Wednesday, October 30, 2013

Economics is a Dirty Job, but Mike Rowe Shouldn't Do It, Parte Dos

*Sigh* its looks like Mike Rowe's Promoting Stupid Tour 2013 continued last week on, of all places Glenn Beck's online exclusive TV show (link, if you dare)

It was bad enough when Rowe went on Bill Maher and was able to spew his nonsense unchallenged. But appearing on the show of wild, raving neofascist lunatic Glenn Beck is a new low for Mr. Dirty Jobs. Rowe continues on his campaign to discredit four year liberal arts degrees with his folksy, visceral "wee dont need no edju-kay-shun BS. He brings up the widely discredited "skills gap" theory that "if only lazy, spoiled Americans would just take the high stress, low wage jobs the the High Holy Private Sector Job Creators(tm) are offering them" then we would fix the economy. He goes on to say "we are borrowing money we dont have" to fund higher ed. Yes Mike....we are going to run out of fiat! I always wonder how these geniuses think we paid for WWII and all the GI bill programs.

Thing is, I want to like Rowe. He does go on to say that he "isnt against college education, just against debt", which is a perfectly reasonable argument. However he doesnt make the next logical step, which is to say that the monetarily sovereign government could just as easily fund higher ed with interest-free grants instead of loans. There is no reason that higher education needs to come with enormous debt, but Rowe skips over this point and continues flattering Beck, who of course hates the idea of national populace that knows history and can think critically. Could it be that having a college education makes Beck's foaming-at-the-mouth chalkboard "lessons" seem almost ridiculous?

Rowe's comments get even more confused from there, when he says:

“This whole topic always boils down to management vs. workers…the blue, the white collar. Enough with the color of collars,” he declared. “The way to talk about work is through the context of, what are you addicted to? Are you addicted to smooth roads? …Cheap electricity? Indoor plumbing? I am. So if you share my addiction to the fruits of skilled labor, you’ve got skin in this game.  So I think if you start to engage a bigger hunk of people, not just management and not just labor, if you really start to have a conversation about work and education, about affordability, everybody can take a micro-macro look at this thing.”

Um, What?!?! Rowe's intentions are probably honest enough, but he shows no humility when making his ass-backwards arguments. He may not realize it, but he is effectively shilling for the corporatist distopian worldview where an informed electorate is an unaffordable triviality but wage slavery is "good for ya." And its not that I even have a problem with Rowe promoting blue-collar jobs, its just that he doesn't mention the reason for the deterioration of such jobs is due to the bipartisan attack on unions, not because "kids today" dont want to work hard. If we got back to 40% private sector unionization levels then maybe, just maybe, these blue collar jobs would be plentiful and lucrative. But you can't blame today's kids for looking at how their parents worked hard in blue collars jobs only to be betrayed by management, and not wanting to follow that same path. 

So Mike, please stop with the glorified s**t kicking. You're a good guy, but ya don't understand econ. From now on, please just stick to cleaning out urban sewer tunnels and leave the policy to the pros. After all, we have to make our fancy pants college degrees pay off somehow!

Thursday, October 17, 2013

Back to the (stupid) future

Understanding macro is difficult, because it has to be learned from a blank slate. There aren't many useful everyday analogies to make about macro as there is for micro, so it is more difficult to teach to most people.

So lets zoom out. Lets take an astronaut's view of the American economy. We can see the skyscrapers sticking out of the cities, the McDonald's golden arches sticking out of the suburbs, and the meth labs exploding in the countryside. You see 300 million people zipping about, trying to make the best of their lives. From this vantage point, how does it make sense for all this economic activity to be depressed for any reason other than real, physical constraints? If there are resource shortages, no infrastructure, mass starvation, disease or war, then there are real world constraints on output. But does it make sense to force 20% of our people into idleness because of a shortage of digital transactional data, known as money? No! Of course not!



Today's out of paradigm policymakers, Dems and Reps alike, are willing to allow real GDP to grind well below potential for years and force millions of people into entrenched unemployment because they think there is something magical about some deficit number. Marriner Eccles knew the folly of that sort of reasoning. He said:

I think it is unfortunate to say the least to have public attention is led into becoming alarmed over the wrong things. I very much regret that responsible leaders, however conscientiously, nevertheless mistakenly create public alarm over the solvency of the nation or the soundness of its credit. This is just what they do when they call attention to one set of facts or figures without showing their relationship to other facts and figures. Isn’t it up to us to keep our eyes on the important things?


We are 21st century human beings for God's Sake! We should be more advanced than, to quote Thomas Jefferson, our "barbarous ancestors" who thought that money was a shiny metal that had to be dug out of the ground! We now have incredibly advanced information technology, historically high standards of living and life expectancies. We can take pictures of galaxies that are billions of light years away and put chicken genomes into strawberries. But we can't understand how our 80 year old fiat currency system works?!?! How dumb is that!!!
Saving money for the future is only possible from financially-constrained private entity who sacrifices current spending in the hope of expanding their future spending capacity. So for a household, the act of saving means they forego current consumption to accumulate financial assets which will enable them to consume more in the future. 
But for the federal government, which issues its own currency, this way of thinking is useless, and even destructive. A federal budget surplus does not give us any extra capacity to spend in the future, in the same way that a budget deficit provides no less capacity for that government to spend in the future. There is no point in raising taxes on anyone or cutting spending right now, because it will only depress economic activity further.

Tuesday, October 1, 2013

The ghosts of A-holes past

Senator Ted Cruz (R-TX)


The utter insanity that has come to grip our national politics did not metastisize overnight. While Ted Cruz may be dominating the airwaves these days, he is just the latest colorful traveler on a road that was paved decades ago. In every word of Republican madness, I see the ghosts of Lee Atwater, Richard Nixon, and Ronald Reagan.

For some of our nation's history, there was a mutual, unwritten understanding among our politicians that you did not burn through the social fabric to win elections. Outright deception and playing of social and racial groups against one another used to be reprimanded by higher minded leaders, of both parties. Then along came the psychopath Richard Nixon, who's only agenda was to seek and hold as much political power as possible. Policy, if considered at all, always came second to Nixon, who was perfectly happy to let Democrats in congress pass liberal bills, as long they didn't threaten his power as president.

But in order to maintain his hold on the presidency, Nixon ventured into previously uncharted territory for national republicans- the south. Long considered a Democratic stronghold since Reconstruction, Nixon realized he could take advantage of the Democratic move toward Civil Rights by appealing to Southern racism in new, less explicit ways. His paranoid, win-at-all costs style ended up being his undoing, but Nixon ushered in the era of slash and burn cesspool politics that survives to this day.

In this era also came the rise of Lee Atwater, the brilliant, and mad political strategist who uttered the infamous phrase: "By 1968 you can’t say “n****r”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “n***r, n***r”"

St. Ronnie the Actor was even more skillful at these divisive tactics than Nixon. He was a master at using charm and whit to disguise his radical, pro-corporate ideology. Despite his weak understanding of policy and diminished cognitive capacity, his appreciation for the art of political communication was enough to convince millions of middle class Americans to begin their experiment with political Stockholm syndrome by re-electing him/his administration twice. 


The legacy of the Southern Strategy and its shameless use of "wedge issues" to stir racial resentment and fear among the middle class remains as strong as ever today, and not just in the south. This "southification" has now spread to other areas of economic disempowerment, especially the rust belt states. It's no coincidence that some of the most rabid, radical members of Congress now come from states like Wisconsin, Indiana, Ohio, and Michigan. The engineered collapse of the white American working class had made for ripe-pickings of the modern day Atwaters, like Karl Rove, Rush Limbaugh, Frank Luntz, and the religious right demagogues.


This is why no explanation of reality matters anymore. When so many members of congress, and their constituents  are motivated only by emotion and visceral distaste for the president, no argument using logic or data has any potency. Good luck getting any discussion of sectoral balances or demand leakages through these frontal lobes! Just the mere idea that our sovereign government can spend its own currency in unlimited amounts is enough to cause heads to explode. At this point it is probably too late for these deranged maniacs to ever come back to earth and contribute positively to our society anyway.