Defining a Depression

"Some point to the success of Latvia in managing its so-called internal devaluation. But its GDP is 23 percent below its pre-crisis peak. That is a depression."

-- Martin Wolf, here

Rare Earth Mineral Finds on Pacific Floor Dwarf Known Land Reserves

The new discoveries near Hawaii and Tahiti in international waters by the Japanese are said to be on the order of perhaps 100 billion tons, while known land reserves are in the vicinity of 100 million tons.

Looks like the Chinese may soon discover they've been paying way too much in their attempt to corner this market.

The article, here, makes no mention of the implications of the Law of the Sea for the discovery.

 

Updated link here.

Everything You Need To Know About TX Gov. Rick Perry, George W., and Karl Rove In One Sentence

"In 1989, Mr. Rove, already a powerful Texas political consultant, helped persuade Mr. Perry to join the Republican Party and run as agriculture commissioner."

The New York Times, here.

Walter Williams Skewers Democracy, and Time Magazine's Richard Stengel

Just one of the bons mots:

Stengel says, "If the Constitution was intended to limit the federal government, it sure doesn't say so." That statement is beyond ignorance. The 10th Amendment reads:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Stengel apparently has not read The Federalist No. 45, in which James Madison, the acknowledged father of the Constitution, said:

"The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite."

Stengel's article is five pages online, and I've only commented on the first.

Read the whole thing here.

Fight The Will-Try-ANYTHING Fed

From Bill Julian, making the contrarian case here that it's already winter:

M3, the broadest definition of money that includes credit creation, is still well off its peak of 2008 and is no higher than it was when QE2 was instituted. ... This is unprecedented and is consistent with the current flurry of poor economic data. It is almost certainly a huge disappointment to the FED.

The meaning of this is that the asset prices which have been inflated by Federal Reserve policies look less and less sustainable. 

'Money is the Lifeblood of the Nation'

"Money, the lifeblood of the nation,
Corrupts and stagnates in the veins,
Unless a proper circulation
Its motion and its heat maintains."

-- Jonathan Swift

End Obama's Big Fat 'Tax Break' For Air Force One: $35 Million a Year

From Rich Karlgaard, here:

[T]he annual carrying costs and fuel costs of Obama’s big fat jet comes to $100 million, give or take. My round number is supported by the National Taxpayer’s Union finding that Air Force One costs $181,000 an hour to operate, all in.  Obama would have to fly 552 hours to hit $100 million-a-year by this calculation. However you analyze it, the cost of Air Force One comes in at around $100 million.

Gee, wouldn’t you call that a form of compensation? The president of the U.S. makes $400,000 in salary but he gets a perk that is worth $100 million a year. Cool! I’m not even counting the annual costs of his other perks — ground transportation in limos, free digs at the White House, the parties, the First Lady’s trips, and so on.

Just one perk, Air Force One, is worth $100 million a year.

You are right, Mr. President. Let’s end this tax break for corporate jets. Which means, you pay up, Big Guy! You owe the IRS roughly $35 million a year for your personal jet.

Rethinking 2008: Panic Number Fifteen

From The Chicago Tribune:

There are remarkable similarities in the events that trigger panics. A century-old economic text, "A Brief History of Panics and their Periodical Occurrence" noted, "The symptoms of an approaching panic… are wonderful prosperity… a rise in the price of all commodities, of land, of houses, etc, etc…, by the gullibility of the public, by a general taste for speculating in order to grow rich at once, by a growing luxury leading to excessive expenditures…." The book further cited excessive leverage in the financial system, a point taken up by [Roger] Babson, who likened the creation of new financial institutions to "putting out a flame by pouring oil over it." How easily all this could have described the years preceding the Panic of 2008!

Read more from Jeff Korzenik's fascinating op-ed, here.

Risk-Taking Capital is Fleeing the US

From The Wall Street Journal here:

Americans are taking their investment dollars abroad at a faster pace than foreigners are bringing capital to these shores. In 2010, for example, U.S. investment abroad was $351 billion—$115 billion higher than foreign investment here. Economic recoveries are periods when investment capital usually surges into a country, but since this weakling rebound began in the middle of 2009 the U.S. has lost more than $200 billion in investment capital. That is the equivalent of about two million jobs that don't exist on these shores and are now located in places like China, Germany and India.

This is a recent and dramatic reversal of fortune. Huge net inflows of productive capital into the U.S. in the 1980s and '90s helped finance the 25-year boom in jobs and broad-based prosperity from 1982-2007. Over that period, foreigners invested just over $6 trillion more in the U.S. (in total capital) than Americans invested abroad, according to the Bureau of Economic Analysis, with most of it going into businesses.

Minnesota Governor Flip Flops on Government Shutdown

Seen here:

[D]uring the 2010 gube[r]natorial election ... governor Dayton said he would not shut down state government in order to get his way on a tax increase.

Anonymous Eyewitness Fukushima Workers Allege Quake Caused Meltdowns, Not Tsunami

The Atlanticwire.com has the long story here, including testimony from three different workers:

 “I personally saw pipes that came apart and I assume that there were many more that had been broken throughout the plant. There’s no doubt that the earthquake did a lot of damage inside the plant. There were definitely leaking pipes, but we don’t know which pipes – that has to be investigated. I also saw that part of the wall of the turbine building for Unit 1 had come away. That crack might have affected the reactor.”

“If the walls are too rigid, they can crack under the slightest pressure from inside so they have to be breakable because if the pressure is kept inside and there is a buildup of pressure, it can damage the equipment inside the walls so it needs to be allowed to escape. It’s designed to give during a crisis, if not it could be worse – that might be shocking to others, but to us it’s common sense.” (first worker)

“It felt like the earthquake hit in two waves, the first impact was so intense you could see the building shaking, the pipes buckling, and within minutes, I saw pipes bursting. Some fell off the wall. Others snapped. I was pretty sure that some of the oxygen tanks stored on site had exploded but I didn’t see for myself. Someone yelled that we all needed to evacuate and I was good with that. But I was severely alarmed because as I was leaving I was told and I could see that several pipes had cracked open, including what I believe were cold water supply pipes. That would mean that coolant couldn’t get to the reactor core. If you can’t sufficiently get the coolant to the core, it melts down. You don’t have to have to be a nuclear scientist to figure that out.”

“There were holes in them [the walls of Unit 1]. In the first few minutes, no one was thinking about a tsunami. We were thinking about survival.” (worker two)

“I was in a building nearby when the earthquake shook. After the second shockwave hit, I heard a loud explosion that was almost deafening. I looked out the window and I could see white smoke coming from reactor one. I thought to myself, ‘this is the end.’” (worker three)

Worker three, quoting a supervisor: “there’s been an explosion of some gas tanks in reactor one, probably the oxygen tanks. In addition to this there has been some structural damage, pipes have burst, meltdown is possible. Please take shelter immediately.”

It's a little odd that the story concludes with this statement:

[S]haking experienced at the plant during the quake was within it’s [sic] approved design specifications.

Three readings from TEPCO's own report of the seismic data, updated June 16, 2011, contradict this statement for Units 2, 3, and 5, and Unit 1 got very close to not just its E-W limit, but also its N-S, which would cohere with its geographic position at the plant, bearing the brunt of the forces from the north, and sharing in the record-setting forces from the east:

Workers fleeing west before the tsunami hit were reported here to have heard a radiation alarm sounding at a point 1.5 km distant from reactor Unit 1.

White House Staff: 454 People. Total Compensation? $37.1 Million.

As reported here:

141 White House staffers make six figures. ...

In total, the 454 White House staffers earn a payroll of $37,121,463.

Poverty Lines 2010 US Census

(source)

Poverty Guidelines for 2011 from HHS

(source)

The Current Tax Code is Already Unseemly and Socialist

Because of the way it massively extracts taxes from the top 50 percent of earners and redistributes the benefits to every class of people, to be sure, but disproportionately to the poorest who pay nothing in federal taxes. They number in excess of 63 million tax filers.

So why can't Bruce Bartlett, here, just say that?

"Perhaps the right and left can at least agree that it is unseemly for those in the top 1 percent of income distribution, with incomes at least 10 times the median income, to pay no federal income taxes. It’s not socialism to ask them to pay something."


"Unseemly"? We're talking 24,000 filers in the top 1 percent. Why isn't it unseemly, and in fact a scandal, that over 5 times as many people in the lowest two quintiles pay no federal income taxes than in the highest three quintiles?

Bartlett well knows that the rich who pay no federal taxes may in fact pay capital gains taxes, and may also be massively financing America's municipalities in the bond market to escape federal taxes, just as he knows the poor who work pay Social Security taxes just like everyone else who works.

That's the problem with the tax code. It's balkanized and hyphenated, just like America, and when only looking at one part of it and from that perspective, it only provokes judgments as distorted as the code itself.

A tax code which taxed all income in all forms and at all levels without exception and at one low rate would go a long way to repairing the divisions in this country.

Unfortunately we don't have very many people in leadership advocating for this.

From the article:

Tim Pawlenty Wasn't Much of Spending Cutter in Minnesota From 2003

Captain Capitalism has the story here:

More Than Half of Real GDP Through 2010 Came from Government Spending

From deficit spending, that is, measured in the hundreds of billions per year under George Bush, and now in the trillions in just two and a half years under Barack Obama.

It ain't worth it! And the country needs a growth strategy.

Seen here at The Department of Numbers:

The Great Stagnation

"[M]ore than half of our economic growth in the past ten years has come from government spending."

Minnesota Government Employee Fears Two Month Government Shutdown

Big whoop:

State worker Lori Sobczak tried to remain optimistic.

"There's frustration," said Sobczak, a two-year Minnesota Department of Transportation employee.

The fear is "the unknown, you know," she said. "Rumors are flying around; [a shutdown] could be, you know, 45-60 days. ... That's scary."

Scary? You don't know scary. Try going two and a half years without a regular paycheck, sister, like seven million other unemployed Americans. That's why your government is shutting down, because we used to pay the taxes that made your job possible in the first place.

If I were you I'd tell my union to cut a deal.

Read all about the Minnesota government shutdown here.

Only Dreamers Think Corporate Cash Will Be Used To 'Create Jobs'

Robert Lenzner opines on the naive hopes for repatriating about $1 trillion in corporate cash, noting how corporations are already sitting on a similar sum here and could just as easily use it to create jobs if they needed to:

[Companies] aren’t in business to serve the public patriotic interest by using that money to create jobs unless there is demand over and above what is being filled today.

Which would mean that a tax break for repatriating the cash would just be a "sweetheart deal," the favor   of which would no doubt redound to the politicians granting it, in the time-honored form of campaign contributions, or revolving door jobs in industry.

It's the same story with using taxpayer funds to "create jobs." There's no economic demand for the jobs created, otherwise they'd exist already. They're a sweetheart deal, usually for the affected government and/or union workers whose jobs, and (Democrat) votes, they're designed to preserve.

Whatayah Mean 'Yesterday'?

“I thought he was a dick yesterday,” [Mark] Halperin, who also is a senior political analyst for MSNBC, said on Morning Joe, referring to the President’s conduct during his press conference.

Story here.