The only way out of our fiscal hole may be to make more money…

January 4, 2013

With our aversion to raising taxes or cutting government spending there seems only one way out of our fiscal hole. Make more money.

I don’t mean roll the government printing presses.

What I mean is get more productive. I have written it and so have so have many others, but we must get the United States of America producing things in more quantity — real things that people need or even think that they need.

If there are barriers to starting or expanding business then they need to be removed. And I know that is the tricky part. Certainly I am not talking about removing reasonable health and safety and environmental  regulations. And tax breaks are problematic because they end up being tax shifts to someone else. Also I suspect tax breaks are often given out unwisely due to political pressure (lobbying). But in some cases tax breaks as an incentive might be appropriate.

One phenomenon we are facing within this context is mechanization and technological advances that are destroying jobs. That is probably inevitable but then again, if there was a labor force to handle things there in many cases would not be quite the incentive to do away with many jobs. Of course a whole host of jobs are gone forever too.

Why don’t we produce more textiles in this nation? We used to have a strong textile industry. We certainly have the resources for the raw product, such as cotton.

I presume the answer is cheap labor offered by other countries where the standard of living is lower than ours.

While we don’t want to bring down our own standard of living it would seem that it would make sense to find a way to offer employment to so many who are chronically unemployed. I don’t mean grab people off the street and put them at a sewing machine. But if work was the only way to get by, many people would opt for gainful employment.

The way it is now, what with unemployment payments and perhaps sometimes too liberal disability awards and the much-abused Aid to Families with Dependent Children (AFDC) siphoned off by adults, there is a large and I think ever-growing population of idle people.

And there is a large population of quite willing to work and talented able people for which there does not seem to be employment or at least adequate employment.

We need industry and we need to find a way to limit the restrictions on it to those that are really necessary and we need to cut the red tape.

Unemployment insurance and disability insurance are a must for a stable society, and certainly we do not want any children to go hungry (no matter the reason). And we don’t want to lower our standard of living. But we have to do something or we will go broke for real.

Sometimes prudent families take stock and figure out what lifestyle is acceptable to them and then they realize that the only way to pay for it is to — make more money. I think that is where we are as a nation.

If there is no pay for troops at war, then there should be no pay for anyone in government and anyone with anything to do with withholding that pay should resign in disgrace…

July 31, 2011

While I find the mantra of “support the troops” tiresome in that it is a device used to blackmail people into supporting a particular policy, I find the idea of not paying them, especially ones in the field, to be unconscionable.

Yet once again we hear that threat, this time indirectly from the outgoing chairman of the military Joint Chiefs of Staff, Admiral Mike Mullen. I don’t mean it is his fault, but he says he does not know for sure whether troops in Afghanistan and elsewhere would be paid (immediately, most likely later, though) if the government defaults on its debts by congress and  the president not okaying a raise in the debt ceiling.

Seems to me that while the ultra-conservative and or/ neocon war mongers are the ones who usually use that mantra of “support the troops” as blackmail, this might be a form of blackmail from the other side, even though I doubt the admiral is part and party to it, other than the fact he has gotten no assurances from the administration that the troops would be paid.

Personally I think troops, especially those in combat areas, have to be paid if anyone can be paid.

I could not support any politician, whether he be the president, or he or she a  member of congress — Senate and House — and no matter what political party he or she is a member of who had anything to do withholding pay to the troops or did nothing to make sure they were paid.

As a matter of fact, I would expect anyone who had any part in withholding pay from the troops to resign and/or be subject to impeachment (although, technically that may not be an impeachable offense).

How could you pay anyone in good conscience without paying those who put their life on the line in your name (regardless of the merits of the policies that sent them there)?

The story that inspired this blog post is:

Wall Street continues the fast and loose game that controls everyone’s economy…

May 7, 2010


Friday, May 7: Today I read on the Wall Street Journal website that still no one knows for sure what caused Thursday’s extreme dip or panic sell-off in the stock market, but it may be that it was simply the result of the fact that most trades these days are done by computers, not humans, and that there was some type of computer glitch based on erroneous info or whatever causes computer glitches. Kind of reminds me of the movie I saw all those years ago called “War Games” in which a computer hooked up to our missile national defense system almost started World War III and it was almost not disabled or fooled into calling off missile launches in time. As I recall they even tried to pull the plug but the computer outwitted them somehow. Science fiction has become true, except instead of missiles being the method to destory the world it’s economics, which might be nearly or just as deadly.


If you could “accidentally” dump billions instead of millions of dollars of stock via computer trading on the market thereby running the price down and then quickly buy up a valuable stock that had dropped precipitously and then came back up you could sure make a lot of money in a hurry.

Wall Street stocks were down by a thousand points in five minutes on Thursday, with the sudden dramatic drop blamed partly on TV images of rioting in Greece where the national government has instituted austerity measures because it is facing bankruptcy. But it was also suspected that there might have been some kind of glitch in the trading system.  Stocks moved back up quickly but did not completely regain all their losses. The way I heard it on the nightly TV news was that there was speculation that someone basically hit the wrong key and put billions of dollars worth of a stock on the market rather than millions — whatever.

After what has transpired on Wall Street and its environs over the past several years (and over its entire history), nothing, including purposeful manipulation, seems implausible.

Why do the vast majority of the public, including workers and small businessmen, who simply want to enjoy life while being productive and who want to think that they contribute something for the good of society, have to live with an economic system dominated by a fast and loose gambling game for the benefit of the relatively few, called Wall Street?

Just wondering.


The problem is really all about how we divide up the fishsticks…

April 24, 2009

While on any given day with all the bad economic news I am prone to think that the situation is hopeless or at least that we will be in this recession (depression?) for a long time, I also realize that the world governments, particularly the richer westernized democratic ones, probably have the power to save us all.

(I know, conservatives will pounce on this and remind me that “government is not the answer”.  And as a middle-of-the-roader I will remind them back that no government or anarchy is not the answer either. We can maintain our freedom and at the same time cooperate with each other through government to maintain some type of order.)

Overall there is no shortage of food and we have not destroyed our planet yet (the fact that Eskimos in Alaska are being flooded out due to a melting of the polar ice cap notwithstanding)  and there is no shortage of work to be done. And as far as a lack of money or too much money owed, one must keep in mind that there is no intrinsic value in money, especially since paper money or computer accounts do not represent some specified amount of, say gold.

In an introduction to economics class I took we had a text that used hard-to-understand economic terms but also had simplistic but probably quite accurate explanations as well. It gave a little illustrative story about the nature of money. As I recall, it basically told of an island (this is fictional, of course) where the natives traded fish as money and then moved on to trading fish sticks because they were easier to handle and could be stored over time. The king kept the fish sticks in his bank, but then there was a fire and all the fish sticks were destroyed and all the islanders were in a panic because they thought they were all broke. But the king said not to worry because he would issue paper representing fishsticks and they could trade back and forth just as before and that he would by his authority guarantee the soundness of the paper fishstick currency (this is my recollection of what I read in Economics, the Science fo Common Sense, by Elbert V. Bowden, copyright 1977).

As I have blogged previously, I along with a lot of others grew up hearing and reading that a government could not successfully simply just print money based on nothing. It had, for example, been tried by Germany in the 1930s and failed miserably with a haus frau having to push a wheelbarrow full of marks to the bakery to buy a loaf of bread. In more recent times, people in Zimbabwe had to hand over millions of their equivalent of dollars to buy a loaf of bread.

But today in the United States of America our government is essentially printing make believe money which represents no more than the full faith and credit of the USA. And people still want dollars.

Part of the value of our dollars is based on money our government is borrowing from countries such as China and then giving it to the Federal Reserve to in turn give it to the banks who in turn loan it to businesses (or are supposed to).

I realize that anyone who is learned in economics realizes that I am already in way over my head here, but if you can show me how I am wrong, go ahead and comment at the end of this blog.

But really money is not bars of gold or silver or fish sticks, it has become a device we use as kind of tickets or coupons to divide and share our resources. In our semi-capitalist society we operate on the notion that the dividing is not done necessarily on an equal basis but a basis determined on what we do for each other. If you can do more for others than the next guy you have created more value and you get more coupons or tickets or dollars. But in our benevolence we also dole out fishstick paper to those who may not be able, temporarily or permanently, to put forth effort to create value.

If ever there was a pure dog-eat-dog capitalist society with no social safeguards or socialist type policies we have not had one in the USA since the at least Great Depression of the 1930s.

With Republican rule we did our best to move away from too much socialism (maybe) and promote more capitalism, but strangely it ended with Republican President George W. Bush unexpectedly in a financial panic moving our government to some form of what looked like national socialism (not completely unlike the Nazis if the 1930s, as far as the relationship between the government and big business).

And now the Democratic President Barack Obama has taken it a step further, essentially nationalizing the banking industry and the domestic automakers (minus Ford so far).

Some ultra conservatives might want to go back to a system in which some men simply put in a day’s work for a day’s pay and others who had saved up capital lived off the profits of their businesses and the interest they made on their capital and where for those who because of lack of talent or health could not make it depended upon the charity of churches and family.

And I am not going to say that what I just described in the previous paragraph is completely undesirable, but I will say that society seems to have decided long ago that it was not completely comfortable with that approach.

What we have in the USA now is basically an economic system based on capitalism but with some elements of some form of socialism, and we have a democratic republic for a government that incorporates some socialism, especially in terms of an economic safety net.

Right now our system has been severely damaged and we are trying to fix it. I think we can because in the end it is always a cooperative effort and I think that even if we disagree wildly with each other on the finer points of how our system should work, we have thus far agreed on preserving our nation and the ideals of individualism and freedom of expression and freedom of the pursuit to life liberty and the pursuit of happiness.

Now if we could just figure out how to divide up the fishsticks….


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Everyone’s debt is cancelled; we all start anew…

April 1, 2009

Everyone’s debt has been cancelled. From the top investment banker to the the lowest person on the totem pole, some unemployed guy somewhere, and everybody in between.

We can all start over again.

But the new rules going forward are that from now on out you are on your own. Take on more than you can afford or more than you can safely risk and you are on your own. Your bad, as they say nowadays.

April Fools!

But, you know, I thought of this some time ago and suggested it to my wife (about the only person who listens to me, and under protest at that) in half jest.  But I am beginning to think it really would be a good idea and quite plausible and doable.

I mean we are printing money backed by basically nothing in order to try to keep our economy going. And we seem to be bending over backwards to help those who should not need help and at the same time seem to be nearly incapable of helping those who really need help.

All this borrowing from China and deficit spending and printing of phony money is putting us in a precarious position that even the top economists agree is unsustainable. We will eventually collapse — even more so than now — under the weight of the mounting deficits.

So why not stop everything and restart it?

Everyone’s debt is cancelled, but tomorrow we begin anew. Those who want to repeat the mistakes of the past are free to do so, but at their own peril. Everyone else gets a second chance.

April Fools maybe, but not such a fool idea after all.

When Obama is presidential, he’s at his best…

March 25, 2009

Just watched President Barack Obama’s news conference and left the TV so I would not hear the pundits sum it up. That way I can give my own personal reaction without fear that I was influenced by the pack.

I have watched presidents from Dwight Eisenhower to John Kennedy to Ronald Reagan to the vapid George W. Bush, and I can say that this one, Mr. Obama, handles himself better in public in this type of formal situation than any of his predecessors. (Don’t care so much for the informal, such as on Jay Leno, but that is more because of my bias against presidents as entertainers).

Maybe I’m just a sucker for a slicked tongue politician, but I don’t think so. His answers are complete and seem to be instructive and he seems to not depend upon platitudes (not so much anyway) or just the usual political rhetoric.

As far as his personal performance on the job, I think he is doing fine in the face of probably the biggest challenge any president has ever faced, the real possibility that not only our own but the world’s economy could almost immediately collapse. I think what we face now and have been facing for the past several months, beginning in the waning months of the Bush administration, is a crisis in many respects much deeper than the Great Depression, although our social programs – unemployment, Social Security, for example – have softened things somewhat so far.

I do not approve of the way Mr. Obama and his administration have handled the banking and AIG crisis, but populist pressure is checking that mess, along with a new force that is a band of moderate to conservative Democrats in Congress. So where Mr. Obama might go too far, he may be kept in check somewhat by his own party.

As for the Republicans, they are still in disarray and have not shown yet that they have any answer. They have not presented any comprehensive alternative program. It is to their political advantage to carp and complain and hope that Mr. Obama stumbles.

For his part, I believe, Mr. Obama needs to keep up his effort to enlist the support of the American people. But rather than demean himself by appearing on late night TV and running the risk of making gaffes as those situations seem to produce, I think he should give personal addresses to the people from the oval office and perhaps make more formal presidential appearances elsewhere around the nation.

(Copyright 2009)

Welcome to the UB of A…..

March 24, 2009

So we give the banks money and then guarantee private investors up to 85 percent their purchase of so-called toxic assets the banks took on themselves in the first place.

Lets rename the United States of America the UNITED BANKS OF AMERICA.

Make sure you make the April 15 deadline for income taxes, the banks need your money!

ABC’s Gibson condescending; President undignified…

March 20, 2009

The condescension by anchor Charlie Gibson and the ABC evening news broadcast was palpable. Gibson wondered why such an uproar over a few million dollars in bonuses when the whole bailout package is in the trillions of dollars.

Well Mr. Multi-million dollar salary Gibson, I doubt that if you could even wonder such a thing that I could explain it to your erudite and quite insulated from the common world self.

Yes it’s politics and a sensational story, but it also goes way beyond that.

For all of you out there, if there are any, who don’t see anything wrong with the government bailing out failing banks and insurance companies and other businesses with taxpayer money and then letting them pay out bonuses (made possible by that money), some as high as a million dollars or more, sometimes to the very people who through imprudence, skulduggery, and outright greed and no concern for customers or the public or the soldiers who protect their fat asses, lost all the money and threatened to take down the world economy with them, what part of shocks the conscience and violates public decency do you not understand?

Common citizens and even most uncommon citizens do not get bailouts from the government – well they did send us $600 apiece awhile back but that was not asked for.

But $600 to an individual, I guess sent out to spur a consumer buying frenzy or as what my mom might have called “mad money”, is not $1 million to an individual.

It is apparent that President Barack Obama and his administration (as the one before him) are: A. In awe of the Wall Street financial crowd or B. Intimidated by them or C. All of the above.

So they, the masters of the universe, can say “we lost all of our money in a crap shoot, give us more and don’t stop till we say so, and we will lavish it upon ourselves and if you object we will take the whole national and international finance system (the economy) down with us.”

And the idea that we have to retain or hire back many of the same people who led us into this mess because, well hold your nose, but they are the only folks with the knowledge to save us, should be seen as complete nonsense on its face. Aren’t a lot of financial types unemployed at the moment?

As for Mr. Gibson who likes to look down over his reading glasses at us, he is not really a journalist as much as an actor and news reader, but to the extent he considers himself a journalist, he is a prime reason why the best journalists may not be in the jet set. You have to retain some connection with the citizenry. You have to retain some empathy for those who toil for modest salaries, but make up the broad audience upon whom you draw your whole reason for being.

And now for a further indignity, my president is appearing on the Tonight Show with comedian Jay Leno. While candidates as far back as Richard Nixon in 1968 have appeared on non news and non-serious TV shows (Laugh In for Nixon), I believe this is the first time a sitting president has done so.

Somehow I think such an appearance is beneath the dignity of the office. And it’s a sad state of affairs when we may well get more answers from a comedian than the show biz folks who call themselves broadcast journalists these days.

Back to the bailouts: let’s pay down that national debt and if we must do extraordinary spending (and borrowing) let’s have the government buy up toxic assets for pennies on the dollar directly. It would be far cheaper in the long run than being suckered into sending the dollars to the crooks who took us all for a ride in the first place. (And I don’t discount greed of the victims in all of this, but I do put the heaviest burden of blame on those who had the knowledge and along with it the public trust as their positions dictated – from politicians to high financiers.)

While government is a necessary part of the framework and an arbiter of disputes and must be the watchdog over the financial and whole economic system, I am believing more than ever it should not try to run the economy or businesses any more than it should run the lives of individuals. And in return, we should only ask the government for help in things such as natural emergencies. Of course we depend upon government to provide for the national defense too.

In our representative democracy we can provide for our own social programs, to include a social safety net and Social Security, and even health benefits, as the majority sees fit, but overall we must protect the right to succeed and the right to fail (and the second part is a necessary evil because if nothing else logic demands an opposite condition and failure can be instructive).

Although it does not apply to me, I have always liked the quote: “I’ve been rich and I’ve been poor and I’d choose rich every time.”


So, am I turning into a Republican? I would hope not. In fact, that will never happen. I may lean a little Libertarian at times, but as I have written before in this blog space, most of the professed Libertarians I have ever met seemed a tad eccentric and some a little off their rockers. I might be a bit of the former, but hopefully not the latter.

(Copyright 2009)

Doddering Dodd does AIG bidding…

March 19, 2009

I just read the story on CNN online and if I got it correctly Sen. Chris Dodd, doddering old fool that he is, yes the Dodd that got the special mortgage deal for himself, now owns up to introducing language in a bill to protect the AIG bonuses, after denying such earlier this week. He said he did so at the urging of the Obama administration. How many thousands of dollars did AIG send his way? Answer: $104,000 (that was the most recently reported amount).

Ironically, Dodd was claims he was trying to eliminate all bonuses made possible by government bailout money, but was forced by the powers that be (administration, financial lobby) to acquiesce to a grandfathering in of some bonuses.

Meanwhile President Obama — also an AIG recipient — says he is hot on the tails of the bonus crowd, but also that we should not get carried away with the bonus issue.

While I agree that the main issue is to fix the economy, this bonus thing cannnot conveniently be swept under the rug. It’s too late for that.

Just went to the library today and read some of the Wall Street Journal. I read one piece in particular in the opinion section. Now I was not sure what the author’s main point was, but what I did get out of it was that with all the money we have poured down the rat hole trying to prop up AIG and the big banks, we could have paid off all the toxic debts.

While I doubt the WSJ would go for this, I’m beginning to wonder if all that bailout money could have as well gone to citizens to help them pay off their own debts.

I am still trying to keep faith with Obama, but he needs to get ahead of this thing before it runs him over!

(Copyright 2009)

My position on consumer credit, the short version…

March 16, 2009

I’ve addressed consumer credit in two recent blogs. But for those who don’t like to get lost in a sea of words, here is my position:

Credit cards and all consumer debt is the Devil.

Watch what the poor people do and don’t do it.

Demand cash. Pay cash or don’t buy at all.