Speaking at a luncheon hosted by financial-industry trade group the Dallas Estate Planning Council at the Dallas Country Club, Mr. Fisher said the central bank has done all it can to stimulate the U.S. economy. He said members of Congress–both Republicans and Democrats–have failed to do their part. Elected officials have “sold our children–and our grandchildren–down the river,” Mr. Fisher said. “We haven’t had a budget for five years; no one knows what their taxes are going to be; no one knows what spending is going to be.” The Dallas Fed president has long maintained that the missing ingredient in the economic recovery is a sound fiscal policy. He argues that deadlock in Washington over a budget plan has created a “fog” of uncertainty. Poor visibility makes it difficult for business owners to plan expansion and hiring, Mr. Fisher noted. Responding to a question from the audience, Mr. Fisher said “Obamacare” health-care reform is currently a “weight” on the outlook for corporate growth.Obamacare already has a multiplier less than one? That means the Undemocratic party has gotten California into years of stumbling and fumbling, eventually leading to bankruptcy.
Thursday, September 5, 2013
Fed codeword for multiplier less than one
Fed’s Fisher Slams Congress Over Fiscal Policy, WSJ
Likely a bribe
Apple Inc. won a $30-million contract Tuesday from the L.A. Unified School District, paving the way for the company to provide every student with an iPad in the nation's second-largest school system. The Board of Education voted 6 to 0 on Tuesday to approve the contract after hearing senior staff laud Apple's product as both the best in quality and the least expensive option that met the district's specifications.LA TimesActual bribery is the most likely cause of California bureaucrats and their continual failure with technology, this project will follow suit. Given the third, or fourth time the NCLB testing has changed, the school board has given up and wants to turn the task over to web bots. The web bots will not be available in time, about a quarter of a billion in software will be wasted, and teachers will, at the last moment, have to adopt pencil and paper. And yet another cycle of failure and fiasco will follow.
OK, then the real problem? California teachers, using insider party channels, got the state invovled with the nasty, destabilizing No Child Left Behind. They have regretted the bonehead move ever since, but because of their inherent Orwellianism, teachers cannot find out what they did wrong. They and the students have suffered for over ten years because Ca teachers are too stupid to step out of the box.
Unemployment indexes are printing
Claims for unemployment down a bit, but gallop is reporting a jump in unemployment. Mixed and confusing. The webosphere will clear this up.
Wednesday, September 4, 2013
California addicted to DC
California's labor reforms conflicted with DC law, so California has to give way to an exemption for the transit unions:
A second point for Jerry, is California pays a 25% premium in federal taxes, that is our money to begin with
Third, this is the basic problem of being short eight Senators, being unrepresented in DC.
A billion-dollar stare down with federal officials ended this morning with an announcement that Gov. Jerry Brown has proposed legislation to exempt roughly 20,000 mass transit employees from California's new pension law. The measure, which is expected to move swiftly through the Legislature, was prompted by the U.S. Department of Labor's decision today to suspend millions of dollars in grant money for the Sacramento Regional Transit District. Read more here: http://blogs.sacbee.com/the_state_worker/2013/09/jerry-brown-backs-bill-to-let-transit-workers-sidestep-pension-law.html#storylink=cpy Sac BeeI have news for Jerry, the real reason transit subsidies are at risk is because DC is broke. Sequestering is cutting that stream of money that Jerry and the Undemocrats said was infinite. The day is arriving where California cuts the deadweight loss making light rails off, or we go broke funding them.
A second point for Jerry, is California pays a 25% premium in federal taxes, that is our money to begin with
Third, this is the basic problem of being short eight Senators, being unrepresented in DC.
Methville, USA
Knife-wielding man shot by Fresno police
A knife-wielding man was critically wounded early Wednesday morning by a Fresno police officer.
Deputy Chief Pat Farmer said the incident happened about 1:30 a.m. Wednesday when an officer was called to a family disturbance in east-central Fresno and was charged by a man with a knife. The officer fired his service weapon at the man.
Police did not identify the man, but said late Wednesday morning that he remained in critical condition at Community Regional Medical Center.
Police spokesman Jaime Rios said the incident took place on Sierra Vista Avenue just north of McKinley Avenue after officers were called by family members, who said the man was acting strangely.
When the officer arrived and was getting out of his car, Rios said, he was charged by the man who was armed with a knife. The officer fired at least one round from his service weapon, momentarily stopping the suspect. The suspect then charged again, and the officer fell while backing up. The officer then fired several more rounds, bringing the man down.
This is once or twice a year
Arab Spring has gone bozonkers
Lybia has devolved into militiaism, Egypt couldn't deal with Islamo nuts, and Syria is a mess. Even Iraq has gone back to sectarian war. Wacko, zonked, goners for the next 10 years.
Tuesday, September 3, 2013
Joe Gagnon is delusional; about the Fed
Misconceptions About Fed’s Bond Buying
He lists a number of delusional ideas that he has and calls it truth. The basic misunderstanding is the old Bernanke fable that the path to high interest rates is via low interest rates. The old cycle theory which has no basis in fact.
Point one: If low interest rates lead to high interest rates then why have rates continually declined for 30 years?
Point two: Bond buying is done by the Fed because the Fed works for Congress and Congress is losing money hand over fist. To see this, examine the accumulated debt over the past thirty years which occurred as the potential output of the economy has dropped, continually.
Point three: There is no reason to think that continual support for Congress leads to a recovery. Look at the volatility of the deficit over time, it has gotten worse, not better. The deficit is now dropping like a rock, and Congress is helpless, prior to that it shot up like a rocket, and Congress was helpless. Congress is operating a regime of multipliers less than zero, has been for 30 years. What else explains the correlation federal debt and low growth. Why does income inequality grow with increasing Congressional deficits?
Point five: The Fed cannot create inflation in the consumer sector, it is about four layers removed from the consumer. The only thing that has directly led to a rise in the CPI are shortages of widely used consumer commodities, namely oil. All of the CPI inflation we have seen since 1980 has come from oil shocks, not Fed action. Where does the surge of federal debt show up? In bubbles, the fast movement of money in and out of emerging markets, for example. The inflationary rise in stock values. And continuing income distortions.
Summary. Congressional activities are loss making and not cyclic. There is no reason to believe the regime will not break down, it has many times in our history and likely to do so again. We call this process the bankruptcy of the old regime and the building of a new, a common experience in American history. It is not a natural cycle, it is the natural adaptation of America to disaster appearing front and center.
He lists a number of delusional ideas that he has and calls it truth. The basic misunderstanding is the old Bernanke fable that the path to high interest rates is via low interest rates. The old cycle theory which has no basis in fact.
Point one: If low interest rates lead to high interest rates then why have rates continually declined for 30 years?
Point two: Bond buying is done by the Fed because the Fed works for Congress and Congress is losing money hand over fist. To see this, examine the accumulated debt over the past thirty years which occurred as the potential output of the economy has dropped, continually.
Point three: There is no reason to think that continual support for Congress leads to a recovery. Look at the volatility of the deficit over time, it has gotten worse, not better. The deficit is now dropping like a rock, and Congress is helpless, prior to that it shot up like a rocket, and Congress was helpless. Congress is operating a regime of multipliers less than zero, has been for 30 years. What else explains the correlation federal debt and low growth. Why does income inequality grow with increasing Congressional deficits?
Point five: The Fed cannot create inflation in the consumer sector, it is about four layers removed from the consumer. The only thing that has directly led to a rise in the CPI are shortages of widely used consumer commodities, namely oil. All of the CPI inflation we have seen since 1980 has come from oil shocks, not Fed action. Where does the surge of federal debt show up? In bubbles, the fast movement of money in and out of emerging markets, for example. The inflationary rise in stock values. And continuing income distortions.
Summary. Congressional activities are loss making and not cyclic. There is no reason to believe the regime will not break down, it has many times in our history and likely to do so again. We call this process the bankruptcy of the old regime and the building of a new, a common experience in American history. It is not a natural cycle, it is the natural adaptation of America to disaster appearing front and center.
Monday, September 2, 2013
Pent up demand
An important economic term because it represents a potential economic energy, the idea that consumers being denied their usual goods will pay a bit extra when they come onto the market.
Keynesians need a source of potential energy because they tell their constituents that an upswing is inevitable (they think in terms of cycles). But we have been at equilibrium for 5 years, GDP growth at 2.3% on average, and well bounded. At least four major investment cycles have occurred (smart phone, fracking, emerging market investing, and Obamacare). That is a lot of movement in which prices would have adjusted. In other words, the Keynesian moment is gone, but the Keynesian want to hang on.
Here is a test. In a turbulent world how long can a consumer stay addicted to a good he has not seen for five years? Some addiction! A meth addict can be locked away from meth for five years, and at the end of five years be clean and barely at risk. Meth is the most addictive drug around (next to nicotine and heroin), yet it is difficult to maintain the addiction when the drug is withdrawn for five years. Yet Kenyesians think the average consumer is more addicted to goods from five years ago? No way.
Keynesians need a source of potential energy because they tell their constituents that an upswing is inevitable (they think in terms of cycles). But we have been at equilibrium for 5 years, GDP growth at 2.3% on average, and well bounded. At least four major investment cycles have occurred (smart phone, fracking, emerging market investing, and Obamacare). That is a lot of movement in which prices would have adjusted. In other words, the Keynesian moment is gone, but the Keynesian want to hang on.
Here is a test. In a turbulent world how long can a consumer stay addicted to a good he has not seen for five years? Some addiction! A meth addict can be locked away from meth for five years, and at the end of five years be clean and barely at risk. Meth is the most addictive drug around (next to nicotine and heroin), yet it is difficult to maintain the addiction when the drug is withdrawn for five years. Yet Kenyesians think the average consumer is more addicted to goods from five years ago? No way.
Darrel Steinberg, America's homegrown terrorist
Cal Political Review: The popularity and success of California’s 900 charter schools aren’t making everyone happy. Union leaders have tried to organize the non-union schools, but unsuccessfully.
New tactic: Hamper the charters’ spread. AB 917, which just passed both houses of the Legislature, might accomplish that. If it becomes law, it also could be the first volley in a move to severely limit the reform.
Currently, according to the California Department of Education, “A charter school is usually created or organized by a group of teachers, parents and community leaders or a community-based organization, and it is usually sponsored by an existing local public school board or county board of education.” Half of the teachers must approve the charter.
AB 917 would add a new requirement: one half of all employees in a school — including non-teachers — would be needed to convert a public school to a charter school. These “classified employees” include janitors, accountants, computer technicians, bus drivers, cooks, etc.. That would make it much more difficult to petition for a new charter school. Although such employees are critical to a school’s function, they have no say in the heart of any school, curriculum and teaching.
Steinberg, Ca Senate and party leader, true to principal, wants to trash the education system so his people can siphon off education funds for goodies. Steinberg is America's worst enemy.
Fallacy of composition
We see mostly, the federal government spending rose to high levels and stayed there the entire period. The period of low growth aligns quite well with expanded Federal spending. This expanded federal spending is the attempt by Keynesians to salvage the situation in New York and California. California Undemocrats had driven the state nearly to bankruptcy, the Undemocratic party platform has one plank, 'Lets hope the California legislature gets a clue'
No one was worried about Texas, mainly because Texas stayed out of trouble. It is the Keynesians bailing out the two progressive hegemons of the American Undemocratic party. It has a multiplier less than one, and now that the money has been invested in these dysfunctional economies, DC is stuck. DC can do nothing else than keep its two hegemons alive, actual economic expansion is not a concern. Thanks to the structure of the party finances, Obama's economic plan is very simple, freeze everything and hope California makes Obamacare work reasonably.
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