Understanding economics is all about understanding human thinking, human plotting and human religions. But in modern times, theorists teaching in schools cut out all of that and psychology and above all, mythology, and reduced economic matters to statistics…and then proceeded to eliminate the information statistics give via obfuscation of cause and effect! So it all became ‘manipulating numbers and statistics’ to get a desired outcome, not to understand the true dynamics. This modern way of looking at things cross-eyed has led to fanaticism and doctrinaire thinking that doesn’t fit reality at all. Meanwhile, things today goes from bad to worse in non-communist countries because they totally misunderstand what capital is and how labor is ultimately capital creation systems, not overhead costs that must be eliminated as much as possible.
NOTE: It never seems to end. My husband is finally getting much better, thank you, everyone, for the kind help! But today I had to take someone I know really well to the hospital due to a nervous breakdown due to the storms and other problems! Back to the economic news today:
One thing that has bemused and annoyed me for a long time is how, when we are in a depression coupled with high commodity inflation surges, have to cut government budgets and balance things but when we were in the middle of a credit bubble with money flowing like a river, we had vast government deficit spending coupled with big tax cuts. This is, of course, the exact reverse of what should happen if one wishes to balance things.
That is, the old theory about economics put forth during the mid-20th century was for government spending go down during growth/high stock market periods and when things threaten to go into a depression or crash, the government spends more and drops taxes. Instead, taxes go down during hot periods and rise (at least, fees and other systems go up) while government spending shoots up greatly during hot periods and then is brutally cut off in cold periods. That is, social services are slashed heavily exactly when they are needed the most! This ‘belt tightening’ then creates long depressions where fewer and fewer people have jobs and people are dumped in the streets and forced to survive on Darwinian levels of death rates.
The problem here is clear in this article: What Not to Do in a Debt Crisis : The New Yorker
The E.C.B.’s actions have been especially damaging because they’ve come at a time when, in response to the debt crisis, European countries have been forced to take austerity measures, slashing government spending and raising taxes. When fiscal policy is contractionary, expansionary monetary policy can help make up the difference. This is what the Federal Reserve has tried to do in the U.S.—albeit not aggressively enough. The E.C.B., by contrast, has decided to tighten, which means that both fiscal policy and monetary policy are hitting the brakes on the economy.
The perplexing thing about the E.C.B.’s approach is that it’s hard to see who benefits. The traditional explanation for the bank’s anti-inflationary zeal hinges on the fact that the continent’s stronger economies, in particular Germany’s, don’t need any help growing, and don’t like the fact that inflation reduces the real value of assets. So while the PIIGS might prefer a monetary policy that shrank debts and spurred growth, Germany wants low inflation, and Germany wins. Yet right now the entire continent would benefit from easier money.
This article shows how clueless people can be. I once lived in Germany and know many, many Germans back then who remembered the 1920’s Weimar inflation event. The entire German culture is very allergic to using inflation to fix anything. Especially war debts. The US has fixed things so we pay for war debts today, not with higher and higher taxes until people get mad and demand the wars cease. No, we pay via degrading the dollar.
Now, the article also mentions that Germans hate inflation due to it reducing the real value of assets. This is an insane statement. The entire business of ‘inflation’ is…the price of things goes up, not down! We had tremendous property value inflation, for example, when we also has tremendous tax cuts and low interest rates and war spending all at the same time. This ‘inflation’ made people wildly happy and many poor souls put their inflated homes very, very deep into debt using them as ATM machines for easy, cheap loans.
Inflation roared merrily along as the government rigged inflation statistics to hide this hideous fact so it looked as if there was only 4% inflation when it was really much, much higher in real terms. Then the value of SOME assets fell while the cost of many other things shot upwards like a rocket. This is ‘stagflation’ and it happened in the past when the US had tax cuts, a major war or two or three and cheap credit.
Tying inflation to wars is very controversial because this means we have to talk about raising taxes during wars and since Eisenhower, no President has wanted to do this. Nearly always, they lower taxes during wars so as to ‘have a strong economy’. This, of course, is very inflationary. The inflation we have seen in commodities including very much, gold, is due to easy credit, very low taxes and wars all at the same time there is a crash in the value of assets (stagflation).
Last time we had stagflation, the price of food, fuel and gold shot to the moon. Then interest rates had to rise to usurious levels to stop it from doing a Weimar hockey stick event.
The Goldman Sachs tower in Jersey City wasn’t destroyed by Hurricane Irene but there is another, legal Big Blow about to come: Goldman Sachs targeted as ‘Jaws’ joins battle over banking crash
He is known as “Jaws”, the perfect nickname for a lawyer entangled in a lawsuit filed against a massive investment bank that has been dubbed a “vampire squid” by its critics. But Jacob Zamansky, a renowned Wall Street defender of the little guy, with a record of extracting large settlements from giant firms, does not fear the tough reputation of Goldman Sachs.
Indeed, he is happy to be helping on a class-action lawsuit against the bank taken out on behalf of a group of shareholders seeking millions of dollars in damages for alleged illegal behaviour. “Goldman misled these investors. So they came to me,” Zamansky said.
Goldman Sachs made a classic mistake: in order to keep their own purses full, they cheated their direct customers who they depend on for funding. They cheated them by giving them the crappy garbage they all knew was worthless while keeping the gold plated derivative deals for themselves. They sold slums to their customers and kept the mansions for themselves. They then boasted about record profits while cheating the people they were serving. Everyone involved in this should be sued to the point of being put out in the streets, in rags, to live in the gutter.
Good luck, everyone, hope you all win, big.
And finally, the big fat report about what went wrong in the last 10 years. Unfortunately, the report does not talk about the last 100 years or about our fatal trade deficit spending and our even more fatal wars; Financial crisis was ‘avoidable’, concludes US government inquiry |
The commission concluded that the crisis was avoidable and caused by:
• Widespread failures in financial regulation, including the Federal Reserve’s failure to stem the “tide of toxic mortgages”.
• Dramatic breakdowns in corporate governance, with too many firms acting recklessly and taking on too much risk.
• Excessive borrowing and risk by households and Wall Street.
• Policymakers who were ill-prepared for the crisis and lacked a “full understanding of the financial system they oversaw”.
• Systemic breaches of accountability and ethics at all levels. Mortgage-holders took out loans they never intended to pay; lenders made loans they knew the borrowers could not afford.
Why on earth do all the restrictions and systems set up after the Great Crash and Great Depression fail? Well, that is easy to answer: the very rich bribed Congress to destroy all the rules and regulations that were created to prevent another Great Depression and lo and behold, we got another Great Depression, in spades! Duh!
So the real problem here is political: Congress is corrupt due to bribes and to the fact that rich people can outspend poor people when running for office. So we have mostly multimillionaires running DC for us and they run it for themselves and their buddies. Then there is AIPAC and other noxious lobbying groups who work insidiously and continuously to insure they run Congress, not the People of the United States.
They wrecked everything and in the mess they created, they guide us to only one solution: cut taxes on the very rich and cut benefits to the middle class and poor. Yes, this fix is in the bag! History tells us, this fix will fail for obvious reasons but the triumph of capitalism seems so complete to these corrupt people, they imagine, their bombing victory over a disarmed Gaddafi and Saddam means they will win if the people try to revolt at home. A strange idea.
The number of jobs in the US continues to disintegrate. I just learned a dear friend lost his well-paying job and he has a very ill wife and one month’s insurance left. Healthcare provisions in America are extremely primitive compared to other, ‘first world’ countries. Here is an amazing story about bringing in foreign labor to displace Americans and drive down wages: Disgruntled Hershey Guest Workers Knew What To Expect, Says Non-Profit CEO who brought in thousands of East Europeans to work on assembly lines in the candy factories in America. This has angered many people so Organized opposition dominates Bass town hall – CNN Political Ticker – CNN.com Blogs
“To what degree did working-class Americans contribute to this crisis?” asked Tess George, a Democrat who said “Wall Street greed” and spending on foreign wars were to blame for the debt crisis.
Bass (the Republican running the town hall meeting) responded that Democrats should share the blame for the struggling economy, saying the president had several years to create jobs. He told the audience the Obama administration’s stimulus initiative helped prove that spending would not pull the country out of its economic slump.
“We’ve got to create an environment in which businesses want and can employ people to do real jobs,” Bass said. “And my ideas for that – I know you won’t like, but they’re the only hope, in my opinion that we have at this point – and that is to lower our corporate tax rate so it’s competitive –”
He was cut off by shouts and groans in the audience. Bass then added Congress would work to make the tax code “simpler and fairer” in the fall.
Cut taxes! The only solution being offered along with lies that Federal spending doesn’t create jobs. Most of what is left of our decimated industries are exactly that: military manufacturing for wars that seem never ending stories. That isn’t being cut since many GOPers love military spending, a lot of it is done in their districts. No, they want to fool people into thinking tax cuts on international corporations will mean jobs here, not even more jobs overseas. The only solution, the ancient solution to floods of imports has always been the same: tariffs, barriers and home manufacturing.
Obama has called on an ‘expert’ in jobs who has absolutely no idea how tariffs and barriers create jobs. He isn’t Chinese or Japanese. He is an American through and through and utterly incapable of thinking straight: Alan B. Krueger – Wikipedia, the free encyclopedia
Krueger developed and applied the method of natural experiments to study the effect of education on earnings, the minimum wage on employment, and other issues.
Krueger compared restaurant jobs in New Jersey, which raised its minimum wage, to restaurant jobs in Pennsylvania, which did not, and found that restaurant employment in New Jersey increased, while it decreased in Pennsylvania.
In his book, What Makes a Terrorist: Economics and the Roots of Terrorism, (2007), he wrote that in contrast to the assumption that terrorists come from impoverished, uneducated environments, terrorists often come from middle-class, college-educated backgrounds.
From 1994-95 he served as Chief Economist at the United States Department of Labor. He received the Kershaw Prize, Mahalanobis Prize, and IZA Prize (with David Card), and is a fellow of the American Academy of Arts and Sciences, Society of Labor Economists, Econometric Society and American Academy of Political and Social Science. He is a member of the Executive and Supervisory Committee (ESC) of CERGE-EI, a top-tier academic institution based in Prague, Czech Republic.
So, he is a labor economist but…stupid. This is all we need. The frosting on the economic cake. I am puzzled about this. Asians figured out how things really work! They use what they know to the point, we are dying and they are taking over, all except the Japanese who went off a private cliff which is no surprise, Japan has done this in the past. The Japanese did pioneer the business of ‘How to totally screw the Americans and get them to help us do it.’ But the self-destructive social forces deep in the Japanese society has doomed their attempt at running the world. Just as Zionism is doing the same at the other end of the world. Both are falling due to xenophobic problems.
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14 responses to “Jobs Will Never Come Back Until Tariffs Return”
LMAO bring it on baby!!!
Just be careful where you place your tariffs. The tariff on sugar has meant the wholesale use of hydrolysed starch, “Fructose”, as it is called, wrongfully, which has had a deleterious effect on US citizens.
The Great Satan walks the plank.
SUGAR AS A VERY HEALTH HARMFUL ENTITY, MAY BE LETTING FATS AND CHOLESTEROLS TAKE ITS BLAMES
I thought inflation increases the apparent (nominal) value of assets because the currency value is reduced, but the actual (real) value of an asset, determined by market supply and demand if there were no inflation but rather measured by some arbitrary baseline value, is static or even reduced by the increasing costs of using an inflated currency. Isn’t that what the New Yorker author was getting at when he said inflation reduces the real value or assets?
E: “Goldman Sachs made a classic mistake: in order to keep their own purses full, they cheated their direct customers who they depend on for funding. They cheated them by giving them the crappy garbage they all knew was worthless while keeping the gold plated derivative deals for themselves. They sold slums to their customers and kept the mansions for themselves. They then boasted about record profits while cheating the people they were serving.”
It’s not only Wall Street that is the problem. As you point out in another section of this article is the current American Way. Loot the little man to become rich at any cost. Smile while you backstab the chumps and grab all you can while sprouting some bs about necessity for the company/nation. Work tirelessly to dismantle his possiblitites to say no and to stop you (dismantling unions, corrupt the political and legal processes). When this sociopathic mentality is endemic to the system itself it is very difficult to work change through the system because there will be endless deflection attempts and roadblocks for any attempt at reaching the real powers behind the scene.
I disagree tariffs is the only solution. Another part of the solution has to be to balance the power system within the US/EU and get rid of these robber barons/war profiteers/financial exploiters/legal wranglers/sticky handed politicians and groups pulling the strings behind the scene. Smoke them out and get rid. And that goes way beyond the neocons and the tea party nuts.
At the core is political reform. Alas, our mostly rightwing Supreme Court has totally trashed even 100 year old campaign laws so it is now totally open for lobbyists to totally corrupt our government and AIPAC is very pleased, too and works hard to keep this status quo going which is why politicians who were once campaign finance reformers are now AIPAC pets.
At least 25 top United States companies paid more to their chief executives in 2010 than they did to the federal government in taxes, according to a study released on Wednesday.
The companies — which include household names like eBay, Boeing, General Electric and Verizon — averaged $1.9 billion each in profits, according to the study by the Institute for Policy Studies, a liberal-leaning research group. But a variety of shelters, loopholes and tax reduction strategies allowed the companies to average more than $400 million each in tax benefits — which can be taken as a refund or used as write-off
against earnings in future years.
“We have no evidence that C.E.O.’s are fashioning, with their executive leadership, more effective and efficient enterprises,” the study concluded.
“On the other hand, ample evidence suggests that C.E.O.’s and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before — at a time when the federal government desperately needs more revenue to maintain basic services for the American people.”
nice. “INf. `1923 DE allowed firms w/ mortgages to pay them off w/ inflated, cheaper marks. Farmers bartered. The mid. class was wiped out. Savers held real stuff and/or o’seas accts.’
PPl near the spout of new funds (mil. contractors?_ do well in non. + real terms, those at the end (on dole) have less p power.” INF seems to hurt more ppl in real p p parity?
DEF allows strong hands to buy up assets and restart the econ.” “DE 1999 had almost steady r.estate values, UK US Sp had r.e. bubbles. . . ” now future generations must pay,
and Arg., Ire. are planning to nat’ize retirement (401k type_ plans).”
all of these “helpless” americans are going to get a lot more government than they ever dreamed of.
i guess dependency fosters denial.
Tariffs are a game every nation can play and will. Trying to make a beggar of your neighbour is not a good idea. Whatever is left that America attempts to export can be tariffed by whatever country might want to import it. And unless America has a world monopoly on what it is trying to export, alternate non-american sources will be found or created. Tariffs do not work. They do cause wars. The war of Northern Agression was caused by tariffs.
So go ahead, put your foolish tariffs on Chinese products that are no longer made here in the USA. What magic will cause the no longer existing factories to be built? Maybe 10 years down the road after all the EPA and OSHA and other federal state and local folderol is filed the ground can be broken for a factory in a non union state. Maybe.
The Industrial Policy of the USA since the end of the Korean war has been to de-industrialize the USA. This was also the Labour policy of the USA, without industry; craft unions do not exist. All that remains are the low pay low skill unions and the governmental unions. Voila another competing source of power destroyed. You have what your governments wished for, no industry, no unions; now put tariffs on imports and you will beggar your own citizens without creating any new jobs or new industries or reviving any old industries. The Bridgeports went to china, the tools that make the tools are not made here anymore. But have your way, impose tariffs on imports and force walmart’s prices up. The poor and the middle class will love you for it. Hozannas in the street for you.
A nation can have either a welfare state or an open door imigration policy, not both. A nation can have freedom and trade, or tariffs and wars. We already have a bunch of tariffs and a bunch of wars.
A nation can have either a welfare state or an open door iMmigration policy, not both………………well the left insists on both…In US, Canada, Eurabia
CK, America had tariffs prior to the end of World War 2. The first US tariff was passed on July 4, 1789 by the first US Congress. At that time the US was an agricultural backwater. Tariffs turned the US into the greatest manufacturing power the world has ever seen. If we go back to the founders and raise tariffs while using the revenue to cut income taxes, then you will see the return of manufacturing in this country. Yes we will also have to undo some EPA regulations; deregulate the manufacturing sector, abolish payroll taxes which provides a tax incentive to not hire American workers;;flatten the tax code on businesses and individuals by abolishing deductions while lowering rates; and balance our budget as foreign countries use US Treasury bonds to artificially manipulate the exchange rates. As to flatting the tax, make the first 25,000 in income be tax free.
Loads of free land, huge amounts of natural respources, scads of skilled immigrants, universal local education had nothing to do with making america an economic giant? Just tariffs is all it took. The folks who believe that government interference is the road to wealth and freedom are always enlightening. In actual fact, without the Tariffs the USA would have become an economic giant even faster than it did. Tariffs always throttle domestic production because they force domestic users to use inferior, less efficient domestic goods that carry a higher price.
Remove the minimum wage: The minimum wage gives non citizens a competitive edge versus citizens. Illegal imigrants, already illegal has little to worry about taking a below mandated wage job. 60% young black citizen unemployment.
Tariffs do not work, never have, never will. They are not magic incantations that cause factories to re-appear, jobs to multiply, research to flourish new products to be created. Tariffs are a way for the people with the guns to favour some of the citizenry over others of the citizenry.