Economics

Conspiracy Theories.

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I’ve been having some fun poking around old posts on my own blog to see how some have held up ten years later.

Conspiracy theories seem to have held up well, and new ones keep popping up. Like Jeff Bezos trying to spin a conspiracy theory about how his penis pictures got to National Enquirer. No, it wasn’t Trump.

Now, the Wall Street Journal reports that Michael Sanchez, “a talent agent who has managed television pundits and reality-show judges” has also “long been a source for the Enquirer.” And, according to the paper, Michael Sanchez sold the Bezos texts to the Enquirer for $200,000.
Imagine that. Mogul sends deeply private texts to gossipy L.A. girlfriend who has gossipy, fame-hungry brother, and somehow it gets out! No Saudis required.

Hilarious.

This one of mine from 2010 has stood up pretty well.

The Democrats are committed to static analysis of tax effects. A tax cut loses revenue while a tax increase adds revenue. Now why are the Democrats, who have large majorities in both houses of Congress, unable to block this Republican effort to keep tax rates the same? It can’t be good economic policy because Steve Benen said so. What could they do to convince Republicans the Democrat position is the better choice ? Here are some theories.

You’re sending the message the richest of the rich actually control this country, and in order to get a few crumbs for the common man, the rich need to be paid off with borrowed money – money that the common man (and woman), and their children, will be obligated to pay back, with interest. That does not bode well for the future of America.

Posted by: delNorte

So the rich and the corporations control the country. That is probably the most widely accepted conspiracy theory in the country. It is accepted by the left and many independents.

I think it’s a confluence of reasons: 1) It’s a simple issue with little to no nuance. There is no good reason to extend the cuts to the rich (outside of politics). 2) OTOH, the bank bailout and the fin reg are/were very complex issues which did not satisfy anyone’s sense of justice for holding responsible those to blame for the mess we’re in.

Posted by: You Don’t Say

Now, there is another theory. There is no reason to keep the tax rates the same for those with incomes over $250,000 except politics. Here is a person who does not believe that small business creates jobs. I doubt he would be impressed by this video. That business owner makes $300,000 and employs about ten people. Raise his taxes and what happens ? Who cares ?

There is absolutely NO convincing case that extending tax breaks for the super-wealthy is good for the nation; quite the reverse — it signals that the unabated looting of America is now in full swing;

Not much has changed in 9 years. Emphasis, maybe.

This morning, the This Week program on ABC, in its new incarnation with Christiane Amanpour, spent the entire show on DADT. They said not a word about the economy. DADT will not be repealed so why spend an hour on it two days after the unemployment rate went up again to 9/8% ? The political left is bored by economics and the national economy. They are far more interested in social issues like DADT or gay marriage. I can understand this because so many of them are government employees, or academic institution employees or low level employees of private organizations who have nothing to do with managing the business. They don’t know how private business is managed, they have never signed the front of a paycheck, and have no idea how people make decisions about investing because, aside from 401ks, they have no contact with it.

Gay marriage has given way to transgender and global warming is still going strong,

The Trump Russia Collusion story explained.

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The election of Donald Trump as president in 2016 was a catastrophic event for a segment of the US government. It had been assumed by the entire “Ruling Class” that Hillary Clinton would, at last, be elected president. Books have been written about her reaction to the loss. One was titled, “Shattered” and recounted her reaction. A pretty good analysis in this Amazon book review.

To be fair to the authors, they lay the blame for her loss squarely on her. They sort of feel bad about it but their close access makes it obvious to them and they are objective enough to report it. The other main person held responsible is campaign manager Robby Mooks, who is so enamored with ‘analytics’ that he can’t see the forest for the trees. The canary in the coal mine is Bill Clinton, who senses that his wife and her campaign are not connecting with the white working class, but is ignored by the team who consider him washed-up and out of date.

What happened after she lost ? The Russia Collusion story was concocted.

Here is an analysis of How it began and why.

It turned out, however, that the dossier was a Clinton-campaign opposition-research project, the main allegations of which were based on third-hand hearsay from anonymous Russian sources. Worse, though the allegations could not be verified, the Obama Justice Department and the FBI used them to obtain surveillance warrants against Page, in violation of their own guidelines against presenting unverified information to the FISA court. Worse still, the Obama Justice Department withheld from the FISA court the facts that the Clinton campaign was behind the dossier and that Steele had been booted from the investigation for lying to the FBI.

Now, more analysis is coming from Sharyl Attkisson.

Taken together in context, the evidence points to two important findings. First, U.S. government insiders, colluding with numerous foreign citizens and governments, conspired to interfere in the 2016 election. Second, after the election, these figures conspired to undermine, oust, and perhaps even frame Trump and some of his associates.

The methods used, according to factual accounts and witnesses, include collusion with reporters and politicians, leaks to the press, and paid political-opposition research. Officials in the intelligence community were involved in the effort, which included the use of the Foreign Intelligence Surveillance Court (FISC), domestic and foreign informants or spies, and electronic surveillance.

Both articles are worth reading in full. The fact that other diversions are appearing, like the hoax bomb story, suggests that the Democrats know the Mueller “investigation” is going to be ended soon with a dud.

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An interesting analysis of the 2008 housing collapse.

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The 2008 economic collapse gave us ten years of economic malaise and the presidency of Barack Obama.

Why did it happen ? I have been a fan of Nicole Gelinas’ book, “After the Fall”

I wrote a long review of it at Amazon, which is still a favorite of readers.

Now, we have a very interesting new analysis, which blames housing almost exclusively.

Looked at in terms of the popular narrative that there was a “financial crisis,” readers shouldn’t be fooled. There was nothing financial about what happened ten years ago. The “crisis” was made in Washington. Left alone, economies and markets never go haywire when natural market forces are putting out to pasture the weak, only to redirect the previously underutilized resources of the weak to higher uses.

He makes an interesting point, which tracks with my own observations.

a booming housing market of the kind experienced in the ’70s and ’00s is not a sign of economic vitality. Getting into specifics, a home purchase is not an investment. It won’t render the buyer more productive, open foreign markets for same, or morph into capital meant to develop something productivity-enhancing like software. Housing is consumption, that’s it. On the other hand, investment is what powers economic growth, so the very notion that a reorientation of precious capital away from consumptive goods and into production would foster economic crisis is for those who presume to comment on the economy to reveal how little they understand what they’re writing about. The feverish consumption of housing was what was holding the economy down, which means a reversal of what weighed on the economy would logically be good for growth. If so, markets would have discounted housing’s correction positively.

I moved to Orange County in 1972 to begin my medical practice. I already owned two homes in South Pasadena which I had difficulty selling after the move. There was no appreciation of housing. By 1975, when a bear market caused a malpractice insurance crisis for doctors, my 1972 house had tripled in value. The South Pasadena house I finally sold in 1972 for the same ($35,000) price I had paid for it in 1969, was by 1979 for sale for $595,000.

What did happen in both the 1970s and 2000s is that the dollar substantially declined vis-à-vis foreign currencies, commodities, and seemingly everything else. This matters because in both the ’70s and ’00s, gold, oil, wheat, land, rare stamps, art, housing, and just about every other kind of hard asset performed well. Well, of course. When money is losing value, the hard assets least vulnerable to currency devaluation perform best. In a repeat of the ’70s, housing and other commodities proved a safe haven in the ’00s from the U.S. Treasury’s policies in favor of a devalued dollar.

I remember well the rush to buy gold and antiques as hedges against the post 1974 inflation. An elderly woman in Oceanside California got wide publicity for her “crazy” decision to invest her money in buying four Rolls Royces and putting them in storage. She paid about $50,000 each. Five years later they were worth about $200,000 each.

Then came 2008.

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Trump and Kim.

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There is intense interest in the present meeting in Singapore of President Trump and Kim Jong-Un. Some observers are hoping it fails, because it is Trump, of course.

Bill Maher, the “comedian” on late night TV hopes the economy collapses to “get rid of Trump” but is mildly optimistic about the meeting with Kim.

Bill Maher thinks President Donald Trump’s agreement to meet with North Korea’s Kim Jong-un is “so crazy, it just might work.” Faint praise indeed.

More important is this article from Asia Times.

Unlike his father, the 34-year-old Kim has been active in pursuing pro-market economic growth and may be aiming to emulate Deng Xiaoping, the architect of China’s reforms in the late 1970s. Kim’s recent sacking of three senior old-guard military officials may hint that he is ready to offer some important concessions to prepare a favorable diplomatic environment for concentrating on economic development.

Some interesting ideas there.

Meanwhile, the G7 trade talks went nowhere and that might be just as well.

In the past 25 years all manufacturing and investment into Mexico and Canada has been reliant on their position to exploit the NAFTA loophole; the backdoor access to the U.S. market. If Trump shuts down that loophole, and brings the manufacturing and assembly back to the U.S., investment North and South of the U.S. border will drop exponentially and the Canadian and Mexican economies will likely shrink rapidly.

We live in interesting times.

Internal Secession ?

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The Trump Derangement Syndrome shows no sign of stopping. The alleged meeting between Russians and Donald Trump Jr is reaching a new level of fever.

The anti-Trump mainstream media is buzzing with news that Rinat Akhmetshin, a Russian American lobbyist and veteran of the Soviet military, attended the June 2016 meeting between Donald Trump Jr. and Russian lawyer Natalia Veselnitskaya.

Rosalind Helderman and Tom Hamburger of the Washington Post insist that Akhmetshin’s presence “adds to the potential seriousness of the Trump Tower gathering that is emerging this week as the clearest evidence so far of interactions between Trump campaign officials and Russian interests.” I think they mean the only evidence.

But now does the attendance of this lobbyist add to the “potential seriousness” of the “gathering”? If it was inappropriate for Trump Jr. to meet with one Russian lobbyist with probable Kremlin connections, the attendance of a second doesn’t make the meeting more inappropriate.

The hysteria shows no sign of abating. What comes next ?

“Resist” marches all over the country bring out thousands of leftists and feminists.

Tens of thousands of LGBTQ folk and their allies marched through Hollywood and West Hollywood on Sunday for the Resist March, a protest which this year replaced the colorful and over-the-top celebratory atmosphere of a Pride parade.

The event was billed as non-partisan, but unmistakeable was the heavy presence of marchers bearing anti-Trump signs, speakers decrying the administration’s immigration, healthcare and civil rights policies, and Democrats calling for a burst of activism to channel into the 2018 elections.

Richard Fernandez has some thoughts on where this might go.

Internal secession.

Our trust hierarchies have collapsed. As with Soviet Russia, the “official” media sources are now distrusted as purveyors “fake news”. To fill the gap a peer-to-peer grapevine, similar to the “friends and family”, a samizdat is emerging to pick up the slack. Sonya Mann at Inc uses a startup to illustrate the growing division of society into trust groups. “Pax Dickinson wants to fund the revolution. Not a blood-in-the-streets revolution, but one where hardcore right-wingers can economically secede from the parts of society they vehemently dislike. “We need parallel everything. I do not want to ever have to spend a single dollar at a non-movement business.”

That’s the right, the alt-right if you prefer.

The left has already shown their willingness to boycott any business that does not follow their script.

Ask Brenden Eich.

Brendan Eich recently stepped down as CEO of Mozilla, developer of the Firefox Web browser. It may be more accurate to say he was forced out in the wake of a rising boycott against him. The backlash against Eich is related to his position on gay rights, but many feel that the campaign against him is its own form of discrimination and intolerance.

His crime was to quietly donate $1000 to the Proposition Eight ballet initiative, which resulted in over 7 million yes votes and a 60% margin of approval. The proposition was ruled unconstitutional by a federal judge who promptly married his gay lover.

California’s AG declined to appeal his ruling. That’s a pretty effective boycott.

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