, she could “figure out a solution.” ....... In the section for men, guests sat listlessly around tables with white table clothes. A videographer awkwardly filmed elder men exchanging a few words, while the younger ones stared at their phones. The silence was leaden. ....... Oddly enough, the life of the party was to be found in the women’s section. There, disco light pulsed in different colors, a DJ (female) played popular songs and the women were dancing. Many wedding halls have ignored the music ban in the female sections of their establishments, confident that the vice and virtue police cannot barge in without notice. ........... Some marched past the former U.S. Embassy, chanting “Long live Islam” and “Death to America.” ........ many a suicide attack. The worst was at the Sayed Ul-Shuhada girls’ school last year, and it killed at least 90 people and injured another 240. The school was in a community dense with Hazaras, a Shiite minority .......... The Ministry of Women’s Affairs is now the Ministry of Promotion of Virtue and Prevention of Vice. Afghanistan’s National Institute of Music is now a Taliban base. The British Embassy has been turned into a madrasa, an Islamic theology school for young men pursuing Islamic studies. ........ The hardest part about covering the Taliban rally earlier that day was having to smile at the men who had occupied my favorite corners of the city, my favorite cafes and parks, and now would not even allow me to enter because I am a woman. ......... After my home was raided, a friend sent me an old essay by the Italian writer Natalia Ginzburg. “Once the experience of evil has been endured, it is never forgotten,” Ginzburg wrote.

Kathmandu Finally Got Tap Water. After a Climate Disaster, It Was Gone. A disaster that wiped out a decades-long project to bring pipe-borne water to Nepal’s capital shows the mismatch between slow-moving donor-financed efforts and rapid global warming. ......... It started with a sudden spike in temperature, nine degrees Fahrenheit, around the Himalayan glaciers. Then came the explosion: a deluge of melted ice racing down at a rate of 2.5 million gallons per second, unleashing a landslide of sludge that wiped out everything in its path. ........ Ancient trees, fertile fields, homes, power lines, bridges — all were swallowed up. Five people died. But the flood didn’t just leave this verdant valley unrecognizable. Its effects rippled dozens of miles away to the Nepali capital, Kathmandu, which had been waiting decades for something that much of the rest of the world takes for granted: clean tap water. .......... The project had never seriously accounted for climate change, even as evidence of the risk of Himalayan glacial melt mounted. And now it must go back to the drawing board. .........

Kathmandu is one of the world’s wettest capitals.

During the annual monsoon, rivulets of water run down the streets and into the swollen Bagmati River. ......... Once a pit stop for mountaineers on their way to Everest or other peaks, with a population working mostly as rice farmers, the city had grown in stature as it found a place at the end of the hippie trail. Its sublime landscape, ancient temples and first-rate hash drew young visitors from across the globe. ........ “People wanted that big project because it brought money into the country, not just water, that people in government and others could get money from,” said Cheryl Colopy, who wrote about Melamchi in her book “Dirty, Sacred Rivers: Confronting South Asia’s Water Crisis.” ......... Corruption riddled the project from the outset ........ Now, 50 years after the idea was first floated, and with Nepali taxpayers still on the hook for about $420 million in loans, the government is no closer to supplying its parched capital city with drinking water. ......... the annual monsoons brought a nightly chorus of croaking frogs and jasmine-perfumed air......... But many of the wetlands and rice paddies that absorbed the monsoon rain and topped up the water table have since been paved over, as the Kathmandu Valley urbanized at one of Asia’s fastest rates, with its population rising from over half a million in 1991 to more than two million in 2021. ......... Like most people in Kathmandu, Mr. Gaurab relies on an elaborate system to catch, collect and buy enough water for his household. He uses two rooftop tanks of rainwater for washing and plumbing. He buys additional supplies from water tankers for washing vegetables and drinking. .......... In 2008, a river embankment failed, and the ensuing floods displaced more than three million people. Four years later, a glacier-fed river in Pokhara, Nepal’s second-largest city, flooded, causing extensive damage. In 2016, a dam in neighboring China containing a glacial lake burst, washing away a hydropower project in Nepal. ......... On the day of the disaster last year, Sharmila Shrestha was cooking dinner when she received a call from a relative living upstream, urging her to run. Her family of four managed to escape to higher ground


Blunt Criticism of Russian Army Signals New Challenge for Putin An official in a Russian-occupied region of Ukraine suggested Russia’s defense minister should shoot himself because of his army’s failings, an unusually blunt and public rebuke of Kremlin leadership. .......... Russia’s floundering invasion of Ukraine has produced an extraordinary barrage of criticism from supporters of the war in recent days, directed primarily at the leadership of the Russian military. The outpouring of discontent is creating a new challenge to President Vladimir V. Putin, who, after cracking down on Russia’s liberal opposition, now faces growing dissent in his own camp. ........... “Many people are saying that as an officer, the defense minister could simply shoot himself for being the one who let things get to this state,” said Mr. Stremousov, Russia’s “deputy governor” of the Kherson region of southern Ukraine. .......... Last month, it was largely pro-Russian bloggers who were voicing anger over the failings that led to the Russian army’s being routed in northeastern Ukraine. But after Russian troops were forced to retreat in two other sections of the front line in the last week, prominent officials have increasingly joined the chorus. .......... Andrei Kartapolov, the head of the defense committee in Russia’s lower house of Parliament, excoriated the Defense Ministry for covering up the bad news from the front. Another lawmaker said that members of Parliament had written to Russia’s prosecutor general asking for an investigation into the military’s supply problems. ......... There were indications that the criticism was part of infighting in the Russian ruling elite that was spilling into the open. It comes on the heels of a tirade against the military leadership published over the weekend by Ramzan Kadyrov, the strongman ruler of the southern Russian republic of Chechnya and an ally of Mr. Putin. ............... Mr. Kadyrov’s broadside appeared to open the floodgates — especially after the Kremlin did nothing public to punish him for his breach of wartime discipline. While none of the prominent pro-war critics of the military have attacked Mr. Putin personally, the Kremlin could still lose control of the situation if Russian battlefield losses continue, said Tatiana Stanovaya, a Russian political analyst. ............ “This is a rather dangerous situation for Putin because no one is in control of it.” ......... One common thread in the criticism has been that Russia’s military, despite the country’s enormous defense budget, turned out to be unprepared for a real war. Many Russian hawks have been calling on the military for months to escalate its offensive, but are frustrated by its poor execution. ......... “So what’s the genius idea of the General Staff?” Vladimir Solovyov, a prominent state television host, said on his online talk show on Thursday. “Just explain it to me, dear people who have received all the necessary budget resources for so many years.” ......... What he did not appear to have bargained for is that the war’s loudest supporters would themselves turn into critics of the government. On Telegram — a social network and messaging app widely used by Kremlin critics and supporters alike — war bloggers and public officials have gone from cheerleading Russia’s advances to grumbling ever more loudly about the military’s failings. .......... The move was supposed to be a way for Mr. Putin to escalate the war quickly; instead it turned into a demonstration of the Russian military’s inability to house and train an influx of new soldiers. ........ how some of the men who were drafted were in their 50s and 60s, even though the officially announced cutoff age was 35. Others highlighted how a man blind in one eye was drafted. ........... The questions around mobilization are part of a larger, unusually public debate about how Russia’s military command is executing the war,

and how is it possible that Russia could be losing

. While the most common excuse is that Russia is fighting the entire NATO alliance, the questions are hitting closer to home. ............ “‘Who is leading us? What is going on? Who are these donkeys? We have traitors among us, we need to shoot them.’ That is some of the worm-eating-its-own tail stuff that should be sending alarm bells up the chain.” .............. “What is he going to do, sacrifice Shoigu or Gerasimov?” said Mr. Alberque. “Saying that his commissars are wrong only works so far in a campaign that has been owned so personally by Putin. ......... analysts are surprised at both the public level of criticism of the war and how much of it is being lobbed at senior figures.


Tracking the Coming Economic Storm Meteorologists tell us that global warming has created new problems for forecasters. Not only are hurricanes getting stronger, they’re also intensifying more rapidly than they used to, making it difficult to issue early warnings for communities in their path. ......... the risks a hard-money policy poses to financial stability and the world economy in general are looming larger. ........ the cost of shipping a container across the Pacific, which was $20,586 in September 2021, is now $2,265. ........ the potential mayhem from rapidly rising interest rates (and the rising dollar, which is causing stress around the world). ....... we really, really don’t want the Fed to do a Lee County, and refuse to act on warnings of an economic storm until all the uncertainty is gone. By then it will be too late to avoid the worst. .



गठबन्धनमा आज पनि जुटेन सहमति, मैत्रीपूर्ण प्रतिस्पर्धाको प्रस्ताव . .
जनता राज स्थापनाका लागि हामी चुनावमा होमिरहेका छौं

Saturday, June 04, 2022

Elon Musk's Irresponsible Economy Comment: "Super Bad Feeling"

Elon Musk started believing his own hpye, the image created by him and his rabid fans on Twitter, an echo chamber that just might mirror Putin's TV shows across Russia. Capitalism can be its own autocracy. I am on record for being for a wealth tax.

Musk's Twitter move would have been good if his motive were right, but now we know it wasn't.

Should Elon Musk Be Owning All Of Twitter?
Musk's 44 Billion Dollar Give To Foolish Fascism

Maybe he should hang out with Peter Thiel less often. He might end up leaning less right. Stop texting.

Musk's "super bad feeling" about the economy is him trying to blame the market for the tumbling shares of both Tesla and Twitter. There seems to be nowhere to go but down. Musk fears the Tesla shares might go further down, with the Twitter deal albatross around his neck, and so he is trying to prepare the market. I don't think it is going to work.

I am neither bullish nor bearish on the economy. On those matters I let Paul Krugman talk.

From: Paramendra Kumar Bhagat
Date: Tue, May 31, 2022 at 9:11 AM
Subject: Paul, you are my favorite part of the New York Times, my favorite newspaper
To: krugman-newsletter@nytimes.com

Hello Paul. I was just reading this https://www.nytimes.com/2022/05/27/opinion/inflation-prices-stagflation.html and for the first time, I noticed this email address at the bottom and figured, hey why not write to him? I could help balance out the hate mail he gets. It could not hurt!

The only thing I disagree with you on is Bitcoin. It is exotic to me how you are missing out. This is like missing out on the Internet in 1995. My thoughts on Bitcoin are here: www.paramendra.xyz It would be a coup for me if I could "convert" you. Bitcoin is biblical. The Age Of Abundance that has been promised in the scriptures is upon us. Bitcoin is the best thing to come out of the 2008 crisis.

Your arguments tend to be so lucid, I am often tempted into thinking, if only Marjorie Taylor Greene could subscribe to this newsletter, American politics would see a tectonic shift for the better. :) But we both know that is not in the cards. The mental blocks are real. It is not your writing that is lacking.

I wish NYT also featured a right-wing Paul to balance things out, the column clearly labeled right-wing, something like A Voice From The Right. You succeed so fully in your writings, sometimes you make me feel like I am in an echo chamber. :)

I was a fan of your column before you won the Nobel. You are the only NYT columnist who shows in my email. If I see your column anywhere, I read it.

In fact, my respect for the Nobel people went up after you won. Even a columnist can win the Prize. How Ivory Tower can it be?

NYT should emphasize the psychology of some of the right-wing phenomena. But then it does. Only last week I read the transcript of the Ezra Klein Show. The guest argued people are lonely. And then they fall for all that hate.

Sangham Sharanam Gachhami. (I go to the community.) As the Buddhists say. "Whenever two or more of you gather in my name, there I will be." That is a promise in the Bible. One-third of Americans live alone. That is blasphemous.

I subscribe to the NYT online for $1 a week. Probably the best bargain I ever got. Except for when there was no paywall. :) Come to think of it, crypto can solve the paywall problem. Super micropayments are the way.

What I admire most about you is your earnest desire to reach out to ordinary people with your complex topics explained as simply and clearly as possible. I wonder how many rewrites that might take.

Check me out on Mirror https://mirror.xyz/0x065e533120b87e5b4F5bfBF0802EB6428c237487 and see if you don't want to start creating Writing NFTs yourself. When you mint your first Writing NFT, you are converted. And I will take a victory lap. :)

Have a good day.

--
www.paramendra.xyz
www.paramendra.com



Before he makes his off the cuff science fiction announcements, perhaps Elon Musk should hold a convo with his top engineers.



With his Twitter antics Musk has managed to kill two birds with one stone. Both Tesla and Twitter seem to be going down.



Musk had been giving the impression there was a time not long ago when he was hanging on to the Tesla rocketship barely by the fingernails. And now he is saying he can walk and chew gum at the same time? Already people thought he spent all day on Twitter. And then he threatened to buy Twitter and become CEO. Tesla also had been facing some bad news of its own.



Elon. Renounce Trump. Repent. There are plenty of Republicans to choose from. Well, maybe not that plenty. But still, you get my point. Trump is fascist. Look at January 6.

Monday, August 31, 2015

Is It Working?

Performance of the Dow Jones Industrial Index ...
Performance of the Dow Jones Industrial Index during Black Monday (Photo credit: Wikipedia)
the snake oil sold as remedy for a sputtering world economy after 2008 isn’t working..... After the sub-prime crisis in the US and the steep fall in markets following the Lehman Brothers bust, the world has tried to solve the problem by throwing more and more money at the problem – money printed and lent out at near zero interest rates almost all over the developed world. ...... China, with its export engine struggling, has been extremely unsuccessful in shifting its emphasis to domestic consumption-led growth. ...... in the absence of a more fundamental re-balancing of real economy incentives and the return of covert mercantilism among countries, it is the financial markets that fed themselves on zero-cost money. ..... the cheap money was used by companies and financial institutions not to lend to companies creating jobs, but to make money from money – which means financial investments like stocks and bonds. ...... More financial wealth has been created over the last seven years than probably in the previous seven – and this when the world isn’t growing too strongly. The Dow Jones Industrial Average hit a new all-time high of 18,312 this May, up from the November 2008 low of less than 7,450. ...... When there is so much money to be made from money, who in his right mind will put up factories and roads in the hope that they will yield a positive return? ....... while keeping money cheap after Lehman was the right short-term response, the obvious mistake western governments made was to let monetary policy do all the hard work, and letting fiscal policy hibernate. If you want to revive growth, you need people to invest and consume, not speculate. When the private sector was unwilling to invest and people in excessive personal debts were trying to bring leverage levels down, the logical thing for the US to do was to invest in infrastructure – which is what India is trying to do now – in order to correct what is called a balance-sheet recession. ....... By first world standards, US infrastructure sucks, and a half trillion dollars spent there would have done more to revive growth than spending the same in rescuing banks and no-hopers....... This is where doctrinaire approaches to what government should do or not do does not help. When economic confidence wanes, the only entity that can act is the government, which technically can spend even without having the money. The Right may not like it, and the Left will crow, but that isn’t the point.

When nothing works, the government has to work.

........ The US government left the Fed to do the heavy lifting instead of chipping in with public investment boosters. The Tea Partyists and the Paul Krugmans and Occupy Wall Streeters got into a Left-Right argument which didn’t help. ......... the global rebalancing that should have happened after Lehman - where the strong exporting countries exported less and consumed more, and the high importers exported more and consumed less – has not happened. Both Germany and China – the two main problem countries – are stuck in currencies that are artificially undervalued. Germany is the most competitive country in the Eurozone, and as long as the zone retains its common currency, the rest of the EU cannot correct the imbalance............ For Germany to import more, it has to get out of the Eurozone, or the weaker elements in the Eurozone have to exit and develop competitive currencies that reflect their true competitive abilities. In the case of China, its recent devaluation of the yuan shows that it is still in an export mindset. China should actually upvalue the yuan and allow more imports so that domestic consumption grows and helps the world. China and Germany have to change course to help the world........ the failure of this economic rebalancing is leading this time to entire countries coming close to collapse. The PIIGS (Portugal, Ireland, Italy, Greece and Spain) and the oil sheikhdoms are under threat as Chinese demand collapses, reducing commodity prices all over. As a Deutsche Bank study noted some time back, Saudi Arabia needs oil prices at $99.2 to fiscally break even............ For Bahrain, Oman, Nigeria, Russia and Venezuela, the fiscal breakeven prices are $136, $101, $126, $100 and $162 respectively........ the Chinese are unable to grapple with the new challenges that come with becoming the world’s second largest economy and key driver of demand. Two issues are paramount: one, there is huge financial repression, where Chinese savers are paid low returns and the cheap money raised from them has been invested uneconomically in unwanted infrastructure; and two, while financial repression helped fund investment-led growth over the last three decades, today it is constricting consumption – which is what China needs to boost internal growth. .......... China has to do the opposite of what it is doing – cutting rates to boost growth. Instead it needs to raise lending rates so that overinvestment halts and consumption is given a boost. A China that consumes more (and invests less at home) will become the world’s growth engine once more. ......... India .. must do five things. One, use higher taxation of cheap oil to boost government revenues for public investment. This situation of ever-cheap oil won’t last forever. Two, recapitalise and privatise some banks so that the lending cycle can resume. Three, generate resources for growth by shifting more subsidies to cash (after LPG, kerosene, food and fertiliser are obvious candidates for huge savings by eliminating wastage and mis-targeting). Four, get states to start moving on land and labour reforms, till the centre itself is able to act when its Rajya Sabha numbers are better. And five, consistently improve ease of doing business. There should be a permanent secretariat constantly liaising with business to eliminate the pain points.
This guy R Jagannathan is brilliant. More brilliant than Paul Krugman in some ways.

I was reading this: Why both Modi and Kejriwal are misinterpreting their massive mandates.

I liked it so much, I looked up the author's name, clicked on it, and that is how I came across this: The global economy is crashing and here's how India can benefit from it.

And I liked it so much, I splurted out the b word.

He mirrors some of my thoughts in late 2008, early 2009. America needed a three trillion dollar stimulus in 2009, the major chunk of it going into taking every human being online. I blogged so.

If the world comes to an end, due to Global Warming, or a Nuclear War, or whatever, we will have the Republican idiots to blame for it, if we are still around.

Here's a sample.


Monday, August 08, 2011

A Second Stimulus Bill Needed

Great Depression: man dressed in worn coat lyi...Image via Wikipedia
New York Times: Second Recession in U.S. Could Be Worse Than First: the economy is much weaker than it was at the outset of the last recession in December 2007, with most major measures of economic health — including jobs, incomes, output and industrial production — worse today than they were back then. And growth has been so weak that almost no ground has been recouped, even though a recovery technically started in June 2009. ..... When the last downturn hit, the credit bubble left Americans with lots of fat to cut, but a new one would force families to cut from the bone. Making things worse, policy makers used most of the economic tools at their disposal to combat the last recession, and have few options available. ....... the four years since the recession began ...... Today the economy has 5 percent fewer jobs — or 6.8 million — than it had before the last recession began. The unemployment rate was 5 percent then, compared with 9.1 percent today..... the typical private sector worker has a shorter workweek today than four years ago...... Income levels are low, and moving in the wrong direction ...... with construction nearly nonexistent and home prices down 24 percent since December 2007, the country does not have a buffer in housing to fall back on. ..... the economy is smaller today than it was when the recession began ....... Unlike during the first downturn, there would be few policy remedies available if the economy were to revert back into recession. ....... Interest rates cannot be pushed down further — they are already at zero. The Fed has already flooded the financial markets with money by buying billions in mortgage securities and Treasury bonds, and economists do not even agree on whether those purchases substantially helped the economy. So the Fed may not see much upside to going through another politically controversial round of buying. ...... at the end of 2007, the federal debt was 64.4 percent of the economy. Today, it is estimated at around 100 percent of gross domestic product, a share not seen since the aftermath of World War II, and there is little chance of lawmakers reaching consensus on additional stimulus that would increase the debt. ...... “There is no approachable precedent, at least in the postwar era, for what happens when an economy with 9 percent unemployment falls back into recession” ...... 1937, when there was also a premature withdrawal of fiscal stimulus, and the economy fell into another recession more painful than the first ..... Corporate profits are at record highs
Even before this recession hit in 2007 China was on schedule to become the number one economy in the world by 2016. Continued policy mistakes in America might only hasten that process. There has been much self destructive behavior.

The stimulus bill was not big enough. The stimulus money was not spent fast like it needed to be to have any effect. One third of the stimulus bill was tax cuts. That was a mistake. Obama did that to get Republican votes, and no Republican voted for the bill anyway. That instead was seen as a sign of weakness and might have hastened the Republican takeover of the House.

The biggest chunk of the stimulus bill needed to go to taking all of America to one gigabit per second kind of broadband. Instead the biggest chunk of the money went to old economy stuff and to humdrum payments. Paying the unemployed is important, but paying the unemployed is not what creates the next generation of jobs.

The threat of a double dip is very real. And the one thing that can save the country is a stimulus bill.

The biggest mistake perhaps has been to apply Great Depression lessons to the Great Recession. The Great Recession is America reeling from a lack of global institutions that globalization asks for. Capital wants to go global at breakneck speeds, but the global infrastructure to make that happen is not there. The Great Depression gave us macroeconomics. The Great Recession needs to give us globoeconomics.

What is needed is massive jobs programs, massive public works programs. Send a million mentors into the inner city schools, and pay them. Send another million to whitewash the roofs across America, and pay them.

Extending the Bush tax cuts was nothing less than criminal.
New York Times: London Sees Twin Perils Converging to Fuel Riot: Frustration in this impoverished neighborhood, as in many others in Britain, has mounted as the government’s austerity budget has forced deep cuts in social services. At the same time, a widely held disdain for law enforcement here, where a large Afro-Caribbean population has felt singled out by the police for abuse, has only intensified through the drumbeat of scandal that has racked Scotland Yard in recent weeks and led to the resignation of the force’s two top commanders...... there was not long to wait until a new one erupted: across London, skirmishes broke out on Sunday between groups of young people and large numbers of riot police officers, which one officer said were drawn from forces around London. ...... In Enfield, a usually calm suburb, shop windows were smashed and debris lay in the street. In nearby Edmonton, groups of young people gathered near damaged storefronts. In Tottenham itself, roads were closed, a helicopter hovered overhead and squads of police vans swooped in to make arrests in side streets. ....... The march turned into a pitched battle between hundreds of officers, some on horses, and equal numbers of rioters, wearing bandannas and armed with makeshift weapons that included table legs and an aluminum crutch. Looting throughout northern London continued past dawn, leaving streets littered with glass. In daylight, residents emerged to survey buildings, many considered landmarks, that had been left gutted and smoldering. ........ unless endemic youth unemployment in Tottenham was curbed, “this will happen again. These kids don’t care. They don’t have to pay for this damage, we do. Working people do. What do they have to lose?” ...... many voiced concern that looters in other areas of London had been allowed to smash and steal for several hours before officers arrived. ....... Economic malaise and cuts in spending and services instituted by the Conservative-led government have been recurring flashpoints for months. ....... Prince Charles and his wife, Camilla, the Duchess of Cornwall, were attacked in their Rolls-Royce as protesters — some of whom were subsequently jailed — shouted “Tory scum,” a reference to the Conservative Party’s traditional links with the aristocracy, and “off with their heads!” In March, a reported 500,000 people marched against the cuts, with some protesters occupying the exclusive food store Fortnum & Mason — Prince Charles’s grocer. ...... one man shouted, “This is our battle!” When asked what he meant, the man, Paul Rook, 47, explained that he felt the rioters were taking on “the ruling class.” ....... As the budget cuts take hold, risk of unemployment increases and social measures like youth projects are sacrificed, Mr. Beech said, and “all logic says there will be an increase in antisocial behavior.” “Boredom, alienation and isolation are going to be factors”
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Thursday, August 26, 2010

Fears Of A Double Dip Recession Are Very Real

Logo of the United States Tennessee Valley Aut...Image via Wikipedia
The Huffington Post
Happy Days Are Not Here Again: Obama, China and the Coming Great Contraction: we have reached the twilight of the oil-industrial age .... nine interlinked planetary conditions and their boundaries, which include climate change, ocean acidification, biodiversity loss and other eco-indicators necessary for human survival and civilized development. Three of these boundaries have already been overstepped because of growing global reliance on fossil fuels, industrialized forms of agriculture, and overuse of natural resources. The world economy is fast approaching almost all of the other boundaries. ......environmentally-induced change is a far greater danger to Americans than any form of terrorism .... A combination of drought, warmer, drier weather, and warmer winters, has allowed the pine beetle to expand its range to higher elevations and devastate forests in Colorado, Montana, Wyoming, Oregon, Idaho, Utah and Washington. ..... 2010 was the warmest year in recorded human history ...... If we don't move more rapidly towards a greener globalization, then we are in for both economic contraction and environmental disorder. ...... Nearly 75% of Americans tell pollsters that they believe the earth's temperature is warming and that human behavior is responsible. Solid majorities think the nation needs a fundamental overhaul of its energy policies and expect oil to be replaced as a major source of fuel with 25 years. Yet, our political system seems unable to act and our president unable to lead.....the Republicans do not have a viable national candidate or a message that is not simply negative and backward looking
Nouriel Roubini: Double-Dip Odds Now Greater Than 40%, GDP To Be 'Pathetically Lousy': there's hardly anything the Fed can do about it because they're "running out of policy bullets"

The banks might have paid out most of the bailout money, but they have not paid for lost economic activity. They can't. It's too big. The damage that was caused to the economy is still there.

When the meltdown started, noone seemed to have the slightest clue what was going on. The entire system was within hours of going bust. One bank collapsed first. One department within that one bank first collapsed. It was one unit within that one department. Just like we don't know about the first few seconds of the Big Bang, we don't know about how the meltdown really started. For all I know, it could have been an act of cyber terrorism, some bug let loose into that one unit of one department of one bank.

The financial system did have systemic malaise. And I personally think it started with the Iraq War. Bush spent a trillion dollars he did not have. That sent the wrong signals to the market. And the market started engaging in gimmicky capitalism. There is a direct relationship between the political act of trillion dollar wars, and the bad behavior on Wall Street.

Part of the systemic malaise was racism. Global microfinance could have absorbed excess capital. Global infrastructure could have absorbed excess capital. But instead the piles of excess money was pumped into real estate in America creating some major sleight of hand. Nefarious ways permeated the culture.

Global microfinance and global infrastructure both would easily have given annual 10% returns.

The banks were bailed out. They paid back the bailout money. And Wall Street reform has been carried out by Congress. But the stimulus bill that was supposed to take care of the rest of the economy did not do the task. It is because the stimulus bill had some fundamental flaws. There was this thinking that if only you paid people their unemployment benefits for a little bit longer, if you paid the salaries of the firefighters, teachers and police officers a little longer, then the economy would rebound on its own, and then we will have crossed the river.

But this was not like the 1992 recession. This was not a recession that happens about once a decade. This was one that happens about once every 70 years.

The stimulus needed to be about massive public works programs. What would be the Tennessee Valley Authority of today? Installing solar panels on a mass scale might be one such thing. The government needs to get down and dirty and retrain people for new jobs.

A second stimulus is going to be cheaper than a second dip.
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Tuesday, September 15, 2009

The Economic Profession Messed Up


http://twitter.com/paramendra/status/3770105844

And here we have one of them owning up to it.
How Did Economists Get It So Wrong? Paul Krugam, New York Times ....... in a 2008 paper titled “The State of Macro” (that is, macroeconomics, the study of big-picture issues like recessions), Olivier Blanchard of M.I.T., now the chief economist at the International Monetary Fund, declared that “the state of macro is good.” The battles of yesteryear, he said, were over, and there had been a “broad convergence of vision.” ........ the “central problem of depression-prevention has been solved,” declared Robert Lucas of the University of Chicago in his 2003 presidential address to the American Economic Association ........ Last year, everything came apart. ........ the 1987 stock crash, in which the Dow plunged nearly 23 percent in a day for no clear reason ......... U.S. households have seen $13 trillion in wealth evaporate. More than six million jobs have been lost ........ even as the recession continued to deepen, conventional monetary policy had lost all traction. ....... flaws-and-frictions economics will move from the periphery of economic analysis to its center. ....... has brought the world economy to its knees. .......... “the market can stay irrational longer than you can stay solvent.” ........ until now the impact of dysfunctional finance hasn’t been at the core even of Keynesian economics. ......... financial markets fall far short of perfection, that they are subject to extraordinary delusions and the madness of crowds ........ H. L. Mencken: “There is always an easy solution to every human problem — neat, plausible and wrong.”
Globoeconomics: Name Of The Game

Micro To Macro To Globo

70 years back the economic profession went up one notch, from micro to macro. Now is the time to go up another notch: from macro to globo. The churn we see is of a US and a global economy tumbling to the global winds. New, robust, global institutions are needed, old ones have to be reinvented.

Old Jobs: Gone Jobs

The Great Depression saw the loss of countless agricultural jobs that never came back. World War II had to create a new set of industrial jobs. The old industrial jobs now lost in America will likely never come back. The country will have to make new strides and create many, many post-industrial jobs.

A Misguided Stimulus?

I thought a big chunk of the stimulus was going to go to ensure universal broadband. Instead they went to old highways, the offline kind.

Another War?

Will a full-fledged war to ensure a total spread of democracy in the Arab world finally get America out of the flunk? Could that be a war that brings about Iran-like mass movements? Is that war essentially one of communications technology?
The purpose of stimulus September 4, 2009 the recession — again, as officially defined — is over. ...... But unemployment is still very high and rising
A strange madness September 4, 2009 Something is going very wrong in the heads of a substantial number of Americans.
My whereabouts September 4, 2009
  1. Jobless in America: Is Double-Digit Unemployment Here to Stay? Time
  2. Guess What Texting Costs Your Wireless Provider?
  3. Behold! Facebook Gives Birth to the Retrosexual
  4. The Next Mayor of Atlanta: A Post-Racial Campaign?
  5. As Election Nears, Germans Feel Another Wall Rising



Thomas L. Friedman: Our One-Party Democracy New York Times It is not an accident that China is committed to overtaking us in electric cars, solar power, energy efficiency, batteries, nuclear power and wind power. ....... “Just because Obama is on a path to give America the Romney health plan with McCain-style financing, does not mean the Republicans will embrace it — if it seems politically more attractive to scream ‘socialist’ ” ....... no one needs the burden of health insurance shifted from business to government more than American business. No one needs immigration reform — so the world’s best brainpower can come here without restrictions — more than American business. No one needs a push for clean-tech — the world’s next great global manufacturing industry — more than American business. Yet the G.O.P. today resists national health care, immigration reform and wants to just drill, baby, drill.



White House Reveals Obama Is Bipolar, Has Entered Depressive Phase

Obama Drastically Scales Back Goals For America After Visiting Denny's

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