A.F. Branco cartoon
In a sane world, one would feel reassured that Senate Joint Resolution No. 8 would never see the light of day, but we are talking about the Nevada Legislature, where anything can and does happen.
Therefore, we feel obliged to shine a bright light on this cockroach in hopes that it will skitter away into a dark corner and never again emerge.
SJR8, sponsored by Las Vegas arch-liberal Democratic state Sen. Tick Segerblom, would double the minimum wage Nevada businesses would have to pay employees. It would raise the minimum wage from $7.25 for workers with health benefits or $8.25 for those without those benefits to $15 and $16, respectively. Those rates would automatically increase if the federal minimum wage were raised beyond that and would be indexed to rise with the cost of living.
If this monstrosity were to pass, it would destroy jobs, increase unemployment and drive many businesses into bankruptcy.
Segerblom has upped the ante. A year ago he penned an op-ed for the Las Vegas newspaper endorsing President Obama’s call in his 2014 State of the Union speech for raising the minimum wage to $10.10 — an increase of merely 40 percent.
Without a shred of supporting evidence or documentation, Segerblom averred, “The benefits are social as well as economic. Raising incomes of workers to decent levels would strengthen families, stabilize neighborhoods and schools and reduce crime. I believe the time has come for Nevada to take action. As the president has said, ‘You’ve got a choice. You can give America the shaft or you can give it a raise.’”
At about the same time, the Congressional Budget Office reported that as many as 16.5 million American workers were then being paid less than $10.10 an hour. The CBO estimated that if the minimum wage is increased by that much it would cost half a million to a million jobs, cutting those workers’ minimum wage to zero.
The CBO did not estimate how the subsequent increase in the cost of goods and services would hurt those on fixed incomes, such as retirees.
According to the American Enterprise Institute, when the minimum wage rose 41 percent between 2007 and 2009, the jobless rate for 16- to 19-year-olds increased by 10 percentage points, from about 16 percent in 2007 to more than 26 percent in 2009.
Due to inflation, the real purchasing power of the current minimum wage is about the same as it was in the late 1960s, according to Pew Research. Raising the minimum wage may momentarily lift a few above the poverty line, but it will drive others into unemployment and onto welfare, possibly for life.
Now, Segerblom wants to double down with SJR8. Fortunately, the joint resolution sought would have to pass in this legislative session and the next one in 2017 and then go to voters in 2018 before it could take effect.
The harm this bill will do, especially combined with the governor’s huge tax hikes and the imposition of ObamaCare on businesses, is incalculable but obviously astronomical. It would leave many low-skill youthful job seekers facing a lifetime on the dole. Lawmakers should drive a stake through its heart now.
A version of this editorial appears this week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record.
4TH ST8 
Recently did some work in Seattle WA. (where the min wage is 15) Knowing this was the case, I stopped tipping in many locations. Even though I was on an expense account.
Just imagine a Las Vegas without tips……
The best alternative to a minimum wage: Make all welfare into workfare and let private enterprise compete with that.
The problem with workfare is transitioning people off the “fare” and on to the “work”.
But workfare IS a much better idea than plain unemployment.
Obviously, we’re long past a philosophical discussion of the political legitimacy of minimum wage laws. Except for me, of course…
Like so many other fascistic programs created since 1930, we’re just so used to them that we can’t imagine a world without them.
War is Peace; Freedom is Slavery; Ignorance is Strength
One of many articles about the effects of the impending minimum wage increase, on Seattle businesses.
http://www.nfib.com/article/bnew-seattle-restaurants-closing-their-doors-ahead-of-minimum-wage-increase-68463/
You guys are dancing around the problem. Simply removing the minimum wage will exacerbate problems that the paltry amount of today’s minimum wage already causes. Supply and demand is all messed up in the workplace. Put simply, there just aren’t enough jobs for dimwits. Although some unskilled people are lazy, most are of limited intelligence. Remember, 1/2 of us have an IQ of less than 100. Our high tech world guarantees that there will be fewer unskilled jobs than unskilled people, therefore, wages will shrink without a minimum wage until, for these people, welfare pays more than a job. As Wal-Mart controversially demonstrated, when employers pay so little that their workers cannot afford health care, Medicaid steps in,. This subsidizes the employer. I thought you were all against government subsidies. Of course, we could just let them die in the streets, but that is a little extreme even for a Conservative.
Getting rid of unskilled immigrants helps of course, but the problem will still remain.
Why did Wal-Mart just increase wages?
Wal Mart made the news because they are every libs favorite whipping horse. What about GAP, IKEA and other retailers with minimum wage jobs?
BTW GAP and IKEA also recently raised their wages above minimum. (For many of the same reasons Wal Mart did)
Ironically, liberal supported programs are subsidizing low wage jobs industry wide in the retail sector, but no one wants to talk about that. It’s always “raise the min wage” and I cannot get the thought out of my mind that it is only to hide the real effect of how those programs are triggered.
Also, I cannot ignore the reductio ad absurdum in Rincon’s otherwise well stated post…this is another liberal attack tool which should go away.
From what I understand, reductio ad absurdum is considered valid logic, so I’m not sure what the objectionable passage is. Maybe the part about dying in the streets? If so, I think it’s logical because if government doesn’t step in, then anyone sick without insurance and unable to pay would either be treated at no charge, which would cost similarly to Medicaid, or not treated (=left to suffer and/or die) – although I suppose some kind of grade B medical care would be possible. Hmmm…not a bad idea if I do say so myself!
Illegals in EMR’s…..
“According to the American Enterprise Institute, when the minimum wage rose 41 percent between 2007 and 2009, the jobless rate for 16- to 19-year-olds increased by 10 percentage points ….”
Hmm … What other events taking place between 2007 and 2008 could possibly have affected unemployment rates? I wonder …. Gosh, I know there was something else going on in the economy around that time, but I just can’t remember what it was!
By the way: the bit about Seattle restaurants closing because of the minimum wage? Turns out to be false. An urban legend.
http://www.seattletimes.com/seattle-news/politics/truth-needle-is-15-wage-dooming-seattle-restaurants-owners-say-no/
Funny….”No wage increases have occurred yet in Seattle; they begin, incrementally over seven years, in April.”
Rumor on BOTH sides falls flat. (guess we should have tipped at the restaurants after all.)
Today is the 5th anniversary of the Affordable Care Act. No American can be denied health coverage because of a pre-existing condition.
Today is the 5th anniversary of Øbamacare. CBO projects there will still be roughly 31 million uninsured adults in the United States by 2025, demonstrating that any notion the law would create universal coverage was a really bad joke.
We’re from the Government, we’re here to HELP!
Much better than the 42 million who were uninsured previously, but far from perfect.
11,000,000 is “much better”….. I call a 35 percentile a grade of “F”.
Please have your parent or guardian sign your report card and return the signed report card to the principles office no later than tomorrow at noon.
Your numbers are wrong
No they aren’t. (Hence the schoolyard reference)
http://www.politifact.com/truth-o-meter/article/2015/mar/20/federal-health-care-law-what-came-true-and-what-di/
The very source you cite notes that the number you use for “Americans uninsured” includes the illegal aliens present in the U.S. The law specifically excludes coverage for illegal aliens.
In addition, many of the American citizens who will still lack coverage are in red states that have taken advantage of the Supreme Court decision to deny Medicaid expansion to millions of their own citizens, despite the fact that it will cost the states nothing for several years and then only 10% after that — a cutting off your nose to spite your face strategy.
I don’t think you can blame Rick Perry and Greg Abbott’s mean-heartedness on the Democrats.
“I don’t think you can blame Rick Perry and Greg Abbott’s mean-heartedness on the Democrats.”
The operative words in your statement are the first three in that last sentence. We most certainly may blame Democrats for the so called “mean-heartedness” you describe. It was DEMOCRATS who forced the incomplete pile of crap down the country’s throat! (or rammed it up the rear, whichever seems to fit best) Damn! make people PAY for their stuff and you are called “mean-hearted”!
BUT MY NUMBER ARE RIGHT!
No, they are not. Your numbers include all the illegal aliens who were not intended to be covered, and all the people in red states who were intended to be covered by the ACA but whom red state politicians have refused to cover. The rest of your response is incoherent.
It matters not why the numbers are right…the fact remains the numbers are right.
Take it up with CBO…that was the source Politifact quoted!
Childishness becomes you.
So when your source expressly states that the projected number of uninsured includes illegal aliens, you think that is the same thing as saying that the projected number of uninsured consists only of American citizens.
I will thank you to stop assuming to pretend to make up false opinions for me.
“5 Reasons Why Obamacare still sucks”
http://www.breitbart.com/big-government/2015/03/23/5-reasons-why-on-its-5th-anniversary-obamacare-still-sucks/
“I call a 35 percentile a grade of “F” So tell me Steve, what grade should be assigned to the system you prefer, which had a percentage of 0%. An F minus?
As for illegal aliens, the question of whether your “fact” is accurate or not is strictly a matter of ego. Yes, your “fact” was right, but your conclusion was wrong. You would not want the illegals covered and neither would I. Their numbers should not be counted as potential or missed candidates for Obamacare.
You nailed it, Barbara. Zerocare equals more debt (with a capital T), less choice (oh where oh where is my doctor I was promised I could keep?), and bigger government (anyone having a little trouble with your taxes this year?).
The real question (to you petey, rincon and other interested liberals) is “what is your goal with all this compassion?” When will we win this war on poverty? How much SHOULD we working stiffs give to those “in need”, until we’re all one big happy family?
It’s not all that compassionate for you to pass laws giving away other peoples money. I don’t mind paying to fix something, but after 50 years of no discernible progress (welfare) and now 5 years of major headaches (with many major parts of Øcare yet to be implemented), I believe it’s time to stop digging this hole deeper and deeper.
How about you fellas?
It really bothers you guys that tens of millions of American citizens finally have access to affordable healthcare and can no longer be denied coverage because someone in their family has a pre-existing conditions. Its a case of congitive dissonance. You were repeatedly told by Fox and by talk radio that the ACA would explode the deficit, destroy the economy, throw millions of people out of work, drive doctors out of the profession, self-destruct in its own “death spiral,” lead to federal bureaucrats standing between you and your doctor, cut Medicare services, etc., etc., etc.
None of that has happened. The deficit has dropped dramatically. The economy is growing at a healthy clip and private-sector job creation is at its best level since the last time a Democrat was President. Best of all, millions and millions of American citizens no longer have to fear that a medical crisis in their family will leave them like
“Athos” — a declared bankrupt with a trail of unpaid medical bills.
I can see why you are so upset.
“So tell me Steve, what grade should be assigned to the system you prefer”….
I will thank you to stop pretending to assume to make up false opinions for me.
Athos: All you have is theory. The facts are that people in most other OECD countries have socialized health care, but enjoy lower costs, longer life spans, and lower prenatal mortality. Show me a few private enterprise health care systems that work well. You have over two hundred countries to choose from.
Steve: What opinion am I falsely assuming? If it’s your preference for the previous system, then I would have to correct myself and say it was your previous clearly stated opinion. Congratulations on finally seeing the light 🙂
Earth to petey. Earth to petey. Come in, petey! Your canard about the “deficit has dropped dramatically” is childish; as are your lies about economic growth and private sector job levels. But that’s all you fellas have, isn’t it? Word games. Then UP JUMPS REALITY, and you just pretend it isn’t so.
And Rinny, quit drinking the cool aid, pal! Socialized medicine works great, UNTIL YOU NEED IT! Then, you wait. and wait. and wait. (and fill out form after form after form)
And neither of you fellas answered the question: How much $$ is enough for you fellas? When are we gonna see Nirvana?
What previously stated opinion of “a preference for the previous system”? Rincon? Show me where I made any such statement. AND STOP trying to invent opinions for me!
As for that system, it is STILL IN PLACE. ACA only modified it a little while piggybacking on it by trying to require everyone to buy insurance from the very same companies, operating in much the same they always did and adding a bunch of new “customers” to the roles.
In fact that “previous system” you think is gone, was actually 85% efficient in covering the populace…ACA is only 35% efficient in covering its intended “customer” base.
Last I checked 85% is a B+ while 35% is still an F.
AND in some cases an F-
IF you look hard enough you will find I am among the many who have always stated improvements in the way we deliver MEDICAL SERVICES not “COVERAGE” is what is needed the most. EVEN with all the “success” of ACA….laughing at myself for typing THAT!
kinda hard to have medical services delivered to you if you don’t have any health insurance.
Reductio ad absurdum, nyp
“And Rinny, quit drinking the cool aid, pal! Socialized medicine works great, UNTIL YOU NEED IT! Then, you wait. and wait. and wait. (and fill out form after form after form)”. Sorry Athos. I’ve talked to too many foreigners about their health care, including my Australian wife and her family to believe the boilerplate scaremongering dispensed by the likes of Rush, Sean and Fox et al,. Besides, you still have presented any facts to back up your opinion. Fact is, they live longer and pay less. And of course, your comment of filling out form after form is hilarious! Have you ever tried to sort out your hospital bills with the insurance company?
“What previously stated opinion of “a preference for the previous system”? Rincon? Show me where I made any such statement. AND STOP trying to invent opinions for me!” You now have a chance to set the record straight Steve. If I’m wrong that you prefer the previous system, then you must either prefer Obamacare or consider the two systems equal. There are no other choices. Which is it?
There are most certainly other options, Rincon.
To reiterate:
As for that (“previous”) system, it is STILL IN PLACE. ACA only modified it a little while piggybacking on it by trying to require everyone to buy insurance from the very same companies, operating in much the same they always did and adding a bunch of new “customers” to the roles.
In fact that “previous system” you think is gone, was actually 85% efficient in covering the populace…ACA is only 35% efficient in covering its intended “customer” base.
Last I checked 85% is a B+ while 35% is still an F.
AND in some cases an F-
IF you look hard enough you will find I am among the many who have always stated improvements in the way we deliver MEDICAL SERVICES not “COVERAGE” is what is needed the most. EVEN with all the “success” of ACA….laughing at myself for typing THAT!
Nice graphics you have there, petey! Impressive! I’m gonna guess you’re a really big hit with your friends when you show em that one, huh?
On the other hand:
Historical Debt Outstanding
date $ amount
09/30/2014 17,824,071,380,733.82
09/30/2013 16,738,183,526,697.32
09/30/2012 16,066,241,407,385.89
09/30/2011 14,790,340,328,557.15
09/30/2010 13,561,623,030,891.79
09/30/2009 11,909,829,003,511.75
all I got is these stupid old numbers.
If my math serves me correctly, we jacked up another $ Trillion in fiscal year 2014. But how can that be, when the deficit fell by whatever percent your cute little orange and blue boxes say??
rin, I notice you and your wife live in Illinois, not Australia. Maybe you like the masters in DC telling you how to live your life, but I don’t. And the problem with Øbamacare is that we (as a country) can’t afford it. Do the math. You have to be smarter than to fall for the bilge this administration is feeding you. Did you save $2500 on your policy? Did you keep your doctor? Period? Do you have any idea what costs are going to do when the government stops subsidizing the Insurance Companies in 2017?
Does any of this bother you at all?
I can’t believe you’re some self centered parasite that has no moral compass, Rin. Even if you live in Illinois!
Because you don’t under the difference between “debt” and “deficit”.
You’re clearly playing rhetorical games Steve. Or is that also unfairly interpreting your words? Count me out on this one.
Prices stabilized during Obamacare, More people are covered. Other OECD countries pay far less than we do, but they and their babies live longer. I saved significantly more than $2500 on my policy. I kept my doctor. Those are all facts. I still see no facts supporting your opinion Athos.
petey, I know painfully well the difference between “debt” and “deficit”. It was burned into my being when I had to declare bankruptcy. Your other statement “kinda hard to have medical services delivered to you if you don’t have any health insurance.” is proved a lie by the very fact that I’m still alive (and a contributing factor to my bankruptcy).
You’re two for two in the “WRONG” category, petey! (par for the course, huh?)
My choices were cut, in my medical coverage, rin. And my deductibles doubled. You benefited, and I lost with zerocare. Good for you! Bad for me. But this was all done by the State picking winners and losers. You see that, don’t you?
“I’m from the Government, and I’m here to help” haven’t lost their terror, with me.
It’s true that, while solving the problems for some, Obamacare created problems for others. I guess the question for me is, don’t insurance companies still compete for your business like they did before? What changed?
No, you do not know the difference between the national debt and the federal deficit.
And don’t believe your statements about your own health plan. In any event, since your own plan is not an ObamaCare plan, what happened is absolutely irrelevant.
“Or is that also unfairly interpreting your words? ”
Why “interpret”? Can’t you take what I write as it stands? If not, then we have no way to communicate at all because, in a words only medium, words are ALL we have. Interpretation blows the only means of communication totally out of the water.
If you insist on “interpreting” everything that is written, then you will always miss the message.
DARPA, which dictionary are you getting your definitions for “national debt” and “federal deficit”? Pls explain why Athos’ numbers are wrong…
Federal deficit and national debt are completely different animals.
But I’m pleased Athos is no longer denying that the federal deficit has declined dramatically under President Obama
Sigh, I just can’t resist:
STEVE: “11,000,000 is “much better”….. I call a 35 percentile a grade of “F” (Referring to Obamacare”
RINCON: “So tell me Steve, what grade should be assigned to the system you prefer,…
STEVE: I will thank you to stop pretending to assume to make up false opinions for me.
STEVE: What previously stated opinion of “a preference for the previous system”? Rincon? Show me where I made any such statement. AND STOP trying to invent opinions for me!
STEVE: “In fact that “previous system” you think is gone, was actually 85% efficient in covering the populace…ACA is only 35% efficient in covering its intended “customer” base Last I checked 85% is a B+ while 35% is still an F.
AND in some cases an F-”
Steve gives the old system a B+ and Obamacare an F, but he says I’m making up a false opinion for him when I say he prefers the old system? Rhetorical games Steve. Hopefully it’s not worse than that.
Not me…I quoted other sources…on previous posts. Still, THAT statement does NOT say what I “prefer”
You are TRYING to get ME to do your interpreting for you!
“Federal deficit and national debt are completely different animals.”
DARPA, are you saying that the annual federal deficit has nothing to do with the ever-increasing national debt?
If so, pls explain the differences to those of us less knowledgeable…
very little. First, you will notice that the national debt has been rising, even though federal deficits under President Obama have been shrinking. In fact, one can run a budget surplus and still have increasing debt. In part, that is because federal trust funds that run a surplus are required by law to invest the surplus in treasury securities. Second, national debt is really money we owe to ourselves. Paying it off doesn’t make us richer. Third, the relevant measure is not the gross amount of debt, but the ratio of debt to GDP, which indicates how much of a burden debt is in relation to the economy’s repayment power.
In any event, you can tell next to nothing about the fiscal policies of a particular administration in a particular year or series of years by looking at changes in national debt levels.
Sorry nyp. I find this confusing. Please bear with me as I have a two questions:
“In fact, one can run a budget surplus and still have increasing debt. In part, that is because federal trust funds that run a surplus are required by law to invest the surplus in treasury securities.” Since the T-bills are sold at auctions, I would expect that any federal trust fund that purchases them merely displaces a different potential purchaser, without changing the national debt at all. Am I missing something?
“Second, national debt is really money we owe to ourselves.” China famously holds a slew of T-bills. Doesn’t that mean that part of our national debt is owed to them?
China owns approximately one quarter of FOREIGN investment in US T-Bills. About 85% of investment in US debt is DOMESTIC. This leaves very little owed to China should they call in all their investments right away. And that is not very likely to happen. Even so, we have plenty of reserves to pay them should they do so.
Moreover…the debt “owed to ourselves” is absolutely true. That 85% is a huge number. Even our 401’s have some component of treasuries in them. We take money out even as we put more back in. It really seems like a revolving door but we use it as a “placeholder” for our investments during down times.
Quantitative easing has made more of us put money in stocks than in T-Bills because it has a better chance at growing and this is what the FED wants…it makes everyone feel wealthier.
Hell, it’s even working for me! Bubbles are great if you can get out before they bust…or even slowly leak out. And THAT is what the FED hopes to do..slowly leak out the debt into the economy at a rate they hope it will be able to absorb it without collapsing. I hope they do it right.
Angle ’16!!
Nope.
Current Las Vegas city councilman Bob Beers for US Senate in ’16!!
Are you guys saying the debt isn’t a great concern because we simply owe the money to ourselves? I also have to pick a little nit. Forbes says foreigners own more than a third of our debt, not 15%. http://www.forbes.com/sites/mikepatton/2014/10/28/who-owns-the-most-u-s-debt/ Certainly significant if true. Wikipedia seems to agree.
See
http://krugman.blogs.nytimes.com/2011/12/28/debt-is-mostly-money-we-owe-to-ourselves/
and
http://krugman.blogs.nytimes.com/2012/10/13/foreigners-and-the-burden-of-debt/
It is certainly growing since I last looked. I suspect this has more to do with the state of the worlds economy more than anything else.
This gives a snapshot back to 1988. Remember, because wer are basically paying zero interest on t-bills and government bonds, these countries are basically “place holding” their funds. All we really owe on this new money is the exact amount “invested”.
The reason for this is the US is considered the safest place to put money during unclear economic times.
Significant? Yes…worrisome? Not really.
http://www.aarp.org/politics-society/government-elections/national-debt-guide/faqs/how-much-us-debt-is-owned-by-foreign-countries.html
Tell me then, why the debt of Greece is a problem, given Krugman’s sunny analysis?
Not sure about Krugman…but Greece doesn’t have other countries sending them money!
Krugman is an idiot. That should be painfully obvious to anyone but another idiot.
1. I suppose that means that the Nobel Prize committee, as well as the committee that administers the John Bates Clark Prize, is composed of idiots.
2. It must be nice to be so dismissive of renowned professional economists who whose analyses challenge one’s preconceptions that one can simply dismiss them as idiots. Very comforting.
3. Perhaps the reason why the US is considered to have a safe economy is that our peer group of industrialized economies pursued seven years of pro-cyclical austerity, while President Obama enacted a stimulus program (until the GOP shut it down) and Bernanke and Yellen pursued monetary policies that the Republicans said would lead to disaster.
4. Greece (a) does not have control of its own currency because it does not have its own currency; (b) does not and never has had a reserve currency; and (c) has a weak, resource-poor economy that produces little that other people wish to consume other than vacation opportunities.
5. If you really think the US fiscal situation is akin to that of Greece you should mark your ideology to market. The Paul Ryans and Arthur Laffers of this country have been claiming for more than half a decade that Obama’s policies were going to “debase the dollar,” lead to crippling inflation, and turn us into Greece. Yet the dollar is stronger than any other Western currency, inflation is non-existent (except to conspiracy nutters who think Obama has corrupted the BLS) and short and long-term interest rates are minimal. Don’t you think there is a need to examine long-standing Tea Party predictions in the light of actual results?? Shouldn’t there be an occasion for sober reflection? Or is that too psychologically fraught?
In fact, inflation being non existent has the FED worried about deflation or stagflation. Japan is an example of a strong western economy that tried some of those things, only worsening the troubles.
Japan has one thing in common with Greece in this….Japan also does not have other countries giving them money…(not to forget that reserve currency part…but we can only have one of those, right?)
Policies in place (Nyp crows about) work because of two things, the reserve currency and all that foreign (and domestic) “investment”. What it really looks like (to me) is we are doing well on the backs of other people’s money. While they try to curb their losses by giving that money to us! (For a while, anyway.)
Can’t really complain, my investments and accounts are doing ok…but it really irritates me that EVERY time I buy a few shares of a stock the damn thing goes down!
But they do come back and grow after a while.
If you are worried about deflation, you really don’t want to engage in Euro-style fiscal austerity.
Who said I want that?
I want the other half of Keynesian economics followed…..pay back the borrowed money!
My complaint about Krugman and many on the left involved in economics, is their very dedicated adherence to the Democrats and liberal wishes.
“Not sure about Krugman…but Greece doesn’t have other countries sending them money!”
I think we’re on the same page. For a bit, you sounded to me a bit like Dick Cheney’s, “Reagan proved that deficits (or debt) don’t matter.”
Even though we owe ourselves, the problem with deficits that get out of hand is that after awhile, nobody wants to lend you money anymore.
NYP – Would that be the same Nobel Prize organizaiton that gave Obama the Peace prize? Why yes, I believe it is. His failed “Arab Spring” policies have completely destabilized the Middle East puting us on the verge of WWIII.
We are the largest debtor nation in the world. The Fed has added 4 plus trillion to its balance sheet. If printing money cured poverty, then eveyone should be eating caviar and drinking champagne. But we’re not. The United States has not decoupled from the World. GDP forecasts are continually being lowered. Timing is always tricky, but I would expect by the Fall it will be evident the US (just like Canada, our largest trading partner) is in a recession. We may get a repreive if the Middle East continues to blow up and oil drilling starts back up.
GDP growth of 2.2 in Q4 2014 is anemic. Like I said, Idiots all.
Although Krugman is a Nobel Prize winner and all of that, I think these papers prove that even Nobel Prize winners aren’t infallible. He says, “And as Dean says, talking about leaving a burden to our children is especially nonsensical; what we are leaving behind is promises that some of our children will pay money to other children, which is a very different kettle of fish.” He seems to minimize the problems the debt can create. It doesn’t seem to occur to him for example, that in this lies the potential to decimate our society.
When our generation of “debtors” dies off, we leave all of our kids holding the bill, but a much smaller number holding the IOU’s – most of them being the richer ones. This creates a future dynamic where everybody owes the rich (it’s today’s dynamic too). It is clear that if the debt becomes large enough, the poor and middle classes will eventually become unable to earn enough to pay their share of the bills. It might be happening already. If that occurs, the rich will swallow at least part of the IOU’S and major financial dislocations will occur – a major depression possibly? Sorry Paul. Defaulting on ourselves may prove just as painful as defaulting on others. It may not be the same kettle of fish, but either way, it stinks.
You predict that the United States, with the healthiest economy of any western nation, will be declared to be in a recession six months from now, that we are about to enter “World War III” (although you don’t identify the enemy,) and that winners of the Nobel Memorial Prize in Economics are “idiots” whose economic advice should be ignored.
Having viewed the world through lenses that proved to be so faulty, having made so many objectively erroneous predictions about the economy for so many years, has obviously not engendered any sense of humility or self-reflection. Instead, it has led you into ever more outlandish and cranky assertions.
NYP – only you would consider 2.2 growth healthy.
From Global Economic Analysis:
1.Inflation is understated
2.Unemployment is understated
3.Global wage arbitrage still matters
4.Robots matter
1. Economists are 100% clueless as to how to measure inflation. Monetary inflation does not always manifest itself in the form of higher consumer prices. Therefore, the CPI is an absurd measure. The CPI ignores asset bubbles (stocks, bonds, land, housing, etc). Given that economists and central banks have a perfect track record of never spotting asset bubbles until after they pop, it’s no wonder inflation looks benign. Bear in mind this discussion comes from a confirmed deflationist. Economists who cannot spot inflation now are simply brain dead. My off the cuff guess is that 90% of them are indeed brain dead.
2. Unemployment is what it is. By definition, I cannot argue with the number. But I can argue with the idiocy of a definition that discounts disability fraud, students continuing education because they cannot find a job, people so discouraged they drop out of the labor force, and those who retire not because they want to, but rather because unemployment benefits ran out and they need to collect Social Security to survive.
3. Wages in China are rising. But wages in other places aren’t. So, price pressures remain.
4. Robots take jobs left and right. And the higher the minimum wage and the lower the cost of capital, the more industries are likely to fire workers and replace them with hardware and software robots. For this point, blame legislatures for higher minimum wages and blame the Fed for suppressing borrowing rates.
Nearly Every Mainstream Economic Theory Wrong
I started to write nearly every mainstream economic theory is suspect. I changed the subtitle to wrong because there is not a single mainstream theory that takes into consideration asset bubbles instead of a fatally flawed CPI as a measure of inflation.
Add to that, misinterpretation of GDP and unemployment, and it’s no wonder that many theories behave so badly in practice.
Economists cling to fatally flawed ideas. Garbage in – Garbage Out is the general rule of thumb.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/2015/03/wage-growth-vs-economic-theory.html#UJqKuWaQMtw3FbQl.99
As far as WWIII:
“A World War is a military conflict spanning more than 2 continents, in which at least 20 major countries participate in an attack against a common enemy, and which has the attention of the man-in-the-street due to the significant loss of life.”
Seems like were pretty close to meeting this definition except Americans are not that concerned with the genocide going on in the Middle East and Africa.
Well… If you are going to rely on wingnut goldbug blogs with loopy theories of why standard, mainstream economic theory is inherently flawed and why accepted economic statistics are all wrong, there isn’t much more I can say. That’s just too out there for me to handle. But I suppose that is where conservatism is these days
Seems Nyp doesn’t like Austrian economists.
Tin-foil hat stuff
Compare this “wingnut goldbug: track record with that of Bernanke and Yellen. Mish correctly called the 2008 implosion while Bernanke was completely taken by surprise.
http://globaleconomicanalysis.blogspot.com/2008/06/things-that-have-not-yet-happened.html
Get ready to be told ” a broken clock is right twice a day” , or something similar, Barbara.
Hon, before you buy any more gold bullion, let me give you some advice: ditch the nutty goldbug blogs. Buy a subscription to Financial Times, and read it carefully. You will be much better informed, and and will be less likely to fall prey to nutty, self-taught bloggers.
Speaking of being well informed:
http://dailysignal.com/2015/03/23/did-14-1-million-people-gain-health-coverage-fact-checking-the-obama-administrations-claim/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=saturday&mkt_tok=3RkMMJWWfF9wsRoisqXIZKXonjHpfsX57e8kX6a3lMI%2F0ER3fOvrPUfGjI4HRcBlI%2BSLDwEYGJlv6SgFQrLBMa1ozrgOWxU%3D
You can’t trust the numbers — it’s all a great conspiracy. Unemployment rates, inflation rates, the reduction in the number of uninsured Americans under ObamaCare. The numbers have all been corrupted by Marxist Jihadist Kenyan anticolonial thinking. Better stock up on canned goods and bottled water.
Or “Investors Business Daily” for a more conservative outlook on investing, Barbara.
I have had the opportunity to know a few Romanians who were born and raised under the “communist” Ceaușescu regime…the best thing I learned from them was “when in Rome do as the Romans do” They had to live, so they joined the “party” and did what was needed to survive.
My point is, this is the system we live in and this is the system we need to use to survive. Fighting it will only cost me. But I will read and understand things from across the spectrum. Hence my conclusion on that link Barbara, “Statistics, Damned Statistics and outright lies” Both sides are guilty of this. Liberals want to paint the best picture they can while conservatives want to prove they were and are, right. I bet the reality is somewhere in the middle.
Sorry, ‘bro. That a crazy-ass outfit as well. they are the ones who declared that Steven Hawking would never have survived if he had been under the care of the British National Health Service.
If you want to get hard-core conservative opinions that have at least some tethering to actual journalistic standards and accepted views of reality, read the Wall Street Journal. Inferior to Financial Times, but not loony like IBD.
See? Anything not liked is loony.
I suspect you are taking to task the IBD editorial staff.
No, there a bunch of conservative things that are not completely loony. But if you rely on IBD for macroeconomic news you are being led seriously astray.
You didn’t read my words…”spectrum” is a descriptor.
And I am finding it is desirable to be more micro than macro when spreading investments around.
You just don’t get it nyp. Mainstream economics is all wrong, climate change is a conspiracy, vaccines cause autism, evolution is a myth, DDT was great stuff, trans fat is unfairly maligned, and, oh yeah, womens’ bodies don’t allow pregnancy in cases of legitimate rape. Get with the Tea Party, man!
Understanding economic history can reveal wonderful investment opportunities. Government’s interference in the markets creates distortions that can be useful to successful investing. Recognizing what is causing the distortions however and knowing there is a limit to a bubble can keep you from falling into the trap that “this time it is different”.
The Fed stimulus (low fed funds rate, QE, bond buying) predictably inflated the market through artificially expanding the credit markets. Falsely identify the expansion as “healthy economic growth” when all economic indicators are pointing to a downturn is wishful thinking at best and idiotic from those who should know better.
My point is that we are not in a “healthy” economy and failure to understand why will only result in a repeat of the boom and bust cycles with each bust increasing in magnitude. Here is another take:
http://davidstockmanscontracorner.com/why-the-mania-is-getting-scary-central-bankers-are-running-a-doomsday-machine/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+PM+Monday
Wow. Another crank. So much of a crank that the right-wing thinks he is a crank. So much of a crank that he denounces Milton Friedman. So much of a crank that he believes that the U.S. has been on a downwards spiral towards disaster since … 1933.
Let’s put it this way: if you had put money into David Stockman’s investments ideas in the period since he left government you would be in very, very bad shape.
If you would like to read a fellow whose economic forecasting and/or policy-making record over the past six years has been pretty good, try this guy:
http://www.brookings.edu/blogs/ben-bernanke/posts/2015/03/30-why-interest-rates-so-low
I’ve already read Bernanke’s blog. His economic forcasting/policy could not possibly be described as “good”. Here is a source you might like – the New York Times:
http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=0
Like most — but not all — policymakers, Bernanke failed to foresee the crash. On the other hand, he helped keep the Great Recession from turning into a Great Recession, and expertly steered the U.S. economy into the fastest and most long-lasting recovery of any major Western nation, notwithstanding the predictions six years ago of Paul Ryan, et al., that Bernanke’s polices would lead to ruinous inflation and “debasement” of the dollar.
Overall, one of the most successful Fed chairmen of recent decades.
Prior to the “Great” Depression…all downturns were called depressions.
That word caused undue stress in the public during the latter part of the 1930’s when that second downturn come along. In an attempt to lessen the psychological impact on the public a conscious decision was made to call depressions by the name “recession” from then on.
Perhaps Nyp’s statement is truly Freudian in nature.
A down turn, by any name, is a downturn. And this one is NOT over yet.
No. A recession is qualitatively different from a depression. And a country in which GDP has grown every quarter in the past four years and in which there have been 60 straight months of private sector job growth is not a country in a “downturn.”
Here you go, Freudian Nyp:
https://books.google.com/books?id=uarFTBpg11wC&pg=PA469&lpg=PA469&dq=Prior+to+the+%E2%80%9CGreat%E2%80%9D+Depression%E2%80%A6all+downturns+were+called+depressions.&source=bl&ots=tQAD8BE2Da&sig=GIi5iTSCeQdnF24f3ajWaACEClw&hl=en&sa=X&ei=3isbVa_5O4KVNtX1gPgD&ved=0CC0Q6AEwAg#v=onepage&q=Prior%20to%20the%20%E2%80%9CGreat%E2%80%9D%20Depression%E2%80%A6all%20downturns%20were%20called%20depressions.&f=false
“Battleground: Government and Politics, Volume 1”
Kathleen Ann Uradnik, Lori A. Johnson, Sara Hower
And…that job growth is still nowhere near previous levels of employment…we are seeing the “new normal”…..more to the point this “recession” is in no way, over yet. Statistically speaking the economy is growing…too bad the people on the ground aren’t really feeling it.
We are now in our 70th month of economic expansion.
Climbing out of a ditch is easy….but we are climbing out of a crater.
Expansion begun from the depths of this last depression remains a long way off from reaching even the bottom of what the US economy is during weak economic times.
The only thing making the US appear strong is the backdrop of the far weaker the world economy.
Welcome to the “new normal”
Whether this is actually a “new normal” is a subject of high-level debate among serious economists. The actual economic term of art is “secular stagnation.”
Larry Summers and Ben Bernanke happen to be on opposite sides of this very important issue. You can read some of their arguments here:
http://larrysummers.com/2015/04/01/on-secular-stagnation-a-response-to-bernanke/
and here:
http://www.brookings.edu/blogs/ben-bernanke/posts/2015/03/31-why-interest-rates-low-secular-stagnation
WWII delayed the real effects of the depression by creating a huge bubble and seemingly unending tech advancement.
Tech is peaking and balancing worldwide while bubbles have kept creating winners and losers.
Sometimes I wonder in amazement at how we have been able to keep this system going for so long. But I then reflect at how my own bloodline has been such an integral part of it in the US over generations.
Mostly military, though there are a couple WH advisers in our history.
Oh, I forgot, does DARPA allow us to cite the Daily Caller?
http://dailycaller.com/2015/03/31/scientists-say-new-study-is-a-death-blow-to-global-warming-hysteria/
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