The Best Laid Plans

Tyler Cowen may have missed the actual sentiment in the land of fantasies. Who can tell? Congresspersons and Senators are first of all Politicians, and individuals incompetent to sufficient level to believe that their efforts are important. They are passing responsibility off on faceless administrators within the various Departments of Government because they don’t have any idea of what is going on anymore, and secondly, in hopes they could personally detour around any wreckage of the current policy. It is their belief that they can avoid disaster if It all goes South. Tyler should not condemn Congress too severely, as greater involvement of Congress could only bring loss of focus, and unwarranted Spending with Add-Ons to the executive policies of Fed and Treasury. You should not want a failed institution to decide the fate of other failed institutions, as the Policy will fail. Can We really afford that?

Menzie Chinn has a Post on Unemployment with the worsening state of Underemployment. He graphs wonderful Tables, but expects that Everyone can understand those Charts as well as he can. Unemployment in down 5%, but Underemployment is down over 7%. Businesses are not consolidating to produce more effectively, they are actually losing Production orders. Their labor force is standing idle more often, and Payrolls are more difficult to cover. Many Employees are looking to alternate Work, often under advisement of Management; the trouble being the huge increase in the Labor Search market, through a declining production clime. It bodes an ill Wind for the future, with lengthening periods of Unemployment not yet seen.

Spencer asks the rationale behind the Oil price. The background is easy to establish: Oil Exporters have watched the declining purchasing power of the Dollar, and have long thought that their Profits should be much higher; especially as they detest the lifestyle of Americans. The trouble for them has always been their financing Costs, being as subject to huge Debt loads. American Oil Importers, on the other hand, have kept their Oil supplies filled throughout the Downturn, knowing that they could force a sustained Price for their Product; backed as they are by huge reserves of Cash. They are now armed by huge production Receipt contracts at good Price, and want arbitrage to act in their favor for large Profits to themselves. Oil Exporters have reduced their outstanding Debt load, and Oil Importers have strengthened their position; so it is now time to bleed the American Consumers. The only crimp in their Plan is the fact that American Demand has slowed, and shows every indication of further decline with higher Pricing. lgl