Links 8/1/10

Everglades on Unesco danger list BBC

Antarctica Experiment Discovers Puzzling Space Ray Pattern Live Science

Judge in Arizona law dispute gets torrent of death threats Raw Story

Tracking Gulf’s Fate as Slicks Recede Dot Earth (hat tip Glenn Stehle)

Southwest Rebrands Mechanical Difficulties As Acts Of God Consumerist

On physics and money Joe Costello

Social Security Jitters? Better Prepare Now New York Times (hat tip reader Glenn Stehle)

Friends Let Friends Read the Wall Street Journal Editorial Page Only If They Promise to Immediately Trade Against It Brad DeLong. I have a weakness for some of his headlines….

With Friends Like This … Gretchen Morgenson, New York Times. Felix Salmon wrote a good post early on about the disgraceful behavior of JP Morgan relative to its long-standing client, Cablevision.

$770 Billion in negative equity Economic Populist

Final Demand and the Inventory Cycle Dean Baker

Rising NAIRU? Tim Duy. From last week, but still worth reading.

The crisis of middle-class America Edward Luce, Financial Times

Antidote du jour:

Picture 9

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  1. psychohistorian

    It may be the time of the morning and where I spent the past few hours but I swear those bats look upside down to me…….

  2. attempter

    Re High Permanent Unemployment Level and the Social Security assault (two pieces above):

    Yet Fed officials seem to prefer the idea that unemployment becomes a long term challenge rather than a short run cyclical issue over the risk of inflation. Like fiscal policy, monetary policy is now limited by imaginary obstacles…..

    I would really appreciate a good story that explained why we should be happy about high productivity growth if real wage growth is not surging. The lack of the latter makes me question the reality of the former…..

    If the productivity gains are real, the wage gains should not be inflationary…. Otherwise, policymakers sit and wait as the potential structural rigidities deepen, thereby ensuring a higher NAIRU in the future. And, driven by fear of inflation, this appears to be exactly what policymakers intend to do.

    This is indeed what they intend to do, and these are the lies they’re telling, but the notion that they actually fear inflation is another such lie. That’s the same kind of lie as the phantom market vigilantes who are allegedly demanding “austerity”.

    Permanent high unemployment is in itself an intentional policy goal. It’s part of the winding down of the “growth” economy which will no longer be able to grow post-Peak Oil.

    The point of “austerity” is to steal the oil surplus-afforded public pension funds and other public property while the stealing’s good (since those programs are also no longer sustainable, so the only question is whether to restore them to the people as they’re liquidated by the end of growth, or for the elites to liquidate and steal them for their own benefit); similarly, it won’t be possible to resume productive growth. There hasn’t been any such real economy growth in over ten years now as it is; all the paper growth was just fraudulent finance sector “growth”, and whatever phony gains are temporarily measured during the phony “recovery” have the same character.

    So the point of normalizing permanent high unemployment, which is now a structural imperative which under the framework of continued neoliberalism, is to try minimize the political risks. So far the sheeple in America seem docile enough that if the government and MSM gradually indoctrinate them into the New Jobless Order they may meekly accept it. As it already is the temporarily-still-employed-and-indebted tremble for their jobs and are likely to self-quash dissenting thoughts let alone undertake actions. The atomization of the “citizenry” looks well advanced.

    So for the propaganda complex it’s stay the course on emitting the message that Permanent Joblessness (and an alleged “jobless recovery) are just laws of nature which cannot be gainsaid.

    The NYT’s villainous article represents the proposed gutting of Social Security as just such a fact of life. It elides how this is purely a political choice* and that a rational, freedom-loving citizenry could, should, and would reject it. A public interest newspaper which was still part of America rather than a propaganda outlet for the destruction of America would dedicate itself to educting people about the facts and exhorting them to citizen action. Instead the NYT, as always, stands outside the slaughterhouse assuring the herd that only good things await them inside, and at any rate they have no choice but to enter.

    Indeed it aggressively helps round up the herds.

    [*As I said above the pensions of the oil surplus are not sustainable in the long run, but they do exist in the shorter run. Their mode of winding down can be done in a way fully for the benefit of the people, which can alleviate the travails of the energy transition civilization must undergo post-Peak. That’s also why we should have instituted single-payer, not because it’s long-run sustainable, but because in the medium run it would be a constructuve use of the diminishing oil surplus.

    But “austerity”, such as gutting and privatizing Social Security now, the way the NYT demands we accept, wants to enable the gangsters to loot any surplus left while the looting’s good.

    That’s why we need to make the right political choices now.]

    1. psychohistorian

      I guess I see the issue bit simpler.

      The world governments are allowing multi-national corporations to play the collective human resources of our various countries off against each other in the name of free trade and free markets while at the same time there is no international governmental body that is assuring that these multi-national companies are organized for the betterment of society over the increased wealth of the relatively few owners.

      At any sustainable level of consumer demand we have too much labor for full employment world wide. With this understanding it seems extra sick to me to see countries racing each other to the bottom of the international wage scale. What happens when all the wage slaves of the world get down to subsistence living? I guess it will give new meaning to the definition of civilization’s advancement.

  3. craazyman

    Holy Shit those are two spirit beings caught and pulled fully formed from some visionary and penetrating Night Dream. How can anybody look at those eyes and not see a fully formed and calculating intelligences, hiding itself behind a demure downward gaze put on no doubt for duplicity and trickery?

    I think what they are is this: they’re the daimonic incarnations that fly in flocks of thousands in the etheric realm and suck perched on the souls of banksters, drinking anything that could form itself into empathy, civic responsibility, integrity, fairness, restraint, compassion, holisticism or any other quality that could restrain their wanton destruction of the financial system and economy and the genocide of millions of hapless and undefended human beings.

    This is the challenge we face. A demonic assault on the very foundation of our collective consciousness by swarms of millions of winged phantoms that camp like gargoyles on the outer edges of the egg-shaped soul sphere, and drain it of anything that empowers it to See itself. And so it walks blindly and destroys blindly and sanctifies itself with logic so tortured and shallow that one can only see in its pathetic workings the final evidence of the complete destruction of spirit and the usurpation by raw matter, bone and blood of what used to be called a human being.

    And when the raw matter wakes up on the final day to see itself as is truly is, the horror will be unbearable.

    1. Rex

      On a less dramatic note, I’m pretty sure the bat picture is upside down. They have more of a Nosferatu quality that way, but less of a bat quality.

    2. Bates


      Great job of connecting dots that are not visible to all…or perhaps to anyone but you! If two upside down bats stir your brain, how much verbiage would ‘Dante’s Inferno’ elicit?

      Yves…How about a pic from Dante’s Inferno so we can read Craazyman’s take?…My wife is a psychologist. She reads the comments here but doesn’t post. I can relay some of her comments. :)

      1. craazyman

        LOL Bates, already been there. Here is my very loose translation of Dante’s Hell from a few months back, thanks to the Archive search. ha ha ha aha ahahaha . . . too much fun, this . , , :) OK, I admit, those bats are kind of cute, really. Just having fun . . .

        This way and that, along the burning rocks
        I saw horned demons armed with great whips,
        Who cruelly beat those fallen from the pain.

        Shit! how they made them wrench and pump their legs
        with such fast blows! and truly not a chance
        between lashes to get a moment’s rest.

        While I was going on, my eyes saw one
        and he saw me; and I said: “Already
        With the sight of you I need to puke my lunch.”

        But still I held my ground to make him out,
        And with me, my sweet Guide came to a stand,
        And agreed to my going somewhat back;

        And he, the whipped one, tried to hide himself,
        Lowering his face, but little it disguised him;
        For I said: “You that castest down your eyes,

        If the features beneath your scars are true,
        Then you are J.B. Banker to Sovereing States;
        But what deed brings you to such torments?”

        And he to me: “Unwillingly I tell this;
        But forces here make me speak the truth,
        Which custom rarely graced me in the world above.

        I was the one who led the deal that made
        a knot of lies and frauds of simple loans
        and brought Europe to a breaking point of debts.

        but I’m not the only banker who weeps here;
        No, rather is this place so full of them,
        That not so many tongues to-day are taught

        from Hamburg to Savena to say ‘borrow’
        And if you want a certain pledge or proof,
        Make it one in taxes and in human bondage.”

        While speaking in this manner, with his whip
        A demon struck him, and said: “Get thee gone
        Banker, there are no nations here to loot!”

        So I went ahead and joined my Guide again;
        Thereafterward with a few steps we came
        To where a crag projected from the bank.

        This very easily did we ascend,
        And turning to the right along its ridge,
        From those eternal circles we departed.

  4. Ina Deaver

    The piece on the plight of the middle class is a nice addend to the discussion of why Elizabeth Warren will never get a responsible position. Her research into what happened to the middle class was a disturbing dose of reality back when the bubble was still inflating. I remember hearing her interviewed on the double-income trap back in 2003 and wondering who let the TRUTH get out on the airwaves! She said something then that I knew myself from looking at schools for my children but no one had adequately articulated to me: you either paid for the education in the price of the house in a decent public school neighborhood, or in private school tuition. But you were going to pay, one way or the other, because public schools had been set up to fail and were failing.

    But because the powers that be know, and don’t care, what is happening to the losers in the game, they can’t allow someone to stir up the serfs. If they were innocent, they wouldn’t feel threatened by Elizabeth Warren.

    Hard to come up with any faith at this point.

  5. Bates

    RE: “Social Security Jitters? Better Prepare Now New York Times”

    Recently our legislative critters have been openly discussing what to do about Social Security and Medicare since these are two huge components of the budget (leaving aside for a moment that these same legislative critters have decided that the US does not need a budget).

    At one time, not so long ago, SS was THE third rail and no politician dared mention it for it meant certain defeat in the next election cycle.

    A couple of questions about SS that the NY Times failed to address…

    1) Why were the ‘excess payments collected in most years’ invested in non negotiable government bonds that do not pay interest? Would any sane individual make such an investment knowing that the ‘target rate of inflation’ of the FED is 2%?

    2) Why were the funds collected by SS used as general revenue funds and not set aside for retiring seniors that had paid into the SS fund their entire working lives? If SS funds had been set aside in trust and simply invested in 30 year treasuries there would never be a ‘crisis’ for retiring seniors due to lack of funds.

    Once again we have been robbed by the theives starting wars of aggression for the benefit of the military and defense contractors…and every other bloated buracracy at all levels of government.

    Running an empire is a poor business model if the empire is constantly running at a loss. Perusing a bit of history of past empires will quickly and conclusively show where the US Empire is headed. Failure of the SS system is one more symptom of a greater failure.

  6. dearieme

    “And although the golden years were driven by the rise of mass higher education..”: or perhaps the golden years made possible the extravagance of the rise of mass higher education that charged extortionate fees?

  7. RueTheDay

    It appears the Tea Party wingnuts have taken over IBD:

    Will Washington’s Failures Lead To Second American Revolution?

    “A President Obama intent on achieving his transformative goals despite the disagreement of the American people has powerful weapons within reach. In one hand, he will have a veto pen to stop a new Republican Congress from repealing ObamaCare and the Dodd-Frank takeover of banks.”

    “Under ObamaCare, he can issue new rules and regulations so insidiously powerful in their effect that higher-priced, lower-quality and rationed health care will quickly become ingrained, leaving a permanent stain.

    Under Dodd-Frank, he and his agents will control all credit and financial transactions, rewarding friends and punishing opponents, discriminating on the basis of race, gender and political affiliation. Credit and liquidity may be choked by bureaucracy and politics — and the economy will suffer.”

    “And by executive orders and the in terrorem effect of an industrywide “boot on the neck” policy, he can continue to diminish energy production in the United States.”

    They go on to compare him to Caesar and to suggest that he is going to fraudulently rig the 2012 election to ensure victory.

    The authors were Treasury Dept. officials under Ford and Reagan.

    I consider myself a moderate, and have probably voted for an equal number of Democrats and Republicans over the years. However, over the past two years, the Republican Party has lost it’s freakin’ mind with this stuff.

    1. Anonymous Jones

      I feel similarly. I doubt any current politicians espousing the policies actually pursued all those many years ago by either Reagan or Nixon would get a dime of RNC money today. These men would be chased out of the party by an avalanche of funds directed at more suitable, pliant “conservative” politicians.

      [not that the Democrats don’t do the same thing, it’s just that their base starts at a different position and thus it’s a longer and more difficult slog to confuse that base into voting against their own self-interest (so in sum, IMO, the Ds are slightly less efficient and less capable of screwing the people who vote for them…very, very slightly)]

  8. Frank A.

    From Edward Luce:

    His words reminded me of a famous quip by George Carlin, the late, great American comedian – “It’s called the American Dream because you have to be asleep to believe it.”

    Yes indeed.

  9. Chris

    @Bates – “Legislative critters?” How cute. How about “legislative scum” or “fascist-elitist trash”? Come on, it’s time to get angry. Nothing changes until we have some fire in our bellies and massive civil unrest occurs. A nice general strike would be great. Americans are too stupid, divided, and brain washed for this to occur.

    1. Bates

      I am personally on strike against all banks and the ‘consumer economy’ and have been for many years. I have no debt, all possible transactions that can be accomplished with cash are accomplished with cash. I use credit cards very little and pay off balance 5 days prior to due date every month, leave only a couple of hundred dollars in checking and savings accounts (be imaginative and keep funds elsewhere), live frugally, do not spend money on consumer crap or vehicles (unless the wheels are literally falling off), I have owned current home since 1987, never refied or taken a second on it… and it does not have GRANITE COUNTER TOPS,…etc. You get the picture.

      If about 20% of Americans lived as I do we would starve the beast! No violence is necessary. Consumer thrift will accomplish more than storming the gates in our house of cards debt based economy. When you hear the tv bobble heads talking about ‘pent up consumer demand’…ignore them.

      And…it feels great to sit back and watch the azzhat bankers, Fed, and treasury try to figure out how to influence thrifty people like me to stop saving and start spending money. Remember, during deflation the purchasing power of your dollars increase causing your standard of living to rise…but the government has yet to find a way to collect taxes on your higher standard of living because your wages are stagnant or falling…one of many reasons governments hate deflation. Once thrift was considered a virtue… I still believe it is.

  10. Norman Morley

    Yves, This may sound dumb, but why can’t the Social Security cut off just be raised to infinity? Wouldn’t that really be fair? After all, everyone who works, pays into the fund, does so up to the cut off. Therefore, it stands to reason that there shouldn’t be any cut off in the amount of wages that pay into the fund. Perhaps, because I’m old, collect S.S. as my only source of income, the present “Kabuki” going on in Washington rattles my cage. A further point of my interest, I think it would serve the dwindling taxpayers of the U.S.A., if all of “K” street, members of Congress right up to the top, along with the looters of the treasury, were given a one way trip to the Moon. I think that would perhaps be the best solution to our present situation.

  11. Ronald

    $770 Billion in negative equity Economic Populist:

    Housing equity disappearing at an alarming rate but mortgage debt levels continue to rise seems to be the new normal. Financial media will be snorting out a variety patch of theories but the bottom line will be that little will be left of the equity pie but the debt will be left intact.

  12. squidly77

    Canada is running out of money, issues IOU’s to its departments:

  13. Jmd

    Regarding the JPM sale of the the Cablevision loan interest to a direct competitor, all I can say is, at least they told Cablevision about it. The large investment banks do this all the time through derivatives which can be structured to avoid/evade disclosure consent requirements with respect to borrowers. Sure, JPM looks slimy here, but I would bet that their competitors (GS, MS, Merrill) would not have even requested consent. Seriously.

  14. michel

    The FT article is excellent, and gives a vivid picture of the facts on the ground underlying the statistics. The situation is not confined to the US, we see the same thing occurring in the UK, perhaps in other European countries. Consider for instance the behavior of house prices in Germany.

    People arguing that the solution to this problem is more deficit spending, more public debt, more public sector employment of people basically doing nothing but impeding others from producing, they are nuts. But where they are not at all nuts is, the situation on the ground is dire, and there seems to be no mainstream program which will address it.

    The Austrian answer would be, liquidate and redeploy. When you consider the ineffectiveness and irrelevance of most policy proposals at the moment, it starts to look more plausible. Surprising though that is.

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