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Raking the Social Latrines for Alms for California. Another NYT Scheme for Indebtedness.

Raking the Social Latrines for Alms for California. Another NYT Scheme for Indebtedness.

 

Abstract: The New York Times has identified some ‘academic’ with a new plan to save California from bankruptcy at NO COST to the federal government or California taxpayers. The state could borrow money from the Treasury as an ‘advance’ on current federal matching funds and spend that to hasten the “recovery.”  This would cost the Treasury nothing except some minor administrative costs. This would transpire with no risk of default and the money would be paid back with interest. Again, we must read more of the debunked Keynesian stimulation policies that currently are crashing much of Europe in debt and inevitable default. Any prattle we can conjure is appropriate for California to beg for alms.

 

We can estimate the level of panic and angst for ants, dogs and panhandlers by their frenzied physical antics, some persistent foam at a key orifice or two and other attributes such as screaming. Frequent bouts of whooping signal us that something important is to be set up on the pergola as the new idea. Those who have fallen in esteem by some now-outdated moral standards in our society are habitually idolized and held up as heroes in the pages of the New York Times. Any person who is a criminal, a debtor, pervert, drug addict or Islamo-Fascist or is even in bankruptcy is a likely candidate for a brief but starry op-ed piece hastily primed with the recurring notion that our ‘system’ (read the Republicans or capitalism) is  responsible for their sorry plight.  We routinely witness this narrow ragzine mentality in  a variety of writers[1][2][3][4][5][6][7][8] and staff[9] that may appear to have spent some time thinking and analyzing the news and have arrived at a fresh and objective opinion after ‘reviewing the facts.’  There is fame and fortune in this reporting and commentary business if they can rise above the rubble of yellow journalism and launch some New Leftist concepts or perhaps discover some hidden secrets behind some tragic event and unleash them upon the public in a brilliant op-ed replete with noisy flourish and kazoo fanfares.  Many must thrash about in a contest of ideological rivalry to see if any are noble enough to match the elegant essays of their honored Pulitzer Prize winner Walter Duranty,[10] but most fail. When things run a bit stale the NYT trolls the academic scene for new ideas. Today, we are treated to a wonderful new idea that ‘solves’ the California[11][12][13] debt/spending problem with no cost to the federal government. And we thought we ran out of miracles in finance!

 

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

Wonderfulness now begins:

 

HERE in California, where people tiresomely boast that the state’s gross domestic product exceeds that of all but seven nations, I keep expecting a ballot initiative demanding admission to the Group of 8 industrialized nations. I’d consider voting for it, too; then maybe Washington would work as hard to synchronize its economic policy with Sacramento as it does with Tokyo and Bonn. The lack of coordination within the United States — and, equally important, the failure to recognize the states as macroeconomic players — helps explain our sluggish recovery.”[14]-- Let Treasury Rescue the States By Christopher Edley Jr. Op-Ed Contributor Published: July 7, 2010 [Emphasis is mine in all quotes.]

 

I think some of us recall that California has 11% of the population and a booming drug and prostitution business and that this sums a bit higher than the GDP of Luxemburg. Greece is a “macroeconomic player” too and so is Spain, both to soon crash in a whirlwind of debt and defaults from foolish spending. We are somehow left hanging for the linkage between recognition and sluggishness, but we need to read on. The first part of this piece is just pulp that is apparently written to grease the skids of the lower reaches of our society at least in financial and moral terms. Big must be beautiful we learn here—not goodness just bigness.

 

This next sentence is a stunning example of illogic, pandering and obfuscation.

 

To make matters worse, several states have country-sized G.D.P.’s, but none has the macroeconomic tools of an independent country. Every state except Vermont has some sort of balanced budget requirement that prevents it from weathering a recession by running up big deficits to keep teachers employed, students in college, welfare payments flowing and construction humming. Nor can New York and California stimulate their economies by, say, printing more currency. Instead, states are managing huge budget crises with the only tools they have, cutting spending and raising taxes — both of which undermine the federal stimulus.”--Let Treasury Rescue the States By Christopher Edley Jr.

 

We should have to read not much further to recognize this was written in Berkeley, Calif. Or Bezerkely as David Horowitz calls it. The idea of a balanced budget is trashed here. Here, in the best traditions of propaganda, we find embedded in this paragraph the Keynesian Nostrum that massive government spending can usher a sorry state over a terminal financial hurdle. The central issue in this piece is that states cannot, as yet, print their own money and that they might have to cut spending and furlough some of their socialist workers. He omits the salient fact that raising taxes in California is not an option as it takes some 2/3 majority by the elected officials in Sacramento to hike taxes and the governor’s signature. He omits the other fact that certain debt is prohibited or was. This is how Spain and Greece came to peer over the yawning crevasse that they will soon careen over into financial oblivion. Stay tuned, this gets funnier as it progresses in word count.

 

The New Idea~!!

 

That’s why the best booster shot for this recovery and the next would be to allow states to borrow from the Treasury during recessions. We did this for Wall Street and Detroit, fending off disaster. It’s even more important for states.”--Let Treasury Rescue the States By Christopher Edley Jr.

 

Now, why didn’t we think of this sooner? How about a Nobel Prize in Economics for this inspiration? The money chucked into the Wall Street nooks and crannies was not necessary and we should have let these businesses crash but the event served as a point of inspiration to those who can do little but beg for alms or write fanciful financial pieces for the NYT.[15] California’s budget is out of control and their debt is massive and there is no mention of the 500 bln needed to ‘fund’ the California retirement monster.  If they spend more they will recover we learn today.

 

A slip in time gains nine:

 

Here’s how this would work. States already receive regular federal matching grants to help pay for Medicaid, welfare, highway construction programs and more. For instance, the federal government pays a share of state Medicaid costs, from 50 percent to more than 75 percent, depending on a state’s wealth. The matching rates were temporarily sweetened by last year’s stimulus.

 

But Congress should pass legislation that would allow a state to simply get an “advance” on these future federal dollars expected from entitlement programs. The advance could then be used for regional stimulus, to continue state services and to hasten our recovery.”--Let Treasury Rescue the States By Christopher Edley Jr.

 

Wimpy would always promise to pay you back for the loan of some urgent hamburger money on Tuesday. This is like offering a drunk some more Tokay so that he will be in better shape to drink some more or like providing a crack addict with a few extra vials so he or she can turn better tricks and earn more dope money. California already has a credit rating down in the lower reaches that match Zimbabwe and this author suggests that this can be paid back? At what interest rate? Oh, the current 1.5%??

 

The soundness of this measure is now showered upon us:

 

The Treasury Department, which writes the checks to the states, could be assured of repayment (with interest) by simply cutting the federal matching rate by the needed amount over, say, five years. Of course, when Treasury eventually collected what it was owed, the state would have to cut spending or find new revenue sources. But that would happen after the recession, when both tasks would likely prove easier economically and politically.”--Let Treasury Rescue the States By Christopher Edley Jr.

 

We can just borrow from the future! Wow! We can just pour money from one bucket into another for a Zero Sum Game spectacular. S0, we just spend more and wait until the ‘recession is over’ and that might be 5 years. And, later the state would have to cut spending or find new revenue sources. How about a perpetual loan from Treasury so they can become even more prosperous? California will cut spending? Look at their record. New revenues sources? Their current idea is to legalize, nurture and sell marijuana and tax that at 30% as if the criminals who grow this stuff would be so kind as to report their sales to the state.  What happens if California defaults on these loans as they are certainly going to do with their other obligations?

 

The author[16] is a minority from Harvard who worked for Peanut Jimmy for a time.  His eternal theme has been ‘social justice,’ a euphemism for reversed racism, contempt for capitalism and wealth redistribution mandates for minorities. This nonsense is exactly what tokens were taught when they were admitted to universities with low SAT scores and given cookie courses to keep their grades above the D level. He must assume that a move from Harvard to Bezerkeley is some form of up. The implicit theme here is to grab money in any way shape or form from anywhere and simply give it to blacks and others who cannot cope with our society. I wonder why his scheme didn’t include a reparations legacy in proportion to the number of black citizens in California. That would rate some praise and more votes.

 

And, all this at NO COST!!

 

“What would this cost the federal government? Nothing. There would be zero risk of default, and a guarantee of full repayment plus interest equal to what Treasury pays in the bond markets to borrow. Congress would need only to appropriate the administrative costs of this program, which would be minimal.”--Let Treasury Rescue the States By Christopher Edley Jr.

 

Indeed, our best shot at devising United States economic policy may be to give the states the role of creating and carrying out the economic stimulus we so desperately need.”--Let Treasury Rescue the States By Christopher Edley, Jr.

 

This essay is a bit more than pathetic. It sounds like some Hurdy-gurdy grinder’s tune that attracts benevolent givers to plunk a few shekels into the tin cup to feel oh so good.  California is in a terminal swoon and probably cannot recover so the idea is to hike up the debt. It seems that our liberal soothsayer depends on the idea that printed money from the Treasury is somehow ‘free’ and that there is no limit to how much paper they can print before Fitch or Moody’s downgrades our AAA credit rating to junk. The IMF warned the US this very day to cut spending.[17]

 

And we once thought Harvard actually trained their students in finance, logic or thinking. This essay refutes that sorry notion. Let us train some more minorities in the legal arena and hope we can produce one with more competence than this specimen.

 

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 



[5] The Babbler and the Old Brown Lady of the NYT Babble about Election Tealeaves. Liberalism Prevails in all Variants.

http://rycksrationalizations.blogtownhall.com/2009/11/10/the_babbler_and_the_old_brown_lady_of_the_nyt_babble_about_election_tealeaves_liberalism_prevails_in_all_variants.thtml

 

[6] Quoth the Old Red Lady of the NYT: Mirror Mirror on the Wall!  Do I see My Party and Myself in My Writings?

http://rycksrationalizations.blogtownhall.com/2009/11/04/quoth_the_old_red_lady_of_the_nyt_mirror_mirror_on_the_wall!___do_i_see_my_party_and_myself_in_my_writings.thtml

 

[7] The Old Brown Lady of the New York Times [Old Gray Lady] Mumbles Dootifully about the Criminal Good Time Charlie Rangel

http://rycksrationalizations.blogtownhall.com/2009/10/08/the_old_brown_lady_of_the_new_york_times_[old_gray_lady]_mumbles_dootifully_about_the_criminal_good_time_charlie_rangel.thtml

 

[10] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death."Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

 

[14] Let Treasury Rescue the States By Christopher Edley Jr. Op-Ed Contributor Published: July 7, 2010 [Emphasis is mine in all quotes.]

 

 

[17]  IMF presses US to cut debt “WASHINGTON (AFP) – The International Monetary Fund on Thursday urged the United States to rein in its ballooning budget deficit without putting the "modest" economic recovery at risk.

 

Amid jitters that high levels of unemployment may force a double dip recession, the IMF warned the slow US recovery would continue and that debt problems loomed.

 

"The central challenge is to develop a credible fiscal strategy to ensure that public debt is put -- and is seen to be put -- on a sustainable path without putting the recovery in jeopardy," an IMF report said.

The balance between spending to stimulate the economy and putting budgets in order has vexed countries around the world as the recovery has looked more and more precarious.

President Barack Obama has plowed nearly a trillion dollars into the economy to spur economic growth, exploding the US deficit to a level that many believe is unsustainable.” http://news.yahoo.com/s/afp/20100708/pl_afp/useconomyimf

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Debt Might Drive Us away from Democracy? Socialism is Responsible for Most of this Debt.

Debt Might Drive Us away from Democracy? Socialism is Responsible for Most of this Debt.

 

Abstract: The horrors of Fascism, or worse, are now brightly ensconced in the diminutive minds of greedy and incompetent politicians that are frantic to preserve their power in the face of a public revolt against massive debt. An article by Jason Groves surveys the narrow view that any other form of government is evil and must be rejected even though the ‘democracies’ in place in the European Union have spent their futures into the abyss of unrecoverable debt.

 

 

We live in a world full of carefully sealed doors that we may not dare open as they contain known Evils that can consume us or so we are told by politicians and their lackeys in academia.  We have traveled these roads and found them unacceptable they pronounce at great length and with somber tones and the literature is full of incidents to prove this elementary fact. The fruits of an ‘education[1]’ currently contain stories of evil intent and the construction of totalitarian governments who oppressed the citizens and keep the gulags and reeducation camps full right up to the very edge of the barbed wire enclosures. If we inspect a few historical episodes that ended in war, financial ruin, poverty, chaos or a combination of these [e.g. Germany, Russia, USSR, France, Spain, Greece, etc.] we experience the strange sensation that most of these initial frameworks were initially wildly supported by ‘voters’ or ‘the masses’ crusading in some form of a political movement or a similar loose ensemble of angry citizens.  They wanted change and they got exactly that. Eric Hofer[2][3] surveyed all this and made the important observation that leaders of mass movements didn’t launch their hoards ab initio against what was then the current offensive establishment but that the movement was already underway and such leaders were essentially opportunistic and managed to get pushed into action and endowed with political power from behind. The threat that peoples might swing too far to the right is an eternal precept that must not even rate some serious thinking or even consider the slightest case of experiment with this horror. In academia, the opposite view of this notion is not tolerated. Those who oppose the far left socialist outlook are termed anti-Communists and must be scorned in such a way that their ideological hatred for anything to the right is not perceived as overtly supporting communism.

 

Ronald Reagan, who never budged a millimeter in his eternal war against Communism, and whose heroic efforts are detailed in a book entitled Reagan’s War won out against the Red Tide.[4]  He is still the foremost eternal target of the anti-anti Communists [even moderate liberals and all to the left].[5] There is much to be learned about keeping faith with your views and many politicians seem to still believe that they can shift and bob and weave and tell the suckers who vote ‘what they want to hear.’ An excellent example of this myopic political mentality is the use of the term McCarthyism[6] which first justifies and then reverses the direction of the smear tactics used against the 50s era senator and is now universally used in a blanket mode to reproach criticism of the left or as a attack mechanism against their right-wing enemies. McCarthy was first smeared and then labeled as the smearer. McCarthyism was an expeditious political construct designed to stop his investigations of the Executive Branch, mostly the Department of State. He terminated the careers of several communist sympathizers[7] and was a threat to both Republicans and Democrats of the Eisenhower and Truman administrations.  All this is outlined in the book Blacklisted by History: The Untold Story of Senator Joe McCarthy and His Fight Against America's Enemies by M. Stanton Evans. Baboonish stooges like the fallen Maryland senator Millard Tydings [8] manufactured a hoax whereby one of McCarthy’s speeches was recorded on a record he brandished before Congress. He later testified, under oath, that the record was blank. Such a crass action is not even condemned by liberals even today.

 

These views are stilted and condensed from both fictions and facts and tend to form a foundation of fear of any alternative that merely questions the status quo for the current status of liberal government across the globe, which is mostly socialism or an admixture of capitalism and socialism. The European Union is such a place and many of those community members have recently spent their way into financial oblivion. Pure far-left socialist states are complete failures [North Korea, Cuba, many places in Africa and soon perhaps Venezuela] but are signaled as outstanding examples of governance by ‘scholars.’ There have been many revolutions against diverse political systems so we wonder why the citizens howl for a change in not only the leadership but the organizational style of their governments. If socialism is so very good then why would those citizens who were raised in that system want to change it? It must be because the current mechanism of socialism has failed in several aspects. We can count the number of stable socialist states on one hand and most have some unique source of funding such as the Swedes who dealt in the dirty gun and explosive business for 150 years while offering to be brokers of peace and entertaining tourists or perhaps the Swiss who readily squirrel away vast sums of money from criminals, despots and tyrants and keep those accounts secret and free of taxes. Most of the media drones today are advocates who leap upon any tidbit of news to ruffle up the fears of the Nazis and howl in chorus to startle and mobilize the voters to reject them and their philosophy.

 

Currently, the European Union, substantially socialist in operation and theme, is collapsing from debt. It is strange that this is happening considering the vast number of university-trained administrations and esteemed cauldron stirrers in the sixteen member coalition of member countries who advocated this union and its manifold wonderfulness.  After all, they ‘teach’ this stuff so why didn’t it work out? Is this sorry outcome a reflection of some basic flaw in the socialist methods or can we blame capitalism again? You cannot extract such a comment that might cast a sallow pallor upon their union from any academic in Europe without excessive pressure but, then, the citizens are unhappy about something and threaten their respective governments in with riots in several cases. If they are mired in terminal debt and angry then who is to blame for their plight other than their governments? The blame will not be squarely placed upon those who suggested that the formation of a monetary union was a dumb idea in the first place so the trust to maintain this collective circus runs forward at full speed. There is even an expansionary nostrum afloat that would form come governmental body dictating government to the entire group. This is fanciful.

 

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

Here are some urgent and alarming warnings from the former prime minister of Portugal:

 

Democracy could ‘collapse’ in Greece, Spain and Portugal unless urgent action is taken to tackle the debt crisis, the head of the European Commission has warned.

 

In an extraordinary briefing to trade union chiefs last week, Commission President Jose Manuel Barroso [former prime minister of Portugal and leftist radical turned Thatcherite-e.d.] set out an ‘apocalyptic’ vision in which crisis-hit countries in southern Europe could fall victim to military coups or popular uprisings as interest rates soar and public services collapse because their governments run out of money.”[9]--Nightmare vision for Europe as EU chief warns 'democracy could disappear' in Greece, Spain and Portugal By Jason Groves 15th June 2010 [Emphasis is mine in all quotes.]

 

The word democracy is deliberately snarled with several obscure meanings and as an example we can cite the U.S. which is not a democracy but a federal republic and the United Kingdom which is a limited monarchy but the masses think they practice democracy in some form so they are democracies if that makes sense in the common circular idiom. For a top of the hat laugh we find that North Korea is a democratic republic as was the USSR where everybody had the right to vote.  So, the notion that these EU governments might fall by some mechanism other that the ballot box is not so far fetched given the elastic definition of democracy and those who vote with rocks and Molotov cocktails in the streets. To mollify some of the debts, bailouts for Greece and Spain may reach 1 trillion euros or more as the debt process continues to consume their societies like a virulent tumor. That is a lot of money anywhere except the United States whose leaders are not concerned with spending a trillion here and a trillion there.[10] Note that this money is a zero-sum exercise in arithmetic since somebody in the EU must put up most of the financing of bailouts except for the IMF and then many of those same community members also contribute to this questionable slush fund. The Germans and French have been given the privilege of underwriting the debts of several of the PIIGS[11] as they are known. This comes at an obtuse time when even the engines of the EU are having some budget difficulties. The concept of paying back sovereign loans has apparently been abandoned.

 

It is interesting that any known country in the universe seems to think they can grow out of their debts by exporting their goods and services to other countries, many of which are thinking the same thing. South Korea actually did this. This nostrum soars beyond absurdity as the net effect is that many debtors will be trying to peddle their stuff to other debtors. But, this logic prevails and must be called government.

 

History might repeat itself.

 

Greece, Spain and Portugal, which only became democracies in the 1970s, are all facing dire problems with their public finances. All three countries have a history of military coups.” --Nightmare vision for Europe

 

This is not the place to dive deep into the history of these three states, but Italy’s period of dictatorship occurred because of the threat of Bolshevism, which has not turned out well in every instance you might want to examine since 1919. This is not an endorsement of Fascism but an observation. What we should look for here is the answer to the question: did a violent change away from democracy, a kingdom, duchy or socialist state provide a better living for the respective citizens after the commissars were finished with their process? Spain, currently one of the PIIGS fought off Bolshevism in 1936 with Fascism and that worked for a while although with much street fighting, a dictatorship but they avoided a fateful entry in a world war. We might state with some fairness that Italy is a bit better off than North Korea at this time although that might be temporary.

 

We need t0 think about China, Cuba, and Russia and wonder why we should just accept Marxism, an offshoot of socialism or one of its congeners as the proper system of governance to be endorsed anywhere. The German citizens willingly voted in Hitler [democracy in action?] as a dictator because he promised prosperity and delivered that promise for a while until he went too far into militarism and revenge against the French. Hitler’s political power was propelled by the Treaty of Versailles that sought to crush the German state and render it helpless against not only aggressive intent but the defense of her own soil. What was the alternative here since the French wanted to knock Germany down to some groveling peasant nation and extract every bit of wealth they could for a few dozen years to pay reparations for the German war with France? It is difficult to imagine the outcome of Russia from Lenin forward to Brezhnev if we could reverse history and set up a capitalist system [or other system] there that could have utilized the vast natural resources in that country to benefit all the citizens. Communism, after 74 years and some 35 million dead bodies didn’t work out very well as we saw in 1989 when the system collapsed and the ruble was essentially worthless.  Maoism was a failure too. Then, there is Africa.

 

Reminiscence to the horrors of Fascism is echoed in this comment:

 

Mr Monks yesterday warned that the new austerity measures themselves could take the continent ‘back to the 1930s.’”--Nightmare vision for Europe

 

Now, a conundrum is injected into the fray: If a government spends too much, incurs debt with ugly interest rates that hobble the economy and the remedy to part of that problem is to cut government spending and that forces austerity then what is the alternative? Default on sovereign debt? An exit from the EU? A gift from some other nation? Loans solicited from those countries too ignorant to see that they will never be repaid? An exercise in simple accounting shows that entities that run deficits, have excessive debts [nearing 70-120% of their GDP], have high spending rates  and low tax revenues because of high unemployment or other reasons, turns up only financial solutions that use imaginary numbers. You must throw in some money from somewhere or print it up yourself to make this elementary balance sheet balance out. It seems that although this is rudimentary accounting nobody can seem to accept or acknowledge the answer. Austerity is obvious in all cases of the PIIGS and other nations that will soon be rated in this class and that is not acceptable we learn.

 

The warning:

 

Mr Barroso’s warning lays bare the concern at the highest level in Brussels that the economic crisis could lead to the collapse of not only the beleaguered euro, but the EU itself, along with a string of fragile democracies. But it risks infuriating governments in southern Europe which are already struggling to contain public anger as they drive through tax rises and spending cuts in a bid to avoid disaster.”--Nightmare vision for Europe

 

So far, this article does not tell us anything since we could have predicted all this with only our own starting list of countries and their debt to GDP ratios as the story is always the same and apparently those who planned these messes believed that “this time will be different” as the title of the new book[12] by Reinhart and Rogoff so elegantly details. The times are never different. Debt is debt. The EU cannot hold together for numerous reasons.

 

The local bean counters weigh in:

 

Yesterday the European Commission and the statistics authority Eurostat met to consider Spain‘s plight as many EU countries consider the austerity package proposed by the Madrid administration insufficient to deal with the country‘s problems.”--Nightmare vision for Europe

 

So, their own bean counters have failed to find a way to refill the bean sacks.

 

So, no austerity programs for these states? Here is another view from a Brit:

 

Il Sole has published a letter by 100 Italian economists warning that the austerity strategy imposed by Brussels/Frankfurt risks tipping Europe into a self-feeding downward spiral. Far from holding the eurozone together, it will cause weaker countries to be catapulted out of EMU. Others will leave in order to restore sovereign control over their central banks and unemployment policies.”[13]--The euro mutiny begins by Ambrose Evans-Pritchard of The Telegraph June 16th, 2010 [Emphasis is mine in all quotes.]

 

I guess 100 Italian economists must be right.  We can recall the 1927 song "Fifty Million Frenchmen Can't Be Wrong[14]" as well.

 

Ambrose Evans-Prichard goes on with some quotes and this analysis seems to be exact if not quite long:

 

The fundamental point to understand is that the current instability of monetary union is not just the result of accounting fraud and over-spending. In reality, it stems from a profound interweaving of the global economic crisis and imbalances within the eurozone …..

 

It blames the crisis on the “deflationary economic policies” of the richer states. “Especially Germany, geared for a long time to holding down salaries in relation to productivity, and to the penetration of foreign markets, gaining European market share for German companies…

 

They say the policy has led to growing surpluses in Germany, offset by growing debts in Southern Europe. The adjustment mechanism has not only failed. Matters have got worse, and worse.

 

“This is the deeper reason why market traders are betting on a collapse of the eurozone. They can see that as the crisis drags on this will cause tax revenues to fall, making it ever harder to repay debts, whether public or private. Some countries will progressively be pushed out of the eurozone, others will decide to break away to free themselves from a deflationary spiral… It is the risk of widespread defaults and the reconversion of debts into national currencies that is really motivating bets by speculators.”-- The euro mutiny begins

 

One way to default, explained in detail in the Reinhart-Rogoff book is to switch the denomination currency in a give debt instrument to one that is worth much less or is inflating thus debasing the debt. Greece, for example, and following Argentina, might break out of the EU, issue a New Drachma, switch the payment currency to the new Greek paper and print off some worthless paper that ‘satisfies’ the debt. This is not amusing in international finance.  Germany here is the goat because they wisely held wages within limits and stressed exports and that wage suppression was the very reason the country is prosperous and debt free. What we see is that the very example of success in their midst is now blamed for the plight of the other members and that must indicate that wages should be raised for Germany and all others in some tormented nightmare. This criticism is the sour grapes of envy and failure.

 

The most interesting point in all this is not that 1000 years of living has taught the Europeans how to count beans, but the salient nostrum that whatever the outcome they need to keep some phony paste-up Marxian union system together is paramount. This invites the circus notion that they will be happier in mutual poverty in some struggling ‘union ’than risking an adventure back into the open world and its probably good outcome, as in Germany,  for some or all of the states. The EU cannot tolerate success so something has to break. If Germany leaves the rest of the sorry sisters will collapse in inflation and poverty. If Germany stays and kicks out some of the weak sisters the system has some chance to survive. If the EU takes on come ‘cetnral government’ with delegates from all members they this form of ‘democracy’ will resemble California where the low class can only seem to vote money to themselves.  I now invest in  Asia and I think avoiding Europe is good business.

 

 

rycK

 

Comments: ryckki@gmail.com

 

 

 

 

 



[2] Read The True Believer by Eric Hoffer.

[4] Reagan's War: The Epic Story of His Forty Year Struggle and Final Triumph Over Communism (ISBN: 0385504713)

Peter Schweizer.

[5] Let us hate the commie haters.

[6] The Universality of McCarthyism and the Political Diodic Effect.

Posted by rycK on Tuesday, February 26, 2008 1:54:55 PM

http://rycksrationalizations.blogtownhall.com/2008/02/26/the_universality_of_mccarthyism_and_the_political_diodic_effect.thtml

[7] Friends of Dean Acheson and others.

[8] Printed here in bold red to honor his politics and his aggressive investigative manner. Stalin and Walter Duranty, inter alia, receive the same honor in my essays.

 

[9] Nightmare vision for Europe as EU chief warns 'democracy could disappear' in Greece, Spain and Portugal By Jason Groves 15th June 2010 http://www.dailymail.co.uk/news/worldnews/article-1286480/EU-chief-warns-democracy-disappear-Greece-Spain-Portugal.html

[Emphasis is mine in all quotes.]

 

[11] Portugal, Italy, Ireland, Greece and Spain.

 

[12]  Kenneth Rogoff  is coauthor with Carmen Reinhart of the new book This Time is Different: Eight Centuries of Financial Folly. [12] Here is a link to a transcript of an interesting interview on sovereign defaults.[12]

 

[13] The euro mutiny begins by Ambrose Evans-Pritchard of The Telegraph June 16th, 2010 http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100006271/the-euro-mutiny-begins/ [Emphasis is mine in all quotes.]

 

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The NYT Shows Unbridled Anger over The Very Angry Tea Party and Other Propagandistic Elements.

The NYT Shows Unbridled Anger over The Very Angry Tea Party and Other Propagandistic Elements.

 Abstract: The NYT recruits some propagandist to fill in the fluff lines in one of their mandated political articles. Beginning from a lofty perch in philosophy, the article launches off with ethereal authority against the Tea Party and then progressively degenerates into wild name-calling, false statements and pedestrian-grade nattering. Every identifiable element of the Tea Party is overblown with soaring negativity and many key elements are even fabricated in this pitiful attempt at informing the public of some impending doom. The author either lost control of his emotions or foamed over his keyboard in frustration as he drew to a close or perhaps the monitors at the NYT fell asleep or just glossed over this screed. This rant is classic leftist propaganda. It has no academic merit.

 

As masters of propaganda agree, it is important to construct some obvious tenets, grant them some mystical or supreme powers, and then proceed to analyze the targeted opposition [Tea Party in this case] using these same very synthetic elements to destroy or mortify them. This is classic circular logic in motion. Pure truth is never a necessity for a good low punch, but the invocation of some apparent truth, a limited concession or two to feign objectivity or even something that strokes the inner souls of frustrated onlookers are all helpful. There is no better source of propaganda outside Pravda than the near-bankrupt New York Times—aka the Walter Duranty Papers.[1][2]  Wisdom resides there we are told by liberals and their lackeys and here they will find hope if not the truth.

 

Today we are treated to an elegant exercise in propaganda that seems to manipulate all the usual levers and we must conclude, based upon some brief meditations at the end of this tome, that the Evil Ones have been identified, tried and convicted upon the Anvil of Leftist Reason hence condemned. Frequently, the surgical point of much of such an article is directed toward the members of the opposing political community so as to shame them into recoiling from their own group. They are thus being tempted to seek enlightenment in the propaganda spheres of the far left and after conversion to remain loyal level pullers at the ballot box.  So, we are to be pummeled if our political perch is shaded by right-wing politics and we must scurry off with a short list of complaints including but not limited to anger, dependency, Hegel, individual liberty, metaphysics, politics, rage, tea party and violence inter alia to defend. This episode is categorically phony and is hereby exposed as a mere chum-chucking exercise in elementary leftist harangue bleating, so, in our analysis today, I am essentially unchucking[3] the chum so to speak. This piece is a disgrace, but there is plenty to laugh at.

 

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

We begin our session on abuse:

 

Sometimes it is hard to know where politics ends and metaphysics begins: when, that is, the stakes of a political dispute concern not simply a clash of competing ideas and values but a clash about what is real and what is not, what can be said to exist on its own and what owes its existence to an other.

 

The seething anger that seems to be an indigenous aspect of the Tea Party movement arises, I think, at the very place where politics and metaphysics meet, where metaphysical sentiment becomes political belief.  More than their political ideas, it is the anger of Tea Party members that is already reshaping our political landscape.”[4]NYT Opinionator: The Very Angry Tea Party By J.M. Bernstein June 13, 2010, 5:15 PM

 

This opening covers a lot of territory and spans two or three centuries and thusly brings up some interesting [and probably nonexistent] cornerstones of leftist political thought. Here we are brought into the tent, Coney Island style, for a demonstration of what is real and what is not. The  delineative process used here is, of course, political and  is derived  from this writer’s own common-place unconscious mental filters[5] that reflexively oppose any challenge to the left [in his case] and our good Dr. Bernstein ought to be keenly aware of  this trap as he purports to  teach Immanuel Kant. His little corner of philosophy has not been acclaimed as the Seat of Reason. If Kant is correct, our writer is as blind as the next guy. Thus, we may expect our writer to artificially transport us across the boundaries of simulated reason as he circles the rim of the metaphysical abyss picking up ideas while polemically hacking away at ‘untruths’ as he flies along. This peremptory nonsense is grounded in the practice of rudimentary philosophy, a crude intimidation mechanism invented by the Greeks to ‘explain’ the world and its ‘truths’ to the ignoranti, particularly if they vote.  This is the very basis of politics and its only utility is piercing persuasion. Let us be very clear that the arena of philosophy had many strong players, but there is no consensus on whose view is rigidly correct and, strangely, any new advance in philosophy begins with an attack on one or more giants in the field if we can imagine that form of organizational chaos.[6] Rodents ‘plan’ impromptu banquets by a similar process. Thus, nothing is actually known except the fact that the quest for the definitive version of philosophy is so far lacking, but that does not hinder the propaganda process in the least. So, the modern polemicist scrapes off as much scale as he can from an assortment of tangled philosophies and tosses them into his works. Today’s piece is a hurried collage peeled from the massive remnants of illogic, a word that more properly defines philosophy. Sophistry and delusion are perhaps better words.

 

Here is some more:

 

It would be comforting if a clear political diagnosis of the Tea Party movement were available — if we knew precisely what political events had inspired the fierce anger that pervades its meetings and rallies, what policy proposals its backers advocate, and, most obviously, what political ideals and values are orienting its members.”—NYT Opinionator: The Very Angry Tea Party By J.M. Bernstein

 

This caveat expands the argument whereby the writer can skirt the outer corners of this arena since he operates in a self-designed philosophical vacuum without the need of some firm truths on his side. He can just make up things since a clear rebuttal of his charges cannot be substantiated. This is the usual case for those who would be philosophers, but here he also plays the character of a keen political translator and content edifier and can broaden his mighty sword because the edges of his target are a bit fuzzy. Translated, this means he can rant and mumble at will. The applause machines at the NYT will then answer his every word.

 

We have yet to read some content as he emerges from his cave:

 

When it comes to the Tea Party’s concrete policy proposals, things get fuzzier and more contradictory: keep the government out of health care, but leave Medicare alone; balance the budget, but don’t raise taxes; let individuals take care of themselves, but leave Social Security alone; and, of course, the paradoxical demand not to support Wall Street, to let the hard-working producers of wealth get on with it without regulation and government stimulus, but also to make sure the banks can lend to small businesses and responsible homeowners in a stable but growing economy.”— NYT Opinionator: The Very Angry Tea Party By J.M. Bernstein

 

This is a reasonable list but each item in his string seems to have its own double standard tethered beforehand. On balancing the budget without raising taxes the task is obviously doable if government cuts personnel, spending and lowers taxes for corporations who hire people who can contribute to the economy. Government people are all too often malicious intimidators [and liberals with a foundation] with some narrow political views such as the myopic zombies in the drug-crazed environmental groups. Social Security was a Ponzi Scam from the beginning, is going broke and will default and should be phased out gradually so that it doesn’t experience a bubbly burst. Nobody in the Tea Party advocates just trashing this entitlement—they want to fix it up. A new retirement program is obviously required and we need one that is NOT run by our parasitic government and overrun with micromanagers. But, such failed and costly programs are the unholy grail of the socialists. Social Security will continue to rot down to its underpinnings and all the forces of the far left will be mustered to counter any private options that might skirt around Social Security. SS is merely a leprotic attachment to the polis. The nostrum that the Tea Party does not support Wall Street is folly.

 

Our hero cites a book[7] and parrots some interesting conclusions by that author:

 

It is common to enlist the correlating notions of the topic at hand with an input of some advice of ‘experts’ so as to give a heavy weight to the argument:

 

It is not for the sake of acquiring political power that Tea Party activists demonstrate, rally and organize; rather, Lilla [the disgruntled author e.d.] argues, the appeal is to “individual opinion, individual autonomy, and individual choice, all in the service of neutralizing, not using, political power.”  He calls Tea Party activists a “libertarian mob” since they proclaim the belief “that they can do everything themselves if they are only left alone.”  Lilla cites as examples the growth in home schooling, and, amidst a mounting distrust in doctors and conventional medicine, growing numbers of parents refusing to have their children vaccinated, not to mention our resurgent passion for self-diagnosis, self-medication and home therapies.”—NYT Opinionator: The Very Angry Tea Party By J.M. Bernstein

 

Here, the author solicits similar conclusions that merely dovetail with his own political notions.

 

Could we call the union movement a Marxist mob or perhaps some Fascist group? How about the old Black Panthers, SEIU, ACORN or the New Black Panthers? We wonder if they were criminals or threatening or just shouting nothings at raucous rallies.  The home schooling actions arise as a viable alternative to having their children taught leftist politics and blaming the US for every evil in the known world. American Exceptionalism is denied and despised by the left. It is important to teach our kids that many ‘teachers’ are just hack political slobs with cushy jobs. The distrust of doctors is interesting, and false in my view, and appears to be a gloss to cover over the anger about the Health Care mess we just created.

 

After plodding through this bundle of fluff our author finally gives his expert opinion on the composition and beliefs of the Tea Partiers:

 

Tea Party anger is, at bottom, metaphysical, not political: what has been undone by the economic crisis is the belief that each individual is metaphysically self-sufficient, that  one’s very standing and being as a rational agent owes nothing to other individuals or institutions. The opposing metaphysical claim, the one I take to be true, is that the very idea of the autonomous subject is an institution, an artifact created by the practices of modern life: the intimate family, the market economy, the liberal state.  Each of these social arrangements articulate and express the value and the authority of the individual; they give to the individual a standing she would not have without them.”— NYT Opinionator: The Very Angry Tea Party By J.M. Bernstein

 

This tortured explanation is apparently designed to cement in place the idea that a ‘liberal state’ or any other ‘government’ actually gives the angry partiers what they believe is intrinsically important.  This is ignorance on the part of the Tea Party. Big government somehow now empowers individualism [or the individual] in more particular terms. Bernstein fashions an essential fulcrum in the form of an economic and financial event like the current financial crash[8] as some kind of prime mover that sets these people off in the wrong direction [that means anywhere away from the goals of big government]. He then drags out the most elliptical view of big government and turns it inside out with this nostrum: “these social arrangements articulate and express the value and the authority of the individual; they give to the individual a standing she would not have without them.” This is the hammer blow and conclusion of this piece. Liberalism is intrinsically good for all. Here we find that the individual, who errantly wants to make his own decisions, is better off [or has more standing] with mobs of government overseers dictating his ‘rights’ down to the very last electron or drop of gas. Control is the essence of socialism.

 

Here is the clincher:

 

The great and inspiring metaphysical fantasy of independence and freedom is simply a fantasy of destruction.”— NYT Opinionator: The Very Angry Tea Party

 

Well, here you have it. We need the gentle guidance of big government so we can avoid destruction! I wonder how many big left-leaning governments participated in World War 1 and 2? Were they successful in guiding their respective citizenry through a stable lifetime? Where was the individualism--in the wet trenches? If you look for some consideration for the unit citizen in all the banter and pomp during the summer of 1914[9] it is difficult to pick out any reflection about the citizens who would soon give their lives [51, 000,000 or so did] for war and the utter destruction of several nations.[10] And, we are expected to learn and believe in the socialism of the Europeans? Their society is crashing in debt.[11][12]

 

Bernstein now conjures up a domestic scene of two lovers about to sever their relationship:

 

This is the rage and anger I hear in the Tea Party movement; it is the sound of jilted lovers furious that the other — the anonymous blob called simply “government” — has suddenly let them down, suddenly made clear that they are dependent and limited beings, suddenly revealed them as vulnerable.  And just as in love, the one-sided reminder of dependence is experienced as an injury.  All the rhetoric of self-sufficiency, all the grand talk of wanting to be left alone is just the hollow insistence of the bereft lover that she can and will survive without her beloved.  However, in political life, unlike love, there are no second marriages; we have only the one partner, and although we can rework our relationship, nothing can remove the actuality of dependence.  That is permanent.”—NYT Opinionator: The Very Angry Tea Party

 

He hears things that are not there like little voices. Maureen Dowd, the Old Red Lady [13][14][15]of the Old Gray Lady, has conveniently provided us with her ‘Unspoken Words Theorem.’ She has the supernatural but politically stimulated facility to hear what is not spoken and provide us with an analysis. Apparently, our author has acquired this rare gift.

 

Now, we wander off into theater. Apparently, the polis is not to be upset when their idiot governments make colossal blunders and deplete the treasuries. Such a proposal of leftist governmental permanency is a hallmark of the dedicated sophist; there is only one answer to all social problems. Given the numerous examples of failed governments on our planet [almost 150 Marxist dictators in Africa since 1950?], numbering almost a dozen so far in contemporary Europe, a bastion of socialism, we must cast away our independence and meld our groups into some solidarity of dependence. The government always knows best paraphrasing a famous but excoriated TV show of the 50s.

 

Bernstein concludes:

 

In truth, there is nothing that the Tea Party movement wants; terrifyingly, it wants nothing.  Lilla calls the Tea Party “Jacobins[16]”; I would urge that they are nihilists.  To date, the Tea Party has committed only the minor, almost atmospheric violences of propagating falsehoods, calumny and the disruption of the occasions for political speech — the last already to great and distorting effect.  But if their nihilistic rage is deprived of interrupting political meetings as an outlet, where might it now go? With such rage driving the Tea Party, might we anticipate this atmospheric violence becoming actual violence, becoming what Hegel called, referring to the original Jacobins’ fantasy of total freedom, “a fury of destruction”? There is indeed something not just disturbing, but frightening, in the anger of the Tea Party.”— NYT Opinionator: The Very Angry Tea Party

 

This is a bald lie and typical of the left. He deliberately paints the perceived identity of the Tea Party group as nihilist,[17] an improper and implausible description of this group that seeks a firm moral grounding for government. It appears that he deliberately distorts the group’s identity with this selective and offensive pejorative since he ought to know all about nihilism as he teaches all about it. This is a vicious rant typical of some warped[18] intellectual who sees a direct threat to his political beliefs. They make their little points along the tattered pathway strewn with clichés and platitudes and then jump off the bridge into the all-consuming flames of some final predetermined conclusion. The Tea Party movement simply wants liberals and radicals to get out of government. The liberals have sunk us in debt.  You don’t have to be steeped in the tea to know that our economy is crumbling, our debt is insurmountable and our borders are being overrun with illegal aliens and terrorists. And we all know who structured and support this mess. It is the liberal establishment that caused the housing bubble[19] with the phony CRA act[20] that mandated subprime loans to people with no job or credit as a sop for their votes. We want an end to this insane spending[21] on the part of the radical left[22] and some way to protect our currency from utter debasement from inflation.[23]

 

If Bernstein was really in favor of big liberal government and could offer us some example of good big government [he does no such thing in this little propaganda piece], then he might show us how wonderful entities like California[24][25][26] New York, New Jersey and Michigan are doing lately. They are all bastions of liberalism and rapidly going broke in more than the mere financial meaning of this word. All these places carry the salient degenerative elements he barks about that will ensure that the citizens will have good and plenty and be carefully guided by their government leaders. The opposite is true. Theses places are going bankrupt from excessive spending and political power excursions. The liberals have ruined these places.

 

Bernie seems to focus too much on interrupting political meetings as an outlet as if he has not listened to common examples recorded for Parliament in the U.K. or perhaps Code Pink as they try to get into everybody’s face on street corners. Being English or sorts he must not be aware of the imams that daily call for the destruction of England in the streets of London. I wonder if he realizes that he is the infidel. That same Islamic group would put to death most of the members of the governing bodies of San Francisco for their obscene acts as barbarians. We see this essay rotting from the base as the intended rigid carriage of an objective intellectual is corrupted in a progressive manner similar to leprosy as the ramblings proceed to his predetermined conclusion.

 

He concludes with the teary-eyed plea for safety and liberal justice usually stated as “I am scared” with his terminal sentence:  indeed something not just disturbing, but frightening, in the anger of the Tea Party. This is similar to the older winky squeak speak, the unhygienic common language of the marijuana-crazed San Francisco street urchin and ex ‘students’ now rewarded with a high chair in the Social Sciences at Berkeley and a classroom full of adoring groupies. Their first reflexive reflex was to sob and bawl.

 

This is typical propaganda of the crudest sort. We see nothing but left-liberal canned prattle and wheezing. The noisy whooping and carnival atmosphere accompanying this prattle are not the least bit novel or even inspiring. What this article tells us, if anything, is the new power of the Tea Party is frightening to the left and will make some major impact in the next election and all hands must appear on deck to fight this menace and that means philosophers as well.

 

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 

 

 

 

 



[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

[3] A new word.

 

[4] The Very Angry Tea Party By J.M. Bernstein June 13, 2010, 5:15 PM

 http://opinionator.blogs.nytimes.com/2010/06/13/the-very-angry-tea-party/?src=me&ref=general

 

[5] The rationalists felt that truth emerged in the mind and was then seen to be reflected in the world around.  The empiricists took the opposite view and felt that truth dwelt in the world around but could be observed and extracted by the mind.  Kant suggested that the mind already held fixed ways of looking at things and that the observed world was fitted into these fixed ways.”—Section on Immanuel Kant in The Greatest Thinkers by Edward de Bono, a NYT best seller 1976. The Greatest Thinkers by Edward de Bono , Putnam, 1976 p 120

 

[6] This is why the academic world is full of kooks and soothsayers. You cannot publish anything if all you do is read and believe in what appears in the text books—you must be ‘creative’ and ‘forward-thinking’ to get your rubbish transformed into glossy print.

 

[7]  The Tea Party Jacobins   by Mark Lilla “We know that the country is divided today, because people say it is divided. In politics, thinking makes it so. Just as obviously, though, the angry demonstrations and organizing campaigns have nothing to do with the archaic right–left battles that dragged on from the Sixties to the Nineties. The populist insurgency is being choreographed as an upsurge from below against just about anyone thought to be above, Democrats and Republicans alike. It was galvanized by three things: a financial collapse that robbed millions of their homes, jobs, and savings; the Obama administration’s decision to pursue health care reform despite the crisis; and personal animosity toward the President himself (racially tinged in some regions) stoked by the right-wing media.1 But the populist mood has been brewing for decades for reasons unrelated to all this.”

The author is an anti Glenn Beck scribbler.

 

[8] Deflation and Defaults: The Path Downward from Debt and Excessive Spending.

http://rycksrationalizations.blogtownhall.com/2010/02/24/deflation_and_defaults_the_path_downward_from_debt_and_excessive_spending.thtml

 

The Coming Age of Debt Defaults: The US May have to Lead the Way and Default on All Debts. We Must Learn New Ways to Live and Survive.

http://rycksrationalizations.blogtownhall.com/2009/12/19/the_coming_age_of_debt_defaults_the_us_may_have_to_lead_the_way_and_default_on_all_debts_we_must_learn_new_ways_to_live_and_survive.thtml

 

 

[9] Read War and Aftermath 1914-1929  by Renouvin, Pierre Harper & Row, New York, 1968. Here is a fair and very objective analysis of the ‘[diplomacy’, deals and partisan antics of most of the most powerful leaders in the world as they hurried to start World War 1.

[16]  Jacobins. the term was popularly applied to all supporters of revolutionary opinions. http://en.wikipedia.org/wiki/Jacobin_(politics)

[17] Most commonly, nihilism is presented in the form of existential nihilism which argues that life[1] is without objective meaning, purpose, or intrinsic value.

 

[18] Are there any other kind?

 

[20] Meet the Real Villains of the Financial Crisis—the CRA [Community Reinvestment Act], “Affordable Housing” and the US Government

http://rycksrationalizations.blogtownhall.com/2010/04/29/meet_the_real_villains_of_the_financial_crisis%e2%80%94the_cra_[community_reinvestment_act],_%e2%80%9caffordable_housing%e2%80%9d_and_the_us_government.thtml

 

[21] Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

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The Babbling Brooks of the NYT Advocates Liberal Arts Studies and Knowing The Big Shaggy to Cope in our Society.

The Babbling Brooks of the NYT Advocates Liberal Arts Studies and Knowing The Big Shaggy to Cope in our Society.

Abstract: David Brooks soars off into some mental swamp with noisy laments on the current financial outcomes of those who studied the liberal arts. We learn that only those who dived deeply into Thucydides, Herodotus and Gibbon can attain the nirvana of a close relationship with their Big Shaggys. I read Gibbon’s Fall and Decline of the Roman Empire in high school and was bored to tears. [What happened to Aristotle? Or, Roger Bacon?] We learn that we all carry around a Big Shaggy that is impervious to penetration or even conscious self-awareness without a detailed grounding in college courses that stir the emotions. Technical types like me are apparently unable to construct a proper declarative sentence. An ignorance of such literature as David lists apparently prompts “self-destructive overconfidence” and was the probably root cause of the current BP oil spill in the Gulf. Perhaps Tony Hayward, CEO of BP, should have read Chaucer or Byron instead of geology.

 

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

Introduction to Incoherent Babblings and the New York Times:

In times of stress and turmoil, many in our society call for more soak time in the liberal arts cold tub to sooth their emotional sores and help them struggle to cope with modern life in a capitalist society.  Some must work for a living however repellent that concept is for the left.  So they read more literature seeking diversions or take more drugs and anxiously seek counsel from the far left writers at the near-bankrupt New York Times—aka the Walter Duranty Papers.[1][2]  Wisdom resides there. Here, they will find hope if not the truth. This newspaper, possessing a discernible ranking that scores only a bit above a crude pamphleteer’s production of pulp political sloganeering or perhaps a wheezy maudlin ragzine on politics, continues to produce little other than new theorems on unfinished racial bias, the crafting of some new amoral litany immersed in reversed racism and all sorts of other projects designed  to increase our taxes, but they have yet to rechart the course for their dedicated readers toward a modern understanding  of the business world.  All they can ever seem to find are ways to increase the size of government via higher spending and taxes. They love other people’s money. The readers who studied the liberal arts are now gauged as being stuck with having to work for a living unless they are lucky enough to secure some cushy government job where they can maliciously meddle with the system for good pay and excellent benefits[3] and insulate themselves from reality. Unfortunately they are competing for very few stylitic[4] pedestals where they might cast illuminations and leftist wisdoms upon the ignoranti from a lofty height. They prefer to wallow in misery and celebrate the self-inflicted horrors of the life of True Believers[5] and through propagandistic means attempt to broaden the path to socialism although this requires some social crutches so today the NYT offers some balm for this deficiency.  

So, today our Chief Babbler David Brooks[6][7][8][9][10][11][12] invents new vistas in the politically unhygienic topic of ‘education.’ He suddenly realizes that students need to study and master some different [and hostile] elements of ejukashon[13] as that may lead to real jobs. He must also reflect on the rage from the far left as directed against Nancy Pelosi[14] by hecklers who were enraged by the absence of some key public assistance legislation and the fact that the State of Israel still exists. Carbuncles like this need a soothing poultice and David Brooks will hopefully help to distract them with fluff pieces like today’s piece.

He begins:

When the going gets tough, the tough take accounting. When the job market worsens, many students figure they can’t indulge in an English or a history major. They have to study something that will lead directly to a job.”[15]--History for Dollars  By David Brooks Op-Ed Columnist Published: June 7, 2010 [Emphasis is mine in all quotes.]

How sad. No openings for basket weavers or business diversity inspectors?

So it is almost inevitable that over the next few years, as labor markets struggle, the humanities will continue their long slide. There already has been a nearly 50 percent drop in the portion of liberal arts majors over the past generation, and that trend is bound to accelerate. Once the stars of university life, humanities now play bit roles when prospective students take their college tours. The labs are more glamorous than the libraries.”--History for Dollars  By David Brooks

 

After having studied engineering, math, chemistry and spent a mere 30 years on the lab bench, inter alia[16], I wonder how those liberal arts majors even got jobs other than as sex workers, government employees, chancre mechanics  or dumpster divers. I am not sure than drug addicts have ‘jobs’ in the usual sense, but I might be wrong if they deal drugs on the side.

 

The buggy whip nostrum now arises:

 

But allow me to pause for a moment and throw another sandbag on the levee of those trying to resist this tide. Let me stand up for the history, English and art classes, even in the face of today’s economic realities.”--History for Dollars By David Brooks

 

The best sources of ‘art’ are clearly Good Will or the Salvation Army. Evidences of some remote association with the fine arts lay in heaps on the floors of these establishments where the buyers first look at the frames for value. Then, there is ‘journalism’ or communication. Does anybody really believe the rants in the New York Times?

 

Studying the humanities improves your ability to read and write. No matter what you do in life, you will have a huge advantage if you can read a paragraph and discern its meaning (a rarer talent than you might suppose). You will have enormous power if you are the person in the office who can write a clear and concise memo.”--History for Dollars  By David Brooks

 

This comment is one of those only-one-way theorems so cherished by the left. I wonder what a liberal would conclude after reading a few paragraphs of the Constitution and reporting back to the therapy room with a discernment of its meanings.  Could its deep meaning ever be untangled by the left? Here, we must bust into some engineering classes at UCLA or maybe a chemistry lecture at SUNY and demand some proficiency in English from those majors who errantly study something valuable in the market place. It was my experience that many such technical students could have gone into history, art or basket weaving or even journalism, and many should have, but chose a more interesting life other than recycling political slogans in snappy prose. Business courses are omitted from scrutiny here and if liberals could read a few thousand intra-corporation e-mails they might get a better understanding of modern communication. I can just imaging G. Bernard Shaw[17] as a new hire writing a memo to manufacturing requesting the making of 10,000 new gizmos in the computer world.

 

What we missed:

 

Studying the humanities will give you a familiarity with the language of emotion. In an information economy, many people have the ability to produce a technical innovation: a new MP3 player. Very few people have the ability to create a great brand: the iPod. Branding involves the location and arousal of affection[18], and you can’t do it unless you are conversant in the language of romance.”-- History for Dollars By David Brooks

 

Brooks might be obliquely referencing the strange career of Steve Jobs who was in technical fields in his youth but was attracted to new ideas by accidentally auditing a course in calligraphy and then became a Buddhist and broadened his mind with psychedelic drugs.[19] Those sound like proper attributes for success on the left.

 

After stumbling through a mangled essay on analogies and citing works by Thucydides, Herodotus and Gibbon he cobbles this together:

 

Let me try to explain. Over the past century or so, people have built various systems to help them understand human behavior: economics, political science, game theory and evolutionary psychology. These systems are useful in many circumstances. But none completely explain behavior because deep down people have passions and drives that don’t lend themselves to systemic modeling. They have yearnings and fears that reside in an inner beast you could call The Big Shaggy.”-- History for Dollars  By David Brooks

 

Wasn’t this similar to the Id [Id, iPod…they sorta rhyme…] of several decades ago by Freud as his mind was collapsing?[20] This run for the swamp is a favorite theme in the liberal glubberance[21] theory. The proof of this statement is that we cannot understand some process and because it is intractable then we need to slither sideways or resort to dumpster diving or other frivolities to broaden our intellectual vision. Not knowing the answer to perplexing problems is so enlightening for some.

 

You can see The Big Shaggy at work when self-destructive overconfidence overtakes oil engineers in the gulf, when go-go enthusiasm intoxicates investment bankers or when bone-chilling distrust grips politics”-- History for Dollars  By David Brooks.

 

How about other examples like the failed mission of Barrack Obama, the outcome of Social Security from politicians or even Greek state financing? Brooks keeps his examples tightly bound to his political opponents.

 

The observant person goes through life asking: Where did that come from? Why did he or she act that way? The answers are hard to come by because the behavior emanates from somewhere deep inside The Big Shaggy.”--History for Dollars  By David Brooks

 

Ah, a conundrum![22] Brooks sums up here with the expected conclusion strained from this mush:

 

Technical knowledge stops at the outer edge. If you spend your life riding the links of the Internet, you probably won’t get too far into The Big Shaggy either, because the fast, effortless prose of blogging (and journalism) lacks the heft to get you deep below.”--History for Dollars  By David Brooks

 

Technical and business people are simply louts.  Journalism is effortless? Probably true if you have a short stack of political clichés to guide your reasoning and written work as in the case of Frank Rich.

 

David Brooks runs out of clichés and concludes that ignorance of The Big Shaggy will eat you up.

 

Few of us are hewers of wood. We navigate social environments. If you’re dumb about The Big Shaggy, you’ll probably get eaten by it.”--History for Dollars  By David Brooks

 

This scary scenario works for rodents and leprosy too. This current op-ed would make a good theme for a children’s fairy tale book or a new character for a Dora the Explorer episode. [23] Brooks fanaticizes that he has found the door to the Fourth Wall[24] [late 18th century philosophy now discarded]  and can peer inside whenever he wants. I think he is merely lost.

 

I presume those of us who studied science, engineering and business are lame-brained zombies who stumble through life in blissful ignorance of what great activities and achievements we have missed. The odd part of this observation is that we who have mastered science or business seem to detect the heavy jingle of coins in our pockets—the absence of which appears to fester in the limited neuronal sets of most liberals. They want our money. On the other hand, this essay by David Brooks might just be a parody on “…watching the old senile dribbler who wanders about in a quest for the origin of the stench of stale urine. It seems to be everywhere he reasons.”[25]  On the other hand, maybe Brooks laments for the liberals who missed out on much of life and are perpetually broke and need to embrace parasitism to keep up their appearances and their caloric intake.  That situation does offer more time to explore the mysteries of Allen Ginsberg.

 

I think I will take up the lute, study astrology, shave my head like Jobs did and become a hermit until I enlighten myself with a personal knowledge of my own Big Shaggy. A fortuitous reincarnation might allow me to continue on with more important works that I missed in this life.

 

 

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 



[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

[3] Some city employers offer free sex change operations as a perk.

[4] sty·lite  (stlt)n.

 

One of a number of early Christian ascetics who lived unsheltered on the tops of high pillars.

[Late Greek stlts, from Greek stlos, pillar; see st- in Indo-European roots.],sty·litic (-ltk) adj., stylit·ism (stltz-m) n. http://www.thefreedictionary.com/stylite

 

[5]Hoffer argues that mass movements such as fascism and communism spread by promising a glorious future. To be successful, these mass movements need the adherents to be willing to sacrifice themselves and others for the future goals. To do so, mass movements need to devalue both the past and the present. Mass movements appeal to frustrated people who are dissatisfied with their current state, but are capable of a strong belief in the future. As well, mass movements appeal to people who want to escape a flawed self by creating an imaginary self and joining a collective whole. Some categories of people who may be attracted to mass movements include poor people, misfits, and people who feel thwarted in their endeavors. http://en.wikipedia.org/wiki/The_True_Believer

 

[6] The Babbling Brooks of the NYT Insanely Races to Liberal Sanity with Our Tax Monies in Education. Pay Raises for Incompetent Teachers!

http://rycksrationalizations.blogtownhall.com/2010/06/07/the_babbling_brooks_of_the_nyt_insanely_races_to_liberal_sanity_with_our_tax_monies_in_education_pay_raises_for_incompetent_teachers!.thtml

 

 

[7] The Babbling Brooks of the NYT Babbles About the Limits of Policy in Governance of Minorities. We Must Preserve their Social Capital.

http://rycksrationalizations.blogtownhall.com/2010/05/06/the_babbling_brooks_of_the_nyt_babbles_about_the_limits_of_policy_in_governance_of_minorities_we_must_preserve_their_social_capital.thtml

 

[8] By David Brooks Op-Ed Columnist Published: May 3, 2010 The Babbling Brooks of the NYT Babbles about Brokenness and other Fluffs He must like Utopias.

http://rycksrationalizations.blogtownhall.com/2010/03/22/the_babbling_brooks_of_the_nyt_babbles_about_brokenness_and_other_fluffs_he_must_like_utopias.thtml

 

[11] The Babbling Brooks of the NYT Babbles about Decision Making [?!] and Perception?

http://rycksrationalizations.blogtownhall.com/2008/10/28/the_babbling_brooks_of_the_nyt_babbles_about_decision_making_[!]_and_perception.thtml

 

The Babbling Brooks of the NYT Babbles about Nihilism with Innovative Socialist and Nihilist Overtones.  Raise Taxes!

http://rycksrationalizations.blogtownhall.com/2008/10/01/the_babbling_brooks_of_the_nyt_babbles_about_nihilism_with_innovative_socialist_and_nihilist_overtones__raise_taxes!.thtml

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

The Babbling Brooks of the NYT Babbles about Debt and Blame but Offers No Solution.

http://rycksrationalizations.blogtownhall.com/2008/07/22/the_babbling_brooks_of_the_nyt_babbles_about_debt_and_blame_but_offers_no_solution.thtml

 

The Babbling Brooks of the NYT Babbles about Lincoln, Mercury Pills and The Grip of Emotions. [?!]

http://rycksrationalizations.blogtownhall.com/2008/06/06/the_babbling_brooks_of_the_nyt_babbles_about_lincoln,_mercury_pills_and_the_grip_of_emotions_[!].thtml

 

From the Babbling Brooks: Confusion, Hokum and Fluff: Vote for Obama

http://rycksrationalizations.blogtownhall.com/2008/05/06/from_the_babbling_brooks_confusion,_hokum_and_fluff_vote_for_obama.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes  Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

Brooks of the New York Times Mumbles about Bugs, Independent Voters and Mechanical Liberalism

Tuesday, January 08, 2008 10:36 AM

http://rycksrationalizations.townhall.com/g/50bf9f36-0e0b-4e9a-be6d-5234d0d54f2c

 

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes  Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

[13] A new word.

 

[15] History for Dollars  By David Brooks Op-Ed Columnist Published: June 7, 2010 http://www.nytimes.com/2010/06/08/opinion/08brooks.html?src=me&ref=opinion [Emphasis is mine in all quotes.]

[16] rycK's Bio: Achieving Prosperity In Spite of the Left  Posted by rycK on Tuesday, June 12, 2007 9:06:28 AM http://rycksrationalizations.blogtownhall.com/2007/06/12/rycks_bio_achieving_prosperity_in_spite_of_the_left.thtml

 

[17] Shaw was well educated, but his first 5 novels were flops.  http://en.wikipedia.org/wiki/George_Bernard_Shaw#Work_as_a_critic

 

[18]  Didn’t Tim Leary find this in LSD?

 

[19] “…calling his LSD experiences "one of the two or three most important things [he had] done in [his] life.” He has stated that people around him who did not share his countercultural roots could not fully relate to his thinking. http://en.wikipedia.org/wiki/Steve_Jobs#Early_years

[21] A new word. A glubberance is any maudlin plea for tax money or other assistance based on emotion ...

[22] Krugman Searches for His Own Truth in an Irish Mirror. He Reflects upon the Mirror and Finds Himself as Originator of the Eternal Solution. Tax and Spend.

http://rycksrationalizations.blogtownhall.com/2010/03/09/krugman_searches_for_his_own_truth_in_an_irish_mirror_he_reflects_upon_the_mirror_and_finds_himself_as_originator_of_the_eternal_solution_tax_and_spend.thtml

 

“Propaganda pieces frequently begin with a conundrum and announce the urgent need for the quest for the ‘facts’ so the guilty can readily be identified. This is the best opportunity to convince the mentally disnimble, the political zombies and the cognitively marginalized of an intrinsic truth buried in the original fog. The political truth, at least, can be delineated; we don’t know what happened, although it must have been the fault of the opposition. The opening paragraph of this current splash of leftist cant from the New York Times squirts great honors upon the eternal monument their infamous Pulitzer Prize winner Walter Duranty[22] and is of interest in this respect. Duranty’s were the best of times for the leftist print media. Here we read that the hard facts about financial crises are largely unknown but we can easily surge to the left with the [absurd] notion that our 10 trillion dollar housing asset bubble was not caused by lending to uncreditworthy persons and that the banks were not forced to make bad loans. The culprits, then, following the Doyle Logic, must have been the Republicans.”

 

 

[24]  “The fourth wall refers to the imaginary "wall" at the front of the stage in a traditional three-walled box set in a proscenium theatre, through which the audience sees the action in the world of the play. The term, which was made explicit by Denis Diderot and spread in nineteenth century theatre with the advent of theatrical realism, is also extended to refer to the imaginary boundary between any fictional work and its audience.

 

The presence of the fourth wall is an established convention of fiction and drama, which has led some artists to draw direct attention to it for dramatic or comedic effect. When this boundary is "broken", for example by an actor onstage speaking to the audience directly, or doing the same through the camera in a film or television program, it is called "breaking the fourth wall."  http://en.wikipedia.org/wiki/Fourth_wall

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The Babbling Brooks of the NYT Insanely Races to Liberal Sanity with Our Tax Monies in Education. Pay Raises for Incompetent Teachers!

The Babbling Brooks of the NYT Insanely Races to Liberal Sanity with Our Tax Monies in Education. Pay Raises for Incompetent Teachers!

 

 

Abstract: David Brooks inspects the current educational system and discovers a new and wonderful attitude about reforming poor schools in our nation.  In his quest for solutions to the problems he finds a “pretty good foundation for a political philosophy” from a recent Obama speech. Here, $4.5 billion of our tax monies has been placed on the block to attract schools to “… hang [my word][1]  tough, demanding real reform in exchange for dollars. The example given for this ‘get tough’ mentality was a poor school in Central Falls, Rhode Island, where all teachers were fired. After a few circus performances featuring  the unions, President Obama and Frances Gallo, the ‘solution’ to the problem was that the teachers would all get a raise and a chance to be rehired by the end of the school term, probably about now.  True to form, all the teachers were hired back with pay raises for their needed ‘extra’ work and a promise not to sue the school system.  There are apparently no standards or metrics demanded of the teachers for this next round. Our school system will now become progressively worse and any attempt to fire incompetent teachers will result in pay raises as a reward for their ineptitude. That is the kind of “education” that makes us noncompetitive with Asia, the rising economic tide of this planet as we can forget Europe because their system is not much better than ours and they are going broke and will experience defaults and more unemployment. To keep the liberals sane we need to just spend more money on ‘education,’ clearly an undefined political term.

 

The New York Times: The Swamp Siren of the Hopeless

The self-inflicted mental  torments celebrated by the far left in the near-bankrupt New York Times—aka the Walter Duranty Papers[2][3]-- have produced nothing but new theorems on racial bias, reversed racism and all sorts of projects to increase our taxes but they have yet to  redirect their course to enlightenment.  They love to wallow in misery and, apparently, anguish is such beautiful sorrow.  They managed to win some seats and the White House over some inept politicians in the last round and got to print money without limits so now we are bankrupt.[4] But that is no reason to cast away reason and think of new financial adventures of this government—it is time to spend more! We can spend our way out of debt!

The net consequence of the last election was to animatedly endorse government spending and even more spending and hike our astronomical national debt[5] to almost the sum of a year’s GDP[6] and this has become the very favorite non-debatable subject of the Times. Keynes is now the craven image that they sacrifice their futures upon with our tax monies and debt, but today our Chief Babbler David Brooks[7][8][9][10][11][12] broaches the outer walls of the already politically polluted topic of ‘education.’ This nostrum is also known as the welfare rip-off circus and sometimes even branded as ejukashon[13] as it might be more colloquially pronounced in places like California[14][15][16]  and all this inspires our leaders to spend more money.  

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

More spending in ‘education’ is Sane we learn:

Sometimes it seems as if we’re doomed to fight a new culture war between orthodox liberals who have lavish faith in the power of government and orthodox conservatives who have almost no faith at all.”[17]--Race to Sanity By David Brooks Op-Ed Columnist Published: June 3, 2010 [Emphasis is mine in all quotes.]

This comment makes me wonder if Brooks spends most of his intellectual time off world or in the mystic past studying some Eastern religion. We have been in a constant war with the socialists since the 1890s. But, maybe Brooks needed some puffy fluff to open his screed with.

Brooks envisions a new vision:

But occasionally a politician comes along with a more measured vision of a limited but energetic government. Recently, for example, I read a speech by a politician who gave examples of both when government had failed (the old welfare system) and when it had succeeded (the railroad legislation under Lincoln, the bank reforms under F.D.R. and the highway system under Eisenhower). “Our government shouldn’t try to guarantee results,” this politician said, “but it should guarantee a shot at opportunity for every American who’s willing to work hard.”” --Race to Sanity

The idea of opening up the West with the rail system was not novel and certainly not new to Lincoln. The Brits started up the rail system in the 1820s. The reference to ‘bank reforms’ under F.D.R must not include his bank holidays blunder and the way he selected those banks  that would reopen  [it was random] or the way in which he increased the price of gold and debased our currency with the increase sum of 21, which was a lucky number since it was three sevens. He must have had a dozen strokes before he gave Europe off to the Communists with, of course, the able help of the slimy Communist-paid traitor Harry Hopkins, yet another good liberal Democrat.

 

Some traitors:

 

It was okay for John Kerry [18]to talk with the Communists in Paris and try to defeat the US in the Vietnamese war.  It was okay for Harry Hopkins to be a paid Soviet Stooge for the Russians and sell of Eastern Europe to Stalin or for the Rosenbergs[19] to be paid Soviet spies [his code name was ‘liberal’—how fitting!] who then sold our nuclear secrets to the Communists. That is okay. It is fine that Mumia is a cop killer and can have routine radio broadcasts from his cell.[20][21][from a previous blog[22]].

All this hashed up lingo from Brooks apparently sets us up for spending more money without the guarantee or even the intent of success. If true, that is the most intelligent remark he has made in years. This model allows the liberals to spend and prevents criticism when they go back on their promises as this echo from one of President Obama’s case stooges:

"Read my lips," Biden said, using Bush's famous phrase while referring to a Barack Obama administration.”Nobody, nobody making less than $250,000 is going to see a penny of their taxes go up."[23]Biden[24] in an incoherent rant at some county fairgrounds near the campus of Ohio University in Athens on Oct 15, 2008.

Brooks now bases our future on this speech:

That sentence struck me as a pretty good foundation for a political philosophy. It was delivered by President Obama at the University of Michigan commencement last month.

Obama administration policies haven’t always hewed to this limited but energetic approach. But there is one area where they sure have: education. The Obama approach to education could serve as a model for anybody who wants to build a center-out governing majority.” --Race to Sanity

I am certain that Brooks suspects that Obama has speech writers.  I wonder who wrote his comment, parroted by Plugs above, about taxation above the level of $250,000? The terms center-out are undefined here but must relate to propaganda induced citizenry.

Now, we have some contest:

First, Obama and the education secretary, Arne Duncan, set up a contest. They put down $4.5 billion in Race to the Top money. They issued some general guidelines about what kind of reforms states would have to adopt to get the money. And then they fired the starting gun.

Reformers in at least 23 states have passed reform laws in hopes of getting some of the dough. Some of the state laws represent incremental progress and some represent substantial change. The administration has hung tough, demanding real reform in exchange for dollars. Over all, there’s been a tremendous amount of movement in a brief time.” --Race to Sanity

This is not heavy-handed Washington command-and-control. This is Washington energizing diverse communities of reformers, locality by locality, and giving them more leverage in their struggles against the defenders of the status quo.” --Race to Sanity

The status quo, not defined here, coupled with the comment about struggles reads like some Lenin letter from around the turn of the last century.  This paragraph gives no clue about what the ‘reforms’ might be about. Whatever they are, there is money on the drum for them.

Here, we focus in a bit and filter some of Brooks’ contorted new-speak and center in on the objections:

Second, the Obama administration used the power of the presidency to break through partisan gridlock. Over the past decade, teacher unions and their allies have become proficient in beating back Republican demands for more charters, accountability and choice. But Obama has swung behind a series of bipartisan reformers who are also confronting union rigidity.” --Race to Sanity

This is the core of his message, no so much disguised and washed with gooey leftist clap trap as in the above paragraphs. The ugly facts are that: [1] certain minorities cannot compete in any equal academic setting, [2] that this cluster of deficiencies that prevent them from having an equal outcome is highlighted by the publication of standardized test scores and these results spur on the quest for charter schools to escape the horrible conditions of the union-dominated ‘school’ system and we now want some system where accountability is not a factor. Is too bad the IRS doesn’t offer this much latitude in interpreting the tax codes. In other words, we will just spend more and more money on the minorities who have little or no chance of attaining par with others [even at the Supreme Court[25] ] and will not subject them to group metrics that might illustrate their manifold deficiencies. In modern parlance this must be something like blackwash. This battle has been going on for 50 years now since Brown v. Board of Education.

The much maligned book The Bell Curve[26], sometimes accused of actually causing the ‘problem’ of cognitive distribution in the US, actually states the blunt facts about our societies and the distribution of mental skills. This salient fact that half the people who take the standardized test will score below the median is the rallying point for ‘change’ in ‘education.’[27] That is not fair. Society must be equalized.[28] Thus propaganda must replace education.

The tragedy of our educational system is that efforts to help certain minorities gain par with the broad majority of other citizens have failed and programs like affirmative action, set-asides and quotas have been conjured to attain not equality but an ‘equal outcome.’ Such measures sometimes consisted of race norming, demanding new tests and other measures of obfuscation. Standardized tests will always highlight these deficiencies thus they are politically incorrect and need to be avoided. President Obama was against more testing.[29] The German testing tuition system of Arbitur[30] [the "Begabtenprüfung" or "test of aptitude"] actually is a fair plan  and it works very well in  Finland too, but does sort out students by IQ and this in unacceptable in a progressive society like ours because it leads to inequality.[31] What else does and IQ test do other than rank test scores by cognitive ability?

One school in New England attempts to fire some teachers:

 In Rhode Island, the Central Falls superintendent, Frances Gallo, fired all the teachers at one failing school. The unions fought back. Obama sided with Gallo, sending shock waves nationwide. If the president had the guts to confront a sacred Democratic interest group in order to jolt a failing school, then change was truly in the air. Gallo got the concessions she needed to try to improve that school.” --Race to Sanity

This sounds tough but all the teachers could reapply for jobs at the end of the school year.[32] The high school is one of the lowest performing in the state. Only 48 percent of the students graduate. They reached an ‘agreement’ with the expectation that all teachers will be rehired at higher pay. They wanted $90/hr to work after the union-specified work period that might help the students.

Here is the catch:

"So if a school is struggling, we have to work with the principal and the teachers to find a solution," Obama said. "We've got to give them a chance to make meaningful improvements. But if a school continues to fail its students year after year after year, if it doesn't show any sign of improvement, then there's got to be a sense of accountability."[33]Obama quote.

Nobody seems to know what this accountability might be. Higher pay for teachers?

 Fourth, the administration has encouraged local officials to raise educational standards. The feds are not imposing national standards. But the National Governors Association and the Council of Chief State School Officers have come up with blueprints of what kids should be learning in math and English. According to the Thomas Fordham Foundation, an authoritative source on these things, these new standards are tough, rigorous and practical. The feds are offering incentives to states to embrace these goals.”--Race to Sanity

Raise standards to what standard. This process is made moot and absurd by the very fact that the verification process [testing]  is not allowed.

Fifth, the administration is opening the door for more fundamental reform. Andy Smarick of the American Enterprise Institute and others have piled up data showing that it’s nearly impossible to turn around failing schools. Once mediocrity infects a school culture, it’s nearly always best to simply replace the existing school with another. The administration has a program called School Improvement Grants, which is helping a few remarkable local reformers, like Joel Klein of New York City, to close miserable schools and put new ones in their place.

In short, Obama’s activism isn’t overbearing. It’s catalytic. The administration hasn’t defeated the forces of the status quo, but in state after state, you’re seeing reformers moving forward.” --Race to Sanity

This all sounds good on the front page. But, we must inquire if merely exiting the bricks and mortar and moving poorly-performing students and questionable teachers to new digs just repeats the failed elements of the projects, known in the 60s as high rise slums or is a mirror of the school they just left.  A while back, [Jan 2009] I wrote a blog on the Obama Metrics.[34] The point here was to find some quantitative way to measure progress in his administration.  Here is a portion of that blog:

High School Dropout Rates:

 

We find that “almost half of all public high school students in the US’ fifty largest cities fail to graduate[35] and the difference between success and failure at the suburbs [right next to these cities] is immense:

 

The City-Suburb Graduation Rate Split for Several Large Cities.[36]

City Metro Area

Grad Rate in Suburbs

Grad Rate in Cities

New York

82.9

47.4

Cleveland

78.1

42.2

Philadelphia

82.4

49.2

Chicago

84.1

55.7

Los Angeles

77.9

57.1

Atlanta

61.8

46.1

Ref: http://www.wsws.org/articles/2008/apr2008/scho-a03.shtml

 

Note that the trend is everywhere. We should expect to see places where blacks graduate at higher rates than whites if there were no cognitive differences among these two groups and if there were sufficient monies to encourage better minority education as in Washington, D. C.  For a spending rate per student that is nearly double the average for whites in America, the D. C. School System is by far the worst in American. Barack Obama is not sending his children to public schools there.  Why is that if he believes in education? There are essentially no examples of any school district where about half the students are black and the others white and where the blacks score significantly higher than whites in academics. We would expect that to be the case particularly in affluent black areas and we do not find that anywhere. This is a structural problem and solutions like the Germans have for their citizens who have different skills is not a possibly.  The minority problem is further complicated by the fact that Asians generally score about 1-2 points higher than whites in standardized IQ tests. [Whites = 100, Asians = 101-102]

 

David Brooks sums up with a question:

So why don’t we use a similarly light but energetic, decentralized but forceful reform approach when it comes to health care, transportation, energy or environmental policy? Good question.” --Race to Sanity

I didn’t even bother to think about this horror unless the ‘decentralized approach’ might include vouchers for home schooling, school choice and more charter schools.

Conclusion:

 

The fact is that nothing happened here. A school system, typical of inner city schools as given in the chart directly above, was perturbed by the threat of discharging all teachers. Some meetings were held, President Obama intervened, a ‘solution’ was found and the net result was this:

 

[1] They identified a lousy school but this was not news.

[2] The teachers were threatened with discharge and rebelled.

[3] The unions and school administrators ‘agreed’ that the teachers needed a pay raise.

[4] The Obama notion of  a sense of accountability” has meant nothing other than to continue on with this farce.

[5] Not a single poor teacher was either identified or fired.

[6] The same teachers and staff occupy the same building with the same students less those who might graduate this June or drop out.

 

Exactly nothing happened except the costs of that school system went up and the taxpayers got stuck again. All teachers got their jobs back with pay raises and the promise not to sue the school district.[37]

 

This is typical liberalism—failure oriented to a fault.  There is NO WAY any incompetent teacher in a union is going to be fired for any reason particularly incompetence. This trashing of our school system, perpetuated by federal tax monies derived from deficit spending, will continue on until businesses refuse to hire these students for any job and our unemployment rate soars up to the 20 percent level that it deserves.

 

Our lousy school system now has a financial impetus to become lousier.

 

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 



[1] See the text below.

[3] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

 

[7] The Babbling Brooks of the NYT Babbles About the Limits of Policy in Governance of Minorities. We Must Preserve their Social Capital.

http://rycksrationalizations.blogtownhall.com/2010/05/06/the_babbling_brooks_of_the_nyt_babbles_about_the_limits_of_policy_in_governance_of_minorities_we_must_preserve_their_social_capital.thtml

 

[8] By David Brooks Op-Ed Columnist Published: May 3, 2010 The Babbling Brooks of the NYT Babbles about Brokenness and other Fluffs He must like Utopias.

http://rycksrationalizations.blogtownhall.com/2010/03/22/the_babbling_brooks_of_the_nyt_babbles_about_brokenness_and_other_fluffs_he_must_like_utopias.thtml

 

[11] The Babbling Brooks of the NYT Babbles about Decision Making [?!] and Perception?

http://rycksrationalizations.blogtownhall.com/2008/10/28/the_babbling_brooks_of_the_nyt_babbles_about_decision_making_[!]_and_perception.thtml

 

The Babbling Brooks of the NYT Babbles about Nihilism with Innovative Socialist and Nihilist Overtones.  Raise Taxes!

http://rycksrationalizations.blogtownhall.com/2008/10/01/the_babbling_brooks_of_the_nyt_babbles_about_nihilism_with_innovative_socialist_and_nihilist_overtones__raise_taxes!.thtml

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

The Babbling Brooks of the NYT Babbles about Debt and Blame but Offers No Solution.

http://rycksrationalizations.blogtownhall.com/2008/07/22/the_babbling_brooks_of_the_nyt_babbles_about_debt_and_blame_but_offers_no_solution.thtml

 

The Babbling Brooks of the NYT Babbles about Lincoln, Mercury Pills and The Grip of Emotions. [?!]

http://rycksrationalizations.blogtownhall.com/2008/06/06/the_babbling_brooks_of_the_nyt_babbles_about_lincoln,_mercury_pills_and_the_grip_of_emotions_[!].thtml

 

From the Babbling Brooks: Confusion, Hokum and Fluff: Vote for Obama

http://rycksrationalizations.blogtownhall.com/2008/05/06/from_the_babbling_brooks_confusion,_hokum_and_fluff_vote_for_obama.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes  Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

Brooks of the New York Times Mumbles about Bugs, Independent Voters and Mechanical Liberalism

Tuesday, January 08, 2008 10:36 AM

http://rycksrationalizations.townhall.com/g/50bf9f36-0e0b-4e9a-be6d-5234d0d54f2c

 

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes  Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

[13] A new word.

 

[17] Race to Sanity By David Brooks Op-Ed Columnist  Published: June 3, 2010 [Emphasis is mine in all quotes.] http://www.nytimes.com/2010/06/04/opinion/04brooks.html?src=me&ref=general

[21] http://en.wikipedia.org/wiki/Mumia_Abu-Jamal

 

[22] The NYT is not Serious about Being Serious about Election Issues: Obfuscation by Omission and Crude Politics as Usual.

http://rycksrationalizations.blogtownhall.com/2008/05/20/the_nyt_is_not_serious_about_being_serious_about_election_issues_obfuscation_by_omission_and_crude_politics_as_usual.thtml

 

 

[24] Biden[Plugs] is a buffoon. He thinks high taxes are patriotic.

 

[25] The Final Fruits of Affirmative Action: An Incompetent on the Supreme Court

http://rycksrationalizations.blogtownhall.com/2009/06/11/the_final_fruits_of_affirmative_action_an_incompetent_on_the_supreme_court.thtml

 

Of course, many minorities need an excuse for poor academic performance.

 

The sad fact is that because of cognitive skill differentials [The Bell Curve[25][25][25]] certain minorities will, on average, not be able to compete effectively in our society so we can expect more ‘affirmative action[25]’ programs from our government. Other minorities will excel. We might even hear that illegal aliens were ‘exploited and abused’ and now deserve some new affirmative action programs provided they will vote with the Democrats. The standardized tests will be outlawed or minimized as they exclude certain minorities by test scores. We saw that in the New Haven Fireman case[25] where, strangely, our nominee flatly slapped down their case. [25] No blacks could pass the test so the levers of reverse racism had to be pushed and Sonia Sotomayor did her part.”— A Bigot is Chosen for the Supremes. Liberalism Celebrates! by rycK

 

 

[26] The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)

by Herrnstein, Richard J. and  Murray, Charles  Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.

 

[28] Political Lies, Ghouls, Dictators and the Eternal Quest for your Wealth.

http://rycksrationalizations.blogtownhall.com/2008/11/20/political_lies,_ghouls,_dictators_and_the_eternal_quest_for_your_wealth.thtml

 

“The quest for ‘equality’ and ‘social justice’ might be attained in other ways we are told and that ‘education’ of the masses is the way to do this. If we teach our offspring to be classless and steep them in fairness and humanity then social justice will spring forth like flowers in the meadows.  The disease that prevented this splendor was capitalism. Any intrinsic truths in the educational theory entrenched in this message failed to materialize in the society as a whole because of two factors: propaganda and the maldistribution of cognitive attributes or IQs. “

 

“To fix this problem, propaganda must replace education. The trickle down theory of distribution of wealth was unacceptable according to the new educated view.  Now leaders of corporations became greedy tyrants and exploited their employees instead of being benefactors and employing millions from their risk-taking and ingenuity. Only a few of these entrepreneurs would rise to power and they were not the ones who by an accident of birth became royal rulers, but they were the ones who were adept in business. In England those who were originally privileged to become educated by their royal parents or peers of the realm were supplanted by those with higher intelligence, more assertive personalities and advancing business skills. Education had now, in the views of the left, produced the same monsters as the royal bed chambers and must be severely modified to teach the masses how to recognize the proper leaders that would create a more liberal society. Education, then, must be modified and transformed into a major propaganda mechanism [a lie machine] that would create a mold where the elite could push out conditioned citizens who would conform to the liberal model. The citizens must be ‘educated’ to the phony notion that socialism or one of its variants is the best form of government for all. This, of course, is a lie and a difficult one to implement without some heavy propaganda and some other drastic measures. The left used both.  Educators must now be social tyrants and act as stooges of some leftist social agenda to hold jobs in the leftist-dominated educational system. Testing must be minimized and students passed along to higher grade levels without regard for academic credentials or any recognizable form of performance. Politics has now replaced facts.”

 

 

[32] http://www.cbn.com/cbnnews/us/2010/February/RI-School-District-Fires-Every-Teacher/

The agreement lengthens the school day by 30 minutes and requires all teachers to spend one hour tutoring each week. Teachers would be required to eat lunch with students once a week, face a more rigorous evaluation system and undergo up to 10 days of professional development every summer and 90 minutes of weekly planning time after school.

Those conditions are similar to but more stringent than the ones proposed by Gallo before the firings.

"Cooperation and collaboration are necessary ingredients in school improvement," union president Jane Sessums said. "The conflict has been very difficult, especially for the students and the teachers."

Teachers would receive an annual stipend of $3,000 for the extra work, plus $30 per hour of professional development time. The principal would be reassigned to the middle school.

 

 

[34] Metrics to Judge the Obama ‘Change’ Movement. We Shall See Soon.

http://rycksrationalizations.blogtownhall.com/2009/01/28/metrics_to_judge_the_obama_%E2%80%98change%E2%80%99_movement_we_shall_see_soon.thtml

 

Metrics to Judge the Obama ‘Change’ Movement. We Shall See Soon.

 

Abstract: The Obama Phenomenon is all about ‘change’ and we wonder just what might change during his administration. I have researched several metrics on education, IQ, crime, SAT scores and other measurable quantities according to ethnicity.  There are tables of numbers on several topics below sorted for ethnicity. The question is thus projected: will the Obama Phenomenon change any of these metrics for the better? Will SAT scores increase or will crime go down? We can measure the efficacy of these promises and see if they are just campaign fluff uttered during the hysteria of political campaigns.

 

 

[36] The city-suburb split is also immense in such metropolitan centers as New York (47.4 percent vs. 82.9 percent), Cleveland (42.2 percent vs. 78.1 percent), Philadelphia (49.2 percent vs. 82.4 percent), Chicago (55.7 percent vs. 84.1 percent), Los Angeles (57.1 percent vs. 77.9 percent), and Atlanta (46.1 percent vs. 61.8 percent

 

[37] Central Falls teachers get their jobs back  http://www.examiner.com/x-6179-Providence-Top-News-Examiner~y2010m5d18-Central-Falls-teachers-get-their-jobs-back

 

In a deal negotiated Monday between the Central Falls Teacher's Union and schools superintendent Frances Gallo, all of the 93 Central Falls teachers that were fired earlier this year will be re-hired.

 

The teacher's will receive $30 an hour for their tutor time, and be paid $3,000 for the extra half hour. The money will come from a federal grant.

The deal also requires all teachers to drop any lawsuits they are currently seeking against the school department.

 

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The NYT Instructs Germany How To Behave and Save Europe: Spend and Loan More!

The NYT Instructs Germany How To Behave and Save Europe: Spend and Loan More!

 

Abstract: The New York Times advises Germany to continue to lend to the beggars in the European Union. The best option is for Germany to opt out of this wreckage as the debt levels are so high that many members of the EU cannot recover and must default. It is terminal this time.

 

When we read politically predisposed essays we are obliged to translate the words into clearly explicable parts so we can obtain a clear and broad view on how and why the statements appear as they do. This requires some background research into the subject matter, the authors and an assessment of the direction by which the political organization that created this missive is directing our attention to. Simplifying this task, we can start out with the provable knowledge that the bankrupt[1] New York Times—aka the Walter Duranty Papers[2][3]-- has steadfastly echoed the elements of socialism or world government anywhere and everywhere on this planet for some 7 decades or more.  And, what do we expect today? Anything different?

 

As for background, we need to merely inspect the basic elements of what happened in Europe since the 1870s to see that Germany is both the growth engine and the most warlike element in the current shaky European Union, which is not so European, certainly not a union but a hurried assemblage of mostly weak sisters who huddle together to prevent another world war. Peace must be sustained at all costs.

 

To analyze the text, we have to highlight certain words or slogans that define the ultimate fire wall of the political group and these give us the translation we need. Thankfully Maureen Dowd, the Old Red Lady [4][5][6]of the Old Gray Lady, has conveniently provided us with her ‘Unspoken Words Theorem.’ She has the supernatural but politically stimulated facility to hear what is not spoken and provide us with an analysis and we might borrow this method to print herein what is not mentioned in this op-ed today. We can thus extract the exact meaning in a given text.

 

How to best read my blogs:

 

[I offer extensive quotes in this blog/essay so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

Starting off, we look at the opening salvo from this little piece and highlight the buzz words, slogans and themes:

 

Germany’s commitment to the European Union has been central to its postwar rehabilitation and its economic success. For years, Germany played the role in Europe that America so frequently plays globally — the locomotive whose dynamism and demand helps turn around recessions before they deepen into depressions.”

 

“Now, at the worst possible moment, Germany is turning to nationalist illusions. Europe’s past economic successes are now viewed as German successes. Europe’s current deep problems are everyone else’s except Germany’s. That is neither realistic nor sustainable. But German politicians and commentators are callously and self-destructively feeding these ideas.”[7]-- Germany vs. Europe By the Editorial Staff Published: May 26, 2010 [Emphasis is mine in all quotes.]

 

The first word here [rehabilitation] is a 60 year old catch word that is daily reiterated to remind us of German militarism dating back to Frederick. The Russians are never mentioned in such a comparative  context even though they murdered 50 million souls since 1917 and dominated most of Europe for half a century with disastrous results. So, we begin with a reproof of previous actions in Europe that really date back some 25 centuries but the payoff is that the political focus is made current for us and stripped bare of any tinsel or spangles.  This word is intercalated with the derogatory terms nationalist illusions that immediately remind us of Fascism.  Fascism bad—Marxism good. The comment about everyone else in the EU cluster is a crude gloss and an unveiled but persnickety condemnation that clearly states that Germany can adjust to many political climates and continue to remain prosperous. This is clearly not the outcome that most liberals and especially their Neo-Marxist brothers in liberalism wanted to see. They wanted Germany to be a common player in this socialist game and not rise above the hated median[8] that exposes the losers from the rest of the pack. The words “callously and self-destructively feeding these ideas are merely wandering around the central argument of this piece and are avoiding the direct accusation that Germany is the best of the best and they know it.

 

This tells it all. The rest is comprised of some fluff, threats and other puerile antics that tend to compel this mighty nation into a soft-soap acquiescence to the maudlin standards of socialism, where everybody loses.

 

Now, for the specifics:

 

The EU is collapsing from debt derived from the insatiable nostrum that the ‘rich’ can be taxed to create a wonderful society reminiscent of the utopias[9] of the past. [10] The threat is that Germany might leave the EU and that is clearly the best option as the rest of the weak sisters, affectionately known as PIIGS, are hopelessly mired in terminal debt. Germany has some tough decisions to make here and most of them that include staying in the sticky cluster of the EU are not realistic.

 

The English have a different view:

 

The European financial crisis may look and smell rather different to the American banking crisis of a couple of years ago, but strip away the details – the breakdown of the euro, the crumbling of the Spanish banking system to take just two – and what you are left with is the next leg of a global financial crisis. Politicians temporarily "solved" the sub-prime crisis of 2007 and 2008 by nationalising billions of pounds' worth of bank debt. While this helped reinject a little confidence into markets, the real upshot was merely to transfer that debt on to public-sector balance sheets.[11]-- Is Europe heading for a meltdown? By Edmund Conway, Telegraph.  This financial crisis is worse than the sub-prime crash of 2008 because the sums are so much bigger and it is governments that are in dire straits. Edmund Conway explains the dangers [Emphasis is mine in all quotes.]

 

That is what we just did. We took in massive  debt in the form of ‘affordable housing’[12] from people with little or no credit or jobs and tucked it into the government’s dust bins known as Fannie Mae and Freddie Mac to rot and then tried to make up the lost  action  in the GDP rate with more debt. The only real difference in the short term is that the U.S. can handle this for a few years but the EU has exceeded the elastic limit of debt stress and will soon snap. You cannot spend[13] your way out of debt.[14] We need to watch California[15][16][17]and the EU collapse to learn the hard lessons about debt and ignorance in governance.

 

Now, ‘reasons’ why they should help out the Greeks and other beggars:

 

After a rough stretch following reunification, Germany took the tough decisions necessary to restore its competitiveness and revive growth. As a result, it is doing far better than the rest of Europe, with a low fiscal deficit and strong export surpluses. But its export-dependent economy would sputter if European consumers — its main customers — could no longer afford to buy its goods. German banks lent billions to Greece and other troubled European countries. If things don’t turn around quickly, those loans may have to be written down.”— Germany vs. Europe

 

Now, for the missing parts supplied by the Unheard Words Theorem:

 

The reunification process was a pathology from the old Soviet system. It was a disgrace to the world that reflects the obvious defects of a command economy and the NYT must not broach the subject too closely because that is that is what they want for the entire EU and the US as well. The lefties see loot here ripe for the plunder so they play on mistakes made by Germany dating back to a dozen decades or so they play upon the misplaced and unjustifiable guilt of the Germans.  They always know how to spend your money better than you can. We know that the German banks lent money to the hapless Greeks and other socialist losers but the threat that those loans may have to be written down is not valid unless you believe that [1] this may not happen again because of more prudent spending but if it did then the banks will have to write off much more debt and [2] flicking some alms into a bottomless pit like Greece or Spain will bring some rewards if even limited to those select countries. There is little hope that the PIIGS can recover from this without a series of massive sovereign defaults.[18]

 

Now, we place blame on the winners in the usual Marxian style. Germany is at fault for not putting the losers in the stocks and whacking their behinds:

 

 Europe’s most-troubled economies today — Greece, Spain, Portugal and Italy — bear plenty of responsibility for this mess. They spent lavishly during the bubble. They failed to reform their rigid and inefficient labor markets and to contain their increasingly uncompetitive wage costs. The rest of Europe, including Germany, should have demanded adjustments earlier, but didn’t.”— Germany vs. Europe

 

A reading of the EU treaty does not give any nation any meaningful control over another sovereign state. Further, there is no way to control Greece’s spending other than by browbeating coupled with the threat of pulling back all financial support for these idiots. Their whole country is swamped by Marxist unions who demand cushy jobs, early retirement, tax loopholes and do not want to work.

 

Germany should pay for this:

 

 With devaluation not an option for euro members, Europe’s high-deficit countries have been forced into steep tax increases and deep spending cuts to bring their soaring deficits under control and calm the bond markets. Necessary as they are, these cuts also run a very high risk of plunging the Continent into deep recession this year unless Germany offsets them with aggressive stimulus of its own. We hope Treasury Secretary Timothy Geithner will remind German officials of that on his visit to Berlin on Thursday.”— Germany vs. Europe

 

The devaluation comment line merely highlights the preposterous notion that a slapstick collection of countries can share a common currency given the dissimilar attitudes and work ethics of their members. The combination of steep tax increases and deep spending cuts will only ensure that their GDPs will drop like rocks. The EU is already in deep recession because of their foolish debt. It is unclear how Germany would offset anything that might secure some aggressive stimulus of their own. Germany has done its best under her own conditions and that works well. The rest of the EU members have not.  All this growth madness fails to persuade because there is no investment capital at hand here—only some liquidity for the banks of the fallen. Who would invest in Greece with their taxes and confiscatory mentality for foreigners?

 

Germany’s direction to date:

 

Instead of committing to more spending, Germany is now preparing a multiyear program of deep spending cuts. Given its troubled history, we can understand its fear of deficit spending and inflation. But right now more German austerity will likely cripple Europe’s nascent recovery and Germany’s own prosperity. That is another hard truth that Mrs. Merkel needs to tell her party and her country”— Germany vs. Europe

 

This is standard liberal socialism or worse. Let the winner sacrifice everything earned from prudent handling of their economy and assets and hope that this booty will do some good for the losers in the meanwhile. It is okay if everybody is broke but there can be no winner in this. This is identical to the hackneyed concept of ‘tax the rich’ and ‘spread it around a bit’ mentality of the left.  We all know that the begging and taunts will continue and even if the Germans put up more loans and other alms the process will continue in a downward loop like a dead buzzard falling from the sky. Abandon hope when you listen to socialists.

 

As usual, the NYT advises thrusting money[19] toward the ‘poor,’ a process that is incessant and will continue to guide their every analysis and also ever jot and tittle on every page of their protoMarxian screeds and crass  pleas for alms. For the left, they always identify wealth in any location and demand that that be spent on their social programs or themes.

 

Germany must opt out of the EU and let the weak sisters stew in their own rot and circumstance. There is no hope for socialism.

 

rycK

 

Comments to: ryckki@gmail.com

 



[1] Morally and intellectually and financially to be sure.

[3] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

[7] Germany vs. Europe By NYT Editorial Staff Published: May 26, 2010 http://www.nytimes.com/2010/05/27/opinion/27thu1.html?hp

 

[8] The truism that half the population falls below the median is unfair.

 

[9] The Babbling Brooks of the NYT Babbles about Brokenness and other Fluffs He must like Utopias.

http://rycksrationalizations.blogtownhall.com/2010/03/22/the_babbling_brooks_of_the_nyt_babbles_about_brokenness_and_other_fluffs_he_must_like_utopias.thtml

 

[10] Of course, they all failed miserable, but that doesn’t stop the yearning to have a great life with other people’s money.

 

[11] Is Europe heading for a meltdown? This financial crisis is worse than the sub-prime crash of 2008 because the sums are so much bigger and it is governments that are in dire straits. Edmund Conway explains the dangers [Emphasis is mine in all quotes.]

http://www.telegraph.co.uk/finance/comment/edmundconway/7770265/Is-Europe-heading-for-a-meltdown.html

 

[14] The Bursting of the GanGreen Bubble II A Prediction coming True in Gooey Green

http://rycksrationalizations.blogtownhall.com/2010/01/18/the_bursting_of_the_gangreen_bubble.thtml

 

The US national debts are massive and Californians bears a massive load of debt of its own. Since there are only 65 million workers to handle 12 trillion dollars in National Debt and only half of them pay taxes above the median of $32,000 then this works out to $192,000 each for these workers. California has 36,756,666 million people while the US has 304,059,724 with about 65 million total workers in above the median.[14] Thus California has about 12.1% of those workers and since about 21.1 % of the workforce on average across the country pays the taxes we find that the 7,850,000 are liable for the total CA tax burden and that works out to about $8,100 in state debt per worker in the upper half of the income bracket. This puts the total tax burden at $200,000 each. For households with two workers and a total income of at least $62, 000 or twice the median this gives the household debt at $400,000 at this current time. So, at a time of high debt we are generating more debt to fund projects that will produce goods and services at a higher cost. This is the way the thinking goes now in leftist circles. This is probably the new economics as long as it lasts.

 

[18] Greece has a long history of defaults we learn from Kenneth Rogoff.[18] Kenneth is coauthor with Carmen Reinhart of the new book This Time is Different: Eight Centuries of Financial Folly. http://financialnewsexpress.blogspot.com/2009/11/rogoff-and-reinharts-research_03.html

 

Arrogance, Ignorance Recurring in Economic History Paul Solman speaks with economists Carmen Reinhart and Ken Rogoff about the financial crisis and how it compares to previous economic meltdowns http://www.pbs.org/newshour/bb/business/july-dec09/makingsense_11-02.html

 

[19] Krugman of the NYT Moans about Deficit Hysteria. We Can Spend More and More and More!

http://rycksrationalizations.blogtownhall.com/2010/02/05/krugman_of_the_nyt_moans_about_deficit_hysteria_we_can_spend_more_and_more_and_more!.thtml

 

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The New York Times Advises: Plan B: Skip College. They Missed Plans A, C and D.

 The New York Times Advises: Plan B: Skip College. They Missed Plans A, C and D.

 

The bankrupt New York Times—aka the Walter Duranty Papers[1][2]-- has many heroic and phenomenal accomplishments, mostly bestowed upon themselves with much pomp and circumstance and with a necessary due diligence to carefully avoid their earlier mistakes in journalism and thinking. Their noisiest fans are Marxists. Barrowing their hackneyed theme on the comments about the shrunken remains of Marxism the “…idea was correct, and still is, but people didn’t carry out the dream successfully and we really need to try again.” This is an ongoing essay in tautology. The word education is more properly translated as propaganda by those dedicated leftists who believe they have some solutions to the world’s problems almost utterly caused by the crass evils capitalism. Today, they embark on a new and wonderful change in education.

 

Education, as an institution, or more properly called a scamish job mill for the semi competent worker, occupies the central star in the galaxy of social programs for the left. Who could be against education or ejukashon[3] as it might be more colloquially pronounced in places like California.[4][5][6] This notion is the topic of an interesting op-ed by Jacques Steinberg in the Times. The central theme is that education is required for some jobs but not necessarily all and that we need some alternatives to our current system, as always. This is Plan B. This is also a very stale essay.

 

Jacques Steinberg begins with our lesson for today:

 

The idea that four years of higher education will translate into a better job, higher earnings and a happier life — a refrain sure to be repeated this month at graduation ceremonies across the country — has been pounded into the heads of schoolchildren, parents and educators. But there’s an underside to that conventional wisdom. Perhaps no more than half of those who began a four-year bachelor’s degree program in the fall of 2006 will get that degree within six years, according to the latest projections from the Department of Education. (The figures don’t include transfer students, who aren’t tracked.)”[7]--Plan B: Skip College By Jacques Steinberg Published: May 14, 2010 [Emphasis is mine in all quotes.]

 

As an echo here, we also note that about half those who attempt to graduate from high school also share this very disappointing metric in many schools around the nation and almost always in the major cities. I wonder if there is some connection. This prompts us to wonder if some of these are the same people. But, that question is not so politically correct so we need to follow the theme here and behave. This observation is not exactly new or even unpredictable so there must be some agenda that will advance the causes of unionized teachers or administrators.

 

Then, a key metric shines brightly and illuminates this article:

 

For college students who ranked among the bottom quarter of their high school classes, the numbers are even more stark: 80 percent will probably never get a bachelor’s degree or even a two-year associate’s degree.”--Plan B: Skip College By Jacques Steinberg

 

Bingo! But, how can this be? And, now for the central but unaddressed question here: why did we ever think that those on the bottom tail of the Bell Curve [below IQ = 100] would ever be able to handle college? Does IQ have anything to do with this? This is currently the thinking in Plan A and it works in advanced education only for those with IQs greater than about 110.  I think we already knew that and it is called the education gap. [8]  This gap is the difference between average test scores of white and blacks or 100- 85 for a 15 point difference [one standard deviation]. These 15 IQ points have even been acknowledged by the New York Times.[9] This gap was first noticed about 1905. [10] There is nothing new here so this article is at best a pot boiler.

 

Among those calling for such alternatives are the economists Richard K. Vedder of Ohio University and Robert I. Lerman of American University, the political scientist Charles Murray, and James E. Rosenbaum, an education professor at Northwestern. They would steer some students toward intensive, short-term vocational and career training, through expanded high school programs and corporate apprenticeships.”--Plan B: Skip College By Jacques Steinberg

 

The Bell Curve, one of whose authors is mentioned in the paragraph above, debunks this phony theory of equality with numerous—nay millions—of examples.[11] The notion of a bell curve, and particularly if such a curve or curves are compiled from race-sorted data, is outlawed by the left in all conversations and thinking. Whites and Asians mostly rank in a median value of 100-102 but blacks and some Hispanics rank lower with a median at about  IQ=85. The existence of such a social monster as cognitively weighted standardized testing violates the ultimate basis of the political concept of equality.[12][13] Never mind that half of any population has to be in the bottom half--this is still unfair. Socialism depends upon such nostrums as equality and many far leftist governments have solved this problem by a simple extermination of the cognitive elite an example demonstrated to the world by Pol Pot and the Khmer Rouge political party in Cambodia.[14] To kill off the top tail of the Bell Curve in a given society actually does yield equality in a warped sense. But, this does make political sense in leftist terms.

 

The article trundles forward even reviewing the German testing system [Plan A] that divides and steers most of the students into college versus a vocational educational system. But, from the lower tail[15] of the Bell Curve we get this response:

 

Peggy Williams, a counselor at a high school in suburban New York City with a student body that is mostly black or Hispanic, understands the argument for erring on the side of pushing more students toward college.

“If we’re telling kids, ‘You can’t cut the mustard, you shouldn’t go to college or university,’ then we’re shortchanging them from experiencing an environment in which they might grow,” she said.”--Plan B: Skip College By Jacques Steinberg

No, we are not. This is the standard political whine we hear from those who cannot compete in our society for many assorted reasons. The German testing tuition system of Arbitur[16] [ the "Begabtenprüfung" or "test of aptitude"] actually is a Plan A  and it works very well in  Finland too. If there was some charge to finish high school by the left then this comment might make sense, but it only calls for more spending on ‘education’ and wasting that money.  This essay runs off into the social swamps here with comments like this:

 

““It’s not just about the economic return,” he said. “Some college, whether you complete it or not, contributes to aesthetic appreciation, better health and better voting behavior.””—[comment quote by Morton Schapiro] in Plan B: Skip College By Jacques Steinberg

 

At this point, I am tempted to suggest that much of our latent ‘education’ is mere propaganda. The assembly of propaganda pieces[17][18][19][20][21] and other blends of disinformation are designed to sway the reader with some guarantee of money, justice or, more appropriately: the notion that justice will claw-back some of the ill-gotten money or hides of evil doers and capitalists.  Victims must be identified, praised and the wrongdoers punished, at best, with higher taxes or more legislation. This article by Steinberg skirts around the raw edges of this but really misses the defined opportunity espoused by President Obama:

 

 

Here, Obama theorizes of ways to avoid the Bell Curve:

 

Standardized testing is stuck in the crossfire in the debate over accountability, and Obama has stepped up to take aim. He says that too often standardized tests fail to provide valuable or timely feedback. Meanwhile, “creativity has been drained from classrooms, as too many teachers are forced to teach to fill-in-the-bubble tests,” Obama says. He doesn’t go so far as to say he’ll drop testing completely; it should be one of the “tools that we use to make sure our children are learning. It just can’t dominate the curriculum to an extent where we are pushing aside those things that will actually allow children to improve and accurately assess the quality of the teaching that is taking place in the classroom.” How does he plan to revamp testing? “I will provide funds for states to implement a broader range of assessments that can evaluate higher-order skills, including students’ abilities to use technology, conduct research, engage in scientific investigation, solve problems, present and defend their ideas,” says Obama.[22]

 

Education must sometimes be only propaganda.

 

We all know that affirmative action is a tacit admission of the failure of ‘education’ to equip each of our citizens with an equivalent set of mental and entrepreneurial skills and opportunities so they can compete. Cognitive equality is an oxymoron. There is no way you can give standardized tests and ensure that everybody gets the average test grade with nobody getting a higher or a lower test result. Or, even the more absurd notion that everybody can score above the median. The much maligned book The Bell Curve[23], sometimes accused of actually causing the ‘problem’ of cognitive distribution in the US, actually states the blunt facts about our societies and the distribution of mental skills. This salient fact that half the people who take the standardized test will score below the median is the rallying point for ‘change’ in ‘education.’[24] That is not fair. Society must be equalized.[25] Thus propaganda must replace education. The Bell Curve correctly predicts what groups [NOT individuals] will probably pass high school, college and who will excel in the work place—and who will not—but strictly on a group basis. It doesn’t work for individuals. This fact commits millions to menial jobs for lack of certain skills but is casus belli for the political left.[26] Politically, then, about half the populations of various minorities and the white majority are candidates for political exploitation based only on their intrinsic skills. This works well politically and that is where about 50% of the votes are derived.[27]

 

So, in nearly all of the 14,000 school districts across the land there are no school systems where blacks routinely score higher than whites on standardized tests with roughly 50:50 population ratios. These tests have been stringently rewritten to expunge the ‘white bias’ and ‘be fair’ and when re-administered have produced the same results; A15 point deficiency is nearly always observed. If the 15 point gap was a myth then we would expect to see about half the school districts showing blacks proportionately populating the upper half of the academic population and we observe essentially none of this. Money is not the solution as the Washington, D.C, school system spends the most money on their students and have probably the worst academic record in America.[28] Money is clearly not the answer.[29] The lefties tacitly admit (without saying it directly) that affirmative action is absolutely necessary for many minorities to compete in our society. They either don’t have the cognitive skills or refuse to use them, or a combination of both. The use of race-norming was used to disguise this gap. [30][31] This worked by sorting test scores by race, forming two averages, taking the difference and adding that difference to the black test scores.[32][33] This is now illegal. Such a practice, while being wholly alien to decency is a grand example of the left’s ability to sanction intellectual dishonesty. This is a characteristic of the liberal progressive where decency, truth, mendacity and other desirable human attributes are cast aside for political gain. You can be a liar, thief, a pervert or anything else like Bill and Hillary Clinton and welcome warm applause from the far left.

 

Push Plan B and get “something.”

 

Nonetheless, Professor Rosenbaum said, high school counselors and teachers are not doing enough to alert students unlikely to earn a college degree to the perilous road ahead.

 

“I’m not saying don’t get the B.A,” he said. “I’m saying, let’s get them some intervening credentials, some intervening milestones. Then, if they want to go further in their education, they can.””--Plan B: Skip College By Jacques Steinberg

 

The Politics:

 

Still, by urging that some students be directed away from four-year colleges, academics like Professor Lerman are touching a third rail of the education system. At the very least, they could be accused of lowering expectations for some students. Some critics go further, suggesting that the approach amounts to educational redlining, since many of the students who drop out of college are black or non-white Hispanics.””--Plan B: Skip College By Jacques Steinberg

 

Again, the minorities cannot compete on equal terms and this truncates their meager chances.

 

This pathetic pathway is apparently Plan B.  Plan A, from testing, excludes more than 3/4 of our society from benefiting from a legitimate B.A. or B. S. or  higher. College is only for a few. Path B, mumbled to death in this article is nothing but affirmative action reboiled and offered with some new excuses for failure preemptively supplied. Liberalism insists on equal outcomes in any arena but mostly for jobs. [34] This is a tangled form of Incrementalism (Muddling Through, Disjointed Incrementalism, Incremental Planning).[35]

 

Plan C, in my view, and an advance over Plan B  would be some system whereby businesses would set up education systems of their own and teach, perhaps in a year or less, the skills needed for jobs in that business for that level. This could be accomplished by corporations cooperatively sponsoring various schools nationwide. They could decide what [if anything] could be done with partial college training or partial high school work in an individual case before entry. The school could monitor the diligence of the students and filter out those who do not have the determination to succeed. Note that it is the cognitive skill base that is the most important determinant for academic learning and that can easily be detected by extensive testing of candidate students. But, that is also an ethnic filter in several cases. Therein lays a massive political barrier. Plan C would tailor employees with a focused education to fit various job descriptions and hence abusing the notion of equality or equal outcomes.

 

Plan D, my plan, is to focus the spending on education only on effective path ways. If students cannot pass standardized exams in their first year in high school then they would be offered some vocational training such as works in Germany. We have a society with a job spectrum of cognitive and other essential skills and agreeing with some of the comments above in this article college is not required for all cases. We should be careful to not give ‘education’ more praise than it deserves from the government point of view. The voting comment above [better voting behavior] refers to the use of political propaganda flatly defined as ‘education’ when it is not. There is no reason to bluntly limit the educational level of any person if they are qualified in cognitive terms to continue on. But, there is also no need to overeducate persons for which no job exists at that level. It is even worse to manufacture jobs. We have a form of bell curve in our job categories in our country and the most efficient way to fill them is to provide enough education for the individual to succeed at that level. If better jobs appear and there is a need for greater skills then some extra education would obviously be required for some and that level should be made competitive and determined by standardized testing along with the wishes of the student and the job giver in concert. Everyone should attain the highest level they can for their job. This fails as standardized testing magnifies the bell curves intrinsic to our society.

 

But, any plan other than B, and particularly one in which there is minimal student testing and certainly no teacher credential testing, will be blocked by the left based on their warped equal outcomes mantra. Nobody knows better than the left what a failure our system is in places like California, and particularly exemplified by cities like Detroit, Baltimore, Oakland, Los Angeles, Philly, Atlanta and New Orleans—all liberal bastions of government and ‘education.’

 

In our current political atmosphere there is no hope for Plans A, C or D.  Plan B is just a mumbler’s paradise where more money can be wasted for political reasons. That will maintain ‘equality’ for all. There is the place where new jobs for the left will appear to ‘solve’ a problem that insolulable. This means job security for many at our expense.  And, they wonder why many jobs disappear here and reappear overseas. This will continue.  Companies in the US routinely import people to fill job slots that cannot be filled. The equal outcomes nostrum just dumbs down America and that is one of the left’s best accomplishments.

 

rycK

 

Comments: ryckki@gmail.com

 



[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

[3] A new word.

 

[7] Plan B: Skip College By Jacques Steinberg

Published: May 14, 2010 [Emphasis is mine in all quotes.]http://www.nytimes.com/2010/05/16/weekinreview/16steinberg.html?src=me&ref=general

 

[8] “The Education gap is a common term for describing differences in educational attainment measured by grades, test scores or other measures between different social groups. The groups compared often are categorized by race or ethnicity but may also include gender or other features.”

 http://en.wikipedia.org/wiki/Education_gap

 

[9] An Emerging Theory on Blacks' I.Q. Scores by Daniel Goleman; Daniel Goleman Covers Psychology For The Times.  Published: April 10, 1988 “Most social scientists know - though few publicly discuss it - that there has been a puzzling gap of about 15 points in I.Q. test scores, on average, between blacks and whites in America ever since the tests were first widely used more than 70 years ago. After long debate over why blacks score lower, and what it means, a fresh theory is putting the discussion into perspective.“

http://query.nytimes.com/gst/fullpage.html?res=940DE1DF1E3AF933A25757C0A96E948260

 

[10] The Measurement Of Intelligence by Lewis M Terman. Published by   George G. Harrap & Co. Ltd, 1905.

 

[11] This book[The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)  by Herrnstein, Richard J. and  Murray, Charles  Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.] is blacklisted in leftist circles  because it shows that when standardized test scores are sorted by race that blacks and Hispanics score much lower than whites and Asians. Thus, a refutation to this vast array of data must somehow be accomplished.

 

[15] A Gaussian distribution has a median and sloping curves on both sides of this median. They are frequently referred to as the upper and lower tails of the curve.  http://en.wikipedia.org/wiki/Normal_distribution

 

[17] Krugman Applies Protosimian Logic to Health Care. Big Government and Higher Taxes! Of Course!

http://rycksrationalizations.blogtownhall.com/2009/07/31/krugman_applies_protosimian_logic_to_health_care_big_government_and_higher_taxes!_of_course!.thtml

[22] Barack Obama on Education August 1, 2008 http://www.education.com/magazine/article/Barack_Obama/

 

[23] The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)

by Herrnstein, Richard J. and  Murray, Charles  Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.

 

[25] Political Lies, Ghouls, Dictators and the Eternal Quest for your Wealth.

http://rycksrationalizations.blogtownhall.com/2008/11/20/political_lies,_ghouls,_dictators_and_the_eternal_quest_for_your_wealth.thtml

 

“The quest for ‘equality’ and ‘social justice’ might be attained in other ways we are told and that ‘education’ of the masses is the way to do this. If we teach our offspring to be classless and steep them in fairness and humanity then social justice will spring forth like flowers in the meadows.  The disease that prevented this splendor was capitalism. Any intrinsic truths in the educational theory entrenched in this message failed to materialize in the society as a whole because of two factors: propaganda and the maldistribution of cognitive attributes or IQs. “

 

“To fix this problem, propaganda must replace education. The trickle down theory of distribution of wealth was unacceptable according to the new educated view.  Now leaders of corporations became greedy tyrants and exploited their employees instead of being benefactors and employing millions from their risk-taking and ingenuity. Only a few of these entrepreneurs would rise to power and they were not the ones who by an accident of birth became royal rulers, but they were the ones who were adept in business. In England those who were originally privileged to become educated by their royal parents or peers of the realm were supplanted by those with higher intelligence, more assertive personalities and advancing business skills. Education had now, in the views of the left, produced the same monsters as the royal bed chambers and must be severely modified to teach the masses how to recognize the proper leaders that would create a more liberal society. Education, then, must be modified and transformed into a major propaganda mechanism [a lie machine] that would create a mold where the elite could push out conditioned citizens who would conform to the liberal model. The citizens must be ‘educated’ to the phony notion that socialism or one of its variants is the best form of government for all. This, of course, is a lie and a difficult one to implement without some heavy propaganda and some other drastic measures. The left used both.  Educators must now be social tyrants and act as stooges of some leftist social agenda to hold jobs in the leftist-dominated educational system. Testing must be minimized and students passed along to higher grade levels without regard for academic credentials or any recognizable form of performance. Politics has now replaced facts.”

 

 

[27] The Apollo Alliance, Marxism and Another Chance to Challenge Capitalism Explained. [next paragraph]

 

[28] Can D.C. Schools Be Fixed?  After decades of reforms, three out of four students fall below math standards. More money is spent running the schools than on teaching. And urgent repair jobs take more than a year.

http://www.washingtonpost.com/wp-dyn/content/article/2007/06/09/AR2007060901415.html

 

[29] Education gap can be closed with fresh ideas MY VIEW • Black and Hispanic students are being left behind. By Abigail Thernstrom The Portland Tribune, Mar 2, 2004.

 

How much would it cost and what would the benefits be if blacks and Hispanics graduated from high school, went to college, and graduated from college at the same rate as non-Hispanic whites? The answer to this important question for the future of the nation is explored in this report. The costs of education would be high, increasing by about 20 percent in California and 10 percent in the rest of the nation. But the benefits, in the form of savings in public health and welfare expenditures and increased tax revenues from higher incomes, would be even higher.

http://www.portlandtribune.com/opinion/story.php?story_id=23161.

The NYT Alerts Us: It Is Now Time to Change Education Programs, Again, Etc. ad nauseum. Tax Hike Alert!

[32]  Quote from Linda Gottfredson: "We now have out there what I call the egalitarian fiction that all groups are equal in intelligence...differences in intelligence have real world effects, whether we think they're there or not, whether we want to wish them away or not. And we don't do anybody any good, certainly not the low-IQ people, by denying that those problems exist. http://en.wikipedia.org/wiki/Linda_Gottfredson

 

[34] The New York Times Essays us on Poverty, Poison and Tax Policies: The Orshansky Glubberance Explained  Posted by rycK on Monday, February 18, 2008 2:58:41 PM

http://rycksrationalizations.blogtownhall.com/2008/02/18/the_new_york_times_essays_us_on_poverty,_poison_and_tax_policies_the_orshansky_glubberance_explained.thtml

 

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Friedman of the NYT Mumbles about Greece’s Newest Odyssey: The Path to Marxist Revolution is at Hand.

Friedman of the NYT Mumbles about Greece’s Newest Odyssey: The Path to Marxist Revolution is at Hand.

 

Abstract: Thomas Friedman of the NYT meets with a member of the Papandreou Dynasty for fish and feta cheese and is properly enchanted by the predictions that Greece will ‘reform’ and ‘change’ their society. The bond holders and vigilantes are suitably cast as greedy capitalist demons by the use of hackneyed anti-capitalist phrases from a dedicated socialist. Papandreou promises what Greece cannot deliver even if every Greek cast off their socialist garb and returned to realism. The rescue package for Greece only services the debt for a short while and there is no capital in this bundle that is necessary to grow the economy. Thus, the plan is a farce to begin with.  We are urged to believe that a new Odysseus emerges to save their country from financial oblivion. A new King Leonidas of Sparta will revisit a modern Battle of Thermopylae fought hand to hand in the bond arena. Friedman is properly enchanted by this promise. This will end in failure and revolution.

 

The word tautological[1] would be so obscure if not for political propaganda machines like the New York Times that pursue single-objective themes. Their writers[2][3][4][5][6][7][8][9][10][11] and staff[12] thrash about in some ideological contest to see if any might wax noble enough to match the elegant essays and airy enlightenment of their honored Pulitzer Prize winner Walter Duranty.[13]He enchanted them with a certain literary mantle of invincibility and indelible fame in the 1930s when the Times published his leftist-sanctioned political lies and received uncultivated acclaim from the depression-era masses who could now openly celebrate the leadership of Josef Stalin while he happily murdered millions. Uncle Joe was for the people.

 

Duranty refined propagandistic processes for the NYT and attained a higher and loftier status than ordinary propagandists rising well above the stature of Eugene Debs. He labored with pencil and paper like those busy workers who must pound upon their rusty anvils to hammer out narrow ideological snippets of propaganda and thus turn or twist any news event into some new and pressing validation for bugger government. He was able to summon a retreat from prejudice against Marxist monsters [or now, the new Islamo-Fascists[14]] and prattle on endlessly about the undying splendor of higher taxes and authoritarian controls.[15] Most pedestrian-level keyboard plunkers on the Times’ staff cannot show us even an inkling of this lost literary art as they cannot synthesize even a modicum of the  original political magic of the Duranty Essence because of their manifold ineptitudes and transparent sophistry of their contributions, but they try. They really need more political training.

 

Today, one of their rank-and-file scribblers relates his wonderful experience having lunch with Greece’s current leader George Papandreou, who is one his way out the political door because he dares to defy the unions and promises to cut government spending. Friedman is properly tantalized at the pomp and circumstance of this epic union with majesty. He fawns with obsequiousness.

 

How to best read my blogs:

 

[I offer extensive quotes in this blog/essay so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

We begin this interview:

 

For a man whose country’s wobbly finances have kept the world on edge for months, the Greek prime minister, George Papandreou, evinces an Obama-Zen-like calm. He is just back from meeting fellow European Union leaders, who decided to try to stave off a Greek meltdown and an E.U. crackup with a show of overwhelming force — committing nearly $1 trillion to support the economy of any ailing member state.”[16]-- Greece’s Newest Odyssey By Thomas L. Friedman Op-Ed Columnist Published: May 11, 2010 [Emphasis is mine in all quotes.]

 

Other than name dropping, this fantasy is simply a crass form of oblique praise for another leftist. Obama has no calm—all he shows is impatience and anger.  There is no calm in Europe if you read the authoritative sources in Germany and England. This is a financial crisis.[17] This new rescue money is wasted and everybody knows it.  But, the pomp and pretense continue. The NYT attempts to help out in the propagandistic sense. Friedman hears his master’s voice.

 

Entire system must change:

 

But over a lunch of Greek salad and grilled fish, Papandreou makes clear that he knows that the deal with the E.U. was not your garden-variety bailout-for-budget-cuts. No, if you really look closely at what it will take for Greece to mend its economy, this is actually a bailout-for-a-revolution. Greece’s entire economic and political system will have to change for Greeks to deliver their side of this bargain.”--Greece’s Newest Odyssey 

 

Friedman mangles his words here in some attempt to place this disaster into some kind of workable context. The revolution is at hand.  We should be keyed into the historical fact that the current guy in charge in Athens is a son and grandson of former Greek prime ministers. Greece is in terrible financial, social and economic troubles.[18] They even lied about their debt to get into the European Union from which they milk much sop.  They tried to hide their massive debts after that. Their military budget is a state secret. Their deficit spending is now exceeding 12.7% of GDP. But, this time the Papandreou Dynasty will be put to the ultimate test: avoiding a Marxist revolution.  The politically correct approach is for him to join in the party.

 

Friedman must feint wonder and show astonishment over the prospect of a favorable outcome for this madness and he does.

 

““Papandreou says he is ready and so, too, he insists, is his country: “People are saying to me, ‘change this country — go ahead and change it.’ People realize that it needs change. You don’t want to miss this opportunity.”” -- Greece’s Newest Odyssey 

 

Any ring of the Obama promises of ‘change’ here?? Parrots in a chorus on an undersized wooden pedestal? This is a lie. The Marxist unions do not want change unless you use the Obama definition of that world and that means more debt and more social programs.

 

The Evil Ones are identified

 

Sitting in a rooftop restaurant with a view of the Acropolis, I ask Papandreou to put on his safari hat and tell me what it was like to be hunted by the electronic bond herd for six months.”--Greece’s Newest Odyssey 

 

Friedman fawns. Greece has a long history of defaults we learn from Kenneth Rogoff.[19] Kenneth is coauthor with Carmen Reinhart of the new book This Time is Different: Eight Centuries of Financial Folly. [20] Here is a link to a transcript of an interesting interview on sovereign defaults.[21] Friedman is being set up with this  lecture on the evil bond vigilantes who watch sovereign bonds and sell when they are about to become worthless from default.  He must then scurry back to his keyboard and encourage everybody to hate bond holders as in the Chrysler and GM bankruptcy cases: Give most of the booty to the unions! This austerity view, capitalist in all variants, is unacceptable to liberals, leftists and Marxists so Friedman is playing the part of stooge here.[22]

 

The Nasty Ones are identified and defamed!

 

Comparing bond players to some kind of living beasts may be unfair to beasts, he suggests. These markets “are not even human anymore. Some of these things are computerized, and they just go into automatic mode” when they see a hint of trouble.” -- Greece’s Newest Odyssey 

 

Paying off your debts is so ‘western’ and so unnecessary we learn from this.

 

The only way for Greece to end this uncertainty was with an unprecedented commitment by the European Union to backstop Greek debts and with an unprecedented commitment by Greece to put its economy on a strict diet — set by the International Monetary Fund — with quarterly budget targets that Athens has to meet to receive additional support.” -- Greece’s Newest Odyssey 

 

And they whine and whine and whine. Friedman gobbles down some feta cheese bit as he hears this:

 

 The cabinet has already approved increasing the average retirement age for public sector workers from 61 to 65. Average public sector wages have been cut 20 percent, and pensions by 10 percent. The value-added tax was raised from 19 percent to 23 percent, and there’s been an excise tax increase of about 30 percent on gas, alcohol and tobacco. The number of municipalities is proposed to shrink from 1,000 to 400 and public-owned companies from 6,000 to 2,000 to save money and red tape. So far, the deficit is down 40 percent from last year.” -- Greece’s Newest Odyssey 

 

Way too much…….

 

That will only happen, he argues, if there is a sense of “justice” — Greeks want to see big tax cheaters and corrupt officials prosecuted — and if the people feel their leaders have a vision. “We need to give this country a dream — where we are going,” so the sacrifices make sense.” -- Greece’s Newest Odyssey 

 

He has a dream. There is so much political slang flying around at this luncheon it must be difficult to concentrate on the fish. The unions will not tolerate this.[23] George Papandreou is head of the Panhellenic Socialist Movement (PASOK) party. He is only slightly right of the Maoist Marxist party coalition.[24][25] He has no chance to survive in office. He must play the game and mooch as much money as he can before the social eruption.

 

But, Friedman is properly enchanted by these promises with predictions and such about the outcome of a state that is dominated by leftist labor unions.

 

Friedman plays the part of wonder and awe at the prospects of all this:

 

 Can Greece have a civic revolution? The odds are long, but you won’t need to consult the I.M.F. to determine the answer. Just watch Greek young people. In six months, if you see them migrating, then short Greece. If you see them sticking it out here, though, it means they think there is something worth staying for, and you might even want to buy a Greek bond or two.” -- Greece’s Newest Odyssey 

 

Like they do as they escape hostile work and business environments like California and New York??  Where else can they go? Young Greeks have an astronomical unemployment rate probably exceeding 30% or more and their future has been sold out to the evil capitalist bond holders. This is an unworkable disaster and the net effect of this is that wealth will flow from Germany and France into this cesspool of Marxian socialism. They have NO CHANCE of recovering and will default. The rest of Europe knows this but want to pretend.

 

My predictions: The Greeks have accomplished what Lenin wanted and that is the ‘workers’ control the country. But, as any socialist can tell you, they will spend every dollar or euro [or both] they can get their hands on and then reject the debt as illegal, immoral or belonging to somebody else using the Argentinean parlance. The current bail-out is phony because it ONLY shoves liquidity into the failed Greek banks and there is nary a speck of capital to grow the economy of this place. The ONLY way out of this is to cut government way down to size and get corporate ownership back in the hands of competent capitalists so they can generate profits that can be taxed at a reasonable rate.  That is a futile list.

 

This will end in disaster.

 

rycK

 

Comments to: ryckki@gmail.com

 



 

[2] The Babbling Brooks of the NYT Babbles About the Limits of Policy in Governance of Minorities. We Must Preserve their Social Capital.

http://rycksrationalizations.blogtownhall.com/2010/05/06/the_babbling_brooks_of_the_nyt_babbles_about_the_limits_of_policy_in_governance_of_minorities_we_must_preserve_their_social_capital.thtml

 

[8] The Babbler and the Old Brown Lady of the NYT Babble about Election Tealeaves. Liberalism Prevails in all Variants.

http://rycksrationalizations.blogtownhall.com/2009/11/10/the_babbler_and_the_old_brown_lady_of_the_nyt_babble_about_election_tealeaves_liberalism_prevails_in_all_variants.thtml

 

[9] Quoth the Old Red Lady of the NYT: Mirror Mirror on the Wall!  Do I see My Party and Myself in My Writings?

http://rycksrationalizations.blogtownhall.com/2009/11/04/quoth_the_old_red_lady_of_the_nyt_mirror_mirror_on_the_wall!___do_i_see_my_party_and_myself_in_my_writings.thtml

 

[10] The Old Brown Lady of the New York Times [Old Gray Lady] Mumbles Dootifully about the Criminal Good Time Charlie Rangel

http://rycksrationalizations.blogtownhall.com/2009/10/08/the_old_brown_lady_of_the_new_york_times_[old_gray_lady]_mumbles_dootifully_about_the_criminal_good_time_charlie_rangel.thtml

 

[13] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death."Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

[14] Islamo-Fascists: The new ally of the liberals?? http://tabletalk.salon.com/webx/.773b56cd/3625?14@877.TvX2akZqf5y@

 

[16] Greece’s Newest Odyssey  By Thomas L. Friedman Op-Ed Columnist

Published: May 11, 2010 http://www.nytimes.com/2010/05/12/opinion/12friedman.html?hp [Emphasis is mine in all quotes.]

 

 

[19] Greece has been in default for a substantial amount of its modern history as an independent country, he [Rogoff] said. Even if the IMF steps in, they won't do so until the crisis actually blows up. http://online.wsj.com/article/SB10001424052748703323704574602030789251824.html

 

[21] Arrogance, Ignorance Recurring in Economic History Paul Solman speaks with economists Carmen Reinhart and Ken Rogoff about the financial crisis and how it compares to previous economic meltdowns http://www.pbs.org/newshour/bb/business/july-dec09/makingsense_11-02.html

 

[22] He does this part very well.

 

[23] ATHENS, GreeceGreek labour unions have called a new general strike next week to protest planned reforms to the debt-ridden country's rickety pension system.

The two main public and private sector groups said in a joint statement Wednesday the walkout was set for May 20 — a day after Greece must repay some €9 billion in expiring debt, using international rescue loans.

==Greek unions call new strike for May 20 to protest pension reform proposals

By The Associated Press (CP) – 59 minutes ago  http://www.google.com/hostednews/canadianpress/article/ALeqM5jHzDBhhyt-BqBrJS5EjYdtXERdvg

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The Babbling Brooks of the NYT Babbles About the Limits of Policy in Governance of Minorities. We Must Preserve their Social Capital.

The Babbling Brooks of the NYT Babbles About the Limits of Policy in Governance of Minorities. We Must Preserve their Social Capital.

 

Abstract: David Brooks attempts to sort out some of our ethnic differences and finds that some attributes, both negative and positive, seem to follow members of a distinct culture across the globe and that their generations seem to share a similar outcome as those who spawned them.  Apparently slavery is the cause of the inability for black minorities to assimilate in the US because certain social bonds were broken and lost. He probes several ethnic compartments in our society [white and Asian] but cannot seem to mention the culture in our inner cities that are dominated by black leftist politics. He cannot seem to even approach the political Snake Pit created by The Bell Curve and proven differences in innate intelligence averages among racial groups that must be included in any discussion of cultural differences. He avoids the tasks that might directly influence and upset the very outcomes he is looking to prove. He is cherry picking. He appears to scrounge for data to support his predetermined conclusion. As a novelty, and being progressive, he gropes for some new social metric called ‘social capital’ to explain his sifted and typed  ‘findings’ and proclaims that governmental policy decisions should not perturb these essential social attributes very much if such a program is  to be successful. He concludes, inter alia, that “Bad” policy can decimate the social fabric, but good policy can only modestly improve it.” Such an unsubstantiated conclusion properly allows social disasters like the condition of many inner cities to remain above criticism for the direct actions of the inhabitants or for the liberal policies that created these hell holes.  Thus, a new liberal escape mechanism is born that explains why many progressive social programs have dismally failed and offers liberals more flexibility and new reasons to conjure new social programs that will enhance,  maintain or possible reconstruct the elements of the lost  ‘social capital’ nostrum they just invented.  All the wonderful social programs so far have failed for certain minorities so we must try again. They need more taxes from us. We can, once more, blame slavery for the manifold ills of black minorities in this country.

The self-inflicted political torments celebrated by the far left in the near-bankrupt New York Times—aka the Walter Duranty Papers[1][2]-- have little ability to drive them off their progressive stools and redirect their course to enlightenment.  They love to wallow in misery. Anguish is such beautiful sorrow. They finally get somebody to win an election against the backdrop of frustration, ignorance and failure of the Bush administration and thus they  put in some noisy activist from the street-level community organizing communes with no history, suppressed credentials, sealed birth certificate and closed college records  or much else to view.  Obama was a ‘community organizer[3]’ and promised change. That was all it took. It hard to believe that George Bush did not graciously but sorrowfully  assist the far left with this political exercise grounded in sympathy, doubt and guilt. Bush must have crawled around for years to open all these doors for the drooling left. He was truly a failure.  The idea that McCain could fix anything with his spendthrift attitude and maverick gyrations is a joke and this was obvious to all viewers from the beginning.[4] We have spent too much money and too many RINOS have gurgled and bought into the silly nostrum that government can do anything possible if we just throw enough money in the pot and endanger the future finances of our offspring. Bush and McCain were ready and willing to give illegal aliens the vote among other frightening and revolution-tempting gestures.  Bush refused to veto the huge spending bills in Congress so he could go play war in the Middle East and work on regime building while his own regime crumbled and now rots.  So, now we are bankrupt.[5]

So, we got something different—but not so different.

The net result of the last election was to purely endorse spending and more spending and astronomical debt and this is the very favorite non-debatable subject of the Times.  But today our Chief Babbler David Brooks[6][7][8][9][10] broaches the outer walls of the socialist redoubts that inspire our leaders to spend more money and pretends to instruct us on broken societies that probably stem from our much earlier misguided government policies. Brooks, in this episode, manages to sneak around the process of laying blame and substitutes some pretentious mumblings that government policies work only slightly (at best) to influence the outcomes of the lives of our ethnically diverse society. This is almost heresy. This comes very close to a criticism of the left as most social programs and failure and all were derived from the sweating inspiration of Democrats. We need to look closely at this one.  He has something deeper in mind.

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

So, today we will inspect our Babbler’s Babblings and insert some comments and ask a few questions that should have been addressed in this ragzine.

 

We begin our dissection of this rubbish:

 

Roughly a century ago, many Swedes immigrated to America. They’ve done very well here. Only about 6.7 percent of Swedish-Americans live in poverty. Also a century ago, many Swedes decided to remain in Sweden. They’ve done well there, too. When two economists calculated Swedish poverty rates according to the American standard, they found that 6.7 percent of the Swedes in Sweden were living in poverty.”[11]--The Limits of Policy By David Brooks Op-Ed Columnist Published: May 3, 2010 [Emphasis is mine in all quotes.]

 

The central tendency of his point offered here, festooned with far too many words injected and not enough data or neuronal power to make his point very convincingly, is that all cultures [and all that baggage] retain some attributes, positive or negative, when they are transplanted willingly or not into different societies. He does not dig deeply enough into history to show that the US is a melting pot and a major transformation event for millions of poor people who were escaping tyranny or poverty. He seems to forget that many ethnic identities, customs and such were scrapped right off the boat. For the Irish in 1848, the choice was starvation or a dismal life as serf on some British-owned plantation or to take their chances in America as we read in The Great Hunger.[12] The  US Irish are not ignorant peasants subsisting on potatoes any more. And what about the Coolie Chinese in San Francisco and the general Bay Area compared to their ancestors? This place was a new experiment where the Old World had little influence upon us until World War I when the progressive failure Woodrow Wilson got us entangled with the problems of Europe for a price of only 160,000 dead. He drones on about little things and ignores larger issues but rushes to his conclusion a bit too soon.

 

Here, he signals he is about to sum up:

 

A similar pattern applies to health care. In 1950, Swedes lived an average of 2.6 years longer than Americans. Over the next half-century, Sweden and the U.S. diverged politically. Sweden built a large welfare state with a national health service, while the U.S. did not. The result? There was basically no change in the life expectancy gap. Swedes now live 2.7 years longer.

 

Again, huge policy differences. Not huge outcome differences.”-- The Limits of Policy

 

Here, Brooks treads on dangerous political grounds because he fails to acknowledge and celebrate our cherished social programs like welfare, prison life, education, drug rehabilitation, juvenile detention and more that were specifically designed to ‘help out’ and change the future of the little guy. He stubbornly ignores heredity here. But, he is priming his own pump with an excuse.

 

And more:

 

Asian-Americans have a life expectancy of 87 years compared with 79 years for whites and 73 years for African-Americans.

 

Even in struggling parts of the country, Asian-Americans do well. In Michigan, for example, the Asian-American life expectancy is 90, while for the average white person it’s 79 and for the average African-American it’s 73. Income and education levels are also much higher.”-- The Limits of Policy

 

Brooks divides up the life spans and other ethnic attributes during some Ouija Board séance and sorts a few of them by race in limited cases. Do we hear an echo of The Bell Curve[13][14][15] here? He apparently unwittingly sorts out groups of people by superior ethnic cognitive skill averages and then seems to stare at their geographic locations of origin, compares this to their present location and dismisses  what influences education, self care, employment, the dreaded religious practices and other factors that might be in force here. Intelligence must definitely not be any factor however remote we must presume from his silence. I wonder what he would say about why the Amish or Mormons and if they are much are different from their ethnic origins and why they are omitted from this Opus Magnus.  Did America give many a chance to scrap some of their social bonds and form new ones?

 

Avoiding the politically trappy notions of differential cognitive skills Brooks babbles on with a grand introduction of a new metric: “social capital.”

 

When you try to account for life outcome differences this gigantic, you find yourself beyond narrow economic incentives and in the murky world of social capital. What matters are historical experiences, cultural attitudes, child-rearing practices, family formation patterns, expectations about the future, work ethics and the quality of social bonds.”-- The Limits of Policy

 

It is culture he tells us—not heredity. He blatantly leaves out the importance of superior cognitive skills and religion again! These two are an obvious ethnic and social division metric  that could be placed in his list to muse about, but are painfully missing some  inspection by our Babbler are the ugly cases of the US  inner cities of several states where the government is completely controlled by black left wing Democrats. We can stare at the crime statistics, sloth, over the top murder levels[16], health problems from AIDS and VD, drug addiction rates, chronic unemployment, poor educational performance and other metrics of this group and compare that outcome with Brook’s conclusion. Does he dismiss this sector because he must think that life in the concrete jungles of Oakland and Baltimore reflects life in Gold Cost or Ivory Coast of the 15th century? We have several dozen to a hundred cities to cite with the kind of data that Brooks files to cite in this op-ed! The top 10 cities in crime metrics all have left liberals at the helm and only NYC has a white mayor in this cohort. We might also want to compare the outcome of places like Los Angeles with their social antecedents in Mexico City and border towns along California and Texas. Can we draw any conclusions from an analysis of California[17][18][19] and their ‘ejukashon’[20] process and wonder if this expensive jumble is constructive in the retention of any social capital terms?  Why do Asians populate the University of California at Berkeley more than 50%?

 

Is poverty being deliberately imported into California? Is that the social legacy they brought here? Is that a valued piece of social capital we must preserve? How about drug addiction? Does that help or hurt some of these pleasing social attributes he places into context for us? Was the failure to implement Ebonics[21] a mistake?  But, Brooks fails to probe these waters and answer other obvious questions. He is content to keep his essay as politically correct as possible [the censors are watching] as he carefully avoids the inevitable conclusion that our social experiments in the major cities with ‘education[22]’, welfare[23], drug rehab, job training and other worthless social programs are massive failures.  New Orleans is exactly what the crime-besotted and drug-crazed leftists want for their ‘chocolate’ city and they love the welfare, drugs, corruption and massive bribes to voters loosely disguised as tax revenues that sustain this outrage. Baltimore, Philly, Detroit, Atlanta, Oakland, San Francisco and many other places seem to share this progressive view of governance. They are the ones going bankrupt too. How can we show where this prevalent social capitalistic metric came from as we look at the successful in our society? Where did the tax and spend mantra come from? George Washington? England? Germany? Did the current welfare system destroy social bonds? How about affirmative action or busing? Did those programs stigmatize blacks and rupture their social bonds?  How would Brooks explain American exceptionalism as viewed by Alexis de Tocqueville  only 50 years after our democratic experiment started?

 

The Prisons:

 

We can easily view the statistics of persons in prison for various crimes by race although some sites carefully suppress the ethnicity ratios of inmates.[24] It turns out that the ethnic distribution of groups in the prisons is remarkably different from their fractional representation in the general population.[25] Here, we see that blacks are arrested 36% of the time while their fractional representation in the general population is only 12%.  It is also true that of all the murder victims tabulated 47% were black showing, clearly, that this interaction is highly intraracial. It appears that Brooks is using a form of political masking here commonly seen in the writings by others at the NYT or ‘Old Gray Lady.’ He omits significant evidence from his work for political reasons. Going a bit further we note that his colleague Maureen Dowd, the Old Red Lady [26][27][28]of the Old Gray Lady, has conveniently provided us with her ‘Unspoken Words Theorem.’ She has the supernatural but politically stimulated ability to hear what is not spoken and provide us with an analysis and we might borrow this method to print herein what is not mentioned in this op-ed today.

 

What is not there can thus be extracted:

 

Here is a good example of how this interesting process works:  In a rage, Maureen added new information to a recorded quote by Joe Wilson who yelled “You lie!” at president Obama during an address to Congress, [but Obama really didn’t lie she states.]  Quoting Dowd: “But, fair or not, what I heard was an unspoken word in the air: You lie, boy!”[29]]—and here it is! She has the proof!

 

Brooks conveniently avoids any mention of this propensity for violence and crime in the black population because if he did he would be obligated, following his own theory here, to compare the US crime statistics with the history of Africa and make some sober conclusions. He could also avoid the crime statistics in Europe as well as it pertains to blacks and other minorities who can burn 100 cars every night in Paris for a week and not elicit a response from the governments in charge.[30] Was, or is, Africa as violent as we might think a few centuries ago and is this violence an intrinsic part of the social capital of minorities as they cannot seem to adjust to our western culture? Thus, he falls silent on this topic and finds ways to blame whites. This services the old progressive political theme. But, we can use the Maureen Dowd process and find numerous unspoken words in this Brooks piece, fair or unfair, as it makes little political difference in the slant here and we can conclude with confidence that Brooks is saying this:

 

We cannot find a way to assimilate blacks in our society in terms of education, work ethic, violence and other social metrics so we need to invent some restricting factor that is not inherent in their culture and blame that factor on whites so that we can excuse blacks from any blame.

 

This restricting factor, of course, is his buzz words “social capital, “which was destroyed by slavery. This, of course, calls for more taxes and more affirmative action programs and more government to search for ways to restore what was lost three centuries ago.

 

A rule:

 

Therefore, the first rule of policy-making should be, don’t promulgate a policy that will destroy social bonds. If you take tribes of people, exile them from their homelands and ship them to strange, arid lands, you’re going to produce bad outcomes for generations.”-- The Limits of Policy

 

This current snippet is so narrow and myopic it stands by itself as one of the most foolish statements ever printed in the Walter Duranty Papers. This snippet also does not explain the similar violence and glaring inability by black minorities to assimilate into European societies such as France, Germany and England. If minorities are violent and cannot pass tests and perform on the job in France then how can this be explained when they willingly and eagerly came into the country with no hint of slavery to force them? What social bonds were broken here by the French, Germans, Belgians and English? Perhaps the premise is just pedestrian-level progressive baloney politics. That assumption fits better into the mainstream of NYT outputs.

 

One obvious implementation of this ‘rule’ might be to halt the invasion of illegal aliens into the US so as to preserve their ethnic social bonds in their existing homelands. Why ruin a good thing? The central mumbling vector here seems to point to the very aspects he ignores and refuses to discuss and that could be that if blacks had their former ethnic identities scrambled and corrupted during slavery that this must play some major role in the utter failure and criminality of the current generation. Their failure to assimilate is thus our fault. Thus, an excuse is offered, however adroitly, to ‘prove’ to us that we need more social programs to address those disadvantaged for being exiled from their homelands and that relocation produced these bad outcomes for many generations. It must be the fault of the white people again and we must include capitalism. We must have spoiled the system in Africa that made them so successful. Blame us and start all over again.

 

People with low intelligence have difficulties assimilating into any culture except peasantry.

 

Liberalism destroys social bonds and ethical standards of conduct. Why not reform that?

 

Today Brooks glides mindlessly into the narrow slip stream of progressive politics where the quest for more taxes is paramount and blame for any failure on the left is transferred, even over the centuries, to others. He is a useful tool at best.

 

Raise our taxes and start over with new social programs.  We must, again, redress the sins of the past.

 

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 



[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

[3] A group that might include pimps, drug addicts, street hustlers, pickpockets, crooked police and terrorists.

[6] By David Brooks Op-Ed Columnist Published: May 3, 2010 The Babbling Brooks of the NYT Babbles about Brokenness and other Fluffs He must like Utopias.

http://rycksrationalizations.blogtownhall.com/2010/03/22/the_babbling_brooks_of_the_nyt_babbles_about_brokenness_and_other_fluffs_he_must_like_utopias.thtml

 

[9] The Babbling Brooks of the NYT Babbles about Decision Making [?!] and Perception?

http://rycksrationalizations.blogtownhall.com/2008/10/28/the_babbling_brooks_of_the_nyt_babbles_about_decision_making_[!]_and_perception.thtml

 

The Babbling Brooks of the NYT Babbles about Nihilism with Innovative Socialist and Nihilist Overtones.  Raise Taxes!

http://rycksrationalizations.blogtownhall.com/2008/10/01/the_babbling_brooks_of_the_nyt_babbles_about_nihilism_with_innovative_socialist_and_nihilist_overtones__raise_taxes!.thtml

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

The Babbling Brooks of the NYT Babbles about Debt and Blame but Offers No Solution.

http://rycksrationalizations.blogtownhall.com/2008/07/22/the_babbling_brooks_of_the_nyt_babbles_about_debt_and_blame_but_offers_no_solution.thtml

 

The Babbling Brooks of the NYT Babbles about Lincoln, Mercury Pills and The Grip of Emotions. [?!]

http://rycksrationalizations.blogtownhall.com/2008/06/06/the_babbling_brooks_of_the_nyt_babbles_about_lincoln,_mercury_pills_and_the_grip_of_emotions_[!].thtml

 

From the Babbling Brooks: Confusion, Hokum and Fluff: Vote for Obama

http://rycksrationalizations.blogtownhall.com/2008/05/06/from_the_babbling_brooks_confusion,_hokum_and_fluff_vote_for_obama.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes

Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

Brooks of the New York Times Mumbles about Bugs, Independent Voters and Mechanical Liberalism

Tuesday, January 08, 2008 10:36 AM

http://rycksrationalizations.townhall.com/g/50bf9f36-0e0b-4e9a-be6d-5234d0d54f2c

 

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes  Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

[11] The Limits of Policy By DAVID BROOKS OP-ED COLUMNIST Published: May 3, 2010  [Emphasis is mine in all quotes.]http://www.nytimes.com/2010/05/04/opinion/04brooks.html?hp

 

[12] The Great Hunger: Ireland 1845 1849 (ISBN: 0060147407 / 0-06-014740-7) by Cecil Woodham-Smith

Harper & Row, Publishers 1962-06, 1962

 

[13] The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)

by Herrnstein, Richard J. and  Murray, Charles  Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.

 

[14] Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes

Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

 

[20] A new word.

[23] Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

[24] This site has been carefully sanitized. http://bjs.ojp.usdoj.gov/

 

[25] African Americans were arrested more than any other race for murder in 2008, making up 36% of all arrests. African Americans, constituting approximately 12% of the general population, were significantly overrepresented in the total arrests made. African Americans were also significantly overrepresented in victimization, representing 47% of all murder victims. White Americans and individuals of Other race were significantly underrepresented in cases of murder and non-negligible homicide in 2008. Murder in White American and African American populations were overwhelmingly intraracial, with 83% of all White victims and 90% of all Black victims having been murdered by individuals of the same race. The same was true, though to a lesser degree, for individuals of Other race, with 52% having been murdered by individuals also of Other race. http://en.wikipedia.org/wiki/Race_and_crime_in_the_United_States#Crime_rate_statistics

[30] http://www.brusselsjournal.com/node/490

 

http://www.time.com/time/world/article/0,8599,1869392,00.html

 

“Police had braced for a bigger replay of violence in the poor suburbs predominantly made up of Muslims from former French colonies in Africa. Friday marked the one-year anniversary of the deaths of two teens that ignited three weeks of riots in 2005.

 

The rioting was fueled by anger at France's failure to offer equal opportunities to many minorities — especially Arabs and blacks — and France's 5 million-strong Muslim population.

 

 

France's trouble integrating minorities and the suburban unrest are becoming hot political issues in the campaign for next year's presidential and parliamentary elections. The government passed an equal opportunities law this spring and has poured funds into "sensitive" areas, but disenchantment is still pervasive.” http://www.foxnews.com/story/0,2933,226061,00.html

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Krugman Traps Himself in his Trappy Claptrap over EU Funny Money

Krugman Traps Himself in his Trappy Claptrap over EU Funny Money

 

Abstract: Paul Krugman mumbles about deflation and spending in Europe and calls upon members of the EU to do something for Greece, currently dragging down the EU and threatening to ignite a financial panic and a probable disintegration of this hapless union. Their spending is too high, their government packed with nepotistic politicians that owe everything they have to Marxian style unions.  The Greeks lied about their debts before joining this cluster of weak sisters and tried to hide their current deficits by subterfuge and now their central bank is insolvent and their citizens are rushing money from Greek banks into Cyprus to avoid being confiscated by a frantic far leftist government. Krugman can make no negative comments about their wild spending and huge deficits as they are not right wing governments. For Krugman, a Bush 3.4% debt to GDP ratio was too high but the Obama deficit of now 84% is just fine and, by the way, we need to spend more. Thus Krugman talks out of alternate sides of his mouth when analyzing leftist governments when to compare to the right. In this op-ed Krugman mumbles and comes to the conclusion that Greece needs more ‘help.’ Krugman condemns Krugman in this and earlier essays where we can easily pick out his political bias and show that this bias is  the  consistent and eternal basis of his so-called economic advice.

 

Krugman launches off:

 

Not that long ago, European economists used to mock their American counterparts for having questioned the wisdom of Europe’s march to monetary union. “On the whole,” declared an article published just this past January, “the euro has, thus far, gone much better than many U.S. economists had predicted.”…“Oops.”[1]--The Euro Trap By Paul Krugman Op-Ed Columnist Published: April 29, 2010 [Emphasis is mine in all quotes.]

 

This is a crude feint by our Nobelette since he adores socialism and high taxes and massive government spending.[2] There is some hidden pungi stake embedded somewhere in the rest of this prattle so we need to step carefully.

 

Debt and spending are not the problem we learn:

 

To understand the euro-mess — and its lessons for the rest of us — you need to see past the headlines. Right now everyone is focused on public debt, which can make it seem as if this is a simple story of governments that couldn’t control their spending. But that’s only part of the story for Greece, much less for Portugal, and not at all the story for Spain."--The Euro Trap By Paul Krugman Op-Ed

 

Oh! Wild spending and gross public debt is not a problem??

 

The fact is that three years ago none of the countries now in or near crisis seemed to be in deep fiscal trouble. Even Greece’s 2007 budget deficit was no higher, as a share of G.D.P., than the deficits the United States ran in the mid-1980s (morning in America!), while Spain actually ran a surplus. And all of the countries were attracting large inflows of foreign capital, largely because markets believed that membership in the euro zone made Greek, Portuguese and Spanish bonds safe investments.”-- The Euro Trap

 

Then came the global financial crisis. Those inflows of capital dried up; revenues plunged and deficits soared; and membership in the euro, which had encouraged markets to love the crisis countries not wisely but too well, turned into a trap.

 

What’s the nature of the trap? During the years of easy money, wages and prices in the crisis countries rose much faster than in the rest of Europe. Now that the money is no longer rolling in, those countries need to get costs back in line.”-- The Euro Trap

 

Apparently, the EU setup whereby various nations can ‘share the same currency’ and adopt wild and incoherent spending and taxation theorems with no controls from the ‘union’ is a good idea.[3] We are thusly enlightened.  Actually, it is a disaster. And, does this mean wage cuts? The message is not clear as to what Krugman advises here. He also treads on dangerous partisan grounds by stressing the need for capital influx, a term despised by liberals. We all know that capital influx means the exploitation of the masses.

 

The problem is that deflation — falling wages and prices”-- The Euro Trap

 

Krugman is well known to want to prevent deflation with massive stimuli.[4]

 

So what will happen to the euro? Until recently, most analysts, myself included, considered a euro breakup basically impossible, since any government that even hinted that it was considering leaving the euro would be inviting a catastrophic run on its banks. But if the crisis countries are forced into default, they’ll probably face severe bank runs anyway, forcing them into emergency measures like temporary restrictions on bank withdrawals. This would open the door to euro exit.”-- The Euro Trap

This run is on as Greeks move their money to Cyprus as of only a few hours ago at this writing.  All or most all [9]  of Greece's banks were just downgraded by S&P.[5]  So far, there is nothing new or novel here except the latent need for more spending.[6] What else has Krugman to offer us except fluff? A Greek default is now almost a certainty. [7] He apparently calls for more wealth transfers disguised as taxes.[8]

Here it is!!

 

If European leaders don’t start acting much more forcefully, providing Greece with enough help to avoid the worst, a chain reaction that starts with a Greek default and ends up wreaking much wider havoc looks all too possible.”-- The Euro Trap

 

And a lesson for the US:

 

The deficit hawks are already trying to appropriate the European crisis, presenting it as an object lesson in the evils of government red ink. What the crisis really demonstrates, however, is the dangers of putting yourself in a policy straitjacket. When they joined the euro, the governments of Greece, Portugal and Spain denied themselves the ability to do some bad things, like printing too much money; but they also denied themselves the ability to respond flexibly to events.”-- The Euro Trap

 

This is a circular essay and is, as such, popular in propaganda circles where phrases and slogans can be used in opposition to the exact contest of the message and still influence the ignoranti.  What Krugman is saying is that it is too bad that Greece and others in the foolish union cannot independently print their own money and offset their debt with inflation while retaining certain elements of socialism. It is this experiment in socialism that will crush their system. This essay is an oblique message to Obama and his drooling Congress to spend more money here in the US on green things and social programs that don’t work. The EU is a bad idea as there are no controls over member nations and their spending. Greece and California have much the same problem.[9]

 

Here is how Krugman thinks deficits are too big when Republicans are in office and 14 trillion is now not so high since Obama is in office:

 

Krugman, in a November 2004 interview, criticized the "enormous" Bush deficit. "We have a world-class budget deficit," he said, "not just as in absolute terms, of course -- it's the biggest budget deficit in the history of the world -- but it's a budget deficit that, as a share of GDP, is right up there."

 

The numbers? The deficit in fiscal year 2004 -- $413 billion, 3.5 percent of the gross domestic product.”--[10] Krugman: Bush's Deficit Bad, Obama's Deficit Good By Larry Elder [Emphasis is mine in all quotes.]

 

This clearly shows, by a scale of (14/.413) or 33.8 fold, that Krugman cherry picks numbers and rattles them around in his little cage for a while and then reverts backward to form by stressing that what any leftist on any continent does is fine but Republicans spend too much and run very high deficits. This proof statement, in Krugman’s own words, gives us the proper information to state that Krugman is nothing more than a mouthpiece or simpering stooge for the far left.  Our current debt to GDP ratio happens to be 12.1/14.3 or %84. I think that is a bit higher than 3.5% even in liberal terms.  Was Krugman a deficit hawk[11] when he criticized Bush?

 

Krugman sums up:

 

And when crisis strikes, governments need to be able to act. That’s what the architects of the euro forgot — and the rest of us need to remember.”-- The Euro Trap

 

This is all very hazy. But, one message is clear. The need to print more money or take on more debt in the EU is paramount. Thus, in the Greek case, we can expect Germany to put up the higher fraction of funds to be sent down the black hole in Athens to be wasted upon those nepotistic government employees and greedy unions who refuse to take cuts of any form. Wasting money on losers is ‘action?’

 

Thus, this guy drags his credibility through the mushy latrines in a frantic search for anything however small or sticky that will aid Obama and his Marxists who are spending too much money. The proof of his bias and political stoogery derives easily from a reading of his own fluff. I wonder if he keeps copies of his earlier op-eds. I guess he really cannot.

 

rycK

 

Comments to: ryckki@gmail.com

 



[1] The Euro Trap By Paul Krugman Op-Ed Columnist Published: April 29, 2010 http://www.nytimes.com/2010/04/30/opinion/30krugman.html?hp [Emphasis is mine in all quotes.]

[2] Krugman Searches for His Own Truth in an Irish Mirror. He Reflects upon the Mirror and Finds Himself as Originator of the Eternal Solution. Tax and Spend.

http://rycksrationalizations.blogtownhall.com/2010/03/09/krugman_searches_for_his_own_truth_in_an_irish_mirror_he_reflects_upon_the_mirror_and_finds_himself_as_originator_of_the_eternal_solution_tax_and_spend.thtml

 

[5] http://www.marketwatch.com/story/moodys-downgrades-nine-greek-banks-2010-04-30-818140

 

[6] Krugman Calls for More Stimulus. What Else is New?? More Debt and Bigger Government and a Bigger Depression!

http://rycksrationalizations.blogtownhall.com/2010/01/05/krugman_calls_for_more_stimulus_what_else_is_new_more_debt_and_bigger_government_and_a_bigger_depression!.thtml

 

[7] The Coming Age of Debt Defaults: The US May have to Lead the Way and Default on All Debts. We Must Learn New Ways to Live and Survive.

http://rycksrationalizations.blogtownhall.com/2009/12/19/the_coming_age_of_debt_defaults_the_us_may_have_to_lead_the_way_and_default_on_all_debts_we_must_learn_new_ways_to_live_and_survive.thtml

 

[9] Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

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Meet the Real Villains of the Financial Crisis—the CRA [Community Reinvestment Act], “Affordable Housing” and the US Government

Meet the Real Villains of the Financial Crisis—the CRA [Community Reinvestment Act], “Affordable Housing” and the US Government

 

Abstract: The government was directly responsible for the Depression of 2007, a process that is only half finished at this date.  Interestingly, the New York Times has an opinion that blames the government for much of this mess. We are mired in debt to the extent that is cannot be accommodated in our budget or even maintained at its current unacceptable and unsustainable levels without more deficit spending. Goldman Sachs is singled out for abuse and political grandstanding by Congress as they made profits and are the biggest investment bank left standing after the downturn. Most of this interaction between government and the banks is rooted in the leftist intolerance for capitalism. The leftists proclaim that they have better ideas to run governments and continually spend too much and throw their nations into massive debt problems as we see in the EU with the cases of the U.K., Greece, Italy, Portugal, Ireland and others. The respective governments of these nations, all left or far left, spent way too much money and now are struggling with the resultant debt which they cannot address even with massive tax increases. There is no way to check this process and the debts will continue to pile up until such nations, including the US, default on their debts. That will bring more chaos.

 

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

 

Capitalism v. Socialism or Success v. Failure.

 

Unfortunately, we live in a divided world where there exists a massive crevasse predictably constructed and carefully maintained almost wholly by political rancor. The divide is the gap between the ‘rich’ and the ‘poor.’ The gulf between these factions provides both relief for some and a political thrust for others to close the space and engender ‘equality[1]’ for all by some promised sharing in wealth. We have evolved from humble beginnings where wealth was managed only by swinging clubs and sailing rocks and arrows, clan wars and the constraining concept of food spoilage time and the weather. In this trek from unsophisticated hunter-gatherer societies to the early beginnings of capitalism the gap has continually widened. This process proceeds on an international scale. Very few governments can play the game and balance these two attributes; most governments fail.

 

The gap is a natural consequence of how societies interact as there are two strongly opposing theories of society that cannot coexist: capitalism and socialism. Hybrid blends are a small exception. Capitalism is an entity that forms spontaneously in all societies however primitive or advanced where sharing and trade are necessary to allow a existence much beyond starvation and successful wealth accumulation however modest such as agricultural plots, rice paddies or following wild game. Capitalism provides a positive group leverage whereas socialism offers the opposite. Capitalism always forms spontaneously in the form of a pyramid[2] where a few  at the apex must make difficult decisions and assign jobs and duties that are spread around the local community not according to any notions of equality but to fill the necessary slots of the mechanism that produces food, shelter and protection. Food and other commodities in excess of the current needs of a given community are offered for trade with other similar groups and thus markets and trade are established. Efficiency is enhanced for all groups. Sharing commodities in markets allow separate and 0therwisle unrelated groups to participate in constructive trade and improve their respective lots.  Thus capitalism moves forward by placing the proper individuals in various key positions in the organization based primarily on skills. This argues directly against the left-wing political nostrum of equality where anybody should be able to do anything in a modern society. The idea that anybody can do any job leads to incompetents being placed in positions of power where they can wreck havoc and destroy societies. Our Congress is such a place where incompetents are particularly safe. Their full time job is to get reelected. For many, their part time job is to attack capitalism.

 

The capitalist mechanism demands material success for the group and tangible outcomes for the members of the group because failure frequently means starvation, loss of assets or worse. Those who fail to provide what is required in a capitalist system fall from power and are replaced by those more fit to do their jobs. The opposition observation and general argument to this is the socialist position where cooperation among the masses provides enough wealth for everyone in the system and is more equitable and this is attained by enlightened leadership. There is no discrete penalty for failure in the socialist system as some failure in the society controlled by elitists simply means that blame is to be placed elsewhere and particularly upon those who have wealth and that assessment is the necessary and sufficient proof that there was foul and unfair play in the economic system. Capitalism refines leadership and provides funding and other social processes while socialism tends toward stagnation, oppression and corruption. The difference is almost always related to the efficiency differential between the two systems: socialists have the wrong people in charge and the wrong plan for the economy among other detracting attributes. The current test for the efficacy of socialism rests in the outcome of the current financial panic in the EU over Greek debt. Here, we have the wrong people in charge of a cluster of societies that are spending too much on various social projects and are ignoring their debt responsibly. The silly notion that the ‘rich’ can always be taxed at higher and higher rates to pay for the social programs is at the very core of their failing system. High taxation[3] stifles economies and that leads to failure. This theory is elegantly expressed in the Laffer Curve[4][5] that shows there is a particular tax rate for maximum tax revenue and another for the highest growth and efficiency in the economy.  Since taxes are the only source of power for the left this theory which supports ‘supply side economics’ is summarily rejected solely on a political basis. It works but reduces the power of elitist governments that believe they can provide a better society with higher taxes and elitist decision making.  The current crash[6] and probable disintegration of the European Common Market and European Union is proof that the elites have no long-term ability to run societies.

 

The current struggle now presents itself as a political war between those who can generate wealth and those who must tax that wealth for their existence. This leads to the enviable outcome where those who are unskilled in the management of wealth become elevated to a class of decision makers based on a political process where they are chosen by those whose skill spectrum is limited. Thus, using the nostrums of ‘sharing’ and ‘equality’ many incompetents perturb the capitalist system and damage local societies in wealth terms. The predictable outcome of this is a disintegration and subsequent reassembly of the capitalists into different groups and perhaps in different locations in an attempt to escape the clutches of incompetents and to start all over again. Two natural processes then compete in this aftermath: political forces again attempt to promote incompetents to positions of power over money, assets and business markets and finally win on a numerical voting basis and the system eventually crashes again. There is no reasonable expectation that this cycle of construction and destruction will ever cease. The stark realities of the results of the USSR and People’s Republic where they ran command economies and were abject failures in this endeavor are not sufficient to prevent socialists from taxing nations to the point of collapse. This tends to convince us that failure is acceptable to the left for any economy as long as they can retain political power. Leftist politics mostly means economic failure.

 

We can cite dozens of examples in South America, Asia, Africa and the Caribbean as case studies to prove this point. The local  pyramids form, are refined and become successful then the hoi polloi view the proceeds with covetous eyes and demand part of the proceeds usually in the form of taxes that eventually become too high hence oppressive and confiscative and the system crashes again. This system could work to the benefit of all if the lower classes could provide suitable workers to make goods and provides services for commerce, but politics frequently prevents this. The workable leadership lies in the business camps as history has shown and political leadership has not been shown to be beneficial to all in most societies. It is the bad political decision that frequently crashes the system, forces unemployment and promotes war and disease. The only time when these opposing systems appear to work cooperatively are places where government and business are separated by some firewall and capitalism takes the lead in its own venue while providing profits to run the government and necessary military factions of a society. This hybrid is difficult to establish and few countries other than China have managed this feat to date. If firmly established, this quasi-Fascist[7] model may change societies and generate the maximum possible wealth and security for all citizens in the group if balanced properly.  This experiment is being run on a massive scale and very successfully at this time compared to other systems in Europe and the US. We shall see.

 

Destruction in our economy from leftist programs

 

We are now in the process of watching incompetents destroy our US economic system and this is the point of this blog.  We are spending and borrowing very much more than we can ever pay back. Debt can always be deal with by the left as illustrated by the way Obama dealt with GM an and Chrysler: clean out the stockholders and then cut away the secured bond holder’s right to first claims on the corporate remains during bankruptcy proceedings. This is a politically instituted default and is know as cleptocracy [theft of citizen’s wealth by government]. The government purloined assets from it citizens and nationalized the remains of an auto company because the workers were unionized, Democrats, and had supported Obama during his political campaigns. Quid pro quo.

 

We begin discussion in this essay with the pedestrian scheme of blaming the opposition for the Depression of 2007 and since this was superficially triggered by a financial crisis then the banks and more exactly the investment banks must be the culprits since they were driven by greed and a conspiracy to cheat the poor out of their deserved rights and future. There is only a bit of truth in this notion. But, the politics of this theme are wildly successful in the politics of the l0w class.

 

The Depression of 2007 was initiated by a collapsing real estate asset bubble that formed not only in the US but in many places in Europe.  Our global economy works such that trading in real estate is fast and profitable in certain areas.  Speculation can be identified by merely looking at the time property owners hold their properties and if they live in them. The driving forces were easy credit, very low interest rates [Greenspanism[8]] and speculation over housing for decades in some cases. This social contagion can be defined as the process whereby growth is encouraged by government directly funding house purchases, maintaining low interest rates and setting very low to zero level mortgage requirements to buy those houses. Thus, when people could not or would not pay their mortgage payments then these mortgages, subsequently bundled into groups as investment instruments, became ‘toxic’ assets. Mortgage defaults continued to grow and that meant that toxic assets were growing in toxicity and banks would not trust each other in the credit markets so they froze up. The Libor rates[9] for inter bank loans shot up. The process was magnified by the fact that although the banks and lending institutions knew their buyers with low credit standing would not be able to afford those homes they had the convenient outlet of shedding their liability by sending these phony real estate instruments to Fannie Mae and Freddie Mac in discount.  This risk dumping process amplified the bubble as more mortgage money was generated and this outcome was the result of a vote-for-substance [quid pro quo] bet by politicians whereby they could trade votes for ‘affordable housing.’ Congress set this up as a social program for the ‘poor.’ A bursting asset bubble vacates the intrinsic equity of the asset hence erases wealth within the bubble so home equities contracted and the credit based on such equity collapsed and so did consumer spending from this source. Thus, GDP plummeted as consumption is 2/3 of the GDP.[10] A typical case would be some person with a $400,000 home [earlier market price] that was now worth only $300,000 [as the bubble bursts] but sustained with a $350,000 mortgage. This is called being ‘under water.’ Such negative turns in a speculative investment prompts flippers to walk away from the mortgage and let the bank do what it wants with the wreckage.  The house value may actually plummet further later on if the bank does not protect the house from looters who want copper tubing and wire and appliances and other fixtures get in and loot the place.  Government attempts to fix the problem with forced principal and interest adjustments leads currently to refinancing recidivism rates of credit-poor people at 70%.[11] Such a failure and waste of printed money is no deterrent for the left to proceed with more projects of this sordid class. Such is also highly predictable as this is one of the very weak spots in the leftist economic theories and governance.

 

After the crash, the hunt was on for the guilty who could only be capitalists and more particularly banks who made fortunes in the downturn and Goldman Sachs was the first point of the attacks.  In markets where there are millions of willing buyers and sellers the political attack by Senator Carl Levin[12] was to tell the world that Goldman made money off short positions and failed to tell their long customers that they were actually betting on a downturn. This is nonsense and crass political theatre as all brokers and traders are awash in buyers and sellers for every single product they sell and at any given instance the same equity or other financial instrument is being sold long or shorted on the same day and all might be customers of Goldman or any other investment bank.  Note that people like Franklin Del Ano Raines[13] and others who ran Fannie Mae into the ground are not on the Senate hot seat although they along with Barney Frank and others conjured up and orchestrated  this ‘affordable housing’ scam that now results in some 3-7 trillion dollars in worthless mortgages now rotting in Fannie Mae and Freddie Mac.  The scam was fueled by the CRA [Community Reinvestment Act][14][15] that created mountains of bad debt by forcing banks to give away free houses to the uncreditworthy low class in exchange for their votes under penalty of prosecution by the government. You were supposed to wipe out the evil process of Redlining[16]  and replace it with Greenlining.[17]Minorities must have loans [free if necessary] so they can participate in the American Dream. This is known as ‘affordable housing’—you, the average taxpayers, cannot afford this but the illegal aliens and criminals and ‘poor’ certainly can if it is free.  The thrust by the left now is to ‘suspend’ foreclosures and use some bank or government money [what else from a socialist?] to fix the problem:

 

An absurd plan to help homeowners who are about to lose their homes:

 

 The best way out of the current mess that avoids a taxpayer rescue is for lenders to modify loans.”[18]-- Pia Lopez, Sacramento Bee.

 

But the role of loans for people who don't qualify for a lower-cost, prime loan should be to provide them with a loan so they can build a credit history and refinance into a conventional loan with better terms when their credit improves.”[19]—Pia Lopez, Sacramento Bee.

 

See how easily the money from the banks should flow to rescue the unfortunate from their financial problems! This is the song and dance of the far left intercalated with racism.[20] We can loan them money so they can establish credit!  Notice that the banks have to absorb the loss here. Stick it to the greedy banks and if that doesn’t work then loan them the money to pay their mortgage payments with government backing. This is a classic example of leftist socialist thinking.  Lopez must have forgotten that the banks were bailed out by taxpayer’s money just to survive. Where are these loans originating from? The printing of money??

 

 

The point of this exercise, going back two or three decades was to, in Obama’s words, “spread around the wealth” and terminated with the usual consequences: incompetents or other people who receive free assets or money cannot always handle the process properly and spend it away and then default. The object of the left is to blame the banks and then secure loans to restore the victims to their homes for another try. Thus the far left socialists in Congress and Obama wasted trillions and now the hunt is on inside Goldman Sachs to find the culprits who made billions off an obviously crashing real estate bubble of political making. This is standard leftist politics: if you have assets above the median then that is proof that you gained it unfairly and probably used racism along the way so you should give it back.  The government wastes trillions so they go after transactions on the billion dollar level as a diversion. Most professional racists are liberal Democrats.

 

The standard process of finding any and all ways to exact wealth from those who have it and

“spread it around for the poor” is being illustrated in the current and terminal collapse of Greece, Portugal, and soon Spain and probably even  the U.K.  It matters not whether the money was spent on housing, health care, rent, food, drugs, education or other the point is that the left believes that they can tax and spend and that the ‘rich’ will pay for this. It seems not to matter to anybody, at least for now, that the definition of ‘rich’ in the defined terms of just who will pay taxes to cover these phony programs extends well below the median income of $32,000 in the US. This number for the ‘rich’ was elevated by Obama and Biden during the contest. They promised [read lied] that nobody earning under $250,000 would see a penny of extra tax.[21] As the cutoff point that determines who pays federal taxes continues to reach its tentacles down past the median then ‘the poor’ will be subject to taxation to pay for these follies. If the entire pile of wealth of the ‘rich’ was confiscated it would propel the government on its egalitarian course for only about 90 days at this rate.

 

This process is unfolding in California[22][23][24][25][26][27] now as they face endless yearly deficits of 20+ billion dollar or more with the extra excitement of find ways to fund their 500 billion dollar pension funds that were a payoff to government workers and teachers for their votes. This deficit will grow until either spending is cut drastically or when they default or perhaps it will happen simultaneously.  There is no known scenario by which California can recover form this as they are increasingly more anti-business in their legislation and outlook and only invite the inevitable default. There hopes then rest solely upon Washington for gifts as they cannot finance a loan. There is a strong parallel between the mentalities of the politicians in California and Greece as they both have the same affliction. Both are going broke and refuse to cut spending.[28] New York, New Jersey and Michigan are in similar positions in debt. These entities are almost entirely controlled by leftist elites.

 

This debilitating debt process is not exactly a new story as we saw the horrible outcome of the French Revolution, the Russian Revolution, Cuba, the People’s Republic during the Great Leap Forward and many other examples of how the far left can grab tangible assets and money and spend it in inefficient ways and bring whole continents down to poverty levels. The prediction circuits were wired in and the red lights blinking for us all to see all the way back to the 1890s and somewhat before that era. But, history’s events are not a deterrent to overspending and poor economic choices.

 

But, why should we expect any other outcome? It is a fact that the far left cannot manage the efficiency[29] of any government or society in a manner that is financially sustaining. There are no highly efficient socialist or Marxist experiments except for the cases of China and the parasitic variants of Switzerland[30] and Sweden, who finance their socialism by participating in the dirty gun business or the dirty money business or both. The far leftists employ slick stooges and Sooth Sayers like Keynes[31] or Paul Krugman[32][33][34][35][36][37] to give credence to their spending and taxation.  Keynes’s  true economic position is always truncated to show that government spending can produce full employment, stability and prosperity and this salient extraction and abridgment of the truth is being tested in the EU now as Greece collapses and will soon be tested in California or New York or both as they crash.

 

But, again, why should we expect any other outcome? The battle between the rich and poor and capitalists and socialists has been raging on for several centuries. To be quite blunt, we can expect that the temporary good times enjoyed by the poor as the far left wastes time and assets and talent actually provides a spate of enjoyment because when the poor are left to their own devices they tend to create their own form of poverty though ignorance, sloth, crime and drug addition. Why not have a little fun until the curtain on this intermezzo comes crashing down?  And, what do they have to lose in the long run? Not much.

 

The time course of the fun times is shortened drastically when poverty in mass quantities is imported to stuff ballot boxes in favor of socialism and massive leftist government spending. California’s far left majority stems, in a large part, from their enormous illegal alien population who vote for benefits, participate in benefits  and form the power base of the Democrats in that state.  The process works even better when invading illegal aliens push up living standards and taxes and those capitalists who cannot make sufficient profits in such a hostile environment move to a different state, switch their manufacturing off shore or quit. The exit of productive citizens subject to state taxes both lowers the tax revenues and increases spending on social programs which encourage deficit spending and shortens the time when they will go into default. The far leftist plan, of course, is to spread the taxes around to all US citizens so that national taxes can be focused back to states in financial trouble thus defeating the purpose of flight. But that does not necessarily fix the debt problem. Until a severe wealth tax is set up there is no way to tax the ‘rich’ if they refuse to make profits and just leave he country or invest in tax free bonds or other options.

 

But, that attitude does not put bread on the table and keep the lights turned on.

 

Then, we look closer at the excuses and explanation of this process using the New York Times:

 

But the transaction at the heart of the S.E.C.’s complaint [fraud against Goldman Sacs] is a microcosm of the entire credit crisis. That is, there are no good guys here. It’s dishonest and ultimately dangerous to pretend that Goldman is the only bad actor. And the worst actor of all is the one leading the charge against Goldman: our government.[38]--Meet the Real Villain of the Financial Crisis By Bethany Mclean Published: April 26, 2010 [Emphasis is mine in all quotes.]

 

This is a politically mixed message. How the government can be at fault as seen from the pages of the Walter Duranty Papers [39]  is a mystery until we probe further.

 

Yet, in the end, it comes down to this: Goldman Sachs, ACA Capital, IKB Deutsche Industriebank and even the rating agencies never had any duty to protect us from their greed. There was one entity that did — our government.

 

But it was the purported regulators, including the Office of the Comptroller of the Currency and the Office of Thrift Supervision, that used their power not to protect, but rather to prevent predatory lending laws. The Federal Reserve, which could have cracked down on lending practices at any time, did next to nothing, thereby putting us at risk as both consumers and taxpayers. All of these regulators, along with the S.E.C., failed to look at the bad loans that were moving through the nation’s banking system, even though there were plentiful warnings about them.”-- Meet the Real Villain of the Financial Crisis

 

And, this surges to the crux of the problem. Any yoyo with a 4th grade education might perceive that lending money to somebody with the surety that they will never pay it back would rebel at this process. Recess time in my school was a place to get a good future grounding on the use of money and the propensity for borrowed money to ever get paid back in my county.  Students who played and lost marbles in ‘keeps’ marble games would want to borrow and promise to ‘pay that debt back’ the next day if they lost. Such transactions resulted in hurt feelings, some fist fights and some strict rules against entering the games without marbles. Play could not continue without marbles in hand. Most of the promises were false.  Kids would go home and complain to their parents that they needed another bag of marbles because they lost theirs in a game of skill. The same process happened in the game of tops where you won a top by knocking it out of the ring. Not everybody has skill in marbles or tops or investing or home economics.  The credit rating is the best indicator of who can pay off their debts and who cannot so we wonder why the US government subsidized those with poor credit and even illegal aliens with public monies. The IQ test [see The Bell Curve[40][41][42]] is similarly the best indicator of performance in college or the workplace. It was for the votes. Quid pro quo.  It was just for the votes and power.

 

And more blame:

 

More important, it was Congress that sat by idly as consumer advocates warned that people were getting loans they’d never be able to pay back. It was Congress that refused to regulate derivatives, despite ample evidence dating back to 1994 of the dangers they posed. It was Congress that repealed the Glass-Steagall Act, which separated investment and commercial banking, yet failed to update the fraying regulatory system.

 

It was Congress that spread the politically convenient gospel of home ownership, despite data and testimony showing that much of what was going on had little to do with putting people in homes. And it’s Congress that has been either unwilling or unable to put in place rules that have a shot at making things better. The financial crisis began almost three years ago and it’s still not clear if we’ll have meaningful new legislation. In fact, Senate Republicans on Monday voted to block floor debate on the latest attempt at a reform bill.”-- Meet the Real Villain of the Financial Crisis

 

This is remarkable and essentially unparallel heresy leaping off the pages of the most dedicated leftist tome every published outside of Moscow or Peking.  Given the performance of Congress we cannot expect that any ‘reform’ will lead to anything more than more government and useless taxes on business that will keep unemployment high.

 

The NYT concludes:

 

Come to think about it, shouldn’t Congress have its turn on the hot seat as well? Seeing Goldman executives get their comeuppance may make us all feel better in the short term. But today’s spectacle shouldn’t provide our government with a convenient way to deflect the blame it so richly deserves.”--Meet the Real Villain of the Financial Crisis

 

This last splash of sour grapes is not convincing or predictive of what the future of our business adventures might be. The people at Goldman are the ‘best of the best’ and they have their counterparts in Asia and even a few spots in Europe. Goldman’s traders are free agents and they can work their magic anywhere on the globe they must go as their skills are highly in demand. Goldman could fold up shop in a heartbeat and the pieces instantly and spontaneously reform in distant parts of the world and the processes could continue without Congressional antagonisms or the exorbitant taxes now imposed on business in the US. This is a global economy and many nations are trolling for talent and capital and offer fewer strings, less red tape and much lower taxes.

 

The salient fact here is that, agreeing with this article, government orchestrated this asset bubble with questionable intentions given the methods they used and that investors saw an opportunity to bet against the government folly to make money. This happens daily in the Forex currency markets.  We should bet that Greek bonds will be safe?? This happens in the bond markets daily. This is like the game of marbles as some players make major mistakes or lack the talent to compete. There is nothing indecorous about betting against a loser.

 

This trend toward destruction by the leftist elites will continue on until either they lose at the polls or the economy collapses and they cannot influence the chaos. We must brace ourselves for the next episode from the Depression of 2007. This will be a new experience in debt management for us all.

 

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 



[3] Maximizing Both Tax Revenues and Economic Growth: The Folly of Government and the Generation of Phony Numbers and Class Warfare

http://rycksrationalizations.blogtownhall.com/2010/03/27/maximizing_both_tax_revenues_and_economic_growth_the_folly_of_government_and_the_generation_of_phony_numbers_and_class_warfare.thtml

 

 

[9] LIBOR stands for "London Inter-Bank Offered Rate."  It is based on rates that contributor banks in London offer each other for inter-bank deposits.  From a bank's perspective, deposits are simply funds that are loaned to them.  So in effect, a LIBOR is a rate at which a fellow London bank can borrow money from other banks. http://www.moneycafe.com/library/libor.htm

 

[10] GDP = C + I + G+ [Ex –Im] where C is consumption, I is investment, G is government spending, Ex is exports and Im is imports all denominated in the state’s currency.

GDP is the sum of all products and services in a year’s time. The efficiency metric is thus complex and depends on essentially all these factors. Most of the U. S.’s GDP is driven by consumer buying C at %65-%70 but a critical part is investment I and government G spending. The final assessment of efficiency is judged by the ability of the state to operate with minimal debt and low deficits and grow GDP at a reasonable rate such as 2-3% per year. Growth is not achievable with insufficient investment capital, I. Some states think creating government jobs leads to ‘growth.’ Although not exactly equivalent, states, banks, nations and corporations all run on very similar financial principles. The similarities are more important than the differences. They must watch spending, not over tax or over regulate and control spending, deficits and debt.  Any failure to do so in any of these enumerated areas prompts excessive debts, future defaults and financial crises.

Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

 

[11]HSA is showing high redefault rates on the early offerings,” FHFA director James Lockhart noted in a Congressional report this week. “Performance on the February through April offerings shows a redefault [or recidivism] rate of almost 70%, which calls into question the program’s assumptions that borrowers have the capacity to make payments going forward.”” -- Fannie Program Sees 70% Recidivism By Diana Golobay May 22, 2009. http://www.latimes.com/business/la-fi-fannie6-2009nov06,0,4259740.story?track=rss

 

[12] potty mouth Carl.

 

[13] Obama, quoted in the video [http://hotair.com/archives/2008/10/06/was-sub-prime-lending-ever-a-good-idea/ ] favored this. He comments on the ‘money flow’ and that was largely supplied by Fannie Mae and Freddie Mac who took in some 3-5 trillion dollars worth of bad mortgages and paid off the banks and other servicers who structured the loans. Thus FM & FM supplied trillions of dollars for this obscene redistribution of wealth to the low class and the system crashed. The phony mortgages were bundled and sold off as ‘investments’ for cash to create some more subprime loans. Fanny Mae was the lavatory where bad loans could be flushed and Franklin Del Ano Raines[13] as head of Fannie Mae made a cool $90,000,000 dollars off this scam even thought he was accused of crimes[13] in this job. Oh, he is black and works for Obama [or did during the campaign]? Oh, yes. Is Raines a fat cat[13] under the current Obama tirade? FM made huge cash contributions to Obama and Chris Dodd and many other Democrats. No corruption here? This was all a vision of Greenlining.[13]How many illegal aliens have sub prime mortgages? 5 million?? Those toxic assets were, in part, bundled and sold around the world and are now ‘toxic” assets and they will remain toxic until the properties are foreclosed upon and sold for a loss.

http://hennessysview.com/2008/09/15/franklin-raines-criminal-enterprise-and-barack-obama-his-accomplice/

http://greenlining.org/

[14]Bear Stearns made the first public securitization of Community Reinvestment Act (CRA) loans started in 1997.[6] Editorialists in some American newspapers[7][8] and US Congressman Ron Paul[9] say the CRA loans were lent to otherwise un-credit-worthy consumers in the name of ending discrimination, although an analysis of actual lending patterns does not generally support this conclusion.[10][11][12]

On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[13] The funds were invested in thinly traded collateralized debt obligations (CDOs) found to be worth less than their mark-to-market value. Merrill Lynch seized $850 million worth of the underlying collateral but only was able to auction $100 million of them. The incident sparked concern of contagion as Bear Stearns might be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios.[14][15] Richard A. Marin, a senior executive at Bear Stearns Asset Management responsible for the two hedge funds, was replaced on June 29 by Jeffrey B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.[16]

During the week of July 16, 2007, Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of their value amid a rapid decline in the market for subprime mortgages.

 

[15] http://en.wikipedia.org/wiki/Community_Reinvestment_Act

Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.)

 

 

[18] Pia Lopez: The party's over; now comes the big cleanup With state at heart of credit crisis, it's up to governor to propose bold steps By Pia Lopez plopez@sacbee.com Published: Sunday, Oct. 12, 2008 http://www.sacbee.com/110/story/1305207-p2.html

http://www.sacbee.com/110/story/1305207-p3.html

[20] Cryptomisoxeny Explained by Theory and  Examples.Posted by rycK on Friday, May 09, 2008 1:34:01 PM http://rycksrationalizations.blogtownhall.com/2008/05/09/cryptomisoxeny_explained_by_theory_and__examples.thtml

 

[21]"Read my lips," Biden said, using Bush's famous phrase while referring to a Barack Obama administration.”Nobody, nobody making less than $250,000 is going to see a penny of their taxes go up."—Bidenin an incoherent rant at some county fairgrounds near the campus of Ohio University in Athens on Oct 15, 2008.

 

 

[22] California Deserves the Greek Prize for Debt. Start Cutting and Cease Spending or Suffer.

http://rycksrationalizations.blogtownhall.com/2010/02/08/california_deserves_the_greek_prize_for_debt_start_cutting_and_cease_spending_or_suffer.thtml

 

[26] The Proud March of the Financial Lepers: Greece Leads the Way Down for California and Other Beggars.

http://rycksrationalizations.blogtownhall.com/2010/02/14/the_proud_march_of_the_financial_lepers_greece_leads_the_way_down_for_california_and_other_beggars.thtml

 

[29] Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

[31]Keynes himself placed equal emphasis on redistributive taxation and a monetary policy of ‘cheap money’ as well as fiscal policy, and he did not believe governments should run deficits for current consumption, as opposed to public investment. He was by no means a socialist in the usual sense and did not advocate big government for its own sake.”[31]Wikipedia on the Keynes book: The General Theory of Employment, Interest, and Money 1936 [3-4 years after the low point of the depression.]

 

 

[34] Krugman Confuses Bacchus, Baucus and Baloney with the Threshold for Healthcare.  Not Enough Big Government in the Latest Episode

http://rycksrationalizations.blogtownhall.com/2009/09/18/krugman_confuses_bacchus,_baucus_and_baloney_with_the_threshold_for_healthcare__not_enough_big_government_in_the_latest_episode.thtml

 

 

[39] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

[40] The Bell Curve: Intelligence and Class Structure in American Life (ISBN: 0029146739)

by Herrnstein, Richard J. and  Murray, Charles  Free Press of Glencoe , Inc, Old Tappan, New Jersey, U.S.A., 1994.

 

[41] Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes

Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

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The Preposterous Notion of ‘Fixing’ the Derivatives Market and Other Follies.

The Preposterous Notion of ‘Fixing’ the Derivatives Market and Other Follies.

 

Abstract: Our current government believes, or so they say, that they can fix financial and economic problems with policy and oversight, mostly using taxation. Some eight centuries of research show that this is actually a proposal that flies in the face of veracity. Government decisions hatched in the Obama administration  appear to be based almost entirely on partisan policies where the entire political game is contingent  upon searching for new ways to restrain capitalism while  acquiring as much of the wealth from this source as possible. The general thrust is to equalize income for the masses even if it requires a total destruction of the capitalist structure of a given economy. This is based on the old, tired Marxist notion of redistribution of wealth. This essay investigates the methods used to nationalize General Motors and the current political attack on Goldman Sachs and then concludes with the stark financial realities of the existing derivatives market.  The notion that some government can control a $600 trillion derivatives market is so far divorced  from realism that we must be both amused and fearful that they will attempt something in the near future toward this objective. Government meddling into markets always yields the same result: higher taxes or prices and less efficiency.  Shortages almost always follow an episode of government perturbation of the free markets. We need to realize that the derivatives market is comprised of millions of willing buyers and sellers. Buyers think they are buying something of value. Who is our government to question that? Whenever we build something there suddenly appears a pack of howling populist or Marxist radicals clustering around to tax it or destroy the process and replace it with government. I don’t see any important exceptions to this rule in our current government officials.  Our elected officials, speaking for the most part now to those in power, are incompetent and greedy radicals that will say or do anything to get at our money.

 

Our society seems to tolerate politicos who dominate certain sectors of our society and generally attempt, in their words, to offer a stable system of laws, the running and regulation of banks, currency and other benefits. Most of the success in politics is grounded by some form of naiveté, and like-minded misplaced trust from the politically uneducated masses and is based on broad promises to the lower classes. Most governments tend to be of the authoritarian type where orders are handed out by some central committee or a close ensemble of trusted cadres that surrounds some dictator or satrap and the citizens are expected to eagerly comply with orders. It is apparently a sorry attribute in human behavior to wish for somebody to hold tightly to your collar and guide you through the rough elements of life. Governments can grow in size and power according to several mechanisms such as protracted war, famine, regulation of commerce, imperialism, religious conflicts, conquests and other factors and resist truncation at all costs. The new recompense for unreasonable expansion in the size of government will be debt and defaults.[1] Singular events that perturb the society such as financial crises are particularly interesting in that they seem to be easily converted into dynamic wellsprings of new and bigger government. The public grovels and twists their hats in the presence of their devoted leaders while begging for relief from some problem; they get only promises. The general observation is that when a financial crisis occurs and the currency or other important  economic vector turns down then such events signal a change in political direction from left to right [or the converse] is indicated by the votes from angry and disappointed people who respond to this effect. George Bush was chased out of office and his party decimated from the 2007 financial crisis which he handled very poorly. As for the voters, “prosperity is right around the corner” they are promised. Or in our current political maelstrom the notion that “I have a plan to fix the economy” encourages change from either or both contestants.  When times turn hard the voters tend to vote for the opposition in frustration and ignorance, two attributes which characterize most of our citizens.

 

The voters tend to bend according to personalities and not fact-based realities of the economy; they are easily controlled and their views strongly influenced if we watch the approval rating polls after some speech. Peasant societies, in which the bottom level people in that system have much in common with our current voters, are universal in our long recorded histories and are seemingly best controlled by feudal or authoritarian systems. The necessary jobs are simple and fairly easily regulated in peasant societies and are not skill intensive. Unemployment was rarely a problem. Those who couldn’t cope merely starved and were no longer a problem. Feudal lords and overseers could control vast amounts of land, water and food with little force. The workforce was mostly immobile and tended to regenerate itself limited only by the food supply and certain diseases. The feudal system of Europe lasted more than a millennium and was very stable in terms of the resident populations being controlled by their lords and ladies. That control and stability has faded away. Some of our biggest nations, such as the US and U.K. posses an intrinsic and major peasant mentality deeply rooted in the broad voter’s psychological composition. Translated, this means that many of our voters are political morons and, as such, are valued assets in any political contest and parallel the Soviet’s notion of the ‘useful idiot.’ The ignoranti can be mounded into convenient lumps like Silly Putty.

 

The advent of the Industrial Revolution, which eliminated the feudal system, placed the new powers in the hands of individuals who could generate wealth from business operations in stark contrast to the earlier wealth-transfer systems that used inheritance and land control to pass along power structures, land and wealth to the next generation. Here, capitalism[2] advanced rather abruptly, as measured in social time units such as generations, and became the dominant creator of power and influence because the ability to make money transitioned from a small collection of heirs to a broad segment of the society who produced a few entrepreneurs. Thus, a new pyramid was created with entrepreneurs seated a the very top of the pyramid.[3] The first offspring, the main vector in continuing on with wealth and power of many nobles, were not able to compete in the free markets with others of lower birth in an arena where cognitive skills were worth more than mere family tartans and standards. Much of their workforce migrated to the cities in quest of money, fun and drink and left landed nobles to their own fate. Thus power in the form of money and capital displaced the previous leadership and land models and pushed the emphasis in new directions.  Clever individuals no longer need authoritarian overseers. They could now do their best without constraints.  There was, then, virtually no limit to how much wealth and power could be accumulated by those individuals with industry, essential cognitive skills and some luck. The system had changed forever.

 

The accumulation of wealth in the hands of a few is always an economic, military and political problem, but reasonably no more of a problem that was extant in the feudal system.  It is currently more of a problem when those few are the politicians who ostensible replaced the nobility.[4] Sometimes this balance appeared to get out of hand and certain governments needed to control business and extract taxes to spread around the profits and address some needs of society that could not be fixed in the feudal system.  After all, there was new and abundant wealth being created from capitalism. Socialism in some form or another was an attempt to control the distribution of the wealth of capitalism and make it more equitable or to pretend to provide the nonexistent ‘equality’ to all.[5]  This effort failed, as we should have expected,  and the politicians shifted the political emphasis to equal ‘outcomes’ rather than the pure ‘equality’ theorem that is rendered impossible by the natural distribution of cognitive skills. People are clearly not equal. The process of controlling the capitalists led to some fateful interactions frequently resulting in the disintegration of whole business sectors or portions of governments. It is fair to say that there must be some level of cooperation between the capitalists, usually few in number, and politicians with even fewer attributes in advanced business skills, and this interaction is both necessary and sufficient to stabilize the society. Capitalism is what drives our world economy. Attempts to stamp out capitalism have summarily failed[6] and resulted in famine and economic disasters wherever attempted. The hybrid forms of capitalism—socialism controlling businesses such as Nazism, Peronism,[7]  and Marxism in the form of modern Communism as practiced in the People’s Republic and elsewhere have produced somewhat satisfactory results as long as government does not interfere too much in the practice of commerce. China is a stunning example of how capitalism [more accurately mercantilism in their case] can produce nearly unlimited wealth and prosperity along side a totalitarian government. Cuba and North Korea are examples where the citizens have a zero chance of rising above poverty levels. We have some 190 countries on the planet and counting changes in” leadership” this sums to about some 1000 or more governments since 1900 alone and most of them do not function well if you analyze and rank the wellbeing of their citizens as a metric. Government is essentially a failure when the history is analyzed in full context and politicians are mostly the root cause of such failure. The chief complaint here is that governments will not share power with individuals for long and will attempt to confiscate wealth derived from capitalism. There is no other source. The political quest for wealth frequently destroys capitalism in local sectors. Note that capitalists vanish from the scene if their business adventures fail for any reason but politicians seem to be firmly cemented in place.  Their propensity to fail does not diminish their status or position in political parties and many times such conduct only facilitates and enhances their stature and frequently only elevates them in the eyes of their adoring chorus.  We would be intellectually closer to the bugs and rodents in cognitive terms if we failed to realize that politicians never offer themselves as the failing component of some disastrous social program or war. They have more excuses that there are grains of sand in Arabia. Thus a criminal, loser or racist might attain a higher station in the political world even though he or she may have the California[8][9][10][11][12][13] disease [Our National Leper], or be tacitly comfortable with drug abuse, financial chaos or even the progressive sodomizing of children or other perversions.  We have more to fear from the soon-to-be second hand marijuana smoke rising and falling in the Assembly in California than from guns in private hands. When corporate leaders fail they are demoted from their position by the sterile arithmetic facts stated clearly in their balance sheets; when political leaders really botch a job they are frequently praised. Corporations constantly reassemble and overcome problems and are thus self-refining and efficiency driven while political parties remain stagnant and their leaders sometimes resemble painted statuary dutifully[14] studying the ancient history of political theory.

 

Suffice it to say that governments and capitalists interact in complex ways and those ways frequently determine the economic fate of a given society. This topic of complex ways must sooner or later be defined in terms of the stability of the economy and more particularly in terms of financial crises. Governments cannot seem to properly balance tax revenues and spending.[15] There is apparently no potential political power in a balanced budget. A reading of two recent books: Ascent of Money[16] by Niall Ferguson’ and the newer book This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff show, very clearly, that the vast majority of governments cannot manage finances with any long term competence. They make enormous mistakes as outlined by 1957 book: War and Aftermath 1914-1929 by Pierre Renouvin[17] that offers us a critical but objective scrutiny of the political and military actions of various government agencies starting in the 1890s and leading up to August 1914 where most world stock markets suddenly shut down for months; this history is enlightening. By 1916 most governments had spent all they had and were wildly printing money to fund the Great War.[18] We achieved 51 million deaths out of that adventure and enough hate and discontent to set up the next world war for 31 million more to pay the ultimate price. This is government operating in full bloom and proves that diplomacy can recurrently solve no problems. Failed governments have no discernable history in the political sense.

 

We can talk about peace and such, but every year we find military action and economic pressures being applied in many places on this globe. Even Obama bombs villages in two places in the Middle East despite his seeming aversion to war. The ethic that should prevent wars proposed by many is absent in nearly all governments. We must finally admit that we are never going to agree on what peace and stability means on this planet and be content to dealing with lesser crises. War is expensive and  this relevant fact brings us back to the perpetual occurrences of financial crises:

 

We had a depression in 2007 that was, in my view[19], temporarily stalled from its downward plunge by massive interaction by the US Federal Reserve and Treasury that resulted in essentially doubling our money supply [M2] in a few weeks.  We wasted a trillion dollars on war for no apparent gain and much more in worthless social programs and the legacy of these efforts surged directly into our debt. Our government now prints unbelievable amounts of money and all of that pile slithers directly into the national debt now approaching 14 trillion dollars.  Our soaring debt will rekindle this depressionary fire in the next few years.[20] We are bankrupt.

 

Several things must be made clear about this attempted salvage of our economy in the 2007 Depression: [1] It was an experiment never attempted on such a massive scale and [2] much of it was guess work at the time as the politicians had scant time to analyze what was happening and [3] the aftermath of this process generated new political opportunities to expand government and control over certain markets.  We are now hopelessly mired in debt and trying to spend our way to prosperity using more debt.[21] There is no way we can grow out of 14 trillion in debt with deficits exceeding a trillion dollar every year on a GDP of only 14 trillion unless we debase our currency.  We are on the path to economic destruction.

 

The first thrust after any catastrophe is to put new laws into place that will ‘fix’ the problem and ‘prevent’ it from happing again. World War 1 was the Great War that would end all wars. This nostrum has never worked in the past because we continue to have such financial catastrophes and government has been in place with ostensibly their fingers on the levers of the money machines for the last 5000 years without any convincing evidence that they are doing anything other than grabbing power or guessing what to do next. They are incompetent.

 

A recent and noisy example of how government can ‘fix’ a problem is the nationalization of General Motors.[22] What happened was actually very simple: the unions forced concessions on job security, pay, benefits and retirement from the company over many decades that brought its labor costs up to unacceptable and noncompetitive levels and the company then lost money on every car they made on average so the corporation failed. This attracted political attention and the Obama organization decided to fix the problem by nationalizing the company. This conforms to my theory of ‘spreading around the wealth.’[23] GM was swamped by $80 billion in debt and was going bankrupt.  Our current Neo-Marxist liberal/radical government now blends fascism[24][25][26] with socialism in an attempt to redistribute the wealth and they applied this in fact as we saw in the GM and Chrysler bailouts where bond holders and stock holders were wiped out [a 70% haircut in the parlance for the bond holders] and the shrunken remains given to the unions while the management was replaced by orders from the White House.[27] The unions retained some 17% of the company [for what?? Political reciprocity??] and the US and Canada lent them 6.1 billion to get restarted. From money lying around in sprawling government project accounts, they ‘repaid’ the ‘loan’ 5 years ahead of schedule and now celebrate. They intend to hire soon but at lower wages according to Mark Reuss who heads up GM of North America. Thus, their debt was wiped out by our government. The taxpayers are stuck with 45 billion in stock and now GM wants to offer an IPO, which will most likely dilute the shares and secure a loss for the taxpayers. This is all an illusion as their labor costs remain uncompetitive against other car manufactures who make profits in this country. We have substantially subsidized a failing company for a political return and we will have to perpetually rescue this monster from time to time. Wages and benefits must come way down before GM can be successful in a free market.

 

This project is now viewed as a positive interaction by the government in ‘fixing’ a problem with a corporation.  The ugly fact is that they were $80 billion in debt and could never make that up by selling cars. At a 10% profit margin per car, it would have meant sales of $800 billion to get that back by selling 26,666,666 autos, about double the US market.  At a profit level of only 1%, it would have required $8 trillion in sales or nearly one car for every person in the US. This is a political farce as we expect. The thrust here was, obviously, to repay the unions for their hard work and enormous political contributions to the Obama organization.  This form of bribery is common in politics. Thus, the government spent printed money in the form of debt to secure more votes.

 

As the celebrations over this feat subside we now turn to how we can ‘fix’ the derivatives markets and ‘prevent the taxpayer from being stuck’ with another financial disaster. Our government can do that they say.

 

The immense size of the derivative market, currently running $596 trillion[28], is daunting. It turns out interest rate contracts [$145.0 trillion] and foreign exchange contracts [$18.2 trillion] constitute 90% of the contracts in this market in the US. Thus, the rest of the world handles the remaining 432.8 trillion. This is the fertile ground where kleptocracy[29] maybe stealthily conducted by governments as they jockey currency exchange rates around to avoid debt repayments.  We need to know two salient features of this market. [1] It is based on risk aversion insurance instruments where, in principle, the number of buyers and sellers is algebraically zero and that most of these contracts are not highly capital based. [2] The business proceeds only on faith unlike standard insurance contracts. None of this is important in terms of details—what is necessary to understand about this market and the potential solution to the problem is this: derivatives are fueled by leverage and leverage is the driving force behind this market just as it is in every other financial market on the planet. This leverage extends to all financial transactions, banks and everything else particularly the carry trade that has generated billions of profit on the US dollar’s low interest rate.[30] We all use leverage. Our homes and cars are leveraged. Leverage is not evil unless you are a socialist.

 

Leverage in banks is debt-driven[31] so the bank capital reserve limits the upper bound of how high this can go and for an 8% capital-to-debt ratio it becomes simply 1/0.08 or 12.5 max. This is peanuts compared to how the government set up securitized mortgages.  We can complain about numerous  massive government failures such as the Great Society, HUD, War on Poverty, and the phony Community Communist Reinvestment Act[32][33]that allowed the liberals to buy votes by offering ‘affordable housing’ to deadbeats and illegal aliens and abruptly ended with an asset bubble. This process is ongoing. This real estate bubble brought down Bear Stearns [34] who conjured up a leverage of 35.5 to 1 with their total debt almost equal to our GDP [13.4 trillion[35]]. Fannie Mae and Freddie Mac probably hold $3-7 trillion of bad debt known as toxic assets. Such bubbles are a natural part of our economic system and have been happening almost yearly for the past 5000 years. All it takes for a bubble to form is an unreasonable demand for some good or service that pushes prices to levels way above the asset base.  The bubble is a free market correction to the supply and demand schedules. We are doubtless bulling another bubble with the push toward alternative “green” energy machines that only add cost to an existing asset.[36]

 

We read fluff like this from liberal politicians on derivatives:

 

"Ultimately, we were not able to reach comprehensive consensus that will fill in dangerous gaps while allowing companies to safely use derivatives to hedge their risks," Reed [Sen from Rhode Island e.d.] said in a statement. "I am hopeful that there will be bipartisan support for bringing derivatives out into the open, regulating trades and ensuring that regulators have the tools to keep up with new innovations in the system."[37]-- Senators divided over rules on the derivatives market. [Emphasis is mine in all quotes.]

 

If we thought GM had a tough frog march back to financial security we have to stand aghast at the notion that our government can fix this derivatives market. Since there is little or no capital behind some 600 trillion in derivatives we can ask if they could be restricted to a leverage of only 100 whereby somebody would post capital of 6 trillion dollars.  According to a leading expert on international financial affairs:

 

Unless this capital [for investment in this context]  is forthcoming, a clutch of countries will prove unable to roll over their debts at a bearable cost. Those that cannot print money to tide them through, either because they no longer have a national currency (Ireland, Club Med), or because they borrowed abroad (East Europe), run the biggest risk of default.”[38]--The capital well is running dry and some economies will wither. The world is running out of capital. We cannot take it for granted that the global bond markets will prove deep enough to fund the $6 trillion or so needed for the Obama fiscal package, US-European bank bail-outs, and ballooning deficits almost everywhere.”--By Ambrose Evans-Pritchard  26 Apr 2009 [Emphasis is mine in all quotes.]

 

Our GDP is only 14.3 and ¼ of the world’s GDP so where could we get 6 more to hold leverage down to only 100, three times higher than what was able to sink Bear Stearns at 35.5?? The world GDP is only about 4 x 14 or 30 trillion. Governments fail to acknowledge that this market is a free market with thousands or millions of willing buyers and sellers. This is a classic free market.

 

So, to sum up: all this smacking about leverage and risk by politicians is misplaced. Our system runs on leverage and debt because credit is money! Debt fuels growth and future profits and more growth. Risk management saves capital and protects assets and financial instruments. There is no way to back derivatives with capital and guarantee no future financial crisis any more than there is a way to prevent a run on any bank. There is no way to back up the banks other than the printing presses running full tilt as we saw in late 2007. This position is not being made clear to the voters: government cannot possible do what they claim.

 

Our politicians have financial and economic advisors and are not as stupid as they first appear. The only purpose of any government intervention into capitalism is to gain power and collect more taxes to build up their power base. The 2007 Depression was a grand opportunity to hike spending and bloat government and the Goldman Sachs case is a prime example. The case against Goldman is flimsy and the target of the investigation [Paulson] is not even named in any indictment. The interesting fact that Goldman’s employees gave Obama a million dollars in campaign contributions [that he will not pay back] leads us to assume that this is a crass grunt and grab intermezzo for Washington. They just want some more power and tax revenues. Goldman should just pay a fine and continue on.

 

Goldman is the best of the best and can best any rules or regulations that our politicians can put up. They can move their operation to Singapore or Hong Kong where there is a more receptive business environment at any time and prosper. Politicians either don’t understand leverage and how it works to expand the money supply and its function in investments or they do not. If Goldman is cut up and trashed the remnants will simply reassemble someplace else and continue on with investments as they did with the fine people at Bear Stearns that needed new jobs. The US needs to participate in capitalism because Asia is growing under this mechanism and can now provide what the US could in the past. The populist view that the ‘big guy’ is cheating the ‘little guy’ out of his or her future is so sadly misplaced that we must wonder how we ever survived FDR, LBJ and JEC.[39] The reason was capitalism and Wall Street ingenuity. This makes the politicians look like bigger fools and uglier criminals than we might expect.

 

Now, let’s do some rational thinking about the derivatives market. Firstly, how much did we lose when some of our investment banks went down? That was 10 trillion at best and another 5 for Europe. So, what was the net effect of the existing market? We lost 15/600? A mere 2.5% of the market!?? Now, we push further on the Stone of Reason to see what lies beneath and ask: what can our government do about this risk? Put up a few trillion here and there in capital backing? No. There is no money to do this. Missing from the equation here is the data that might show that the derivatives market actually prevented some loses fr0m the financial meltdown on Wall Street. This market exists for a reason and because so many people buy products from this market we probably err greatly to summarily condemn this financial instrument or tax it to death.

 

The effect of government interference in markets is always the same: higher costs and a series of distortions. We seem to want to depend upon politicians who are only radical, racist-based chum chuckers[40] or outright criminals[41] or pervert enablers[42]  for help and advice on this issue. They profess to know the solutions to this problem. What solution can they offer? Why, they can get tax money to buy more political power.

 

The effect of government intrusion into such markets that address the important attribute of risk aversion is that the cost of buying risk insurance will soar thus fewer municipalities and pension funds will buy fewer contracts and the risk of damage from defaults and varying exchange rates will rise. That is an unnecessary cost and is inefficient.

 

Thus, you will be paying incompetents to tax you to make the risks in business and the currency exchange world increase. That sounds like the old politics we know and vote for. The new radicals like Bertha Lewis of ACORN fame, noisy propagandists like Joe Klein of Time[43], Andy Stern of the vicious street-gang and head bashing SEIU union and their Communist allies and other chum chuckers are trolling for money and power.  They try to play on the propagandist’s favorite themes: fear, corporate greed and racism. They attempt to show that the Tea Party people are Nazi thugs who want to round people up people of color and send them to internment camps and other crass lies.[44] And, notice that Democrats like Joe Biden, Hillary Clinton, and Harry Reid sit idly by and make no comments or corrections to these lies and their preposterous statements. These senators are just slugs stuck in the cracks of the Washington leftist movement. Reid has just sacrificed himself for the greater good of Marxian statism.

 

All these people want is the control over your money and future and they will get if we don’t chuck these parasites out in November.  All they have is your money. And, you don’t have enough to satisfy the far left. They will attempt to grab it all if they can. Lenin is still their patron saint.

 

 

rycK [a 5th generation Californian in exile]

 



 

[4] USSR, Cuba, People’s Republic prior to 1980 etc.

[6] Russian Revolution, Chinese revolution, Cuban revolution, etc.

 

[12] The Proud March of the Financial Lepers: Greece Leads the Way Down for California and Other Beggars.

http://rycksrationalizations.blogtownhall.com/2010/02/14/the_proud_march_of_the_financial_lepers_greece_leads_the_way_down_for_california_and_other_beggars.thtml

 

[14] Or perhaps dootifully, a new word derived from dooty: Belligerent Ignorance, Phony Economics and the Clunker Crusaders: Washington Wastes our Money Again.

http://rycksrationalizations.blogtownhall.com/2009/10/29/belligerent_ignorance,_phony_economics_and_the_clunker_crusaders_washington_wastes_our_money_again.thtml

 

[15] Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

 

[16] The Ascent of Money: A Financial History of the World (Hardcover) by Niall Ferguson (Author) http://www.amazon.com/Ascent-Money-Financial-History-World/dp/1594201927

 

Review:

 

 “The number one lesson from this book is this: financial systems collapse all the time. It happens in every era in every geography — which highlights why it shouldn’t be such a surprise that our own system is under serious strain right now.” http://john.jubjubs.net/2009/04/03/the-ascent-of-money-by-niall-ferguson/

 

[17] : War and Aftermath 1914-1929 by Pierre Renouvin

 

[18]  Extracted from a previous blog: Maximizing Both Tax Revenues and Economic Growth: The Folly of Government and the Generation of Phony Numbers and Class Warfare

http://rycksrationalizations.blogtownhall.com/2010/03/27/maximizing_both_tax_revenues_and_economic_growth_the_folly_of_government_and_the_generation_of_phony_numbers_and_class_warfare.thtml

 

[19] Maximizing Both Tax Revenues and Economic Growth: The Folly of Government and the Generation of Phony Numbers and Class Warfare

http://rycksrationalizations.blogtownhall.com/2010/03/27/maximizing_both_tax_revenues_and_economic_growth_the_folly_of_government_and_the_generation_of_phony_numbers_and_class_warfare.thtml

 

[21] Krugman Offers an Essay on Misdirecting Political Power. We can Control the Banks and prevent the Next Crises, but No Details, Just give us Power.

http://rycksrationalizations.blogtownhall.com/2010/03/02/krugman_offers_an_essay_on_misdirecting_political_power_we_can_control_the_banks_and_prevent_the_next_crises,_but_no_details,_just_give_us_power.thtml

 

 

[23] The Phony Quest for More Jobs--A Prediction: Obama will Just Create and Transfer Debt for Jobs Funding.

http://rycksrationalizations.blogtownhall.com/2009/12/08/the_phony_quest_for_more_jobs--a_prediction_obama_will_just_create_and_transfer_debt_for_jobs_funding.thtml

 

[26] Our Economy is Collapsing. The Liberals will Now Institute Some Kind of Neo- Fascism or Socialism or Some New Blend to Maintain Power.

http://rycksrationalizations.blogtownhall.com/2009/08/06/our_economy_is_collapsing_the_liberals_will_now_institute_some_kind_of_neo-_fascism_or_socialism_or_some_new_blend_to_maintain_power.thtml

 

 

[29] Government theft of citizen’s wealth by debasing the currency or manipulating currency exchange rates.

 

[30] The Bubble that will Burst Higher than all Previous Bubbles: Depression Looms as the Dollar Crashes.

http://rycksrationalizations.blogtownhall.com/2009/11/02/the_bubble_that_will_burst_higher_than_all_previous_bubbles_depression_looms_as_the_dollar_crashes.thtml

 

[32]Bear Stearns made the first public securitization of Community Reinvestment Act (CRA) loans started in 1997.[6] Editorialists in some American newspapers[7][8] and US Congressman Ron Paul[9] say the CRA loans were lent to otherwise un-credit-worthy consumers in the name of ending discrimination, although an analysis of actual lending patterns does not generally support this conclusion.[10][11][12]

On June 22, 2007, Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund, while negotiating with other banks to loan money against collateral to another fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[13] The funds were invested in thinly traded collateralized debt obligations (CDOs) found to be worth less than their mark-to-market value. Merrill Lynch seized $850 million worth of the underlying collateral but only was able to auction $100 million of them. The incident sparked concern of contagion as Bear Stearns might be forced to liquidate its CDOs, prompting a mark-down of similar assets in other portfolios.[14][15] Richard A. Marin, a senior executive at Bear Stearns Asset Management responsible for the two hedge funds, was replaced on June 29 by Jeffrey B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.[16]

During the week of July 16, 2007, Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of their value amid a rapid decline in the market for subprime mortgages.

[33] http://en.wikipedia.org/wiki/Community_Reinvestment_Act

Community Reinvestment Act (or CRA, Pub.L. 95-128, title VIII, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.)

 

[34]By my count, the Federal Reserve has already extended something on the order of $455 billion in loans collateralized by some of these same troubled assets, namely $125 billion in repos, $150 billion in the term auction facility, $50 billion in "other loans", $30 billion from the Bear Stearns deal, and $100 billion in "other Federal Reserve assets". That $455 billion total does not include this week's$85 billion loan to AIG, nor the $180 billion in reciprocal currency swap lines.  http://www.econbrowser.com/archives/2008/09/paulson_bailout.html

 

[35] $13.40 trillion in derivative financial instruments, of which $1.85 trillion were listed futures and option contracts. In addition, Bear Stearns was carrying more than $28 billion in 'level 3' assets [ dog droppings] on its books at the end of fiscal 2007 versus a net equity position of only $11.1 billion. This $11.1 billion supported $395 billion in assets,[4]which means a leverage ratio of 35.5 to 1. This highly leveraged balance sheet, consisting of many illiquid and potentially worthless assets, led to the rapid diminution of investor and lender confidence, which finally evaporated as Bear was forced to call the New York Federal Reserve to stave off the looming cascade of counterparty risk which would ensue from forced liquidation.”[35]

 

[38] The capital well is running dry and some economies will wither

 The world is running out of capital. We cannot take it for granted that the global bond markets will prove deep enough to fund the $6 trillion or so needed for the Obama fiscal package, US-European bank bail-outs, and ballooning deficits almost everywhere.-- By Ambrose Evans-Pritchard 
Last Updated: 8:49AM BST 26 Apr 2009
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5220118/The-capital-well-is-running-dry-and-some-economies-will-wither.html

 

[39] Presidents Roosevelt, Johnson and Carter.

 

[40] Barrack Obama : O’Bozo the Clown and His Lying Neo-Marxist Droolers Ruin the Economy and Put Criminals into Power.

http://rycksrationalizations.blogtownhall.com/2009/02/13/o%E2%80%99bozo_the_clown_and_his_lying_neo-marxist_droolers_ruin_the_economy_and_put_criminals_into_power.thtml

 

[41] The Clintons, Chris Dodd and other senators.

 

[42] Bill Clinton and Barney Frank

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The US Heads for High Inflation and Probably Default. Spending Must be Cut.

The US Heads for High Inflation and Probably Default. Spending Must be Cut.

 

Abstract: Our government is spending us into unrecoverable debt and massive inflation. They will NOT cut spending and will NOT lower taxes for businesses. We are at the point where we cannot recover from the debt, the stimuli are failing to aid the GDP and more spending is envisioned by Obama and his leftists. Our currency is being debased by our cleptocratic [defined as the government stealing from its citizens] government using the obvious mechanism of inflation. Things are going to get a lot worse.

 

In a previous blog entitled Deflation and Defaults: The Path Downward from Debt and Excessive Spending,[1] I outlined some potential problems concerning deflation, inflation and the Fed’s printing of vast, and mostly unknown, amounts of money. In a more recent blog entitled Maximizing Both Tax Revenues and Economic Growth: The Folly of Government and the Generation of Phony Numbers and Class Warfare [2]problems with US Treasury bonds are emphasized. Our credit rating is bound to slip. We face a crisis.

 

The topics of inflations or deflation, in particular, always provoke a contentious political and economic dispute[3] consisting of those players who insist this phenomenon is in progress, and can actually prove the existence thereof, in a fierce battle with the opposing forces who insist we are inflating or other. The analysis process to solve this riddle is seemingly wrought with technical difficulties because there are many varied financial inputs and calculations that must be assessed by the jury in this trial until a final verdict is returned. It appears that even identical economic elements can be used to argue either case thus leading to a conundrum.  The proof, however, that we have transitioned, in part, from deflation to potential high inflation happens when we examine the US Treasury bond auctions.

 

This spending is what is driving our deficit into an ocean of debt[4] and we rank high amongst the list of other losers who may soon default on their sovereign debts:

 

 

Country

Deficit as a % of GDP

Iceland 

15.7

Greece 

12.7

Britain 

12.6

Ireland 

12.2

United States 

11.2

Spain 

9.6

France 

8.2

Japan 

7.4

Portugal 

6.7

Canada 

4.8

Australia 

4

Germany 

3.2

Figures from OCED forecast in November 2009. [5]

 

 

The US debt is crushing our society. Since there are only 65 million workers to handle 12 trillion dollars in National Debt [soon to be 14 and rising] and only half of them pay taxes above the median of $32,000 then this works out to $192,000 each for these workers and that ignores Social Security, Medicare, Medicaid and state debts.[6][7] But, there is no signal to stop spending.  

 

Overspending, to bribe voters to keep socialists in power as we see in California[8][9][10][11] [Our National Leper[12][13]], New York, and other states, is testing the bond markets. California now hopes for a miracle in revenues and will ‘wait.’ The federal stimuli had a very short and shallow effect on the US economy but did send money to the states. They spent that and now want to spend and borrow much more. Attempts to provide federal “stimuli” lead to disasters like the previous ‘jobs’ program that spent $92,000 per job![14] And, then, we spent $24,000 per car on the Clunker Follies and a mere $43,000 per house on the housing scam. [15] This is a farce.

 

All along, we were reassured that inflation was not a problem and that we could unwind the Fed monies used to salvage our Zombie Banks, which are, to be frank, quite dead.

 

The Geithner Pledge:

 

"We have the deepest and most liquid markets for risk-free assets in the world. We're committed to bring our fiscal deficits down over time to a sustainable level.

 

"We believe in a strong dollar ... and we're going to make sure that we repair and reform the financial system so that we sustain confidence," he said.”[16]-- Geithner tells China its dollar assets are safe On Monday June 1, 2009 [Emphasis is mine in all quotes.]

 

We are already past the limit of sustainability of our currency values and the bond interest rates that just shot up a few days ago show that inflation concerns are now affecting into the market for US Treasuries. Inflation is on the rise.

 

US Treasury Sales:

 

For more than a year, analysts have been warning that record sized debt sales by the US Treasury were at odds with a 10-year yield sitting comfortably below 4 per cent. This week, the yield on 10-year notes jumped from 3.65 per cent to a peak of 3.92 per cent on Thursday. On Friday it was 3.87 per cent.

 

Falling inflation [deflation, ed] , rising unemployment, the housing market slump, the Federal Reserve’s policies of a near zero overnight borrowing rate and its purchase of up to $1,700bn in bonds have all helped keep Treasury yields near historic lows.”[17]-- Supply fears start to hit Treasuries By Michael Mackenzie in New York and David Oakley in London Published: March 26 2010 [Emphasis is mine in all quotes.]

 

The Fed has, we think, some 1. 7 trillion in bonds on their books  and what not, but we cannot know what the Open Market Committee is doing or what is happening in the Fed’s Off-Balance Sheet operations. We do know that Fannie Mae and Freddie Mac hold some 3-5 trillion dollars worth of worthless mortgages of the Toxic Asset type. We also need to understand that Barney Frank and other liberals want the banks to readjust interest and principal levels for many home owners who are ‘underwater’ and cannot make mortgage payments. The banks are asked to take massive loses. Mortgage defaults are still soaring and unemployment is still too high. Where is this money going to come from? The printing presses? Probably.

 

US and state budgets are out of control:

 

The spotlight on Greece only helped to reveal that the US’s kitchen – with Federal and state budget balances – was itself full of cockroaches,” says William O’Donnell, strategist at RBS Securities””-- Supply fears start to hit Treasuries [Emphasis is mine in all quotes.]

 

More massive spending.

 

The environment for debt auctions has turned negative,” says Rick Klingman, managing director at BNP Paribas. “Long-term rates are rising and it is no coincidence that this has occurred after the passage of healthcare reform and the end of Fed buy-backs.””--Supply fears start to hit Treasuries

 

Social Security is going broke:

 

Also rattling US investors this week was a report by the Congressional Budget Office that falling payroll taxes due to high unemployment, means that the social security programme will pay out more in benefits than it receives for this fiscal year.“”--Supply fears start to hit Treasuries [Emphasis is mine in all quotes.]

 

All this was predicted by me and many others although Paul  Krugman seems to think we can handle this and 9 trillion[18] more dollars to spend.[19]

 

So, what do we do about this?

 

Slow spending? Lower he deficits?

 

Actually, none of the above as the Obama Administration, Congress and many states will NOT STOP SPENDING.  Thus, we are crashing into a debt limit barrier that we cannot reverse without massive inflation. Soon, nobody will buy our debt.

 

Many bonds are ‘insured’ by interest rate swaps, a very complicated process that is mostly confined to sovereign bond markets.[20] Before such ‘insurance’ on debt was available in world markets, a bond holder was at risk of a default or a currency debasement, two favorite avenues for governments to take when they overspend and cannot meet their debt obligations [known as cleptocracy] as we read in the new book This Time is Different: Eight Centuries of Financial Folly[21] by Carmen Reinhart and Kenneth Rogoff. This tome reviews this very common process of overspending, massive debt, bank crises and inevitable defaults that plague California, Greece, New York and other entities and shows that such defaults are very common in the last several centuries. The US has no option but to default on this massive debt.

 

Now bonds for private issuance are now sold at lower rates than US 10-year bonds—a signal that the current notion of ‘safety’ of the US Treasury is not accepted:

 

For the first time since swaps emerged in the mid-1980s, the 10-year swap rate traded below that of the “risk free” 10-year Treasury yield. Analysts say this reflects how government debt issuance has altered the dynamics between “risk-free” yields and swaps, which reflect borrowing costs for non-sovereign borrowers.”--Supply fears start to hit Treasuries

 

Money markets and capital acquisition operations are now global and it appears that the massive spending and huge, unsustainable deficits in the US are showing up in market actions. Once the Fed stopped buying up stuff to keep the rates artificially low the market forces are driving up the interest rates and the US Treasury will have to offer debt at a higher rate. That means that our debt service, currently $191 billion on $12.1 billion in debt for an average  rate of only 1.5% will have to rise. That will, in turn, drive our deficits higher at constant spending and tax revenues. As bonds mature and are redeemed new bonds will have higher interest rates so the 1.5% will tend to double and with it the debt service of $191 billion will double too.

 

This starts off a spiral: if interest rates are trending higher then businesses will suffer in earnings and will not hire more people. They may have to lay off more workers to keep their bottom lines reasonable. The new Obamacare costs are now being incorporated into business plans and many companies like ATT, Deere and others have publicly given notice that they will have to raise prices. Fewer employed workers will buy less and default more on mortgages and the problem will become worse in time. Higher prices means inflation.

 

Spending must be halted at this time and new spending on illegal aliens, weird green things that may be only asset bubbles brewing[22], and avoiding massive tax increases like the Cap and Trade Taxes are all mandatory. There is no way to solve this problem with more spending as Krugman and other Keynesian economists advise. Tax cuts to allow businesses to hire more employees are the only way out of this and that avenue is not acceptable to the far left and their lackeys.

 

This massive spending by liberals, intoxicated by their own phony rhetoric, will sink our economy and we will return to the depression days of the 30s.

 

We MUST cut spending and furlough several government projects and reject EcoNazism[23][24] and Cap and Trade and other phony nostrums.

 

rycK

 

Comments: ryckki@gmail.com

 



 

[6] The Fed Thinks of Ways to Claw Back Some of the Stimulus Money: This Will be A Disaster as Congress Will Continue to Spend and Spend.

http://rycksrationalizations.blogtownhall.com/2010/01/03/the_fed_thinks_of_ways_to_claw_back_some_of_the_stimulus_money_this_will_be_a_disaster_as_congress_will_continue_to_spend_and_spend.thtml

 

[7] The Fed Thinks of Ways to Claw Back Some of the Stimulus Money: This Will be A Disaster as Congress Will Continue to Spend and Spend.

http://rycksrationalizations.blogtownhall.com/2010/01/03/the_fed_thinks_of_ways_to_claw_back_some_of_the_stimulus_money_this_will_be_a_disaster_as_congress_will_continue_to_spend_and_spend.thtml

 

 

[16] Geithner tells China its dollar assets are safe On Monday June 1, 2009, By Glenn Somerville http://finance.yahoo.com/news/Geithner-tells-China-its-rb-15396905.html?.v=2

 

[17] Supply fears start to hit Treasuries By Michael Mackenzie in New York and David Oakley in London Published: March 26 2010 19:18 | Last updated: March 26 2010 19:18 [Emphasis is mine in all quotes.]

http://www.ft.com/cms/s/0/c51fbbce-3908-11df-8970-00144feabdc0.html

 

[18] How big is $9 trillion? By Paul Krugman The Conscience of a Liberal, August 23, 2009, 5:54 PM http://krugman.blogs.nytimes.com/2009/08/23/how-big-is-9-trillion/

 

[19] Inefficiency in California, Greece and Other Places and the Socialist Disease of Parasitism: They will NOT stop spending and WILL default.

http://rycksrationalizations.blogtownhall.com/2010/03/05/inefficiency_in_california,_greece_and_other_places_and_the_socialist_disease_of_parasitism_they_will_not_stop_spending_and_will_default.thtml

 

Krugman Offers an Essay on Misdirecting Political Power. We can Control the Banks and prevent the Next Crises, but No Details, Just give us Power.

http://rycksrationalizations.blogtownhall.com/2010/03/02/krugman_offers_an_essay_on_misdirecting_political_power_we_can_control_the_banks_and_prevent_the_next_crises,_but_no_details,_just_give_us_power.thtml

 

 

 

[24] Reprinted from a previous blog: The Dollar Sags in Full View of the World This Invites a Run on the Dollar. Inflation Threatens US.

http://rycksrationalizations.blogtownhall.com/2009/09/25/the_dollar_sags_in_full_view_of_the_world_this_invites_a_run_on_the_dollar_inflation_threatens_us.thtml

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Maximizing Both Tax Revenues and Economic Growth: The Folly of Government and the Generation of Phony Numbers and Class Warfare

Maximizing Both Tax Revenues and Economic Growth: The Folly of Government and the Generation of Phony Numbers and Class Warfare

 

Governments cannot seem to balance tax revenues and spending. A reading of two new books: Ascent of Money[1] by Niall Ferguson’ and the newer book This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff show, very clearly, that the vast majority of governments cannot manage finances with any competence. An inspection of the actions of various government agencies starting in the 1890s and leading up to August 1914 where most stock markets suddenly shut down for months is enlightening. By 1916 most governments had spent all they had and were wildly printing money to fund the Great War. We see more and more of this, for instance, as Portugal’s deficits soars and now Fitch has downgraded their credit rating.[2] Why? Why because massive deficits of the sort that can trigger defaults and financial crises are the singular reason. We have witnessed several massive financial crises and dozens of sovereign defaults in the last 120 years and it is clear that these events are not going to stop. It is also clear that the financial operations of governments are not transparent given, for instance,  the recent news that Greece’s military spending is ‘state secret’ and that they lied about their debts to gain entrance into the now failing EU.[3] China’s reserves are also a state secret. A collection of EU members known appropriately as the PIGS [Portugal, Italy or Ireland—pick one or two--, Greece and Spain] have massive and unsustainable deficit problems all rooted in the inability of their leaders to control spending  and exacerbated by the greedy and Marxist-based unions who hold the political power and refuse to cut anything.  This is the kind of climate that produces depressions and wars.

 

Now, we could sift through the wreckage and pick out particulars to dwell upon but, using a popular leftist nostrum, the holistic view[4] is more enlightening. This approach is facile as the holistic theory leads to utter nonsense and a thickening of the crusted drool upon the shoes and slippers of the left so we can apply that to the operations of government, financial, social and military.  We find only mumbling and excuses as we expect. As long as some ‘government’ has the power to tax then the ‘reasons’ or methods of that government are  always self-defined, self-serving and lead eventually to social and financial disasters. We saw that in the debt-driven deflationary spiral[5] and Depression of 2007-2008 now only half way finished. That was stalled half way down by such interesting measures as a 10 trillion spending spree by the Fed and other governments by simply printing money, a process known as quantitative easing.

 

The basis of the deficit, if I could be politically obtuse or stubbornly blunt in the algebraic sense, is that governments spend more than they take in thus taxation and debt are the two vectors that will eventually bankrupt a country such as ours. After this, the path to reason is lost and the quest for OPM [other people’s money] becomes the prime mover of any government. Revolution and nationalization of business and land are the next obvious step. What else can they do? Let the capitalists get control? Our government had ‘problems’ yesterday with bond sales and many experts, like Bill Gross of PIMCO, recommend “advising that investors buy the debt of countries such as Germany and Canada that have low deficits and higher-yielding corporate securities.”[6]

 

What should be expected to be a reasonable consideration of government is the accurate forecast of tax revenues so that spending might be adjusted for some moderate growth for the economy so that debts might be managed for the good of the society. Spending is the only financial attribute known up front for any government entity posturing to set up a “budget.” They can get that much right until ‘emergencies’ occur and then, usually in a panic, they instinctively spend more to fix the problem.  Tax policies are frequently a lower form of insanity: Here is an example where reality flies off into the swamps for a rendezvous with illogic. The following is an example of illogicality that illuminates the financial swamps infested by politicians who make the laws:

 

Example: Differential revenues from tax rates:

 

The absurdity of this approach became clear in 1988 when Senator Robert Packwood (R-OR), then ranking Republican on the Finance Committee, asked the JCT [Congress's Joint Committee on Taxation[7]]  to estimate the revenue impact if the government confiscated all income over $200,000 annually. The revenue estimators at JCT responded that such a tax would raise $104 billion the first year, $204 billion the second year, $232 billion the third year, and $263 billion and $299 billion in the fourth and fifth years, respectively. Needless to say, this was a nonsensical estimate. As Senator Packwood noted, the JCT's calculation "assumes people will work if they have to pay all their money to the Government. They will work forever and pay all of the money to the Government when clearly anyone in their right mind will not.”[8]--The Correct Way to Measure the Revenue Impact of Changes in Tax Rates Published on May 3, 2002 by Daniel Mitchell, Ph.D. 2010 [Emphasis is mine in all quotes.]

 

This is political reality--sick as it is. The tax base is considered to be an unending wellspring of wealth that can be taxed at rates up to and probably exceeding 100% with the confidence that the money will flow like honey forever.  This becomes a financial reality when you add in the propensity to borrow for incalculable reasons and the last-resort mechanism of getting money: the printing press. This is not a joke—this is political reasoning as the world practices it today. This is a prime example of liberal thinking as taught at Harvard.

 

We can choose the simple arithmetic view and ask what happens under a few scenarios whereby we think we can reduce the deficit to zero from growth alone. This is a multivariate system so simple examples like this only lead to objections that there are other possibilities. Here goes anyway:

 

[1] We currently have a 14 trillion dollar debt level and essentially a 10% deficit of about 1.4 trillion dollars. We also have a 14 trillion dollar GDP.

 

[2] IF we stopped the increase in spending and allowed growth alone to reduce these deficits how long with it take at a 2% growth rate in the economy to zero out the deficit? The assumption here is that a 2% growth rate leads to a 2% increase in tax revenues that would subtract from the deficit because there would be no increase in spending. We can then try 4% and higher variants and see what happens.

 

[3] The Results:

Year

GDP @ 2% growth

Tax Rev. [2% GDP growth] [trillions]

Budget Deficit [@2%]

GDP @ 4% growth

Tax Rev. [4% GDP growth] [trillions]

Budget Deficit [@4%]

0

14.00

0.00

1.40

14.00

0.00

1.40

1

14.28

0.29

1.11

14.56

0.58

0.82

2

14.57

0.29

0.82

15.14

0.61

0.21

3

14.86

0.30

0.53

15.75

0.63

-0.42

4

15.15

0.30

0.22

16.38

0.66

-1.07

5

15.46

0.31

-0.09

17.03

0.68

-1.75

 

So, fixing spending for 5 years would cut the deficit to zero at a 2% growth rate. At a 4% growth rate it would vanish in 3 years. This kind of deal works because when Congress submits fairy tales to the CBO [Congressional Budget Office] they must take the Congressional numbers on faith. Thus, when planning for the future the higher the growth rates the better. This is the way our government works or, better, fails miserably to manage our finances. Of course, there is no way our government could hold spending at zero for even a year. We can dream up all sorts of spending and revenue streams to our fancy and the CBO must conclude that these numbers are reasonable and sanction them by law.

 

The interest rate on our national debt, for many reasons is [today] 0.191 trillion/12.649 trillion or only 1.51%. That looks great. But, what happens if Moody’s cuts our AAA rating? Greece is now paying about 7% or so if they can get it. Look what happens if our interest rates rise to 7.5%:

 

Year

GDP @ 2% growth

National Debt Service [current rate 1.5%]

Budget Deficit [@2%]

Budget Deficit [@2%]-debt service

Budget Deficit [@2%]-2Xdebt service or 3%

Budget Deficit [@2%]-3Xdebt service or 4.5%

Budget Deficit [@2%]-4Xdebt service or 6%

Budget Deficit [@2%]-5Xdebt service or 7.5%

0

14.00

0.19

1.40

1.59

1.78

1.97

2.36

2.55

1

14.28

0.19

1.11

1.31

1.50

1.69

2.07

2.26

2

14.57

0.19

0.82

1.01

1.21

1.40

1.78

1.97

3

14.86

0.19

0.53

0.72

0.91

1.10

1.48

1.67

4

15.15

0.19

0.22

0.41

0.60

0.80

1.18

1.37

5

15.46

0.19

-0.09

0.10

0.30

0.49

0.87

1.06

6

15.77

0.19

-0.40

-0.21

-0.02

0.17

0.55

0.74

7

16.08

0.19

-0.72

-0.53

-0.34

-0.15

0.23

0.42

8

16.40

0.19

-1.05

-0.86

-0.67

-0.48

-0.10

0.09

9

16.73

0.19

-1.39

-1.19

-1.00

-0.81

-0.43

-0.24

10

17.07

0.19

-1.73

-1.54

-1.35

-1.15

-0.77

-0.58

11

17.41

0.19

-2.08

-1.88

-1.69

-1.50

-1.12

-0.93

12

17.76

0.19

-2.43

-2.24

-2.05

-1.86

-1.48

-1.28

 

If we halt spending and our interest rates rise because we have to raise money to pay off the debt and that interest rate rises to .5% then it will take 9 years to cut the deficit to zero and we still have the national debt fixed at 12.1 trillion to service.

 

If our budget deficit grows by 5% per year and it goes into debt then here is what our national debt will be:

Year

Budget Deficit @ 5% increase per year

National Debt

Debt Service  1.5%

Debt Service  7.5%

0

1.40

12.10

0.18

0.91

1

1.47

13.57

0.20

1.02

2

1.54

15.11

0.23

1.13

3

1.62

16.73

0.25

1.26

4

1.70

18.44

0.28

1.38

5

1.79

20.22

0.30

1.52

6

1.88

22.10

0.33

1.66

7

1.97

24.07

0.36

1.81

8

2.07

26.14

0.39

1.96

9

2.17

28.31

0.42

2.12

10

2.28

30.59

0.46

2.29

11

2.39

32.98

0.49

2.47

12

2.51

35.50

0.53

2.66

 

 

Now, there is a theory to describe the optimal tax rate for maximizing revenues and that is the Laffer Curve.[9] Here is a video on the process.[10][11] This is not accepted by liberals and an alternative scheme known as ‘dynamic scoring’ is preferred by the left. [12]  They assume that tax levels have no effect on the revenues. Thus GNP may remain constant with various tax levels. This is nonsense, of course, but that is what the left is all about. The curve clearly shows that maximum growth occurs at much lower tax rates than does maximum tax revenues and growth is the engine of the economy.

 

The Reagan Tax Cuts brought the following:

 

HOW DID THE REAGAN TAX CUTS AFFECT THE U.S. TREASURY?

 

Many critics of reducing taxes claim that the Reagan tax cuts drained the U.S. Treasury. The reality is that federal revenues increased significantly between 1980 and 1990:

 

Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990. In constant inflation-adjusted dollars, this was a 28 percent increase in revenue.

 

As a percentage of the gross domestic product (GDP), federal revenues declined only slightly from 18.9 percent in 1980 to 18 percent in 1990.

 

Revenues from individual income taxes climbed from just over $244 billion in 1980 to nearly $467 billion in 1990.

 

In inflation-adjusted dollars, this amounts to a 25 percent increase.

 

The rabid left point to the percentage decline in federal taxes as a fraction of the new higher GDP as ‘proof’ that there was a ‘cost’ to the Regan Era. Reagan doubled revenues and there was some ‘cost??’ Krugman rejects the Laffer Curve and gives his own nostrums of how the projected 9 trillion dollar deficit envisioned by Obama will fit into the growth:

 

What you have to bear in mind is that the economy — and hence the federal tax base — is enormous, too. Right now GDP is around $14 trillion. If economic growth averages 2.5% a year, which has been the norm, and inflation is 2% a year, which is the target (and which the bond market seems to believe), GDP will be around $22 trillion a decade from now. So we’re talking about adding debt that’s equal to around 40% of GDP.”[13]--How big is $9 trillion? By Paul Krugman The Conscience of a Liberal, August 23, 2009, 5:54 PM

 

Notice that there are two fixed numbers in this estimate: 2.5% growth and 2% inflation. The inflation-adjusted growth rate for 2007 was 2% and 2008 was only 1.1%.[14] There are lots of numbers to choose from including World Bank estimates but the choice has to be reasonable.[15] We are still stuck with a 9.7% unemployment rate and much of our current GDP comes from temporary stimuli like the recent ‘jobs’ program spent $92,000 per job[16] and, then, we spent $24,000 per car on the Clunker Follies and a mere $43,000 per house on the housing scam[17] And, none of these had a lasting effect. All of the money to propel this was either borrowed or printed up quickie fashion by our government.

 

Krugman and other dynamic scoring types seem to ignore the fact that Social Security is going broke and lugs along a 34 trillion dollar legacy while Medicare carries a similar burden of about 14 trillions. This 54 trillion dollar lump sum is almost as big as the entire household assets of our country at 57 trillions and total national assets at 72.3 trillions.[18] Ignoring the Laffer Curve is politically expedient as they can claim that their tax revenues will be on target despite tax hikes, Social Security debt service, new health care taxes for business and more. In other words, growth will continue onward and upward no how they tax business. The CBO thus must act as parrots and squawk out the good news on command.

 

The Reagan System could restore much growth to the economy with tax cuts especially for small businesses but that is not to be. The left wants to increase taxes on every level for political power reasons. This is proof that they care more about power and long terms in office with their powers influence and attract bribes and sweetheart deals [Chris Dodd, Barack Obama, Hillary Clinton, Charlie Rangel, Cold Cash Jefferson and others].

 

And on we go. It turns out that the left are only propelled by the hatred they see for those in the capitalist markets. They tend to form sticky cabals and drug-infested societies where their hatred is celebrated. Here is an example from James Cameron the director of Avatar as he flies into a rage:

 

Cameron said at a news conference that he would like to shoot "those boneheads," referring to skeptics of anthropogenic global warming. "Anybody that is a global warming denier at this point in time has got their head so deeply up their a** I'm not sure they could hear me," Cameron added.”[19]-- James Cameron: Shoot Climate 'Deniers,' Glenn Beck a 'F------ A--hole' By Lachlan Markay (Bio | Archive) Wed, 03/24/2010 - 18:45 ET

 

It is easy to characterize the attitude of the left with a new word: Cryptomisoxeny [20]

Cryptomisoxeny is a mental condition in which a person is compelled to enlist in a valiant crusade to ferret out and squash such human notions such as bigotry, racism and hypocritism. The person with this disease is completely unaware of its presence and control of his actions and is deluded with the false or reverse notion that his or her conduct is actually the exact opposite from the unacceptable targeted conduct in others. Hence, those who rail and rant and search for bigots frequently use overt bigotry in their sanctimonious quest for the offenders and employ bigotry in its strictest definition to condemn other persons or groups. All this proceeds unconsciously as the bigots, in this case, believes that they are far above such a social defect and are some form of cleansing device for our society. Sanctamonicity is the ultimate internal psychosomatic reward as it draws rave reviews and wild applause from peers and others also burdened with this affliction and offers comfort and camaraderie.  The same argument holds for those who chase and attempt to correct racists using overt racism and, of course, this is hypocrisy, but a form hypocrisy that is buried deeply in the id.[21]

We hear of cutting deficits by Obama and his minions:

In his speech, Geithner renewed pledges that the Obama administration would cut its huge fiscal deficits and promised "very disciplined" future spending, possibly including reintroduction of pay-as-you-go budget rules instead of nonstop borrowing.

 

"We have the deepest and most liquid markets for risk-free assets in the world. We're committed to bring our fiscal deficits down over time to a sustainable level.

 

"We believe in a strong dollar ... and we're going to make sure that we repair and reform the financial system so that we sustain confidence," he said.”[22]-- Geithner Monday June 1, 2009

 

Can we believe this tax cheat or Nancy Pelosi [a.k.a. Spartacus[23]][24] and her rush to spend trillions on bigger and farther-left government?? Didn’t Obama just chop off the secured bond holders in the Chrysler bankruptcy fiasco? Were these also risk-free assets? It is hard to believe that Nancy has not been excommunicated by the Pope. She has the gall to instruct the Pope on abortion?[25]

 

Here is the Obama promise to cut the deficit in half:

 

This budget actually is going to assume that there will be a hurricane, tornado, earthquake, flood or manmade disaster in the United States in fiscal year 2010, and each year going forward 10 years,” the official said. “The Bush budget never assumed that.”

 

Under White House projections, this year’s inherited budget deficit of $1.3 trillion will be cut to $533 billion by fiscal year 2013, the end of the first term.

 

So we’ll cut it at least in half,” the official said.”[26]-- Obama vows to cut huge deficit in half By Mike Allen  2/22/09 6:58 AM EST

 

That is such a lie!

 

Our federal elected officials parasites must have learned politics from California[27] as the once Golden State is turning brown in a storm of bad debt and default. Sloth, sodomy and drugs—the old liberal recipe for success.[28]

 

And so it goes. The only process we see is the frantic quest for the wealth of others using racism and a political corruption of the Constitution as vehicles. The liberals have no regard for anything that would really stimulate the economy as they think that bloating government ‘provides jobs’ and that they can print money ad infinitum to finance their social justice projects. Their projects, however destructive to the American people are always enthusiastically endorsed by the New York Times—aka the Walter Duranty Papers[29][30]--a turn-of-the-crank Marxian puppet stage where intermezzos and grand opera ring.

 

We need to be prepared for some revolts, some tax protests [perhaps we can call it ‘civil disobedience!’], bunker mentalities[31]and much more from a group of some 175 million Americans as they realize that the rabid left are destroying our society from the currency down to the courts. We might expect visits to our homes from some ‘community organizers.’ We can also expect that our ‘government’ will backlash against some of us like Clinton did at Waco as the lefties cannot tolerate criticism.

Hard Times Ahead.

rycK

 

Comments: ryckki@gmail.com

 



 

[1] The Ascent of Money: A Financial History of the World (Hardcover) by Niall Ferguson (Author) http://www.amazon.com/Ascent-Money-Financial-History-World/dp/1594201927

 

Review:

 

 “The number one lesson from this book is this: financial systems collapse all the time. It happens in every era in every geography — which highlights why it shouldn’t be such a surprise that our own system is under serious strain right now.” http://john.jubjubs.net/2009/04/03/the-ascent-of-money-by-niall-ferguson/

 

[2] Portugal's debt downgraded by Fitch By PAN PYLAS (AP) – 2 hours ago “"A sizeable fiscal shock against a backdrop of relative macroeconomic and structural weaknesses has reduced Portugal's creditworthiness," said Douglas Renwick, Associate Director in Fitch's Sovereign team.

In 2009, Portugal had a deficit representing 9.3 percent of its national income. That was higher than the 6.5 percent forecast by Fitch as recently as September and underlines why the ratings agency lowered its rating on the country by one notch to AA-. “http://www.google.com/hostednews/ap/article/ALeqM5goSQ5xWnCRQQPEvA-6sRLbJ1gPgQD9EKV38O0

[5] Krugman Menaces the Fear of Phantoms and Questions Obama with his Menacing Quips.  Tax and Spend and Damn the Inflation.

http://rycksrationalizations.blogtownhall.com/2009/11/23/krugman_menaces_the_fear_of_phantoms_and_questions_obama_with_his_menacing_quips__tax_and_spend_and_damn_the_inflation.thtml

 

[13] How big is $9 trillion? By Paul Krugman The Conscience of a Liberal, August 23, 2009, 5:54 PM http://krugman.blogs.nytimes.com/2009/08/23/how-big-is-9-trillion/

 

[19] James Cameron: Shoot Climate 'Deniers,' Glenn Beck a 'F------ A--hole'

By Lachlan Markay (Bio | Archive) Wed, 03/24/2010 - 18:45 ET

http://newsbusters.org/blogs/lachlan-markay/2010/03/24/james-cameron-shoot-climate-deniers-glenn-beck-f-hole-0

 

[20] Cryptomisoxeny Explained by Theory and Examples IIPosted by rycK on Sunday, December 06, 2009 8:48:28 http://rycksrationalizations.blogtownhall.com/2009/12/06/cryptomisoxeny_explained_by_theory_and__examples_ii.thtml

[23] Pelosi: The New Red Flag Rules of Spartacus.

Thursday, November 09, 2006 10:37 AM

 

[24] Coat Hanger Nancy the Queen of the Asian massage parlors in San Francisco. The Terminal Financial Psychosis of California as Seen Through a Green Lens

http://rycksrationalizations.blogtownhall.com/2008/12/14/the_terminal_financial_psychosis_of_california_as_seen_through_a_green_lens.thtml

[26] Obama vows to cut huge deficit in half  By Mike Allen | 2/22/09 6:58 AM EST

http://www.politico.com/news/stories/0209/19124.html

 

 

[27] Arnold Makes a Noble Stand. We will See if He Can Fight Off the Hoards of Barbarians at the Gates.

http://rycksrationalizations.blogtownhall.com/2009/06/30/arnold_makes_a_noble_stand_we_will_see_if_he_can_fight_off_the_hoards_of_barbarians_at_the_gates.thtml

 

Copulating with Coprolites: The Unveiled Mechanism of Governance by Progressive Liberalism in California

http://rycksrationalizations.blogtownhall.com/2009/06/23/copulating_with_coprolites_the_unveiled_mechanism_of_governance_by_progressive_liberalism_in_california.thtml

 

The Benefits of a Depression to the Tax Payers: Some States Will Have to Cut Away Many of their Phony Jobs. Illegal Aliens will Leave.

http://rycksrationalizations.blogtownhall.com/2008/10/21/the_benefits_of_a_depression_to_the_tax_payers_some_states_will_have_to_cut_away_many_of_their_phony_jobs_illegal_aliens_will_le.thtml

 

[30] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

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The Babbling Brooks of the NYT Babbles about Brokenness and other Fluffs He must like Utopias.

 

The Babbling Brooks of the NYT Babbles about Brokenness and other Fluffs He must like Utopias.

 

Abstract: David Brooks shows off his deep perceptive talents by essaying on the incoherent rants of some British cleric who runs amuck in the literary world. The sad, but predictable, case of Liverpool and its race riots run willy-nilly through a ‘new theory’ on reversing the roles of local and state governments with a stunning array of foolish comments.  Brooks is led down some path that Alice seemed to have missed.  There is wild talk of a ‘moral’ market and other strange notions. Brooks sums up this piece with the comment “that the only way to restore trust is from the local community on up” in one of those famous all-or-nothing leftist edicts where there is no middle ground. This is a farce but amusing to read.

As we peruse the hallowed pages of the near-bankrupt NYT—aka the Walter Duranty Papers[1][2]--a turn-of-the-crank Marxian puppet stage where intermezzos and grand opera ring until the wall paper curls, we must always be alert for true political designs and other odd bits of propaganda that are thoughtfully woven into the fabric of the average op-ed piece presented before us. There are more talented  writers and web-spinners like Maureen Dowd, the Old Red Lady [3][4][5] [than our current author] who offer us interesting political enigmas to dissect as she sandwiches literary clichés, unlikely metaphors and newsworthy characters with leftist political demands with sound and fury and the messages are usually very clear. But today our Chief Babbler David Brooks[6][7][8][9] broaches the banks of his pond to instruct us on broken societies. Brooks, in this episode, manages to leap beyond much of the sticky cliché besotted pulp that is both boring and intellectually insulting and spares us from the hackneyed nostrums that we need to ‘hear both sides of the story.’ But we need to be prepared to first hear the sobs of brokenness and then wade through a swamp of pity and social insanity until we reach the end and find out here was no clear fix recommended or intended. Thus, we are left hanging.

How to best read my blogs:

 

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.]

We begin this episode with some stale facts:

The United States is becoming a broken society. The public has contempt for the political class. Public debt is piling up at an astonishing and unrelenting pace. Middle-class wages have lagged. Unemployment will remain high. It will take years to fully recover from the financial crisis.”[10]-The Broken Society -By David Brooks Op-Ed Columnist Published: March 18, 2010 [Emphasis is mine in all quotes.]

We knew this. And, we knew that Obama and others had ‘solutions’ to our economic and financial problems as well and could guide us out of the swamp we are mired in. We know we are broke and heading for a currency default with our AAA credit rating now in serious jeopardy.[11] The liberals who now infect Congress and the White House  didn’t have any ‘solutions’ other than to print more money and bloat government like a sow with gangrene [ a reflection of California[12][13][14] and their  ejukashon[15]] so now they  promise  more and more as control more and they continue to  print more  money and monetize the debt and make matters worse. What else is new?

Now, the fix upon the fix:

This confluence of crises has produced a surge in vehement libertarianism. People are disgusted with Washington. … But there is another way to respond to these problems that is more communitarian and less libertarian. This alternative has been explored most fully by the British writer Phillip Blond.

He grew up in working-class Liverpool. “I lived in the city when it was being eviscerated,” he told The New Statesman. “It was a beautiful city, one of the few in Britain to have a genuinely indigenous culture. And that whole way of life was destroyed.” Industry died. Political power was centralized in London.”-- The Broken Society

Liverpool was and is a dump and was wrecked by far left-wing activists.[16] The Toxteth Riots, a Labor Party stronghold [thus political power centralized there in contrast to Blond’s inaccurate comment above] had major problems with racism  that took place there in 1981 with tear gas and rioters of all colors and creeds fighting in the streets and need to quell the mess by massive government force. This war resembled Watts 1 and 2. Liverpool is a prime example of how importing poverty from Third World results in a massive incompatibility with the indigenous society in it is collision with modern education, work force ethics, conduct and government. We would expect a first-hand victim of this social wreckage to fly off the wall and scrounge for unworkable solutions to this problem. Phillip Blond is just the guy to stir the scant and misfiring neuronal remains of David Brooks.  He demonstrates just that in this article. He should study Oakland next.

The revolutions revolve:

Blond[17] argues that over the past generation we have witnessed two revolutions, both of which liberated the individual and decimated local associations. First, there was a revolution from the left: a cultural revolution that displaced traditional manners and mores; a legal revolution that emphasized individual rights instead of responsibilities; a welfare revolution in which social workers displaced mutual aid societies and self-organized associations.

Then there was the market revolution from the right. In the age of deregulation, giant chains like Wal-Mart decimated local shop owners. Global financial markets took over small banks, so that the local knowledge of a town banker was replaced by a manic herd of traders thousands of miles away. Unions withered.

The two revolutions talked the language of individual freedom, but they perversely ended up creating greater centralization. They created an atomized, segmented society and then the state had to come in and attempt to repair the damage.”-- The Broken Society

This is so convoluted it is impossible to untangle the circular logic. There must be a punch line somewhere in this rag.

The Reformation Project:

Economically, Blond lays out three big areas of reform: remoralize the market, relocalize the economy and recapitalize the poor. This would mean passing zoning legislation to give small shopkeepers a shot against the retail giants, reducing barriers to entry for new businesses, revitalizing local banks, encouraging employee share ownership, setting up local capital funds so community associations could invest in local enterprises, rewarding savings, cutting regulations that socialize risk and privatize profit, and reducing the subsidies that flow from big government and big business.”

He talks about morality? I can see part of what he means by a relocalization of the economy but the recapitalization of the ‘poor’ smells like more welfare to me.  Education of the ‘poor’ is usually a failure and it must have been a wreck in Liverpool. Since cognitive skills are not evenly distributed among peoples of various races we expect to see places like Liverpool, Watts, Baltimore City, San Francisco, Oakland[18] and Atlanta degenerate into social cesspools. People with talent and brains left Liverpool never to return and for good reason.

Didn’t they do this in the French Revolution?

To create a civil state, Blond would reduce the power of senior government officials and widen the discretion of front-line civil servants, the people actually working in neighborhoods. He would decentralize power, giving more budget authority to the smallest units of government. He would funnel more services through charities. He would increase investments in infrastructure, so that more places could be vibrant economic hubs. He would rebuild the “village college” so that universities would be more intertwined with the towns around them.”-- The Broken Society

Essentially, Blond would take a political culture that has been oriented around individual choice and replace it with one oriented around relationships and associations.”-- The Broken Society

The only way to restore trust is from the local community on up.”-- The Broken Society

Well, there you have it or not. I missed the details. What I get from this seems to resemble what the utopians[19] were talking about many decades ago and seems to strongly resemble Local Exchange Trading Systems (LETS)[20]  where there is little need for currency and swaps are controlled by individuals.

There are so many holes in this argument it resembles something freshly dug out of a dumpster:

[1] This system would migrate backward to the feudal system as only locals would make and enforce laws.

[2] There is no way to tax this system and who would pay for the army, Social Security and other government programs?

[3] To think that by multiplying our ‘government leaders’ some 10,000 fold might improve decision making of the cognitively disnimble is a joke.

[4] This just about cracks international trade and hikes inefficiency because the tendency would be to make any and all products locally.  In a country of 304 million people we could imagine some 25,000 different laws and government bodies with a few hundred tariffs and taxes upon those outside the utopias.

The Brooks summation comment that the only way to restore trust is from the local community on up in one of those famous all-or-nothing leftist edicts where there is no middle ground. I would only participate in such as system if I were Head of Secret Police.

rycK [a 5th generation Californian in exile]

 

Comments to: ryckki@gmail.com

 



[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the NYT. The color RED is used in my essays in honor of Walter Duranty, a saint, if there could be one, in the Marxist Archives of Honor.

 

He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the Soviet Union which only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty

 

 

[3] The Hag of Harpur and the Old Red Lady both Criticize the Obama Healthcare System and Hillary

http://rycksrationalizations.blogtownhall.com/2009/08/12/the_hag_of_harpur_and_the_old_red_lady_both_criticize_the_obama_healthcare_system_and_hillary.thtml

 

[8] The Babbling Brooks of the NYT Babbles about Decision Making [?!] and Perception?

http://rycksrationalizations.blogtownhall.com/2008/10/28/the_babbling_brooks_of_the_nyt_babbles_about_decision_making_[!]_and_perception.thtml

 

The Babbling Brooks of the NYT Babbles about Nihilism with Innovative Socialist and Nihilist Overtones.  Raise Taxes!

http://rycksrationalizations.blogtownhall.com/2008/10/01/the_babbling_brooks_of_the_nyt_babbles_about_nihilism_with_innovative_socialist_and_nihilist_overtones__raise_taxes!.thtml

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

The Babbling Brooks of the NYT Babbles about Debt and Blame but Offers No Solution.

http://rycksrationalizations.blogtownhall.com/2008/07/22/the_babbling_brooks_of_the_nyt_babbles_about_debt_and_blame_but_offers_no_solution.thtml

 

The Babbling Brooks of the NYT Babbles about Lincoln, Mercury Pills and The Grip of Emotions. [?!]

http://rycksrationalizations.blogtownhall.com/2008/06/06/the_babbling_brooks_of_the_nyt_babbles_about_lincoln,_mercury_pills_and_the_grip_of_emotions_[!].thtml

 

From the Babbling Brooks: Confusion, Hokum and Fluff: Vote for Obama

http://rycksrationalizations.blogtownhall.com/2008/05/06/from_the_babbling_brooks_confusion,_hokum_and_fluff_vote_for_obama.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes

Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

Brooks of the New York Times Mumbles about Bugs, Independent Voters and Mechanical Liberalism

Tuesday, January 08, 2008 10:36 AM

http://rycksrationalizations.townhall.com/g/50bf9f36-0e0b-4e9a-be6d-5234d0d54f2c

 

The Babbling Brooks of the NYT Babbles about Obama and his Failure to Have a Clear Lead Over McCain.

http://rycksrationalizations.blogtownhall.com/2008/08/05/the_babbling_brooks_of_the_nyt_babbles_about_obama_and_his_failure_to_have_a_clear_lead_over_mccain.thtml

 

The Babbling Brooks of the NYT Babbles about Education.

http://rycksrationalizations.blogtownhall.com/2008/07/29/the_babbling_brooks_of_the_nyt_babbles_about_education.thtml

 

Echoes from the Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on Society, as Usual: Higher Taxes  Posted by rycK on Saturday, February 16, 2008 10:37:49 AM

http://rycksrationalizations.blogtownhall.com/2008/02/16/echoes_from_the_babbling_brooks_envision_a_new_conservatism_the_new_york_times_advises_us_on_society,_as_usual_higher_taxes.thtml

 

[10] The Broken Society By David Brooks Op-Ed Columnist Published: March 18, 2010 http://www.nytimes.com/2010/03/19/opinion/19brooks.html?src=me&ref=opinion [Emphasis is mine in all quotes.]

[15] A new word.

 

[18] The New York Times Laments the Rule of Law and Weeps over Illegal Aliens and their Lost Jobs.

http://rycksrationalizations.blogtownhall.com/2009/10/01/the_new_york_times_laments_the_rule_of_law_and_weeps_over_illegal_aliens_and_their_lost_jobs.thtml

 

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