Income Inequality

It seems that the more the term is used the more it is becoming the latest buzz term….a dog whistle for the Left…..the Left?  I am so tired of that term!  There is NO one in Washington that is on the Left.  At best the ass clowns are solidly in the middle….with that said I will move on……

For the last couple of months the term “income inequality” has been batted around and used for talking points……..but is any of this going to do any good?  Or is it just something to talk about until a bigger news story breaks?

Any way….the prez has jumped onto the subject……

President Obama raised this issue yesterday in a speech to a progressive audience so I think it’s a worthy topic for discussion. In the President’s view, income inequality and disparity are issues which only the government can “solve” by some sort of redistribution scheme. However, the President offered no specifics, he only encouraged congress to […]

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As an old hippie commie pinko and about a hundred other adjective that people used in the past to describe me and people like me………I have been bitching about income inequality for decades…..usually to deaf ears until recently…….there seems to be a growing concern over something that has plagued American workers for years……but what if anything will be the answer to solving the problem?  I have a plan but NO one will like it…….and then I will once again be bombarded with the insults on my political beliefs…..cool, huh?

2012 Election Issues #4–Europe Economic Crisis

All the crap that people bitch about and this one is NO where to be found……of course, a couple politicos have compared the US to Greece, most notably some on the pseudo-news channel that shall remain un-named…..my problem is that Europe and its problems will eventually come to our shores and roost and yet neither candidate has mentioned except in passing and saying one candidate sucks…….maybe these dorks need to tell the American people what is awaiting the US…….

But it does matter….even if you ignore it…..it still matters….and why is that?

AP has a beautiful explanation——-

Europe buys 22 percent of the goods America exports. U.S. companies have invested heavily in Europe. So any economic slowdown in Europe dents U.S. exports and corporate profits. But the biggest fear is that a European financial crisis will flare up and move west across the Atlantic — the way Wall Street’s 2008 crisis moved east to Europe — with dire consequences for the U.S. economy.

Europeans are struggling to repair a system that was flawed from the start. The euro, introduced in 1999, makes it easier to do business across Europe; no more changing francs to deutschemarks when French and German companies do business. But the common currency joined countries with vastly different economies and political cultures — and each got to keep running its own budget. During the 2000s, banks were willing to overlook the differences and lend at low rates to countries like Greece with dubious records of fiscal discipline. Lenders knew they’d be repaid in euros, not local currencies that could be devalued by inflation. Greece and other countries took advantage of the easy money. Their debts proved crushing after the recession hit.

To fix their finances, European countries have cut government spending and raised taxes. Greece, Portugal and Ireland had to tighten their belts to qualify for bailouts. But the austerity has taken a toll. Europe is sliding into recession. The pressure might force Greece to abandon the euro and revive its old currency, the drachma. Other countries — notably Italy and Spain — might follow Greece out of the eurozone.

Abandoning the euro would free countries from an economic straitjacket. When they joined the eurozone, they surrendered control of interest rates to the European Central Bank, so they cannot cut their own rates to boost their economies. Nor can they push down their currencies to give their exporters a price advantage and trade their way out of trouble.

But breaking up the eurozone would be dangerous. Borrowers in countries that left the eurozone would struggle to produce enough money in their weak local currencies to repay old debts denominated in much stronger euros. As debts soured, Europe’s banking system would freeze. Its economy would follow. The pain would spread. Worried about a crackup, investors are demanding higher rates on Italian and Spanish debt, driving those countries’ borrowing costs to unsustainable levels.

The Euro-Zone problems are our problems…..we will suffer as much as the countries of the EU if the wall cracks and falls in the economy’s lap….but yet it is not important enough for either candidate to try to explain the situation to the American people……

What If China………….?

We hear daily from Repubs, Dems, Media hacks and faux economists tell us just how much trouble we are in because of China’s booming economy and their owning of our debt……you know it is so……..we are being preached to using the ever popular “Fear Factor” to push one form of thinking or another towards China…..whether it is their currency, or their manufacturing or their social policies……you have heard it all…in news stories, in debates, yada yada…..but what is the real story on China?

What is the future with China in the wings…..waiting…….

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.

Lang’s assessment that the regime is bankrupt was based on five conjectures.

Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.

Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang.

Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.

Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in real estate development each year (accounting for up to 70 percent of GDP in 2010).

Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said.

Once the “economic tsunami” starts, the regime will lose credibility and China will become the poorest country in the world, Lang said.

Professor Frank Xie at the University of South Carolina, Aiken, said that the idea of China going bankrupt isn’t far fetched. Major construction projects have helped inflate the GDP, he says. “On the surface, it is a big number, but inflation is even higher. So in reality, China’s economy is in recession.”

Further, Xie said that official figures shouldn’t be relied on. The regime’s vice premier, Li Keqiang for example, admitted to a U.S. diplomat that he doesn’t believe the statistics produced by lower-level officials, and when he was the governor of Liaoning Province “had to personally see the hard data.”

Cheng Xiaonong, an economist and former aide to ousted Party leader Zhao Ziyang, said that high praise of the “China model” is often made on the basis of the high-visibility construction projects, a big GDP, and much money in foreign reserves. “They pay little attention to things such as whether people’s basic rights are guaranteed, or their living standard has improved or not,” he said.

Behind the fiat control of the economy, which can have the appearance of being efficient, there is enormous waste and corruption, Cheng said. It means that little spending is done on education, welfare, the health system, etc.

Cheng says that for the last decade the Chinese regime has accumulated its wealth primarily by promoting real estate development, buying urban and suburban residential properties at low prices (or simply taking them), and selling them to developers at high prices.

According to Cheng, the goals of regime officials (to enrich themselves and increase their power) are in direct conflict with those of the people–so social injustice expands, and economic propaganda meant to portray the situation as otherwise prevails.

If this report is true…..what is to gained from lying to the American people?

Another Economic Hit Approaches

My thinking was that the ratings would be lowered……and this post was going to be about that…..but the bastards best me to it…….oh well….onward and upward.

I wish that I had better news…..I hate being that guy that seems to always delivers the crappy stuff….but I do what I must to help people see what is coming…….

The economy is in the toilet….so it cannot get any worse, right?  Wrong again!  It will soon get a lot worse and this time it will be again on the backs of the unemployed……Washington is doping the spending cut two step and there is an economic storm approaching….NO!  This time it is not he debt or the debt ceiling……..but rather the stopping of the unemployment benefits……I know…I know……I can suck the fun out of the party…..but forewarned is fore armed…….

This from Yahoo News…….

At the start of 2012, the extended unemployment benefits approved by Congress in December 2010, which cover a maximum of 99 weeks per person, will expire. Though the benefits are hardly lavish–a little more than $300 a week for most recipients–their total impact on the economy is huge, because so many Americans are currently taking advantage of them. Moody’s Analytics estimates that when the benefits expire, $37 billion will be taken out of the economy, the New York Times reports. That’s enough to exert a significant slowing effect–at a time when the recovery is already a long way from robust.

Government benefits that go to poorer Americans, like unemployment insurance, tend to boost consumer spending more than other kinds of stimulus, because people living paycheck to paycheck have little choice but to spend the money, rather than saving it. So the disappearance of jobless benefits will take money out of circulation when economic growth is seeking to gain some traction.

Indeed, economists say that the withdrawal of jobless benefits will create a major ripple effect on growth as a whole. Consumer spending accounts for around 60-70 percent of U.S. economic activity, economists say. But with so many Americans having lost wealth in the housing bust, spending has been tepid for a while, preventing the recovery from gaining any momentum. Now, the end of the extended benefits will likely soon put a further crimp in spending.

Oh crap!  It cannot get much worse, huh?  Nope!  And how will our cowards in Washington handle this new crisis?  I know that at times I can be a bummer and I see boogey men behind every bank account….but so far I have been pretty accurate in my concerns….

And then there is Cantor, the House majority leader who said to Jim Kramer…..

CANTOR: Jim, the most important thing we can do for somebody who’s unemployed is to see if we can get them a job. I mean, that’s what needs to be the focus. For too long in Washington now we’ve been worried about pumping up the stimulus moneys and pumping up unemployment benefits and to a certain extent you have states for which you can get unemployment for almost two years and I think those people on unemployment benefits would rather have a job. So that’s where our focus needs to be.

So if you are unemployed you will most likely be one the chess pieces in a debate in the House and if all goes like it did with the debt debate…..YOU ARE SCREWED!