Bank of America has dropped it's plan to start a new $5 fee on debit cards. There were many things which mitigated this like for example the petition started by Molly Katchpole on Change.org that gathered 200,000 signatures.
http://news.change.org/stories/score-one-for-a-customer-rebellion/?alert_id=AKzGhdjypX_QRLoYCAmdv&utm_source=action_alert&utm_medium=email
When all the other banks decided not to inmpose fees of their own this really hurt BAC's position as the one thing they don't want is to be out on a limb on this as the only bank imposing the fee. The work, however of the 22 year old Ms. Katchpole, however, can not be overstated.
After Bank of America installs it's new $5 debit card fee on September 29, Molly creates her petition the very next day and within 5 days already has 150,000 signatures. By October 5 the petition has become a national news story. ABC News interviews Molly, then forces BAC CEO Brian Moynihan to respond to it.
On October 6 she delivers 153,000 signatures to Bank of America and closes her account. She is featured in the NY Times and it discussed in a Charlotte newspaper whether this could lead to the firing of Moynihan.
On October 10 "Bank of America executive Andrew Plepler calls Molly Katchpole to discuss her petition."
On the 13, "Molly meets with Congressman Brad Miller to discuss a bill in Congress to make it easier to switch banks. The two later appear on CNN together."
On October 26, Moynihan peevishly declares that he's "outraged" at the criticism of the fees but the next day JP Morgan and Well Fargo announce they will stop testing their own $3 fees. As of now, yesterday her petition cleared 300,000 and they continue to demand that BAC end it's fee for all their customers.
This shows the influence a determined citizen can have as well as what change.org can do. While I celebrate Molly's success I can't help but ask that those who have yet to demand that Andrew Breitbart be indicted, seeing as we have first hand proof that these petitions work.
So please, sign to indcit Breitbart today-we only need 84 more signatures. http://www.change.org/petitions/mike-l-sax-indict-andrew-breitbart
Monday, October 31, 2011
Keynes' General Theory
If you haven't yet read Keynes's General Theory of Employment, Interest, and Money, I highly recommend it for you. Some books really do live up to the hype.
This is actually my second time reading it but I understand it a lot better this time as I have been delving a lot into economics lately. In reading it I keep in mind James Galbraith's point that the claim that Friedman somehow laid a serious blow to Keynesianism at that 1968 academic conference is something of an urban myth.
He is supposed to have disproved the Phillip's Curve which threw the Keynesian into a terrible dissonance and quandary. Yet Galbraith argues quite persuasively that Keynesians should never have accepted the Phillip's Curve in the first place.
And he has a point: that what does it really do for Keynesianism? Really nothing. If anything it's a strait jacket as it claims that there's this trade off between inflation and unemployment. Even the great New Economic Keynesians of the Kennedy Administration had bought this hook, line and sinker. They just figured that if that's the case then we should accept a little higher inflation. When Friedman got an Administration who offered him an ear to talk into-Nixon's-, Fed policy was revamped towards preferring unemployment to inflation which was the opposite of the NEP Keynesians .
Yet why accept that there is any trade off? Certainly there is no historical data that proves it at all. Even with the sneering term that the conservatives got to coin in the 70s-stagflation-this ignores that "stagflation" discredits the idea that inflation and employment rise and fall together.
What is particularly interesting in what I've read in Keynes so far is that according to him there is a big difference between the stimulus of a government funded project and a boom that comes from private investment firms. The conservative Republican argument is that you can have one or the other-government stimulus or private investment boom in capital-the former "crowds out" the former. Yet Keynes seems to be suggesting that in point of fact in a deep recession or depression the multiplier from a government stimulus will be felt much faster than a private investment boom- a large part of the effectiveness of the latter is to what extent it is not expected. If it isn't it's much less effective.
This is actually my second time reading it but I understand it a lot better this time as I have been delving a lot into economics lately. In reading it I keep in mind James Galbraith's point that the claim that Friedman somehow laid a serious blow to Keynesianism at that 1968 academic conference is something of an urban myth.
He is supposed to have disproved the Phillip's Curve which threw the Keynesian into a terrible dissonance and quandary. Yet Galbraith argues quite persuasively that Keynesians should never have accepted the Phillip's Curve in the first place.
And he has a point: that what does it really do for Keynesianism? Really nothing. If anything it's a strait jacket as it claims that there's this trade off between inflation and unemployment. Even the great New Economic Keynesians of the Kennedy Administration had bought this hook, line and sinker. They just figured that if that's the case then we should accept a little higher inflation. When Friedman got an Administration who offered him an ear to talk into-Nixon's-, Fed policy was revamped towards preferring unemployment to inflation which was the opposite of the NEP Keynesians .
Yet why accept that there is any trade off? Certainly there is no historical data that proves it at all. Even with the sneering term that the conservatives got to coin in the 70s-stagflation-this ignores that "stagflation" discredits the idea that inflation and employment rise and fall together.
What is particularly interesting in what I've read in Keynes so far is that according to him there is a big difference between the stimulus of a government funded project and a boom that comes from private investment firms. The conservative Republican argument is that you can have one or the other-government stimulus or private investment boom in capital-the former "crowds out" the former. Yet Keynes seems to be suggesting that in point of fact in a deep recession or depression the multiplier from a government stimulus will be felt much faster than a private investment boom- a large part of the effectiveness of the latter is to what extent it is not expected. If it isn't it's much less effective.
Why Herman Cain Leads the GOP Field: The Clarence Thomas Factor?
He's the Right wing dream candidate. He wants to cut taxes for the top .01 percent-not the top 1 percent-while at the same time raising taxes for everybody else, he wants to cut Social Security, and he doesn't believe that we have any right to civil liberties or at least those of us who are Muslims.
Now there's something else for the Right wing to gush over. He is accused of sexual harassment women who worked with him back when he ran the National Restaurant Association back in the 1990s. Talk about the trifecta. Regressive tax policies, no civil liberties, and a personal history of being an accused sexual offender. And bear in mind that he talks on and on about how Clarence Thomas is who he most admires.
As the Yahoo headline puts it, Cain 'denoucnes the charges but doesn't deny it.'
http://news.yahoo.com/cain-denounces-harassment-claims-025800689.html
The charges were made in a Politico article which admittedly doesn't provide all the specifics. However Cain's response to the report is interesting.
"It is difficult to assess the potentially damaging allegations, as the article relies on unnamed sources, does not identify the women, and does not detail what is said to have happened. But the piece does say that the women received financial settlements in the five-figure range in leaving the trade group."
Asked for comment Sunday night, Cain’s vice president for communications, J.D. Gordon, responded with a statement titled “Inside the Beltway media attacks Cain."
He added: “Dredging up thinly sourced allegations stemming from Mr. Cain’s tenure as the chief executive officer at the National Restaurant Association in the 1990s, political trade press are now casting aspersions on his character and spreading rumors that never stood up to the facts.”
Despite Gordon’s characterization of the “political trade press” assailing his boss, what is at issue here is a single report in Politico—one whose allegations Cain has declined to flatly deny.
Politico says that “the women complained of sexually suggestive behavior by Cain that made them angry and uncomfortable” and that they later signed agreements barring them from talking about their departures. There were “conversations allegedly filled with innuendo or personal questions of a sexually suggestive nature,” the report says, as well as “descriptions of physical gestures that were not overtly sexual but that made women who experienced or witnessed them uncomfortable.” An unnamed source cited by Politico says one of the women cited “an unwanted sexual advance” by Cain at a hotel where an event was being held.
If this is a media hit job, Mr. Cain would do a lot towards establishing this by simply denying it. As he seems more interested in denouncing the messenger than denying the message there's no reason the story should go away.
Now there's something else for the Right wing to gush over. He is accused of sexual harassment women who worked with him back when he ran the National Restaurant Association back in the 1990s. Talk about the trifecta. Regressive tax policies, no civil liberties, and a personal history of being an accused sexual offender. And bear in mind that he talks on and on about how Clarence Thomas is who he most admires.
As the Yahoo headline puts it, Cain 'denoucnes the charges but doesn't deny it.'
http://news.yahoo.com/cain-denounces-harassment-claims-025800689.html
The charges were made in a Politico article which admittedly doesn't provide all the specifics. However Cain's response to the report is interesting.
"It is difficult to assess the potentially damaging allegations, as the article relies on unnamed sources, does not identify the women, and does not detail what is said to have happened. But the piece does say that the women received financial settlements in the five-figure range in leaving the trade group."
Asked for comment Sunday night, Cain’s vice president for communications, J.D. Gordon, responded with a statement titled “Inside the Beltway media attacks Cain."
He added: “Dredging up thinly sourced allegations stemming from Mr. Cain’s tenure as the chief executive officer at the National Restaurant Association in the 1990s, political trade press are now casting aspersions on his character and spreading rumors that never stood up to the facts.”
Despite Gordon’s characterization of the “political trade press” assailing his boss, what is at issue here is a single report in Politico—one whose allegations Cain has declined to flatly deny.
Politico says that “the women complained of sexually suggestive behavior by Cain that made them angry and uncomfortable” and that they later signed agreements barring them from talking about their departures. There were “conversations allegedly filled with innuendo or personal questions of a sexually suggestive nature,” the report says, as well as “descriptions of physical gestures that were not overtly sexual but that made women who experienced or witnessed them uncomfortable.” An unnamed source cited by Politico says one of the women cited “an unwanted sexual advance” by Cain at a hotel where an event was being held.
If this is a media hit job, Mr. Cain would do a lot towards establishing this by simply denying it. As he seems more interested in denouncing the messenger than denying the message there's no reason the story should go away.
Giants are Not a First Half Team
This is becoming clearer every week. However they are a second half team. The Giants, who won an important game yesterday against the winless but feisty Miami Dolphins, are now 5-2 on the season; if the team that scored first always won in the NFL they'd be 0-7.
Yesterday, again they fell behind the Dolphins 14-3. In the early going it seemed too reminiscent of the Seattle loss for comfort-here we were again with the Jints facing a team that couldn't beat anyone all year suddenly looking like world beaters against the G-Men. Still it was all according to the script. They had Miami right where they wanted them just like it went in the Buffalo win, the Arizona win, even the Rams had a 6-0 lead in the first half in Week 2 before the Giants stormed back for a 28-16 win.
Watching the game even during the first half where they seemed not to be able to contain Moore who suddenly looked like Michael Vick, they seemed find as Justin Tuck, whose welcome return to the NFL's best pass rush yesterday said, "I felt that we were going to straighten it out."
It did feel that way. I did expect them to rally from the late first half 14-3 deficit and they did winning at the end 20-17 And yet again, Eli had a great day completing 31 of 45 passes for 349 yards, 2 TDs and no picks. You Eli bashers should keep in mind that through 7 games he has 13 TDs and only 5 Ints. At this rate he is on schedule for another 30 TDs as he had last year, but unlike last year's career high 25 picks he is more than doubling up on his TDs to INT ratio. He is also at present on the way to shattering his career high in yards-while he had just over 4000 the last few years for the first time in his career, at this point he is pushing 4800.
Even without Burress, he has three great targets to throw it to with Victor Cruz, Hakeem Nicks, and Mario Manningham.
With the return of Tuck things are going to get even worse for opposing quarterbacks and their offensive lines. As Tuck observes though, they will have to continually make adjustments, "As we go through the year and get more and more sacks, teams are going to do something to ease that pressure off, whether it's screens, draws or quarterback draws. We have to adjust." With 5 sacks of Moore yesterday, the G-Men now lead the league with 26.
About the only thing they can't seem to do is run the ball-or stop the run. In this they are an unusual Giants team, though not surprising as Eli and company keep getting better. You do feel that you want more balance, yet who knows? While on any given week most of the teams in the winner's circle have the most rushing yards these are just stats and there are always exceptions. When you think of it two of the top teams in the NFL-maybe the best even with New England's loss to Pittsburgh yesterday-are the Pats and Packers neither of which are know for a strong running game, though the Packers in particular do have a very strong game defending the run. The Giants have been uncharacteristically weak on both sides of the run game, yesterday being another case in point as they were outgained by Miami 145-58. Yet edges like this are supposed to be the stuff of winning football games but the Giants yet again buck the trend.
Yesterday, again they fell behind the Dolphins 14-3. In the early going it seemed too reminiscent of the Seattle loss for comfort-here we were again with the Jints facing a team that couldn't beat anyone all year suddenly looking like world beaters against the G-Men. Still it was all according to the script. They had Miami right where they wanted them just like it went in the Buffalo win, the Arizona win, even the Rams had a 6-0 lead in the first half in Week 2 before the Giants stormed back for a 28-16 win.
Watching the game even during the first half where they seemed not to be able to contain Moore who suddenly looked like Michael Vick, they seemed find as Justin Tuck, whose welcome return to the NFL's best pass rush yesterday said, "I felt that we were going to straighten it out."
It did feel that way. I did expect them to rally from the late first half 14-3 deficit and they did winning at the end 20-17 And yet again, Eli had a great day completing 31 of 45 passes for 349 yards, 2 TDs and no picks. You Eli bashers should keep in mind that through 7 games he has 13 TDs and only 5 Ints. At this rate he is on schedule for another 30 TDs as he had last year, but unlike last year's career high 25 picks he is more than doubling up on his TDs to INT ratio. He is also at present on the way to shattering his career high in yards-while he had just over 4000 the last few years for the first time in his career, at this point he is pushing 4800.
Even without Burress, he has three great targets to throw it to with Victor Cruz, Hakeem Nicks, and Mario Manningham.
With the return of Tuck things are going to get even worse for opposing quarterbacks and their offensive lines. As Tuck observes though, they will have to continually make adjustments, "As we go through the year and get more and more sacks, teams are going to do something to ease that pressure off, whether it's screens, draws or quarterback draws. We have to adjust." With 5 sacks of Moore yesterday, the G-Men now lead the league with 26.
About the only thing they can't seem to do is run the ball-or stop the run. In this they are an unusual Giants team, though not surprising as Eli and company keep getting better. You do feel that you want more balance, yet who knows? While on any given week most of the teams in the winner's circle have the most rushing yards these are just stats and there are always exceptions. When you think of it two of the top teams in the NFL-maybe the best even with New England's loss to Pittsburgh yesterday-are the Pats and Packers neither of which are know for a strong running game, though the Packers in particular do have a very strong game defending the run. The Giants have been uncharacteristically weak on both sides of the run game, yesterday being another case in point as they were outgained by Miami 145-58. Yet edges like this are supposed to be the stuff of winning football games but the Giants yet again buck the trend.
Saturday, October 29, 2011
The Baldwin Public Library: Where the Community Comes Last
I am a regular patron here at the Baldwin Public Library here in Baldwin, New York and I come here because it's a good environment for doing my own thing without distraction. The place is nice and comfortable enough. However what has struck me in the 2 years I have been a regular patron is how unfriendly the reference women are-ok they;'re not all women but they are mostly women- as well as the circulation desk, and for that matter from what I see, the maintenance department. The workplace culture here is for whatever reason very poor much worse than at other libraries in the area.
The reference desk sets a very negative tone. A friend I know who works here-he's a nice guy, so no he doesn't work at reference-told me that they often have meetings where they study from prepared sheets which tell them what to say to patrons in answer to various questions and in response to various situations. To me this says it all. Why do you need a list of likely questions to tell you what to say? Do these folks so totally lack any sense of social instinct or common sense" Evidently, yes. I mean it seems to me it's obvious the way you speak to patrons-basically how you speak to customers at a private business: in a friendly, helpful way. Maybe they should call up Cablevision and talk to a customer service girl to get what they should sound like.
I would love to see these sheets, but judging by their general conduct it seems that the rules they follow is to not smile, be very unapproachable and where possible, lecture adults as if they're children. Act as if the patron is the enemy that you have to keep a close watch on rather than the whole point of your job. Most of all don't ever smile, or be friendly-that's a sign of weakness! Let these patrons know whose boss- you're not their mother! You have better things to do than waste time listening to their tom foolery. There are shelves to be stocked! What these people don't get is that their job is essentially customer service, nothing else. Right now libraries are in trouble and they would be wise to make people want to be here rather than drive them out.
Then there are The Trustees. I capitalize them as they are this big, mysterious entity that no one seems to know anything about but everyone knows they're out there. These trustees seem to have a lot of time on their hands. Otherwise I don't know why they would spend so much time hanging around the library, "undercover" trying to catch people talking or eating or behaving "inappropriately."
The best way to understand the poor way the staff here acts towards patrons is to compare it to other libraries. At Freeport and Rockville Center I have been floored to be actually greeted by a smile and friendly "Hello!" rather than a scowl, or a suspicious stare. After speaking to a reference woman at Rockville Center once I was compelled to tell her that our exchange was a better conversation than I have ever had at Baldwin in 2 years.
I do have some friends among people who work here-of course not in reference. It turns out they are not any nicer to employees than patrons. As a few friends have told me, the library now plans to cut library hours starting in January down. Currently it is open 9-9 5 days a week, 9-5 on Saturdays, and 1-5 on Sundays. Evidently they're going to cut back on a few days-which are not yet known-to close at 6. This is a bad sign because it reminds me of the time I used go to the library in Fitchburg, Mass that was at first a full time library, but within a few years was down to be opened only one and a half days per week.
I fear these cuts are just the start. There's no question that in this age of the Internet, Amazon.com. etc .libraries are largely a relic. The reason I spend so much time there is basically because I don't live alone and I like to spend some quality time here in my PC here on the Internet.
Of course they are now cutting back the hours of employees, particularly the part timers. The PTs at this point feel they need some sort of voice or ability to fight back. The powers that be-ie, The Trustees-have responded to the PTs request for union representation by taking back a small raise which comes to about $.20 cents an hour. This is illegal but who's going to call them on it? The Trustees have now hired a lawyer who they are paying $125 an hour to bust this talk of unionization.
Think about that: they are coming down on PTs because they say they don't have the money to pay them, yet they can afford to spend an extravagant sum on a lawyer, who incidentally has a history of embezzlement. As it is Baldwin Library employees do worse than their counterparts at almost any other library here in Nassau County-the best estimates is they make about 20 percent less. There are people who have worked here for 10 years and make $8 an hour-the wonder of not indexing wages to inflation.
Ultimately the question is who are these Trustees? The library is a NY state institution so how are they able to intercept funds, break the law by cutting raises if the PTs don't cease and desist from forming a union, and hiring expensive lawyers to bust union activity? Figuring who these folks are and whose interests they serve is the first step in this inquiry. What is clear is that whoever they do serve it is not the people of Baldwin.
The reference desk sets a very negative tone. A friend I know who works here-he's a nice guy, so no he doesn't work at reference-told me that they often have meetings where they study from prepared sheets which tell them what to say to patrons in answer to various questions and in response to various situations. To me this says it all. Why do you need a list of likely questions to tell you what to say? Do these folks so totally lack any sense of social instinct or common sense" Evidently, yes. I mean it seems to me it's obvious the way you speak to patrons-basically how you speak to customers at a private business: in a friendly, helpful way. Maybe they should call up Cablevision and talk to a customer service girl to get what they should sound like.
I would love to see these sheets, but judging by their general conduct it seems that the rules they follow is to not smile, be very unapproachable and where possible, lecture adults as if they're children. Act as if the patron is the enemy that you have to keep a close watch on rather than the whole point of your job. Most of all don't ever smile, or be friendly-that's a sign of weakness! Let these patrons know whose boss- you're not their mother! You have better things to do than waste time listening to their tom foolery. There are shelves to be stocked! What these people don't get is that their job is essentially customer service, nothing else. Right now libraries are in trouble and they would be wise to make people want to be here rather than drive them out.
Then there are The Trustees. I capitalize them as they are this big, mysterious entity that no one seems to know anything about but everyone knows they're out there. These trustees seem to have a lot of time on their hands. Otherwise I don't know why they would spend so much time hanging around the library, "undercover" trying to catch people talking or eating or behaving "inappropriately."
The best way to understand the poor way the staff here acts towards patrons is to compare it to other libraries. At Freeport and Rockville Center I have been floored to be actually greeted by a smile and friendly "Hello!" rather than a scowl, or a suspicious stare. After speaking to a reference woman at Rockville Center once I was compelled to tell her that our exchange was a better conversation than I have ever had at Baldwin in 2 years.
I do have some friends among people who work here-of course not in reference. It turns out they are not any nicer to employees than patrons. As a few friends have told me, the library now plans to cut library hours starting in January down. Currently it is open 9-9 5 days a week, 9-5 on Saturdays, and 1-5 on Sundays. Evidently they're going to cut back on a few days-which are not yet known-to close at 6. This is a bad sign because it reminds me of the time I used go to the library in Fitchburg, Mass that was at first a full time library, but within a few years was down to be opened only one and a half days per week.
I fear these cuts are just the start. There's no question that in this age of the Internet, Amazon.com. etc .libraries are largely a relic. The reason I spend so much time there is basically because I don't live alone and I like to spend some quality time here in my PC here on the Internet.
Of course they are now cutting back the hours of employees, particularly the part timers. The PTs at this point feel they need some sort of voice or ability to fight back. The powers that be-ie, The Trustees-have responded to the PTs request for union representation by taking back a small raise which comes to about $.20 cents an hour. This is illegal but who's going to call them on it? The Trustees have now hired a lawyer who they are paying $125 an hour to bust this talk of unionization.
Think about that: they are coming down on PTs because they say they don't have the money to pay them, yet they can afford to spend an extravagant sum on a lawyer, who incidentally has a history of embezzlement. As it is Baldwin Library employees do worse than their counterparts at almost any other library here in Nassau County-the best estimates is they make about 20 percent less. There are people who have worked here for 10 years and make $8 an hour-the wonder of not indexing wages to inflation.
Ultimately the question is who are these Trustees? The library is a NY state institution so how are they able to intercept funds, break the law by cutting raises if the PTs don't cease and desist from forming a union, and hiring expensive lawyers to bust union activity? Figuring who these folks are and whose interests they serve is the first step in this inquiry. What is clear is that whoever they do serve it is not the people of Baldwin.
You Mean Involuntary Unemployment Exists?
I've finished Galbraith's Born Unequal now. It was a good read-I'd say it is good for anyone who is concerned with the decline in American living standards over the last 30 years and wants to know what needs to be done-'What is to be done' as Lenin once asked.
Having finished this I'm now reading Keynes himself, his masterpiece, The General Theory of Employment, Interest and Money. The idea of "General Theory" is contrasted with the old "Classical Theory."
Already on page 6 I had to smile. Keynes contrasts the classical theory as regards unemployment with his new general theory. He notes that for the classical school there are only two types of unemployment-broadly speaking, "frictional" and "voluntary."
Keynes then notes: "The classical postulates do not admit of the third category, which I shall define below as "involuntary unemployment."
After 100 years of classical economics it took a radical like Keynes to suggest that it's possible even in theory that someone could be out of work against their will!
Having finished this I'm now reading Keynes himself, his masterpiece, The General Theory of Employment, Interest and Money. The idea of "General Theory" is contrasted with the old "Classical Theory."
Already on page 6 I had to smile. Keynes contrasts the classical theory as regards unemployment with his new general theory. He notes that for the classical school there are only two types of unemployment-broadly speaking, "frictional" and "voluntary."
Keynes then notes: "The classical postulates do not admit of the third category, which I shall define below as "involuntary unemployment."
After 100 years of classical economics it took a radical like Keynes to suggest that it's possible even in theory that someone could be out of work against their will!
Friday, October 28, 2011
Bank of America Finds itself out on a Limb
With it's latest fees it has imposed on debit cards that is exactly where it finds itself and such a position is very unwelcome for BAC.
It has been argued that more and more, the market for the big banks is becoming like the airlines industry in the sense that while each company may want to nickle and dime it's customers wherever possible yet each are very sensitive to being out on the limb that BAC currently finds itself.
Historically speaking airline fares have come down adjusted for inflation, which is why they are always looking for ways to put fees on new "services"-bag fees, etc. However when an airline introduces a new fee, if it sees that its competitors don't follow suit it usually rescinds it. The last 2 decades in the industry have been characterized by many price wars
The big banks in the environment they've faced recently-fewer loans, etc. have been trying to make up for lost profits by the kind of add-ons typical of the airline industry. However it is likely that sensitivity will be just as acute here as in airlines for being out on the proverbial limb.
Bac has been widely criticized for it's recent decision to add a $5 monthly debit fee by President Obama, Dick Durbin, and many others. For this reason, some of the other banks who had considered their own have backed off leaving BAC with egg on its face:
" It looks like many of the big banks are backing down from threats to raise debit card fees, reports the Wall Street Journal. After Bank of America was pounded over its decision to slap debit card users with a $5 monthly fee, JP Morgan Chase, US Bancorp, Citigroup, PNC Financial Services Group, and KeyCorp have all said they will not be adding such fees—though they say it's not a reaction to the Bank of America mess. "We looked at all options and quickly decided it didn't fit with our overall strategy," says a spokesman for KeyCorp.
http://www.newser.com/story/132040/big-banks-decide-against-debit-card-fees.html
"Chase, which has been testing a $3 monthly fee in Wisconsin and Georgia, will end the practice next month. But Wells Fargo is currently running a test in five states, and SunTrust and Regions Financial are joining Bank of America with a monthly fee—a move that other banks hope will drive new customers their way. "It's not about the money. It's about 'are you kidding me?'" says one US Bancorp customer who said she would have "immediately" left left the bank if it instituted a fee—but now won't have to."
This is an example of what might be called "correct incentivization." But if so, both Obama and Durbin deserve some credit as well for leaning on Bank of America. The effect is similar to what may happen to those 'the unemployed need not apply' ads. Though Obama mainly just criticized it, that may be enough to make many employers reconsider putting things like that in their ads as even without any new law with enforcement power behind it, having the President of the United States criticize you publicly like that is something of a "chilling effect."
Similarly with the banks reversing themselves, Obama and Durbin played a part in that reversal. Still while for now they won't follow BAC in the future they may wait for a time when this has died down and they can do it much more quietly. For now you may even see BAC drop or reduce the fee or offer something.
It has been argued that more and more, the market for the big banks is becoming like the airlines industry in the sense that while each company may want to nickle and dime it's customers wherever possible yet each are very sensitive to being out on the limb that BAC currently finds itself.
Historically speaking airline fares have come down adjusted for inflation, which is why they are always looking for ways to put fees on new "services"-bag fees, etc. However when an airline introduces a new fee, if it sees that its competitors don't follow suit it usually rescinds it. The last 2 decades in the industry have been characterized by many price wars
The big banks in the environment they've faced recently-fewer loans, etc. have been trying to make up for lost profits by the kind of add-ons typical of the airline industry. However it is likely that sensitivity will be just as acute here as in airlines for being out on the proverbial limb.
Bac has been widely criticized for it's recent decision to add a $5 monthly debit fee by President Obama, Dick Durbin, and many others. For this reason, some of the other banks who had considered their own have backed off leaving BAC with egg on its face:
" It looks like many of the big banks are backing down from threats to raise debit card fees, reports the Wall Street Journal. After Bank of America was pounded over its decision to slap debit card users with a $5 monthly fee, JP Morgan Chase, US Bancorp, Citigroup, PNC Financial Services Group, and KeyCorp have all said they will not be adding such fees—though they say it's not a reaction to the Bank of America mess. "We looked at all options and quickly decided it didn't fit with our overall strategy," says a spokesman for KeyCorp.
http://www.newser.com/story/132040/big-banks-decide-against-debit-card-fees.html
"Chase, which has been testing a $3 monthly fee in Wisconsin and Georgia, will end the practice next month. But Wells Fargo is currently running a test in five states, and SunTrust and Regions Financial are joining Bank of America with a monthly fee—a move that other banks hope will drive new customers their way. "It's not about the money. It's about 'are you kidding me?'" says one US Bancorp customer who said she would have "immediately" left left the bank if it instituted a fee—but now won't have to."
This is an example of what might be called "correct incentivization." But if so, both Obama and Durbin deserve some credit as well for leaning on Bank of America. The effect is similar to what may happen to those 'the unemployed need not apply' ads. Though Obama mainly just criticized it, that may be enough to make many employers reconsider putting things like that in their ads as even without any new law with enforcement power behind it, having the President of the United States criticize you publicly like that is something of a "chilling effect."
Similarly with the banks reversing themselves, Obama and Durbin played a part in that reversal. Still while for now they won't follow BAC in the future they may wait for a time when this has died down and they can do it much more quietly. For now you may even see BAC drop or reduce the fee or offer something.
Glen Beck Mocks Shamar Thomas
The title of this could just as easily be 'man of honor mocked by man without honor." Shamar Thomas is a former marine who recently called out NYPD police on video for using excessive force on demonstrators, in a video that ended up on YouTube.
http://thinkprogress.org/
On the video which has been viewed 2.3 million times, Thomas declared "There is no honor in this! This is not a war zone!"
Clearly Thomas, who served in Iraq for 14 months takes his vow to protect and serve Americans seriously.
I don't see how anyone could not respect the stand he took. Except it turns out, Glenn Beck, a man who truly knows no honor:
http://thinkprogress.org/
What is clear is that Beck had the dishonourable motivation to mock a heroic marine, so much so that he didn't watch the whole footage. Thomas wasn't accusing the cops he was speaking to "with their hands in their pockets" of police brutality but speaking to them of previous brutality he had witnessed earlier. A man as dishonourable as Beck shouldn't be trying to make anyone look bad-he looks plenty bad himself.
http://thinkprogress.org/
On the video which has been viewed 2.3 million times, Thomas declared "There is no honor in this! This is not a war zone!"
Clearly Thomas, who served in Iraq for 14 months takes his vow to protect and serve Americans seriously.
I don't see how anyone could not respect the stand he took. Except it turns out, Glenn Beck, a man who truly knows no honor:
BECK: The guy who was like there’s no honor in this, these people are unarmed, there’s no honor in this and I’m watching this [laughing] and I couldn’t take it anymore, because the video shows this Marine yelling [mocking crying voice] stop brutalizing, we’re unarmed! And the cops have their hands in their pockets. [...] They’re like, “We know, we’re standing here.”
CO-HOST: What, you want us to brutalize you, is that what you want? [...]
OTHER CO-HOST: That video taken from the right angle is just one panicked man screaming. As long as you take that picture from one side, it’s pretty dramatic.
http://thinkprogress.org/
What is clear is that Beck had the dishonourable motivation to mock a heroic marine, so much so that he didn't watch the whole footage. Thomas wasn't accusing the cops he was speaking to "with their hands in their pockets" of police brutality but speaking to them of previous brutality he had witnessed earlier. A man as dishonourable as Beck shouldn't be trying to make anyone look bad-he looks plenty bad himself.
Now Hiring: Anyone Want to Be an Executive Producer?
Not even kidding, talking about my radio show at http://planamerica.org/index.jsp
We currently now have a vacancy as my previous executive producer and co-host, Turbo Kitty, is no longer with us as her schedule has changed. Many of you, I know listen, at 1 est everyday. I apologize it hasn't been on the last few days. Right now all that's stopping us from going back on is someone who can produce the show as Kitty did.
All that "producing the show" amounts to is having a server or some other way so that you can broadcast the show over your computer. Your role would be only that. If you chose to, as Kitty did sometimes, to also schmooze a bit with me on air, as I talk about the issues of the day all the better. That part is your choice, you can talk on air as much or as little as you like. Only thing that is essential is that you can broadcast the show from your computer-I can't as I have no server and don't know how to use one anyway.
If you have heard the show, hopefully you enjoy it, and it would be your chance to be part of a fun, progressive show, that is trying to change the conversation in this country at the same time.
At the moment there is no pay in it-for me or you-but I can say that Bob Abston, the guy who makes it all possible-would he be the "General Manager" , I don't know-is good at getting us air time and sponsors. At some point in the future it could pay.
Anyways, if you're interested please let me know, either here in the comments section or at my twitter address @evilsax.
This could be your next big thing! I would love the opportunity to do my part in cutting into that 9.1 percent unemployment rate-LOL!
We currently now have a vacancy as my previous executive producer and co-host, Turbo Kitty, is no longer with us as her schedule has changed. Many of you, I know listen, at 1 est everyday. I apologize it hasn't been on the last few days. Right now all that's stopping us from going back on is someone who can produce the show as Kitty did.
All that "producing the show" amounts to is having a server or some other way so that you can broadcast the show over your computer. Your role would be only that. If you chose to, as Kitty did sometimes, to also schmooze a bit with me on air, as I talk about the issues of the day all the better. That part is your choice, you can talk on air as much or as little as you like. Only thing that is essential is that you can broadcast the show from your computer-I can't as I have no server and don't know how to use one anyway.
If you have heard the show, hopefully you enjoy it, and it would be your chance to be part of a fun, progressive show, that is trying to change the conversation in this country at the same time.
At the moment there is no pay in it-for me or you-but I can say that Bob Abston, the guy who makes it all possible-would he be the "General Manager" , I don't know-is good at getting us air time and sponsors. At some point in the future it could pay.
Anyways, if you're interested please let me know, either here in the comments section or at my twitter address @evilsax.
This could be your next big thing! I would love the opportunity to do my part in cutting into that 9.1 percent unemployment rate-LOL!
Consumer Confidence Rises
A preliminary study at the beginning of the month indicated weakness but here at the end of the month, consumer sentiment rose in October for the second straight month, though concern about their own personal finances remained.
http://www.cnbc.com/id/45075556
"The sentiment index picked up to 60.9 from 59.4 the month before, topping expectations for 58.0 among economists polled by Reuters. The preliminary October survey had seen a decline to 57.5."
"The survey's gauge of consumer expectations also improved from the more than 30-year lows registered in the preliminary reading."
http://www.cnbc.com/id/45075556
"The sentiment index picked up to 60.9 from 59.4 the month before, topping expectations for 58.0 among economists polled by Reuters. The preliminary October survey had seen a decline to 57.5."
"The survey's gauge of consumer expectations also improved from the more than 30-year lows registered in the preliminary reading."
"The index rose to 51.8 from 49.4 in September, while the barometer of current economic conditions was up at 75.1 from 74.9."
"A gauge of current personal finances edged up to 77 from 76, but expected personal finances eased to 103 from 104."
Overall between the deal in Europe-the 50 percent haircut on Greek bonds and the quadrupling of the EFSF bailout fund-and improved U.S. numbers we may be getting out of this. It is at least reasonably possible. Yet I find many currently reluctant to even consider this. On the Right this makes sense as they need a bad economy as they think it improves the GOP's chances next November.
Yet I find many liberals involved with Occupy Wall Street, etc. who wont entertain the possibility.. Someone I spoke to even believes that the improved numbers are all "lies" meant to slow down the OWS movement. While I fully support the aims of the movement and may go to Zucotti myself soon to check it out this sense that some don't even want the economy to get better as they fear it could dampen the movement are missing the point that the movement is for many the means rather than the end itself. Many people are marching because they want and need jobs, mortgage help and a livable wage. Those who are actually living comfortably seem to think that whether some economic indicators are accurate is not important. On this they are wrong. I support OWS and hope it fulfills its objectives. But the economy actually getting better can't hurt OWS-if it can then OWS has something wrong with it.
Millionaires Support Millionare's Tax
In all fairness to millionaires they as individuals are not the ones blocking any sensible tax reform in the progressive direction. As a matter of fact 68 percent of millionaires favor raising taxes on millionaires. In addition fully 61 percent of those with an after tax income of $5 million or more favor raising taxes on millionaires.
“what this tells us is that there are a number of wealthy folks who said: ‘Gee, we need to increase taxes to stimulate the economy. No one likes to be taxed more, but the reality is maybe it has to be done.’”
http://thinkprogress.org/
Meanwhile under Rick Perry's latest flat tax scheme-he's proposed a 20 percent flat tax in trying to keep up with Cain's truly awful 9-9-9 plan-it turns out that Warren Buffet-who in fairness is a billionaire who has called for taxes to be raised on the wealthy-could pay as little as .0.2 of his income in taxes. This is because most of his income is in capital gains not wages; the only amount of his income that would be taxed is the combination of the salary he pays himself at Berkshire Hathaway and what he makes as a director at the Washington Post for a combined total of $600,000-his total income was $62,855,038 last year. Currently he only pays about 11 percent of his income in taxes anyway.
CHENEY: Former Vice President and Halliburton CEO Dick Cheney fares almost as well under Perry’s tax plan. Cheney reported $3.1 million in income on his 2007 tax return (the most recent available), including $2.1 million in dividends and capital gains. Since he’d only pay Perry’s 20 percent tax on his other income, his tax bill would be reduced by about two-thirds — a $387,000 cut. Cheney’s effective rate, which was 19.1 percent in 2007, would be 6.4 percent under Perry’s plan. Of course, this is probably fine with Cheney, since he believes that deficits don’t matter.
OBAMA: Even though President Obama has said that “people like me don’t need another tax cut,” Perry’s plan would give him a big one. The Obamas reported relatively little investment income on their most recent tax return. Still, they would get a $60,000 tax cut from Perry’s plan because they paid more than 20 percent on their other income ($1.8 million from the President’s salary, book sales, and other items). President Obama has proposed the polar opposite of Perry’s plan by suggesting the “Buffett rule,” which would ensure that millionaires can’t pay lower taxes than middle-class families.
PERRY: Perry himself would receive a tax cut of $6,310, based on the income reported on his most recent tax return. That would drop his effective rate from 18.6 percent to 15.8 percent. (If Perry has another large capital gain like he did from selling land in 2007, he’d benefit even more. Had his tax plan been in effect that year, the Perrys would have saved more than $150,000 in taxes on $1.1 million of income and paid a minuscule 3.8 percent effective rate.)
Romney needs to some how top these miserable plans. If he comes up with one worse than Perry and Cain-Cain is worse than Perry actually-it is going to be one ugly sight.
“what this tells us is that there are a number of wealthy folks who said: ‘Gee, we need to increase taxes to stimulate the economy. No one likes to be taxed more, but the reality is maybe it has to be done.’”
http://thinkprogress.org/
Meanwhile under Rick Perry's latest flat tax scheme-he's proposed a 20 percent flat tax in trying to keep up with Cain's truly awful 9-9-9 plan-it turns out that Warren Buffet-who in fairness is a billionaire who has called for taxes to be raised on the wealthy-could pay as little as .0.2 of his income in taxes. This is because most of his income is in capital gains not wages; the only amount of his income that would be taxed is the combination of the salary he pays himself at Berkshire Hathaway and what he makes as a director at the Washington Post for a combined total of $600,000-his total income was $62,855,038 last year. Currently he only pays about 11 percent of his income in taxes anyway.
CHENEY: Former Vice President and Halliburton CEO Dick Cheney fares almost as well under Perry’s tax plan. Cheney reported $3.1 million in income on his 2007 tax return (the most recent available), including $2.1 million in dividends and capital gains. Since he’d only pay Perry’s 20 percent tax on his other income, his tax bill would be reduced by about two-thirds — a $387,000 cut. Cheney’s effective rate, which was 19.1 percent in 2007, would be 6.4 percent under Perry’s plan. Of course, this is probably fine with Cheney, since he believes that deficits don’t matter.
OBAMA: Even though President Obama has said that “people like me don’t need another tax cut,” Perry’s plan would give him a big one. The Obamas reported relatively little investment income on their most recent tax return. Still, they would get a $60,000 tax cut from Perry’s plan because they paid more than 20 percent on their other income ($1.8 million from the President’s salary, book sales, and other items). President Obama has proposed the polar opposite of Perry’s plan by suggesting the “Buffett rule,” which would ensure that millionaires can’t pay lower taxes than middle-class families.
PERRY: Perry himself would receive a tax cut of $6,310, based on the income reported on his most recent tax return. That would drop his effective rate from 18.6 percent to 15.8 percent. (If Perry has another large capital gain like he did from selling land in 2007, he’d benefit even more. Had his tax plan been in effect that year, the Perrys would have saved more than $150,000 in taxes on $1.1 million of income and paid a minuscule 3.8 percent effective rate.)
Romney needs to some how top these miserable plans. If he comes up with one worse than Perry and Cain-Cain is worse than Perry actually-it is going to be one ugly sight.
Why the Republicans are not Celebrating Better GDP
It ruins their 2012 election strategy of running against the "Obama recession." They have precious little else to run on. House Speaker Boehner may think it's cute after bad economic numbers come out to say, "Mr. President where are the jobs?" but what would be better is for the Speaker to answer this himself. After all he has been a fixture in the House for years, he has been in the majority for a year and what has he or his party done to create jobs?
They have obstructed Obama's proposals, that's about it. And most Americans believe that Obama's ideas would create jobs and are frustrated that the Republicans are blocking them.
http://thinkprogress.org/
On the other hand Boehner and friends claim that the budget cuts they pushed through in April were job creating. This illusion that companies were not hiring due to regulation or tax uncertainty has payed the dividend you would expect: a recent report by the Center for American Progress shows it will actually destroy 370,000 jobs. Maybe that's why Boehner is always asking where are the jobs? So he can better destroy them.
“All of the various 250 program reductions in the fiscal year 2011 Continuing Resolution probably eliminated more than 370,000 American jobs. The three areas selected for discussion in this paper are in my judgment neither the worst cuts made by the committee from a policy standpoint nor the best. But without a doubt they demonstrate the consequences of slashing government spending in a weak economy.”
Next time he asks where they are let's just not tell him.
They have obstructed Obama's proposals, that's about it. And most Americans believe that Obama's ideas would create jobs and are frustrated that the Republicans are blocking them.
http://thinkprogress.org/
On the other hand Boehner and friends claim that the budget cuts they pushed through in April were job creating. This illusion that companies were not hiring due to regulation or tax uncertainty has payed the dividend you would expect: a recent report by the Center for American Progress shows it will actually destroy 370,000 jobs. Maybe that's why Boehner is always asking where are the jobs? So he can better destroy them.
“All of the various 250 program reductions in the fiscal year 2011 Continuing Resolution probably eliminated more than 370,000 American jobs. The three areas selected for discussion in this paper are in my judgment neither the worst cuts made by the committee from a policy standpoint nor the best. But without a doubt they demonstrate the consequences of slashing government spending in a weak economy.”
Next time he asks where they are let's just not tell him.
Thursday, October 27, 2011
Fed Repression Sounding Pretty Good Right Now
Morgan Stanley's Stephen Roach is complaining that "Fed Repression" is punishing savers?! You'll have to excuse me, I must be missing something.
http://www.cnbc.com/id/45065234
Mr. Roach laments that: "one of the big disconnects in the U.S. policy debate right now is a fixation on stimulus packages, the Fed's "unconventional monetary policy," and President Barack Obama's jobs bill at the expense of helping Americans get rid of their increasing debt load so they can save more."
We should be helping Americans get rid of their increasing debt load-as Greece has just taken a major step towards doing with the 50 percent haircut in bond debt the EU negotiated with bondholders-and his recent notion of a national debt forgiveness is just what is needed. But the second part is clearly wrong. The one thing we don't suffer from right now is a lack of saving. To the contrary that's been our whole problem just as Irving Fisher correctly explained is always the problem in deep recessions and depressions, 80 years ago.
"How else are we going to fund economic growth?" he asked "Right now we’re borrowing surplus savings from abroad because we don’t save a nickel at home, and we have to wean ourselves from that."
See this is the very same illusion Keynes argued against 80 years ago as well-that savings can get you out of a deep recession. Americans can't hope to save while so many lack jobs and those who do either have underwater mortgages or are just scraping by-or just not scraping by. Unemployment as we know from James Galbraith is the leading cause of deepening economic inequality and depression of wages. American savings are not going to fund growth. Rather only after sustained growth will more Americans hopefully have something saved. What is needed now is not savings but consumption. When you look at all the hoarding going on seems to me that there's not enough penalizing of savings right now. If there were more there would be higher growth.
http://www.cnbc.com/id/45065234
Mr. Roach laments that: "one of the big disconnects in the U.S. policy debate right now is a fixation on stimulus packages, the Fed's "unconventional monetary policy," and President Barack Obama's jobs bill at the expense of helping Americans get rid of their increasing debt load so they can save more."
We should be helping Americans get rid of their increasing debt load-as Greece has just taken a major step towards doing with the 50 percent haircut in bond debt the EU negotiated with bondholders-and his recent notion of a national debt forgiveness is just what is needed. But the second part is clearly wrong. The one thing we don't suffer from right now is a lack of saving. To the contrary that's been our whole problem just as Irving Fisher correctly explained is always the problem in deep recessions and depressions, 80 years ago.
"How else are we going to fund economic growth?" he asked "Right now we’re borrowing surplus savings from abroad because we don’t save a nickel at home, and we have to wean ourselves from that."
See this is the very same illusion Keynes argued against 80 years ago as well-that savings can get you out of a deep recession. Americans can't hope to save while so many lack jobs and those who do either have underwater mortgages or are just scraping by-or just not scraping by. Unemployment as we know from James Galbraith is the leading cause of deepening economic inequality and depression of wages. American savings are not going to fund growth. Rather only after sustained growth will more Americans hopefully have something saved. What is needed now is not savings but consumption. When you look at all the hoarding going on seems to me that there's not enough penalizing of savings right now. If there were more there would be higher growth.
Obama's Mortgage Relief Plan
In line with their reelection strategy, Operation Tank the Economy, the Republicans have not moved forward on Obama's American Jobs Act. This strategy, however may see limited success in the future as there are signs the economy is coming back. They're recession dividend could be declining.
However Obama has thankfully used the power of his office to pass those things which can be done without a vote of Congress; most recently, this week he put through measures for mortgage relief as well as student loan modification-another very pressing need.
As to his mortgage relief plan, the centerpiece is the strengthening and expanding of HARP-Home Affordable Refinance Program. On Oct 24 the Federal Housing Finance Agency (FHFA) its plans to strengthen and extend HARP till December 2013.
To be sure, HARP has existed for 2 years but there are several reasons that it was not effective and saw only a fraction of those eligible use the program:
http://www.piie.com/realtime/?p=2456
To deal with the very pressing problem of public awareness:
"the FHFA should direct the housing agencies to write to all mortgagors whose loans are eligible under HARP to inform them of their eligibility to refinance at current market rates."
According to Joseph Gagnon, the writer of this article, the macroeconomic effects of this restructuring could be huge:
"Remy, Lucas, and Moore (2011) estimate that a program similar to the one described above would result in $428 billion additional refinancings with annual savings to household borrowers of $7.4 billion. They estimate that the program would have a small positive effect on the net worth of the housing agencies, but that it would have a small net cost to the federal government (in present value, not annual, terms) of less than $1 billion. This cost is entirely accounted for by losses in the Fed’s portfolio of existing MBS that would be prepaid. However, they do not include any positive effect on federal tax revenues from the additional stimulus implied by the fact that the program beneficiaries (indebted households) have far higher marginal propensities to consume than the existing MBS investors, who are mainly financial institutions and foreign governments. If the program increased US GDP by as little as $1 billion per year for two or three years, the additional tax revenues would exceed the costs."
"The annual savings to borrowers would be about 0.5 percent of GDP. Because of the long-lasting nature of these savings, the total effect on household spending would be greater than that of an equivalent but temporary tax cut.4 In addition, the availability of record-low mortgage rates for a fixed period of time likely would spur potential new home buyers into the market and boost home building and sales."
"Even more important, if the Federal Reserve supported the refinancing boom by purchasing $2 trillion of new MBS, for example, the existing MBS holders would have to find another market in which to invest $2 trillion. This avalanche of money would surely push up stock prices, push down bond yields, support real estate prices, and push up the value of foreign currencies. All of these financial developments would stimulate US economic activity. Based on a recent Fed study (Chung et al 2011) Fed purchases of this magnitude would increase US GDP by more than 2 percent after about two years, creating nearly 3 million additional jobs. This estimate includes only a small part of the effects operating through the mortgage refinance channel discussed above, so that the total effects on the economy would be even larger, perhaps creating 4 million extra jobs or more."
Clearly Operation Tank the Economy is hitting a snag.
However Obama has thankfully used the power of his office to pass those things which can be done without a vote of Congress; most recently, this week he put through measures for mortgage relief as well as student loan modification-another very pressing need.
As to his mortgage relief plan, the centerpiece is the strengthening and expanding of HARP-Home Affordable Refinance Program. On Oct 24 the Federal Housing Finance Agency (FHFA) its plans to strengthen and extend HARP till December 2013.
To be sure, HARP has existed for 2 years but there are several reasons that it was not effective and saw only a fraction of those eligible use the program:
- Low public awareness combined with homeowner fears of being rejected.
- Fears by mortgage originators that the housing agencies may “put back” these new loans if they subsequently move into default, which leads them to apply unduly high underwriting standards.
- Refusal by some holders of second liens to subordinate their claims to the refinanced first mortgage.
- Restrictions on applying the original mortgage insurance policy to the refinanced loan, particularly if the refinanced loan has a different servicer.
http://www.piie.com/realtime/?p=2456
To deal with the very pressing problem of public awareness:
"the FHFA should direct the housing agencies to write to all mortgagors whose loans are eligible under HARP to inform them of their eligibility to refinance at current market rates."
According to Joseph Gagnon, the writer of this article, the macroeconomic effects of this restructuring could be huge:
"Remy, Lucas, and Moore (2011) estimate that a program similar to the one described above would result in $428 billion additional refinancings with annual savings to household borrowers of $7.4 billion. They estimate that the program would have a small positive effect on the net worth of the housing agencies, but that it would have a small net cost to the federal government (in present value, not annual, terms) of less than $1 billion. This cost is entirely accounted for by losses in the Fed’s portfolio of existing MBS that would be prepaid. However, they do not include any positive effect on federal tax revenues from the additional stimulus implied by the fact that the program beneficiaries (indebted households) have far higher marginal propensities to consume than the existing MBS investors, who are mainly financial institutions and foreign governments. If the program increased US GDP by as little as $1 billion per year for two or three years, the additional tax revenues would exceed the costs."
"The annual savings to borrowers would be about 0.5 percent of GDP. Because of the long-lasting nature of these savings, the total effect on household spending would be greater than that of an equivalent but temporary tax cut.4 In addition, the availability of record-low mortgage rates for a fixed period of time likely would spur potential new home buyers into the market and boost home building and sales."
"Even more important, if the Federal Reserve supported the refinancing boom by purchasing $2 trillion of new MBS, for example, the existing MBS holders would have to find another market in which to invest $2 trillion. This avalanche of money would surely push up stock prices, push down bond yields, support real estate prices, and push up the value of foreign currencies. All of these financial developments would stimulate US economic activity. Based on a recent Fed study (Chung et al 2011) Fed purchases of this magnitude would increase US GDP by more than 2 percent after about two years, creating nearly 3 million additional jobs. This estimate includes only a small part of the effects operating through the mortgage refinance channel discussed above, so that the total effects on the economy would be even larger, perhaps creating 4 million extra jobs or more."
Clearly Operation Tank the Economy is hitting a snag.
The EU Bailout: China's on Board
In judging whether you like the EU deal or not, China's has seen enough and is convinced, they welcome it:
"We hope that this consensus ... is conducive to boosting market confidence," Foreign Ministry spokeswoman Jiang Yu told a regular news briefing. "China is willing to make joint efforts to preserve the global economic recovery and growth."
Some may value such support more than others... Recently there has been a rise in China bashing, with a recent Senate bill to in some way sanction China with higher tariffs if they don't allow their Yuan to accrue at the pace some have decided they should. For my part I was not sure at all about such action. The main reason I have been anything less than wholly dismissive of this is because Krugman has supported it. Yes I admit: if he supports something I almost assume there must be some merit in it somewhere.
The idea is that China by keeping it's Yuan pegged or at least not letting it grow as fast as it naturally could has hurt our exports. What this comes down to is we seemed to have been saying this: "China your weak dollar policy is no fair. It's harming our desire to have our own weak dollar policy." I guess not many countries want a strong dollar anymore but how can we argue that it's not fair for China to have what we want?
I read Krugman's support as more desperation than anything-which is perfectly understandable. However with the positive recent data we've been seeing-today's 2.5 percent GDP and 2.4 percent consumer spending-as well as a lower trade deficit maybe this was simply a desperation move and we should put it behind us.
Back to now, China was unhappy with us then, happy with Europe now:
"China supports the measures taken by the EU to deal with the debt crisis problem," Jiang said.
"China was also ready to increase cooperation with the EU in areas of investment, trade and finance, she added, without providing details."
China's official Xinhua news agency said the outcome of the EU summit was "positive but filled with difficulties", adding the deal showed that Europe could surmount its economic woes.
http://www.cnbc.com/id/45057522
Ok, I guess I should admit it, on this I'm with China. I think it's a very good development. I know there are details to be worked out and the devil is always in such details. Nevertheless, there is more than enough known of the broad outline to support: a 50 percent haircut on Greek debt and a quadrupling of the EU EFSF bailout fund. Couple this with some improving numbers here in the U.S. and there is some room for some very tempered optimism.
"We hope that this consensus ... is conducive to boosting market confidence," Foreign Ministry spokeswoman Jiang Yu told a regular news briefing. "China is willing to make joint efforts to preserve the global economic recovery and growth."
Some may value such support more than others... Recently there has been a rise in China bashing, with a recent Senate bill to in some way sanction China with higher tariffs if they don't allow their Yuan to accrue at the pace some have decided they should. For my part I was not sure at all about such action. The main reason I have been anything less than wholly dismissive of this is because Krugman has supported it. Yes I admit: if he supports something I almost assume there must be some merit in it somewhere.
The idea is that China by keeping it's Yuan pegged or at least not letting it grow as fast as it naturally could has hurt our exports. What this comes down to is we seemed to have been saying this: "China your weak dollar policy is no fair. It's harming our desire to have our own weak dollar policy." I guess not many countries want a strong dollar anymore but how can we argue that it's not fair for China to have what we want?
I read Krugman's support as more desperation than anything-which is perfectly understandable. However with the positive recent data we've been seeing-today's 2.5 percent GDP and 2.4 percent consumer spending-as well as a lower trade deficit maybe this was simply a desperation move and we should put it behind us.
Back to now, China was unhappy with us then, happy with Europe now:
"China supports the measures taken by the EU to deal with the debt crisis problem," Jiang said.
"China was also ready to increase cooperation with the EU in areas of investment, trade and finance, she added, without providing details."
China's official Xinhua news agency said the outcome of the EU summit was "positive but filled with difficulties", adding the deal showed that Europe could surmount its economic woes.
http://www.cnbc.com/id/45057522
Ok, I guess I should admit it, on this I'm with China. I think it's a very good development. I know there are details to be worked out and the devil is always in such details. Nevertheless, there is more than enough known of the broad outline to support: a 50 percent haircut on Greek debt and a quadrupling of the EU EFSF bailout fund. Couple this with some improving numbers here in the U.S. and there is some room for some very tempered optimism.
Economy Grows at 2.5 GDP in Third Quarter
This time the consensus was right. While we had worried earlier that such optimism could be dashed, I had concluded that the trend in data lately has unquestionably been up.
For my earlier piece-that I wrote before dawn-please see http://diaryofarepublicanhater.blogspot.com/2011/10/todays-gdp-report-too-much-optimism.html
As it turns out GDP growth increased by exactly the 2.5 percent predicted. At the moment it seems that while we haven't felt confident-recent consumer confidence is at its lowest level since the 2007-2009 recession-things have been getting better. Consumer spending, which accounts for 70 percent of economic activity, grew by 2.4 percent as opposed to only .7 percent in the second quarter.
Similarly, business investment picked up:
'Similarly, while some business surveys have pointed to a contraction in factory output, there is little sign corporate America is cutting back spending. Indeed, recent data has suggested business spending is picking up. Business spending rose at a 16.3 percent pace as companies splurged on equipment and software, and invested in nonresidential structures. "
Like consumers it seems that business spending exceeds confidence. Unemployment claims were down 2,000 to 402,000 and have clearly shown a downward bias in recent months though sustained job growth is only indicated when they are able to consistently dip beneath 375,000 a week.
"Apart from consumer and business spending, growth in the third quarter was also supported by a smaller U.S. trade deficit, and the careful management of business inventories bodes well for fourth-quarter production."
"The GDP report also showed a moderation in inflation pressures, with the personal consumption price index (PCE) rising at a 2.4 percent rate in the third quarter, slowing from the April-June quarter's 3.3 percent pace. Core PCE, which excludes food and energy, rose at a 2.1 percent rate after increasing 2.3 percent in the second quarter."
http://www.cnbc.com/id/45058763
For my earlier piece-that I wrote before dawn-please see http://diaryofarepublicanhater.blogspot.com/2011/10/todays-gdp-report-too-much-optimism.html
As it turns out GDP growth increased by exactly the 2.5 percent predicted. At the moment it seems that while we haven't felt confident-recent consumer confidence is at its lowest level since the 2007-2009 recession-things have been getting better. Consumer spending, which accounts for 70 percent of economic activity, grew by 2.4 percent as opposed to only .7 percent in the second quarter.
Similarly, business investment picked up:
'Similarly, while some business surveys have pointed to a contraction in factory output, there is little sign corporate America is cutting back spending. Indeed, recent data has suggested business spending is picking up. Business spending rose at a 16.3 percent pace as companies splurged on equipment and software, and invested in nonresidential structures. "
Like consumers it seems that business spending exceeds confidence. Unemployment claims were down 2,000 to 402,000 and have clearly shown a downward bias in recent months though sustained job growth is only indicated when they are able to consistently dip beneath 375,000 a week.
"Apart from consumer and business spending, growth in the third quarter was also supported by a smaller U.S. trade deficit, and the careful management of business inventories bodes well for fourth-quarter production."
"The GDP report also showed a moderation in inflation pressures, with the personal consumption price index (PCE) rising at a 2.4 percent rate in the third quarter, slowing from the April-June quarter's 3.3 percent pace. Core PCE, which excludes food and energy, rose at a 2.1 percent rate after increasing 2.3 percent in the second quarter."
http://www.cnbc.com/id/45058763
How to Bring Down Economic Inequality
As I said in earlier posts, I'm currently reading James Galbraith's "Created Unequal" which I highly recommend for those who really want to get to the bottom of our declining standard of living that we have seen over the last 30 years.
He does a good job of showing what does-and doesn't-effect economic inequality. For example, while affirmative action may-and I believe is-a positive social policy that engenders more diversity it does not by definition decrease economic inequality as such. What it does is give us more diversity at the top of the economic pyramid.
This is clearly borne out by the high levels of unemployment we have continued to see in the African-American community even as there has been a growing black economic elite. It's important to realize that while affirmative action can be a positive social policy for blacks and women, it is not going to do much about underlying economic inequality, either within the demographic of blacks and women respectively, or between blacks and whites or women and men. Inequality numbers come down for these groups really in the same way they come down for white males with modest or little income: full employment policies.
For as simple as it is, what brings down inequality more than anything, it turns out is low unemployment. This really is simple and really when you think about it intuitive. While I'm just laying the punch line out for you here, Galbraith got here by painstakingly factoring in many different variables that might be expected to affect inequality-the US dollar, the amount of global trade, interest rates, inflation, etc. What emerged is that there is a 77 percent level of correlation-in economics that's very high-between unemployment and inequality.
What's important to realize is that if it is this simple-simply bring down unemployment, follow full employment policies-this has not been our policy in recent years. Galbraith is very clear on when we gave up on full employment policies-1970. He dates this as the time when the Federal Reserve moved from a focus on full employment to low inflation as it's mandate. With the recent crisis, some at the Fed have been talking about possibly declaring that while 2 percent inflation is the long term goal, more important for right now is their full employment mandate and that maybe we can tolerate higher inflation until unemployment goes beneath 7 percent. If the Fed does anything like this it would mark a departure from the last 40 years of monetary policy.
He does a good job of showing what does-and doesn't-effect economic inequality. For example, while affirmative action may-and I believe is-a positive social policy that engenders more diversity it does not by definition decrease economic inequality as such. What it does is give us more diversity at the top of the economic pyramid.
This is clearly borne out by the high levels of unemployment we have continued to see in the African-American community even as there has been a growing black economic elite. It's important to realize that while affirmative action can be a positive social policy for blacks and women, it is not going to do much about underlying economic inequality, either within the demographic of blacks and women respectively, or between blacks and whites or women and men. Inequality numbers come down for these groups really in the same way they come down for white males with modest or little income: full employment policies.
For as simple as it is, what brings down inequality more than anything, it turns out is low unemployment. This really is simple and really when you think about it intuitive. While I'm just laying the punch line out for you here, Galbraith got here by painstakingly factoring in many different variables that might be expected to affect inequality-the US dollar, the amount of global trade, interest rates, inflation, etc. What emerged is that there is a 77 percent level of correlation-in economics that's very high-between unemployment and inequality.
What's important to realize is that if it is this simple-simply bring down unemployment, follow full employment policies-this has not been our policy in recent years. Galbraith is very clear on when we gave up on full employment policies-1970. He dates this as the time when the Federal Reserve moved from a focus on full employment to low inflation as it's mandate. With the recent crisis, some at the Fed have been talking about possibly declaring that while 2 percent inflation is the long term goal, more important for right now is their full employment mandate and that maybe we can tolerate higher inflation until unemployment goes beneath 7 percent. If the Fed does anything like this it would mark a departure from the last 40 years of monetary policy.
Today's GDP Report: Too Much Optimism?
With the many positive signs we've seen lately, and the upgraded predictions of GDP-up to 2.5 percent for the third quarter as opposed to .4 percent in the first and 1.3 in the second for a yearly total coming in of only 1 percent-I can't help but wonder are we set up for disappointment?
That's always possible but right now there seems to be a lot of reason for optimism. That the EU is finally giving Greece the 50 percent haircut it needs on the bond debt is another very positive development. Finally reality has been allowed to peak in for Europe. Clearly at least part of the weak GDP during the first half was the shocks from Japan and oil prices, etc.
Most recent reports have suggested some reason for optimism. Another that has is recent unemployment fillings. There is a new report of filings for last week out today as well.
If things are getting better this has to be good news for those of us of have suffered unemployment. It may really throw off the GOP election strategy.
The GDP report will be at 8:30. Fingers crossed.
That's always possible but right now there seems to be a lot of reason for optimism. That the EU is finally giving Greece the 50 percent haircut it needs on the bond debt is another very positive development. Finally reality has been allowed to peak in for Europe. Clearly at least part of the weak GDP during the first half was the shocks from Japan and oil prices, etc.
Most recent reports have suggested some reason for optimism. Another that has is recent unemployment fillings. There is a new report of filings for last week out today as well.
If things are getting better this has to be good news for those of us of have suffered unemployment. It may really throw off the GOP election strategy.
The GDP report will be at 8:30. Fingers crossed.
Wednesday, October 26, 2011
Occupy Wall Street: Don't Make War, Make Out
In the latest edition of The Occupied Wall Street Journal I saw one of the most appealing pictures under that caption Don't Make War, Makeout. It had a very attractive woman kissing an attractive young guy. I gotta admit some might find me schizophrenic. On the one hand I support Occupy Wall Street, on the other I am a regular reader of the Wall Street Journal. I don't see the contradiction. As it happens those who have put together The Occupied Wall Street Journal, actually have a history doing marketing for papers like WSJ which is not surprising.
http://www.scribd.com/doc/69793428/Occupied-Wall-Street-Journal-Issue-3
In looking at that attractive couple as the most seductive images OWS has to offer, I again think of Zizek, who has already personally spoken at Zucotti Park. What can be more seductive for any movement than the spectre of Zizek's Sexual Relationship?
With all the impact that OWS has already had, in many ways I find these type of angles the most interesting. Because not everyone likes it and some feel it cheapens the movement. Yet I think that what some see as cheapening may be the aspects that make it most relatable to the mainstream. Like the recent furor over the OWS girls gone wild video, or when capitalism is shown to be alive and well at Zucotti park-with all the merchandise being sold, with credit cards even being taken.
I guess because in this area that some find cheapening I see proof that these are real people with a pulse that you can relate too. They are still of this world rather than being so heavenly as to be of no earthly use.
http://www.scribd.com/doc/69793428/Occupied-Wall-Street-Journal-Issue-3
In looking at that attractive couple as the most seductive images OWS has to offer, I again think of Zizek, who has already personally spoken at Zucotti Park. What can be more seductive for any movement than the spectre of Zizek's Sexual Relationship?
With all the impact that OWS has already had, in many ways I find these type of angles the most interesting. Because not everyone likes it and some feel it cheapens the movement. Yet I think that what some see as cheapening may be the aspects that make it most relatable to the mainstream. Like the recent furor over the OWS girls gone wild video, or when capitalism is shown to be alive and well at Zucotti park-with all the merchandise being sold, with credit cards even being taken.
I guess because in this area that some find cheapening I see proof that these are real people with a pulse that you can relate too. They are still of this world rather than being so heavenly as to be of no earthly use.
Occupy Wall Street Too Successful?
Occupy Wall Street is undoubtedly a success. Some are now wondering if it's almost too much. At Zucotti park business is literally booming.
"On every corner of the park, vendors sell buttons, T-shirts, wristbands and artwork, leading some to complain that the merchandising is undermining the movement."
"Business appears to be booming online, too. One site is selling 30 packs of Occupy Condoms for $11.99. Another has a $35 Occupy Wall Street iPhone case. Nearly 5,000 individual items were available for sale on eBay by Tuesday night."
"Michael Wright, whose Facebook page advertises him as "The Ultimate NYC Skateboarding Hu$tler," set up shop in the park to sell T-shirts and sweatshirts to the crowds who stop by for a glimpse of the anti-Wall Street protesters.
"I'm running low! What you see is what you get. What size you need?" he asked tourists approaching his table.
"Wright, who accepts all major credit cards, acknowledged he has been challenged by protesters inside the park. "I've had people hold up a sign that says, 'What are you doing here?' But I try not to take it personally," he said
"Across the park, Herman Smalls hawked "I Am the 99%" buttons for $2, without apology.
"Some hard-core protesters inside the park were not pleased. Nicole Capobianco, 19, who said she's been part of the movement since its Sept. 17 inception, was appalled by the profiteers. "I don't appreciate that," she said. "That's the antithesis of this movement."
She said she and her fellow protesters "do not want to be involved in the marketing of our movement." Volunteer spokesman Haywood Carey said Occupy Wall Street protesters have asked vendors not to sell their merchandise inside the park.
"But honestly, it's not our place to tell them they can't do it. We do not own 'Occupy Wall Street."' One New York couple is trying to do just that.
Last week Robert and Diane Maresca filed an application to trademark the phrase "Occupy Wall Street."
http://www.cnbc.com/id/45047264
"On every corner of the park, vendors sell buttons, T-shirts, wristbands and artwork, leading some to complain that the merchandising is undermining the movement."
"Business appears to be booming online, too. One site is selling 30 packs of Occupy Condoms for $11.99. Another has a $35 Occupy Wall Street iPhone case. Nearly 5,000 individual items were available for sale on eBay by Tuesday night."
"Michael Wright, whose Facebook page advertises him as "The Ultimate NYC Skateboarding Hu$tler," set up shop in the park to sell T-shirts and sweatshirts to the crowds who stop by for a glimpse of the anti-Wall Street protesters.
"I'm running low! What you see is what you get. What size you need?" he asked tourists approaching his table.
"Wright, who accepts all major credit cards, acknowledged he has been challenged by protesters inside the park. "I've had people hold up a sign that says, 'What are you doing here?' But I try not to take it personally," he said
"Across the park, Herman Smalls hawked "I Am the 99%" buttons for $2, without apology.
"Some hard-core protesters inside the park were not pleased. Nicole Capobianco, 19, who said she's been part of the movement since its Sept. 17 inception, was appalled by the profiteers. "I don't appreciate that," she said. "That's the antithesis of this movement."
She said she and her fellow protesters "do not want to be involved in the marketing of our movement." Volunteer spokesman Haywood Carey said Occupy Wall Street protesters have asked vendors not to sell their merchandise inside the park.
"But honestly, it's not our place to tell them they can't do it. We do not own 'Occupy Wall Street."' One New York couple is trying to do just that.
Last week Robert and Diane Maresca filed an application to trademark the phrase "Occupy Wall Street."
http://www.cnbc.com/id/45047264
Europe ESFS to Quadruple Bailout Funds?!
You've heard the phrase too good to be true; today is beginning to seem like a day with too much that is too good to be true. Today we have had headlines that durable goods are (mostly) up, new home sales are up, the Eurozone is going to allow Greek bondholders to have-at least- a 50 percent haircut and Berlusconi in getting a deal with the opposition may have offered his own resignation in the bargain. And yesterday it emerged that the consensus among economists is now 2.5 percent GDP growth-much higher than what was assumed just a short time ago.
Going in today's Euro Zone meeting it was assumed they wouldn't have a deal today. However it has now been announced that EU leaders intend to quadruple the EFSF to about 1.0 trillion euros:
"The sources said the 440 billion euros ($611.4 billion) fund, set up last year, would have about 250-275 billion euros available after amounts are set aside for aid to Greece, Ireland and Portugal and for the recapitalizing the region's banks."
"The ratio of the leverage will be of at least 4 times," one source said, while another said the spare capacity available to be leveraged was 250 billion to 275 billion.
"The exact amount of capital available will only be known once negotiations over a second bailout package for Greece are agreed. Part of the problem is agreeing on credit enhancements for the private sector. More credit enhancement will reduce the amount of funds in the EFSF for leveraging."
Turns out Republican Operation Tank the economy is tanking.
Going in today's Euro Zone meeting it was assumed they wouldn't have a deal today. However it has now been announced that EU leaders intend to quadruple the EFSF to about 1.0 trillion euros:
"The sources said the 440 billion euros ($611.4 billion) fund, set up last year, would have about 250-275 billion euros available after amounts are set aside for aid to Greece, Ireland and Portugal and for the recapitalizing the region's banks."
"The ratio of the leverage will be of at least 4 times," one source said, while another said the spare capacity available to be leveraged was 250 billion to 275 billion.
"The exact amount of capital available will only be known once negotiations over a second bailout package for Greece are agreed. Part of the problem is agreeing on credit enhancements for the private sector. More credit enhancement will reduce the amount of funds in the EFSF for leveraging."
Turns out Republican Operation Tank the economy is tanking.
Does Italy's Deal Include Berlusconi Stepping Down?
It's not so hard to understand how Italy's parliament finally came to an agreement if Berlusconi has agreed to step down as part of the deal.
http://www.cnbc.com/id/45042889
"The deal with the Northern League averts an immediate government crisis that put Berlusconi's leadership at risk and could give fresh impetus to an EU summit Wednesday aimed at saving the euro from the widening sovereign debt crisis."
"Italian news reports say Berlusconi and Northern League leader Umberto Bossi reached a deal on pensions, part of the EU-demanded measures that Berlusconi will deliver later."
"Newspapers La Stampa and La Repubblica have speculated that Berlusconi stepping down and allowing for early elections may have been a condition for the deal to be reached."
Belusconi stepping down may have been the one offer Bossi couldn't refuse. Many have demanded that the chronically scandal ridden Italian Prime Minister step down over the years. Hard to believe it's 10 years since the Economist started demanding he step down. The nadir of his administration has to be when he was caught on tape telling someone to "get out of this country, it's fucked.' Or words to that effect.
The actual deal itself will consist of raising the pension age from 65 to 67 by 2025. This was the sticking point for Bossi. For the price of Berlusconi he may have finally been willing to budge. Other more palatable parts of the deal:
"new infrastructure spending, with a push for more private investment for strategic projects, the privatization of public entities and property and simplifying rules for companies."
http://www.cnbc.com/id/45042889
"The deal with the Northern League averts an immediate government crisis that put Berlusconi's leadership at risk and could give fresh impetus to an EU summit Wednesday aimed at saving the euro from the widening sovereign debt crisis."
"Italian news reports say Berlusconi and Northern League leader Umberto Bossi reached a deal on pensions, part of the EU-demanded measures that Berlusconi will deliver later."
"Newspapers La Stampa and La Repubblica have speculated that Berlusconi stepping down and allowing for early elections may have been a condition for the deal to be reached."
Belusconi stepping down may have been the one offer Bossi couldn't refuse. Many have demanded that the chronically scandal ridden Italian Prime Minister step down over the years. Hard to believe it's 10 years since the Economist started demanding he step down. The nadir of his administration has to be when he was caught on tape telling someone to "get out of this country, it's fucked.' Or words to that effect.
The actual deal itself will consist of raising the pension age from 65 to 67 by 2025. This was the sticking point for Bossi. For the price of Berlusconi he may have finally been willing to budge. Other more palatable parts of the deal:
"new infrastructure spending, with a push for more private investment for strategic projects, the privatization of public entities and property and simplifying rules for companies."
Demand for Durable Goods "Mostly" Higher
I guess that's "mostly" good then! There have been some positive signs lately that the economy may be starting to do a little better. In recent weeks unemployment claims have been down, though still not enough to conclusively bring the unemployment rate down.
The consensus view of economists has now risen to 2.5 percent for the third quarter which would be almost double the 1.3 percent rate during the second quarter.
Now a new report out today shows most durable goods having higher demand.
http://www.cnbc.com/id/45044666
"Demand for a range of long-lasting U.S. manufactured goods rose more than expected in September to post the largest increase in six months, cementing views of a step-up in economic growth in the third quarter, even though new orders for transportation equipment fell."
http://www.cnbc.com/id/45044666
New orders for transportation fell, that's where we get the "mostly."
"The Commerce Department said on Wednesday durable goods orders excluding transportation rose 1.7 percent after falling 0.4 percent in August. The rise beat economists expectations for a 0.4 percent increase. "
So a rise in durable goods excluding transportation rose 1.7 percent. However if we don't exclude transportation, there was actually a net drop in durable goods demand of .8 percent.
"The tenor of the report was further strengthened by a 2.4 percent jump in non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending. That was the largest increase since March. "
"The report was further evidence that economic activity picked up in the third quarter after a weak first half. Though manufacturing has slowed in recent months, the September durable goods report pointed to underlying resilience."
Look, I'll take it where I can get it. There are some so cynical that they can't ever believe good news. I'm actually fairly cynical myself. Having said that I believe that pessimism isn't always right either. Right now consumer confidence is at it's lowest point in 3 years-taking us back to the time when the economy was shedding 750,000 jobs a month. Yet actually consumer spending has been dipping up. I myself have even been doing a little consumer spending of my own-more than I should be actually, which is always how it goes. Fingers crossed I may even have work soon-a few good prospects. If you are in the same boat as me and millions of other Americans, consider security. It is one market that is hiring and often even has a decent wage, though it varies.
If that sounds dangerous to you, it really isn't, unless you go out of the way to look for armed guard positions. Many jobs are little more than a kind of public relations. That's what most security is. On a different tack, you might consider teaching. I recently took the New York state teacher's assistant exam. I just got my results and I did pretty good, so I now have my license. Of course the proof is in the pudding here-let;'s see how quick I get a TA job.
Failing that, there are sales jobs. These vary. There are out and out scams and many "packages" that grossly overstate the possibilities. At best there are those jobs that, if you sell of course, you can make pretty good money at. Generally a rule of thumb is that if they aren't going to give you a decent drawer through at least the first month it isn't even worth trying. I know this is not for everyone-nothing is-but the one virtue here is that there is not a high bar to entry. Any way good luck to us all and God Speed Occupy Wall Street! I am not so pessimistic as to not believe that we will make it one way or the other.
The consensus view of economists has now risen to 2.5 percent for the third quarter which would be almost double the 1.3 percent rate during the second quarter.
Now a new report out today shows most durable goods having higher demand.
http://www.cnbc.com/id/45044666
"Demand for a range of long-lasting U.S. manufactured goods rose more than expected in September to post the largest increase in six months, cementing views of a step-up in economic growth in the third quarter, even though new orders for transportation equipment fell."
http://www.cnbc.com/id/45044666
New orders for transportation fell, that's where we get the "mostly."
"The Commerce Department said on Wednesday durable goods orders excluding transportation rose 1.7 percent after falling 0.4 percent in August. The rise beat economists expectations for a 0.4 percent increase. "
So a rise in durable goods excluding transportation rose 1.7 percent. However if we don't exclude transportation, there was actually a net drop in durable goods demand of .8 percent.
"The tenor of the report was further strengthened by a 2.4 percent jump in non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending. That was the largest increase since March. "
"The report was further evidence that economic activity picked up in the third quarter after a weak first half. Though manufacturing has slowed in recent months, the September durable goods report pointed to underlying resilience."
Look, I'll take it where I can get it. There are some so cynical that they can't ever believe good news. I'm actually fairly cynical myself. Having said that I believe that pessimism isn't always right either. Right now consumer confidence is at it's lowest point in 3 years-taking us back to the time when the economy was shedding 750,000 jobs a month. Yet actually consumer spending has been dipping up. I myself have even been doing a little consumer spending of my own-more than I should be actually, which is always how it goes. Fingers crossed I may even have work soon-a few good prospects. If you are in the same boat as me and millions of other Americans, consider security. It is one market that is hiring and often even has a decent wage, though it varies.
If that sounds dangerous to you, it really isn't, unless you go out of the way to look for armed guard positions. Many jobs are little more than a kind of public relations. That's what most security is. On a different tack, you might consider teaching. I recently took the New York state teacher's assistant exam. I just got my results and I did pretty good, so I now have my license. Of course the proof is in the pudding here-let;'s see how quick I get a TA job.
Failing that, there are sales jobs. These vary. There are out and out scams and many "packages" that grossly overstate the possibilities. At best there are those jobs that, if you sell of course, you can make pretty good money at. Generally a rule of thumb is that if they aren't going to give you a decent drawer through at least the first month it isn't even worth trying. I know this is not for everyone-nothing is-but the one virtue here is that there is not a high bar to entry. Any way good luck to us all and God Speed Occupy Wall Street! I am not so pessimistic as to not believe that we will make it one way or the other.
Greek Bond "Haircut" Appears Set
While markets were disappointed earlier that it appears that there will be no finalized agreement, with no concrete numbers likely coming out of today's Euro summit, there is now some relief that it appears set that there will be a 50 percent writedown of Greek debt.
http://www.cnbc.com/id/45027839
The only question still in doubt in this regard is what to do with Greek's remaining 50 percent of bond debt( $284.9 billion dollars).
"Indications are that the remainder will be divided into a cash sweetener, Greek Sovereign paper and paper from the European Financial Stability Facility (EFSF), the name of the currency zone's bailout fund. The exact mix remains to be determined and remains a key point of debate."
"Indications are that the deal on a writedown—or "haircut" in current parlance—bears no resemblance to the original 21 percent PSI haircut, but will remain voluntary, though this word's meaning is becoming increasingly fuzzy, sources said."
50 percent is actually the number that realists had been asking for a long time-21 percent was not going to do it.
As to the deal coming out of today's summit: "Prospects for a comprehensive deal to resolve the euro zone debt crisis at a summit on Wednesday had begun to look dim, with deep disagreement remaining on critical aspects of the potential agreement, including how to give the region's bailout fund greater firepower."
"While there appears to be broad consensus on the need for around 110 billion euros ($150 billion) to be injected into the European banking system to help it withstand a potential Greek debt default and wider financial contagion, there is little clarity on either of the other two critical parts of the plan."
"Aside from the Greek writedown, any agreement would hopefully involve scaling up the region's 440 billion euro EFSF."
"European Union leaders will consider two methods for scaling up the EFSF, one by using it to offer guarantees to purchasers of new euro zone debt, and the other using part of its capacity to set up a special purpose investment vehicle that would attract money from sovereign wealth funds and other investors to buy debt."
Or they could agree on both options. In any case there appears to be some progress here, though, as you expect with the EU, it is a slow progress.
http://www.cnbc.com/id/45027839
The only question still in doubt in this regard is what to do with Greek's remaining 50 percent of bond debt( $284.9 billion dollars).
"Indications are that the remainder will be divided into a cash sweetener, Greek Sovereign paper and paper from the European Financial Stability Facility (EFSF), the name of the currency zone's bailout fund. The exact mix remains to be determined and remains a key point of debate."
"Indications are that the deal on a writedown—or "haircut" in current parlance—bears no resemblance to the original 21 percent PSI haircut, but will remain voluntary, though this word's meaning is becoming increasingly fuzzy, sources said."
50 percent is actually the number that realists had been asking for a long time-21 percent was not going to do it.
As to the deal coming out of today's summit: "Prospects for a comprehensive deal to resolve the euro zone debt crisis at a summit on Wednesday had begun to look dim, with deep disagreement remaining on critical aspects of the potential agreement, including how to give the region's bailout fund greater firepower."
"While there appears to be broad consensus on the need for around 110 billion euros ($150 billion) to be injected into the European banking system to help it withstand a potential Greek debt default and wider financial contagion, there is little clarity on either of the other two critical parts of the plan."
"Aside from the Greek writedown, any agreement would hopefully involve scaling up the region's 440 billion euro EFSF."
"European Union leaders will consider two methods for scaling up the EFSF, one by using it to offer guarantees to purchasers of new euro zone debt, and the other using part of its capacity to set up a special purpose investment vehicle that would attract money from sovereign wealth funds and other investors to buy debt."
Or they could agree on both options. In any case there appears to be some progress here, though, as you expect with the EU, it is a slow progress.
Economists Raise Forecast: GOP Plan Not Working?
I admit it seemed like a pretty good plan, the GOP thought it was airtight: just let the economy tank, do nothing to help it and then run against Obama on how bad the economy is tanking and how it's his failure rather than it's own.
However, you know what they say about the best laid plans, and yesterday economists raised their predictions for the third quarter sharply, suggesting that despite their best efforts, the economy may be coming back a little.
Economists now estimate that the economy grew at an annualized pace of 2.5 during the third quarter, almost double the 1.3 in the second and a major jump on what was being feared just recently.
If these better predictions are true it may show that many of the factors that drove down the economy in quarter two were temporary-oil prices, Japan's earthquake, etc.
This despite consumer confidence numbers at the worst level in 3 years:
"While consumer confidence crumbled to levels last seen during the 2007-09 recession. and some business surveys pointed to a contraction in factory output, so-called hard data measuring actual activity continued to show modest growth."
"Data from retail sales to factory orders to manufacturing output painted a portrait of households and businesses not shy to spend, despite feeling terrible about the economy. "
"We are looking at consumer confidence numbers which are as bad or worse than at the bottom of the recession when we were losing about 800,000 jobs a month," said Bill Cheney, chief economist at John Hancock Financial Services in Boston.
With the constraints mentioned above having eased-gasoline prices, the earthquake in Japan-"Auto production rose at an annual rate of 21.4 percent in the third quarter after contracting 15.8 percent in the second quarter, according to Federal Reserve data."
"Further, car sales, which were held back by the lack of popular models, have also shown new vigor. In September, auto sales jumped 3.6 percent."
"That strength is expected to drive overall consumer spending, which accounts for about 70 percent of U.S. economic activity, at a 2 percent pace or better. In the second quarter, it advanced just 0.7 percent, the smallest gain since the fourth quarter of 2009."
"While some of the factors behind the expected third-quarter growth spurt could be perceived as temporary, economists believe the momentum will be sustained into the end of 2011."
"However, they caution that Europe's debt crisis could derail the U.S. recovery if not dealt with decisively, as could a failure by Congress to keep in place economic supports."
So there is hope for Operation Tank the economy:
"A temporary payroll tax cut and emergency extension of unemployment benefits will expire at year end, absent congressional action. At the same time, Republican lawmakers have shown little appetite to move forward with other elements of President Barack Obama's $447 billion job creation plan."
"If they do end up with total gridlock where tax cuts expire and spending gets choked off, then the outlook would be quite a bit worse."
All quotes found here http://www.cnbc.com/id/45041466
However, you know what they say about the best laid plans, and yesterday economists raised their predictions for the third quarter sharply, suggesting that despite their best efforts, the economy may be coming back a little.
Economists now estimate that the economy grew at an annualized pace of 2.5 during the third quarter, almost double the 1.3 in the second and a major jump on what was being feared just recently.
If these better predictions are true it may show that many of the factors that drove down the economy in quarter two were temporary-oil prices, Japan's earthquake, etc.
This despite consumer confidence numbers at the worst level in 3 years:
"While consumer confidence crumbled to levels last seen during the 2007-09 recession. and some business surveys pointed to a contraction in factory output, so-called hard data measuring actual activity continued to show modest growth."
"Data from retail sales to factory orders to manufacturing output painted a portrait of households and businesses not shy to spend, despite feeling terrible about the economy. "
"We are looking at consumer confidence numbers which are as bad or worse than at the bottom of the recession when we were losing about 800,000 jobs a month," said Bill Cheney, chief economist at John Hancock Financial Services in Boston.
With the constraints mentioned above having eased-gasoline prices, the earthquake in Japan-"Auto production rose at an annual rate of 21.4 percent in the third quarter after contracting 15.8 percent in the second quarter, according to Federal Reserve data."
"Further, car sales, which were held back by the lack of popular models, have also shown new vigor. In September, auto sales jumped 3.6 percent."
"That strength is expected to drive overall consumer spending, which accounts for about 70 percent of U.S. economic activity, at a 2 percent pace or better. In the second quarter, it advanced just 0.7 percent, the smallest gain since the fourth quarter of 2009."
"While some of the factors behind the expected third-quarter growth spurt could be perceived as temporary, economists believe the momentum will be sustained into the end of 2011."
"However, they caution that Europe's debt crisis could derail the U.S. recovery if not dealt with decisively, as could a failure by Congress to keep in place economic supports."
So there is hope for Operation Tank the economy:
"A temporary payroll tax cut and emergency extension of unemployment benefits will expire at year end, absent congressional action. At the same time, Republican lawmakers have shown little appetite to move forward with other elements of President Barack Obama's $447 billion job creation plan."
"If they do end up with total gridlock where tax cuts expire and spending gets choked off, then the outlook would be quite a bit worse."
All quotes found here http://www.cnbc.com/id/45041466
Tuesday, October 25, 2011
Mitt Romney Out-Ryans Paul Ryan
And they said it couldn't be done. While he is seen as the more mainstream candidate in the Republican field-which would not seem hard in a race that includes Rick Perry and Herman Cain-Romney on Sean Hannity's radio show made news by describing a level of Medicaid cuts that go beyond Paul Ryan's.
Ryan's block grant program plans to reduce the federal government's contribution to Medicaid by 35 percent by 2022. His plan is about:
"converting the existing federal matching rate for each state into a block grant and growing the grant by approximately 3 percent annually (as compared to the estimated 6.5 percent to 7 percent annual growth* in federal expenditures that would occur under current law)."
Romney promises to go Ryan better. In his own words:
ROMNEY: It’s mathematically pretty straight forward how you hold down costs, which is you say, we’re going to cut it by a certain amount and then comes the hard work of saying where you’re going to cut it. And that why I’ve laid out a plan that balances our budget…taking Medicaid and giving it back to the states and growing it only 1 to 2 percent a year.
http://thinkprogress.org/
So while Ryan reduces the federal government contribution by 35 percent with the contribution to Medicaid growing by only 3 percent annually, Perry promises to reduce that total by 40 percent a year and to increase contributions to the states at only 1 to 2 percent per year. And this is the mainstream, centrist Republican this year.
Ryan's block grant program plans to reduce the federal government's contribution to Medicaid by 35 percent by 2022. His plan is about:
"converting the existing federal matching rate for each state into a block grant and growing the grant by approximately 3 percent annually (as compared to the estimated 6.5 percent to 7 percent annual growth* in federal expenditures that would occur under current law)."
Romney promises to go Ryan better. In his own words:
ROMNEY: It’s mathematically pretty straight forward how you hold down costs, which is you say, we’re going to cut it by a certain amount and then comes the hard work of saying where you’re going to cut it. And that why I’ve laid out a plan that balances our budget…taking Medicaid and giving it back to the states and growing it only 1 to 2 percent a year.
http://thinkprogress.org/
So while Ryan reduces the federal government contribution by 35 percent with the contribution to Medicaid growing by only 3 percent annually, Perry promises to reduce that total by 40 percent a year and to increase contributions to the states at only 1 to 2 percent per year. And this is the mainstream, centrist Republican this year.
Let's Hear it For Dayton Ohio! Doing Drew Carey Proud
With so much bad news to report it's nice to have a man bites dog moment now and again. At the moment that moment is being giving to us by the people of Ohio. Ohio is no doubt doing us proud on a lot of levels, not the least in its ballot initiative to defeat SB 5 in the upcoming special referendum. The polls look good on that.
Now the city of Dayton, Ohio has decided to be a safe haven for immigrants from places like Alabama and Georgia whose civil rights are under attack:
"While other states are cracking down undocumented immigrants — and scaring away legal immigrants at the same time — one town is embracing them. Dayton, Ohio officials adopted the “Welcome to Dayton” plan on Oct. 5 to encourage immigrants to settle in their city. They see the potential influx of new residents as a way to boost the city’s economy, while states like Alabama and Georgia that have extreme anti-immigrant laws are seeing their economies suffer."
"Before the Dayton city commission unanimously approved the plan, Mayor Gary Leitzell, whom the local Republican party endorsed in 2009, said immigrants bring “new ideas, new perspectives and new talent to our workforce. … To reverse the decades-long trend of economic decline in this city, we need to think globally.”
City leaders aiming to turn Dayton around started examining the immigrant population: Indian doctors in hospitals; foreign-born professors and graduate students at the region’s universities; and owners of new small businesses such as a Turkish family’s New York Pizzeria on the city’s east side and Hispanic-run car lots, repair shops and small markets. They say immigrants have revitalized some rundown housing, moving into and fixing up what had been vacant homes. [...]
Everyone once and a while someone gets something right. Congratulations to the people of Dayton, Ohio.
Now the city of Dayton, Ohio has decided to be a safe haven for immigrants from places like Alabama and Georgia whose civil rights are under attack:
"While other states are cracking down undocumented immigrants — and scaring away legal immigrants at the same time — one town is embracing them. Dayton, Ohio officials adopted the “Welcome to Dayton” plan on Oct. 5 to encourage immigrants to settle in their city. They see the potential influx of new residents as a way to boost the city’s economy, while states like Alabama and Georgia that have extreme anti-immigrant laws are seeing their economies suffer."
"Before the Dayton city commission unanimously approved the plan, Mayor Gary Leitzell, whom the local Republican party endorsed in 2009, said immigrants bring “new ideas, new perspectives and new talent to our workforce. … To reverse the decades-long trend of economic decline in this city, we need to think globally.”
City leaders aiming to turn Dayton around started examining the immigrant population: Indian doctors in hospitals; foreign-born professors and graduate students at the region’s universities; and owners of new small businesses such as a Turkish family’s New York Pizzeria on the city’s east side and Hispanic-run car lots, repair shops and small markets. They say immigrants have revitalized some rundown housing, moving into and fixing up what had been vacant homes. [...]
Dayton officials say their plan still needs funding and volunteers to help put it in place; they hope by the end of the year. Its key tenets include increasing information and access to government, social services and housing issues; language education and help with identification cards, and grants and marketing help for immigrant entrepreneurs to help build the East Third Street section.http://thinkprogress.org/
“We will be more diverse, we will grow, we will have more restaurants, more small businesses,” said Tom Wahlrab, the city’s human relations council director, who helped lead the plan’s development.
Everyone once and a while someone gets something right. Congratulations to the people of Dayton, Ohio.
GOP Candidates Compete for Worst Tax Proposal
Herman Cain has been in the lead, but now Rick Perry is trying to get some street cred with the Republican base by coming up with his own terrible tax plan. He has an uphill climb as it is clear that Cain's 9-9-9 plan is about the worst plan we've seen in modern history. It would cut social spending while radically raising taxes on most Americans to levels higher than they've ever been while sharply cutting the top .01 percent. With all the talk about those 50 percent of Americans who allegedly don't pay any taxes-which isn't true, they don't pay any income taxes, but more than make up for it between payroll taxes, and state sales, property, income and other assorted taxes-it's easy to forget that historically speaking the income tax was only intended for the highest tax brackets, it wasn't until the start of WWII and the need to raise record revenue for the war that most Americans become subject to the federal income tax. Prior to that the income tax was effectively a wealth tax.
Rick Perry has been fading after the initial excitement about his "Texas Miracle" so he is now offering his own tax plan monstrosity. Of his "Cut, Balance, and Grow" plan he was asked if it favors the rich, to which he answered: I don't care. Obviously he doesn't though one might wonder if he cares about his chances of getting elected. If he did then maybe it's not so smart to say so.
http://www.cnbc.com/id/45030263
His plan would be a 20 percent flat tax which would preserve certain deductions and provide an exemption of $12,500 per person-it is claimed that would mean the first $50,000 of income would be untaxed. It would also:
— Preserve deductions for mortgage interest, charitable donations, and state and local taxes on incomes below $500,000.
Rick Perry has been fading after the initial excitement about his "Texas Miracle" so he is now offering his own tax plan monstrosity. Of his "Cut, Balance, and Grow" plan he was asked if it favors the rich, to which he answered: I don't care. Obviously he doesn't though one might wonder if he cares about his chances of getting elected. If he did then maybe it's not so smart to say so.
http://www.cnbc.com/id/45030263
His plan would be a 20 percent flat tax which would preserve certain deductions and provide an exemption of $12,500 per person-it is claimed that would mean the first $50,000 of income would be untaxed. It would also:
— Preserve deductions for mortgage interest, charitable donations, and state and local taxes on incomes below $500,000.
—Allow anyone to file under the current system if they choose.
This last might seem to make it a wash. There is doubt that such a system could work very seamlessly. At best it would not be a tax increase for those of lower income who would do better under the current system. What it would do though is radically cut government revenue while it is already at anorexic levels and we are suffering a huge deficit:
"Two things are clear: It will lose lots of revenue, and it will give a big tax cut to the rich," said Robertson Williams, a senior fellow at the Tax Policy Center, a think-tank joint venture of the Brookings Institution and the Urban Institute, both viewed as left-of-center.
At a time of such a weak economy and huge deficit this is the wrong plan. Not that I can envision a scenario that it would ever be the right one.
For the struggling American Mr. Perry has these inspiring words:
"If you're looking for somebody that's going to nibble around the edges, if you're looking for somebody that's going to say, ‘Hey listen we're not going to make it hard on you, it's all going to work it out, and it's just, you know, kumbaya,’ I'm not your guy."
Well I can't speak for anyone else but I'm not looking for someone to say "kumbaya" or nibble around the edges, which actually sounds like our current policy. Mr. Perry's snide sarcasm doesn't do much either. I don't want the kumbaya guy or the sarcastic guy. Who I want is not in the Republican field this year. He is promising however to nibble around the edges of Social Security by raising the retirement age. Kumbaya.
The Declining American Standard of Living
If you want to understand why this is happening-read James Galbraith! I can't recommend this highly enough. There are no doubt many good sources and authors to read. I, in case you can't tell by how often I mention him, am a big fan of Krugman. Reich is also very good, and you never go wrong reading Think Progress, the Economic Policy Institute or the Tax Policy Institute. In this regard I do actually quite enjoy some of the new so-called "Market Monetarists" though they are conservatives, they are very thoughtful and worth reading. At the present there is a convergence between them and the New Keynesians-Krugman, Brad DeLong, etc-on the matter of monetary policy. While some so-called Keynesians may see monetary policy as less important than fiscal policy this is a mistake.
This brings us to Galbraith. If you want to really understand not just what happened but how it happened and how we might actually be able to reverse it, he is your man. As we mentioned the importance of monetary policy, this is what is important about Galbraith as well. In his 1997 book "Created Unequal" he argues that what was responsible more than anything for the stagnation of median American income was the Fed moving off its policy of Full Employment in favor of inflation fighting. While this book was only written in 1997 it is even more relevant today.
At the time it was written in the late 90s most Americans were less receptive as times were good for many and at least decent for many more. At that time we still could take refuge in the illusion that the American Dream was still working as it always had done in the postwar era. Most Americans still could believe that we were still a middle class nation. It wasn't until the Bush years that it became clear just how much this was no longer the case. For this reason, Galbraith's work is more relevant now than it was even then. Only now do we see the fruits of not heeding him. I haven't yet finished the book but already on just pg. 80 it is clear to me that this is the analysis I've been looking for in really knowing how we got here; only by doing so is there any hope in solving the problem. One interesting kink right now that I will get into in more detail later is how different his model is-it's Keynes's model of course-from the neoclassical model which presumes perfect competition. With the idea of monopoly power as a strong force in markets it gives us a very different type of analysis. Note that the term monopoly isn't wholly pejorative here, mostly it's just descriptive. Without getting too into it yet-wait till I finish for that!-even on the intuitive level it makes sense.
After all isn't it logical that the goal of a company is not "competition" but dominance-ie, monopoly? His idea-again he gets it from Keynes-that a company's profit is a product of their relative monopoly power is very interesting to consider next to the standard perfectly competitive markets assumed by neoclassical models. To be sure, it is not only Keynesians who have suggested a model with less than perfect competition-Schumpeter was another very notable one to do so.
For more on Galbraith's discussion about income inequality http://utip.gov.utexas.edu/
This brings us to Galbraith. If you want to really understand not just what happened but how it happened and how we might actually be able to reverse it, he is your man. As we mentioned the importance of monetary policy, this is what is important about Galbraith as well. In his 1997 book "Created Unequal" he argues that what was responsible more than anything for the stagnation of median American income was the Fed moving off its policy of Full Employment in favor of inflation fighting. While this book was only written in 1997 it is even more relevant today.
At the time it was written in the late 90s most Americans were less receptive as times were good for many and at least decent for many more. At that time we still could take refuge in the illusion that the American Dream was still working as it always had done in the postwar era. Most Americans still could believe that we were still a middle class nation. It wasn't until the Bush years that it became clear just how much this was no longer the case. For this reason, Galbraith's work is more relevant now than it was even then. Only now do we see the fruits of not heeding him. I haven't yet finished the book but already on just pg. 80 it is clear to me that this is the analysis I've been looking for in really knowing how we got here; only by doing so is there any hope in solving the problem. One interesting kink right now that I will get into in more detail later is how different his model is-it's Keynes's model of course-from the neoclassical model which presumes perfect competition. With the idea of monopoly power as a strong force in markets it gives us a very different type of analysis. Note that the term monopoly isn't wholly pejorative here, mostly it's just descriptive. Without getting too into it yet-wait till I finish for that!-even on the intuitive level it makes sense.
After all isn't it logical that the goal of a company is not "competition" but dominance-ie, monopoly? His idea-again he gets it from Keynes-that a company's profit is a product of their relative monopoly power is very interesting to consider next to the standard perfectly competitive markets assumed by neoclassical models. To be sure, it is not only Keynesians who have suggested a model with less than perfect competition-Schumpeter was another very notable one to do so.
For more on Galbraith's discussion about income inequality http://utip.gov.utexas.edu/
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