The End

I write this for those few who have maintained consistent watch of this site over the years. I was diagnosed with lung cancer this past week, and will likely not contribute more to this site. I am in Hospice right now, as the combination of low blood flow through the heart and the active nature of cancer rule out any pleasant scenarios for Chemo or Radiation treatments. I wish All well, and that the nature of this blog will be maintained elsewhere by others. lgl

Money mystifies Me

I will tell my Readers to consider this Post, and even study the graphs. I confess that I have a real problem with Stimulus overall. Stimulus, by its very nature, must be significantly effective as to swing the entire economy; when One hopes to draw the economy out of a Recession. Discussion of Stimulus in the context of the 1930s economies implies far less inertial weight to swinging the economy, as does shaking an economy many times that size. Stimulus could well be a economic policy which has reached its limits. Like Karl Smith, I really doubt a Zero Interest rate when Corporations are not spending, and Banks are not lending. I hate to pick on a particular, but the rise in Stocks could honestly express the real Inflation rate, and nothing else. I once long ago argued with a group of friends on the value of outsourcing any Government program established to promote Employment. Outsourcing leads to lobbyist demands to continue funding after the need for extra employment has passed, and the Government could layoff Workers at a proscribed rate; economically justifying the reduction. There is the added problem of Outsourcing costing more than in-house cheap Labor rates, with a Profit for the outsourcing management. I am terribly afraid that this Dog does not Bark, and even does not Hunt. The Fed cannot spread Cash into the economy without having real effect on the Pricing. The hesitation in Market Prices immediately after Fed movement on Cash release consisted of Everyone adopting a ‘Wait and See’ attitude about Price movement, before releasing any valuable Commodity in possession; this means that there was not that much for Sale, while Buyers awaited knowledge of how rising potential Commodity Pricing could affect their Sales structure. Remember this comes from a man who drove a Ford for ten years with a poor Heater in cold Weather; never have bought any Ford stock; I might have missed a real opportunity since the last Recession. I will now delve into Rachael Carson’s ‘Silent Spring’ with the ritual of getting a Banker to admit anything on the Record. We conceive that the Fed adopted the same casual attitude of debt acceptance that the Banks who were borrowing previously had to abandon. This poses a Question for myself: Under what Conditions could a central banking system fold up? I ask ths because Everyone said the big Investment banks were too big to fail. What happens when a few central banks have to admit that they have no real assets, only default Paper? I never claimed to be a Banker, but what are the Options from there? lgl

All that Nit-Picking

I am not one capable of agreeing with the Austrians, Some consider that I do not even understand their Thought processes. I here bring you a Post which I think is important coming from an Austrian, the major purpose of which is to present a Counterpoint to my own Thought, which is truly at odds with all other economic thought. My idea states that Recalculation cannot possibly take place without a fall-off in the Aggregate Demand. Austrian or Keynesian, they all have got it wrong. Recalculation requires that policymakers, whether Private or Public, clearly identify the failures within the current system. What must be fixed cannot be found accurately without the drain of Cash down the Losses hole. Reestablishing the AD simply places a Band-Aid over the Skin Cancer, as We await the deadly fiber to sink to Crisis levels and crippling state. Give me an AD curve which is 20 points below normal, and everyone agrees that Changes have to be made. I find this Post which soothes my achy, breaky Heart. I have long surrendered any goal to become the next great American author, and even to develop a committed online Readership. It is why I am starting to enjoy blogging more than ever. They tell me that what is put on the Internet never really disappeared, simply loses View rate. Now I can play Nostrodomus without Anyone laughing at me, and I might be found to be accurate in a couple of Centuries. What are the Odds? Probably less than I having achieved real Notice on the Internet today, but what the hell, why not go for It? I will finish with this Post today. Everyone wants less taxation, but does Anyone actually deserve it? I am talking about lower Incomes as well as higher Incomes. Would it not be wise to demand a set Tax rate, and collect from All? Here are some of my reasons: the Union and Labor movement would be much more powerful under a set tax rate, and overall Wages would be much higher; the bonus system currently in force would include all Contributors to the Profitability, not just Those at the top of Management; Stockholders would demand a fair share of the final take, and not be left with undistributed Dividends, which are held until upper Management can find methods to absorb most of those Profits; and tax revenues could be stabilized at high levels, and Politicians could be forced to spend within necessary limits. Your Guess is as good as Mine! lgl

The Harsh Word from On-High!

This is exactly that type of Post I can understand, but disagree with heartily. I have long since decided that the American economy can be truly saved only by revision of the Tax Code with lowered rates of Taxation, but ones that have no discounting allowed. My position on the Issue states that We cannot afford Keynesian deficit spending, even if the economy needed such which it does not. We must adopt mass, swarm labor tactics for government expenditure for any stimulation, and We must insist that such activity must be paid by Taxation. This still does not answer the claims of the Post, and I will follow with my Thoughts. Henry Ford’s standardization of Parts and assembly-line production must solve our deficit problem. This means the designation of only a One-Size payment as a Social Security benefit and Relief payment for the Poor. A simple Statement that no FICA taxation to this Point has fulfilled full payment for all Social Security payments with the addition of Medicare should silence all Claims of having paid more into the system. A Medicare and Medicaid system will be established where Insured will be allowed only a half million dollar total allowance for any 5-year period, combined with legislated Medical Provider responsibility for additional medical assistance to the Patient if they received any of the original half million; this means they are responsible for any added Costs of Treatment within the Period. A new Proscription rider will be included to the Social Security and Medicare/Medicaid system, where the previous author of Proscriptions using up a set allowance must be accountable for half of the remaining medication not covered. The Proscription allowance will be determined by Committee to provide the Drug industry with a 12% Profit ratio for their Drugs. Now We must turn to the Pensions and Retirement benefits. The Civil Service will receive no retirement benefit in excess of that provided by the Social Security benefit, so that they can double or triple the size of final benefit. Some may question the triple comment, and I will answer it. Military pensions and medical benefits will not be granted to Military Retirees until they are at least 62 years of age. Here is the Kicker: Military Retirees will lose their Pension benefits unless they continue to work for the federal government until they are 62, at the same rate of Pay as they received at time of Retirement; this helped by federal mandate that qualified ex-military Retirees will replace any Civil Service employees under a forced Retirement program; their pensions only becoming active after they reach Age 62. Retirement Investment funds are encouraged everywhere throughout the economy and society, with some of the advantages currently contained being somewhat restrained; the most notable being Tax delay can only extend for 10 years after registration, not upon actually Cashing Out. We advocate everyone plan for their Retirement, and follow clear Guidelines that Congress will outline for the greater Tax advantage. Still, in no way will it be the current Give-Away program of younger labor supporting Retiree lifestyles. lgl

The Chicanery of Corporate Taxes

I started this search by reading this Post last. There will be two other Opinions which I will cite concerning their evaluation of the material, which focus on other aspects of the situation I would outline. I work the content of the original Post through my mind, and come up with several decisions. The first one is that if actual Productivity basically matches the drop in Employment, then We are actually still in a Recession. I scribble up some Paper, curse a little, input a little Kentucky Windage, and determine that the actual Inflation since 2007 has been more on the order of 6% per year, if one discounts the falling values of Housing. Quantitative Easing saved no Jobs, and directly suppressed actual Productivity by artificially decreasing actual Demand for Product through higher Pricing of final Product. All Stimulus efforts advanced so far only aided final stage Production, which paid less for inputs, but received advanced Retail Pricing. This spurred the level of Business Profits, but only at the level of international Players who could import intermediate Production Goods; such items which could not be supplied by domestic Producers because of higher Costs of Production, and rising material Costs. Tyler Cowen brings his own View to the Mandel Post. He asserts that the Mandel data compares favorably with one current economic model hypothesis, while contradicting its opposition posit. I am not sufficiently fluent in either hypothesis to argue this Point. I do know of no economic evaluation which measures Productivity rate gains in terms of actual or real output increases or decreases. One factor Tyler does not touch upon remains the fact that a great share of the international competitiveness for input supply comes from Corporations desiring to transition to foreign production in order to escape necessary response to United States Business and Corporate Tax law. He does stress that there is definitely a structural unemployment problem in this Country further injured by a declining Productivity output. I could mention that the Fed Quantitative Easing did finance the Corporate efforts to shift Production overseas. Arnold Kling joins in with this effort, which underlines that this is not Trade neutral. It is also not Employment neutral. The real Cost of intermediate inputs are being under-valued. The amounts of such inputs are also under-estimated; but here is the kicker, the matrix changes massively when it is canopy production for a parent Corporation. The later has a real advantage in under-pricing the value of these inputs to achieve Tax advantage, when they can shift final Sales Profits overseas to the intermediate inputs production. They get taxed less on less reported Income. At the same time, they can claim a higher Profit ratio, but with lower amounts taxed. Corporations, if they are big enough, love this system. lgl

The High Moral Ground

I began reading this Piece, and started to feel disquiet, then I reached the part where Megan should have more forcibly retracted her own statements because of the follow-up information. The bright Knight is slightly tarnished armor in me decided I needed to ride my trusty stead, almost as Good as Don Quixote’s, at the gallop. I considered that I would need something new and original for evaluation, something to stick the lance point in the Corporate rear, even if my slight weight could do no real penetration. I hoped that the radio would play the Song ‘The Night Chicago Died’ so I could imagine that though the Darkness surrounded me, Right and Truth could still succeed. I was hit by a Bolt of Lightning, or at least a bit of joint pain, and came up with the Winning Ticket; otherwise known as the Alternative Corporate Minimum Tax for Domestic Sales. It is quite simple in context, some might say like its author. There are only a few short elements in the hopeful law, which I will stipulate: 1) Every Corporation and Business must pay the Alternative Corporate Minimum Tax for Domestic Sales 2) The ACMT will apply in each and every case where the Business or Corporation does not pay an equal or greater amount of Tax in the United States on the Profits of their Sales in the domestic United States. 3) The ACMT will not consider any Tax paid elsewhere of any form–including State and Local Taxation, Excise Taxes, and Taxes paid to any foreign entity. 4) Foreign Corporations and Business enterprise will be as subject to the ACMT as domestic entities. 5) The ACMT will be equal to the lowest listed Income Tax rate for Individual Taxpayers, and the final Tax applied will be the highest of the two applications–the normal Tax Accounting, or the ACMT. 6) The Profits from Domestic Sales will be considered to be 10% for Domestic Sales, unless the Business or Corporation can prove a reduced Profit from actual finance payments made outside the canopy of the total Business or Corporation.. I wish my Business friends well, as I ride off to joust with lesser Knights; I could get bruised up you know. The one Thought I would leave with all of you must be that We cannot create Debt through Spending which We know We will never be responsible for, or pay. Forcing our descendants enter Receivership is both Wrong and morally bankrupt. lgl

Some Common Sense in a World of Nonsense

This article presents me with the pressure to bring a response to the fore. I will state first that federal economic policy makers do not understand Inflation as well as they should. Their first failure comes in the ignorance of the impact of Inflation by sector. Where is all the Inflation coming from? The Answer is Food and Fuel. Both generate the highest Inflationary pressure and rate of Inflation. Food and Fuel make up the largest component in the Household budget beyond capital acquisitions like Homes and Vehicles. Capital acquisitions come with some form of mortgage, whose rate has been set in prior period, and relatively immune to Inflation. Households do not see Inflation there–they see it in continuous Daily or Weekly purchases. What are the most continuous of steady purchases?–Food and Fuel. These Costs are Inflation to Consumers, and where real Household notice is paid. Consumers are contracting their purchases by the Inflation they can see, and they see the heaviest Inflation out there. One only need to blow that C-Note on a SUV refill to notice the Inflation. The second flaw in Fed policy lies in the Interest rates–economists always talking about less than 0% as a good thing. Households have watched their Bank Deposits tank, with absolutely no Income coming from them; a sincere burst of confidence foregone, as Households thought they had a slight hedge against Inflation–now gone by Fed decree. I once had a Father who made about $30k per year off his bank deposits; thank God he is not alive today to witness the miserable $600-800 which he would probably draw from like amounts. My Father was never a big Spender, but such Interest rates would have put him in catatonic freeze in buying anything; especially with a magnificent Inflation rate which the Fed refuses to observe. I can positively explain that Consumer Confidence is being adversely affected by the Inflation. Quantitative Easing has been a long-standing Joke, whose sole Goal fulfillment has been Jobs saved, according to the economists who designed the policy. There were better Hiring rates late in the Great Depression, as the Warehouses slowly emptied. The Fed utilizes the collapsed Housing market to exclaim there is no Inflation, while concurrently, banks demand full capital asset coverage before extension of any new mortgages; this means Housing prices will descend still for quite a while due to lack of Buyers. Everyone in the Markets screams Household should invest in Stocks, Bonds, and Securities of various types, but all require constant supervision, else those investments will be even more ineffective than the 0% bank interest rates. Grandpa always told me to never draw Cards in another man’s game; you should know Gramps was a professional Gambler at one time in his career. I fear for federal economic policy makers who turn Households loose to ‘Sink or Swim’ on their own, with even less recourse to Social Services. lgl