Loyalty without truth
is a trail to tyranny.
|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
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
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
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
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|
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
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|
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.”
|Monday, 1 August 2011 at 10h 46m 33s|
The so-called crisis
I am so sick of this nonsense (or is it deliberate obfuscation.)
Why is the above graphic adding Social Security and Medicare taxes into the the total revenue? Why
are they also lumped together as total government liabilities?
These two programs are payed for by separate payroll taxes. Leftover funds for social security are
saved in the form of bond purchases. The tax revenue streams are separate, and the expenditures are
also separated from the general revenue stream, so why are the lopped together? No business would
do this with their subcontractors or sub-corporate entities.
This is like taking the revenue earned from a cafeteria and saying its the same revenue stream as a
furniture store merely because the two businesses both put their money in the same bank. On the
banks asset sheet these two separate businesses are summed together to get the total banks assets.
But the banks business is separate from the cafeteria and the furniture store, as equally as the
two businesses are separate from each other.
So when the bank goes into default, do the auditors raid the assets of the furniture store and count
the revenue stream of the cafeteria as resources for the bank merely because they have accounts with
This is exactly what the dishonest bundling of all government revenue and liabilities means. Social
security liabilities have nothing to do with medicare liabilities and the interest payments
necessary because of funding government revenue deficit shortfalls on the yearly fiscal budgets.
THEY ARE SEPARATELY FUNDED PROGRAMS. The government does not borrow to pay for social security, and
government payments to social security come from separate accounts. Payroll taxes do not fund
anything other than social security. So why are the payroll taxes added to total revenue?
The people paid for the social security insurance program into a collective separate account through
payroll taxes to create a huge asset fund that will be able to pay 100% of benefits to at least 2042
by the most conservative of projections. That is no exactly a major crisis situation. And all we
have to do to raise funds is raise the income cap on the payroll tax another $100,000. Problem solved.
This massive drumbeat of fiscal "crisis" is intended to provide smoke for an ideological agenda. It
is also short-sighted and very stupid. All that happens is you push older citizens onto the backs
of younger generations already strained income; you also force older people to have to compete with
younger people for fewer jobs. All it does is drain the economy of spending, investment, health,and
social stability just so the upper one percent can earn 20 times more than they will ever need in
their entire lifetime.
Its a foolish shame.
|Sunday, 31 July 2011 at 5h 34m 11s|
It costs 20 million per terrorist
Former Intel Chief Dennis Blair
our relationship with these countries [Yemen, Pakistan, & Somalia] is only the start of the overhaul
Blair has in mind, however. He noted that the U.S. intelligence and homeland security communities
are spending about $80 billion a year, outside of Afghanistan and Pakistan. Yet al-Qaida and its
affiliates only have about 4,000 members worldwide. That’s $20 million per terrorist per year, Blair
“You think — woah, $20 million. Is that proportionate?” he asked. “So I think we need to relook at
the strategy to get the money in the right places.”
Blair mentioned that 17 Americans have been killed on U.S. soil by terrorists since 9/11 — 14 of
them in the Ft. Hood massacre. Meanwhile, auto accidents, murders and rapes combine have killed an
estimated 1.5 million people in the past decade. “What is it that justifies this amount of money
on this narrow problem?” he asked.
[SOURCE: Dennis Blair | wired.com | 28
|Thursday, 14 July 2011 at 9h 54m 2s|
A history of American government debt
“With one brief exception, the federal government has been in debt every year since 1776. In
January 1835, for the first and only time in U.S. history, the public debt was retired, and a budget
surplus was maintained for the next two years in order to accumulate what Treasury Secretary Levi
Woodbury called “a fund to meet future deficits.” In 1837 the economy collapsed into a deep
depression that drove the budget into deficit, and the federal government has been in debt ever
since. Since 1776 there have been exactly seven periods of substantial budget surpluses and
significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823
to 1836 it was eliminated (Jackson’s efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to
1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a
third. Of course, the last time we ran a budget surplus was during the Clinton years. I do not know
any household that has been able to run budget deficits for approximately 190 out of the past
230-odd years, and to accumulate debt virtually nonstop since 1837.
The United States has also experienced six periods of depression. The depressions began in 1819,
1837, 1857, 1873, 1893, and 1929. (Do you see any pattern? Take a look at the dates listed
above.) With the exception of the Clinton surpluses, every significant reduction of the
outstanding debt has been followed by a depression, and every depression has been preceded by
significant debt reduction. The Clinton surplus was followed by the Bush recession, a speculative
euphoria, and then the collapse in which we now find ourselves. The jury is still out on whether we
might manage to work this up to yet another great depression. While we cannot rule out coincidences,
seven surpluses followed by six and a half depressions (with some possibility for making it the
perfect seven) should raise some eyebrows. And, by the way, our less serious downturns have almost
always been preceded by reductions of federal budget deficits. I don’t know of any case of a
national depression caused by a household budget surplus.”
[SOURCE: Professor Randall Wray | pragmatic
capitalist | ]
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