The economy in a nutshell

"We're in a zero-inflation, zero interest rate savings glut. The only way to get out is liquidity + fiscal stimulus."
-- An anonymous commenter on Brad DeLong's blog

Sad to say, with all the bullshit that the Rethugs are pushing out, they're doing their damndest to turn a deep recession into an all-out depression. They're saying the exact same goddamned things that they said in 1930, and are just as wrong now as they were in 1930. It's as if they flunked history in college or some shit like that, or maybe Republican history classes at Sheep Dip Bible College says FDR was President in 1930-1932 or some stupid shit like that (just as Republican science classes at Sheep Dip Bible College says the world is only 16,000 years old and the dinosaur bones were placed underground by the Great Flood).

So anyhow -- we're in liquidity trap territory right now, where any money being printed is stuffed under (virtual) mattresses, rendering monetary policy ineffective. We have to solve the fundamental solvency problem to eliminate the liquidity problem, but doing that isn't enough. A functioning financial marketplace is a necessary, but not sufficient, precondition for economic activity in an era of deflationary expectations. People (or banks) with deflationary expectations, who see their money as being more valuable to them in the future as their income declines due to job losses or pay cuts, will shove money under mattresses (or the virtual equivalent) rather than spend, no matter how much money you print. Any extra money printed simply goes to make mattresses plumper, rather than being spent or loaned and thus create economic activity.

Thus why I continue to state that it isn't enough to print money in order to re-inflate a deflating money supply. We need continued massive fiscal policy spending on the part of the U.S. government and government as a whole in order to make that newly-printed money actually employ people and create economic activity, and thus change deflationary expectations into inflationary ones where people want to spend again because their money will be worth less in the future. It's not as if there's any shortage of projects to spend money on. The nation’s infrastructure has been crumbling for years because of the pervasive underinvestment of almost 30 years of Republican domination of U.S. politics dating back to the election of Ronald Reagan, so it’s not as if there’s nothing to use as the target for this fiscal spending. We need roads, bridges, new high-speed rail and mass transit systems to deal with the fact that oil is running out and the automobile will not continue to be a viable means of transportation at some point within the next 20-30 years, we need a new electrical grid to replace the current collapsing one and new power plants to produce the power that will power the transportation infrastructure of the future, we need investment in basic science and research both theoretical and practical (for practical, in how to do agriculture in the future once easy petrochemical access is lost due to peak oil otherwise there will be a *lot* of hungry Americans and we aren’t likely to survive as a nation), there are just so many things that fiscal policy could be used for that not only help re-inflate the money supply, but result in actual valuable infrastructure and products in the future. Simply cranking up the printing presses won’t do all of this, it’ll just make the mattresses plumper and the Fed’s (virtual) vaults plusher. Cranking up the printing presses *and* spending the newly-printed money on all these backed-up infrastructure projects, on the other hand, are how you keep a deep recession from turning into an all-out New Great Depression.

Thing is, then you got these Republican fucktards whinging about inflation. What the fuck? There is no inflation out there, asset values are still spiraling downward like the Republican Party's collective IQ as all the smart Repubs jump ship, wages are flat or declining (remember, wages of unemployed people declines to ZERO and there's half a million people a month losing their jobs right now), prices of a few commodities have risen but mostly things are flat or declining there too. Only a total moron would be worrying about inflation when we're on the precipice of an all-out Great Depression. Hold it, we're talking Republicans here, of course we're talking about total morons :-).

The depressing thing is that all these morons waving teabags inchoately and whining about (mythical) inflation and shit are having an effect. I see no possibility that we're going to do the sort of fiscal stimulus needed to take the place of a significant amount of the private economic activity that has simply collapsed due to the asset bubble collapse. Instead, we have dolts waving fucking teabags, of all things. We have become a nation of dolts and idiots from top to bottom, reduced to inchoate expressions of outrage upon demand, and the stupidity seems to be wearing off even on people who I generally respected for their intelligence, such as President Obama. Sigh.

Why nobody is invading North Korea

Okay, so as Brian at Why Now mentioned, the Chinese are pretty pissed at North Korea for exploding a nuke and firing off some more missiles. As in, pissed enough that they voted for some U.N. security council resolutions and basically told Li'l Kim, "Stop that shit - or else!" The "or else", though.... ah yes, therein lies the problem. Sure, China could cut off its economic support for Li'l Kim's regime. But then a) you got a lot of starving peasants (what, you don't think Li'l Kim would go hungry? Perish the thought!), and b) it doesn't hurt Li'L Kim a whole lot because most of the country *already* has devolved economically to pre-industrial times with animal power and all that.

Which brings up the real reason nobody has invaded North Korea since Li'l Kim started being a bad boy. That million man army? Bah. They spend most springs planting crops, and most autumns harvesting crops, and do fuck-all little training and none of their advanced weapons actually work anymore due to age and lack of fuel. They're basically a hoard armed with AK-47's, RPG's, and mortars, and any modern army (or even China's only halfway-modern army) could crush them like a bug. The problem is, once you do that, then what? You invade the place, you own it. And what you own is a medieval hell-hole where the entire population has been brainwashed and indoctrinated into some weird-ass cult shit, and the economy relies on having a million soldiers planting rice in the spring and harvesting rice in the fall and that's the million soldiers you just crushed, remember? Meaning, economic collapse. Meaning, you own this shit unless you want pictures of starving North Korean babies showing up on the Western news. Both South Korea and China have plenty of capability to invade and conquer North Korea any time they like (South Korea's modern army is some real hard-asses, they basically model themselves on the old Imperial Japanese Army but with modern warfighting equipment like some damn fine Hyundai tanks and supporting F-15's), but the question of "then what?" still remains, and nobody has the slightest inclination to hurry up the answer to that question until they have no choice at all.

- Badtux the Geopolitical Penguin

Congratulations, Californians!

Your Supreme Court just ruled that 51% of California voters can take away a right granted by the California constitution. Cool! Let me go look at the California constitution's equal protection clause... hmm. Oh I know, let me get an initiative onto the ballot to eliminate marriage rights for vegans! Because we all know that those vegans are sick and immoral. If God had not intended for man to eat meat, then He wouldn't have placed beefsteaks into our grocery stores. Marriage between vegans passes that evil seed of depravity on to future generations and thus must be abolished! Yeah!

-- Badtux the Snarky Penguin

Remembering the victims

Over 20,000 people per year are killed by the for-profit health insurance industry in the United States. Here are the names and stories of some of them.

As I've mentioned before, if your ideology ends up with thousands of dead bodies in the streets, your ideology is immoral and wrong. The only reason to retain the current U.S. health care system, a system which is a) the most expensive in the world, and b) the most deadly of any first-world health care system, is ideology. Period. It doesn't work, and it results in tens of thousands of dead bodies in the streets.

Let us remember that the whole purpose of any form of social organization is to produce the most good for the most people. People who raise any "-ism" to the level of religion are dangerous -- and, in many cases, evil, and not knowing they're evil because they view their own ideology as "good" and everything else as "evil". But if their ideology leads to dead bodies on the streets... I don't know what else you can call these people.

-- Badtux the Pragmatic Penguin

Why should religion get special treatment?

There are currently at least two lawsuits outstanding by religious organizations against cities for enforcing their zoning ordinances prohibiting home businesses. A group of Buddhists in Pennsylvania, and a group of evangelical Christians in California, are both suing their respective cities for prohibiting them under the city's residential zoning ordinances from holding study/worship sessions that clog residential streets with fifteen cars or more in local homes.

The deal is that most cities have ordinances strictly regulating home businesses. Home businesses are basically restricted to businesses that do not attract traffic or require infrastructure that would disrupt the residential nature of the neighborhood or disturb the neighbors. For example, any business that attracts more vehicles than will fit into the driveway of the home may be prohibited, which basically prohibits retail businesses of any sort. And if the business will have more than five employees or clients at a time, it is strictly prohibited in a residentially zoned area. So if a church study group is attracting more than five people in addition to the people who live in the house, it's not allowed by zoning ordinances that cover business use of residentially-zoned properties.

Now, churches may claim that they are not a business and thus do not need to comply with zoning ordinances. They may claim that they are a study group and no different from, say, a private dinner party, in their use of the residence. But when you consider the cash flow that goes through churches, and the regularity of these study groups, that is clearly not the case. A dinner party happens maybe once a month on some random night. A church meeting every Sunday, on the other hand, is a different tale. Churches are incorporated as non-profit organizations because, duh, they're businesses.

Not that this is stopping churches from suing for special treatment... sigh. It's just wonderful how churches scream "persecution! persecution!" every time a city tries to enforce its sane and reasonable zoning laws equally against all businesses...

-- Badtux the "Equal treatment is persecution?!" Penguin

Ah yes, I'm back

Thank you to Bukko and Hipparchia for minding the children in the health care threads while I was gone :-). I'll finish reading all of the new comments as soon as I somewhat recover from multiple days of hiking. Meanwhile, I'm enjoying a gigantic pepperoni and jalapeno pizza, yum!

-- Badtux the Tired Penguin

A small blue thing

From Suzanne Vega's first album, a concert in 1986 at Albert Hall. Sad to say, she is pretty much out of the music business nowdays (other than occasional small side-projects). Her early success made it possible for Tracy Chapman, Tori Amos, Sarah McLachlan, and many other female folk-pop artists to become heard outside of coffee shops, but her cool cerebral music was swiftly abandoned by the listening public after they had the warmer folk-pop ladies to listen to, and her remaining fans largely abandoned her after she went edgier with 99.1F, which was brilliant but much cooler and harder than people were comfortable with. So it goes. It seems we mostly like music that tells us what we want to hear, just like everything else in life. Sigh.

-- Badtux the Music Penguin

Trying a new recipe for trail food

• 1/2 cup instant black bean soup flakes
• 1/2 cup instant rice
• 1 1/3 cup water
• Tapatio or Tabasco hot sauce or salt and pepper to taste
• about 2 tablespoons of Monterrey Jack hard cheese, cut into small pieces

Mix it all up, bring it to a boil, turn off the burner and cover the pot, wait five minutes. Stir, season to taste with the hot sauce or with salt and pepper. The result is only barely edible, but it's no worse than prepared freeze dried foods specifically marketed for camping, and aside from being much cheaper, the bean flakes and rice are quite compact so you can carry a lot in a small bear canister. It is *definitely* recommended that you carry something other than these for some variety. Hard pretzels and flavored pouch tuna, for example, makes a nice mid-day meal with no cooking required.

-- Badtux the Camping Penguin

An example of why American healthcare is Teh Fail

Young man condemned to death because of pre-existing condition that disqualifies him from health insurance. And also, apparently, because the people of Nevada are skinflints who won't fund their Medicaid program enough to cover serious illnesses, instead throwing those people out on the streets to die.

That's not the kind of story you hear about in France, because it wouldn't happen in France. That's not the sort of story you hear about in Netherlands, because it wouldn't happen in the Netherlands. Or in Germany. Or Austria. Or Canada. Or even in the sorry British Public Health Service, which is always woefully underfunded. People don't get denied health care there just because they're poor or have the bad luck to live in a state populated by retired vicious elderly skinflints who hate everybody and everything and they have their Medicare so why should they care about the healthcare of youngsters? It's only in this sick, sad society where we condemn people to die because we're a nation of vicious hateful bastards.

-- Badtux the Disgusted Penguin

Which book shall I read over the Memorial Day Weekend?

Hmm, The Mighty Fang seems to be indicating that the Tony Hillerman is the one he wants to read... a cat with good taste in books. Heh.

- Badtux the Cat-owned Penguin

Jesse Ventura waterboading school continues

Took it to Fox and Friends, had an absolute put-down of the nonsense about coddling terrorists: “No. I’m not worried about their welfare. I’m worried about what our country stands for."

Took it to Huffpo, bet that he could waterboard Sean Hannity into saying "Obama is the best President ever".

At least one conservative took up the challenge. Conservative radio host "Mancow" said, "pshaw, it's just a little water on the face." He lasted a whole SIX SECONDS. And emerged to say, "Yes, it *IS* torture."

School is in session. Let's see where it stops next.

-- Badtux the Education Penguin

Republican "health care plan": Massive Fail

Well, looks like the good ole' John McInsane Health Care Plan that I so justly derided back in October 2008 is back, as the brand-spankin' new GOP Health Plan. As is usual for GOP proposals, it is a huge honkin' tax increase for the middle class disguised as a "tax cut" -- it eliminates the tax deduction for employer-provided health insurance, and replaces it with a laughably inadequate tax credit that provides less than *HALF* of the cost of the average family health insurance policy. It also adds some cool pork for Republican donors, such as privatizing Medicaid (more profit for insurance companies! Yum!), auto-enrollment in insurance at the emergency room (yay, more customers for the insurance companies!), limit malpractice lawsuits against bad doctors... and all while doing nothing, nada, zip, zilcho, for the problem of out-of-control health care costs in America.

The United States is spending 17% of its GDP on health care. France is spending 12% of its GDP on health care, or 30% less than the United States. Yet France surpasses the U.S. on *all* measures of health care -- outcomes measures (life span, cancer survival rates, etc.), waiting periods for treatment, number of doctors per thousand population, number of hospital beds per thousand population, access to advanced medical treatments (only 66% of Americans have *any* access to advanced medical treatments -- the other 33% of Americans have no insurance or are too underinsured to have access to advanced medical treatments), access to advanced medical technology... and they do that all for less money than the U.S., because they have a guaranteed universal single-payer health insurance system rather than the costly and inefficient bunch of money grubbing leeches that is the U.S. privatized health insurance system. Now, the big problem here is that this is unsustainable. We can't spend 20% of our GDP on health care and expect to maintain a viable economy, and at current rate of growth of health care spending, we'll be at 20% by the end of this decade.

Yet the Republicans have nothing -- nada, zilch, zero -- to offer regarding fixing this problem. Indeed, by pushing yet more people into the costly and inefficient individual health insurance market instead of the far more efficient group health insurance market, they'll make health care costs go up even *more* -- and almost all of the increased costs will be profits pocketed by health insurers. Meanwhile, the most cost-effective solution for funding, single payer ("Medicare For All"), *still* isn't on the table... gotta make sure the blood-sucking leeches in the private insurance industry get to make more profit from the illnesses of Americans, sigh. And President Obama seems just peachy-keen comfortable with that. Best Republican president of the past thirty years? We'll have to see, hmm?

-- Badtux the Health Care Penguin

Jesse Ventura further redeems himself

-- Badtux the Appreciative Penguin

H/T to WOK3

Thought for the day

Once upon a time, medical care in the U.S. consisted of barbers wielding razors and leeches. US healthcare still involves leeches. Only now we call them 'insurance companies' or 'HMOs'.

-- Badtux the Snarky Penguin

Jesse Ventura schools Sean Hannity

Jesse was a lousy politician, he is dispositionally incapable of the give-and-take and compromises needed to be an effective politician. But he needs to get his own television show, dammit, he's fun, entertaining, and you can't intimidate him. This is one of the few times that I've seen Sean Hannity fail at his attempts to bully his guests.

-- Badtux the Entertained Penguin

Yogi better watch it....

Visitors to Jellystone National Park might be armed next time he tries to raid their camp. Yessiree, while the tighty righties have been frothing at the mouth about how Obama is gonna take their guns away... Obama is apparently having no problem at all signing a credit-card bill that has an expansion of gun rights to allow packing in national parks.

While I don't personally think allowing people to pack iron in national parks is a good idea, let's face it -- people are doing it already, the rangers don't have any real way of enforcing the current ban (I've come across people shooting in the DVNP back-country many times), and park visitors are still going to have to obey state and local firearms laws. So while some loonie lefties might whine about how evil this rider was, I suspect Obama is gonna be smirking, because he's seriously fucking with the head of some tighty rightie paranoics who are concerned that "that nigger" is gonna take their guns away and leave them unarmed for the coming race war they expect...

-- Badtux the Easily Amused Penguin

Has-beens

France surpasses the U.S. on every measure of health care availability, provision, and outcomes, whether it's number of doctors, access to advanced medical treatments, or outcomes. They do this despite spending 5% less of GDP on healthcare than the United States spends. Single-payer health insurance, commonly referred to as "Medicare For All", works. We have proof it works. The only reason not to do it is ideology. There is a term to describe nations where ideology trumps pragmatic reality: "Has-beens." Just ask the USSR. Oh wait, you can't...

-- Badtux the Snarky Penguin

Insane Clown Prince of Alien Race of Lizard People sues blogger

TBogg has the story.

Apparently Stephanie of Teablogging.net dug through public records and discovered that teabagging organizer Michael Patrick Leahy doesn't like paying his taxes unless legal action is taken against him. Which was fine and dandy with him, apparently, until Keith Olberman's people noticed this story that Stephanie uncovered and got the right-wing's Mr. Whipple ("Don't squeeze the teabags!") onto the Olberman show as one of the World's Worst People -- a tax evader who organizes rallies against taxes, yay! At which time Mr. Leahy went nuts and started frothing all over the furniture for this "invasion of privacy" created by, err, examining public records. #teapartyfail indeed...

In any event, I'll keep my eye on this one, and let you know when to send Stephanie some bloggy love (a.k.a. "money to pay her lawyer")...

-- Badtux the "If you can't beat'em, sue'em?" Penguin

In which the penguin is very rude

I don't like half-ass crap that ain't worth a shit. If you've ever worked on a car, read my rant and you'll probably nod your head, because you've encountered cheap-ass aftermarket parts that ain't worth puttin' on your worst enemy's car too. Otherwise, avoid, I use bad language on something that won't interest you.

-- Badtux the Wrenchin' Penguin

Single Payer, or Medicare For All?

I was derided by a single payer health insurance advocate for saying, "Why call it some new-fangled name like 'Single payer'? Why not call it 'Medicare For All'?" After all, that's what Medicare is -- single-payer insurance for old people. Granted, Medicare has some bells and whistles and such that make it something other than "pure" single-payer, such as optional parts, and the fact that it covers disabled people too, but thing is, that's just a distraction. The reality is that everybody knows what Medicare is, while people are often confused and uncertain about what "single-payer" is.

In short, Medicare For All might not be an entirely accurate term to describe single-payer health insurance for all Americans. But from a PR point of view, we're talking pure gold. Who can diss Medicare without having hoards of wrinkly prunes whacking them over their heads with walking sticks and walkers? Is there a single serious politician, anywhere, who would dare vote against Medicare? Well, yeah, there's dozens of Republican politicians who would happily vote against Medicare, but really, the Republican party isn't exactly a serious party anymore. I mean, we're talking about a party whose leaders are Sarah Palin and Rush Limbaugh, i.e., the intellectual equivalent of gnats. If your party is so shriveled that it relies on morons and big-mouth liars to lead it, it's hard to call your party a serious party...

So anyhow: Yeah, I advocate single-payer health insurance. But I also advocate calling it Medicare For All. Medicare. It's PR gold.

-- Badtux the Health Care Penguin

A bad idea still going around

Missouri wants to allow teachers to bring guns to school. A rural school district in Texas encourages teachers to bring guns to school.

This is nuts. First of all, let me say this much: Any teacher who wants to bring a gun to school should be summarily discharged as dispositionally unsuited for the job of teaching -- either that, or a total moron, which similarly disqualifies him from the teaching profession. As I've pointed out before, the logistics don't work. It's impossible to keep a weapon concealed from kids if you have it on your person -- those little bastardsangels are sharp, they'll eventually figure out where you're hiding your weapon, and then the temptation to steal"borrow" the weapon to play with it will happen. Meaning that to keep it safe from the kids, you'd have to put it in a locked drawer where it does fuckall good to protect yourself or your class if Little Johnny snaps and starts shooting up the school.

And even if you can get to the weapon, real teachers simply are not dispositionally suited to effectively use a gun against a student. A gun is only useful if you're willing and able to kill someone with it without flinching and without hesitation. Teachers are teachers because they love working with kids, not because they like killing the little bastardsangels. I mean, it sure the hell isn't because of the astounding pay -- since I left teaching I've never made less than double the amount of money that I made while teaching. While teachers might mutter about how rude, disorderly, and lazy today's little jerksscholars are, the fact of the matter is that most are still teaching because they like the little assholesparagons of virtue. And it's damned hard to kill someone that you like, unless you're a deranged psychopath, and I sure the hell hope we don't have deranged psychopaths working as teachers in our schools. Given that most school shooters are children, the notion of a teacher with a gun being effective against a school shooter doesn't pass the laugh and giggle test -- all that a teacher with a gun is, if faced with an armed student, is a dead body who will provide an additional weapon and additional ammo to the shooter.

Let's face it, a teacher serving as a cop is a stupid idea. The two jobs simply are too different. A cop's job is, amongst other things, to deal with violent threats to public safety. A teacher's job is to educate the little miscreantsangels. If it's decided that anybody within the school should be armed, it should be people who are professionally trained at law enforcement -- not teachers. A teacher's job is to teach, not to kill. 'Nuff said on that.

-- Badtux the Former Teacher Penguin

Monday penguin porn

Gay Chinstrap Penguins nuzzle each other. Or maybe they're not gay. They're penguins, about the only way you can tell which sex a penguin is, is to send a otoscope up his or her cloaca (no external sex organs, dudes). These penguins thus may or may not be gay, and who cares, really?

-- Badtux the Porn Penguin

A reminder

If your ideology ends up with thousands of dead bodies in the streets, your ideology is immoral and wrong. Sorry. That applies whether you call your ideology "neo-conservatism", "conservatism", "libertarianism", "communism", or whatever. The only ideology that has ever actually worked is pragmatism, for the simple reason that pragmatism is defined as, "do what works", heh. I.e., if there is a problem, look at all the solutions that have been tried and choose the one that works, rather than choosing according to whatever specific ideology first proposed and implemented that solution. That's pragmatism.

Let us remember that the whole purpose of any form of social organization is to produce the most good for the most people. People who raise any "-ism" to the level of religion are dangerous -- and, in many cases, evil, and not knowing they're evil because they view their own ideology as "good" and everything else as "evil". But if their ideology leads to dead bodies on the streets... I don't know what else you can call these people other than evil.

-- Badtux the Pragmatic Penguin

Another reminder

A healthy banking system and bond market are necessary, but not sufficient, conditions for a healthy economy.

-- Badtux the Economics Penguin

Yet another victory in the "War on (Some) Drugs"

Drug cartel enforcers disguised as Federal police raids Mexican prison and frees imprisoned gang enforcers. Or maybe it wasn't a disguise. The War on Drugs corrupts police departments just as surely as the War on Alcohol did during Prohibition.

Yeah, that War on Drugs thingy is just working out so well. Especially for folks down in Sandy Yaygo who have to deal with the cartel violence spilling across the border. But that's what happens when you criminalize a medical issue, you end up creating criminals. Huh, who coulda guessed?

-- Badtux the Snarky Penguin

Toy of pole

Every time Maru meow'ed, Mencken meow'ed in reply. But then, Menken loves to talk :-).

-- Badtux the Amused Penguin

An example

Some people wonder, "how could Medicare For All be so less expensive to provide than individual insurance?" Well, the fact of the matter is that every attempt to privatize a society-wide expense proves less efficient than providing it via government employees. This has proven true for everything from providing janitorial services at VA hospitals to running water systems -- invariably, if you turn it over to private enterprise, expenses soar through the roof and the quality of service plummets. We now have two decades of experience that privatization of government services does not work... government ended up providing those services in the first place because private provision of those services had failed, and re-privatizing them just lets them fail again.

But, you say, health insurance has never been run by the U.S. government. Really? Uhm, yeah, Medicare, bitches. It exists because, well, the private market for health insurance for the elderly collapsed in the late 60's, and the choice was either a buncha wrinkly prunes dyin' on the streets, or everybody gathering together as a society to provide health insurance for them. And since said wrinkly prunes happen to be our mommas and daddies and grannies and grammas, kicking them out to die on the streets wasn't an option. Except for Republicans, of course, who booed and hissed Medicare then as "socialized medicine" and did their darndest to stop it, because Republicans just *love* dead bodies. They, like, get woodies and cum all over their undies at the thought of dead bodies. For Republicans, dead bodies are, like, the most erotic thing their necrophiliac little moral-less "minds" can imagine, and the thought of all those dead prunes just made them jump up and down with glee and caused laundries everywhere to wonder why they suddenly got flooded with jizzum-stained boxers and briefs.

Which is the exact same thing the tighty righties are doing now about the current collapse of the U.S. health insurance system, a system which is astoundingly inefficient (here's an example) and which doesn't even cover half of all Americans (who either receive government-provided health care via Medicare, Medicaid, VA, Tricare, etc. or don't have any insurance at all). A supposed "health funding" system that can't even manage to cover half of Americans, and which is astoundingly inefficient at covering even that half, has to be said to have failed. Note that Medicare/Medicaid/VA/TriCare/etc. don't exist because Congress lurves them some socialism, they exist because private insurers wouldn't cover prunes/poor people/veterans with service-related problems/families of veterans/etc. and government (i.e. "we the people") had to step in to keep there from being lots of dead bodies all over the place. So the very *existence* of these government programs is because private health insurance has failed as a mechanism for funding health care in America. It's time to admit reality, and end this failed experiment in private health insurance that everybody else in the world has given up on except America, where, apparently, the fact that Republicans jizzum their tighty whities at the thought of dead people is more important than the health of America and Americans...

-- Badtux the Single Payer Penguin

Now added to the health care Axis of Evil: Senator Max Baucus, D-Insurance Industry, who arrests anybody who proposes single-payer health insurance in his presence. Way to be a Stalinist asshole, Max!

Map Cat

The Mighty Fang asks why anybody would want to look at a boring old map when they could pet a nice shiny kitty. Why, indeed... thus the reason the map is now folded and the kitty is patiently awaiting his ear rub.

-- Badtux the Cat-owned Penguin

Yes, he was helping me "read" the map. Thus why I folded it over to keep him off it while I gave him a kitteh massage.

More on "Socialist Medicine"

Let's get one thing straight: Medicare For All is socialized HEALTH INSURANCE, not socialized MEDICINE. It's about funding health care, not about providing health care. Under Medicare For All, health care is provided by private doctors and hospitals, not by the government, and you and your doctor, not some government employee, decides what health care you'll get. This is by contrast with socialist medicine as is practice in, say, Norway or Britain, where all doctors are employees of the government and all hospitals are owned by the government. While socialist medicine has proven to be very cost-effective and much more efficient than private provision of health care, it also has proven very inconvenient with long lines for advanced procedures, so Americans would never go for it.

But Medicare For All... look. Every single one of us needs health care. It's not as if people voluntarily go off and peacefully die if their appendix becomes infected, or a doctor tells them "Nuh-uhn, no appendix operation for you!". All that happens if someone isn't insured is that they go to the hospital emergency room and then those of us who are insured pay for it. In short, everybody ends up using health care at some point in time, and given that, it should be mandatory that everybody pay into the health care fund. And the most efficient way to do that is via Medicare For All, which leverages the huge tax-collecting machinery of government to do it in a much more efficient way than private enterprise. 40% of your premium, if you have individual health insurance, goes towards billing you every month and collecting and processing your payments and handling the mandatory insurance fund to make sure they have enough money to handle claims and processing claims and so on and so forth, as vs. less than 2% of Medicare collections. Yes, over 98% of Medicare collections go straight to doctors and hospitals. Medicare is just more efficient.

As for the notion that Medicare For All puts some bureaucrat in charge of your health care... well, Having my health care in the hands of someone who gets paid a bonus to deprive me of care, who in many cases is in some 3rd world country call center and has no formal medical training at all, scares me a whole lot more than having my health care in the hands of a bureaucrat somewhere, even if it were true. But thing is, it isn't true. My grandmother received Medicare and Medicaid during the last 20 years of her life. There was not ONE SINGLE TIME that a government bureaucrat interfered with her health care. Not ONE time. Period. It is a LIE that Medicare For All puts a bureaucrat in charge of your health care. It just isn't true, and the people spreading that lie should be ashamed of themselves -- they should have at least talked to Granny before spewing that sort of nonsense, if they cared in the very least about truth.

-- Badtux the Health Care Penguin

Health care quote of the day

"I think I would rather have decisions about my health made by a bureaucrat with no financial stake in the outcome than by a corporate flunky whose job depends on my getting as little health care as possible." -- Gordon

BTW, we already got this. It's called Medicare. Haven't heard any of the wrinkly old prunes suggesting we ban it yet, though the Rethugs certainly would love to. Medicare. If it's good enough for the prunes, why isn't it good enough for the rest of us?

-- Badtux the Health Care Penguin

Republican fail

Hey boys and girls. Are you a Republican? Do you lust after the hot sweaty arms of Guvner Goodhair and Guvner Goodteeth? The teabaggers have your number! Are they going to hold a Skype conference call? Or a Twiscussion? Or maybe use IM? Why, NO, that would be way too advanced for Republicans. They're going to use the TELEGRAPH! Yessiree, get your hot Republican telegraph sex here... Click click clack click … click clack… click click … click clack click click… oh the awesome!

Oh. Telephone. Well, hey, look, it's all old obsolete communications technology, whatever. All you have to do is call their 900 number, 900-REP-SEXY and there ya are, you, too, can have hot sexy phone sex with Guvner Goodhair and Guvner Goodteeth. Or maybe they're just going to talk about teabagging. Heh.

-- Badtux the Snarky Penguin

Housing prices continue to fall

The median sales prices of existing homes declined in 134 out of 152 metropolitan areas during the first quarter of this year. While sales are up, 50% of those sales are foreclosed homes at fire-sale prices. And in the worst-hit markets, such as San Francisco, San Jose, Riverside, and Phoenix, prices fell over 40% since 1Q last year.

This presents serious continuing difficulties for banks and for Fannie Mae/Freddie Mac. In any given year, you can figure that around 1% of the outstanding mortgages are going to default and most of those are going to end up in foreclosure. Usually that is not a problem. Mortgage insurance and required down payments ensure that first order lenders are exposed to only 80% risk in a home whose price is at least stable, if not rising. That gives them 20% overhead to do the legal process and dispose of the home, meaning that typically it's even profitable for a bank to foreclose on a home. But if housing prices have declined 40% -- as they did in San Jose California last year -- then suddenly that's a different story. Even lenders who never issued any exotic mortgages, such as Fannie/Freddie, are suddenly going to find themselves in the position of losing major chunks of change.

Thus far the Federal Reserve and U.S. Treasury appear to have stanched the bleeding and kept the financial system working, sort of. But housing prices still have a pretty good amount to go before they reach affordability with conventional loans and thus quit falling. As much as San Jose prices have fallen, for example, I still would not be able to justify purchasing a home in San Jose right now -- it's still much cheaper to rent even with the tax benefits of buying vs. renting. So expect to see more of these headlines over the next year... and as that backing for dollars evaporates from the economy, the need for further fiscal and monetary stimulus is going to grow, yet it appears that the political will for fiscal and monetary stimulus has evaporated. So I guess I'll have to watch with baited breath what happens next. (Yes, baited, not bated -- herring, yumm! ERRRP!).

-- Badtux the Economy Penguin

And the retreat goes on...

How many of his principles is President Obama willing to let fall by the wayside in pursuit of "expedience"? Yes, it must be a priority to get the economy straight, re-regulate the fat cats, fix the budget, fix our broken health care funding system, and so forth and so on. But I agree with Jesse Ventura (below) about one of my biggest disappointments with President Obama -- that our President is not moving to prosecute those who violated or authorized the violation of our nation's laws against torture, and indeed, isn't even going to release further information that might further inflame public opinion regarding enforcing that law.

It's critical for the position of Bush Administration defenders that the lie that Abu Ghraib was an exception and not policy be maintained. Any evidence to the contrary must be suppressed. And if they can get Obama to cover up for Bush, their own task in preventing accountability for war crimes becomes much easier. Expedience may indeed be the lubricant that makes politics work, but expedience without principle is exactly that -- principle-less expedience. And Obama appears to be proving himself a master of this. Thus far.

-- Badtux the Morality Penguin

Hmm, he don't like Dick Cheney

It's interesting that everybody who has ever experienced waterboarding has no problem saying that it's torture, even if it's someone as basically conservative as Jesse Ventura... it's only chickenhawks like Dick Cheney who love sending other people's sons into war but was too cowardly to go himself who defend torture. Hmm.

-- Badtux the War Crimes Penguin

Dr. Doom: We've probably averted a total collapse

Nouriel Roubini is as optimistic as he'll ever be that the current deep recesion isn't going to continue on into an outright replay of the total economic collapse of 1932-1933. He credits the government's interventions for averting total collapse, though he still gripes they aren't sufficient, especially when it comes to banks that he gripes are still insolvent no matter what the so-called "stress test" said. On the other hand, he still sees the global economy contracting this year, and stagnant next year.

For what it's worth, my reading of the tea leaves shows similar issues, but the main problem I see is employment. The main problem we're going to face here in the United States is that we're going to have 10% official unemployment (and 20% unofficial unemployment) by the end of this year... and no hope of jobs for those people since the economy is not going to grow next year. I worry that we're entering a time of structural unemployment at a time when the country is ill-suited to deal with that kind of problem. Unlike the 1930's people no longer have large extended families to help them through hard times, and unlike the 1970's and early 80's the social safety net has largely been dismantled and once unemployment benefits run out, there is going to be a *lot* of homeless people on the streets. And if you have that many unemployed homeless people, social disorder is sure to follow.

In short: Something has to be done here. I hope we can avoid FDR's make-work projects -- those basically institutionalized unemployment during the Great Depression, people "on relief" rarely looked for jobs elsewhere even after the economy turned up and jobs started being available again. But I am not seeing the sort of fiscal stimulus coming out of the Obama Administration that's going to result in a lot of economic activity to take the place of the failed businesses that are causing this unemployment. Given that, my fear is that there is going to be a *lot* of political pressure for "easy" but counterproductive things like extending unemployment benefits pretty much forever, thereby giving people no incentive to look for work... it is far, far better to have jobs, than to just give people money, because with jobs at least they're adding *something* to the economy, even if the government has to subsidize those jobs with "job creation tax credits" or whatever...

-- Badtux the Economics Penguin

And meanwhile, in Afghanistan...

President Obama makes the war in Afghanistan his own, forcibly retires General McKiernan (a traditional war-fighter) and installs the somewhat notorious General McChrystal, an "unconventional" war-fighter who came up through the Special Forces.

What does this mean? Not much. Just a shift to death squads rather than conventional military campaigns, and much more emphasis upon intelligence gathering. Will this change the outcome in Afghanistan? Of course not. Everybody involved knows that the U.S. will leave Afghanistan. Maybe not this year, maybe not even the next year, but there simply is nothing in Afghanistan to justify the U.S. staying there long-term. It's not as if the U.S. has any national interests at stake in Afghanistan. Yeah, Afghanistan as a failed state could allow al Qaeda to re-form into an effective organization again... but then, there's plenty of other failed states in the region where they could do that. Like, increasingly, Pakistan. Which, I might remind you, has nuclear weapons...

-- Badtux the Geopolitical Penguin

Grumpy about the newspaper industry

Various people say, "the newspaper industry is dying because it's giving away its content for free online!" But the problem with that notion is that they have no (zero) clue about the business model for every newspaper in existence for the past 200+ years. Newspapers have pretty much *always* given their content away for free. That subscription you pay for? It barely pays for the cost of the newsprint and the paper dude to plop it at your doorstep. At best. All the infrastructure (printing presses and such)? Paid for by advertising. All the reporters? Paid for by advertising. All the bought content from AP, Reuters, etc.? Paid for by advertising.

The basic problem isn't that newspapers are giving content away for free, because that's been their business model since, like, forever -- the news-stand price has never covered content. Rather, the basic problem is that newspapers screwed the pooch on Internet advertising. If newspapers had set up their classifieds sections online early on, Craigslist would have never existed and sucked the guts right out of their dead trees classifieds. If newspapers had set up online jobs advertising systems early on with the ability to submit resumes through the newspaper's computer systems, Monster.com and its ilk would have never existed. And so on and so forth. There's a *ton* of ways that newspapers could make money online to replace the off-line advertising income, and they just freakin' screwed the poch on *all* of them, instead using their outrageous profit margins to buy up other media outlets all over the country, run up oodles of debt, and now... now that debt is killing them.

So the whole "giving content away" thing isn't their problem. It is the fact that, given a choice between investing in new technology (Internet advertising) and buying the Boston Globe, the New York Times decided to, err... buy the Boston Globe. Morons! They're like buggy manufacturers that invested in a new buggy assembly line to compete with Henry Ford's Model T, instead of themselves going into the automobile industry. It's not a case of them "giving away content". It's a case of them failing to see that the news industry is undergoing the same sort of paradigm shift that the transportation underwent in the first decades of the 20th century. They're buggy-makers in a time of automobiles, and unless and until they retool to meet the current conditions, they're going to continue losing market share and readership every year until they finally collapse and go away.

- Badtux the Business Penguin

Grumpy about the NRA

Former cop Brian at Why Now is grumpy at the NRA, which he feels is responsible for the deaths of multiple cops at the hands of right-wing paranoids with their current irresponsible fear campaign. He notes the hypocrisy in particular -- the hypocrisy being that the NRA said nothing when the Department of Homeland Security was seizing guns from citizens of New Orleans in the aftermath of Katrina, but now, with not a single bill in Congress to regulate guns in any way, is throwing several kinds of hissy fits about an "anti-gun" Congress. But wait, I forget, those New Orleanians were black, so they shouldn't have had guns in the first place. Hmm, some folks' pointy white hats must be cuttin' off the flow of blood to the brain...

Practically speaking, the person with the least qualms about using a gun — i.e., amoral murderers — win if we devolve to rule of gun like the NRA often seems to be advocating. I have firearms for home defense and for hunting, but even when I lived in a state that handed out concealed weapons permits like candy I didn’t carry outside the home. The reality is that in a face-off between me and an amoral murderer, I would still be trying to figure out whether the situation called for deadly force at the same time that the amoral murderer was plugging my plump penguin ass. As for the nonsense the NRA types like to spittle out about guns and resisting a dictatorship, there is no contradiction between a nation flooded with firearms and dictatorship. As long as the dictatorship provides special privileges and such to the minority of people who are amoral murderers, the amoral murderers will then keep the rest of the populace in check no matter how many weapons the rest of the populace possesses. Just ask the people who lived in Saddam Hussein’s Iraq. Iraq was flooded with guns (as we found out to our chagrin), but since most people only want to go about their lives in peace, handing out special privileges to amoral murderers was more than enough to keep Saddam in power for over twenty years…

In short, guns are nice and all, but they simply don’t solve the problems that the NRA claims they solve, and add problems that the NRA refuses to acknowledge. I support the right to own and bear arms because it is the law as written in the 2nd Amendment, not because I have any delusions that guns are some sort of magical talisman that solve all problems.

-- Badtux the Practical Penguin

Writing update...

Okay, I finally figured out who did it -- who killed who, and who the killer is at the end of the story. Or rather, one of the characters just accidentally told me who killed the first victim by being *far* too interested in how to kill someone. The second and third victims fall out of the murder of the first victim even though their killers are different people altogether. So now I just need to sit down and finish writing the damned thing...

-- Badtux the Fiction Penguin

Did the Smoot-Hawley Tariff Act cause the Great Depression?

In a word... no. Yes, the Smoot-Hawley Tariff Act of 1930, proposed by Republicans Sen. Reed Smoot of Utah and Rep. Willis Hawley of Oregon,passed by Congress with the active support of President Herbert Hoover, killed U.S. imports and exports. But the total U.S. exports were under 5% in 1930 and total U.S. imports were over 4% in 1930, meaning the total loss to the U.S. GDP was under 1%. Meanwhile U.S. GDP plummeted by over 30% by 1933. It's been a common trope amongst "free trade" enthusiasts to blame the Smoot-Hawley Tariff Act for deepening a serious recession into the Great Depression, but it just isn't true -- at least, not in the United States. (Germany is another story, but we'll talk about that later). It certainly didn't help, but in the greater scheme of things the collapse of the banks and thus of the money supply was the main driving force here.

Why bring this up today? Well, Congresswoman Michelle Bachman (R-Batshit Crazy) blamed FDR's Hoot-Smalley Tariffs for deepening the Great Depression. But of course that is nonsense because there was no such tariff passed during FDR's Presidency. Ms. Bachman (R-Totally Insane) was simply pulling shit out of her ass and flinging it like a howling monkey at the zoo because she'd heard something about some mean old tariff that made the Great Depression worse, but since she is a (certifiably nuts) Republican, surely it couldn't have been Republicans who did it. So she a) mangled Smoot and Hawley's names, b) turned them into Democrats rather than Republicans, c) moved their tariff to 1934 rather than 1930, and d) was wrong about the economics anyhow (like, duh, they don't teach that kinda stuff in Bible school, though to be fair after hearing free-trade advocates pull shit out of their ass about Smoot-Hawley for the past 70 years, she could perhaps be forgiven for her confusion about the economics part).

In short, just more Republican stupidity. Move along, nothing to see here...

-- Badtux the Snarky Penguin

Beautiful day

It was a beautiful sun-shiny day, so I went hiking again. Unfortunately I forgot my camera, so this iPhone snapshot as I descend the trail towards the sea will have to do.

-- Badtux the Waddling Penguin

Suppertime

I made it to the Korean grocery tthis afternoon and picked up a bunch of banchan. Here is my supper: Let's see... in the middle is cabbage kimchi. Then going clockwise from the bean sprouts: Seaweed, pickled radish, cucumber kimchi, and radish kimchi. Nice vegetarian supper.

-- Badtux the Veggie-munchin' Penguin

You gotta be kiddin...

The Mighty Fang reacts to the latest pronouncements by the "Party of Lincoln" (hmm, dead, moldy, got a hole in their head, yep).

-- Badtux the Cat-owned Penguin

Charles Manson is a nursery school teacher, say Republicans

What do Charles Manson, David Berkowitz, Jerry Brudos, Eric Rudolph, and Jeffrey Dahmer all have in common? Well, according to House Minority Leader John Boner err Boehner, all of them are cream-puffs compared to a bunch of illiterate goat herders, taxi drivers, and smugglers. Yeppers, that's right. We can't bring suspected terrorists, mostly illiterate goat herders with delusions of granduer, into America and give them a trial because, wait for it, they're more dangerous than Jeffrey Dahmer! Gah! The stupidity! It burns! It burns!

The fact of the matter, of course, is that the United States is the world's largest prison state with a full 3% of its population in prison or on parole at any given time, and has no shortage of places to stash even the most vile and evil prisoners, people who make these illiterate goat herders look like boy scouts. If it is decided to stash some of the prisoners currently at Guantanamo into a Supermax somewhere here in the US while they are tried, there's no (zero) chance that these people will get anywhere near the general population. If found innocent, there's no (zero) chance that they would actually get released into the general population -- instead they'd go into immigration prisons to be deported.

But those are facts. And, of course, for Republicans, facts don't matter, only politics matters, and they think they're going to be able to play politics by spewing nonsense and lies. Hey, it worked during the 2006 and 2008 elections, right? (Hmm, you think the American public is *finally* starting to catch on that the Republicans, are, like, full of shit?!).

-- Badtux the Prison Penguin

Israel: We're the only ones allowed nukes in the Middle East

Prime Minister Voldemort of Israel says there will be no talking with the Palestinians until Iran is wiped from the map. At least, that's how it would be translated from the original Hebrew if the AEI was an Iranian organization rather than an Israeli organization and did the translation. In reality, of course, he basically said "we aren't going to talk to the Palestinians until Iran has no nuclear program", i.e., until U.S. bombs turn every piece of industrial infrastructure in Iran into moldering ruins (since that's the only way to stop the Iranian nuclear program -- just as it worked for stopping Iraq's nuclear program in 1992).

Prime Minister Voldemort justifies this by saying Iran wants to wipe Israel off the map, even though there is no such idiom in the Persian language. The reality is that the armed forces in Iran are led by Supreme Leader Ali Khamenei who in turn serves at the pleasure of a council of senior ayatollahs in Iran, and this corrupt gerontocracy of ayatollahs has one and only one desire -- to be able to continue ruling Iran and enrich themselves from its assets. Maybe thirty years ago when they had fire in their belly they might have considered attacking Israel with their ballistic missiles. But today, their sole purpose for having a military -- or a nuclear program -- is to keep outsiders from invading Iran and toppling them from power, not because they have any desire to invade anybody at all.

The reality is that after the Safavid rule of Persia, Iran has not attacked any other nation. None. Zero. Nada. That's over 300 years since the last time Iran invaded any other nation, and as far as the ayatollahs are concerned, another 300 years would be just fine with them, for the same reason it was fine with their predecessors -- because they have a comfortable life on top, and war would interere with that. Furthermore, Iran in the past has had no problems dealing with Israel. For example, in the early 1980's, Ayatollah Khomenei (the person whose speech was first mis-translated as "wiping Israel off the map") was selling oil to Israel and buying weapons from Israel at the same time he was making those speeches. Maintaining power trumps all, for the corrupt Iranian ayatollahs, and attacking Israel... well. Even if it were possible (which it isn't, there's a couple of countries between Iran and Israel in case you haven't looked at the map of the Middle East lately), Iran has to be under no delusion that a nuclear attack on Israel would turn Iran into radioactive dust. Not exactly conducive to being a corrupt oligarch looting the nation for your own benefit, eh?

The reality is that all this sabre-rattling is for internal Israeli consumption as part of internal Israeli politics of fear, and is about as realistic as Condi Rice's "we must invade Iraq to prevent New York City from being blown up by an Iraqi nuke" rhetoric. I.e., it's just sabre-rattling by Likkud intended to scare people into supporting them, much as the Iraqi nuke nonsense was just lies spread by the Busheviks to scare people into supporting them. In the end, the biggest threat to peace in the Middle East is not in Tehran. You'll need to look a bit west for that.

- Badtux the Geopolitics Penguin

Dijon-gate continues

...grassroots activists are planning nationwide “Mustardjarring” rallies to express their outrage at President Obama’s tax policy and/or spending plans and/or birth certificate and/or secret Muslim faith and/or the gay liberal media and/or teleprompter and/or auto bailout and/or TARP and/or Michelle Obama’s tennis shoes.

Heh.

-- Badtux the Outsnarked Penguin

Wither the Treasuries

U.S. Treasury Bond interest rates rising. Especially for longer-term Treasuries -- the three-month note is still hovering at around 0%. There's multiple possible interpretations possible here:

1. Investors now have inflationary expectations. This is Bloomberg's preferred interpretation, and possibly the most optimistic one no matter how gloomily Bloomberg paints it. The deal is that if investors have inflationary expectations then they will move money out of treasuries and other "mattress" instruments (i.e., places to park money because you expect the money to be worth more in the future, i.e., because you expect deflation) and into productive investments within the economy, thereby spurring economic activity. In addition, if banks have inflationary expectations, they will start loaning money rather than hoarding money because they will expect their money to be worth less in the future, thus it will make more sense to get it out of their vaults and into appreciating financial instruments ASAP. In this interpretation, a rise in Treasury interest rates is a *good* thing, and means that the Fed's policy of monetary easing has produced the desired results -- inflationary expectations that will swiftly produce the real thing (which, as I've pointed out in the past, is a *good* thing within reason since inflation is what mobilizes the resources of the economy by drawing money out from under mattresses and out of bank vaults).
2. Deflation has resulted in a shortage of investment capital within the economy as a whole, as too much money has already fled out of the economy and is hiding under (virtual) mattresses where it does not contribute to economic activity. In this interpretation the problem is a shortage of cash, requiring the Treasury to pay out a higher interest rate to get people to buy their bonds. In this interpretation, the proper response is for the Federal Reserve to intervene even more massively, perhaps by buying massive numbers of long-term Treasuries at these treasury auctions.
3. The inflation in the amount of the deficit has outrun the amount of capital available to finance the deficit, resulting in a need for higher interest rates to attract sufficient capital to finance the deficit.

So which interpretation is correct? The doom and gloom sorts go for #2. They're like Captain Kirk to the inflation-hawks' Mr. Scott, shouting "More money, more money, we need more money!" as the inflation hawks say "We canno go no faster, Captain! She'll blow into hyperinflation!" They handwave away the effectively 0% interest rate on short-term Treasuries by saying that this is just a case of people shoving money under mattresses using the short-term Treasuries rather than lumpy mattress, and that the reason they're going short-term bonds for their mattress-stuffing is because they're almost as liquid as cash stuffed under the mattress.

The "Things are turning up!" crowd, on the other hand, sees the difference in interest rates between short and long term Treasuries as meaning that in the long term the market does see an increase in economic activity coming along with inflation. #1 is the optimist's choice. In their view, the reason why long-term Treasuries' interest rates are heading up is because investors are seeing higher returns for their long-term investments if they invest now rather than waiting for later, and thus the Treasury must pay more interest to attract these investors to Treasuries instead. In short, investors have inflationary expectations and are acting in ways that will cause more economic activity, thus pulling money out from under mattresses to fund economic activity rather than to make lumpy mattresses. They hand-wave away the effectively 0% interest rate on short-term Treasuries by noting that right now the short-term corporate bond market is dysfunctional so anybody needing to park money short-term while they are seeking out good long-term investments is likely going to park them in short-term Treasuries instead.

And finally, there's the doom and gloomers of the #3 "government is too big!" family. Problem for them is that money doesn't just disappear into a black hole when the Treasury buys bonds. It gets re-deposited into banks as economic activity and is then added to the money supply again. The Treasury is just recycling money, it's not vaporizing money. So #3 fails into #2 -- i.e., if the Treasury can't get enough money without paying big interest rates, it's because of deflation, and the solution is to have Helicopter Ben crank up his helicopter fleet and throw yet more dough out the windows.

So what's going on? Well, I need to find some more data points to give you any clue as to which of the above is true (or none of the above). I'm leaning towards a combination of #1 and #2 with a teensie bit of #3, personally -- i.e., that we're seeing inflationary expectations start to take hold (that's a *good* thing since it will pull mattress money out from the Fed's vaults and back into producing economic activity), but that we need to make sure this gets lubricated and not stifled by high interest rates so having the Fed purchase long-term Treasuries at auction to drive down their interest rates a bit would be some nice pump-priming to keep Treasuries from pulling investment money away from other productive investments during this period of deflated money supply. In short, I'm not the #2 option's Captain Kirk shouting "More Money, Mr. Bernanke Scott!" but I do believe some quantitative easing is still necessary, just that it must be carefully targetted. I'm decidedly not the #2 critic's "Mr. Scott" shouting "she's gonna blow into hyperinflation, Captain!". One Treasury auction at a not-particularly-high 4.3% interest does *not* mean that we're facing hyperinflation!

Indeed, 4.3%, historically speaking, isn't a particularly high interest rate for 30 year Treasuries. It's only high by comparison to recent months of deflationary expectations, and indeed, if the overall expectation from investors is that we face 4.3% inflation over the next 30 years, I'll take it. That's not a bad rate of inflation at all, and will serve well to perform the usual job of inflation in a capitalist economy, which is to draw money out from under mattresses and into the economy where it can fuel actual economic activity rather than just being lumpy mattress stuffing.

So anyhow, I'm keeping my eyes open. We'll see soon enough who's right -- or if nobody is right, including me :-). I'll just say that, regardless of which of the above is true, one thing is clear: Something new is happening. Whether this is good or bad is yet to be known.

-- Badtux the Somewhat Optimist Penguin

Inflation, Deflation, and the Federal Reserve

The U.S. spent close to 100 years in the 1800's without an effective central bank. These years were exemplified by a constant cycle of inflation and deflation that served to strip wealth from the debtor class (i.e. people like you and me) and transfer it to the creditor class. This was caused by fractional reserve lending and the business cycle. As the business cycle went up, banks expanded their lending and thus created inflation by reducing their reserve ratio (the money supply increases as an percentage of the banking system's overall reserve ratio). As the business cycle went down, banks contracted their lending and thus created deflation by increasing their reserves in case there was a run on their bank by people who'd lost their jobs and needed their money. And if the bank was hit by a lot of defaults on its loans because deflation rendered the loans unpayable, so that it could no longer sell its loans on the open market to other banks in case it needed cash to deal with a bank run (or worse yet other banks or investors refused to buy the loans because they too were preserving capital), then banks collapsed, causing even more deflation and more economic misery as everybody with money in that bank lost it.

This happened while the U.S. was on a "hard metal" standard, so Ron Paul's idiotic call to return to the gold standard won't resolve it. Only banning fractional reserve lending would resolve it, and that would kill the economy because fractional reserve lending is how the capital equipment that produces future income is purchased using current income. Without fractional reserve lending you basically do not have banks and the amount of capital available for lending implodes dramatically. That is, in a mildly inflationary environment where virtually all capital is in a bank at any given time (since that is where you earn interest, as vs. mattress stuffing where your money loses value), your economy can leverage the capital of the entire nation as backing for bank loans that produces future economic output. And bank loans are also important because bank lending allows the capital expenditures to respond to future demand using the future income generated by that future demand, and thus allows a capitalist system with functioning banks to be far more flexible and nimble at meeting consumer needs than a system without functioning banks. Without functioning banks, you must wait for capital to slowly accumulate before you can make the capital investments needed to meet new needs... which slows economic activity drastically over a modern economy with a functioning fractional reserve banking system.

Okay, so the gold standard won't work at solving these inflation/deflation cycles as long as we have fractional reserve lending, and we can't ban fractional reserve lending without basically knee-capping capitalism, so now what? Well, we could hypothesize a central bank that could print money during "down" cycles to replace the money that's being lost as banks contract their lending, and that could *unprint* money during "up" cycles to keep excess inflation from taking hold. By carefully adjusting the money supply up and down, this hypothetical central bank could keep the money supply growing at the slight amount of inflation needed to keep most capital in the banking system (and thus available to leverage for future economic activity). In addition, this hypothetical central bank could buy loans from banks hit by bank runs i.e. serve as a lender of last resort if necessary to prevent banks from collapsing. That prevents the stripping of wealth from people who have money in banks.

There is only one problem with this scenario: It had been tried multiple times before, and the result was almost always disaster. The core problem: Governments, given access to a printing press, are almost compulsively driven to print money to meet their financial needs rather than raise taxes to meet their financial needs. And there is only one end game there -- hyperinflation, which is a disaster of *another* sort for the economy because then banks once again cannot serve as an instrument of leveraging current income into future economic activity, because people yank their money out of banks to spend it as quickly as possible before it becomes worthless.

So it is clear, then, that putting a central bank with the power to print money under the direct control of the U.S. Congress or of the President is a bad, bad, bad, BAD idea. The notion that they could long resist the impulse to print money rather than tax the general public to pay for the government's expenses simply doesn't pass the laugh and giggle test. So if it cannot be under the direct control of the President or Congress, then what?

So the general scheme arrived at was to put some of the control in the hands of those entities that have the most to gain from a stable (but slightly inflating) money supply: Banks. Thus banks are the shareholders of the Federal Reserve Banks and appoint 2/3rds of the board of directors at the Federal Reserve Banks. But then there would be the temptation to manipulate the money supply to benefit bankers rather than the public as a whole, so the overall Federal Reserve System was given a board of governors appointed by the President with staggered 14 year terms (to insure that no single President could overly influence the board) with the consent of the Senate and with the final power to determine the money supply. In short, that's today's Federal Reserve, which is a bizarre setup, but it's a bizarre setup for a reason -- it's a work-around to two major problems, the first being inflationary-deflationary cycles caused by fractional reserve lending and the normal business cycle, the second being hyperinflation when government itself has the power to print money.

So there you go. It sounds all so prosaic now that you see where the Fed came from, why we need it, and why it's set up the bizarre way it's set up rather than as a direct federal agency. As for the natterings of gold bugs and conspiracy theorists? Well, what can I say... some folks' tin foil hats just need adjusting.

-- Badtux the Monetary Penguin

Bad Bush Lawyers, Part Deaux

I pointed out, earlier, that giving bad legal advice isn't a crime. Thus the bad advice that the Bush Administration's lawyers gave is not sufficient reason to charge them with a crime. Criminalizing the practice of law is 100% opposite of rule of law, and being an incompetent lawyer is simply bad lawyering, not something which is criminal in nature.

But Hilzoy states the next logical step that is part of the whole concept of rule of law: Disbarring bad lawyers. These guys gave *terrible* legal advice, ignoring clear precedents in their eagerness to provide their clients with legal advice that they believed their clients wanted. Hilzoy says:

The difficulty with prosecution is establishing intent. When a lawyer makes a stupid legal argument, it's always possible that s/he is not malicious, just a terrible lawyer. When you've narrowed the options to criminal intent or complete ineptitude, you have not got enough to prosecute. You have, however, got enough to disbar someone, since while total ineptitude is not an indictable offense, it is a good reason not to let someone go on practicing law.

Indeed. I agree 100% with Hilzoy: Yoo, Bybee, Bradbury, and anybody else involved in this outrageous example of bad lawyering ought to be immediately disbarred by their state bar associations and forever prohibited from practicing law again. And those who happen to be on the bench (hello, Bybee!) ought to be immediately impeached. They have proven, at the very least, that they are not fit to practice law. It's the least we can do for them...

-- Badtux the Law Penguin

An interesting debunk of Federal Reserve conspiracy theories

Who controls the Federal Reserve system?. A well documented rebuttal, with cites of source documentation. Hint: Ben Bernanke was *NOT* selected to lead the Fed by a secret cabal of foreign Jewish bankers!

General debunk of most popular conspiracy theories regarding the Fed. Also follow the links to detailed debunks, including cites to source papers that you can go track down for yourself.

I will return later with my notes on why we need the Federal Reserve (hint: fractional reserve lending), and why the Federal Reserve is set up the way it's set up. Hint: Weimar Germany (albeit that hadn't happened yet, it's a perfect example of the sort of thing the Fed's governance was purposely set up to avoid).

-- Badtux the Economics Penguin

World Nut Daily: Your daily ration of crazy

Okay, so a threat to liberty is not a President who says that it's okay to intern any American as an "enemy combatant" without trial for as long as he declares you an enemy combatant, or who says it's okay to torture you while you're imprisoned (without trial) as an "enemy combatant". A threat to liberty is... the U.S. Census Department adding GPS coordinates to the address maps they get from your local 911 system so that they can more reliably guide census workers to those addresses for the upcoming 2010 census? WTF?!

BTW, addresses are a real problem, especially in rural areas. When I worked census fifteen years ago, I came in doing quality control behind other census workers (the point being to work up adjustments so we could estimate how many people were missed by the normal census process and adjust the numbers accordingly). In rural areas, not only are street signs almost unheard of, people very rarely post numbers on their houses. They know where they live, their neighbors know where they live, anybody who comes to their house knows where they live, why would they need a number? They do post numbers on their mailboxes though so that the postman will put the mail into the right box. But then they tend to live in family compounds, two or three trailer houses on one plot of family land, and the order of the mailboxes does not necessarily have anything to do with the order of the houses. The only way to know which trailer is which is to knock on the door and ask. And as you can imagine, after thirty years of right-wing hate radio people saying that any gubmint worker at your door is there to take your guns and take your kids, this can be a bit more awkward than you'd think. I mostly did okay because I was very polite, very nice, very non-threatening (what's more cuddly than a penguin after all?), but it definitely did get awkward a couple of times.

So anyhow, especially in rural areas, you can either equip your census workers with some *very* detailed maps or you can just give'em a GPS-equipped tablet computer with all the addresses already programmed in. The Census much prefers the latter, because it's much less bulky and a lot easier to provision than all those $#%@! 911 maps... but that, of course, requires having the GPS coordinates to program into those computers. Which many 911 maps do *not* provide.

The solution: Send someone out with the 911 maps to take GPS coordinates of each house. Can be done at the local level by the local branch of the census bureau in multiple years before the actual census has to be done. Duh. But as far as World Nut Daily is concerned, this is part of some bizarre Obama gummint conspiracy to steal your guns or sumthin'... despite the fact that it's been underway since *2005*, which is when this effort started under the Bush Administration as part of the Census Bureau's preparations for the 2010 census. Gah! The crazy! It burns, it burns!

-- Badtux the Snarky Penguin

Ron Paul zealots prove they're idiots -- again.

Their latest blogswarm: They want to audit the Federal Reserve.

Okay, now, first problem: The Federal Reserve possesses this marvelous technology called the PRINTING PRESS. And they have the power granted unto them by Congress to print as much money with this printing press as they wish. So why does that matter? Well, it matters because the core principle of financial auditing is that money can NOT be printed upon demand. If there's money in an account, it wasn't printed. It came from somewhere else. Auditing tracks those money flows within an enterprise and makes sure that each debit has a credit somewhere.

But that whole paradigm breaks down when the entity in question has been granted, by law, the right to print all the money it feels like printing. So yeah, you can audit that $X went out, and assets valued at $X by the Federal Reserve came back in return. But what use is that? And even if $X+Y went out and it can be proven that the asset was *really* worth only $X, overpaying for an asset isn't a crime unless there's deliberate fraud involved. Otherwise everybody who overpays for a used car is a criminal. GAH! The stupid, it burns, it burns!

So what's the point? Well, it's all about all those ridiculous conspiracy theories that the gold bugs, Austrian "economists", and fellow travellers have built up around the Federal Reserve. Apparently their whole intent is to prove that the Federal Reserve is actually a conspiracy by Jewish bankers to impoverish America or something like that, despite the fact that the greatest economic expansion and greatest improvement in wealth of the average American in U.S. history -- the 1946-1973 expansion -- happened under the Federal Reserve. In short, they're just plain nuts. And more on the Federal Reserve in my next posting, where I discuss *why* we need the Federal Reserve if we're going to have fractional reserve banking, not to mention why we want fractional reserve banking in the first place, and why the Federal Reserve's current governance is not a conspiracy, it is necessary to keep the U.S. dollar credible as a currency. Please wait for that posting to discuss those particular topics. Thanks!

-- Badtux the Economics Penguin

WWLDD?

The first LD in the above is Lou Dobbs. So what would Lou Dobbs do if: North Korea threatened to incinerate Japan with a nuclear missile. On the same day that Israel launched a ground offensive against Syria and Iranian troops crossed the border into Iraq on their way to support their Syrian client state, triggering a war between Iran and the United States that resulted in three U.S. Army divisions turned into Dien Bien Phu hamburger meat as the entire Iraqi population rose up and overwhelmed them with sheer numbers. On the SAME DAY that millions of people around the world just vanished, poof, into thin air, as four horsemen rode in the sky and trumpetted the end of the world. On the SAME DAY that an invasion of multi-tentacled aliens swooped down from the sky and started stuffing innocent women and children into their multi-tentacled maws. *AND* it was the 5th of May, Cinco de Mayo.

What Would Lou Dobbs Do? Well... bash Mexicans, of course. Like, duh.

-- Badtux the Snarky Penguin

Why journalism is dead

It takes a 4th grader to ask Condi a probing question about torture. None of the other "reporters" who have interviewed her since her original "it's not torture if the President says it's okay" statement asked her whether she agreed with torture or not, because that would have been "adversarial" -- why, they might have even been disinvited from her dinner parties in the future! It took a fourth grader.

I've earlier stated that the reason mainstream newspapers are dying is because of a self-inflicted wound -- they're simply not selling a product that the majority of people want. There are fewer newspapers sold today than when JFK was elected President of the United States in 1960, and that's not a coincidence, that is a steady drip-drip-drip of people deciding newspapers simply do not provide them with what they're looking for (which, for the most part, is truth -- not "he said she said" transcription of "he said the sky is blue, she said the sky is purple", which fails once issues become too complex to be immediately obvious). This is yet another example of Journalistic Fail. I think in the future we should just eliminate the whole White House press corpse and replace them with 4th graders. I suspect the end result will have more value. Which says a lot about the value of today's press corpse (sorry, Helen, but you're not typical today).

-- Badtux the News Penguin

Public health system collapsing

3.8 million people have lost their jobs and thus their health insurance at the exact same time that state and local budgets have collapsed due to the Depression of 2007 (started in December 2007). The result: public hospitals are overwhelmed and unable to provide critical care to patients, leading to people literally dying in the streets for lack of health care.

People, this is not sustainable. While the Rethugs might cry "socialism, socialism, socialism!", people will not willingly die in the streets just because Republican's ideology of selfishness and greed says that people ought to. Republicans might say that poor or unemployed people have a moral duty to just die quietly if they can't afford health care, but human beings do not "just die quietly". Republicans may believe that the U.S. now has such an effective prison state that the need to maintain social peace and public order via providing necessary services to the people is no longer necessary in order to maintain the State, but that system is already creaking under the weight of having 3% of the U.S. population on probation or in prison at any given time, and it's unclear that the U.S. police state would be in any way capable of handling an uprising by those who've been told that the solution to their health care problem is to go home and die.

There is, of course, a solution -- Medicare For All. Old people seem reasonably happy with Medicare, even though they grumble about how much it costs and how it won't cover some of the stuff they wish it would cover. The last time someone proposed eliminating Medicare a bunch of old people with canes and walkers attacked his limo as it left the Capitol and that was the end of that. But wait, I forget, "socialism, socialism, socialism!". Well, Medicare has been around since 1968 and as far as I can tell has not made America less free, but then, I'm a pragmatic realist who lives in the real world, rather than ideologue living in a fake made-up la-la land like the morons shouting "socialism, socialism, socialism!", so that probably makes a difference too...

-- Badtux the Health Care Penguin

Monday sad music blogging

-- Badtux the Music Penguin

Hiking in the rain sucks

Admittedly it would have been better if I'd brought my rain pants and some waterproof boots, but I was experimenting to see if those were really necessary. Conclusion: Yes, they are. But the bigger issue was the fact that the $#%@! mist was so thick that I couldn't see a dadburned thing. The whole point of grunting uphill for three hours is so that you can see a view when you get to the top. If all you can see is freakin' mist... well. Bah humbug!

Other than that, everything seems to be working okay. A bit tired, but that's to be expected, given that I had roughly 3500 feet worth of total altitude gain during the hike (once I got to the top, the road back was up and down from hilltop to saddle and back up to hilltop again to hike the ridge back to where I started in this loop hike). I had hoped to explore some of the old ranching ruins and old ranching roads, but I couldn't see a #$%! thing once I got up into the mist level, so that will have to wait until next year, probably (since the season is turning to the point where long hikes in the desert aren't feasible -- even this early into summer and even with the rains we had the past few days, the stream was almost dry).

-- Badtux the Hiking Penguin

Pete Seeger: 90 years old

Pete Seeger will be 90 years old tomorrow. It seems like he has been around forever? Well, that's because he has been around forever. A man who was singing a song for freedom before most of us on this blog were even born is still singing.

Happy birthday, Pete. And if the banjo playing is shot and the voice barely is there, well, you have an excuse. All those who do not take up the guitar or banjo and sing a song of freedom... they have no excuse at all.

-- Badtux the Music Penguin

Saturday sad music blogging

Blaze Foley singing at a wedding in 1985, his music distilled down to a minimalist accompaniment on his steel-string guitar and that sad sad voice.

-- Badtux the Music Penguin

Pack is loaded...

27 pounds, including food and 8 pounds of water. The 8 pounds of water is for desert hiking, though it's the rainy season so no desert involved here. This load includes a very small tarp-tent, barely big enough to sleep in, that weighs in at 24 ounces, as well as full rain gear (because it's going to rain tomorrow), complete safety gear, cooking gear, and lots of socks (see previous parenthetical statement about rain). Because it is impossible to keep your feet dry in the rain, I'm just going to have to hike with wet feet and trust my duct tape on strategic spots, wicking socks and trail runners to do the job of keeping my feet from turning into blister-fests :-(. 'Cause ain't nothin' except the Great Penguin Himself who could keep my feet dry in that situation...

So now to see how my leg handles under load, backpacking an overnight trip. Wish me luck.

-- Badtux the Waddling Penguin

H1Z1 virus

Five local schools here in the SF Bay Area are shut down because of the H1N1 swine flu virus. As I've previously pointed out, there currently appears to be no indication that this virus has sufficient virulence to create a 1918-style mass death even if it proved to be as deadly as the 1918 virus (not likely, in any modern society where there is sufficient access to anti-inflammatories to keep people from drowning in their own inflamed lung tissues).

On the other hand, all it would take would be a single mutation... such as the H1Z1 mutation...

Gotta go. Need to clean and oil my Mossberg 12 gauge pump and make sure I have sufficient shells for the upcoming zombie apocalypse. If you need me, I'll be hiking out in the national forest far from civilization...

-- Badtux the Mutation Penguin

Snark bites

1. Happy Mission Accomplished Day! Codpiece optional.
2. WWJT (Who Would Jesus Torture)?
3. Oxford Health Plans falls victim to that evil supervillain, The Gay Agenda.
4. Waiting for World Nut Daily to announce that Obama's pick to replace Souter on the U.S. Supreme Court is... Osama bin Laden. 5... 4... 3... 2......

Reminder: Snark bites get posted to Twitter (see left margin box), this is just a taste. Yes, I'm now a twit. Sigh.

-- Badtux the Twit Penguin

Note: There is some controversy over whether the codpiece is optional for celebration of Happy Mission Accomplished Day. After all, Dear Former Leader clearly was wearing a class-A codpiece as part of his celebration of this most hallowed of days. However, I say it's quite clear that the codpiece is optional, as none of the sailors participating in the first Happy Mission Accomplished Day were wearing obvious codpieces. Besides, have you ever tried to buy a codpiece for a penguin?!

Yay, it's a kitty pile!

-- Badtux the Cat-owned Penguin