Archive for November, 2008

Deflation? (November 24, 2008)

Posted in Depression, Economics, Gas/Fossil Fuel, Inflation on November 24, 2008 by

Deflation seems to be the current concern.  Oil, copper and aluminium prices are down dramatically.  When the raw materials go down in price, the finished products should go down in price.  In theory, sort of.  The price of a 250 foot section of Romex wire is now almost what a 100 foot section cost a year ago.  However, prices often are sticky and ratchet down slowly.  Lower prices sound appealing, although deflation does create economic problems among debtors and consumers.

However, the old economic models may not work.  Demand is down because no one has any real money and no one will loan any real or unreal money.  However, credible reports indicate that people need to eat, house, drive, acquire plasma tvs, etc.  The system is awash in unreal money.  However, those who produce goods and provide services are not standing by ready to respond.  They are collapsing.  The world‘s economies and the world Economy are splintered and increasingly disconnected.  If you build it, they may not come.

Gas did not hit $6 a gallon by Halloween; it hit $3 a gallon.  [See the e-ssay dated May 26, 2008 entitled “$4 in June, $5 in July, ….”.]  The momentum for fuel-efficient vehicles has abated and investment in oil-producing equipment and fields has declined.  When the demand for aluminium declines, bauxite is not mined.  In the near future, everyone will compete with pockets full of unreal dollars for scarce goods and services.  Bread at $100 a loaf?  Inflation still seems to be the hidden monster.  The new Weimer Republic writ large.

Bumper sticker of the week:


Whip Inflation Later

The Virtual Horserace (November 17, 2008)

Posted in Economics, Greenspan, Housing on November 17, 2008 by

During the bubble, a small number of affluent investors (consultants, dentists, consultants to consultants, public employee retirement funds, consultants to consultants to consultants, candle stick makers, etc.) anteed up large bets in cash up front; few horses crossed the finish line a few years later; everyone absorbed the losses with little intermediate-term damage.  Okay, they will retire later and perhaps with less money.  Life went on.  [See the e-ssay dated December 4, 2006 entitled “When the Bubbles Burst”]

During the “Greenspan Bubble,” however, the seeds of the Depression were sown democratically across the land.  (Almost) everyone in the populace placed huge bets on credit; few horses will ever complete even the first stretch of a 30-year race (mortgage term); the negative consequences are predictable and devastating.  The intermediate-term loses may be 3 to 5 to 7 Trillion in the US and a few Trillion overseas.

Astute observers knew that something evil was going on behind the scenes during “Hurricane Al,” but the contours of the corruption did not emerge until recently.  The Wall Street Boys devised something noxious known as a “Credit Default Swap” that involves a “virtual horserace” without real money that jeopardizes the economy and the American economic and political system.  The real nightmares are the bets placed on bets placed on bets placed on bets placed on bets placed on bets placed on bets in this virtual and unregulated gambling casino using CDSs as tokens.  These players were betting on outcomes in the horse race and then insuring the outcomes without any money, margin or reserve.  The winners (who may need to lose in order to win) of the game want to be paid; the losers cannot pay and never intended to pay.

No one will say that these gamers are “domestic economic terrorists.”  Saying something that true and stark is deemed to be impolite and impolitic.  The CDSs are a cancer on the country.  The losses may be 25 to 50 Trillion or more.  The Economy cannot absorb the losses.

Bumper stickers of the week:

We will get fooled again.

“All you need in this life is a tremendous sex drive and a great ego.  Brains don’t mean a shit.”

Mayor Anthony “Captain Tony” Tarracino (1916 – 2008)

U.S.A. – 1 (Won); World – 1 (Won) (November 10, 2008)

Posted in Elections, O'Bama on November 10, 2008 by

We have met our friend and he is us.  Pogo.

McCain very likely would be President-elect of the United States of America today if the first wave of the Bush Depression had not crashed ashore in mid-September.  September 15 may be the high water (or low water) mark when McCain proclaimed:  “The fundamentals of our economy are strong.”  Americans were not fooled.  They were afraid, very afraid.  It was the stupid economy.

Obama’s guerdon and lagniappe — the privilege to deal with the Great Tsunami, the “Bush/Greenspan/Gramm Depression,” and World War III now festering in at least two theaters on a planet in ill health.

Reverend Wright incited the Right and left others feeling that something was not right; seems that everyone on the national stage sports a Rev. John Hagee in their entourage.  Some white Republicans could accept an African-Thai-American named Tiger but were not ready to accept an African-Saxon as the Lion.  However, others conquered their fears and anxieties and played through them.  Many Americans had gotten a preview by watching two different African-Americans play the President OTUS on the television show “24.”  In this episode, Alexander “Scotty” Scott goes to the White House.  Illinois finally sends Adlai Stevenson to the Casa Blanca.

Obama may be the Transformative Candidate or the Transitional Candidate, yet he is clearly the Technological Candidate.  The toxic a.m. radio shows and the venomous robo-calls from the Franchise Republicans marketing fear were matched and exceeded by a relentless stream of e-mails from Team Obama offering hope, promising change and soliciting funds.  Intimidation for your ears; inspiration for your eyes.  The Internet won handily.

Money talks; McCain walks.  McCain-Feingold has been replaced by Obama-Plouffe.  The billion dollar Presidential race in 2012.

Washington presided when the country was forming; Lincoln when the country was dissolving; Roosevelt when the country was segregated and disintegrating economically.  The man from Hope brought some semblance of prosperity and peace and now the man promising hope confronts the Bush Depression and World War III.  Obama will preside in one of the dozen most uncertain periods in American history.  He appears to be up to the challenge.  One can only hope.

A profound development.  The first African-Irish-American in the White House.  Barack Hussein “Steve” O’Bama.

Bumper stickers of the week:

Hope and Money and Fear


Si, se puede

Yes he/we can (maybe)

Do It (November 3, 2008)

Posted in Elections on November 3, 2008 by

It’s the thing to do on the first Tuesday in November.  Vote.  Hope over Fear.

Bumper sticker of the week:



Politicians are the only people in the world who create problems and then campaign against them.

Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits?  Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

You and I don’t propose a federal budget.  The president does.  You and I don’t have the Constitutional authority to vote on appropriations.  The House of Representatives does.  You and I don’t write the tax code.  Congress does.  You and I don’t set fiscal policy.  Congress does.  You and I don’t control monetary policy.  The Federal Reserve Bank does.

One hundred senators, 435 congressmen, one president and nine Supreme Court justices – 545 human beings out of the 235 million – are directly, legally, morally and individually responsible for the domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that problem was created by the Congress.  In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered but private central bank.

I excluded all but the special interests and lobbyists for a sound reason.  They have no legal authority.  They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing.  I don’t care if they offer a politician $1 million dollars in cash.  The politician has the power to accept or reject it.

No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.


Don’t you see how the con game that is played on the people by the politicians?  Those 545 human beings spend much of their energy convincing you that what they did is not their fault.  They cooperate in this common con regardless of party.

What separates a politician from a normal human being is an excessive amount of gall.  No normal human being would have the gall of Tip O’Neill, who stood up and criticized Ronald Reagan for creating deficits.

The president can only propose a budget.  He cannot force the Congress to accept it.  The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating appropriations and taxes.

O’Neill is the speaker of the House.  He is the leader of the majority party.  He and his fellow Democrats, not the president, can approve any budget they want.  If the president vetoes it, they can pass it over his veto.


It seems inconceivable to me that a nation of 235 million cannot replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility.

I can’t think of a single domestic problem, from an unfair tax code to defense overruns that is not traceable directly to those 545 people.

When you fully grasp the plain truth that 545 people exercise power of the federal government, then it must follow that what exists is what they want to exist.

If the tax code is unfair, it’s because they want it unfair.  If the budget is in the red, it’s because they want it in the red.  If the Marines are in Lebanon, it’s because they want them in Lebanon.

There are no insoluble government problems.  Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take it.

Above all, do not let them con you into the belief that there exist disembodied mystical forces like “the economy,” “inflation” or “politics” that prevent them from doing what they take an oath to do.

Those 545 people and they alone are responsible.  They and they alone have the power.  They and they alone should be held accountable by the people who are their bosses – provided they have the gumption to manage their own employees.

[This article was taken from the Orlando Sentinel Star newspaper.]