Pelosi delivers

[Pliny]

That Pelosi is a real trickster. Who would have thought she would come through so impressively? It was sort of a back door approach but it worked. I guess she is used to coming in the back door with all those back room deals of bribery and privilege granted those who may have shown some resistance to her charming self.

The Republicans now have dominance in the congress and President Obama has been handed his restraining order, as PJ O'Rourke so deftly put it.

Unfortunately, I don't foresee a vast improvement in the economy over the next two years. I would like to see what Obama has to say.

If he's the ideologue I think he is he will pretty much stay the course.

Since the economy is the biggest problem facing the country The Federal Reserve has a lot of input as far as policy. I don't think Bernanke is going to abandon his zero interest rate policy (ZIRP) or quantative easing (QE - the fancy term for creating money from nothing.)

Volcker back in 1980, during that recession decided to raise interest rates to save the dollar. It looks like Bernanke is willing to sacrifice the dollar. Attempting to resolve the slow economy with ZIRP and QE makes currencies unstable. Watch for loss of value in your pension plan. Reminiscences of Zimbabwe spring to mind.

A higher interest rate is hard for those with debt and a bitter pill to swallow but if confidence in the economy is to be restored then confidence in the dollar must be restored.

If you want to create some quantative easing it would best be done by rewarding savers through higher interest rates not further destabilizing the dollar by just devaluing it.

I hope some of the new blood in Washington has the tenacity and cojones to expose the Fed and it's current policies for what they are so the people can get back to work.

Edited November 3, 2010 by Pliny

[eyeball]

Since the economy is the biggest problem facing the country...

I think if you look more closely you'd probably find the state of the economy is merely one of the symptoms.

...confidence in the dollar must be restored.

Actually, I think it's the hubris in the dollar that's missing.

[Pliny]

Since the economy is the biggest problem facing the country

I think if you look more closely you'd probably find the state of the economy is merely one of the symptoms.

confidence in the dollar must be restored.

Actually, I think it's the hubris in the dollar that's missing.

Something has to be #1. You may call it hubris and indeed it was an arrogant move of bankers to basically write themselves a blank cheque and start the metamorphosis of money from the binding restraint of a limited resource commodity to fiat paper notes that grow on trees and from there to the more environmentally friendly electronic entry on an electronic balance sheet.

Nevertheless, hubris; confidence, whatever you want to call it, money has to fulfill the purpose it is designed for and confidence lost in the American dollar, as the currency standard, is confidence lost in all fiat paper currencies.

[eyeball]

Something has to be #1. You may call it hubris and indeed it was an arrogant move of bankers to basically write themselves a blank cheque and start the metamorphosis of money from the binding restraint of a limited resource commodity to fiat paper notes that grow on trees and from there to the more environmentally friendly electronic entry on an electronic balance sheet.

Nevertheless, hubris; confidence, whatever you want to call it, money has to fulfill the purpose it is designed for and confidence lost in the American dollar, as the currency standard, is confidence lost in all fiat paper currencies.

It's just a good thing there's more to life than money.

Edited November 4, 2010 by eyeball

[Pliny]

It's just a good thing there's more to life than money.

When money represents the value of your efforts to produce and contribute to others it simply serves as a measure of our value to the community. You and I know it no longer does measure the value of your contribution - it has lost it's hubris and become a token used by governments to reward and punish at their whim. The populace, you and I, attempt to be fair in our transactions but it becomes increasingly apparent that something unfair is occurring and we find it difficult to place a value on our efforts while some seem to walk the primrose path of dalliance and others simply yield to dependence.

Edited November 4, 2010 by Pliny

[bloodyminded]

When money represents the value of your efforts to produce and contribute to others it simply serves as a measure of our value to the community. You and I know it no longer does measure the value of your contribution - it has lost it's hubris and become a token used by governments to reward and punish at their whim. The populace, you and I, attempt to be fair in our transactions but it becomes increasingly apparent that something unfair is occurring and we find it difficult to place a value on our efforts while some seem to walk the primrose path of dalliance and others simply yield to dependence.

I agree in a way, but I disagree with what I think is an implied premise: that the private sector is inherently "fair in its transactions" (were it not for the evil statists) and that financial compensation (or discompensation) is commensurate with some true "value" in the sense people view the word beyond the cold and austere economic terminology.

People continually try to screw people out of money, in order to have more of it. That's ancient; it's been practically sanctified; and so money decidedly does not "represent the value of your efforts to produce and contribute." Work at WalMart for a while, and find a single employee (excuse me: "associate") who believes he or she is being "fairly compensated."

(I understand the arguments for such a system, and am not trying to interject that particular argument; I"m saying that the notion of "fair and just reward" is not an inherent trait of the private sector, forever undermined by government. In fact, I think it's jaw-droppingly preposterous.)

It's never been the case. The government, if not particularly helpful is not at fault; the government, too, is a symptom of this much larger paradigm, not a cause.

Edited November 6, 2010 by bloodyminded

[Jack Weber]

I agree in a way, but I disagree with what I think is an implied premise: that the private sector is inherently "fair in its transactions" (were it not for the evil statists) and that financial compensation (or discompensation) is commensurate with some true "value" in the sense people view the word beyond the cold and austere economic terminology.

People continually try to screw people out of money, in order to have more of it. That's ancient; it's been practically sanctified; and so money decidedly does not "represent the value of your efforts to produce and contribute." Work at WalMart for a while, and find a single employee (excuse me: "associate") who believes he or she is being "fairly compensated."

(I understand the arguments for such a system, and am not trying to interject that particular argument; I"m saying that the notion of "fair and just reward" is not an inherent trait of the private sector, forever undermined by government. In fact, I think it's jaw-droppingly preposterous.)

It's never been the case. The government is not at fault; the government, too, is a symptom of this much larger paradigm, not a cause.

That's right!

I love it when business pats itself on the back for being fair when dealing wage and benefit plans...Particularily in non unionized environments.It's only fair to them because the employees,or associates in this case ,have no recourse but to take what they are given and force a smile...

We've had a busines first,neoliberal economic outlook for almost 30 years in the West.In that time,we've seen the stock market hit heights unseen,corporate profits go through the roof,and,the standard of living of most people stagnate or get worse...Something is drastically wrong with that...

[sharkman]

The standard of living of most people has not stagnated over 30 years, and that stock market you seem to misunderstand is a source of real wealth for anyone who has the scruples to save and invest. There have certainly been challenges for the West, but we've been leading the world in quality of life and personal wealth for a lot longer than 30 years.

For the first time in my life, I joined a union a couple of years ago. The whining and complaining coming from some of these cry babies is ridiculous. We are paid the highest in the industry, with benefits packages that are second to none, and the union attitude in general showed me that no matter how good things are for people, some will always find something to become unhappy about.

[Sir Bandelot]

When money represents the value of your efforts to produce and contribute to others it simply serves as a measure of our value to the community. You and I know it no longer does measure the value of your contribution - it has lost it's hubris and become a token used by governments to reward and punish at their whim. The populace, you and I, attempt to be fair in our transactions but it becomes increasingly apparent that something unfair is occurring and we find it difficult to place a value on our efforts while some seem to walk the primrose path of dalliance and others simply yield to dependence.

The general public has become aware of this imbalance. IOW people know we're being systematically screwed. And I believe, this is very much part of the reason that "consumer confidence" is down. Consumers, the middle class, are not spending what they have left over on stupid trinkets and toys. Certainly not the way we used to a few decades back. The obvious corruption of the system is one factor. Others include fear over polluting the environment, rejection of inferior or tainted goods made in foreign lands. Items made by child labourers for sale cheap at Woolco Woolworths (if there still was a Woolco Woolworths). Let alone the losses in jobs and income right here in North America. People are getting sick of the injustice. Because the current system is consumer based, through mass production, it has depleted its resources and lost the public confidence. Consumerism is becoming a dirty word. Now there is only one thing left for it to consume.

The new economy will be based on interest in buying local made goods, made by small manufacturing operations, networked together with other local industries to keep costs low. People want good quality, safe products and fair jobs. People will demand more balance between time spent at work and family life. People will want to make things themselves, fix things, not throw everything away.

[Jack Weber]

The standard of living of most people has not stagnated over 30 years, and that stock market you seem to misunderstand is a source of real wealth for anyone who has the scruples to save and invest. There have certainly been challenges for the West, but we've been leading the world in quality of life and personal wealth for a lot longer than 30 years.

For the first time in my life, I joined a union a couple of years ago. The whining and complaining coming from some of these cry babies is ridiculous. We are paid the highest in the industry, with benefits packages that are second to none, and the union attitude in general showed me that no matter how good things are for people, some will always find something to become unhappy about.

I'm not complaining about the stock market exactly,I invest as well...

However,if you don't think there has ben a direct correlation between the neoliberal economic policies put forward by the likes of Reagan and Thatcher in the early '80's and the wage stagnation that has occured since then,you're dreaming in technicolour...

http://www.monthlyreview.org/0607wkt.htm

http://www.freelibrary.com/Why+have+real+wages+lagged+labour+productivity+growth+in+Canada%3f-a0199685171

http://ca.news.finance.yahoo.com/s/26122009/2/biz-finance-economy-recovers-decade-joblessness-flat-wages-lie-ahead.html

Even the National Post does'nt agree with you...

http://www.nationalpost.com/nationalpost/story.html?id=485124

Edited November 7, 2010 by Jack Weber

[BubberMiley]

We are paid the highest in the industry, with benefits packages that are second to none, and the union attitude in general showed me that no matter how good things are for people, some will always find something to become unhappy about.

Then why don't you stop whining and cheer up? You're in a union now. You can enjoy the last remaining days of the middle class organized labour created.

[blueblood]

The standard of living of most people has not stagnated over 30 years, and that stock market you seem to misunderstand is a source of real wealth for anyone who has the scruples to save and invest. There have certainly been challenges for the West, but we've been leading the world in quality of life and personal wealth for a lot longer than 30 years.

I think the problem with the US is that it got too wealthy and discovered the wonderful world of outsourcing. For the world in general I think this is a good thing. We have GDP growth in India, Brazil, and China of well over 5% and as high as 8%. North America can only dream of growth like that now. There have been scores of Capital flowing to these countries making investors and citizens of these countries in a much better financial situation. North American and Western European are in for a bath until these countries have the ability to consume their own products. The only thing saving Canada from taking a huge bath resulting from a US downturn is that these emerging economies need our products and that Western Canada has a more diverse export market than the rest of the continent.

The US will grow again when the world catches up.

[Pliny]

I'm not complaining about the stock market exactly,I invest as well...

However,if you don't think there has ben a direct correlation between the neoliberal economic policies put forward by the likes of Reagan and Thatcher in the early '80's and the wage stagnation that has occured since then,you're dreaming in technicolour...

http://www.monthlyreview.org/0607wkt.htm

http://www.freelibrary.com/Why+have+real+wages+lagged+labour+productivity+growth+in+Canada%3f-a0199685171

http://ca.news.finance.yahoo.com/s/26122009/2/biz-finance-economy-recovers-decade-joblessness-flat-wages-lie-ahead.html

Even the National Post does'nt agree with you...

http://www.nationalpost.com/nationalpost/story.html?id=485124

Let me illustrate something about the gap between rich and poor and how that gap widens, Jack.

Every tax increase marginalizes someone and the numbers of the poor increase. Every rise in wages, that is not based upon an increase in production, puts someone out of work or may close a business.

[Bitsy]

If you want to create some quantative easing it would best be done by rewarding savers through higher interest rates not further destabilizing the dollar by just devaluing it.

I agree, Pliny, that is exactly what should be done; nothing like a bit of inflation to get money circulating. Now, I shall sit and wait for the slings and arrows of the anti-inflationary ideologues.

[bloodyminded]

Let me illustrate something about the gap between rich and poor and how that gap widens, Jack.

Every tax increase marginalizes someone and the numbers of the poor increase.

Except that the gap between rich and poor has widened monumentally as the tax rate has fallen.

I'm not even suggesting that it's causation, because I don't know. But you are.

Every rise in wages, that is not based upon an increase in production, puts someone out of work or may close a business.

Every right-wing economist worth his salt will tell you that this is not a zero-sum game.

[Pliny]

Except that the gap between rich and poor has widened monumentally as the tax rate has fallen.

INCOME tax rates have fallen slightly, indeed. But they are not the total sum of taxes we pay nor government services that are charged us.

I'm not even suggesting that it's causation, because I don't know. But you are.

That plus government licensing and regulation of all sorts that limits who can work and where.

Every right-wing economist worth his salt will tell you that this is not a zero-sum game.

Government is the only thing that is not a zero sum-game. It gives and takes at it's whim. Trade is a zero sum game. It's a co-operative mutual interaction where the parties involved gain and if that were not true no trade would occur.

[Pliny]

I agree, Pliny, that is exactly what should be done; nothing like a bit of inflation to get money circulating. Now, I shall sit and wait for the slings and arrows of the anti-inflationary ideologues.

Of course the reason money circulates is people want to divest themselves of it before it becomes worthless. You won't get just a bit of inflation from $600B you'll get quite a bit. I note that just from the announcement the Canadian dollar is already above par.

[bloodyminded]

Government is the only thing that is not a zero sum-game. It gives and takes at it's whim. Trade is a zero sum game. It's a co-operative mutual interaction where the parties involved gain and if that were not true no trade would occur.

That both parties gain does not constitute a zero-sum game.

If wealth can be created...it is not a zero-sum game.

It seems I'm now the consevative, arguing with socialist Pliny.

[Pliny]

That both parties gain does not constitute a zero-sum game.

If wealth can be created...it is not a zero-sum game.

It seems I'm now the consevative, arguing with socialist Pliny.

My understanding of a zero sum game is that both parties in a transaction gain. Do they gain equally? According to each participants subjective valuation the gain is sufficient enough to conclude a transaction. There is no loss = zero sum. Government is the only entity that can legally run a non-zero-sum game, that is, where someone gains at someone else's expense. Outside of government it is called fraud or theft or perhaps insurance.

I'm not politically conservative so I guess I must be socialist.

Edited November 14, 2010 by Pliny