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.
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.
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 17h 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 12h 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.
“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.”
The NCAA puts out a statistical analysis looking at the “Estimated Probability of Competing in
Athletics Beyond the High School Interscholastic Level.” If you have some natural talent and work on
your skills, you can probably compete at the High School junior varsity level. More skills, hard
work, a little luck, and you make it to Varsity.
The talent pool gets much more competitive at the college level. The NCAA estimates approximately 3%
of HS basketball players, and 6% of HS football and baseball players make an NCAA team.
If those number look daunting, the cut is far more challenging at the professional level. In
basketball, only 1.2% of NCAA senior players get drafted by an NBA team. NFL drafts 1.7% of NCAA
senior football players; Baseball holds the best odds, where 8.9% of NCAA baseball players will get
drafted by a Major League Baseball club — but that includes minor league farm teams.
Lets crunch the numbers to put this into full context: A mere 0.03% of high school basketball
players eventually get drafted by an NBA team. Football, its 0.08%, and baseball its 0.44%
(including farm teams).
Ritholtz | http://www.ritholtz.com/blog/ | 14 July 2011]
Natural ability only gets you to college. The rest of the way takes discipline, hard work, and
maybe a little luck. However, the luck will do you no good without the discipline and hard work.
Wednesday, 13 July 2011 at 2h 43m 10s
I'm looking hard to source this. I heard this from yesterday's Young Turks Show. This is from
David Stockman, Ronald Reagan's first Budget Director. [NOTE: this is a paraphrase.]
In 1980, the top 5% earned 9 trillion dollars. Today, the top 5% earns 40 trillion dollars. Now
that increase [31 trillion dollars] is more than was created by the entire history of mankind prior to
~ ~ ~ ~ ~
UPDATE: I realize that my paraphrase might give an inaccurate impression. I said "earned" 9
trillion dollars in 1980, but what I meant was that the total net worth was 9 trillion. The gain of
31 trillion is a gain in net worth since 1980, and that gain was more than mankind had created prior
to that point in time. We are living in exponential times.
Wednesday, 13 July 2011 at 19h 23m 25s
The Road Before Us
These are dangerous times. The US may be on the verge of making among the biggest and
least-necessary financial mistakes in world history. The eurozone might be on the verge of a fiscal
cum financial crisis that destroys not just the solvency of important countries but even the
currency union and, at worst, much of the European project. These times require wisdom and courage
among those in charge of our affairs. In the US, utopians of the right are seeking to smash the
state that emerged from the 1930s and the second world war. In Europe, politicians are dealing with
the legacy of a utopian project which requires a degree of solidarity that their peoples do not
feel. How will these clashes between utopia and reality end?
[SOURCE:Martin Wolf | Financial
Times | 12 July 2012]
Tuesday, 12 July 2011 at 0h 45m 48s
More mythology and lies
This my response to a trollish comment hawking pseudo economic ideas.
This is not true:"Government-created jobs are extremely expensive, with a net cost greater than the benefit.
Moreover, government spending on job creation squeezes out private sector spending.
Businesses create jobs that deliver a net gain (i.e., the business value of hiring a new employee
exceeds their cost) -- which has the additional benefit of making the newly-created job more likely
The post office is a job that delivers a "net gain.. more likely to last". What private sector job
has been squeezed out by this government spending? The coast guard is squeezing out private
competition? Really? Are there a plethora of businesses trying to compete with the police department
and the tax assessors office? Or the DMV?
Likewise, you don't see the government building supermarkets and coffee shops for a reason. Because
its a different economic sector. Government invests for society what the free market cannot do
withour perverse results. Like the national highway system, the internet, the Federal Aviation
System, the National Parks Service, et cetera. And the businesses next door to various government
offices do quite well economically. Downsizing those jobs will not produce the "economic benefits"
of long lasting duration.
Get real Mr. Objective. Your statement is oversimplified nonsense that has been dragged around by
ideologues and has no basis of fact. Its just another myth carted out by persons who have an agenda
to cut down government spending for purely ideological reasons. They have no idea about history and
the actual relevant economic analysis over the last 100 years which utterly refutes the nonsense.
What was it Josef Goebbels said when he was in charge of spewing Nazi propaganda?