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Archive for the ‘Economics’ Category

As it turns out, however, to make sense of new and strange phenomena, one must be prepared to play with ideas.  And I use the word “play” advisedly: dignified people, without a whimsical streak, almost never offer fresh insights, in economics or anywhere else.
   —  Paul Krugman
From the introduction to his book: “The Return of Depression Economics
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On This Day In:
2016 And Fathers, Sons
2015 My Suspect Confidence
2014 Disguised Blessings
2013 Be
2012 The Only Way to Win
2011 Honest Writing
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The question isn’t who is going to let me; it’s who is going to stop me.
   ―  Ayn Rand
Today, the Republican controlled Congress and Presidency passed and signed [* see correction below] the largest tax cut for the American wealthy class in history.  While it is true that almost everyone who pays Federal Income Taxes will receive a reduction in taxes, the top 20% of all income earners will receive over 80% of the tax savings.  This includes “poor” little #LyingDonald who promised any tax cut would be primarily directed at the working / middle class in American (those making $75,000.00 or less), while “millionaires” would have to pay more in taxes.  This is, if fact, the EXACT opposite of what Congress has just passed.  It seems the “investment” of corporate America in buying the Republican party over the last 40 years has at last paid off.
My prediction:  We will see a booming stock market as the cash reserves being held by American companies overseas comes home to buy back stock and pay dividends with almost NO gain in income being paid to employees.  In other words, if you own large chunks of stock, you’ll see higher dividends (more money and less taxes).  If you own small lots of stock, expect to be screwed by the corporations buying the small lots up prior to paying out the dividends (in other words, you’ll be getting screwed).  If you are a worker, get ready to see more job uncertainty as jobs (and factories) will  continue to move overseas and be automated when left here in the states.  You will only see a salary increase if you can upgrade your education / skill level (personally pay for it) AND find another employer willing to hire you.  There will be a continuing abundance of workers and a continuing shortage of well paying jobs.  Oh, yeah, and almost none of the jobs / companies will have pensions, so you’ll be on your own for that.  But don’t worry, you can pay for your retirement savings with all that extra money you’ll be making.  And don’t count on Social Security or Medicare for your retirement because the tax deficit the Republicans are creating with the tax give-away will be used as the excuse to cut “entitlements” (Social Security and Medicare) next year.  After all, deficit created debt was the reason the Republicans routinely gave / used to try to ruin the Obama Administration’s economic recovery for the last eight years.  You remember the last eight years we’ve had such anemic economic growth.  That anemic growth was because debt (big government and over-regulation) prevented economic growth which should have happened.  So, now the Republicans have intentionally increased the deficit, which will inevitably increase the debt, which they will then use as their excuse to cut spending on social benefits.
Lord, save us from these treasonous Republicans and give us back honest conservatives who sought a limited government which paid for the things (wars, infrastructure and a social safety net) which the majority of Americans discussed openly, debated honestly, and ultimately arrived at consensus on.
[* CORRECTION:  I was incorrect in stating the President has already signed this tax bill.  In fact, as of today (Thursday 21 Dec. 2017), he has not, and it appears he may not sign the bill until next year (3 Jan 2018).  The reason for this is it appears the signing will trigger an automatic reduction in Medicare the year immediately after signing.  If it is signed in January 2018, the automatic trigger does not occur until 2019.  Obviously, the Republicans do not want to do this in an election year, so the signing will be delayed.  The bill has not yet been “enrolled” – that is, formally printed and presented to the President.  This is the point which actually starts the “pocket veto” clock.  If the law had been enrolled on passing, the President would have ten days to veto or sign the bill.  The ten days does not include Sundays, so it is actually a twelve day rule.  Of course, this assumes Congress breaks for Christmas.  If Congress is in session for the full twelve days after a bill is enrolled, there is no pocket veto and the bill becomes law after ten days if the President does not sign it.  This “trigger” is still being debated in Congress.  If it is decided it doesn’t happen until 2019, irrespective of signing, then Trump will sign the bill before Christmas or as soon as possible.  If it is decided it (the trigger) happens in 2018, the Republicans will push the signing date back until January to make sure the the reduction does not happen during an election year.
Also, it appears the tax benefits to the top 20% will be only 60% (-ish) through 2027.  After that, the personal reductions will go away and then 80% (-ish) benefit will be for corporations and the very wealthy.  The benefits to the corporations and the very wealthy are permanent, while the benefits to the middle and working class are limited (sunsetted).  —  KMAB]
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On This Day In:
2016 Something Authentic Happened
2015 Back On The Bricks
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2014 Changing Frequently
2013 Trifles
2012 Simple, Ordinary And Wonderous
2011 Humane Writers

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Walden Two”  (1948©, 1976©)  —  book review
This is another “classic” book (novel) I’ve wanted to read for some time.  No, it’s not the original “Walden Or Life In The Woods“, by Thoreau, or its sequel.  It is the fictional description of a “scientifically” created utopian community used by the author (B. F. Skinner) to promote his theories about (what is now known as) applied behavioral analysis.  It was Skinner’s belief that most of an individual’s actions (and cultural preferences) are determined by the environmental factors / variables / cultural norms one is exposed to.  While Skinner did not start the nature vs. nurture debate, he did go some distance in promoting his side (nurture) of the argument.
Basically, the novel revolves around an academic who is approached by two students to find out if stories about Utopia’s are real or even possible.  They have heard of one (in the professor’s class) and wonder if the professor would approach the person who organized it (the utopian society) so they could visit it.  The professor writes to his old friend who agrees to host them (the visitors) for a time.  The group of visitors ends up being the original professor, another academic / current friend, the two students and their two girl-friends.  The visit is to “Walden Two” – a play on Thoreau’s Walden which uses the sequence / numeric (two) instead of the “also” (too).  In other words, “we follow, but we are not the same.”
The “visit” allows the author to present his theories about how to “properly” arrange a society so it can maximize leisure time as well as efficient productivity to generate just enough to cover more than what the society needs, but never to exceed requirements so much that people do not have time to be and to become themselves.  As an example, everyone is “expected” to do a certain amount of work / chores, and you receive “credits” for the time spent doing them.  The “jobs” average to four hours per day and the remainder of the time is yours to use any way you see fit – eat, sleep, art, play, whatever…  The job credits are scored based on the number of staff who want to do the job, which presumes fewer folks want to do “harder”, “more tedious”, or “dirtier” jobs.  This, in turn, means you can earn your four hours of credit in less than four hours of work.  The “science” comes from the statistical analysis of how many folks ask to do the job.  Of course, the majority of jobs are also shifted periodically (again using analysis) to even out the more favorable jobs, too.  For those, you have to work more than four hours to get the four hours of credit.  The “surplus” generated by efficient productivity is used to deal with external entities – to pay taxes and for buying supplies which cannot be generated within the society.
This pretty much covers the general economics of the utopia.  The social engineering and politics are also covered and they are what was found so objectionable about the book that it was banned in some places.
Can man play God?  Can we make life so pleasant that free will becomes a lost / legacy concept?  Can we eliminate greed and/or the desire to rule others?  I don’t know.  My instinct is to say “no”.  And if we could do any of these things, is it a society I would want to live in?  Again, I don’t know…  But the book sure did make it sound appealing.  What happens to the six visitors?  I’m afraid  that would be telling, so you have to read the book to find out…
Final recommendation:  highly recommended!  This is a book which made me think about my own values and what I’d be willing to give up in my “society” to have a civilization where wealth was not the “be-all / end-all”.  If nothing else, that (“it made me think”) is a pretty good description of a “classic”.  …And, of course, quotes / excerpts will follow in good time.  (LOL)
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We’ve used up a lot of bullets.  And we talk about stimulus.  But the truth is, we’re running a federal deficit that’s 9 percent of GDP.  That is stimulative as all get out.  It’s more stimulative than any policy we’ve followed since World War II.
     —  Warren Buffett
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2016 Picky, Picky, Picky
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Many will work temporary or part-time  —   sometimes because that’s the way they want it, sometimes because that’s all that is available.
   —  Charles Handy
From his book:  “The Age of Unreason
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Let us all be happy, and live within our means, even if we have to borrow the money to do it with.
   —  Artemus Ward
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On This Day In:
2016 Definitely Not Bell Shaped
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2014 Worse Than Useless
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The toughest job in America is to be poor and trying to raise a family.
   —  Michael (“Mike”) Barnicle
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On This Day In:
2016 Congratulations!!
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