Jobs Will Never Come Back Until Tariffs Return

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:

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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.

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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.

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The problem here is clear in this article: What Not to Do in a Debt Crisis : The New Yorker

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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.

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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.

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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.

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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.

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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.

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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).

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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.

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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 

 

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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.

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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.

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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.

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Good luck, everyone, hope you all win, big.

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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 |

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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.

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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!

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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.

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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.

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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

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“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.

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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.

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“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 –”

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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.

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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.

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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

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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.

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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.[4]

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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.[citation needed]

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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.

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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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