A Red-Baiting April Fool's FAIL for 2009

is this forwarded email an April Fool's joke? ;-) i think it must be. there are no links to source data or text of any pending legislation. looks like yet another random smattering of red-baiting euphemisms. granted, i think there are important mistakes speaker pelosi has made, typical of any politician; however, taking the initiative to address the underlying symptoms of unsustainable resource skews in america is not among her failings. surely, specific tactics and methods need rigorous cross checking; however, the strategy of addressing malignancies grown from free radical capitalism is thrust upon all of us, regardless of political persuasion.

for those interested, specific comments follow this subject email.

> --- On Mon, 3/30/09, Some Random Interwebber wrote:
>
> From: Some Random Interwebber
> Subject: Fwd: Fw: Tax on Retirement Income
> To: A Select Group to Probe Responses, Perhaps
> Date: Monday, March 30, 2009, 8:49 PM
>
>
> I am scared for our county.
>
> >
> > Windfall Tax on Retirement Income
> >
> > Adding a tax to your
> > retirement is simply another way of saying to the American
> > people, you're so darn stupid that we're going to
> > keep doing this until we drain every cent from you.
> > That's what the Speaker of the House is saying. Read
> > below...............
> >
> > Nancy Pelosi wants a
> > Windfall Tax on Retirement Income. In other words tax what
> > you have made by investing toward your retirement. This
> > woman is a nut case! You aren't going to believe this.
> >
> > Madam speaker Nancy
> > Pelosi wants to put a Windfall Tax on all stock market
> > profits (including Retirement fund, 401K and Mutual Funds!
> > Alas, it is true - all to help the 12 M illion Illegal
> > Immigrants and other unemployed Minorities!
> >
> > This woman is
> > frightening.
> >
> > She quotes..' We need
> > to work toward the goal of equalizing income, (didn't
> > Marx say something like this?), in our country and at the
> > same time limiting the amount the rich can invest.' (I
> > am not rich, are you?)
> >
> > When asked how these new
> > tax dollars would be spent, she replied:
> > 'We need to raise the
> > standard of living of our poor, unemployed and minorities.
> > For example, we have an estimated 12 million illegal
> > immigrants in our country who need our help along with
> > millions of unemployed minorities. Stock market windfall
> > profits taxes could go a long way to guarantee these people
> > the standard of living they would like to have as
> > 'Americans'.'
> > (Read that quote again and
> > again and let it sink in.) 'Lower your retirement, give
> > it to others who have not worked as you have for it'.
> >
> > Send it on to your
> > friends. I just did!! This lady is out of her mind and she
> > is the speaker of the house
> >

so, let's take a moment to pretend that this is not an April Fool's joke. what if someone were actually 'scared' of the undeniable necessity of correcting the decades of unsustainable hoarding that have become a malignant tumor that is so intimately intertwined within the very sinews of the american economy that, literally, any attempt to extract the tumor creates an existential risk to the entire body? let's have some fun with that thought experiment, shall we?

first, i'm worried that writer says he is scared. unsubstantiated fear is seldom an adaptive emotional response to any crisis; particularly in times of increasing and rapidly accelerating socio-technical changes. i like this old acronym, first heard from a Texas preacher during a 1980's downturn:

F.E.A.R. is all too often False Evidence Appearing Real.

as we see it today, at the core of a disturbingly normalized culture of unmitigated capitalist corruption are massive, unsustainable resource skews in america.

we've used this analogy before, and it's worth repeating. an economy is a circulatory system and just like the body, if 70%+ of the blood (liquid net worth) is pooled in less than 1%, or even 5%, or 10% of the body, that's going to kill the whole body every time. there is no other remedy for failed circulation but healthy circulation. we can pump in plasma while we clear the massive clots, but the clots must be dissolved. our system can not be hooked up to plasma transfusions for the long term; not even the medium term.

our emailer uses the name of marx as nearly synonymous with pure evil or utter market destruction. this is a grossly over-simplified and wildly popular misconception.

marx was often exactly right about many of the ultimate human outcomes of capitalism, though lenin thoroughly proved that violent revolt was the exact WRONG way to correct capitalism's shortcomings.

another popular misconception is that socialism is functionally equivalent to communism. a close corollary assumes that economic models are a zero sum games, each mutually exclusive from the other. naturally, such easy sound bites regularly pepper emotional outcries from financial entertainers such as santelli, cramer, or kudlow precisely because they constitute an EASY button for pushing viewer emotions.

unfortunately, repeated pressing of this EASY button is one of the most intellectually dishonest, populist fear-mongering tactics of the day, and these guys fully know better. perhaps oddly enough, cramer seems to come across as just a little less dishonest than kudlow in this regard. cramer seems more of a pragmatist while kudlow reliably portrays the ideologue.

while there is still far too much of a strong, negative knee-jerk stigma attached to the following words (probably because so few have studied the actual ideas), Free Market Socialism maintains and even improves upon the best of vibrant Free Markets -- which are uncompromisingly required to create Stuff, Services, and Wealth -- while simultaneously acknowledging that every part of the economic body is vital to that creative process, right down to a seemingly insignificant tiny baby toe.

at a bare minimum, america needs some form of universal healthcare and a universal basic income just in order to continue the adaptive evolution of our wonderful american experiment. these two requirements are not ideologically based 'demands' rather, they are functional requirements, essentially equivalent to Henry Ford's 'welfare capitalism' innovation (which many considered communistic): the 8 hour, $5 day.

today, we are again hearing similar philosophical opposition to today's required economic adaptations. this, in spite of the empirical historical reality that had Ford's 8 hour, $5/day "socialistic spreading of the wealth" not been abandoned, it may have continued to 'stimulate the economy' at the edges, where all stimulus is undeniably most effective in spurring consumption.

meanwhile, here on the cusp of Depression 2.0, we face additional and new complex challenges, on top of those created by the utter moral collapse of wild west renegade capitalism. from VC's and (former) captains of industry, to mentally ill veterans on the street, to the burgeoning 25% structurally unemployed (due to the *success* of early stage industrial capitalism), to an ever-growing and vibrant demographic of citizen scholars; each and every one of us is more globally interdependent than ever. the era of Shared Fate is indeed upon us. we're all in this together.

at the very tip of socioeconomic evolution, dramatic morphological change is happening right before our very eyes.

now is the time for the most experienced, tried, and true of america to participate in and shape these changes. obviously, evolutionary change can never be put back into the bottle; we can choose to adapt and thrive, be sidelined, or become ... as our previous president might have said, "extinctified."

Obama budget asks far less of the rich than either Reagan or Nixon

Despite my (and many others) lobbying for vastly increased taxes on individual personal wealth of the 793 American Billionaires (down from that 1,000 number back in June; but puh-lease) Obama's budget asks far less of the rich than either President Reagan or Nixon ever did. To dissolve the blood clots in the economic circulation system, Corporate Taxes actually do need to be DECREASED and Cash Hoarders targeted with direct clot-dissolving policies. For ambiance, how about set to the music of Concerto for Squealing Piggies and Harried Hoarders in “F” Major.

Obama's budget cuts taxes for 95% of working Americans who are struggling to make ends meet. To pay for the investments we desperately need to get our economy moving again, it closes tax loopholes for big corporations and rolls back the Bush tax cuts for the wealthiest Americans.

Unemployment Skyrockets, So Do Stocks

Are we getting the message of the system they'd love to rebuild YET AGAIN? Are we all going to play the victim and fall for it all YET AGAIN? Probably. So sad.

03/07
Briefing.com Estimate 640K
Consensus Estimate 644K
Actual 654K

Actual Prior 645K
Revised up from under reported 639K

And keep in mind, this is only the Freshly Discarded Humans (U3), which is about Half of the actual Total Discarded Humans (U6).

Debunking Second Half-ism Mythologies

It's real nice that Goldman (GS) is now selling it's Limited Edition Silver Lining for 2009, pitched by none less than the infamous @SteveCase (who reportedly, almost single handedly, closed the biggest DOA dead fish corporate deal in history to Time Warner, seemingly without so much as a flinch of conscience). In fairness, I've never met the guy yet, but the harder you sell the Status Quo Mythology, the more likely you are part of the problem, today.

This need not be the case. Those who so choose could become part of the solution in a single moment, but for the sclerosing strain of chronic Aristocratic Oligarch Entitlement Personality Disorder that has catastrophically clotted up the American economic circulation system.

More specific to the mythology at hand, let's see where have we heard, "Trust Us, the Second Half Will be Better" before? Oh yeah, same time, same channel as last year:

• TheStreet: New Year, Same Problem (1 Jan 2008)
• The estimates are certainly coming down for 2008, but they're still higher than this past calendar year," said John Butters, research analyst with Thomson. "Since 2007 estimates have been dropping faster, the growth rate for 2008 is actually increasing."
  
• US growth to recover in 2008 (Feb 2008)
  
• Forbes: Atlanta Fed's Lockhart sees economy improving in second half of 2008 (Feb 2008)
• CNN: Experts: Don't fear the weak dollar (Mar 2008)
• "But two key factors temper economists' fears about the lasting impact of a sunken dollar: a surge in exports and expectations that the economy will begin to show signs of the growth during the second half of the year."
• ROTFLMAO! Trust the Experts!
• CNN: Read the Fed's minutes (Apr 2008)
  
• "The staff projection showed a contraction of real GDP in the first half of 2008 followed by a slow rise in the second half. The recently enacted fiscal stimulus package was expected to boost real GDP in the second half of 2008, but that effect was projected to unwind in 2009."
• Home Sales, Prices to Pick Up in Second Half of 2008 , Says NAR Chief Economist (May 2008)
• Fox Business News (echo chamber for NAR, May 2008)
• "Home sales and prices throughout most of the country are poised for improvement in the second half of 2008."
• Car economist sees limited drop in '08 US sales (Nov 2008)
  • ROTFLMAO!!!
  • I could go on, but it's not worth wasting more time proving what we all already know.

Namely, your 19th century pre-industrial communications model is just a little bit broken when you can't count on the fact that the masses threw away last year's paper and don't have the first recollection of what you said last year.

Today, we not only remember your lies, we can prove them, substantiate, cross-reference, cross-check, and cross-post them globally in minutes. In short, We the People don't believe a single word you say any more. You have stolen or hoarded all of OUR CASH. It's not yours, it's OURS, The Public's. Look at the ownership stamp on every piece of paper:

Federal Reserve Note

And WE own the Federal Reserve. They are OUR NOTES. So Shut Up and Cough 'Em Up. Right Now.

"Devil and the deep blue sea behind me; Vanish in the air youll never find me. I will turn your flesh to alabaster; When you find your servant is your master" (Wrapped Around Your Finger, The Police).

Basic Income a right: Essential for economic recovery

SooToday.com Staff. Sunday, March 01, 2009

NEWS RELEASE
TONY MARTIN, MP, Sault Ste Marie

Basic income a right, essential for economic recovery

Martin speaks at international conference in New York

NEW YORK - (March 1) - A basic income guarantee for people living in poverty honors human dignity and will help countries recover from the recession, Sault MP Tony Martin told the closing plenary of an international conference here today.

“We are facing a challenge today different in nature and depth than anything any of us have experienced before,” Martin told delegates attending the 8th Congress of the U.S. Basic Income Guarantee Network.

“It will require phenomenal common effort to get us through it in a way that leaves no one behind. We need to be able to influence the decision makers (politicians). Large numbers of people need to be sending the same message -- poverty is not acceptable for anybody.

“We need to be speaking to people of kindred spirit in faith groups, in labour organizations and other citizen groups rooted in a quest for fairness and justice. The economic system is failing, people are being affected. We have an unprecedented opportunity to affect positive change. It is in our collective self interest to do so. It is not only a moral imperative, it is necessary for economic recovery and redistributive justice. A basic income is part of the answer. Those who had privilege will fight this and are well funded and organized.”

While here, Martin met with Conservative Senator Hugh Segal, another conference presenter and long-time advocate for a guaranteed income, on plans to move the basic income initiative forward in Parliament.

Martin believes any economic stimulus package should include income security investments and critical social infrastructure for communities.

"We have a duty as a socieity and government to offer equal opportunity for everyone, to ensure people have enough money to pay for the basic necessities of life, including food, clothing, shelter, heat."

It's Only a Greater Threat Than Terrorism

“Nearly everybody has been caught by surprise at the speed in which unemployment is increasing, and are groping for a response,” said Nicolas Véron, a fellow at Bruegel, a research center in Brussels that focuses on Europe’s role in the global economy.

Modestly, it seems, "nearly everybody" hasn't included us. So far.

Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.

Unemployment in Britain is expected to rise to 9.5 percent by the middle of 2010, from 6.3 percent now, according to Peter Dixon, an economist with Commerzbank in London. Germany’s jobless rate could rise to 10.5 percent from 7.8 percent, he added.

Keep in mind, all these numbers are often and regularly intentionally understated by around half (give or takebecause they omit the previously and long-term unemployed. Compare U3 to U6 and note correlations so helpful to understating the case with uncanny symmetry.

On the other hand, some genius at JP Morgan is apparently helping to clarify the picture by exponential overstatement of the bubble collapse.

SOURCES: New York Times, Nelson D. Schwartz;  The Big Picture, Barry Ritholtz.

We are All Socialists Now

Finally, We Are All Socialists Now.

In many ways our economy already resembles a European one. As boomers age and spending grows, we will become even more French.

What if 25% and Growing Real U.S. Unemployment is Equilibrium?

For starters, it would be called Structural Unemployment; and there is mounting, compelling evidence that this is precisely where we're headed. Not as punishment -- unless we are stupid and inflexible about it -- but as the logical outcome of the overwhelming success of industrialization. Nevertheless, it's also observed in nature that every metamorphosis is an excruciating process; an epiphany of existential crisis.

It’s hard to exaggerate how much economic trouble we’re in. The crisis began with housing, but the implosion of the Bush-era housing bubble has set economic dominoes falling not just in the United States, but around the world. -- Paul Krugman, New York Times, Feb 5, 2009

The BLS U.S. UNEMPLOYMENT PICTURE Right Now

Data extracted on: February 6, 2009 (8:47:17 PM)

SOURCE:Bureau of Labor Statistics Table A-12. Alternative measures of labor underutilization (Percent)
Series Id:LNS13327709 Seasonal Adjusted
Series title: (seas) Total unemployed, plus all marginally attached workers plus total employed part time for economic reasons, as a percent of all civilian labor force plus all marginally attached workers
Labor force status: Aggregated totals unemployed
Type of data:Percent
Age:16 years and over
Percent/rates: Unemployed and mrg attached and pt for econ reas as percent of labor force plus marg attached

Just last month, January 2009, Seeking Alpha explained:

As you can see here we have an increase of 1.3% to 13.5% unemployment in December. Many people including myself think this is a better more accurate number for understanding the current unemployment situation.

It is also interesting to note that a loss of 1.3% of jobs from a labor force of about 254 million with slightly more then a 65% participation rate equals job losses of more then 1 million jobs from November to December. Almost double that which was reported.

Interesting also is that even though the scales are somewhat different (U6 at 6% unemployment is good) the U6 numbers represent a 10% increase in the unemployment rate vs just a 5.8% increase in the U3 from Nov to Dec.

Something to think about and keep an eye on going forward.

Prior to the addition of today's (February 6, 2009) 600,000 lost jobs, The Market Oracle, UK explained, "if you include the people that the government doesn't even count – such as unemployed farm workers, the idle self-employed, and workers in private homes – the unemployment rate approaches an astonishing 18% (top line)."

"In other words, unemployment has insidiously spread to almost one-fifth of the U.S. work force, a number much larger than the single-digit figure commonly bandied about in the press."

So if we're already at 18% to 20% real unemployment, and Davos is even partially correct that things are definitely going to get worse before they get better, how unlikely is 25% unemployment, really?

Not all that unlikely, at all. Friends, in case you haven't yet noticed, this is called a Disruptive Inflection Point. It's time to insist that our leaders shift gears into the Post-Industrial, Post-Information, Post-Scarcity policy mode.

I understand the paradox, it's easy to think that downturns must be because we don't have enough stuff. However, terabyte hard drives are $100. Brand new state-of-the-art netbooks with 1GB RAM and 8GB solid state drives (no moving parts) are $250. We have more than enough information age stuff. In fact, it's a crisis of context amidst runaway accelerating change, a crisis of abundance, and a crisis of resource skews; not a crisis of lack. Perhaps Toffler was simply a little ahead of schedule; perhaps his future shock has finally arrived.

What we do know is that Barry Ritholtz has: "frequently exhorted people to pay attention to N.I.L.F. — those people Not in Labor Force." And:

Over the past few years, dishonest politicos failed to mention that Unemployment had gone down primarily due to people leaving the labor pool — not due to a surge of new job creation.

U.S. Labor Force Participation Rate

We also know that as far back as June 2008, Ritholtz pleaded, to no avail, of course:

Here is a modest proposal for all of the poor scribes (like me) who slog through the monthly NFP report: For the sake of more accurately describing the conditions in the labor market, let's begin reporting two measures of Unemployment: U3 as well as U6.

Its been pretty obvious for sometime that the Financial Media are doing a disservice to their readers by only reporting U3, given how dramatically it understates Unemployment. Indeed, consumer sentiment reports are at deep negative levels that only occur when Unemployment is much than what U3 has been saying. It is painfully obvious that U3 does not paint an accurate view of the Employment situation.

Its way past time to fix that.

Here's the experiment I propose: Let's start reporting both, with appropriate descriptions of each. Report U3, add U6, provide monthly and year over year changes. Let the reader see the full picture, via BLS data.

Finally, raise your hand if you think U6 is really, truly accurate. What, no hands? How many think the number is overstated? Really? Nobody? How about understated? That's what I thought. But by how much 10%? 50%? Can we really continue to sit around twiddling our thumbs and placing false hope in this "stimulus" that will essentially only bail out essential infrastructure companies? I think not.

So what do we do to adjust to this Disruptive Inflection Point? We legislate a U.S. Basic Income immediately and make it a model for The World.

The Basic Income solution to Structural Unemployment is nothing new, many of the world's leading intellectuals have seen this coming for a very long time:

One of the explanations behind structural unemployment came from Austrian and French social philosopher, André Gorz. He argues that it could be permanent in modern society. He therefore argues that a basic income could be a solution, and as he explain: "The connection between more and better has been broken; our needs for many products and services are already more than adequately met, and many of our as-yet-unsatisfied needs will be met not by producing more, but by producing differently, producing other things, or even producing less. This is especially true as regards our needs for air, water, space, silence, beauty, time and human contact...

Discussion thread on Friendfeed.