How to buy happiness (ted.com) – h/t patrick.net
Friday, April 27, 2012
After Yves trashed the first two segments of Frontline’s expose, I am posting a CNBC video referenced in comments at NC that may have a bit more bite:
We’ll see if the concluding episodes of the Frontline series get any better. Naturally, Frontline is probably afraid for its life if the Republicans win in November.
Thursday, April 26, 2012
Tuesday, April 24, 2012
Today’s must read is a compelling expression of nausea at the state of American political economy by itself and compared to that of the Chinese. As someone who has spent a little time in China, I can say that there is a greater sense of the collective welfare there than in America, perhaps driven by higher kinship coefficients across the population.
When I try to explain my politics to folks I generally say something like, “I’m out there at the intersection of Noam Chomsky and Ron Paul and Simon Johnson and Acemoglu and Robinson and Richard Wilkinson…,” and if their eyes glaze over that’s generally the end of the conversation. The learned helplessness of the American people is stunning, but they keep falling for the lies of the false god of Econ spun by the politicians.
I believe the wedge that will drive reform—if we escape falling into a repressive neofeudalism that could persist for a century—will be a Constitutional amendment to repeal Citizens United, to state once and for all (and these are terms that people should be able to understand) that corporations are not people, money is not speech.
From The American Conservative:
Monday, April 23, 2012
The main service provided by this site, other than my perspective on “animal spirits,” is to filter the large amount of blog reading I do and forward to my readers the best. Jim Quinn has a great post that is worth a read in its entirety at
Jim makes some great points about the true state of the labor market that even we cognoscenti can lose sight of in the constant barrage of propaganda from the MSM.
Thursday, April 19, 2012
The adaptation level theoretic measure of confidence that I track continues to be positive, slightly, based on the relationship of the unemployment rate to an exponential moving average of recent rates. When you’re coming down from over ten percent, 8.1 percent seems great (and nobody really pays close attention to the high U measures of unemployment, in this view). The configuration of my confidence metric and the Michigan sentiment measure most closely resembles that in 1973, when Michigan confidence was low, but the A metric was positive.
The period after the election to the inauguration is what someone has called the mother of all lame ducks if Romney wins. Any tax relief the Congress might enact—whether a “temporary” payroll tax cut or further postponement of the Bush-Obama tax cuts’ expiration—will be political suicide. It might well be even if Obama wins.
That implies that fiscal drag equivalent to 3-4 percent of GDP could kick in January 1, 2013. The underlying unemployment rate forecast is as follows:
Notice that confidence turns up even as the unemployment rate continues to rise! This is one of the interesting nonlinearities of the A metric. In terms of my confidence metric, the next recession may not be that bad, ending in about the middle of 2014, probably as the Fed pumps even more credit into the economy, and as inflation probably infects the wage price spiral, gunned on by war in the Middle East, if Charles Nenner’s forecast is true.
In the final supernova end game of the global credit bubble there is a tremendous first-mover advantage to she who inflates first. And historically, war is a quick way to get a “hot” inflation going—even as some sectors (like housing and some commodities) continue to deflate!
We need a new term for this phenomenon of inflation and deflation occurring simultaneously.
Great big picture review. Note the big increase in the share of federal taxes coming from the payroll tax. That’s was Ronnie Reagan’s great sleight of hand, to raise this regressive (because not capped; it would be fine if it were proportional all the way up) tax while lowering top income tax rates across the board so conservatives can crow that “half of Americans don’t pay any [federal] taxes,” a line that is still repeated as if true by journalists and political whores even today.
Saturday, April 14, 2012
I was telling a hedgie friend of mine a couple of years ago—a market neutral small cap guy—about the incredible track records being racked up by HFT shops—not a down day in a quarter, etc., changing the bid and offer every nanosecond in a dance like snake and mongoose, and he said:
“That’s a tax.”
Which it is—so why not a transactions tax? All the arguments against it are self-serving garbage, IMHO.
See previous post High frequency bloodscukers.
Sunday, April 8, 2012
Beginning first with Alan Greenspan, and then with Ben Bernanke, the Fed has increasingly pursued policies of suppressing interest rates, even driving real interest rates to negative levels after inflation. Combine this with the bursting of two Fed-enabled (if not Fed-induced) bubbles - one in stocks and one in housing, and the over-55 cohort has suffered an assault on its financial security: a difficult trifecta that includes the loss of interest income, the loss of portfolio value, and the loss of home equity. All of these have combined to provoke a delay in retirement plans and a need for these individuals to re-enter the labor force.
In short, what we've observed in the employment figures is not recovery, but desperation. Having starved savers of interest income, and having repeatedly subjected investors to Fed-induced financial bubbles that create volatility without durable returns, the Fed has successfully provoked job growth of the obligatory, low-wage variety. Over the past year, the majority of this growth has been in the 55-and-over cohort, while growth has turned down among other workers. Meanwhile, overall labor force participation continues to fall as discouraged workers leave the labor force entirely, which is the primary reason the unemployment rate has declined. All of this reflects not health, but despair, and explains why real disposable income has grown by only 0.3% over the past year. […]
Regardless of the fact that QE has had no durable economic benefits […], and does little but to repeatedly lay fresh wallpaper over the rotting edifice that is the global banking system, the main effect of QE has been to provide temporary support for the most speculative corners of the financial market after they have been pummeled.