Hale “Bonddad” Stewart is a former bond broker with several regional firms. He has been involved with the financial markets since 1995. He is a graduate of the Thomas Jefferson School of Law’s LLM program with a dual concentration in international and domestic taxation. He currently practices tax law in Houston, Texas.

~~~

BR: I have a different take than Hale does: Political types don’t care if they do lame economic analysis – intellectually integrity isn’t their “thing” — they are only interested in influencing voters by any means, regardless of truth or integrity or fealty to reality. Dishonest is simply a tool towards that end.

Here’s Hale:

~~~

I read a fair number of conservative and liberal blogs.  While each is pretty good at explaining their respective political philosophy, they all are absolutely terrible at economics.  By terrible, I mean that, without a doubt, they are abject failures of the highest order.   Let me give you a few examples.

Over at Hot Air, Ed Morrissey has argued that real inflation is in fact 8% according to an organization named the “American Institute for Economic Research.”  Mr. Morrissey states that AIER’s methodology is “robust and scholarly.”  There is one slight problem with this analysis (along with the “robustness” of the AIER model): the entire US Treasury market, where the 10 year treasury is trading right around 2%. You see, Mr. Morrissey, bonds are extremely sensitive to inflation.  When inflation is high, bond yields have to rise to compensate investors for the loss of income. Someone who has the ability to determine whether an economic model is “robust” surely knows the interest rate/inflation relationship.

Either the entire US Treasury market is wrong or AIER is.  I’m putting my money on the Treasury market.

John Hinderacker at Powerline recently posted the following chart from the Republican Study Committee (which made its way around to a bunch of conservative sites):

I could just as easily make this argument:

Or this one with total establishment jobs:

It took about 9-12 months for the stimulus to take effect.

Yet both Mr. Hindraker’s statement and mine suffer from the same problem (which is classic in statistics): correlation does not mean causation.

What’s even more telling is what’s absent from Powerline’s analysis — there is a dearth of information explaining the effect of retiring baby-boomers on the LPR — which the Chicago Fed did nicely over the last few months. My guess is Mr. Hinderaker has absolutely no idea what the LPR really measures, probably never heard of it until the he saw that chart, has no idea about the how its calculated, can’t name the survey from which its derived or the effects of an aging population on that calculation.

And before the political left thinks they’ve gotten off without a hitch, consider this.  Let’s start with this: they missed the first two years of the economic recovery because they were addicted to disaster porn. First there was no turnaround.  Then there was something inherently fishy about the government data (unless the data was bearish).  Then we were in a “black swan” environment.  Then it was something else.  In short, the left lives by the “if it bleeds, it leads” moto of journalism.  Calm, reasoned economic analysis has absolutely no place.

Then there is this: the left wants to think of itself as “champion of manufacturing.”  Really? Then why has there been a complete dearth of writing about this chart:

Manufacturing is one of the primary drivers of this expansion.  And I forgot to mention, the importance of exports as well:

That’s a record high for real exports. And yet, when it comes to the political left, they’re absolutely silent on the issue, even though, according to most, we need to “become a net exporter again.” 

The above chart shows we’re on our way to being a net exporter, along with exports providing a tremendous boost to this expansion.

So, if you’re a political blogger and you want to write about economics, please answer the following questions prior to writing on economics.

For the political right.

1.) During the 1950s, the highest marginal tax rate was over 90%.  In addition, Congress raised taxes to pay for the Korean War.  Yet, this decade was incredibly prosperous for the US economy with GDP growing at incredibly strong rates.  Why didn’t this high rate of taxation cause a recession (in fact, why did the economy thrive) and why didn’t it lead to people “going Galt?”

2.) The overall rate of taxation is currently near its lowest level in 60 years. Why isn’t this having a tremendously stimulative effect, as theorized by supply-side economists?

3.) The GDP annual growth for the years 1934-1936 was 10.9%, 8.9% and 13.1%, respectively.  The annual GDP growth rate for 1937 was 5.1%.  By 1937, real GDP had attained the same approximate level as that of 1929.  Please explain why the above growth rates are bad.

For the political left.

1.) According to the CBO, expenditures for entitlements have increased from a little over 35% of federal expenditures to a little over 60%.  Please explain why this does not mean entitlement reform is mandatory.

2.) In 2010. the world experienced a series of weather events that severely limited global good supplies.  In addition as countries such as India and China have increased their standard of living, demand has increased.  However, by 2012, world output of agricultural goods has increased thereby lowering cost pressures.  Please explain why this example does not indicate that a market based system is the most efficient way to allocate resources, nor the fact that demand and not speculation was the primary driver of prices.

3.) Please explain why the removal of corporate personhood would not lead to a complete shutdown of the US economy.

In case you were wondering, the preceding questions are basically “un-answerable” from each sides respective political position.  It’s like the old Star Trek episode where Spock tells the computer to compute pi to the last digit or states, “I always lie; I am lying.”  That’s the point. Both sides have taken political positions which are inherently at odds with reality and economics.  In other words, their political desires trump economic analysis, making their economic analysis completely and utterly useless.

So, if you’re a political blogger and you write about economics, please realize that you have absolutely no idea what you’re talking about.  Really.  You don’t — not one clue.  Please — in the name of all that is holy — please stop.

Category: Data Analysis, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

74 Responses to “Memo To Political Bloggers: Please Stop Writing About Economics; You Really Suck At It”

  1. 1.) According to the CBO, expenditures for entitlements have increased from a little over 35% of federal expenditures to a little over 60%. Please explain why this does not mean entitlement reform is mandatory.

    What is it in Scandinavian countries? And how much is due to the presently crappy economy?

    3.) Please explain why the removal of corporate personhood would not lead to a complete shutdown of the US economy.

    What happened to corporations before they were given such status via the Supreme Court in the later half of the 1800′s?

  2. louiswi says:

    Barry, I think you are close to the title of your next book:
    JERK OFF NATION- The story of political bloggers gone freaking mad!!!

  3. InterestedObserver says:

    While I’m sure some bloggers are knowingly dishonest, I’d guess that the bulk of them simply don’t see it. They only see the end point they’re trying to make and are so hyperfocused on that singular issue that they don’t stop to appreciate the logical consistencies or inconsistencies that reside elsewhere.

    When you’re breaking bad news (Hey! We’re in freefall and we’re all bound for oblivion!), it’s also critical to be first. That eliminates undertaking a rational analysis right off the bat. About the only path available is a random cut/paste extravaganza of bits and pieces of other peoples thought, likely stripped of any context or caveat, assuming that was there in the first place, which is regrettably unlikely.

    While economics tends to be the focus here, the flavor of the analysis really applies to just about any complex material which requires a measure of subject matter expertise.

  4. GeorgeBurnsWasRight says:

    Sigh. The usual attempt to be “fair and balanced”. Almost all the examples cited are right wing misinformation. But then at the end, there’s an equal number of questions for both left and right to attempt to show that both sides are equally at fault.

    On the “questions for the left” #1 is the only one with validity, but to focus on a single factor oversimplifies the issue to the point of uselessness. #2 is strangely worded, at best. Weather events in 2010 are mentioned, but there’s no attempt to quantify their impact either on 2010 or 2012 food production, and there’s also no comparison to 2012 weather. Then the question at the end ignores the impact of weather as an option for the driver of food prices, so why was it mentioned at all? How about a better question: compare commodities markets which allow 3rd party speculators vs the ones that don’t, and is there any reason to think that the differences aren’t due to the impact of the inflow of money into those markets as “diversification” has become popular among pension plans, hedge funds, and even the investing public. Now there’s an argument for the impact of supply and demand, as the amount of money being invested in these markets is too large for these small markets in various commodities to absorb.

    Question 3 can be turned around- what is in Stewart’s term “removal of corporate personhood” which inevitably leads to the “complete shutdown of the US economy”? The arguments I’m familiar with about corporations are about first, getting their money out of politics by reversing Citizens United, second, increasing their effective regulation (ending TBTF, reforming regulatory agencies from the SEC to the FDA, etc). To be blunt, you know that Stewart has reached a level of hysteria when he’s talking about some single, undefined action as leading to the “complete shutdown of the US economy”.

    To be fair, in his “questions for the right”, #3 is so condensed as to not make sense.

  5. Iamthe50percent says:

    Regarding inflation:
    There is not one inflation rate. All prices do not move in lockstep. The bond market sees low inflation because asset prices are deflating. That is what’s important to bond buyers. Working men see high inflation because the prices of everything they have to buy to survive, food, gasoline, electricity, rent, taxes is going up at double digit rates. They see no solace that this is “compensated” for by their home’s value dropping at 20% rates. And in my case, I can attest to property taxes simultaneously jumping by 22% in one year.

    Regarding the myth of the disappearing baby boomer work force:
    We are not retiring. We are claiming Social Security as a pay supplement to compensate for the above inflation and clinging to our jobs because of the steady drumbeat of assaults on Social Security and Medicare from BOTH parties. Those of us fortunate enough to have (formerly) substantial IRA’s and 401K’s have seen them cut in half or more along with the prospect of means testing SS based on having IRA’s. When a boomer loses a job, he is reclassified as “not in the work force”, “didn’t really want a job”, or “became an independent contractor”. Answer me this riddle, “If the work force is shrinking, WHY THE HELL CAN’T ANYONE FIND A JOB!”

    Finally, regarding “According to the CBO, expenditures for entitlements have increased from a little over 35% of federal expenditures to a little over 60%. Please explain why this does not mean entitlement reform is mandatory.”:

    Because feeding a corrupt Defense Industry, guaranteeing bloated bank bonuses, and endless tax havens for the rich are not the proper function of government. Paying back the promises made to an entire generation of workers IS. Reagan doubled the payroll taxes so that we paid for our fathers’ retirement pensions and pre-funded ours as well. Now that the time to collect has come to collect, we told “That is an entitlement, just unearned welfare. You boomers are just greedy. How can we afford TARP if we pay you. You dumb proles just crawl off and die!” Well, I’m tired of being f****ed. Fifty years ago, the government taught my generation a useful skill, how to kill other human beings with automatic weapons. It’s time to dust off those skills. We will NOT just crawl off and die!

  6. kaleberg says:

    If I remember the 70s correctly, inflation was much higher than the major interest rates. That’s why it made so much sense to borrow and buy stuff and pay it off in cheaper dollars. I know I did and it paid of nicely . That’s also why there was such a big crash when the Fed finally raised interest rates higher than the inflation rate and the whole game ended.

    For the left:

    1) Entitlements are the easiest and the probably best way, to raise the standard of living without raising wages. The economy can easily afford them, it’s just that they’ll take up a bigger and bigger portion of government spending as we all get richer. Sure, we could live without paved roads and save a whole pile of government money, but paved roads, like Medicare, a standing army and the like improve our way of life. In fact, as the economy grows, entitlements should a fair bit of it. It’s just not politically, and probably not economically viable, to raise living standards by dramatically increasing wages. (Dean Baker discusses this a lot.)

    2) The decline in food prices in the face of rising population is the result of a great deal of government activity and intervention in the economy. Yes, they use a market for the final shuffling and allocation, but the real work is all planned government manipulation, especially in China and India. You just don’t read the right reports. Science magazine is full of discussions about this, how the governments operate, the science behind it and so on. Historically, the market has done a terrible job improving food security and industrializing without massive government support. In fact, it has never done so.

    3) It depends on what you mean by corporate personhood. No one is arguing against giving corporations standing in court, but they are simply not people. They are government chartered collectives granted particular privileges by the state. As creations of the state, they need to be regulated extensively by the state. Unlike human beings, they were not endowed with inalienable rights by their creator. They were granted specific rights by government statute.

  7. streeteye says:

    If corporations are people, then I guess that makes a lot of us slaveowners.

  8. Joe Friday says:

    Hale,

    For the political left

    There is no “political left” in this country. In global terms, the Democrats are centrists, and there is one, count him, ONE federally elected officeholder that is a Socialist.

    According to the CBO, expenditures for entitlements have increased from a little over 35% of federal expenditures to a little over 60%. Please explain why this does not mean entitlement reform is mandatory.

    Putting aside that you’re lumping expenditures that are not financed from the general fund in with those that are (almost 2/3 of general revenue spending is for the Military Industrial Complex and interest on the Reagan/Poppy Bush/Chimpy Bush federal debt), the simple answer is that entitlements are just not the drivers of our massive federal deficits & debt according to the independent non-partisan CBO.

    In 2010. the world experienced a series of weather events that severely limited global good supplies. In addition as countries such as India and China have increased their standard of living, demand has increased. However, by 2012, world output of agricultural goods has increased thereby lowering cost pressures. Please explain why this example does not indicate that a market based system is the most efficient way to allocate resources, nor the fact that demand and not speculation was the primary driver of prices.

    Name me a federally elected official who is against the “market based system”.

    Please explain why the removal of corporate personhood would not lead to a complete shutdown of the US economy.

    Please explain why it would.

    Nobody I know of is saying you cannot be a corporation. You simply have to pay your fair share of the tax burden and don’t get the same rights as an American citizen, because you’re not.

  9. 4whatitsworth says:

    Well, I was no fan of Bush Jr. But maybe the congress has something to do with it.

    In the interest of lies, dam lies and statistics take a look at this..

    http://www.politicalmathblog.com/?p=383

  10. Bill Wilson says:

    Both Mish and Krugman are full of political opinion, but they’ve both made some pretty good calls, and produced excellent content.

    Not everyone with a political opinion is a shill. Clearly, some people are. Instead of making generalizations about everyone. Identify the shills, and state your case against them. And of course, everyone has a political bias. Anyone who claims that they don’t, should not be listened to.

  11. Frilton Miedman says:

    Excellent and honest critique of both sides.

    On “corporate personhood”, I don’t think most people who extol this realize that’s an endorsement of Fascism,
    “Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.”
    – Benito Musollini.

    As wealth condenses into a smaller and smaller group, entitlement spending offsets it by gradually incorporating programs into the “middle” class to offset their inability to Afford necessities. (This is what the Heritage foundation or Koch brothers calls “wealth creation”)

    Of “entitlement” spending, the bulk is healthcare.

    When I hear the term “entitlement” spending, it infuriates me, tell a 35 year old father of two, a laid off IT engineer who let his Cobra lapse to afford keeping his family fed that an operation to save his life is an “entitlement”….I suspect his wife and kids will debate the use of that word.

    The other thing that pisses me off to no end, the constant reference to “spending” with little reference to “cost”.

    If we allowed the Sherman anti-trust to apply with healthcare (the only U.S. industry that’s exempt for reasons unknown {lobby}), though we might see a few 8 figure executive salaries go down and maybe a few 6-7 figure sales positions rendered obsolete, or at least have wages readjusted for efficiency.

    We would also see “cost” go down, which in turn would bring “spending” down.

    Better yet, the tens of millions in bribe money “SPENT” in D.C. by healthcare companies could be used instead to affect cost reduction as well by acknowledging the Constitution’s prohibition of bribery.

    Unfortunately, this would not benefit John Boehner’s stocks in healthcare, I was horrified to learn he was buying healthcare stocks as he ranted “HELL NO” to Obamacare.

  12. bobmitchell says:

    Come on, someone throw Ezra under the bus. A few times, everyday.

    That, most people could agree with.

  13. blackjaquekerouac says:

    You have no integrity. Thanks for bringing up the word tho. Now eat, shit and die like all the rest of the “economists” who think politicial talk is useless moron.

  14. mo·ron/ˈmôrˌän/ Noun: A stupid person. Synonyms: imbecile – fool – cretin Hale “Bonddad” Stewart who never heard of QE or Stealth QE, the ECB, LTRO, ESFS or IMF.

    Do you recall that point in the documentary, “Inside Job”, you know where that guy is talking about his friend who was a bond trader that made so little that he had to drive a cab or a bus and then when things took off he was trading bonds full time and pulling down some serious cash —- because he thought he was smart. Was he talking about Bonddad???

    What an effing clueless economic moron!!!!!!!!!!!!!!!!!!

  15. GeorgeBurnsWasRight was right. This post reeks of false equivalence.

    To repeat: Sigh. The usual attempt to be “fair and balanced”. Almost all the examples cited are right wing misinformation. But then at the end, there’s an equal number of questions for both left and right to attempt to show that both sides are equally at fault.

    Hasn’t ever been thus, shall not ever be thus, but for the time being, the GOP & its affiliates and hangers on are completely untethered to reality. There’s nothing similar going on on the left.

    As to question #1 for the left, look at the budgets of the (healthier) OECD countries, look at projections of US spending on health care, look at US spending on health care vs. the rest of the OECD, and explain to me why the problem with the budget is anything but health care costs.

    As to #2, it’s the 21st century. Who are you even arguing against? Who doesn’t like the market? As a left-leaning person under 40, I’ve almost never met anyone who counts as that– certainly, that has nothing to do with the Democratic Party.

    #3: People are angry about corporations being granted equal treatment as citizens under the First Amendment, not about corporate personhood. That is what’s new. See, e.g., Rehnquist’s dissent in First Bank of Boston v. Bellotti: “The free flow of information is in no way diminished by the Commonwealth’s decision to permit the operation of business corporations with limited rights of political expression. All natural persons, who owe their existence to a higher sovereign than the Commonwealth, remain as free as before to engage in political activity.” No one who’s able to get into a meeting with a congressman– much less anyone serving in Congress– wants to eliminate corporations.

    Meanwhile, the then-president of the US, Pres. Bush, claimed in 2006 that reducing revenues increased revenues. There’s just no equivalence between the two sides right now. Your effort to pretend that there is greatly detracts from the value of your argument in this post.

  16. how Obtuse does ‘someone’, really, need to be, to repeat this, tired, Canard..

    1.) During the 1950s, the highest marginal tax rate was over 90%. In addition, Congress raised taxes to pay for the Korean War. Yet, this decade was incredibly prosperous for the US economy with GDP growing at incredibly strong rates. Why didn’t this high rate of taxation cause a recession (in fact, why did the economy thrive) and why didn’t it lead to people “going Galt?”

    ??

    Who cares what the ‘highest Marginal Tax Rate was? (what does that ‘tell’ anyone?)

    ‘Effective’ Tax Rate is the ‘Driver’, yes? Hey, Hale, What was that #, in the ’50s?
    ~~

    “…Yet, this decade was incredibly prosperous for the US economy with GDP growing at incredibly strong rates…”

    flippin’ Dude should cue-up some ‘John Donne’..

    forget about, *True, ‘Consumer Repression’ (~1932-~1945), here, in the U.S. ..

    Wasn’t the ROW (Rest of the World) ‘re-Building’ from the ‘deleterious’ effects of WW II?

    Weren’t ‘We’ providing (a lot /the majority) of those ‘Goods’ ?
    ~~

    “…Why didn’t this high rate of taxation cause…” the, later, adoption of the AMT?

    Hale, guess what?, It did!~

    care to see some of..

    “…Why are more and more people having to pay the Alternative Minimum Tax (AMT)? And what is it? This controversial tax was enacted as part of the Tax Reform Act of 1969 to target the rich. But because the rates were not adjusted for inflation, it now targets not only the rich but also the middle class, and there seems to be no end to the problems its causes. The New York Times reported that “by 2010, nearly 30 million taxpayers will be hit — among them, a staggering 94 percent of married filers who have children and make $75,000 to $100,000.” The Alternative Minimum Tax was designed as a parallel tax system to the federal income tax and checks it to ensure that that the people in higher tax bracket don’t evade paying any taxes through loopholes.

    With the AMT most tax deductions are disallowed. In 1969 the minimum tax was a 10 percent flat rate. Over the years the AMT has evolved to also include a corporate AMT; with each tax reform effort from the Carter to Clinton Administration the AMT has increased. As of the latest revision, which was passed in 1993, there is a two tier system: 26 percent and 28 percent for individuals. Here is a look back through media reports and presidential and congressional messages about the origins of the AMT in the Johnson and Nixon Administrations and its subsequent revisions in the Carter, Reagan, Bush and Clinton Administrations.

    President Lyndon Johnson and the Origins of the AMT…”
    by Bonnie Goodman
    Ms. Goodman is a graduate student at Concordia University and an Assistant Editor at HNN.

    http://hnn.us/articles/11819.html
    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=History+of+Taxation+adoption+of+the+AMT

    you know, at the EOD, maybe, ‘Financial “Bloggers” could get their *Facts straight.. (?)
    ~~
    n.
    1. An unfounded or false, deliberately misleading story.
    http://www.thefreedictionary.com/canard

  17. Jack says:

    Great post. To me it proves the adage “lies, damn lies and statistics”. Also, it seems to have brought out a new class of ecopoliticos (my word).

    Oh the horror of it all. Some of you seem to be having the vapors.

    Sheesh.

  18. Frilton Miedman says:

    reflectionephemeral Says:
    March 3rd, 2012 at 7:34 pm
    GeorgeBurnsWasRight was right. This post reeks of false equivalence.

    “As to question #1 for the left, look at the budgets of the (healthier) OECD countries, look at projections of US spending on health care, look at US spending on health care vs. the rest of the OECD, and explain to me why the problem with the budget is anything but health care costs.”

    ~~~~

    I truly hope and pray this theme becomes more and more discussed publicly in the open.

    To reiterate my earlier statement -

    Frilton Miedman Says:
    March 3rd, 2012 at 6:19 pm

    “Of “entitlement” spending, the bulk is healthcare……

    ….The other thing that pisses me off to no end, the constant reference to “spending” with little reference to “cost”.

    If we allowed the Sherman anti-trust to apply with healthcare (the only U.S. industry that’s exempt for reasons unknown {lobby}), though we might see a few 8 figure executive salaries go down and maybe a few 6-7 figure sales positions rendered obsolete, or at least have wages readjusted for efficiency.

    We would also see “cost” go down, which in turn would bring “spending” down.”

    ~~~~

    While there’s almost complete focus on “SPENDING,” no one is discussing the apparently taboo topic of “COST”, God forbid we encroach corporate profits and, ahem…”job creators”.

    It just baffles me that over 40,000 Americans die every year for lack of funds to afford health insurance & healthcare, while it’s common for health insurance executives to collect $10-$30 million per year salaries.

    The costs in foreign trade in lost jobs due to the cost differentials in healthcare is staggering.

    Half of a salary of $10 million would insure 300 families with 3 members, 900 people for half the salary of a health insurance executive who makes $10 million, and the executive would still be making 200 times the individual median wage.

    Is that a “free market”?…didn’t Milton Friedman have a problem with what he called “technical monopoly”?

    King George III and the East India British Tea Company would be proud of this “free market”.

    I really, really want Republican special interests like Heritage Foundation and Koch brothers to stop aligning themselves with Libertarians…corporate freedom is NOT personal freedom, corporations are NOT people.

  19. Apinak says:

    I think we have also established that bond traders should not write about politics. It is clear that Bonddad does not understand what corporate personhood is, or what is being debated.

  20. Bob A says:

    You might as well ask a thief to stop stealing, an alcoholic to stop drinking, a prostitute to stop hooking…

  21. Frilton Miedman says:

    Bob, indeed, Reaganomics founder Paul Craig Roberts says the problem of corporate bribery controlling the government may well have to come down to a revolt by the people.

    Meanwhile, the very same corporate interests invoking bribery over the government are using the name of Reaganomics to somehow rationalize bribed government in exchange for tax policies and monopolies.

  22. Apinak says:

    The questions for the left are 1) entitlements grew from 35% at some unspecified time to 60% at some unspecified time, why isn’t this a problem and 2) why won’t you admit that free markets are great?

    Well, entitlements are either fully funded through 2040 in the case of SS (and not included in the general fund anyway) or rising as a result of out-of-control health care costs. The reason health care costs in the U.S. are twice as high as the rest of the world are because the free-market is not a good way to run health care. Thus, the skepticism for answering every economic question with lower taxes and less regulation.

    So, the first two questions are bogus and based on ridiculous simplification and false equivalence . Most liberals believe in a well regulated market were appropriate. As for the third question, it is just bizarre. There is no conceivable reason ending corporate personhood would destroy the world economy. Corporations are a legal entity and should only be given the rights that we want them to have. Subverting our democracy with unlimited spending is clearly not one of those rights.

    Frankly, I expect a better quality of post on TBP.
    So we h

  23. Investradamus says:

    How the shit does a chart showing federal tax revenue as a % of GDP translate into “the overall rate of taxation is currently near its lowest level in 60 years”? That’s not what that chart is showing. I have a hard time believing this guy doesn’t know that, which leads one to believe that it’s an intentionally disingenuous claim. I find that a little amusing, given the nature of the article.

  24. jd351 says:

    @4whatitsworth Says:
    March 3rd, 2012 at 5:44 pm

    Well, I was no fan of Bush Jr. But maybe the congress has something to do with it.

    In the interest of lies, dam lies and statistics take a look at this..

    http://www.politicalmathblog.com/?p=383

    Your kidding right. I feel sorry for you, if your not….

  25. benzeke says:

    C’mon, man.

    The first rule is ‘check the links’.

    The second rule is ‘watch out for aggregates’.

    Oh, and add stuff up.

    The graph showing the percentages of mandatory spending, discretionary spending and interest adds up to more than 100%. Interest on the debt is double counted. What’s with that?

    The entitlements (plural!) listed are not 60% of the budget as Mr. Stewart asserts. They are a percentage of mandatory spending, which includes interest on the debt.

    Entitlement reform is a euphemism for cutting Social Security which is about 20% of our expenditures. Medicare and Medicaid are about 23% of our expenditures. The cost of health care is our #1 problem. Lumping this problem with ‘entitlements’ or ‘mandatory spending’ is either slovenly or deliberately misleading, and not worthy of The Big Picture.

    Interest is about 6% of our budget.

    Other mandatory expenditures total about 13% of our budget. This category includes Federal retirement, VA benefits and deposit insurance. Oh, and unemployment benefits. Maybe if we helped put more Americans to work revenue would be up and mandatory expenditures would go down!

    So, mandatory expenditures are about 62% of our budget, with Social Security and the two medical programs comprising about 69% of that total.

    So, as far as I can tell #1 for the left is just the usual right wing bs. The link to Mr. Stewart’s blog actually points out the our health care cost problem. Why not go with that instead of the bs phrase ‘entitlements’? Maybe it would then belong in the ‘For the Right’ section and he would lose his faux centrist cred.

    Points #2 and #3 are ably handled above. I want predatory and destructive corporate behavior stopped. Please: name a single significant public figure who advocates a Soviet style planned economy. Strawman propped up and knocked down is not an argument worthy of The Big Picture. And yeah, corporate personhood is what makes our economic system work? Spare me. The Citizens United decision is a scab of the butt of American jurisprudence.

  26. ilsm says:

    About 60% ( seen the past couple of decades) for entitlements up from 35% in the 60′s when there were none………………….

    If you were going with the tax institute’s attack on the 99% since the mid 1990′s 60% is middling for entitlement “burden”.

    About 20% for wasteful wars, which is half the worlds military with one twentireth the population…. about reforming that enmpire thing and the war profiteering.

    And taking 2007 as 100 (FRED chart) for industrial output, talk about flying out of a trough.

    And the other FRED chart……………… Exactly what are real services? Try the chart stripped of “services”.

  27. Petey Wheatstraw says:

    Economists are no better at economics than are politicians or any goddamned body else. If they were, we wouldn’t be where we are (if, in fact, anyone could pin a point on a continuum, in the first place). We wouldn’t have failed banks.

    Then, there’s the theory vs. observable fact differential. Inflation is low? Not at the grocery store, it isn’t, nor at the gas pump, nor in the rigged stock markets, nor in in supply of monetary units (e.g: the number of dollars floating around, physically or electronically). Inflation is high? Not in housing, autos, or wages.

    So, we have an inflated (fiat) monetary base, with little to no real progress to show for that inflation, other than being forced to call into existence even more of the same, ad infinitum, to keep the fiat money dishonesty going (Tangentially, I’d really like to know, from Bonddad, or anyone else, where the “capital” came from by which we have so far, saved our bacon. If the answer is that we borrowed capital from the Chinese or Japanese, I’d like to know where they got it to loan to us, since it is all denominated in our currency).

    The reality is that the system is gamed, daily, by politicians with the full involvement of economists (there is no left or right distinction). Our economy is perpetuated by dishonesty, fraud, and lawlessness. The reality is that the middle class is fine, as long as you ignore the un- or under-employed and the declining wages earned by the working/producing public. The reality is that GAAPs would never have to be changed if our economy was hunky-dory.

    So, Mr. Bonddad, tell me: Are we safe and secure, now, or not? Can we trust the numbers (any numbers from any source), or not?

    Our command economy might be working for some, and it might be working on paper (depending on the definitions and metrics cherry-picked), but it is based on dishonesty, fraud, and lawlessness, and it is rending the social fabric of our nation — not promoting its general welfare, as it is supposed to do. Thus, both the first and second charts you provide are true in the contexts of their own political and economic dishonesties.

    As for taxes and tax rates, please tell me, in light of our fiat system, why and how our monetary system would fail if taxes were zeroed, across the board. Please tell me what function a corporation serves that a contract could not, if not solely as a shield from criminal liability (keeping in mind theory vs. fact*). Please explain how you make any distinction, whatsoever, between your equation of reality and economics vs. cluelessness and politics (the distinctions you draw are are disingenuous, shallow, and vapid, at best).

    * See BR’s earlier post: “Foreclosure settlement a failure of law, a triumph for bank attorneys”

  28. Petey Wheatstraw says:

    Shorter critique: Bullshit.

  29. soulmatic09 says:

    I haven’t been to TBP in awhile, and needless to say I’m taken aback that this is the first post on the site.

    Joe Friday is absolutely correct when he says there is no Left in this country. But I’ll address your strawman, as you have invited me to:

    1) Entitlements are a dog whistle for health care spending & debt. The problem is the growth in costs. The debt problem was exacerbated by military misadventures, both of which have been pointed out above.

    2) These are two unrelated points thrown together into a word salad. There are multiple causes of rising agricultural prices (peak oil, peak water). Further, you know that rising output does not always mean falling prices, you also know that GS already admitted rising commodity prices was due to speculation, and who said we should get rid of markets? *Unregulated* markets are the problem.

    3) The US economy is not dependent on corporate personhood for survival, that is just silly. And if it were, that is part of the whole problem, because at that point as a group they are bigger and more important than the law. Corporate personhood is about removing blanket immunity from organizations that do harm to our society. Limited liability is one thing, but we are well past that at this point.

    Also, if you’ve been paying attention, you would have noticed that both our politicians and economists have failed us. The last thing I need is an economist giving me a lecture about economics. I’m better off getting a lecture on alchemy from an alchemist…

  30. Futuredome says:

    Sorry Pete, but your wrong on several accounts:
    1.Gas prices and grocery prices ARE NOT HIGH!!! If I hear that one more time, I will scream. To many people living off the Asian crisis of the 1990′s. We were getting subsidized cheap prices. Clinton also was pushing prices down through the SPR. Destroy Chindian economies and you will……understand.
    2.The Monetary base is elevated…….globally, not so much domestically. I blame foriegners for that problem.
    3.Wages are lower……to a extent, but that was after a decades of major runups. Especially with the Obama admin putting higher taxes on offshoring, this is beginning to reverse as higher paid industrial jobs are coming back home and it is starting to show(which is amusing since we are only talking about a modest chunk so far).
    4.You overuse the word “fiat”. Fiat gold standards are fun as well. Taxes can be zero, but higher taxes moves the fiat system to equalibrim by moving savings from wealthy to non-wealthy. See the end of the great contraction.

  31. swag says:

    All this shit is really beginning to bore me.

    I’m going to go make art.

    Or biscuits and gravy.

  32. palolololo says:

    As to point 3 for the Left, “I’ll believe Corporations are people when Texas executes one”.

  33. olddogDALTX says:

    Good points all around but consider that the exit polls in November will be a measure the number of un/under employed workers the USA has in REALITY. There is also a hysteretic effect. Those recently un/under employed won’t remember with warm feelings the tribulation they have been through, especially those who have had a major economic setback. Then there are those who fear next year having seen what happened to their previous coworkers. Political blogging as well as economic analyses are sham election issues for those amongst us, who have seen the near (hopefully near) death of the American dream. The severity of the last recession does not bode well for November’s election, if one is to judge by the sanity of the outcome.

  34. bulfinch says:

    @swag: Best post I’ve ever read on here.

  35. Petey Wheatstraw says:

    Futuredome:

    1. Gas prices also differ from state to state, and even station to station. Gas and grocery prices are higher here than they were, previously (as a trend). They are also higher elsewhere. How is that not price inflation?

    2. What do you think the “Q” in “QE” stands for? That the “money” has gone into the black hole of bad debt makes little difference.

    3. Show me decades of “major run-ups” in wages.

    4. Fiat means what it means:

    : a command or act of will that creates something without or as if without further effort.

    Again, tell me where all of the dollars for QE came from, if not nowhere.

    You seem to ignore the observable and demonstrable fact that taxes can also redistribute money from the wealthy to the wealthy, from the middle to the top, and from government to private interests (as in from the government to the M/I complex, to support wars of choice/convenience).

    Have we not witnessed the redistribution of money to the top percentages over the past 30 years?

  36. [...] Memo To Political Bloggers: Please Stop Writing About Economics; You Really Suck At It By Guest Author – March 3rd, 2012, 4:00PM [...]

  37. Don Levit says:

    Apinak wrote:
    Entitlements are either fully funded through 2040 in the case of SS (and not included in the general fund anyway) or rising as a result of out-of-control health care costs.
    Many people believe SSuis fully funded until the trust fund is exhausted, including Stephen Goss, the chief actuary of Social Security.
    This suggests there are no impacts on the general fund, as apinak concluded in his statement.
    This is simply false. Don’t take my word for it. How about this quote from the Social Securuity Advisory Board:
    From a paper entitled “Social Security: Why Action Should be Taken Soon,” published by the SSAB:
    Pages 14-15 “Income from payroll taxes and taxes on benefits is expected to be higher than spending for benefits and administrative expenses until the year 2017. Thus, until 2017, the Social Security program will be a net plus for the Federal Budget. The U.S. Treasury borrows Social Security’s surplus income, uses it for other government purposes, and issues bonds to the Social Security trust funds.”
    “Beginning in 2017, Social Security expenditures will be higher than tax income. At that time, an equal amount to all of the tax income and a part of the interest due to the Trust Funds on outstanding bonds will be needed to pay the benefits that are due. TO THE EXTENT THAT PROGRAM COSTS EXCEED SOCIAL SECURITY TAX INCOME, THE FEDERAL GOVERNMENT WILL HAVE TO FIND ADDITIONAL FUNDS ELSEWHERE TO MEET ITS OBLIGATIONS TO SOCIAL SECURITY BENEFICIARIES.”
    “BEGINNING IN 2027,SOCIAL SECURITY SPENDING WILL EXCEED TOTAL SOCIAL SECURITY INCOME (TAXES PLUS INTEREST ON THE BONDS). AT THIS POINT, IN ORDER TO PAY BENEFITS THAT ARE DUE, THE GOVERNMENT WILL HAVE TO BEGIN PAYING BACK THE PRINCIPAL OF THE FUNDS IT HAS BORROWED FROM SOCIAL SECURITY BY REDEEMING THE BONDS HELD BY THE TRUST FUNDS.”
    http://www.ssab.gov/documents/WhyActionShouldBeTakenSoon.pdf.
    Don Levit

  38. pintelho says:

    I count myself lucky to be aware of this. Even though I am a liberal I find myself constantly at odds with their lack of the economy (my current struggle is with liberals who have been constantly clamoring for more jobs in upstate NY and saying how manufacturing jobs have been usurped….and these people are against Fracking by any means measure or regulation.)

    In any event, my struggle is with the question Why? Why do these factions do this? Why do they espouse these views? If it is to gain power, fine. But what good is power when the ends of that power lead to the ultimate destruction of it (see Bush years leading to collapse of Republican supremacy…well sort of).

    Politics then must be no more than a religion. (Some economic views are also similar…eg. efficient market theory).

    It is a group of people who will lie cheat and steal just to keep people sending them money to that they can maintain their position of liars, cheaters, and stealers.

    They are the vilest of people, and the scurge of the earth.

    Economists who keep saying that austerity is the right thing while at the same time believing that banks need to be bailed out are equally evil. Or, Economists who think people will always act in their pocketbook’s best interest need look no further than the price of an iPad vs an Android tablet…surely the quality of the product cannot possibly make up for the vast differences in price usually seen in this market.

    In anycase…thanks for posting this and I applaud you for doing so. More of this please.

  39. Petey Wheatstraw says:

    louis:

    thanks for the WZ link. Saw him at a small venue, just before he died — the songs kept coming, making me realize just how prolific and extensive his catalog was. Then again, I’m just an excitable boy (ooooh, wah oooooh . . .).

  40. rktbrkr says:

    That export chart looks unbelievable. We may be experiencing a boom in raw products exports, high grain and commodity prices but I don’t think it touches the high value added things like finished goods exports that create jobs – good paying jobs.

    Mfgr jobs index may have come back from 85% to 95% of Bush era benchmark but there is a larger workforce now in spite of the discouraged dropouts so the goal is to get to more than 100%.

  41. m111ark says:

    The only left or right is in the minds of the sheeple. Those that know, know there’s only those on the inside and those on the outside. All this left/right, conservative/liberal, Democrat/republican screeching is only to distract the sheeple so the real business of sucking up more money and power can continue. Economics is simple, it takes a FED trained economist to make it complicated. The real problem is the monetary system; fix that and most of the rest of the problems fix themselves. Debt-money does not and CANNOT ever be a viable monetary system… it’s a very sure path to collapse. Self-interest is self destructive – Adam Smith’s compilation resulted in a necessary but transitory economic paradigm. Our self-interest, absent a mind aligned with the cosmic mind, necessarily results in selfish interest – a sure road to self-destruction. Governments cannot remain viable as long as they’re forced to borrow their own currency. Only a FED trained economist can fail to see that.

  42. Apinak says:

    Don,

    The fact that we have been borrowing from SS for decades and will eventually have to pay it back is not an argument for cutting SS. We have been paying excess regressive payroll taxes for 25 years with the explicit promise that these dollars would be used to fund SS. Remember how Al Gore said we should put them in a lockbox? George Bush and now Obama have decided to borrow this money and use it to pay for massive tax cuts for the rich, excessive military spending, and endless wars. In return they want to cut SS after we have already paid for it. If they get away with it, it would be one of the most massive transfers of wealth from the poor and middle class to the rich in history.

  43. NeutralObserver says:

    Thanks Petey for your succinct analyis, once again.

    BR – This post is really way below the quality readers of TBP expect. If you posted it as a teaching device you should have done the analysis yourself instead of leaving it to your readers like Petey.

  44. rd says:

    I think one of the biggest issues that I have seen in the United States is a lack of a generally understood social compact between the citizenry and the governed on what government is and is not supposed to do.

    One of the reasons that many of the “socialist” countries appear to be able to have relatively high taxation in a successful economy is because there is a general consensus on what the money is supposed to be spent on. As a result, much of the focus can then be on doing those actions efficiently, so you actually end up with society wide benefits like universal health care.

    The United States federal government appears to have been focused on proving that it cannot provide government services effectively for the past decade or so. As a result, we have high levels of spending without the benefits that many other countries see. Also, instead of the spending being declared openly, much of it is done through back doors, such as subsidies, tax deductions, and tax credits so the populace does not even know who is getting what money.

    Also, there are many mandates created, but not funded, by higher levels of government and then pushed down one to two tiers for funding and execution. In NYS, a significant percentage of my county property tax bill is for Medicare which is actually mandated by the Federal and State government. In countries like Canada, these types of mandates are funded at the level where most of the rules are set and executed.

  45. louis says:

    @Swag “All this shit is really beginning to bore me.”

    They beat you.

  46. Investradamus says:

    @pintelho

    Tell your friends that are against fracking to learn the difference between well stimulation by perfing and fracking, and cementing the casing and liner cementing. It is physically not possible for fracking to create communication channels to water sources, when the cracks that are formed are a few feet in length, 5,000-10,000ft below the closest drinking water source. Fracking has never caused water contamination since it started in 1947. The number one reason for any contamination is bad cement jobs. That’s not unique to shale gas plays or other tight gas/oil formations. It’s the most important part of any drilling operation and is commonplace for all types of drilling, including your conventional well. Look at the BP Macondo spill in the Gulf. That had nothing to do with fracking, but everything to do with a bad cement job.

  47. Frilton Miedman says:

    It amazes me that BR draws in such great discussions, the ratio of personal insult to meaningful debate here makes other blogs look silly.

    Several comments I thought I ought hat-tip to -

    Apinak Says:
    March 4th, 2012 at 10:40 am
    “Don,

    The fact that we have been borrowing from SS for decades and will eventually have to pay it back is not an argument for cutting SS.”

    ~~~~
    Absolutely, also, it’s very frustrating listening to the constant references to “SPENDING”, while any time we attempt to focus on “COST”, we hear a plethora of accusations of “government takeover”, “Socialism” or rants about “free markets”.
    While we hear corporate puppets in D.C. rant about medicare cuts to those who cannot afford costs as is, healthcare executives are raking in 500+ times the median wage while paying lower effective tax rates than those who struggle to afford their goods. – 40,000+ whom die each year for lack of funds to pay as is.
    ~~~~

    rd Says:
    March 4th, 2012 at 10:52 am
    I think one of the biggest issues that I have seen in the United States is a lack of a generally understood social compact between the citizenry and the governed on what government is and is not supposed to do.

    ….One of the reasons that many of the “socialist” countries appear to be able to have relatively high taxation in a successful economy is because there is a general consensus on what the money is supposed to be spent on.”

    ~~~
    Complete agreement, read above
    ~~~~

    soulmatic09 Says:
    March 4th, 2012 at 12:23 am

    “1) Entitlements are a dog whistle for health care spending & debt. The problem is the growth in costs.”

    ~~~~
    Again, the focus on spending instead of root costs with some kind of invisible dog-fence placed over the application of the Sherman Anti-trust to regulate monopoly or price fixing.

    We lost 3,000 lives in NYC on 9/11 & spent $2 to $4 trillion on military & defense contractors.

    We lose 40,000+ lives every single year, and we’re hearing we may have to expect to lose even more human lives each year rather than interfere with the “free market” & protect corporate healthcare profits.

  48. dancingdiva says:

    It’s far too easy to cherry pick statistics to prove your point. Most they are trying to influence aren’t knowledgable enough to see through the bullshit. And what’s worse – even if they are trying to be intellectually honest, there are so many forces in the global economy that you really don’t know for certain whether it’s correct.

    That’s not only true of politicians and political bloggers but market strategists and economists as well.

  49. hkent says:

    Our model for medical care is an outdated product of WWII that allowed employers to deduct all costs for medical expenses, thus employers, not employees, own the policy. Medicare sets the payment schedule and the services provided, doctors check off the procedures used: call it “dim sum” medicine. Inefficient and costly, with lots of fraud. Insurance companies negotiate with providers and employers over rates and those are completely unknown to the employee. State insurance commissioners determine what services/procedures are to be included in all policies. This is not a free market. Free markets are determined by consensual agreement between parties. Medicare is close to “eating our lunch” and Obamacare is a massive generational transfer, and not from the rich. Demographics are destiny. Collectively, hopefully, we can choose something akin to the Wyden-Ryan model, where as free adults can decide or we will have a fifteen person panel decide for us.

    Promises have been made that can’t be kept, or at least kept on the current scale. And it isn’t “the rich” or “corporations” that led us here. Since about 1994 the total public and private debt to GDP has rise around 50%:240% to 370%. That’s a lot of leverage folks…too much cheap money:bad monetary policy, the heart of our misery. The piper always gets paid. Finally, just an opinion, too much hot air anger here.

  50. Investradamus,

    to your Point (a very good one, btw), How? is it that ‘peep’ (presumably, so interested in a Topic) don’t, even, bother to Understand the basic Mechanics of it?

    not ‘All’ of these are ‘Poli-Shills’, are they?

    continuing Instances of ‘Useful Idiots’, yes?
    ~~~

    Useful Idiots: Green!
    March 3, 2012
    By DBKP Humor-Satire-Graphics

    by James Hudnall & Val Mayerik

    The Lamestream Media, Corporate Mainstream Media, Mouthpiece Media, Dinosaur Media, Legacy Media, MSM, Mainstream Media, Old Media, Moron Media, MSM: whatever you call it, they’re mostly Useful Idiots. By James Hudnall & Val Mayerik…

    http://deathby1000papercuts.com/2012/03/useful-idiots-green/
    ~~

    “…The most famous of these was the New York Times’ Moscow correspondent, Walter Duranty, who won a Pulitzer prize for telling people what they wanted to hear, rather than what was actually happening. Duranty assured his readers that “there is no famine or actual starvation, nor is there likely to be.” Moreover, he blamed reports to the contrary on “rumor factories” with anti-Soviet bias.

    It was decades later before the first serious scholarly study of that famine was written, by Robert Conquest of the Hoover Institution, always identified in politically correct circles as “right-wing.” Yet when the Soviets’ own statistics on the deaths during the famine were finally released, under Mikhail Gorbachev, they showed that the actual deaths exceeded even the millions estimated by Dr. Conquest…”
    http://www.jewishworldreview.com/cols/sowell090100.asp
    ~~
    “WHY THIS WEB SITE ?

    Useful idiots is a name that no group of people would like to be called. It is however, what most Americans are relied upon to be by the powers that be. When the voting segment of our country fails to vote to stay free and instead allows itself to fall for the same old word games and mind manipulation, it sadly earns the title of useful idiots. In contemporary America, too many Americans are naive about their political “system” and its politicians. Therefore, we are as a people, where we are, because we allow it to be so. You see, America is a land of plenty, plenty of food, plenty of money, plenty of gods, plenty of corrupt politicians and alas, plenty of useful idiots that repetively vote for them.

    America is also a land of plenty of mindless indifference towards the useful idiots and where their misguided votes are taking all of us…”
    http://usefulidiots.com/

  51. Mr Reality says:

    I read Hale before he had his own blog. He posted diaries over on Dailykos. His posts about the (then) coming financial melt down in the real estate markets was cogent and spot on. He enjoyed that accolades of the members of Dailykos for several years and then the praise stopped and he gathered his toys and went to where he is now.

    So, why did he leave? His diaries after the bubble burst seemed more concerned with “the markets” than with the people affected by those markets. Also, he seemed rather thin skinned and when the accolades stopped and the brickbats started he ran away.

    There are several liberal economists with Noble Prizes: Krugman, and Stiglitz to name two. Should they just STFU because they are liberals? I don’t think so. Economics IS a political endeavor because it attempts to measure human endeavors (hopefully for the betterment of all humans).

  52. Frilton Miedman says:

    Mark, though I agree with your “useful idiot” concept, I debate two points -

    1 – In context to Plato’s allegory, people will base their reality according to available facts (shadows on Plato’s cave), here, Fox network has 60% of the news audience and Fox has repeatedly been exposed not only for bias, but for manipulating fact to influence votes and public opinion to the extent of blatant lies in many cases. – A government option is not a “government takeover”, there never were any “death panels” in the healthcare bill yet I spent months debating these lies with Fox drones.

    Ultimately, Fox had beaten Democracy using the same propagandist tactics that Hitler had, by inserting parAnoid fear of “communism” into the public, he was able to convince them to bypass their Constitution.

    Fox makes the case for regulation over media monopoly (while NOT interfering with the 1rst amendment), or at the very least, to be required to disclose what’s news from what’s opinion.

    2 – On being angry with the voting populace for “allowing” these people into office.

    The people are presented with choices that are selected via the amount of money available for each candidate to campaign.

    That money comes with a price – in other words, we’re presented with choosing the lesser of evils in most elections.

    My case is proved, Buddy Roemer (R) is by far the MOST qualified candidate this presidential election, he has substantial business experience running his bank, he also has years of experience as an effective political leader.

    The reason he’s not doing well, he refuses corporate money.

    The ONLY candidate I’d vote for over Obama can’t even break 1% in polls because he wants to do the right thing.

    I cannot blame “useful idiots” for this, I blame greed, corporatism and bribery between government and special interests who have refused to recognize the Constitutions prohibition of bribery..

  53. La Marque says:

    The treasury market is not right in my book. Hmm, the FED is the largest holder of treasuries, add all of the foreign countries buying them along with many retail investors just looking to preserve principal after suffering thru 2 major downturns in the last 12 years. ZIRP just forces people to go to equities or hi-yield to equal or beat inflation.

    Exports are up. True. Also true is that the balance of trade deficit is up if memory serves me right because we keep buying foreign oil, mostly.

    All political bloggers use economics to bolster their case. I think most people can see thru the rhetoric.

  54. Mr Reality, here..”…Economics IS a political endeavor because it attempts to measure human endeavors (hopefully for the betterment of all humans)…”

    makes a Good Point..

    before.. http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=the+Federal+Reserve+bought+the+Economics+Profession

    the Field of Inquiry was, properly, known as “Political Economy”.

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Political+Economy
    ~~~

    Frilton,

    Keep it Simple..

    re-read some of..

    “…When the voting segment of our country fails to vote to stay free and instead allows itself to fall for the same old word games and mind manipulation, it sadly earns the title of useful idiots. In contemporary America, too many Americans are naive about their political “system” and its politicians. Therefore, we are as a people, where we are, because we allow it to be so. You see, America is a land of plenty, plenty of food, plenty of money, plenty of gods, plenty of corrupt politicians and alas, plenty of useful idiots that repetively vote for them.

    America is also a land of plenty of mindless indifference towards the useful idiots and where their misguided votes are taking all of us…”
    ~~
    differently, I, really, don’t care if ~’People are ‘in a Cave’, or ‘the Shadows’ they believe to ‘Seeing’ are cast by “XYZ”…

    ultimately, it is their _______ Problem, and, by extension, Ours..
    ~~

    Comments: This quotation was well-known in the nineteenth century, and was in fact used by a number of famous figures, including Frederick Douglass, James Buchanan, and William Henry Harrison. It is most often traced back, ultimately, to John Philpot Curran’s statement, “The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt.”[4] While the form in question, “eternal vigilance is the price of liberty,” is most often attributed to Wendell Phillips,[5] this form is in fact far older. The earliest appearance in print found so far is 1817, and it is clear that this source is quoting yet an earlier (unnamed) source. Several nineteenth-century sources claim that this was a quotation from Junius, an anonymous political writer who wrote a series of letters to the London Public Advertiser between 1769 and 1772, but we have not found this exact statement in his writings, either.

    http://www.monticello.org/site/jefferson/eternal-vigilance-price-liberty-quotation

  55. Joe Friday says:

    Don Levit,

    How about this quote from the Social Securuity Advisory Board: From a paper entitled ‘Social Security: Why Action Should be Taken Soon,’ published by the SSAB:

    You need to separate what the trustees say (as well as the Advisory Board they appointed) with what the actuaries say. All of the trustees appointed by Chimpy Bush had already previously held the view that Social Security should be scrapped and given to Wall Street to rake commissions from.

    The U.S. Treasury borrows Social Security’s surplus income, uses it for other government purposes, and issues bonds to the Social Security trust funds.

    Ass backwards.

    By federal statute, Social Security MUST INVEST any surplus in U.S. Treasuries.

    Beginning in 2017, Social Security expenditures will be higher than tax income.

    And ?

    In 14 of the past 75 years, Social Security paid out more in benefits than the government collected in payroll taxes.

    At that time, an equal amount to all of the tax income and a part of the interest due to the Trust Funds on outstanding bonds will be needed to pay the benefits that are due. TO THE EXTENT THAT PROGRAM COSTS EXCEED SOCIAL SECURITY TAX INCOME, THE FEDERAL GOVERNMENT WILL HAVE TO FIND ADDITIONAL FUNDS ELSEWHERE TO MEET ITS OBLIGATIONS TO SOCIAL SECURITY BENEFICIARIES.

    That’s why the trust fund exists.

    BEGINNING IN 2027,SOCIAL SECURITY SPENDING WILL EXCEED TOTAL SOCIAL SECURITY INCOME (TAXES PLUS INTEREST ON THE BONDS). AT THIS POINT, IN ORDER TO PAY BENEFITS THAT ARE DUE, THE GOVERNMENT WILL HAVE TO BEGIN PAYING BACK THE PRINCIPAL OF THE FUNDS IT HAS BORROWED FROM SOCIAL SECURITY BY REDEEMING THE BONDS HELD BY THE TRUST FUNDS.

    The actuaries say that Social Security is solvent through 2085, and they only do 75-year forecasts:

    http://www.ssa.gov/OACT/TR/2009/lr4b3.html

  56. Frilton Miedman says:

    Mark E Hoffer Says:
    March 4th, 2012 at 5:44 pm
    “….Frilton,

    Keep it Simple..”

    ~~~~

    Fine.

    1- Get money OUT of politics, bribery is unconstitutional regardless what you label it – if you’re paying money in exchange for political favoritism, legislation, tax policy or claim you have more “freedom of speech” than those with less money – it’s bribery, nothing else, we need a publicly funded campaign process for ALL qualified candidates, instead of restricting our selections to the wealthiest or those most willing to screw us..

    2- Regulate the level of market share any single entity can own within it’s sector, be it Fox’s 60% share of the news media, XOM, or TBTF banks that dwarf and monopolize global governments with smoke and mirrors financial wizardry & overwhelm Democracies..it has to be stopped, it’s the root of our trouble right now in ALL sectors (not just banks)

  57. ezrasfund says:

    Just gotta say I think you folks have just about covered it. In fact. although agree with many of the rebuttals to the original post (it’s the medical costs, for example) this was in fact a great article for BR to include because it produced a very lively discussion.

  58. Frilton,

    toward your second point..

    if, only, We were ‘Aware’..

    “…Explaining John Sherman has an importance that goes beyond the activities of one midwestern politician. Although his older brother, Civil War general William Tecumseh Sherman, is better known today, John had a far greater impact on nineteenth-century America. His public career stretched from the late 1840s to the end of the century. No single figure was more important in shaping the policies of the early Republican Party or in laying the basis for the broad set of changes called the “Second American Revolution.” Thus, explaining John Sherman sheds light on the direction of the party he helped establish, as well as the creation of the modern industrial state. (1)

    The arc of Sherman’s career suggests the central role he played during a half-century in politics, and the respect his colleagues accorded him. Sherman entered politics as a Whig but, angered by the Kansas-Nebraska Act, became a founder of the Republican Party. Elected to Congress from Ohio in 1854, he soon stood out for his legislative skills and clear sense of purpose. Passing over more senior members, the Speaker in 1856 chose Sherman and two other lawmakers to investigate conditions in Kansas. With Sherman doing most of the work, the committee produced a 1,300-page report that excoriated the proslavery forces and provided an extraordinary source of information for Republican partisans inside and outside Congress. In the ensuing debates, Sherman distinguished himself by his passionate opposition to the spread of slavery and the clarity of his vision for the economy…”
    http://www.highbeam.com/doc/1G1-163046774.html?key=01-42160D517E19126A130E0418016A4B36254D35463B78700E730E0B60641A617F1371193F

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Sherman+Anti-Trust+Act+1890

    We, certainly, could use a(nother) Dose of Abolitionism..(at the min.)
    ~~

    and, to your first..

    http://www.supportingevidence.com/Government/fed_budget_over_time.html

    you know, that if you are going to accrue that kind of ‘spending ability’, in one place, it will Not be left ‘unmolested’..

    http://www.thefreedictionary.com/unmolested
    ~~

    but, at the EOD, this..”…America is also a land of plenty of mindless indifference towards the useful idiots and where their misguided votes are taking all of us…”

    still, seems to be the Issue..

  59. Pantmaker says:

    I tend to agree with BR in his initial point- “Political types don’t care if they do lame economic analysis – intellectually integrity isn’t their “thing”. I also think that economic analysis in general is a vast and complicated world and many “Political types” are blessed with the same ability to be “wrong” as any other group of people. Give him a look but to me much of Hale’s blogging is simply strategic fight picking with popular sites and writers. Keep on eye on people and sites like Mish, Hussman, Auchuthan, ECRI, Zero Hedge, DK for the next Bonddad Blog posts. He’s got to be freakin’ loving the fact that TBP gave him a mention….just sayin. To me Hale get’s a big “Meh”

  60. rtol says:

    While I don’t really disagree with the premise of the article (me, lefty bias, some working knowledge of finance and economics), and agree political writers on both sides are commonly either deliberately or doctrinally obtuse, I do have one sincere question. The article seems to take as a given that corporate person hood (as it is currently defined, including Citizens United) is as essential as energy to the American economy. Why is that? Can someone post a link to a credible version of that argument?

    As a card carrying lifelong Santa Cruz liberal who has been called a right wing troll may times for posting basic economic facts on lefty websites, there is no denying the occasional lack of economic education on the left. Of course, that’s not surprising- most people are ignorant about most things. However, ignorance is not the same thing as a deliberate attempt to inject counter factual information into economic discourse, a common thread of most right wing press. For example, ask any Fox News viewer if (according to the CBO) Obama Care will raise or lower the deficit.

  61. Hugh says:

    I fail to understand why a political commentator should not comment on the falling LPR rate.

    Who should be licensed to comment on such matters? Is Mr Stweart quailified to do so? He was a bond trader and is now a tax advisor; is that sufficient qualification?

    If the LPR figures on the graph a wrong, please let us know. If not, you’ll just have to suck it up.

  62. Don Levit says:

    Joe Friday:
    You are correct that, by law, Social Security must invest the surplus in nonmarketable U.S. Treasuries.
    The intent was to use that surplus and interest only for Social Security beneficiaries.
    Somewhere along the line, what started out to be a true reserve fund BECAME ASS BACKWARDS.
    I had nothing to do with it, and neither did any American citizens.
    Instead of the trust fund representing a store of wealth, it morphed into a hollow artifact, only to be used as collateral for the internal loans between the Treasury and the SS trust fund.
    How can the surplus be in 2 places at the same time, lent to the Treasury and spent and lowered the deficits and still in the trust fund?
    Do you disagree that when the trust fund is used for any shortfall, the financial dynamics are like any pay-as-you-go- system, without a trust fund? It takes general revenues to redeem the interest and principal, just as it takes general revenues to pay for all other government expenses.
    The trust fund merely indicates what can be withdrawn from the general funds without an appropriation.
    Don Levit

  63. Joe Friday says:

    Don Levit,

    You are correct that, by law, Social Security must invest the surplus in nonmarketable U.S. Treasuries. The intent was to use that surplus and interest only for Social Security beneficiaries.

    Not just “intent”, but federal LAW. By federal statute, Social Security Trust Fund monies can ONLY be used for Social Security.

    Instead of the trust fund representing a store of wealth, it morphed into a hollow artifact, only to be used as collateral for the internal loans between the Treasury and the SS trust fund.

    Not quite sure what you’re driving at. The U.S. Treasuries the trust fund invested in are all still exactly where they should be:

    http://www.ssa.gov/cgi-bin/investheld.cgi

    How can the surplus be in 2 places at the same time, lent to the Treasury and spent and lowered the deficits and still in the trust fund?

    It remains in the trust fund.

    Do you disagree that when the trust fund is used for any shortfall, the financial dynamics are like any pay-as-you-go- system, without a trust fund?

    When is the trust fund “used for any shortfall” ?

    It takes general revenues to redeem the interest and principal…

    That’s how it works with any bond issuer.

    just as it takes general revenues to pay for all other government expenses.

    And ?

    The trust fund merely indicates what can be withdrawn from the general funds without an appropriation.

    Nope.

  64. Don Levit says:

    Joe:
    Regarding the loans between the Treasury and the trust fund to pay for current expenses, and lower the deficits – refer to the quote I provided from the SSAB.
    There are many other quotes I can provide from reputable government sources.
    This argument is not between Joe and I.
    It is between Joe, the SSAB, The CBO, the GAO, and even the Social Security Administration itself.
    How can borrowed and spent money be in 2 places at the same time?
    Don Levit

  65. Frilton Miedman says:

    Mark Hoffer,

    Isn’t it funny when you review history, just how many contributions have been made by Republicans to what are now deemed progressive/civil rights attributes to Democracy, Lincoln – civil rights & abolition, T Roosevelt on wealth disparity & progressive taxes, Eisenhower on fighting corporatism…..

    The contemporary neo-con movement has soiled that history by conveniently mingling regulatory, tax and foreign trade policy with the profitable agenda of the highest bidders while entirely ignoring the interest of the majority of Americans.

    The Dems have as well, but not the the extent the neo-cons have.

    As with extreme left being Communism, the opposite extreme to the right goes as far as Fascism…I think the neo-con movement is treading that line now by promoting corporatism – the ultimate hostile takeover of the United States by controlling politicians on tax policy, bankrupting the U.S., then capitalizing on it the same way it’s happening in the E.U. with “bond vigilante’s”.

    As Grover Norquist puts it “Cutting the U.S. government down to a size where it can be drowned in a bathtub.”

    Whether Grover realizes it or not, he’s openly boasting of insurrection.

  66. Frilton,

    it has been a bi-partisan ‘Sell-Out’, of the Country..

    the DLC ‘Dems’ & the neo-con (R)s have been ‘tag-team’-Partners, in ‘the Deal’..

    We should be more interested in ‘Right &Wrong’, not ‘Right & Left’..

    or, differently, ‘it’s the Contents, not the Package..’
    ~~

    the *funny thing, at the EOD, about ‘Communism’/’Fascism’/’Socialism’ is that they all, by different Labels, Totalitarianism.

    and, yet again, that, remains, the ‘friction-point’…Totalitarianism v. Individual Liberty

  67. Joe Friday says:

    Don Levit.

    Regarding the loans between the Treasury and the trust fund to pay for current expenses, and lower the deficits

    What “loans” ?

    refer to the quote I provided from the SSAB.

    Refer to my post in regards to the current trustees and the SSAB they appointed.

    How can borrowed and spent money be in 2 places at the same time?

    You’ve yet to substantiate such a bizarre set of circumstances exists outside of your and others imagination.

  68. Frilton Miedman says:

    Mark E Hoffer Says:
    March 5th, 2012 at 5:42 pm
    “…the *funny thing, at the EOD, about ‘Communism’/’Fascism’/’Socialism’ is that they all, by different Labels, Totalitarianism.

    and, yet again, that, remains, the ‘friction-point’…Totalitarianism v. Individual Liberty”

    ~~~~

    In vehement Agreement,
    the very definition of Libertarianism is to be against ALL forms of totalitarianism, be it right, left, monarchy, plutonomy, dictatorship or any minority control outside that of the people.

    This is why Mark Meckler just left the Tea Party, he openly admits the movement has succumbed to corporate control, he wants no part.

    What has me particularly angered more with the right in recent years is the way they’ve attempted to manipulate and merge corporatism into Libertarianism via angry/fearful propaganda (FOX) terms like “Socialism” and “government takeover”, similar to Hitler’s strategy to overthrow the Weimar and invoke Marshall law by invoking fear and outrage over relatively inert “Communism” plots.

  69. Frilton,

    quite.

    Propaganda works. (Primarily, b/c ‘People’ can’t be bothered by their own Learning..)

    this dude..said, “Father of PR”..

    http://search.yippy.com/search?query=Bernays&tb=sitesearch-all&v%3Aproject=clusty

    will ‘tell you all about it’..
    ~~

    also, see..

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Martial+Law

  70. Don Levit says:

    Joe:
    From a paper entitled “Issue Brief, May 2011,” published by the American Academy of Actuaries:
    Page 2 “Any excess of tax income over outgo is recorded as an asset in the Social Security trust funds AND ALLOWS THE TREASURY TO BORROW THAT MUCH LESS FROM THE PUBLIC. The bonds in the trust fund represent the government’s commitment TO REPAY THE BORROWED CASH whenever Social Security needs the money. AS THE SECURITIES ARE REDEEMED BY THE TRUST FUNDS, THE U.S. GOVERNMENT MUST RAISE THE NECESSARY CASH EITHER BY RAISING TAXES, INCREASING PUBLICLY HELD DEBT, OR LOWERING OTHER EXPENDITURES.”
    Notice how the option of simply cashing in the bonds is not available, because the TREASURY BORROWED THAT MONEY FROM THE TRUST FUND.
    If the Treasury had not borrowed the money, the principal,and interest would still be intact.
    Then, those Treasuries you provided on the link could be cashed in without having to raise new cash.
    http://www.actuary.org/pdf/SocialSec_Trustees_2011_IB_final_06111.pdf.
    Don Levit

  71. Joe Friday says:

    Don Levit,

    From a paper entitled ‘Issue Brief, May 2011′, published by the American Academy of Actuaries:
    Page 2 ‘Any excess of tax income over outgo is recorded as an asset in the Social Security trust funds AND ALLOWS THE TREASURY TO BORROW THAT MUCH LESS FROM THE PUBLIC. The bonds in the trust fund represent the government’s commitment TO REPAY THE BORROWED CASH whenever Social Security needs the money. AS THE SECURITIES ARE REDEEMED BY THE TRUST FUNDS, THE U.S. GOVERNMENT MUST RAISE THE NECESSARY CASH EITHER BY RAISING TAXES, INCREASING PUBLICLY HELD DEBT, OR LOWERING OTHER EXPENDITURES’.

    And ?

    You care to explain how this is different from any of the government treasuries held by banks, insurance companies, mutual funds, and ordinary American citizens ? How is this different from when they redeem their government bonds (and they comprise a MUCH LARGER amount) ?

    If the Treasury had not borrowed the money, the principal,and interest would still be intact.

    Once again, the trust fund INVESTED in treasury securities, and the “principal and interest” is in exactly the same place as with any other relationship between any other bond issuer and investor.

    You don’t seem the have a basic comprehension of how a bond instrument works.

  72. Don Levit says:

    Joe:
    This is my last entry.
    I cannot continue this discussion with one who does not recognize this fact: the difference between a Treasury which is borrowed against and one which is not.
    The one which is borrowed against is hollow; is simply an IOU that can be paid only by new revenues.
    The principal and interest the Treasury borrowed from the trust fund were real dollars. At least, they were real enough to pay current expenses and lower the deficits.
    These real dollars, if not spent in such a fashion, and left intact only for Social Security beneficiaries, would represent a true trust fund. One that could be liquidated without new revenues.
    If you disagree with me, then so be it.
    Who knows, maybe you’re right?
    Don Levit

  73. Joe Friday says:

    Don Levit,

    I cannot continue this discussion with one who does not recognize this fact: the difference between a Treasury which is borrowed against and one which is not.

    Not a fact in evidence.

    And I’m not running an online economics 101 course for someone who does not comprehend the basics of a bond instrument.

    The one which is borrowed against is hollow; is simply an IOU that can be paid only by new revenues.

    U.S. government treasuries are not mere “IOU”s, and where do you think the revenue comes from when an American citizen redeems a treasury bond ?

    The principal and interest the Treasury borrowed from the trust fund were real dollars.

    NOTHING was ever “borrowed from the trust fund”.

    These real dollars, if not spent in such a fashion, and left intact only for Social Security beneficiaries, would represent a true trust fund.

    There is a “true trust fund”. I gave you the link to see for yourself.

    One that could be liquidated without new revenues.

    Ah, ALL treasury securities, when redeemed, always require “new revenues”. Why would you think the ones redeemed by the trust funds would be any different ?

    If you disagree with me, then so be it.

    I’m afraid it’s reality that disagrees with you.