[$tinkle]

That's the thing though, when you're paying out the ass for healthcare

you don't pay for healthcare, just health insurance, at your pleasure & ability

The system is working against the poor who are hard working, and allowing the lazy rich to rob them blind through campaign donations.

just to speculate, what percentage of poor do you believe are "working hard"?
and, what percentage of the rich are lazy?

the free market tends to reward results, not efforts.

 

[zdubyadubya]

In grad school I managed to support myself, wife, and "brought along for the ride" two kids on 30k a year. Its doable. You just have to be creative about what you spend money on. I think the saving grace was the state employee health insurance. ~120/mo and covered EVERYTHING 100% with $15 copays.

 

[TheMontashu]

you don't pay for healthcare, just health insurance, at your pleasure & ability

Pleasure and ability?? That's a crock of **** sir, and the ignorance of that statement isn't even worth responding.

just to speculate, what percentage of poor do you believe are "working hard"? and, what percentage of the rich are lazy?

the free market tends to reward results, not efforts.

You sure about that? I can dig through some old research, cause I'm pretty sure the free market rewards the people who's mom and dad had the most money the vast majority of the time. The rich also push numbers to make most of their money IE investments. So yea, my buddy at the UPS warehouse who makes 10$ an hour lifting boxes probably does work harder.

 

[$tinkle]

Pleasure and ability?? That's a crock of **** sir, and the ignorance of that statement isn't even worth responding.

obvious troll not obvious?

You sure about that? I can dig through some old research, cause I'm pretty sure the free market rewards the people who's mom and dad had the most money the vast majority of the time. The rich also push numbers to make most of their money IE investments.

you know them so well, yet without knowing a single one of them.
michael moore & george soros continue to appreciate your blind loyalty, however

So yea, my buddy at the UPS warehouse who makes 10$ an hour lifting boxes probably does work harder.

if we're talking work=force*distance, then i agree
all other definitions recognized by the market place are more pertinent, however

 

[Toshi]

Uh, no offense, but that's not exactly a cohesive argument when you extrapolate it to the rest of the population. There has to be *someone* to flip burgers for minimum wage or else the living costs go through the roof. If everyone who made less than $15/hour moved to the midwest prices would go up for everyone to the point that $20/hour workers would have to move........

You lost me here: Why again would prices go up if teh Montashu's crew migrated elsewhere?

 

[$tinkle]

You lost me here: Why again would prices go up if teh Montashu's crew migrated elsewhere?

b/c voters would have approved a "living wage", duh

 

[Toshi]

just to speculate, what percentage of poor do you believe are "working hard"?
and, what percentage of the rich are lazy?

Table A-4. Employment status of the civilian population 25 years and over by educational attainment

Sept 2011 figures:

1. Less than high school completion, 40.0% employment to population ratio, and of the 60.0% unemployed 14.0% (of the total, not of the 60%) are actively looking and thus counted in the headline unemployment number.
2. Bachelor's degree or more, 73.0% employment to population ratio, with 4.2% of the 27.0% not employed actually counted in the headline unemployment number.

There are many reasons why someone might be a discouraged worker and not actively looking, but the difference between 22.8% (bachelor's degree, not employed, not looking) and 36% (dropout, not employed, not looking) is pretty huge. Are all these remaining people felons? Stay at home moms/dads? Disabled? Mentally ill? Lazy? Hmm. The truth lies somewhere in between...

 

[$tinkle]

no better place to navel gaze than the unemployment line

but now that you can apply for UI online...

 

[Toshi]

Going back to the original point of this thread, before the lambast-Montashu's lazy friends digression:

The behavior of the exceptionally rich drives the national numbers - the “appallingly low” overall savings rates, the “over-extended consumer”, and the “unsustainable” current accounts that accompany this phenomenon. We want to spend little time worrying about these (non)issues, neither do we think they warrant any risk premium on equities.

Anyone still care to characterize these issues as irrelevant? In their self-serving paean to plutonomies and the luxury brands favored by those in the ruling class (remember that they brokered investment in said companies), the Citi analysts seem to have totally missed the boat.

Much as the Montashu and his struggling-musician friends feel that their life will not be complete without all of the middle class trappings (whether they can afford them at the moment or not), much of middle class America itself apparently felt that their lives would not be complete without the trappings of upper middle class life. Buy a boat and an SUV on an all-too-eagerly-offered home equity line of credit, and add in a second house for good-Brian HCM #1 measure while one's at it, and then multiply by millions of households…

 

[Toshi]

On the other hand, many of the exotic brands that truly cater only to the top 0.1% consumers have bounced back rather well… It's just that mainstream consumers along with all their attendant brands were clobbered along the way.

Beth Kassab: Pure luxury shows signs of bouncing back - Orlando Sentinel

 

[$tinkle]

i take great offense to all these consumers of luxury to buy their goods, which are clearly manufactured, distributed, & manned by a retail sales staff only by other 1%-ers

 

[clarkenstein]

https://plus.google.com/115479414905422234350/posts/MPoSAB4itu6
https://plus.google.com/115479414905422234350/posts/9qSa8JQq8bt

these links aren't working - what were they a reference to outta curiousity?

good points on the home ownership as a right thing.

 

[clarkenstein]

On the other hand, many of the exotic brands that truly cater only to the top 0.1% consumers have bounced back rather well… It's just that mainstream consumers along with all their attendant brands were clobbered along the way.

Beth Kassab: Pure luxury shows signs of bouncing back - Orlando Sentinel

i work for a luxury brand company and this is spot on. we're having an awesome year. i think with any economic class, a majority in that class will always have the N+1 equation in their head. they are at N, and they want that +1.

 

[Toshi]

these links aren't working - what were they a reference to outta curiousity?

good points on the home ownership as a right thing.

They're public Google+ post links, posts by yours truly. Perhaps it's blocked by your company's firewall. I'll inline them and their comments here since they're public anyway:

In The Way Forward, Alpert, Hockett, and Roubini argue that the Lesser Depression/Great Recession is not an ordinary business cycle downturn, and raise the scepter of a Japan-style extended period of stagflation affecting both the US and Europe.

Unlike most authors, though, they don't stop there, and offer up a plan for carving a new way forward out of the quagmire. Worth a read, I think, both for their analysis of how we got here and where to go.

http://growth.newamerica.net/sites/newamerica.net/files/policydocs/NAF-The_Way_Forward-Alpert_Hockett_Roubini_0.pdf

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On the illusory sense of wealth:

"In effect, these policies [by the Fed and the Bank of Japan of easy monetary policy and an expansion of credit] amounted to a totally impractical 'supply-side Keynesianism' that led to ever more borrowing meant to compensate for dwindling consumer demand no longer supported by real wages and incomes."

Same topic, different facet: "During the Great Credit Bubble of 2001-2009, real median incomes fell, on both an average annual basis and in the aggregate." Translation: this past decade of apparent prosperity under GWB was a total illusion, with all of the "gains" and then some fueled by credit, not by true growth.

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On the bind we have created by a consumer-demand-dependent economy, high debt burdens and excess capacity:

" In a globalized economy with excess capacity and ongoing private sector de-levering, diffuse, as distinguished from concentrated, demand stimulation through tax cuts and income supports can have only limited effect. For indirect fiscal stimulus of this kind is either rationally hoarded in significant part by the individuals who receive it, or goes to pay down their overhanging debt, or leaks out of the economy to buy yet more cheap imports."

Why the US can't weaken our currency sufficiently to get ourselves out of this trap:

"In a “normal” debt deflation, debtor economies that must de-lever can substitute external demand for reduced domestic demand. Trade adjustment is aided by a fall in that economy’s currency relative to that of its main trading partners. This is how Sweden and Canada successfully worked off their credit bubbles and debt burdens in the 1990s. But this option is not available to the United States at this time for several reasons. One is that Europe and the United States can’t both pursue trade adjustment simultaneously, and the Euro-zone seems poised to win the battle for the weaker currency. Another is that the United States is locked into a de facto “dollar zone” with China by virtue of China’s continuing policy of pegging the yuan to the dollar. Since the London meeting of the G-20 in April 2009, Beijing has not allowed its currency to appreciate against a basket of currencies, leaving it still undervalued by 25 percent according to some estimates. Finally, there is the reality that while demand is growing in the BRICs and other emerging economies, these economies are not yet anywhere near sufficient contributors to global aggregate demand as to put the United States into actual trade surplus, especially when we factor-in the large surpluses of the petro-dollar economies."

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Attention, Ron Paul acolytes: Fiscal austerity is a bad idea. Here's why:

"Under existing conditions of weak global demand, austerity would simply lead to a vicious circle of yet weaker demand, weaker investment, more unemployment, and still weaker demand, ad infinitum – the familiar “downward spiral” of all “great” depressions wrought by the “paradox of thrift.” This is especially true if austerity is pursued simultaneously in Europe and the United States, as now is in real danger of happening owing to European measures that are just as wrong-headed as now-voguish American ones."

Attention, Obama-philes: Your preferred plan is also bunk.

"[A Grand Bargain of short--term stimulus combined with long--term fiscal consolidation] has emerged as the responsible centrist position in policy and media circles in DC – it is, in fact, the essence of the President Obama’s recent proposal (see below). On the face of it, it seems eminently sensible but again it does not fit economic realities. The main problem with this proposal is that the short-term stimulus envisioned by those pushing the idea looks much too much like the three previous stimulus efforts but smaller. It is too temporary, too focused on short-term tax relief and consumer support, and too misdirected to provide the economy more than a modest and temporary boost, as opposed to the bridge to long-term restructuring and recovery that the U.S. economy requires.

"This, again, is a solution designed for a typical business cycle downturn. But as we have shown we are facing a much more serious challenge of a multi-year de-levering process. In keeping with the analysis of other de-levering studies, we estimate that it will take at least another five to seven years for households to repair their balance sheets, for unemployment and underemployment to return to normal levels, and for balance to be restored in global demand and supply given the problems we see in Europe and given the length of times it takes for emerging markets to develop domestic demand."

------------------------

So how do we solve this mess? Here's what they suggest, in a nutshell:

"Rather than lurch from one futile ministimulus and quantitative easing to another, we must build consensus around a five-to-seven-year plan that matches the likely duration of the de-levering with which we now live, as well as that of the time it will take for emerging markets to transition to patterns of economic growth driven by domestic demand rather than exports. We believe there are three basic criteria that should guide the construction of such a longer duration recovery program."

The three criteria are then outlined to be Concentrated demand, debt-overhand reduction, and global rebalancing.

The first includes "intrastructure investment, development of America's abundant energy sources, and new technological development." The second "will require creditors to recognize losses and recapitalize" through "debt restructuring, refinancing, and in some cases relief." The third involves addressing the "warped financial architecture that mis-priced risk and channeled excess savings into housing and other non-productive investments", the global imbalances between export-heavy and consumer-driven nations, the labor-capital imbalances that have led to weak wage growth, and quelling the hemorrhage of dollars to Middle Eastern oil sheiks, in as many words.

------------------------

I think they hit upon an important point regarding the different roles of corporations and governments, after touching upon the incredibly cheap cost of capital and abundance of labor that are secondary to this very recession:

"Governments are the only entities that can abstract economic utility from the present capital glut. Governments are not subject to the imperative to generate equity returns since they are not profit-generators. But they can create value by using this excess capital to make investments in the economic future that will redound to everyone’s benefit."

Finally they outline their plan to meet the above criteria in much more detail for the curious. (Need I state the obvious, that their eminently rational policy proposals will likely never see the light of day in Congress, let alone make their way to the President's desk for a signature?)

------------------------

I do take issue with their "highly structured and appropriately granular" plan for restructuring mortgage debt, though. I think any plan such as theirs that offers principal reduction to some but not all is intrinsically unfair. I'd favor a simpler approach, perhaps the "quickly expiring/devaluing $10k platinum coin for every adult" method that Brad DeLong has thrown about in semi-jest.

If all the world's economic problems could be alleviated through a 10% across-the-board increase in demand, but said demand could only be achieved by all asset holders taking a similarly across-the-board 10% haircut, would the latter go for it?

Alternately: what would happen if all the governments in the world minted a $10,000 platinum coin for each and every one of their citizens, and then handed them out with the caveat that they'd be worthless come calendar year 2012, and had to be converted to material goods, not cash or Treasury bonds or the like?

It seems so… unjust that we have so much wasted human capital and productive capability currently going to waste in a self-perpetuating downward spiral. There's no shortage of money, per se, as witnessed by the record-low T-bill yields, but rather a demand shortage. To me, it seems that we should therefore be devaluing money until it returns to an equilibrium with the (fully utilized) productive capacity of the world…

------------------------

I like the $10,000 figure, too. To the billions of poor people in the world, it'll represent a huge multiplier of their annual salary, and might mean that they can purchase their own bit of land, first Tata Nano or whatever, or at least a cell phone so that they can track produce prices and barter with more leverage. To the indebted middle class people in this nation and elsewhere it'll represent a nice "3-6 month cushion" windfall, albeit one that must be spent* in order for this experiment to work. To the already-wealthy it won't mean a thing, except that said money will immediately go back into circulation.

* It'll still serve to reduce debt, as it'd replace spending on necessities, probably. The only people for whom the "must spend on goods" condition would make a difference would be the wealthy, who would be forced to spend it instead of dumping it straight into their investment accounts.