frankilin roosevelt

It's not about being liberal or conservative anymore y'all. That is a hype offered by the fascist whores who want to confuse the people with lies while they turn this country into an aristocratic police state. Some people will say anything to attain power and money. There is no such thing as the Liberal Media, but the Corporate media is very real.



Check out my old  Voice of the People page.


Gino Napoli
San Francisco, California
High School Math Teacher

jonsdarc@mindspring.com




Loyalty without truth
is a trail to tyranny.

a middle-aged
George Washington



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Thursday, 18 August 2011 at 19h 28m 25s

Why Term Limits Suck

First of all, you don't fix government by castrating it.

Term limits happened in California so there is a historical record of what happens. The term limits idea has castrated California governance. Legislators are more dependent upon lobbyists and non-governmental private firms because they are vulnerable to opposition from organized money when they have a term limit. They only have a small amount of time to build up a name brand and utilize that brand name to create an independent money raising organization. You don't get experienced legislators because the turnover of veterans and experienced personnel undermines the relationships of the institution. What happens is that staff members come from lobbyist organizations that persist longer than the terms of the legislators themselves, thus shifting the nexus of the power relation. The chief of staffs have been around longer than more than half the legislators, and are more connected.

Imagine a school that loses half of their staff every 6 years, and has completely different staff in 12 years. Imagine further that after 12 years the teachers can no longer be teachers and have to retire. The transitory nature of the profession would inhibit the effectiveness of the teaching profession. It takes ten years to really learn all of the millions of issues involving the complications of teaching, and then you have to retire.

This is what happened when term limits got applied in California. It creates more dys-functionalism. Just look at California over the last 10 years. Even mainstream Republican operatives in California have admitted that the "term limits" worsen governance in California. There was an article in the Sacramento Bee about this very matter a few months ago.

The real problem is that corporations are considered "persons" under the law, and thus are enabled to raise insane amounts of money to buy the legislators, because spending money is a free speech when the law categories large organization of money as a legal "person."

The amendment we should pass instead is one that says "corporations are not persons and should not be treated as such under any law or interpretation of any law made by any court or legislator or local governmental body."

The "term limits" movement is a hoax. Rabid anti-government zealots use it to further their agenda. The answer to bad government is not to blow the government up with bad laws. There are plenty of good legislators, but the power of money is too big for them to do anything about. It is very difficult for a new legislator to compete against the insidious viciousness that large sums of money use to manipulate the public ignorance. Term limits would transfer the powers further into the camp of the lobbyist organizations, because the power of money is the real problem AND TERM LIMITS DO NOTHING ABOUT THE POWER OF MONEY.

The answer is to understand the original source of the bad government, and that is that corporate aggregations of wealth have too much power because they get all the benefits of "personhood" but none of the responsibilities. When a person murders another person, they get a huge prison term or the death penalty. When a corporation kills 10,000 people, they pay a fine or put a few figureheads in jail, but the corporation lives on; there is no accountability.


Wednesday, 17 August 2011 at 18h 14m 48s

What Teacher's Make


Monday, 15 August 2011 at 6h 25m 1s

Why Business Uncertainty is not the reason for record excess cash reserves

Yves Smith writes a piece in Salon where he calls out the notion that Corporations are currently sitting on historic piles of cash because of "business uncertainty."

Click here for the long exposition. It's a really good read. Here's an exerpt just in case the link fails:

If you read the business and even the political press, you've doubtless encountered the claim that the economy is a mess because the threat to reregulate in the wake of a global-economy-wrecking financial crisis is creating "uncertainty." That is touted as the reason why corporations are sitting on their hands and not doing much in the way of hiring and investing.

This is propaganda that needs to be laughed out of the room....

Commerce is all about making decisions and committing resources with the hope of earning profit when the managers cannot know the future. "Uncertainty" is used casually by the media, but when trying to confront the vagaries of what might happen, analysts distinguish risk from "uncertainty", which for them has a very specific meaning. "Risk" is what Donald Rumsfeld characterized as a known unknown. You can still estimate the range of likely outcomes and make a good stab at estimating probabilities within that range. For instance, if you open an ice cream store in a resort area, you can make a very good estimate of what the fixed costs and the margins on sales will be. It is much harder to predict how much ice cream you will actually sell. That is turn depends largely on foot traffic which in turn is largely a function of the weather (and you can look at past weather patterns to get a rough idea) and how many people visit that town (which is likely a function of the economy and how that particular resort area does in a weak economy).

Uncertainty, by contrast, is unknown unknowns. It is the sort of risk you can't estimate in advance. So businesses also have to be good at adapting when Shit Happens. Sometimes that Shit Happening can be favorable, but they still need to be able to exploit opportunities (like an exceptionally hot summer producing off the charts demand for ice cream) or disaster (like the Fukushima meltdown disrupting global supply chains). That implies having some slack or extra resources at your disposal, or being able to get ready access to them at not too catastrophic a cost.

So why aren't businesses investing or hiring? "Uncertainty" as far as regulations are concerned is not a major driver. Surveys show that the "uncertainty" bandied about in the press really translates into "the economy stinks, I'm not in a business that benefits from a bad economy, and I'm not going to take a chance when I have no idea when things might turn around."

The "certainty" they are looking for is concrete evidence that prevailing conditions have really turned. But with so many people unemployed, growth flagging in advanced economies, China and other emerging economies putting on the brake as their inflation rates become too high, and a very real risk of another financial crisis kicking off in the Eurozone, there isn't any reason to hope for things to magically get better on their own any time soon. In fact, if you look at the discussion above, we actually have a very high degree of certainty, just of the wrong sort, namely that growth will low to negative for easily the next two years, and quite possibly for a Japan-style extended period....

The problem with the "blame the government" canard is that it does not stand up to scrutiny. The pattern businesses are trying to blame on the authorities, that they aren't hiring and investing due to intrusive interference, was in fact deeply entrenched before the crisis and was rampant during the corporate friendly Bush era. I wrote about it back in 2005 for the Conference Board's magazine.

In simple form, this pattern resulted from the toxic combination of short-termism among investors and an irrational focus on unaudited corporate quarterly earnings announcements and stock-price-related executive pay, which became a fixture in the early 1990s. I called the pattern "corporate dysmorphia", since like body builders preparing for contests, major corporations go to unnatural extremes to make themselves look good for their quarterly announcements....

Despite the cliché “employees are our most important asset,” many companies are doing everything in their power to live without them, and to pay the ones they have minimally. This practice may sound like prudent business, but in fact it is a reversal of the insight by Henry Ford that built the middle class and set the foundation for America’s prosperity in the twentieth century: that by paying workers well, companies created a virtuous circle, since better-paid staff would consume more goods, enabling companies to hire yet more worker/consumers.

Instead, the Wal-Mart logic increasingly prevails: Pay workers as little as they will accept, skimp on benefits, and wring as much production out of them as possible (sometimes illegally, such as having them clock out and work unpaid hours). The argument is that this pattern is good for the laboring classes, since Wal-Mart can sell goods at lower prices, providing savings to lower-income consumers like, for instance, its employees. The logic is specious: Wal-Mart’s workers spend most of their income on goods and services they can’t buy at Wal-Mart, such as housing, health care, transportation, and gas, so whatever gains they recoup from Wal-Mart’s low prices are more than offset by the rock-bottom pay.

Defenders may argue that in a global economy, Americans must accept competitive (read: lower) wages. But critics such as William Greider and Thomas Frank argue that America has become hostage to a free-trade ideology, while its trading partners have chosen to operate under systems of managed trade. There’s little question that other advanced economies do a better job of both protecting their labor markets and producing a better balance of trade—in most cases, a surplus.

The dangers of the U.S. approach are systemic. Real wages have been stagnant since the mid-1970s, but consumer spending keeps climbing. As of June, household savings were .02 percent of income (note the placement of the decimal point), and Americans are carrying historically high levels of debt. According to the Federal Reserve, consumer debt service is 13 percent of income. The Economist noted, “Household savings have dwindled to negligible levels as Americans have run down assets and taken on debt to keep the spending binge going.” As with their employers, consumers are keeping up the appearance of wealth while their personal financial health decays.

Part of the problem is that companies have not recycled the fruits of their growth back to their workers as they did in the past. In all previous postwar economic recoveries, the lion’s share of the increase in national income went to labor compensation (meaning increases in hiring, wages, and benefits) rather than corporate profits, according to the National Bureau of Economic Analysis. In the current upturn, not only is the proportion going to workers far lower than ever before—it is the first time that the share of GDP growth going to corporate coffers has exceeded the labor share.

And businesses weren't using their high profits to invest either:

Companies typically invest in times like these, when profits are high and interest rates low. Yet a recent JP Morgan report notes that, since 2002, American companies have incurred an average net financial surplus of 1.7 percent of GDP, which contrasts with an average deficit of 1.2 percent of GDP for the preceding forty years. While firms in aggregate have occasionally run a surplus, “. . . the recent level of saving by corporates is unprecedented. . . .It is important to stress that the present situation is in some sense unnatural. A more normal situation would be for the global corporate sector—in both the G6 and emerging economies—to be borrowing, and for households in the G6 economies to be saving more, ahead of the deterioration in demographics.”

The problem is that the "certainty" language reveals what the real game is, which is certainty in top executive pay at the expense of the health of the enterprise, and ultimately, the economy as a whole. Cutting costs is as easy way to produce profits, since the certainty of a good return on your "investment" is high. By contrast, doing what capitalists of legend are supposed to do, find ways to serve customer better by producing better or novel products, is much harder and involves taking real chances and dealing with very real odds of disappointing results. Even though we like to celebrate Apple, all too many companies have shunned that path of finding other easier ways to burnish their bottom lines. and it has become even more extreme. Companies have managed to achieve record profits in a verging-on-recession setting.

Indeed, the bigger problem they face is that they have played their cost-focused business paradigm out. You can't grow an economy on cost cutting unless you have offsetting factors in play, such as an export led growth strategy, or an ever rising fiscal deficit, or a falling household saving rate that has not yet reached zero, or some basis for an investment spending boom. But if you go down the list, and check off each item for the US, you will see they have exhausted the possibilities. The only one that could in theory operate is having consumers go back on a borrowing spree. But with unemployment as high as it is and many families desperately trying to recover from losses in the biggest item on their personal balance sheet, their home, that seems highly unlikely. Game over for the cost cutting strategy....

So this haranguing about certainty simply reveals how warped big commerce has become in the US. Top management of supposedly capitalist enterprises want a high degree of certainty in their own profits and pay. Rather than earn their returns the old fashioned way, by serving customers well, by innovating, by expanding into new markets, their 'certainty' amounts to being paid handsomely for doing things that carry no risk. But since risk and uncertainty are inherent to the human condition, what they instead have engaged in is a massive scheme of risk transfer, of increasing rewards to themselves to the long term detriment of their enterprises and ultimately society as a whole.


[SOURCE: Yves Smith | Salon.com |14 August 2011 ]


Saturday, 13 August 2011 at 11h 35m 41s

new CDs in the making

These two long over due. Like 4 years overdue. I started putting together the songs in 2007. But now that I've gotten a Roland 24 track music production system set up and running, the long delays and procrastination can finally cease.

Well ... at least a man can dream, right?


This is the new CD. Check out that fog.

Hopefully I'll be done by the end of this year. It takes a while to perfect every thing that winds up getting mixed in these songs. The songs that are just me singing with one guitar track are easier. Its the harder songs with multiple guitar tracks that take time.

If you want to hear some of my stuff, you can check out the "My Audio" links in the left-hand column. Its bright green. Scroll down below the red-bordered & black archived post links and you will find it. Some of the songs are a bit raw and need re-mastering, but most of them are finalized.


Friday, 12 August 2011 at 9h 47m 35s

A Timeline of the Economy from 2004 to April 2011

Click here for a very cool map of the United States and a lot of green and red circles indicating job losses/gains in 200 Metropolitan areas from 2004 to April 2011.

You press play and the map changes month by month from 2004 to April 2011. The first big red circle occurs in August and September of 2005 over Louisiana -- the twin Hurricanes of Katrina and Ivan.

Then watch out when 2009 hits. Huge red circles that encompass more than half of the Area of the continental United States. Wow.


Monday, 8 August 2011 at 15h 1m 40s

An Accounting Identity

GDP = consumption + (private investment + savings) + (government spending + savings) + (exports − imports)


The Gross Domestic Product is the total monetary value created by a nation as a measure of all goods and services used by that nation within a year or span of time. This shows up as goods & services purchased by citizens and institutions of the nation minus purchases of imports. Profits from exports are a net gain. Investment occurs when assets are created or purchased that will obtain a future value, either at a future point of sale, or as a future source of regular revenue and potential profits. Savings are accounts that are not spent, probably sunk into interest-bearing accounts that have a future value. Government spending is usually in the form of payments & subsidies (tax breaks are subsidies) which can either get spent or invested; unless the government directly spends or invests -- rather than through surrogate citizens and businesses that get tax incentives and subsidies.

We can simplify this equation by merging the private and government spending and investment, as follows:

GDP = consumption + investment + savings + (exports − imports)


Doing this avoids the conflict of what private and government spending and investment does. The Consumption = private + government. The Savings = private + government. The Investment = private + government. The allocation, or ratio of private to government, is dependent upon the culture and history of the particular nation. There is no nation which is 100% private. There is also no nation with 100% government, because even in the most totalitarian government bureaucracies there is leakage in the form of corruption and black market economies.

Now if we subtract consumption investment and savings from both sides we get the following identity:

GDP - consumption - investment - savings = exports − imports


This equation means that whatever is left after subtracting consumption, investment, & savings equals the difference between exports and imports.

A lot has been debated about the significance of this identity. In a world of high-wage/high-productivity-per-worker economies and low-wage/low-productivity-per-worker nations, this identity involves the dynamic of excess savings from the high-wage nations financing the creation of factories and products in the low-wage nations. The out-sourcing and moving production to East Asia, Mexico, China, and India is a familiar theme to Americans. But what does this do to above identity?

Assume a low-wage nation gets a massive increase of foreign investment. This would cause more negative value on the left-hand side of the above equation; but that doesn't necessarily mean the right-hand side becomes more negative. Consumption can go down, savings can down, exports can go down, imports can be increased, or some combination of all the above. If there is more negativity on the left-side induced by a massive increase of foreign investment, consumption can up if savings goes down; or there could be some combination of a decrease in savings and exports with an increase of imports. Exports can go up without an increase of imports, but then some combination of a decrease in savings and consumption would have to balance the increase of Exports. If foreign investment is to produce an increase in Export income, this is like subtracting ten on one side but adding five to the other side -- the net imbalance would then be a minus 15. Hence, foreign investment creation of export wealth produces reduced consumption and savings along with an increase of imports.

The form of the investment and the type of socio-economic relationships within each nation determines the effect of the new massive increase of investment. What happens in Mexico, is quite different than what happens in Vietnam, India, or China, because the current income distribution and political economies of these nations are not the same.

Lets analyze this reaction to the increase of foreign investment in a low-wage nation. One reaction could be less consumption and less savings. Profits from the foreign investment will most likely leave the low-wage nation and return back to the foreign investors as profits. Not all of the gains will remain in the low-wage nation. Potential increases in exports are thus siphoned off and returned back to the investors as profits. The investment might also crowd out internal competitors, who now have more expenses and this would result in a decrease in savings.

Remember the basic Accounting Identity:


GDP- consumption - investment - savings = exports − imports

Suppose however that the foreign investment did not exit back to the investors and instead remained in the low-wage nation as increases in savings and consumption, because the profits get dispersed to workers or because they cause an increase in average wealth. Maybe the profits get further invested, and there is an additional increased negativity for investment. In this scenario, the increased negativity on the left-hand side of the equation can (and probably will) cause an increase in the GDP to counter-balance the negativity, but not all of the negativity will be balanced by the increased GDP.

What percentage of the increased negativity gets balanced by an increase in GDP doesn't necessarily affect the "exports - imports" right-hand side of the equation at all unless the GDP increase does not absorb all of the increased negativity from consumption, investment, and savings. Any leftover negativity can cause a rise in imports. If the various increases in savings and investment is NOT managed effectively, by default, any increase in negativity on the left-side of the equation results in an increase in imports.


Saturday, 6 August 2011 at 23h 29m 15s

Is Obama a Trojan Horse

Click here

This is a youtube video of a youngturks.com episode on Friday, 5 August 2011 with Cenk Uygur, Sam Seder, and Jimmy Dore.


Saturday, 6 August 2011 at 23h 35m 48s

Corporate Profits

The new figures indicate that corporate profits accounted for 14 percent of the total national income in 2010, the highest proportion ever recorded. The previous peak, of 13.6 percent, was set in 1942 when the need for war materials filled the order books of companies at the same time as the government imposed wage and price controls, holding down the costs companies had to pay....

The latest figures indicate the smaller businesses’ share of national income fell to a 17-year low of 7.7 percent in 2009, but recovered to 8.3 percent in 2010 and in the first quarter of this year.

Employees have always received more than half the total national income, until now. In 2010, the percentage of national income devoted to wages and salaries fell to 49.9 percent, and it slipped a little more to 49.6 percent in the first quarter of this year....

Nonetheless, President John F. Kennedy’s observation that a rising tide lifts all boats is no longer as true as it once was.

There have been 10 years when corporate profits as a share of national income exceeded 13 percent — 1941, ’42, ’43, ’50, ’51, ’55, ’65, ’66, 2006 and 2010. In eight of those years, the economy, as measured by real gross national product, grew at a rate of greater than 6 percent.

The exceptions were 2006, when real growth was just 2.7 percent, and 2010, when it was 3 percent.

Similarly, in the past, unemployment was generally low when corporate profits were high. In 2006, the unemployment rate ended the year at 4.4 percent — and that was higher than it had been in other postwar years when the corporate share of national income was high. At the end of 2010, the jobless rate was 9.4 percent. On Friday, the government reported that the rate was 9.1 percent in July.


[SOURCE: Floyd Norris | New York Times | 5 August 2011]

I guess that since the percent of GDP accruing to corporate profits is at an all-time high, we should expect massive re-investment by such profits in all of the areas that the nation needs re-investment. Isn't that what the "theory" says should happen. Excess capital leads inherently to investment that benefits all of society.

Except that the history of the human species is one of massive misallocation of resources due to the whims of dictators and kings; or the derelictions of paradigms beholden to the oligarchy. Extremely rich people spending more and more on extravagance with no redeeming value litters the history of mankind. Yet whatever and wherever the origin, the ignorance is promoted as the national ethos because concentrated wealth always promotes itself, and the sanguine wounds of pride deteriorate the wealth and strength of the nation despite the grandiose jargon.


Wednesday, 3 August 2011 at 15h 15m 17s

Deadcat bounce



hat tip to Barry Ritholtz.


Monday, 1 August 2011 at 18h 13m 56s

Social Security 101

This comes from a comment left by rktbrkr on the comment thread which sponsored my lambast below.

Many people misunderstand how the program operates. Payroll taxes stream into the trust fund that is used to pay current retirees’ benefits. When there is a surplus, that money is invested in a special type of Treasury bond that pays interest to the trust fund. At the end of last year, the trust fund had about $2.6 trillion. And though last year was the first year since 1983 that the fund paid out more than it received in tax revenue, it still continued to grow because of the interest accrued — and it is estimated to continue to grow through 2022.

Since the money in the trust fund is held in Treasury securities, taxes collected are essentially being lent to the federal government to pay for whatever it wants (and this allows the government to borrow less from the public). That is where some of the confusion comes into play about how Social Security is used to pay for things that are unrelated to the program. But it is really no different from China lending the government money by investing in Treasuries. (So the Fed by printing money to buy 75% of Treasuries is undercutting SocSec revenues. So the Fed is punishing SocSec as well as private savers with their policies!!!)

“Social Security does not, and cannot by law, add a penny to the federal debt,” said Nancy Altman, co-director of Social Security Works, an advocacy organization that promotes the preservation of the program. “It, by law, cannot pay benefits unless it has sufficient income to cover the cost, and it has no borrowing authority to make up any shortfall.”





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