Sunday, March 29, 2009

Friday, March 27, 2009

A Gentleman Reads

I know you're all taxed from the seriously heavy shit I've been laying down. Yep! This is a serious web log. Only the best, most informed prose.

Which, of course, makes it deadly dull and one of the least likely to be read pieces of electronic media currently littering the ether. And I do mean "littering."

To address this critical dearth of fun and silly shit, I try to link to some other practitioners of the bloggist's art who are considerably funnier and altogether better for your constitution.

You are instructed to go, at once, to the Foggy Monocle and laugh your ass off.

That is all.

A Portrait of Onanist Delight

That's a year-to-date chart of the Dow Jones Industrial Average (all charts click to enlarge). The DJIA, and its turgid performance during the last two years of the Bush Presidency, are what allowed MSNBC, CNN, NBC, Powerline, and pretty much every pundit and bloviator tied to the corporate media to proclaim that the economy was doing just fine, thank you very much, in spite of rising jobless claims and mushrooming foreclosures.

Compare these charts of Initial Jobless Claims and New Home Sales

With this chart of the S&P 500:

It's a little hard to see because the scale of the graphs isn't perfectly aligned. ignore the point where the S&P falls off the table in October of 2008, and its fluctuations that spring and summer tend to look more like white noise in a stabilizing pattern at a very high level.

In the meantime, however, during the spring and summer of 2008 when practically every business analyst from Kudlow and Cramer to John Sidney McCain were telling us that the "fundamentals of the economy are sound," jobless claims were creeping steadily up and housing starts were declining.

I bring this up not to point out how wrong they were (which they were), but rather to highlight a huge blindspot in the media's vision: they are slaves to shareholder profits.

They don't analyze the economy. They tell you whether or not rich people are making money, and they mistake that for the same thing. If the stock market is performing well, that's all they're interested in. Cash is flowing in, baby! The fundamentals of the economy must be sound.

No one getting paid to tell the world what's what analyzes the economy. They report (take dictation from) the market. Sure, there were some whispers around the edges. But hey! Are you gonna listen to those nattering nabobs of negativism? Or do you wanna come for a swim in my pool of cash?

Now look at the top graph again. What you see there is an Obama-induced bounce. The markets are up about 20% since the early days of March. Not many people are talking about it, but that's mostly because they want Obama to fail and they've spent the last three months claiming every drop in the DOW was his fault. Suddenly they've got nothing to talk about.

But that's not my main point. My point is, this isn't necessarily good news. The "fundamentals of our economy" are but a whisker more sound now than they were last October, and only because we're starting to put on the brakes.

If the status quo system likes what's going on and the market is going up, I'm not filled with confidence. Here's another chart for ya (click to expand):

Since the '50's (when there were 14 tax brackets and income over $400k was taxed at 91%), the rate of growth was a steady-state economy. In the 1980's we bought into the supply side logic of the infinitely expanding market. We slowly took bankers and investment houses off the leash and shackled the wardens. 1992-2008 was as close as I hope we'll ever come to a financial anarchic utopia (for bankers) / dystopia (for workers).

I guess you can tell where that gets you.

So, finally the point: taking into account the growth of a world-wide market, or at least the introduction of that potential, I figure a good place for the DOW to be is a steady-state economy at about 4,000-6,000. In other words, a bit below where we are this Friday as I sit here typing away.

If this is where we should be, then we can probably expect another crash. Sometime this summer, I expect. Which will be blamed on Obama. Which will be right, in part. But also necessary. There is still a lot of waste in the private sector. Here's what I mean by "waste:"

Capital is created by labor, which adds value to the product being worked on. That value is sold to a market. The employer siphons off most of that value and pays his/her labor with the balance. Much more complicated than that, of course, but that's essentially the deal.

Over the last 40 years, more and more of that value has been lodged at the top. This is "supply-side" or "trickle-down" theory, which depends on two things being true: 1) If you feed the suppliers/oligarchs enough to keep them fat and happy, they'll keep the wheels of commerce turning by seeking infinite wealth, thereby employing you and keeping you fed and out of the rain. (With just enough extra to buy you off.) 2) We will never run out of markets to expand in, so the money will be able to continuously flow up the ladder and, mostly, stay there.

Something happened to this fairy tale. The money wasn't flowing fast enough. So the oligarchs (in this case, investment bankers and the lawyers who work for them) created a variety of investment baskets that allowed them to essentially sell the same "value" (from the "value added" equation, above) over and over again, and to package it with thousands of tiny risks (iffy mortgages) which themselves had been packaged multiple times and resold.

This worked well enough except for one thing: the need for more and more capital at the top of the ladder outstripped both the workers' ability to generate it, and the market's rate of expansion.

The butterfly in Thailand caused a tornado in Brussels. Or, in this case, some dude in Nevada finally failed to pull the ends to meet, tapped out his credit, and his home was foreclosed on. Then his neighbor, and his neighbor on the other side.

That was the pin in the balloon. It started small, but once that vacuum of capital was in the room -- a literal absence of money to fill a hole -- the game was over and the void spread very quickly up the chain and sucked the fancy house of cards into the shitter.

So anyway. The market is up in March. But I don't expect it to stay there, nor do I think it should.

These assholes just can't believe the party's over. And we're all going to take the bullet/pay the piper/sell our vacation homes.

What? You don't have a vacation home?

Thursday, March 26, 2009

"Barry" Needs a Teleprompter

Dear "President" Obama: I'm very disappointed to see you using a teleprompter. I guess the image you falsely portrayed to the Nation during your campaign of a thoughtful, articulate speaker, was a cheap charade designed to lull the passive left-wing media into a hero-worshiping drool-fest -- one that continues to this day. I hereby withdraw my support, since it's clear that your memory sucks and that you're therefore too addled to be President. Why don't you go back to Indonesia, you America-hating Islamist traitor? Only idiots use teleprompters...

More here.

Credit to John Aravosis

Saturday, March 21, 2009

Twisted from the root

From Kung Fu Monkey:
There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.

Sunday, March 8, 2009

False Choices: WSJ's self indulgent crap continues

The Wall Street Journal's editorial page has become as predictably shallow as Rachel Ray, without the useful side effect of dinner.

This week's victim: the energy crisis.

In "Let's Get Real About Renewable Energy" Robert Bryce pulls off two equally disingenuous tricks: 1) He uncritically complements W's energy policy, and 2) pans Obama's efforts to "double, then double again" our output from alternative sources.

Naturally, I have a couple of quick comments that will have to suffice for a more thorough dressing down.

By promising to double our supply of renewables, Mr. Obama is only trying to keep pace with his predecessor. Yes, that's right: From 2005 to 2007, the former Texas oil man oversaw a near-doubling of the electrical output from solar and wind power. And between 2007 and 2008, output from those sources grew by another 30%.
Whatever W did to support this growth a) had little to do with that growth, as industry is more clear-eyed about the future of oil than our Republican colleagues are, and b) was motivated by a transparent desire to "greenwash" his permissive approach to extractive industries including so-called "clean" coal and his liberal expansion of pro-pollution policies both direct (the roll-back of the Clean Air Act and Clean Water Act) and indirect (appointing pro-pollution directors to the EPA with instructions to collude with industry in its efforts to dodge the true cost of production and foist it on the living things -- like you -- that enjoy breathing and drinking clean water).

Next, Bryce focuses on the output of our current "renewables" industry against the total energy usage of the USA. Of course, it's paltry.
The latest data from the U.S. Energy Information Administration show that total solar and wind output for 2008 will likely be about 45,493,000 megawatt-hours. That sounds significant until you consider this number: 4,118,198,000 megawatt-hours. That's the total amount of electricity generated during the rolling 12-month period that ended last November. Solar and wind, in other words, produce about 1.1% of America's total electricity consumption.

Of course, you might respond that renewables need to start somewhere. True enough -- and to be clear, I'm not opposed to renewables. I have solar panels on the roof of my house here in Texas that generate 3,200 watts. And those panels (which were heavily subsidized by Austin Energy, the city-owned utility) provide about one-third of the electricity my family of five consumes.
Here's another way to consider the 76,000 barrels of oil equivalent per day that come from solar and wind: It's approximately equal to the raw energy output of one average-sized coal mine.
Sure, Mr. Obama can double the output from solar and wind. And then double it again. And again. And again. But getting from 76,000 barrels of oil equivalent per day to something close to the 47.4 million barrels of oil equivalent per day needed to keep the U.S. economy running is going to take a long, long time. It would be refreshing if the president or perhaps a few of the Democrats on Capitol Hill would admit that fact.
That's enough for the sense of it. Read the (very brief) editorial for all his calculations.

I absolutely include Democrats in my indictment of this editorial, by the way. Our entire government is colluding with the energy industry in preventing us from truly addressing the problem.

And it's a huge fucking problem. The most important thing that Bryce totally ignores is this: Oil -- hydrocarbons -- will, absolutely, incontrovertibly, without doubt, run out. Whether we need them or not, they will be exhausted if we keep using them.

"[H]ydrocarbons just won't go away." Um, Bryce? Yes. Yes, they will.

But there is a part of Bryce's essay with which I actually agree.

The happy fiction we allow ourselves (and our politicians permit us) is that we can invent and innovate our way to a future where we do exactly what we do now, but with different sources of energy. Clearly, that's the future Bryce is imagining: one where his family of 5 is still permitted to use 9,600 watts of energy per day (holy shit, by the way). Energy "independence" may also be a fiction, but there's no reason to assume that we can't eliminate our use of hydrocarbons, or our reliance on and exploitation of barbaric, repressive societies in unstable and impoverished countries.

The fairy tale is that we can do that and still drive our Texas-sized cars Texas-sized distances to our Texas-sized homes, where we sit down to Texas-sized meals of factory-raised food in front of Texas-sized televisions and bask in the cool breeze from our Texas-sized swamp cooler before tucking our Texas-sized family into their Texas-sized beds made in China, and expect that the subsidized solar panels on our roofs will do the trick.

I'm sorry to say that in the future (apocalyptic collapse after we exhaust the supply of hydrocarbons or transition to alternative sources of energy), this popular picture of the American Dream is dead as dinosaurs.

Bryce would do better to help solve that problem.

Instead, he'd rather play "gotcha journalism" with an intentionally shallow and one-sided examination of the new administration's energy policy.

In the words of David St. Hubbins, "It's such a fine line between stupid, and clever." Bryce? You're not being clever.

Thursday, March 5, 2009

No Soup For You

Play along with me here.

Stretch your arms out as wide as you can. Wider. Wider! C'mon, you're hugging a big pile of money! WIDER!


Now, at the tippity tip of your right middle finger is zero dollars. At the tippity tip of your left middle finger is the total amount of all the bailout money that has been given to the financial industry since the late fall of 2008 -- TARP money, supplemental funding, zero collateral loans (of your money), handouts and golden cushions. All of it.

Keep stretching: that pile keeps growing...

Now, take all the money represented by the first knuckle on the middle finger of your right hand. That's the money the Obama administration proposes to use to help out homeowners who are in danger losing their homes.

I'm not entirely sold on that plan. But I'm definitely not sold on the billions and billions of dollars (with no real end in sight) being doled out to AIG, BofA, etc.

The Right Wing would have you believe that class war is the left's idea. But let's just see what happens when the barest fraction of their precious bailout money might be siphoned off to keep people under a roof. "Ooo, we can't have that! That rewards bad behavior!"

This is the true spirit of "trickle-down" economics, laid bare. The truth is, even the trickle pisses them off.

Tuesday, March 3, 2009

On the radar

Borrowed Suits' recounting of my epic half-marathon/motorcycle wreck weekend has been picked up and edited by a new 'blog: The Accidental Extremist, where it has been retitled "Chariot of Fire (Burning Sensations)."

TAE features true-life stories of accidental idiocy, whether death-defying or merely dignity-slaying. I got the point to them from the gentlemen at The Foggy Monocle, another fine internet establishment which I highly recommend.

Here's to living the dream.