Perry Glasser

Archive for the ‘Political Economy’ Category

TOUGH TARIFFS

In Business, Economics, Economy, Political Economy, ROBERT REICH on March 9, 2018 at 2:15 pm

This is about jobs, real jobs, not service economy jobs, not digital economy jobs, not jobs that require mortgaging one’s life for a fortune in educational debt, but high-paying jobs that can be performed by anyone with a strong back and will.

screwed1

Citizen

Tariffs are one of those simple topics every Citizen should understand but the Powers That Be (PTB) have designed American education to make the topic obscure and seem arcane, the better to screw Citizens.

Dollar$ once again finds himself with his standard disclaimer, declaring that President Donald Trump is a boorish lout, but that another of his economic policies make great sense.  We did not elect a Pope.

Readers who find that distinction difficult are advised to read no further. One can always turn to Professor Robert Reich, the former Secretary of Labor who, like Napoleon on Elba, gazing to the far-off corridors of power he expected to walk with Hillary Clinton, declares himself to be the leader of what he calls The Resistance, which may be an insult to the Free French of WW2 or an homage to the Star Wars futuristic fantasies. Professor Reich, too, longs for a galaxy far, far away and offers all the bias confirmation anyone can stomach.

robert reich

NOT A RESISTANCE FIGHTER

But Dollar$ revels in the here and now among realities.

TARIFFS

Do be sure, a tariff is simply a tax on designated imports, in today’s news the imports in question are steel and aluminum.

Weasel-Republicans reflexively clutch at their hearts and gasp for breath at the word “tax.” What’s this? A Republican president has raised taxes!!! Is he mad???

They clutch at their hearts because the Buccaneers who write the large checks that buy Weasel-Republicans may be displeased. Nothing terrifies a Weasel more than a situation than an ambivalent issue that calls for voting with conscience. They have no conscience—they have opinion polls. When opinion polls are closely divided, Weasels go mute.

buccaneerDevoted to profit and personal enrichment, Buccaneers expect to get what they pay for, especially those Weasel-Republican members of Congress who need their money to run for office and keep them in healthcare for life, periodic international fact-finding junkets, and provides them prestige among the naive.

Gifted with a vision that equates American purpose with their own, many Buccaneers fear tariffs. If their supply chain becomes more expensive, they may make less profit, though Dollar$ readers should by now understand that Buccaneers never pay taxes at all; they pass along taxes price increases.

Price increases are paid by you and me, Citizens.

What, you expected Buccaneers will accept less money? What are you smoking; why don’t you share?

TRUMP’S TARIFF

Start by knowing that in 2016 China produced about 50 percent of the world’s steel. (Figures are from the World Steel Association report of 2017). At the same moment in time, the US, Mexico, and Canada COMBINED, produced less than 10 percent.  The trend over the prior decade was Chinese growth and NAFTA decline.

In real life terms, that means Citizens in Indiana and Pittsburgh no longer have the option of a high-paying job in a steel mill; those jobs are gone to places where labor accepts a fraction of what an American expects hard labor to pay, and, in the case of China is substantially subsidized.

Could it be that the President is fulfilling a campaign promise? America First? Working people’ well-being? Leveling an uneven playing field?

Terrified Weasels, Buccaneers, and professional intellectuals point at retaliatory trade wars.

Yellow Mongoose

This Weasel is really a mongoose in disguise.

Pooh.

The trade balance for years has been negative and growing ever more negative—the US imports far more than it exports. Retaliatory tariffs will, in the end, punish the greater exporter—and that ain’t us.

BOTTOM LINE

Dollar$ says, “It’s about time.”

The same professional intellectuals who bemoan that job creation in America means nothing but burger-flipping need to stand up for working men and women.

 

 

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TREES DON’T GROW TO THE SKY AND OTHER TRUTHS GRANDMA TAUGHT ME

In Business, Economics, FINANCE FOR THE CLUELESS, Personal Finance, Political Economy, Wall Street on February 6, 2018 at 3:42 pm
(modified from a post originally written in 2017)

Simple Truths

  • The stock market neither advances nor retreats–though prices indeed go up and down.
  • For every buyer, there is a seller.
  • When buyers and sellers agree to prices, they set asset values.
  • Buyers buy with the expectation of future profit; sellers sell when they believe continued ownership of an asset constitutes a risk no longer commensurate with possible reward.
  • No one in a free market is under compulsion to sell, buy, or participate at all.
  • Wall Street is neither a battleground for territory, nor  an adversarial contest.
  • It’s a market.

Wizards require small investors to believe that generals understand the battlefield and so deserve your trust and your fees because they otherwise have nothing to sell.

Market Sentiment

After getting into the game by buying 3 to 5 broadly diversified vehicles, you should do nothing. Nada. Nothing at all. In 2017, if you followed that strategy, you made mere 20%. In January of this year, the froth of your beer bubbled up, but the winds of February blew them away.

Throw thyself off no bridges. You are still 20 percent ahead of a year ago.

Since the vast majority of investing operations on Wall Street and the bourses around the world are performed by networked machines that monitor every price tick and move great mountains of capital for millions of worldwide financial vehicles, there is no human sentiment involved. Understand: When you as a small investor get the news of sharp price movement, it is too late to act, unless you think and make decisions at light speed and happen to be a Cray computer.

  • Machines do not agonize over decisions such as Buy, Sell or Hold.
  • Machines have no hearts. Machines do not succumb to sentiment. Machines do not read the newspapers.
  • Machines do not hold on to send their kids to college.
  • Machines do not save pennies to accrue the down payment on a house.

Nevertheless modern Wizards want us to believe market sentiment exists and that they are plugged into that sentiment.

Yeah. Sure. Right. Got it. Roger that.

How do TV Wizards get away with recommending buying or selling new assets every day?

kramer7

Sells perpetual panic and urgency

A Warning

Dollar$ is aware that sharp price moves can be precipitated by events and non-events such as national elections, earthquakes, floods, train wrecks, and planet-killing asteroids. Only that last may have an impact on your buy and hold strategy, and Dollar$ is unsure of that.

If you think the US is going to hell in a handcart, do you also believe that after the crap hits the fan that the money you buried in the backyard will buy a can of tuna?

This is why reasoned investors await blood on the floor before buying, and unless you are within 5 years of a financial goal–retirement, your kid’s first year of college, that down payment on your house–sit tight, never sell, buy steadily, take advantage of dollar-cost averaging, and sip better whiskey.

  • Buy and hold.
  • Ignore alleged “corrections.”
  • Sleep at night.

(modified from a column originally published in December 201)

THE GOOD NEWS

In Business, Economics, Economy, Political Economy, ROBERT REICH, SOCIAL MEDIA, TAXES on January 6, 2018 at 1:10 pm

SOCIAL MEDIA STARS -TWOFER

Dollar$ like to imagine the column is the counterpoint to the tsunami of illogic and disinformation that rises in the far off muddled oceans and then inundates us all. Good news rarely makes it into major media. Social media is more iffy, but the War for Clicks devolves into imagery of Fluffy the Cat or Adolph Hitler because as long as there is no middle ground, panic, disgust, and self-pity rules the day.

Good News

  • Though legions of the self-righteous were quick to announce they had to leave the country because of The Orange One’s election, they are still here. Yes, that is good news. This is America, and in America when an election result does not confirm your convictions you are obliged to learn something and, if so inclined, try again. (Go Joe!  Joe Biden that is.)
  • Urban murder rates in the US are the lowest they have been since 1990. That’s hard to notice on the Left where shrill accusations of American racism serve as a touchpoint for activism no matter how distant the cry lies from Truth.
  • The stock market is at an all-time high. Again, the Left wants you to believe that lives are being crushed by corporate America when, in fact, more than half of all American workers have 401-k accounts whose returns have been staggering in the past 2 years. Will there be a correction?  Of course. So what? Stay the course; grow rich sloooooowly.
  • Unemployment rates are so low that wages are rising. If employers want hands, eyes, or brains, they have to bid for them. Cynics question the motives of organizations that have perceived the 2018 tax cut as an occasion to raise minimum wage and to give low-level workers raises.   No one, however, has yet demanded that workers scorn the new money in their wallets. Dollar$ suggests the true cause is a worldwide growing economy.
  • Your take-home pay starting in February will be higher. If you are on salary, You get to keep more or what you earn. Robert Reich* and other progressives who lack a program beyond, “I’m against it!”  are at pains to remind us that this is really a profound plot to transfer wealth from your pocket to the pockets of the rich. Dollar$, however, suggests you buy a better Pinot. Should the tax law need to be adjusted, it will be. After all, if tax law were shaped in brittle concrete, how did it get changed this year?

* Professor Reich continues to redefine chutzpah by not only telling citizens his work is vital to the program-free Resistance, but by asking us to pay to see that vital message on Netflix. This is akin to expecting members of the maquis before they were strangled with piano wire to have passed a hat to continue their vital anti-Nazi work and expecting the SS to look on benignly before beginning any torture.
All right, maybe they’d pass a beret.

BITCOIN IN WONDERLAND

In Business, Economics, EDUCATION, Finance, Personal Finance, Political Economy, Wall Street, Wall Street Journal on December 22, 2017 at 2:52 pm

“Curiouser and curiouser!’ cried Alice (she was so much surprised, that for the moment she quite forgot how to speak good English); ‘now I’m opening out like the largest telescope that ever was!”

Bitcoin Speculator

Bitcoin Speculator

Whenever Dollar$ believes the Bitcoin mania is safely dead, someone nibbles a few crumbs of Bitcoin Cake and we hauled back to Looking Glass Land where mad creatures believe strongly that “Jam yesterday, and jam tomorrow, but never jam today,” is an economic promise and not an explanation the White Queen offers Alice.

The Queen said. ‘The rule is, jam to-morrow and jam yesterday – but never jam to-day.’
‘It MUST come sometimes to “jam to-day,”‘ Alice objected.
‘No, it can’t,’ said the Queen. ‘It’s jam every OTHER day: to-day isn’t any OTHER day, you know.’

Beware of strange substances that are labeled Eat Me.

A Silicon Valley startup called Xapo is the White Queen of BitcoinLand.

If you think gains like these are sustainable or represent some sort of value, you must have been eating Alice’s cakes. Maybe you’ve got some of that jam from yesterday. You might also wish to contact Dollar$ who just happens to have shares in the Brooklyn Bridge he can be persuaded to sell to you, a once in a lifetime opportunity.

BTC-2010-lin

 

Xapo is headquartered in Hong Kong, safely away from pesky US regulatory agencies. Sure, they’ve got offices in California, but so does every other financial firm in the world. The Board of Directors boasts former bankers from Argentina and Brazil, not exactly world beaters for stable currencies.

Magic Beans

The bitcoin business proposition is like the story Jack and the Beanstalk. (When it comes to bitcoins, metaphors from fantasy and fairytales are unavoidable.) Give us your real cow, and we will give you magic beans! Overnight they will grow to the sky! When you get up there, you’ll probably encounter a voracious giant ! To survive the giant, you’ll need to be a thief and run like Hell! All you need is the heart of a thief!

The Xapo Proposition

Xapo claims to have constructed physical vaults, “the company says are in mountainous regions.” There are no physical coins, of course. What will be down there will be computers Xapo promises will never be connected to the Internet–you know, like your laptop with no wifi.  If so, that means an army of people doing data entry on a army of disconnected laptops, in mountainous regions that cannot be approached easily. The mountain locations are, naturally, top secret.

If this does not strike you as the premise of a James Bond plot to bring down the world currency markets, what does?

goldeneye_oddjob007_reloade

Bitcoin Security

Liquidity

The bottomless credulity of the cyber-community originates with vitamin deficiencies caused by a steady diet of cold pizza and Red Bull for breakfast, watching Goldfinger too many times, the conviction being that one can get rich without ever getting out of a chair, if armed with an unshakeable libertarian belief that the arms merchants, sex traffickers, and drug dealers MUST have an untraceable non-government issued currency for money laundering.

Bitcoin Banker

Bitcoin Banker

 

TAXE$ AND COMMON CENT$

In Business, Economics, Economy, Finance, Personal Finance, Political Economy, Politics, TAXES on December 21, 2017 at 4:24 pm
bert-lahr-imdb-630x459

SCHOLAR OF THE SUBJUNCTIVE

Dollar$ resents and excoriates finance writers who write in the subjunctive mood. For readers who stopped paying attention to their English teachers in the 8th grade, that means a statement that is conditional. Correctly constructed, the sentiment expresses and a condition that is either not yet true, will never be true, or the speaker wishes were true followed by an outcome that is also not true.

 

If this be treason, make the most of it! – Patrick Henry

In our times, the greatest use of the subjunctive mood is for Romance, handy for lovers unwilling to commit but nevertheless compelled to express what resides in their hearts. Is there a better love song than If I Loved You?

Many speakers flummox the niceties of this important use of mood, and while it is not Dollar$ purpose today to deliver a grammar lesson, he earnestly hopes readers will be afflicted with the dry heaves should they come across ersatz prophets who preserve deniability and protect their alleged expertise by abusing the subjunctive mood. Yes, the stock market may go up, a bold prediction that allows deniability. It may also go down. Dollar$ also notes in passing that Patrick Henry was not speaking archaic English when he addressed the Virginia House of Burgesses, but was properly employing the subjunctive mood of the verb to be. If you still don’t get it, consider that the Cowardly Lion of Oz fame sings “If I were King of the Forest.” Now you know why Bert Lahr never sang was.

THE 2017 TAX BILL

chicken-little-sky-is-falling-1a

SOCIAL MEDIA EXPERT

Dollar$ has until now said zero about the proposed tax bill because it was proposed. Details were open to negotiation. That, however, did not prevent the doyens of social media to claim the sky was falling and suggest that passage of the tax bill would end civilization as we know it.

FACTS IS FACTS

The corporate tax rate has dropped from 35% to 21%. Lest you read Robert Reich, the former Secretary of Labor so startled he is not advising Hillary Clinton in the White House that he has taken to Facebook to lead “The Resistance,” let’s note that despite Professor Reich this tax cut is does not pick the pockets of the poor to give money to the rich. After all, 35% of nothing remains nothing, not coincidentally the amount of taxes paid by Apple Computer and many other multinational American-based companies that have disincentives to bring their profits back to American shores.  The new tax law is a hope to repatriate funds, an overdue program first called for by John F. Kennedy. Short version: US corporate taxes now align with the rest of the industrialized world.

Apple and other corporations can bring billions back to our shores and suffer no financial penalty for doing so. The Tax Policy Center noted in 2014, “Despite its relatively high corporate tax rate, the United States raises slightly less revenue from corporate income taxes as a share of GDP than the average of other countries.”

TRICKLING.4.19.1-figure2_0
Facebook economists who took time from photographing their cats and their breakfast (or cats having breakfast) have been told repeatedly that Trickle-Down Economics does not trickle.  Dollar$, however, notes that several organizations have as of this morning announced raises for line workers and hikes in their minimum wage. Dollar$ is certain those responses are due to more than a rosy picture of future profits precipitated by a tax cut. Fact is, labor is getting scarce; like other valued assets, if you want to keep trained and skilled workers, you have to pay for them. That’s how markets work.

The Koch brothers may have a social agenda, but Facebook economists smugly predicting that the new tax codes will so reduce revenue that Social Security and Medicare will have to be sharply reduced may want to note that neither of those programs is funded out of general revenues but from separate trusts funds. That’s why your annual pay stub has separate boxes for Medicare and Social Security, Binky. They ain’t general revenues. Dollar$ bids good luck to any weasel who lays a hand on those monies, but since the first rule of weasel life is to remain a weasel, Dollar$ is losing no sleep over that possibility.

Similar dire predictions about how the poor will suffer because so many itemized deductions are now disallowed stagger Dollar$ for the hypocrisy or ignorance of how taxes work.

Itemized deductions are

  • also known as loopholes
  • seldom used by citizen taxpayers who do not own a home

LITTLE OLD LADY WHO LIVED IN A SHOE

woman-livedinashoe

TAX PLAN BENEFICIARY

The Little Old Lady who lived in a Shoe had so many children she did not know what to do will, if she itemizes, will get $2,000 per kid where she used to get $1,000. Unless her shoe is worth more than $750,000, her mortgage interest will remain a deduction. Chances are, however, since more than 60% of all taxpayers already use the Standard Deduction, the Little Old Lady will avail herself of that tax simplification because the SD has near doubled. That is, should she choose to itemize, she’d be a damned fool to do so unless he has more than $24,000 in deductions, something highly unlikely for any who works for wages.Look, that redoubtable working family never paid taxes anyway, and at year’s end looked forward to cashing a tax refund check, the sum of all that withholding tax. Under the new tax plan, her refund will indeed be less because week to week and month to month the Fed will be withholding less of her money. Maybe she can build an addition on the shoe, a playroom in the heel, perhaps.

If any of her kids are planning college, despite the dire warnings of Facebook economists, the deductibility of tuition remains untouched.

So do her medical costs above a certain level—the same as the way things are now.

FLIES IN THE OINTMENT

Okay, Dollar$, a few of you still awake might ask what happens by 2028? Don’t these individual tax breaks phase out? That’s when we’ll be screwed, right?

Dollar$ asks the professional pessimists where it is written that a Congress controlled by Democrats in, say 2024, can’t tweak or change tax law? We change appropriations annually (it’s called a budget).

That is to say, Binky, if you think it is in your best interest, vote your convictions, but stop screaming like Chicken Little. Dollar$, you pestiferous fool, this tax law will raise the deficit!! We are going to hell in a handcart!” (Be careful though, you may start to sound like a Republican advocating fiscal responsibility.)

We have for a decade endured GDP growth in the 2% range, and we hunger for greater. Three percent is not unreasonable; up around 4% you can get a nosebleed and bet we are losing ground to inflation. But should the economy grow more quickly than it has, the deficit goes down. Bill Clinton demonstrated that by riding out Ronald Reagan’s tax cuts.

A country near 100% employment can afford a few risks, and if for a few years we put money in the hands of citizens, should we sweat it?

 

 

$$$

ZERO-SUM TAX POLICY

In Business, Economics, Economy, Political Economy, Politics, TAXES on December 12, 2017 at 12:52 pm

Five players sit down to play cards, poker for example. Each brings $100 to the table, and because of a peculiar tradition of the Dollar$ Casino, no player is allowed to introduce additional money into the game. If one player has sufficient skill, after some time that player will have $500 and the other four players will have $0.

That’s a zero-sum game.

In the social realm, that’s another way of saying that no player can be allowed to accrue more wealth without a second player becoming poorer.

This is assuredly NOT how the economy works, nor can it be the basis of Tax Policy. Perhaps for the simple-minded who find their checkbook to be an overwhelming problem in higher math, but let’s hope that political and economic policy are not tailored for the least able among us.

THE ZERO-SUM ECONOMY3032348.large

In reality, players in a card game can bring welcome new money to the table by:

  • dipping into a vault where old money has been snoozing,
  • innovating when some whippersnapper creates new
    • logistics (drone delivery, anyone?),
    • desirable products (cats do love their roomba rides),
    • organizational efficiencies that squeeze every nickel out of every process

On the Left, the “I don’t got it and you do so you must give it up” social justice warriors are out there, demanding that your children have to split up shares of an ever-shrinking pie. On the Right, the tax proposal now undergoing reconciliation between the House and Senate limits Research and Development tax (R&D) credits out of some misguided effort to cast a political illusion of “fairness.”  Fairness in tax policy usually means “the other guy should pay more.”

Dollar$ readers with a lick of sense will see this for what it is—an attempt to disallow new money to be brought into the game. Dollar$ is no champion of trickle-down economics, but hopes we can all acknowledge that faith in the future is not blind faith, but a realistic assessment of economic history. If it were not, Malthus would have been right and we’d all have become cannibals by now.

AN OBJECT LESSON

Twenty years ago, the world was supposed to be out of oil by now. Petroleum cartels (OPEC) were supposed to have sucked up all the money in the world. An entire genre of popular films was developed depicting a desert world where fuel was so scarce that warlords took women, water, and weapons based on how much fuel they could steal. Mad Max was a nightmare born of shortages and the lurid fantasies of adolescent boys.

If tax policy had been based on that scenario, and gasoline taxed to conserve an ever-diminishing resource, the cost of gasoline would today be sky-high instead of the roughly adjusted for inflation stable price of the past 25 years – the sole exception being those years when OPEC states manipulated prices by manipulating supply under the false impression that no innovation could ever occur—which it did.

OPEC’s hold on the world economy was busted by hybrid cars and oil from shale extraction coupled with the discovery of 80% of the world’s accessible shale in the United States. It may not be clean and it may not be pretty, but after the picketing is done, you can be sure some whippersnapper will find a way to make it prettier and cleaner.

THE R&D TAX CREDIT

Let’s keep the whippersnappers in business!

 

 

 

 

WHINING – A HOW-TO FOR MILLENNIALS

In Business, Economy, Political Economy, Politics on December 9, 2017 at 2:26 pm

One of the more frequent themes Dollar$ reads on social media is the ongoing complaint that the generation born between 1945 and 1970, those rotten Baby Boomers, are a bunch of louts who deliberately loused up the economy for everyone who came after them. Selfishness is something you develop by smoking weed through a bhang and

HENDRIX

SELFISH BABY BOOMER

listening to Jimi Hendrix. If they would all only die, housing would be cheap and jobs would open, easy, high-paying jobs with benefits that require no experience.

This theory explains why that kid who lives in your basement on a three-legged couch incessantly watches pornography on his cellphone. All the jobs out there are soul-sucking crushes, fruitless and stupid wastes of time. Even looking for that job is a waste of time. Fixing the couch isn’t worth the trouble, either. Glue? Nails? It’s all too complicated.

Facts

Facts only obstruct a good theory, but Dollar$ is not yet of the party that deems feelings should be the basis of policy because facts are no more than the legacy of the dying culture called Western Civilization, but our hearts never err and can only lead us to a better world. As Donald Trump and deconstructionist professors have taught us, facts are relative.

However, some facts are numbers.

  • In November 2017, the US economy created 228,000 new jobs
  • The jobless rate for non-high school graduates is 5.2%
  • The jobless rate for the overall US economy is 4.1%, the lowest it has been since the dot-com bubble burst in 2000.
  • After years of lackluster growth of 2%, the economy is now growing at nearly 3%, a pace that means business expansion will require ever more new employees and—gasp—will need to pay entry-level employees well to compete for their heads and hands.
(figures from The Wall Street Journal, Dec 9, 2017)

By the way, Dollar$ also notes that the economic expansion these figures suggest is worldwide. The stock market is soaring because that confidence in the future is shared most everywhere. If Finance Buccaneers don’t screw it up by inventing products that have no basis in reality and then leverage that fantasy 100-fold before selling those vehicles to municipal retirement accounts, regional banks, and other suckers, your BitCoin Futures, for example, we are in for some good years.

Good news upsets ideologues who prefer to complain about their ongoing, constant anxiety even though that anxiety, at least in the economic sphere, is misplaced. Sure, things can go wrong, and eventually will, but the quality of life has never grown in a straight line. When things suck, wait a while. They will turn around. You don’t really need to check under the bed each night.

For example, Robert Reich, the Beserkely professor, former Secretary of Labor, and Facebook columnist, checks under the bed three to four times each day with columns and videos. His trauma at not being reintroduced to the corridors of power when Hillary Clinton failed to be elected must have been acute. Instead of running the world, he is on the sidelines where he generates a tsunami of media whose final point is that whomever is doing whatever, Professor Reich could do it better. He has the time to do this because California pays him in excess of $400,000 per year, requires him to teach no more than one or two classes, pays the salaries of a cadre of graduate students to assist him with his onerous work, collects $40,000 for speaking engagements, and has published a book called Saving Capitalism, which, if Dr. Reich’s situation were typical, would seem to need no saving at all.

At least not for him.

Baby Boomer Failures

  • The safe and cheaply available birth control that makes hook-up culture possible on that basement couch, thus eroding the moral fiber of our culture.
  • The internet that delivers porn directly to the basement couch.
  • The virtual elimination of several diseases, such as polio and smallpox.
  • The virtual elimination of famine because of advances in agriculture and the successful world distribution of crops like winter wheat.
  • The Civil Rights Movement of the 1960s.
  • The Women’s Rights Movement that began again in the 1970s.
  • Passenger jets. How else can a Millennial go backpacking in Nepal before taking residence on the sofa?
  • Cell phones, that device that permits Millennials to snap selfies, cat photos, and up-to-the minute data on any Millennial’s location should they venture from the basement, all forms of narcissism previously never seen on our planet.
  • Digital special effects that bring believable visions of world apocalypse and intergalactic warfare to that cell phone or the game box beside the couch facing the flat screen TV on which HD pornography plays most of the day.
  • The rising preponderance of women in higher education as students, teachers, and administrators.
  • Automobiles that cost more because they are built to new standards of safety, airbags, seatbelts, and the like for passengers who strangely wish to live through collisions. Those doodads are constructed with materials other than steel to keep vehicles lightweight enough to conserve fuel. slow global warming, preserve energy, and keep that basement comfy.

Why are These Failures?

Dollar$ is glad you asked.

The work, you see, is not yet done. Those damn Boomers selfishly left the world imperfect. Some kids may have to get off the couch and build better infrastructure, get us renewable energy sources, find better batteries, silence jet engines, create hologram entertainment, and take the US out of rubber, concrete, and petroleum logistics.

You know, work and innovate.

Effort sucks.

Totally.
download

 

 

 

WEALTH INEQUALITY

In Business, Economics, Economy, EDUCATION, Finance, Political Economy, Politics, TAXES on December 5, 2017 at 10:40 pm

bossy sisterWhenever my big sister played Monopoly, if the game was going against her she would toss the playing board in the air. My hotels and houses would scatter across the living room carpet as she shouted, “Salugi!” (a New York-ism pronounced “suh-LOO-gee”)and lunged across the table to confiscate most of my deeds, especially Boardwalk and Park Place.

When I was able to read the rules of the game, I learned there was no allowance for tossing the game in the air or confiscating my property. My sister was cheating! But since I was 8 and she was 14, she was able to meet my accusation by beating me up.

The History of Wealth Redistribution

My sister was a revolutionary.

To be sure, Dollar$ reminds readers that rebels object to rules, but revolutionaries rewrite them. Rebellions are common; revolutions are rare.

The folks who threw the board in the air in the past have cried, “Justice!” not “Salugi!” They had names like Washington, Lenin, Mao, and Castro.

Note that political persuasion—Left or Right—has nothing to do with revolutionary status. Mao and Washington might have discussed military tactics, but Dollar$ suggests they would have come to no agreement about economic systems or the function of government.

The Function of Governmentpreamble-20532-20120118-55

It’s less complicated than Monopoly.

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Washington (the dude on the $1) believed that the function of government was primarily to protect the rights of the individual, rights that most often needed protection from government itself. If no military personnel have been billeted in your living room, thank Washington.

Washington may have noted that to promote the general welfare required some redistribution of wealth to insure equal opportunity and to insure domestic tranquility, but that does not guarantee equality of status among citizens.

Washington’s pal was the first Secretary of the Treasury, Hamilton (the dude on the $10). Hamilton understood that wealth concentration in institution like banks were a social good, provided the bank used that concentration of wealth to fund the visions of a greater society, lending money to visionaries and giving stability to the economic infrastructure by protecting wealth from being squandered by a ruling class on personal indulgences. Hamilton, an orphan at 11 and the illegitimate son a British West Indies plantation owner, would likely not endorse a notion that the function of government was to protect the rights of the filthy rich to become obscenely rich.

The Situation Today

Some of Dollar$’s best friends sink into fuzzy thinking when talk comes around to how wealth is created and distributed in the United States. They lose sleep fearful that someone, somehow, somewhere, is leveraging assets to optimize profit.  They simple-mindedly believe that economics is a zero-sum game and cannot imagine economic growth. If an organization makes a dollar, someone must be a dollar poorer.

No. That simply is untrue. If it were so, you and I would enjoy the same standard of living as Washington and Hamilton. But the fact is that economies grow.  At issue is how they grow, not whether they should grow at all, though there are indeed some who think that a good idea, too.

The deluded friends of Dollar$ from time to time propose bold programs to redistribute wealth, programs they understand as pursuing Justice.

There two reasons those cannot and should not work.

1. Nowhere in the US Constitution will one find the word corporation. True, we reserve the right to free assembly, but that does not elevate any assembly of citizens devoted to profit a guaranteed right to speak lies in its advertising or compensate its directors and executive officers so rapaciously that shareholders who hope to partake of the boons of the system see their profit participation reduced by rapacious Buccaneers.

Oliver-Wendell-Jr-Holmes-9342405-1-402
Not Sherlock; not Mycroft, just Oliver

2. Oliver Wendell Holmes, Jr. noted Taxes are the price we pay for a civilized society. The idea is carved in stone on the IRS building in DC., but let’s note that corporations do not pay taxes, they collect them.  If you think they do not, you are submitting to a distraction. Dollar$ hastens to explain that citizens are consumers. Tax us, and we bleed money. Bleeding, we consume or save less, neither of which are good things, though it does not follow consumers should not be taxed. Civilization is messy, but must be purchased. But to a corporation, taxes are a cost of doing business, like labor, supplies, and logistics.

Raise corporate tax rates, and corporations will only raise their prices.

Guess who pays the difference?

Today’s  Lesson

Remember, friends, we cannot pursue social justice by confiscating wealth. We can, however:

  • Limit executive compensation by law to some multiple of the lowest worker in an organization;
  • Create progressive income tax brackets that limit the shift of American wealth to the rich from the poor;
  • Lower repatriation taxes so that companies that keep their money off-shore are encouraged to bring it home where they can invest in more factories and create jobs here–better to collect 15 percent of something than 30 percent of nothing;
  • Demand that higher education is a matter of national security, and so to insure the blessings of liberty are  free to all;
  • To insure the blessings of liberty on ourselves and our posterity, give tax breaks to organizations that train employees instead of demanding that future employees borrow so much money to gain perceived needed skills that students have no choice except a life of indentured servitude;
  • Regulate publicly traded corporations by disallowing aggregation of profits as cash without paying shareholder dividends, a means to share in that profit. Can we stop the nonsense that hoarding cash is good corporate financial strategy when all it does is spike share prices that are subsequently used to calculate executive performance compensation? (Are you listening Apple Computer?)
  • Return to personal income tax rates that  reflect the needs of our society. Under Eisenhower, we built the interstate highway system and taxed marginal income as much as 92 percent.

We don’t have to throw the game board in the air to start over again: all we need to do is play by the rules.

DEMONIZE THE OTHER GUY

In Business, Finance, Political Economy, Politics, TAXES on December 4, 2017 at 5:50 pm
screwed1

Citizen

Dollar$ sadly notes that social media has reduced American political discourse into rabidly demonizing the other guy. I wish we could say Dollar$ is surprised.

If you dislike the proposed tax bill, it cannot be that in 500+ pages there is not a line or page you admire. If you admire the new tax bill, it cannot be the in 500+ pages there is not a page that is wrong-headed.

Here’s a challenge: call your representative and ask him or her what he or she likes (or dislikes) about the bill. Make them reverse field. Watch them cry.

Real-world logic allows for conversation and (gulp) compromise. Instead, we see Republicans who simply walked away from their responsibilities for the final year of President Obama’s tenure and refused to act on anything at all; we now have Democrats who think what citizens want is for them to do the same, to get even.

You know, like a kid in a school yard with a grudge.

Wake up, ladies and gentlemen who  represent us—none of us voted for you to do that.

Is it any wonder that Congressional approval ratings linger under 15%? Think of it, 6 of 7 Americans think their representatives are a bunch of horses’ asses.

Guess who is getting screwed?

Congress at work.

Congress at work

CONSPIRACY THEORY

In Business, Economics, Economy, Finance, Political Economy, Politics, Wall Street on February 12, 2016 at 1:09 pm
Janet Yellen

Wizard-in-Chief

Dollar$, always eager to explain the inexplicable world of Finance, that realm in which Wall Street Wizards and Corporate Buccaneers run rampant in their never-ending struggle to own, pervert, master, and control Political Weasels, has developed a theory.

 

Why should Plain Money Talk  be any different from every other blog?

 FACTS

2015 saw:

  • unemployment drop to new lows,
  • minimum wage adjusted up,
  • auto sales rise to recent highs,
  • home sales rise to recent highs with no speculative bubble,
  • the cost of gasoline and heating oil sink to new lows,
  • the United States become an oil exporter.

The Fed is so concerned at all this good news that Janet Yellen has begun to tighte credit, a tactic employed to throttle growth and forestall inflation. Yes, the Wizard-in-Chief, Janet Yellen, is worried things are too good.

Some apologist is sure to point out that the second largest economy in the world, China, is hurting. Dollar$ will give that point of view some quick attention.

CHINA

China’s weakening economy should mean the cost of living in the US will drop, meaning you and I will have more money in our pockets to pay off debt or buy more stuff, everything from furniture to T-shirts at Wal-Mart. The US – China trade balance is heavily weighted toward China—the US imports far more goods from China than China imports from the US. If those good become less expensive, the American consumer benefits. This does NOT harm American business.  Maintaining profit margins at lower prices is easy to do. The cost of commodities the world over is dropping because of the slowdown in Chinese demand. Commodities are the stuff that comes out of the ground from tin to lumber and to gold, the stuff from which everything else is made. Everything should be getting cheaper. Every time Wizards predict that Apple will stop selling iPhones in Shanghai, Apple sells another few million units, but at a lesser price. With inexpensive gasoline, Citizens will be driving  to Disneyworld this year, and they will be able to afford the Mouse’s uptick in prices.

This phenomenon confounds the Wizards., who have learned that bad predictions are clickbait, and clicks drive revenues. No one watches CNN until the shit hits the fan and the shelter under the table grows crowded and cramped.

In the face of positive economic news, the US stock market should be soaring. Instead, the Dow-Jones average has stepped off a cliff in 2016, shedding 2,000 points in 8 weeks, more than a trillion dollars worth of value has been erased from the books.

THE CONSPIRACY

Cui bono?

For the past 30 years,  at every presidential election, commentators complained of the choice between Tweedledee and Tweedledum. But this year, it ain’t so.

weasel candidates in days of yore.

US Presidential Candidates Since 1964

 

This year, on the one hand, we have a wealthy, self-funded foul-mouthed injudicious narcissist celebrity never elected to anything anywhere who is much favored by people who have felt disenfranchised for a generation. On the other hand, we have a New York Jew now from Vermont who has never accepted a dime from Buccaneers or Wizards. An older man, his followers are youth because he demands payback from the banks and companies who were too big to fail and in the past 20 years have sucked the economy dry, indenturing students with education debt. On the third hand, we have a woman who is indebted to the old politics, and on the fourth hand, we have a clown car of interchangeable Republicans who lacking economic issues promise to disallow what your neighbors do in their bedrooms while coyly ignoring that for those promises to be fulfilled they will have to rollback several Supreme Court decisions by what by any account has been a conservative court.

Dollar$ sees the common threat. The two leading candidates are not in thrall to Wizard or Buccaneers. Should either get elected, the summer house in the Hamptons, the private jet, and the 10-room Manhattan  condo are all in jeopardy.

How to dissuade Citizens from voting for either?

Scare the piss out of them. Scare the piss out of them by manipulating stock prices downward. It’s only temporary, and it’s not as tricky as it sounds.

  • Claim good news is bad.
  • Threaten us with defunded pensions, evaporating college savings, and the elimination of savings toward the American Dream, a house.
  • Imply that unless Citizens vote the status quo and allow rapacious policies to continue, grass will grow on Main Street as economic activity collapses.

The stock markets should be soaring, but never forget that 90 percent of all trading is electronic and that computer algorithms engage in a global battle to take advantage of a quarter point’s worth of arbitrage. There is no longer any such thing as investor sentiment. As they now say in Wizard country, My algorithm can beat up your algorithm!

Fear is the most potent means of keeping the harridans out of the White House. Without the creation of synthetic Terror, Weasel Business As Usual will come to a halt.

O the horror!