From the WSJ (Hat tip Moose):
They Put a Face on the ’90s Homeownership Push. Then They Lost Their Home
This month marks 20 years since President Bill Clinton unveiled his “National Homeownership Strategy,” a 100-point action plan that put as its overarching goal achieving an “all-time high level of homeownership in America within the next six years.”
That set in motion an effort by both parties in Washington to work with the private sector to loosen lending standards and make it easier for middle-class Americans with less savings or inherited wealth to purchase homes.
Jean and Jim Mikitz of Allentown, Pa., had just bought a home using a loan backed by the Federal Housing Administration when the Clinton administration was rolling out its homeownership campaign. Their mortgage broker connected them with administration housing officials, which is how Ms. Mikitz ended up introducing Mr. Clinton at his June 1995 speech, a few weeks after they closed on the purchase.
The homeownership rate, then at around 64%, steadily climbed to 69% in 2004, after President George W. Bush similarly embraced a goal of increasing homeownership. Today, the homeownership rate has fallen back to below where it was 20 years ago following the bursting of the housing bubble, which led to millions of foreclosures.
Mr. and Ms. Mikitz’s story, it turns out, also ended in foreclosure. Mr. Mikitz, a 41-year-old mechanic, lost the house in 2004, according to public records. Mr. Mikitz said they stopped making payments on the home when he and his wife divorced. “It pretty much forced me into bankruptcy,” he said. His former wife couldn’t be reached for this article.
…
There’s considerable evidence that the worst excesses of the housing bust stemmed less from homeownership and more from speculative purchases that drove home prices higher—as opposed to owner-occupied purchases. Home prices peaked in 2006, two years after the homeownership rate stopped rising.Moreover, the downturn was exacerbated by the hundreds of billions of dollars that homeowners pulled out of their homes in the form of home-equity loans and cash-out refinancing, which left millions of households at risk of foreclosure even if they bought their homes well before the bubble inflated.
…
The problem: Many households can’t afford to buy homes because they don’t have the income or savings to qualify for a loan, and lenders have tightened standards. At the same time, rental growth is soaring, pushing up rents, and leaving families in a spot where they can’t qualify for a loan and where they can’t afford the rent.
Good Morning New Jersey
Common sense prevails, it’s a good day in America. From Mother Jones:
The American Medical Association Just Voted to End Personal Vaccination Exemptions
The American Medical Association, the country’s largest association of physicians, is weighing in on the vaccination debate by supporting the end of personal vaccination exemptions on both the state and federal levels.
At the group’s annual meeting in Chicago on Monday, members voted to mobilize the organization in order to persuade state legislatures to eliminate nonmedical reasons for exemption, such as religion, which are used to dodge crucial immunizations against diseases such as measles and whooping cough.
“As evident from the recent measles outbreak at Disneyland, protecting community health in today’s mobile society requires that policymakers not permit individuals from opting out of immunization solely as a matter of personal preference or convenience,” said board member Dr. Patrice Harris, according to Forbes. “When people are immunized they also help prevent the spread of disease to others.”
The lede clashes with anons worldview and has too much factual basis for an Internet meme. How will our resident snowflake cope? Hopefully he can find a countervailing bit of snark on Twitter to get through his day.
And think of poor Footrest: isn’t this a micro aggression? He might get his microhackles up, or suffer a microbreakdown.
Turn immunization into a private property rights issue (i.e., you can’t play sports at my facility without immunization records, etc).
Make access to the world impossible to those who won’t immunize, and watch this become a non-issue…
Turn immunization into a liability and negligence issue. Bulldog lawyers would have a field day.
First they came for the gun blogs…and nothing was said….next….real estate, economics and political blogs….
The State Department’s Dangerous New Proposal to Regulate Gun Enthusiasts’ Internet Speech
http://www.nationalreview.com/article/419489/obama-administration-supports-free-internet-except-when-it-comes-gun-enthusiasts
Last week, the U.S. Department of State published an alarming notice in the Federal Register, which, if transmuted into regulatory action, could prove downright disastrous to the nation’s rapidly multiplying gun fora. “In updating regulations governing international arms sales,” Paul Bedard recorded at the Washington Examiner, the State Department is effectively “demanding that anyone who puts technical details about arms and ammo on the web first get the OK from the federal government.” And if they do not? They could “face a fine of up to $1 million and 20 years in jail.”
There is a new bill in the NJ Senate being led by two democrats that significantly limits the vaccination exemptions.
I suspect that if it makes it onto Christie’s desk, he won’t sign it. Risks alienating some of the hardcore libertarian base (he doesn’t care about the anti-vaxxers, they’d never vote for him anyway).
what’s mother L Rand Hubbard position on vaccines?
Much ado about nothing, most of the enthusiast micro communities would just go private. Policing it would be near impossible.
Good example is the distilling enthusiast communities online. Despite distilling at home being illegal on both a Federal and State level, plenty of people are online talking about it, plenty of online stores selling exactly what you need to do it, etc etc. Hell you can buy a small still at Corrados wine store in Clifton, but don’t try to actually use it.
“The right of all Americans to own private property, and in particular, their own home, is a fundamental principal of our democracy, a founding bedrock of our democracy…Through home ownership each family can hold a piece of America.” – Ronald Reagan 1986
It’s the simple mind that ignores the march of neoliberalism (which is the capitalist takeover of government and society and NOT liberalism) since the Reagan era.
where’s the IQ chart?
@Barbie892: Ah Republicans. Pataki: It’s ‘absurd’ we’re talking about vaccines and evolution in the 21st century
“Former New York Gov. George Pataki (R), who says he is considering a presidential run in 2016, on Tuesday took a shot at several other prominent Republicans who are mulling White House campaigns.
“I think it is absurd in the 21st century we’re talking about things like measles vaccines and evolution….”
[10] footrest
Ooh, someone has their microhackles up.
“We celebrate Walmart, or any other employer, foregoing greed in favor of empiric economics showing that in a 500-store retailer, for every $1 increase in employee salaries, there was a $4 – 28 increase in sales:
http://dealbook.nytimes.com/2014/03/21/pay-higher-wages-earn-more-profit/
according to Zeynep Ton at MIT’s Sloan School.
Shortly after this study’s appearance last year, company’s began announcing planned wage increases.
Even though we’re sure that this relationship between increased wages/increased sales is not a straight line into infinity, it’s good that employers are recognizing the danger to their business models by cutting cutting cutting labor costs as the preferred way to profits”
http://krugman.blogs.nytimes.com/2015/06/10/notes-on-walmart-and-wages-wonkish/?module=BlogPost-ReadMore&version=Blog%20Main&action=Click&contentCollection=Opinion&pgtype=Blogs®ion=Body#more-38633
It’s the simple mind that ignores the march of neoliberalism
So tell me, who shouldn’t be afforded the opportunity to own their own home and property?
“Good Jobs” focuses largely on four retail companies that have built their success by investing in employees rather than on their backs: Costco; Trader Joe’s; QuikTrip, a privately owned convenience store and gas station chain; and Mercadona, a grocery store chain in Spain. All of them pay wages significantly above their competitors, and all of them go out of their way to invest their jobs with dignity and meaning.
QuikTrip is an especially inspiring example of the possible. Convenience stores with gas stations are not exactly high-end retailers, and yet QuikTrip has spent more than a decade among Fortune’s 100 best companies to work for. Employees there start with typically low retail salaries, but can quickly win raises. Ms. Ton focuses on one store manager, a woman with a high school diploma, who was earning more than $70,000 after several years, which is about average at QuikTrip for her tenure. “There is no other company,” this woman said, “who will pay you your regular wage, a customer service bonus, a profit bonus and even an attendance bonus.”
On the one hand, QuikTrip’s formula is a simple one: treat employees with care and respect, and they’ll do the same with customers. In turn, those customers not only become loyal, but also recommend the store to others. Sure enough, QuikTrip’s per square foot sales are 50 percent higher than the industry average, Ms. Ton writes, and its gas sales are twice as high. The employee turnover rate is 13 percent, she says, compared with 59 percent for the top quartile of the convenience store industry.
How bad can it be to work for a chief executive who writes a memo to all employees with the following promise: “QuikTrip employees expect and deserve intelligent, positive, factual supervision.” The memo later added, “I am more tolerant of poor operation than I am of poor treatment of employees.”
If a low-cost retailer like QuikTrip can treat its employees well and pay them a reasonable wage, why can’t other retailers? One reason, plainly, is that they simply don’t believe their employees add that much value. But another, Ms.Ton writes, is that, “Doing so isn’t easy. You have to get many things right.” It requires not just taking good care of employees and of customers, but also pursuing excellence in every facet of the operation to maximize efficiency.
Many retailers, for example, seek to save money by understaffing. The result is rushed, overworked and mistake-prone employees and higher turnover, which leads to unhappy, antagonized customers. The counterintuitive solution, Ms. Ton says, is to increase “slack” — meaning to have more employees available than are absolutely required at any given time of day.
QuikTrip, in contrast with most of its competitors, purposely overstaffs stores so that they can accommodate employees with emergencies or who are sick or on vacation. The result is happier employees and better-served customers. Ms. Ton cites one study of a 500-store retailer that found that every additional $1 spent on employee salaries resulted in an increase of anywhere from $4 to $28 in sales.
For my money, it’s morally repellent to pay honest and hardworking full-time workers less than they need to live. What Ms. Ton makes so persuasively clear is that it’s also a shortsighted business practice”
http://dealbook.nytimes.com/2014/03/21/pay-higher-wages-earn-more-profit/
Another angle that will appeal to the perspective of the board. Cheap wages=cheap expenses. You still have to have a balance. Imo, they pushed the consumer wages too low that it’s hurting business activity. Raise them up a little bit. It will be better for business.
“There are other benefits of low wages that are unquantifiable but the top 0.01% rightly senses: people on low wages are desperate, too busy on 2 jobs to make political demands or even understand the world they live in. Low wages go beyond your own company: the sea of cheap labor means cheap household help, cheap restaurants and entertainment, cheap gardeners and all that stuff that really makes your life pleasant.”
13 – Michael, stop being so transparent. Krugman’s blog is rife with bias. You and he believe in Keynesian economics and you seek to confirm your bias by reading his.
Try mixing it up a little:
http://www.aei.org/publication/blog/carpe-diem/
[14] grim
“It’s the simple mind that ignores the march of neoliberalism
So tell me, who shouldn’t be afforded the opportunity to own their own home and property?”
This simple mind is going to go out on a limb and suggest that those who cannot afford it financially shouldn’t be afforded the opportunity.
Dense, I know. Clearly my lack of an Ivy League education, beyond those three courses I took at Harvard, is showing.
14 – Grim
Obviously Caucasians, the wealthy, Republicans, and rust-belt Democrats.
Oh, and Clot too.
Gourd [13];
for every $1 increase in employee salaries, there was a $4 – 28 increase in sales
That just tells me that they’re getting their money back in sales to employees who feel flush on a full-time equivalent salary of $20k/yr ands p!$$ it away on the usual lineup of Chinese cr@p that is Walmart’s mainstay. It sounds pretty predatory to me, but you and the Krugman chorus who claim to champion the downtrodden eat it up with a spoon.
[15] pumpkin
So let me get this straight: Are you suggesting that the use of a wage policy as a competitive business practice that you agree with is evidence that wage policies as competitive business practices should be banned?
Honestly, I have been trying to look at multiple angles. This makes the most sense. Why would I advocate for low wages right now, when it brings no positive results to the economy due to wages that are as low as they can possibly go. If wages were too high and it was hurting the economy, I would be advocating for lowering wages. Right now, it’s clearly not the case. You have to understand that you need to adjust economic policy with what the economy gives you. You can not stick to one policy and just walk away and think everything will be okay. That’s what a lot of people on the right think, I just can’t agree with it. The magic hand will not fix all. It will create unneeded hardships for what? Because you have to stick to a policy that fits your political audience? That’s bs and that’s why I can’t jump on that bandwagon right now. I don’t care about left or right, I care about what’s good for the economy. Right now, I feel like the conservatives are doing more harm to the economy than the left. We need spending and all they want to do is cut. When the economy is good, I will go the conservative way. Bank your surplus and save it for a rainy day. Right now, we are HURTING the economy by being conservative at the wrong time. You don’t make cuts when things are bad. You make cuts when times are good. Too bad our politicians don’t follow this. They adhere to political rhetoric that will get them votes instead of doing the right thing.
D-FENS says:
June 10, 2015 at 8:36 am
13 – Michael, stop being so transparent. Krugman’s blog is rife with bias. You and he believe in Keynesian economics and you seek to confirm your bias by reading his.
Try mixing it up a little:
http://www.aei.org/publication/blog/carpe-diem/
22 – Who the hell is advocating for lower wages?
I’m this close to putting a bounty on Punkin’s head.
That’s dealing with extremes. I am in no way advocating for extremism on these fundamentals. I’m not advocating for permanent policies. I’m advocating for policies that adjust to the economy(temporary). It’s a constant battle. The economy throws things your way and you must adjust. You can’t just pick up a school of economics, apply it, and walk away. Doesn’t work that way. How do we know? We tried it many times before and it always blows up in our face. No economy has ever survived the test of time. That’s a fact. They all crumbled at one point or another. If you are smart, you will realize this, and will never ever adhere to one school of economic thought. It’s suicide.
Comrade Nom Deplume, the loan snark says:
June 10, 2015 at 8:47 am
[15] pumpkin
So let me get this straight: Are you suggesting that the use of a wage policy as a competitive business practice that you agree with is evidence that wage policies as competitive business practices should be banned?
[20] moose
In gourds defense, I don’t think that you can read that into the data. It is, at best, an incremental effect.
However, neither can you fully accept the correlation equals causation argument that Gourd is putting out. Ton’s range is wide and the data across industry lines makes it near useless. At best, in some instances and some industries, better pay will correlate to better performance, which should correlate to better results. However the effect that wages would have on margin improvement is attenuated at best.
I think that a better explanation, which is also the simplest explanation, is that both wage improvement and margin improvement are the result of the same source: Overall economic improvement which has improved store margins and put upward pressure on wages.
So I agree that pumpkin is wrong, but not for the reason you postulate.
You tell me.
D-FENS says:
June 10, 2015 at 8:51 am
22 – Who the hell is advocating for lower wages?
You said “Why would I advocate for lower wages right now”
Which infers that you think people who argue against Krugman’s view…want lower wages….they don’t….do you understand that?
I don’t think that you do.
The Great Pumpkin says:
June 10, 2015 at 8:56 am
You tell me.
Good Morning, 1400 miles in 4 days. Left Saturday Morning, was shocked that there was no craziness on I 95 thru DC. Stayed and explored all Raleigh and Cary have to offer. Conclusion: Economy is booming. Hated Cary. Loved inner belt Raleigh, really loved Mid town Raleigh. Went with Real estate agent to look at homes in Mid town Raleigh because that’s where I narrowed my search and LOVED it. I honestly loved Raleigh. I stayed in the inner belt which is old homes all restored and really liked that too but cant afford them. They are very expensive and old meaning 1930 or older. So its a done deal. Now the problem is waiting to dump my house in NJ. The market where I live sucks and I guess I am willing to take a big bend over job to leave NJ. My mind is made up! Its too good for my situation to pass up. I can come back and visit NJ.
[25] pumpkin
Not since I read Thoreau have I seen anyone use so many words to say so little.
anon is a moron but at least he is a model of brevity, and I appreciate that he doesn’t obscufate the fact that he has nothing intelligent to say. He hangs it out there in 144 characters or less.
The point you made, intentionally or not, is that employers should not be permitted to use labor costs at the low end as an input in business decisions. And you use as proof those few businesses that did exactly that (but in a different way) and succeeded. So you argue that business should be prevented from keeping labor costs down because you can point to some examples of companies that were more generous and still succeeded as proof that keeping labor costs down doesn’t work. I’m not sure I buy the universality of this argument.
Also, and with no small measure of irony, you inadvertently argue that the tactic these businesses used to (allegedly but I’ll go with it) gain a business advantage should be nullified.
Did my autocorrect just allow “obscufate”? Heck yeah, it did. Incredible.
The correct spelling would be blacklisted, you’ve probably mistyped it often enough for it to be remembered.
[15] pumpkin
As I go back and read over your commentary regarding Quiktrip, something struck me. The esteemed Professor notes a number of metrics to show how Quiktrip beats their competitors. One in particular jumped out at me: Much higher gas sales. This is a component that is almost completely devoid of human interaction unless you are in New Jersey. But the professor postulates that this great result is due to the fact that they pay more.
I’m not sure, without more analysis, that you can make this argument. It is no more valid than pointing out that the company locations are all located next to highways or that they have a pleasing color scheme. And what is true of that metric may be partially true of the others.
“Ms. Ton focuses on one store manager, a woman with a high school diploma, who was earning more than $70,000 after several years, which is about average at QuikTrip for her tenure. “There is no other company,” this woman said, “who will pay you your regular wage, a customer service bonus, a profit bonus and even an attendance bonus.””
While most lefties will focus on the amount of the other person’s comp (as always) let’s take a different angle.
This is an absolutely brilliant post-hiring employee screening and culling device.
For traditionally low wage, low service jobs it is nearly impossible to judge pre-employment how a potential employee will perform. Their track record is often incomplete or non-existent. This compensation structure gives the employer another bite at the apple.
The outsized pay for what is traditionally a low wage job is comprised of incentive comp – bonuses if she performs in the areas of attendance, profits, and customer service. She gets paid extra for a job well done that makes me more money.
Variable upside comp allows those employees willing to put out the effort to earn more. Conversely, those employees who won’t step up don’t get paid more.
Compensating two like employees hired concurrently with the same job description substantially different amounts is a sure fire way to get a resignation from the lower paid employee. Better for the employer.
I suppose the lefties will find this hard to believe but if I were owner of the QuikTrip service stations I would go to bed every night praying that I will be compensating every line employee $70k. Because:
1. If I do it is only because I am earning even more money, and
2. It means that all the dead weight, problem employees have moved on elsewhere.
[32] grim
I’m no tech wiz, I admit that. But I tried to spell it correctly on an iPad and it autocorrected to the incorrect spelling while typing. It will permit the correct spelling if I complete it. This isn’t a word I use much at all and it isn’t an old device. Just vexing how something that is supposed to help actually gets in the way.
Nom
LOLOLOL.
Don’t even bother. I hung up those cleats two weeks ago. You have entered a logic and rationale empty twilight zone.
Or, better, don’t try to teach a pig to waltz. You’ll only succeed in agitating the pig and frustrating yourself.
[34] left wing
An astute observation. The article does say that wages are low at the beginning.
Of course, this business practice would violate the Americans With No Abilities Act.
[36] left,
I’m not trying to convince pumpkin or anon that they are right. I’m trying to show everyone else that they’re wrong.
Which, now that you mention it, is a complete waste of time. Everyone already knows this.
Well, as Shore Guy used to say, Off to the salt mines.
WTF is clot anyway? Some kind of yehuda inspired french canadian poutine-philistine with an Elvis twist?
A Home Buyer says:
June 10, 2015 at 8:46 am
14 – Grim
Obviously Caucasians, the wealthy, Republicans, and rust-belt Democrats.
Oh, and Clot too.
Nom, you’d have a better conversation arguing alone in front of a mirror.
[40] left wing,
I usually lose those arguments.
I came back to share a quote someone left on another board, one I’m sure will rankle anon and Otto on so many levels.
“Anything in life worth having is worth working for.” -Andrew Carnegie
those in favor of vaccines and evolution don’t run. what a shame
@RBReich:
After much consideration, including discussions with my family, I’ve decided not to run for the Republican nomination for President.
Look, the real homeownership rate is near 98%, not the numbers we typically talk about, in the 60’s.
Every “housing unit” is owned, exempting the obvious abandoned homes and government owned housing (army barracks, etc).
It’s arguable that property has been the single most important factor in the economic success across many households through history. I can anecdotally provide many examples of immigrants with less than ideal educational backgrounds becoming very wealthy through property ownership. Hell, my own parents have done very well with this. On the flip side, there are no shortage of examples where people were screwed by others, and ended up with nothing. However, it’s clear that it has the potential to be an incredible equalizer.
We can point to Reagan, Clinton, Bush and others, and claim they created the housing bubble, and are therefore responsible for the collapse.
However, increasing owner occupied ownership isn’t a shitty ideal, there is merit behind it. Where it gets ugly is when you start to push it past what would be reasonable.
Problem is, when you start to look at increasing homeownership in the lower income quartiles, in economically disadvantaged areas, or in certain populations, you end up potentially causing more harm than good. Not everyone can be a home owner. Not everyone should be a home owner.
But I think it is worthwhile to try and fail than to not provide the opportunity at all.
Honestly, I think it’s positive to push for it, but we need to acknowledge that Foreclosure is Good (™) and not bad. Provide the opportunity, and if it doesn’t work out, quickly work it out and resolve it (I don’t mean keep the owner in an unsustainable situation). I’m not talking about houses for everyone, but realize that houses for few will typically mean the wealthy will benefit significantly more.
Yes, that is the objective, to grow the economy so that everyone is better off.
“I suppose the lefties will find this hard to believe but if I were owner of the QuikTrip service stations I would go to bed every night praying that I will be compensating every line employee $70k. Because:
1. If I do it is only because I am earning even more money, “
Agreed, so why the push against people working on coming up with a better economy for everyone?
“Anything in life worth having is worth working for.” -Andrew Carnegie
Good morning everyone.
Not sure what the big deal about the low wage worker is. Pay them double if you want to ignore market forces if it makes you feel good. In the grand scheme of things, it really doesn’t change a thing. The middle class will continue to pay for the lower class. The upper class will continue to pad the coffers of the Clintons and the Bushes to make sure that the middle class pays the bills.
In my opinion, all of the economic models don’t mean sh1t as our current form of government is owned by the highest bidder. Is it surprising to anyone that income inequality is growing exponentially? And it’s not a partisan issue whatsoever. Both parties play the same game. The spoils of our society will continue to go to the wealthiest and it’s only going to get worse.
All one really can do is work their absolutely hardest to get ahead of their peers. Then get the heck out of dodge.
My whole premise starts with the economy. The economy is stuck in a rut with almost zero growth due to the consumer being tapped out by rising costs and no wage increase.
I’m not trying to get rid of poor people by raising the minimum wage. I accept and understand that poor people come with a capitalist system. I am only focused on bringing back an economy that provides growth which leads to opportunities to move up the ladder if you work hard. This results in an economy that is better for everyone from top to bottom.
Right now, the money is too saturated at the top. This doesn’t mean it’s stuck in actual individual’s hands. The people at the top come and go, but the money stays and has continued to consolidate at the top and grow with every year. We need to get SOME, NOT ALL, but a small percentage back towards the bottom of the economy to create demand and get the economy to function in a way that is better for everyone.
Right now, there is no incentive for a good amount of the population to work hard. They see no purpose and give up. This is not good for anyone to have people dropping out of the economy. Lower the carrot, let them see that working hard will get them somewhere. Do we want an economy where close to 50% of the population has given up or do we want an economy in which every single individual is striving to get rich on hard work? They have to realize that their hard work has a great chance of improving their lot. When most think their hard work will result in no difference, the economy suffers from top to bottom. We are witnessing it as we speak.
Comrade Nom Deplume, the loan snark says:
June 10, 2015 at 9:09 am
[25] pumpkin
Not since I read Thoreau have I seen anyone use so many words to say so little.
anon is a moron but at least he is a model of brevity, and I appreciate that he doesn’t obscufate the fact that he has nothing intelligent to say. He hangs it out there in 144 characters or less.
The point you made, intentionally or not, is that employers should not be permitted to use labor costs at the low end as an input in business decisions. And you use as proof those few businesses that did exactly that (but in a different way) and succeeded. So you argue that business should be prevented from keeping labor costs down because you can point to some examples of companies that were more generous and still succeeded as proof that keeping labor costs down doesn’t work. I’m not sure I buy the universality of this argument.
Also, and with no small measure of irony, you inadvertently argue that the tactic these businesses used to (allegedly but I’ll go with it) gain a business advantage should be nullified.
Great overall post and esp this part. I think the idea of everyone owning a home is a beautiful idea. I will never ever advocate for this policy though. This paragraph explains why. Not everyone is meant to be a home owner under a capitalist system, just like everyone is not meant to be rich under a capitalist society.
“Problem is, when you start to look at increasing homeownership in the lower income quartiles, in economically disadvantaged areas, or in certain populations, you end up potentially causing more harm than good. Not everyone can be a home owner. Not everyone should be a home owner.”
[46] libturd,
You don’t hear me advocating against raising the min. wage. I can already see opportunity from it.
One of my own costs would be directly impacted because what I pay now, which is a very good sum and better because I don’t withhold, would become min. wage in the future. To keep this cost down, and to have some semblance of reliability, I sometimes turn to disruptors who leverage underutilized assets and economies of scale. Eventually, they will be the norm. And I just had an idea to take this one step further, an idea that could net me huge money if I can partner with the right people.
Then there is technology. I can envision a world right out of “I, Robot” where the only people I saw with jobs were the Cops and the USR folks. Invest in USR.
Finally, the pass-through of costs will alter some habits. Dining out will change as will other service industries. This will result in new products (other than tech) and services. Invest accordingly, or better yet, come up with them yourselves.
[47] punkin
“The economy is stuck in a rut with almost zero growth due to the consumer being tapped out by rising costs . . .”
If there is no growth and no spending power, why are costs rising?
“I accept and understand that poor people come with a capitalist system.”
Poor people come with ALL ‘systems’. Care to name a ‘system’ that does not have any?
And btw if you are defining ‘poor’ as the amount of income inequality then Zimbabwe and North Korea likely have the least number of poor people around.
I do not believe, however, that any of our ‘poor’ would for one second trade their larger income gap in the US for the more level field of being ‘poor’ in either of those two countries.
Wealth (and poverty) are measured in the absolute. The poor of the US in this decade are more well off than 99.9% of the population of the world in the last century.
Here’s a conundrum guaranteed to make anon’s head explode (though that shouldn’t leave too much of a mess):
” . . . Wal-Mart may be in a better position than other retailers to absorb the wage increase, said Leon Nicholas, an analyst at Kantar Retail in Boston. If rising paychecks put smaller stores out of business, Wal-Mart benefits, he said.
“It could knock out small independent grocers, pizza shops, electronics retailers, auto suppliers, lawn and garden stores,” he said. “Wal-Mart gets those customers.”
Wal-Mart. Hoodathunk it?
50. Nom, just had to go back for another dance, huh? Have fun, I’ll watch this one.
Check the men’s room. Not lunch yet, bet the mirror is open.
[54] leftwing,
Nah, in the office, having a little fun. I love tossing things into the anon/otto/ccb thought pond that just leaves a huge splash.
Like this story from uber-left Prince Georges County:
“An effort is underway in Prince George’s County to carve out an exemption to the much-ballyhooed “regional minimum wage” increase passed by lawmakers there, in Montgomery County and in the District last year.
County Council member Derrick Leon Davis is expected to introduce a bill Tuesday that would let one of the county’s largest employers, Six Flags, continue to pay its seasonal workers at the lower rate of $7.25 per hour instead of the wage that would increase to $11.50 per hour by 2017.
Labor activists and economic analysts who support wage increases called the exemption bad policy and worried that it could set a precedent for other industries and undermine the regional effort to combat poverty.
“Let us see how the legislation works before we come back and tamper with it,” said Joslyn Williams, president of the Metropolitan Washington Council AFL-CIO, who spoke in favor of wage increases across the region. “If we need to revisit, it needs to be based on specific experience.”
Six Flags annually employs about 2,000 seasonal workers — making it the largest source of summer youth employment in the county, said David Iannucci, senior economic development adviser to County Executive Rushern L. Baker III.
But because of the amusement park’s seasonal employment schedule — the park will be open daily for three months during the summer and on weekends from April 5 to Oct. 26 — lawmakers believe an exemption to the minimum wage law is in order.
“It’s a very unique situation that brings to bear a unique response,” said Mr. Davis, a Democrat whose district includes the Upper Marlboro area where Six Flags is located.
Asked why seasonal workers shouldn’t expect the same wages as employees in the rest of the county, Mr. Davis said that demographics of those employees don’t warrant the higher wages.
“These are not family wages. This is summer employment,” Mr. Davis said. “These children are typically on their way off to college.”
/snip
Irony abounds. I can guarantee you there wasn’t a Republican in the room, and probably very few white people. Apparently, they haven’t heard Pumpkin’s lecture on economics.
It’s growing, but at a stubbornly slow pace. On top of that, almost all the growth is going to the top. Great economy.
So now you are saying the economy is doing good because costs are rising? How will people afford these rising costs with crap raises or no job? My answer to that is Wage inflation. That’s why I believe wage inflation is inevitable. Deflation is not an option.
Comrade Nom Deplume, speaking from the Cone of Silence says:
June 10, 2015 at 11:10 am
[47] punkin
“The economy is stuck in a rut with almost zero growth due to the consumer being tapped out by rising costs . . .”
If there is no growth and no spending power, why are costs rising?
Here’s another piece of noggin dynamite for our lefties.
If you accept that an outcome of the QuikTrip manager earning $70k through incentive bonuses is differentiation of the lower end workforce into those capable and willing to succeed to such levels and others who cannot, then there is an interesting corrolary:
You kick the knees out of the attractiveness of unionizing for a good number of these workers, as the last thing Ms. 70kQuikTrip wants to hear is how her comp and benefits will be equalized with her peer who is out back getting high and will not make it out of $9/hr land, ever.
So yes anon, punkin, et. al. please bring me a plan that incentivizes low wage scale workers to $70k so I can earn more money, have poor performers self select out of my company, and put another nail into the union movement. TY!
I agree with the advocates who say that the min. wage hike promotes spending. I hope it does. One final investment tip for the day from an article on that point:
“Nik Modi, consumer staples analyst at RBC, said that added income “is particularly positive for tobacco as well as energy drinks and beer.”
His top pick: Lorillard, which “generates a meaningful portion of sales and profit from New York as well as California where overall tobacco consumption is highest.”
So beneficiaries of a min. wage hike will be Wal-Mart, Lorillard, Miller/SAB, InBev, Diageo, Red Bull, Monster, and Altria? That is enough to make any progressives head explode.
Funny that Six Flags will get an exemption.
My father took a job at Great Adventure after he retired from his rectifier manufacturing business. He made slightly over minimum wage. He worked all types of jobs there. From operating rides to selling season tickets. Keep in mind, my father has an engineering Masters degree from Columbia. He just was not comfortable not working. He said it made him feel old. And there were tons of workers just like him. Here’s the best part of the Six Flags story. On the last day of work, they bus all of their workers over to the unemployment office and assist them in collecting unemployment benefits during the off-season. I wonder how much Six Flags pays their local politicians?
55. Good to hear that the Dems view an hour of the same work performed by two people has a different value depending on who those people are? Would it make a difference if the (under)compensated college kids were LGTB and the (over)compensated family man drove a pickup and swilled Miller on a lawnchair in his front yard while listening to Rush?
Didn’t someone noteworthy once address a large crowd about being judged on the content of one’s character and not on personal traits? Not sure, maybe 50 years ago or so? I guess the Dems feel their policy is furthering the goals of that dream…..
[56] punkin
Me: If there is no growth and no spending power, why are costs rising?
Punkin: “. . . So now you are saying the economy is doing good because costs are rising? How will people afford these rising costs with crap raises or no job? My answer to that is Wage inflation. That’s why I believe wage inflation is inevitable. Deflation is not an option.”
Is it just me or was that about as nonresponsive as you can possibly get?
It made about as much sense as this:
Me: If there is no growth and no spending power, why are costs rising?
Punkin. Twelve. And the full moon is so pretty on the water.
I’ve had my fill of stupid. Time to make some money and pay these idiots to hang out at Moe’s where they can’t do any real damage.
God, Christianity and Evolution are not necessarily mutually exclusive
anon (the good one) says:
June 10, 2015 at 9:50 am
those in favor of vaccines and evolution don’t run. what a shame
@RBReich:
After much consideration, including discussions with my family, I’ve decided not to run for the Republican nomination for President.
61. Oh yes, you have me rolling around on the floor now.
I had the benefit of working for two years in Vienna. The Viennese waltz is especially tricky, the left turn is different.
Have fun. Don’t save the last dance for me, LOL.
https://www.youtube.com/watch?v=iwdWE-X2vRI
Hurry up, still before lunch. Mens room mirror is open to debate.
@wsjMelanie:
Shortage of skilled construction workers is pressuring builders to raise wages @jeffsparshott via @WSJ
SNL Skit: Don’t Buy Stuff You Cannot Afford
Wife…..Amy Poehler
Husband…..Steve Martin
Spokesman…..Chris Parnell
[open on couple trying to balance their checkbook]
Wife: (sighs) I just can’t get these numbers to add up.
Husband: Like we’re never going to get out of this hole.
Wife: Credit card debt, does it ever end?
Spokesman: [walks in] Maybe I can help.
Husband: We sure could use it.
Wife: We’ve tried debt consolidation companies.
Husband: We’ve even taken out loans to help make payments.
Spokesman: Well, you’re not the only ones. Did you know that millions of Americans live with debt they cannot control? That’s why I developed this unique new program for managing your debt. It’s called [presents book] “Don’t Buy Stuff You Cannot Afford.”
Wife: Let me see that… [grabs book, reads] “If you don’t have any money, you should not buy anything.” Hmm, sounds interesting
Husband: Sounds confusing.
Wife: I don’t know honey, this makes a lot of sense. There’s a whole section here on how to buy expensive things using money you save.
Husband: Give me that… [grabs book, looks at it] And where would you get this saved money?
Spokesman: I tell you where and how in Chapter 3.
Wife: OK, so what if I want something but I don’t have any money?
Spokesman: You don’t buy it.
Husband: Well let’s say I don’t have enough money to buy something, should I buy it anyway?
Spokesman: No-o-o-o.
Husband: Now I’m really confused!
Spokesman: It’s a little confusing at first.
Wife: Well, what if you have the money, can you buy something?
Spokesman: Yes.
Wife: Now take the money away, same story?
Spokesman: Nope. You shouldn’t buy stuff when you don’t have the money.
Husband: I think I got it. I buy something I want, and then hope that I can pay for it right?
Spokesman: No. You make sure you have money, then you buy it.
Husband: Oh, THEN you buy it. But shouldn’t you buy it before you have the money?
Spokesman: No-o-o-o.
Wife: Why not?
Spokesman: It’s in the book. It’s only one page long. The advice is priceless and the book is free.
Wife: Well, I like the sound of that.
Husband: Yeah, we can put it on our credit card.
Spokesman: [shakes head]
Announcer: So get out of debt now, write for your free copy of “Don’t Buy Stuff You Cannot Afford.” If you buy now you’ll also receive, “Seriously, If You Don’t Have the Money, Don’t Buy It!” Along with a 12-month subscription to “Stop Buying Stuff Magazine.” So order today!
http://snltranscripts.jt.org/05/05lbuy.phtml
So I’m assuming your question is asking in a smart ass way if we are experiencing inflation? If one price rises on one good and decreases in another, it’s called relative price change. Oil has gone down tremendously, so how are we currently experiencing inflation? Energy costs have dropped significantly.
Comrade Nom Deplume, speaking from the Cone of Silence says:
June 10, 2015 at 11:46 am
[56] punkin
Me: If there is no growth and no spending power, why are costs rising?
Punkin: “. . . So now you are saying the economy is doing good because costs are rising? How will people afford these rising costs with crap raises or no job? My answer to that is Wage inflation. That’s why I believe wage inflation is inevitable. Deflation is not an option.”
Is it just me or was that about as nonresponsive as you can possibly get?
It made about as much sense as this:
Me: If there is no growth and no spending power, why are costs rising?
Punkin. Twelve. And the full moon is so pretty on the water.
I’ve had my fill of stupid. Time to make some money and pay these idiots to hang out at Moe’s where they can’t do any real damage.
67-
“Last week, I ran out of ink for my printer and ordered some more online. My computer automatically pulled up the previous order, and I was shocked to see that the price of the ink cartridges I was buying had gone up 25%. To my mind, ink always seems overpriced. Manufacturers sell printers cheaply because they know that they can make lots of money on the ink. For the same reason, John D. Rockefeller’s Standard Oil is said to have sold millions of cheap kerosene lamps in order to make big profits selling kerosene. But since ink cartridges were already priced way above cost and official statistics show little general inflation, why had ink gone up 25% in less than a year?
Price hikes for a particular item here or there don’t qualify as inflation. If one thing gets more expensive but something else gets cheaper, that’s what economists call a relative price change. Inflation is a simultaneous increase in prices across the board. Some measures of inflation, such as the GDP Deflator, track price changes that affect businesses as well as those that affect consumers. But the Consumer Price Index is supposed to focus on inflation at the consumer level. And the CPI has recorded minimal increases over the past four years. Since the recession ended, the 12-month change in consumer prices has averaged 2% and has never been as high as 4%.”
http://business.time.com/2013/03/12/if-theres-no-inflation-why-are-prices-up-so-much/
68- continued
“There are lots of other ways to gauge inflation, however, that give very different signals. Gold was $930 an ounce when the recession ended, and today it’s $1,583. So if you believe in the gold standard, prices have increased 70% in four years – or an annualized rate of 14.2%. Of course, many economists dismiss the gold price as an archaic indicator. So it may be more meaningful to look at price increases over a broad range of commodities. The Reuters CRB Commodity Index, which tracks the prices of coffee, cocoa, copper, and cotton, as well as energy, is up 38% over four years, or 8.6% at a compound annual rate.
It may well be that these increases in the cost of raw materials aren’t translating into broader inflation because the economy is so weak. For sustained inflation to get going, workers have to be able to demand higher pay to make up for increases in their cost of living. And today, whatever inflation is caused by the rising cost of raw materials is being offset by below-normal increases in wages. Indeed, that’s one of the factors causing the decline in real after-tax household income that I wrote about last week.”
The stock market has an empirical rule: interest rates lead stocks. And the current interest rate environment is pointing to a massive decline for the U.S. market.
Consider: The Federal Reserve has taken rates to the lowest level in more than a generation. This has energized stock prices. The Fed has persisted in its directive to “stay the course,” having made no raises in the discount rate for more than seven years. Such monetary policy has no precedent; this is the longest stretch of accommodation by the Fed in the post-World War II era.
But there’s Fed-induced rates, and “actual” rates. The most widely followed Treasury markets are the longer-term 10-year TMUBMUSD10Y, +0.75% and 30-year TMUBMUSD30Y, +0.60% markets. These two markets are highly sensitive to longer-term actual interest-rate pressures. For example, banks use longer-term Treasurys to make decisions on pegging personal loan rates to clients for mortgages, businesses, and other uses. The commercial and industrial areas of the economy also are susceptible to the actual cost of money.
Are there parallels to this current market environment? Yes — 1987.
The summer that year began with a slow, methodical rise in actual rates. Yet the Fed did not raise the discount rate, even though actual rates suggested otherwise. The fall of 1987 arrived with the stock market having hit an all-time high in late August, unfazed by this unsettled condition.
As it happened, the Federal Reserve was literally forced to raise interest rates. Policymakers were behind the curve severely, just as the Fed is now. The 1987 rising-rate action caused stock prices to tumble more than 30% within two months, including a sharp 20% selloff in October — still among the Dow Jones Industrial Average’s DJIA, +1.42% worst one-day percentage declines ever.
These warning signs are again visible. The first week of June recorded the highest interest rates since December. Bond prices are down about 12% since the end of January.
The stock market, meanwhile, follows the bond market’s direction — except by a much wider margin. A multiple of 2.0 is conservative. A 2x multiplier figured against the recent 12% plus loss in bonds prices would generate a 24% decline in stock prices.
At current levels, such a slide would equate to a loss of about 500 points on the S&P 500 SPX, +1.26% and a Dow pullback of close to 4,300 points.
Steve Martin was great in that sketch.
Essex. I am banking on it. Noticed that the 10-year is back up to $2.46. It briefly hit $2.49 this morning. This should start to put some pressure on mortgage interest rates at least in the short run. The Shanghai market is going to implode soon too. About the only thing the market has going for it is that the market tends to do well among the optimism of national elections. We’ll see. I have already begun to bail. In a minor way, but I’m not all at risk at this juncture.
Personally, I find this sketch as the best ever on SNL.
https://screen.yahoo.com/cork-soakers-000000587.html
@RBReich:
The choice isn’t between big or small government. It’s between a government responsive to all, or one responsive to big money.
What would “GoodFellas” be like if it were told by a woman?
Meet an at-risk youth called Henry Hill. Victimized by horrific physical abuse from an early age, and traumatized by the responsibilities of caring for a handicapped brother, he fell prey to criminal elements in his rough East New York neighborhood in a time when social-services agencies were sadly lacking. At an impressionable age, he became desensitized to violence when a gunshot victim bled to death in front of a restaurant where he was working. His turn to the mafia was a cry for help — a need to find a family structure to replace the one he had never really known.
And who would want to watch that movie?
“The choice isn’t between big or small government. It’s between a government responsive to all, or one responsive to big money”
How about a small government responsive to all? Moron.
@blackrepublican: Rubio’s ‘luxury speedboat’ was actually a FISHING boat: http://t.co/sTVjrYzkXh #RubioSpendingSpree #RubioSoPoor #tcot http://t.co/XccDjrHBXF
Can’t we talk about Rubio’s luxury yacht?
The New York Times, among the finest toilet paper in the nation.
I spoke to a couple the other day whose daughter is going to be attending a Catholic HS this fall in Upper Bergen Cty. They began looking for a house a few months ago and are beyond appalled and beyond shocked over the selection and price. I agreed but didn’t want to pound the issue. They’re getting the experience first-hand.
They mentioned that they see nothing but sh1t splits and sh1t bi-levels at stup1d prices. Again, nothing more needs to be said.
They said Bergen County is so overrated that it’s pathet1c. That’s their words, not mine but they are absolutely right. All they’re looking for is a decent house, not a financial death sentence.
Can someone send me a link to the NY Times’ similar analysis of the Clintons’ income and spending habits over the past 30 years? That would be handy if I need to decide between Rubio and Clinton.
74,
Said the other dwarf intent on convincing humanity to enslave itself.
If you make a donation to the Clinton Foundation, they’ll help you in any way you desire Rags. Even if you need Uranium.
What’s the deal with statist short people intent on claiming power over humanity?
Reich, Krugman, Donna Shalala.
Stalin and Lenin were both only 5 ft 5.
http://southpark.cc.com/clips/155480/dr-nelson-meets-eric-cartman
Kim Jong Il, also.
“Jurassic World” promises a scary new hybrid dinosaur cooked up in a lab that combined T. rex DNA with something else we’re not immediately told about. For a while, the beast is so rageful, I was convinced they’d figured out how to graft onto it the personality of Alec Baldwin.
My Uncle when he was a big shot in FBI way back was the agent who put the cuffs on Henry Hill. He actually brought a camera and made Henry pose while he cuffed. He blew it up and had it on his living room wall for many years. He is long dead. But Henry made his career. He said he just gave up no problem. And even let a few other agents take pictures with him in cuffs.
If you go to the Catalina Beach Club in Atlantic Beach, which was Henry Hill’s favorite Beach club the table he used to sit in a lot and play cards etc is still there. In movie Goodfellas they actually shot it parts in the Catalina Beach club and the actor who played Henry Hill sat at his favorite table. Kinda cool.
Funny part is the Beach Club in Atlantic Beach back then in same era had a young man in his first job as a Life Guard. Bernie Madoff. I can only imagine playing cards with Henry Hill while Bernie Madoff was in the lifeguard stand
chicagofinance says:
June 10, 2015 at 2:47 pm
What would “GoodFellas” be like if it were told by a woman?
Meet an at-risk youth called Henry Hill. Victimized by horrific physical abuse from an early age, and traumatized by the responsibilities of caring for a handicapped brother, he fell prey to criminal elements in his rough East New York neighborhood in a time when social-services agencies were sadly lacking. At an impressionable age, he became desensitized to violence when a gunshot victim bled to death in front of a restaurant where he was working. His turn to the mafia was a cry for help — a need to find a family structure to replace the one he had never really known.
And who would want to watch that movie?
Casino in Newark? You gotta be kidding me, we already have an Atlantic City, we don’t need two.
Jersey City Waterfront or Meadowlands are the only two realistic options.
Did not end up putting our place on the market FWIW.
You know JJ…if I was like clot and adopted handles based on stuff you say, such as “Splat What Was He Thinking” or “There Went Meat”…….I would probably appear as “Banco Popular Trust Preferred Shares” or something similar…..is it worth a change?
What do you think?
Libturd likey.
The NY Times attempted hit pieces on Rubio over traffic tickets (mainly accumulated by his wife) and financial history are an embarrassment. I just don’t know what they are thinking coming out with these silly articles… so transparent and such a joke. Kinda makes me want to vote for Rubio actually.
[92] ccb
Who are you?
92
When was the last time a government official balanced a checkbook? Rubio hit pieces are placed by someone in his own party. He has no chance in a general. baa.
Real ‘muricans won’t vot for a Cuban.
The fun political news of the day was Lindsay graham naming his beards.
“While cleaning out my Princeton office, I became all too aware of the ephemeral nature of policy writing. A depressingly large share of the books on my shelves consisted of 30 years’ worth of books about the crucial decade ahead. Oh well. But as I added all those books to the giveaway pile, I found myself doing a bit of self-referential and maybe self-indulgent thinking, not about the decade ahead, but about the decade behind.
You see, it’s almost 10 years since I started writing about the financial crisis and the Great Recession. True, at first I didn’t know that that was what I was writing about; it began with the diagnosis of a housing bubble, whose bursting I knew would be bad but had no idea would be this bad. Still, there has been a pretty consistent arc, and I find myself thinking about what I got right and what I got wrong.
The starting point, as I said, was the housing bubble. I certainly wasn’t the first to warn on that front; Dean Baker, in particular, was both much earlier and much more forceful. Still, what I think of as my first crisis article did, I think, add value by pointing out the huge difference in price behavior between building-contrained states and others. If you looked at national averages, it was just possible to argue that prices made sense, but once you broke out the right subset of states and cities, the craziness stared you in the face. And the bifurcation was overwhelmingly confirmed in the years that followed:
That was the beginning. Since then, what have I been right about and what have I been wrong about?
Things I got right
1. The housing bubble: It’s very much worth remembering just how much bubble denial there was, and how much it was politically driven; I got a lot of “you only say there’s a bubble because you hate Bush.”
2. Inflation, or the lack thereof: I’ve written about this many times, but after the bubble burst I was an unwavering advocate of the view that the Fed’s expansionary policies posed no inflationary risk. This was again a deeply contentious issue, with the right fully convinced that inflation was coming and some on the center and left at least wobbly on the issue.
3. Interest rates: No crowding out under these conditions. I said it strongly from the start — and on this subject there was a lot of wavering among Democrats, all too many of whom bought into stories about deficit dangers even in a depressed economy.
4. Austerity hurts: A lot of people who should have known better bought into the confidence fairy, or at least accepted the notion that multipliers were fairly small; I said big multipliers under current conditions, little or no offset from confidence, and the research has caught up with and vindicated that position.
5. Inadequate stimulus: I warned, early and often, that the ARRA was hugely inadequate, and that its inadequacy would have lasting consequences — that by falling short, it would discredit the whole notion of stimulus as far as politics was concerned. Alas, I was right.
6. Internal devaluation is nasty, brutish, and long: I argued from the start that adjusting relative prices within the euro area would be extremely hard, that nobody has the kind of wage and price flexibility that would make “internal devaluation” easy — and that countries able to carry out currency devaluations, like Iceland, would have a much easier time.
7. Obamacare is workable: A quite different subject, but back in my book Conscience of a Liberal I argued (not originally) that an ACA-type system of mandates, regulation, and subsidies, while not anything you would build from scratch, would work (I wanted a public option, but that’s another story). Lots of disagreement, both from right-wingers predicting a death spiral and people on the left declaring that it was single-payer or nothing.
Things I got wrong
1. The scale of the disaster: I saw a housing bubble, knew the aftermath would be bad, but had no idea how bad. I was blissfully ignorant of the rise of shadow banking, wasn’t thinking about household debt, and wasn’t paying attention to imbalances within the euro are.
2. Deflation: I thought that Japanese-style deflation was an imminent risk in all depressed economies. Instead, low but positive inflation has been remarkably persistent. I now think that I underestimated the important of downward nominal rigidity, which combined with dispersal of shocks — some workers and firms face strong demand even in a weak economy — tends to keep prices rising even in a depressed world.
3. Euro crackup: For the most part, I think my analysis of the euro area’s economy and its problems was pretty good (but see below). But I vastly overestimated the risk of breakup, because I got the political economy wrong — I did not realize just how willing euro elites would be to impose vast suffering in the name of staying in. Relatedly, I didn’t realize how easy it would be to spin a modest upturn after years of horror as success.
4. Liquidity effects on sovereign debt: Finally, I’m sorry to say that I completely missed the important of liquidity and cash shortages in driving bond prices in the euro area. It wasn’t until Paul DeGrauwe weighed in that I realized just how much difference it would make if the ECB did its job as lender of last resort; if the euro survives, DeGrauwe — and this guy named Draghi, who put his ideas into practice — should get a lot of the credit.
I’ve probably missed some things, although I do think it’s interesting how many of my critics feel the need to attack my record by inventing predictions and claims that I never made. Still, I think that’s the main stuff, and although I have definitely been fallible, I think I did OK — mainly because I never let fashionable worries divert me from basic macroeconomics, and always tried to apply the lessons of history.”
http://krugman.blogs.nytimes.com/2015/06/10/the-decade-behind/
Thought this comment was pretty funny.
“What Everyone Got Wrong
1. Wall Street bankers are capable of fraud on a massive, world-wide scale that can take down the entire world financial system like a house of cards.
2. The Fed can hold interest rates at zero for over 6 years with no consequences for inflation or the strength of the dollar in FX markets.
3. “Printing” trillions of dollars to buy mortgage backed securities in order to stimulate housing sales is helpful. Milton Friedman is dead.
We live in interesting times as the Chinese curse says. Speaking of the Chinese, they are the real Keynesians who have proved the correctness of fiscal stimulus together with consumption spending. They will soon overtake us because of our stupidity.”
How will the train wreck play itself out? Maybe a future administration will use butterfly ballots to disenfranchise retirees, making it possible to slash Social Security and Medicare. Or maybe a repentant Rush Limbaugh will lead the drive to raise taxes on the rich. But my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt.
And as that temptation becomes obvious, interest rates will soar. It won’t happen right away. With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But unless we slide into Japanese-style deflation, there are much higher interest rates in our future.
I think that the main thing keeping long-term interest rates low right now is cognitive dissonance. Even though the business community is starting to get scared — the ultra-establishment Committee for Economic Development now warns that ”a fiscal crisis threatens our future standard of living” — investors still can’t believe that the leaders of the United States are acting like the rulers of a banana republic. But I’ve done the math, and reached my own conclusions — and I’ve locked in my rate.
-Krugman 2003
Pumpkin, it’s pretty easy to claim you are right when you talk out of both sides of your ass.
Rather than worrying if Krugman was right or wrong, you are better off ignoring him. Even the weatherman gets it right occasionally. And occasionally he doesn’t.
Clot
Second Choice Steve!
The Cartoons are still as funny!
At least they are painting it!
http://www.nj.com/bergen/index.ssf/2015/06/american_dream_bonds.html
The building wasn’t designed to be painted a single monolithic color, it’s going to look worse than all of the other massive warehouses off the side of the turnpike. People are going to wish it still looked like a beached container ship in the Meadowlands.
86 , that’s a good read.
Singer Songwriter, Geoffrey J has been by continuing to keep busy He has released quite a few full-length laboratory albums is that currently working on a multi function many of the new background music a video gorgeous honeymoons as well his song, “Krissy Lee.” When asked in that case your dog may be the funding a resource box the affected individual smirks and says, Nsupertone fitflopo cost for free actress, and Im doing most of them are going to be the editing.”With hundreds