Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

Copyright Notice

Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Tuesday, November 30, 2010

Some Thoughts on Fascism

Over at G&T, Ed said:

I try not to think about 2002 and 2003. America was a truly awful thing to see while it was pregaming the Iraq War. Watching the American public, desperate as it was to lash out incoherently in post-9/11 rage, swallow one tablespoon of horseshit after another as the previous administration engaged in the greatest marketing campaign in history was not pleasant. It was a real reminder – not a Teabagger's "Obama = Hitler" reminder – of how thin the line between American-style democracy and fascism really is.

In comments, bb asked:

I know Dave likes to do the Top 10 thing, but owing to the fact that we have a wide spectrum of Leftist thought here, can a few of y'all give a Top 5 things that we should do/be that would move us a few notches away from "fascism" (We have had discussions before on exactly what is meant by that term – so a working definition from you might be attached)

 ladiesbane responded

And when we discuss Democracy versus Facism, I agree that we should define our terms. I can easily see a Democratically elected leader who espouses a Facistic philosophy: authoritarian control of social behavior rather than liberty of person; ultra-nationalism rather than patriotism; State attitude of division rather than unity, discriminating against a designated set of Other among the populace; definition of dissent as treason; utter negation of anything that questions authority; and so forth. Economic principles and class divisions are no longer relevant to a definition of Fascism — Classism is a separate problem. But if we have (crypto-)Fascists in office, we elected them, right?

My response:

@ bb

OK. I'll take the bait. But first, I'll remind you that there is essentially NO leftist thought in the U.S. these days. For decades, the political debate has been between the right and the far right. Only thus can a centrist conservative like B. Hoover Obama be described as some sort of raving leftist commie socialist.

It sometimes amuses me to see the world in cartoon images. As such, Fascism is the devil sitting on democracies right shoulder, always tempting her down the road to serfdom. Imagine a demonic Donald Duck perched on the statue of Liberty.

Fascism is fundamentally control of the government by business interests – essentially the inverse of socialism – along with control of people's minds by a combination of religious and patriotic – no, make that NATIONALISTIC – jingoistic drum beating. Ladiesbane, above, has a pretty good sad litany of characteristics.

Since corporations have no soul, they are totally immune to any feelings of conscience or sympathy as the population becomes impoverished, and the corporate overlords grow ever richer. Since government is the only entity large and powerful enough to provide a counterbalance to big business, when business controls government, the people get {expletive deleted} hard.

The top five things to move away from fascism, obviously have to do with getting business out of government, and un-brainwashing the population. (as they occur to me – not rank ordered)

a) Reverse the appalling Citizens United decision: corporations – and most especially trans-nationals who are loyal to nobody – are not people, and we give them quasi-human rights at our peril.

b) Real election reform. I don't have a formula, but multi-million dollar elections are a distortion of democracy that invites corporate control.

c) The right almost exclusively owns the airwaves. There are enormous stretches of countryside where the only a.m. talk you can get is Rush, Sean, and the idiot Beck. Somehow restore parity in the exposure to ideas.

d) Education: Americans are staggeringly ignorant of history, and knowledge of how government works, and methods of rational discourse and critical thinking. Fascists, conservatives, and religionists hate education. They want a population trained only well enough to operate machinery and follow orders – not well enough to engage in free thought.

e) Big business loves monopolies and hates free enterprise. Bring back real entrepreneurial capitalism. This means prohibiting mergers that eliminate competition, and breaking up any too-big-too-fail organization.

And, at no extra charge:

f) Instituting tax policies that are genuinely progressive and loophole resistant to reverse and impede the flow of wealth into the hands of the mega-rich.

Then I added:

I got it from Mussolini himself:

Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power.
-  Benito Mussolini
Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.
- Benito Mussolini
Fascism, the more it considers and observes the future and the development of humanity, quite apart from political considerations of the moment, believes neither in the possibility nor the utility of perpetual peace.
- Benito Mussolini

This highlights the other characteristic of fascism – that it degenerates nationalism into an excessively warlike stance. Comparing W to fascists was not so over-the-top as his supporters would have the rest of us believe. It's no coincidence that his grandfather made a fortune bankrolling the Nazis.

And BTW – American industrialists in the 30's were in LOVE with the Nazis, and fervently hoped for an American version of fascism.

And now they're getting it.

Characteristics of fascism can be found here and here.

Of course, none of my proscriptive solutions is even remotely possible.  We're screwed.

Monday, November 29, 2010

Dead Economists Society

Friedman and Hayek on QE II:

Haven't had time to read these posts yet, but I captured the links form my side bar, re: Friedman (Milton, not the ass-hat Tom.)


Beckworth via Thoma

Beckworth directly

Re: Hayek.


Dead economists favor QE II!  Though I think Keynes might have been tempted to write a very politely stated letter of criticism.


Mellow Yellow Monday

It's always a good 
Time to have a good time; let's
Play cars on the hearth


Sunday, November 28, 2010

Mish Reverts to Ass-Hattery

Recently I gave Mish credit for being right about deflation.

Now I have to pull the rug back out, because he is wrong - about deflation.

Check this out:

Shadow Shot Sunday - 11/28

Leaves that last in Fall
Under spindly branch shadows:
The last leaves to fall.

Sunday Music Blogging 11/28

Smokin' Latin music with blazing brass and uninhibited dancing.  Lo mejor!

Saturday, November 27, 2010

Six Word Saturday 11/27

Kids went home -- house is quiet.

For reference, see yesterday's picture post.)

Nobody to play cars with me.

(See next scheduled Mellow Yellow Monday.)

Friday, November 26, 2010

Thanksgiving in Bumpaland

Abby made this to hang on our door.

Abby and Grandmom








The Back-scratch Brigade

Kids on the Couch

Just a part of why I am thankful and blessed!

Wednesday, November 24, 2010

Haiku Wednesday - Inhibition


Why think outside the
Box, but let inhibitions
Box in how you act?

Join the fun!

But wait - there's more!

I hadn't written a sonnet in a while, but was reminded recently about this one by Edna St. Vincent Millay. Her musings here are not fanciful. Besides being a genuinely great poet, she was both bisexual and wildly promiscuous.

What Lips My Lips Have Kissed, And Where, And Why (Sonnet XLIII) 

What lips my lips have kissed, and where, and why,
I have forgotten, and what arms have lain
Under my head till morning; but the rain
Is full of ghosts tonight, that tap and sigh

Upon the glass and listen for reply,
And in my heart there stirs a quiet pain
For unremembered lads that not again
Will turn to me at midnight with a cry.

Thus in winter stands the lonely tree,
Nor knows what birds have vanished one by one,
Yet knows its boughs more silent than before:
I cannot say what loves have come and gone,

I only know that summer sang in me
A little while, that in me sings no more. 

I wrote this response - or parody, if you want to see it that way.  I was especially taken with the imagery of the tree, and tried to use it to good effect.  I also tried to keep her end-rhyme words, but couldn't quite make that work.  I did keep the same rhyme scheme, and rhymes.  By some odd coincidence, it also fits today's haiku theme.

What lips my lips have missed, and stayed too dry:
The breath of comely girls, and young - or plain,
Their damp breath uninhaled. But now the rain
Makes the air moist tonight, Not ghosts that sigh

In forlorn memories of sad goodbye.
And in my heart there stirs a quiete pain
For girls untouched, unkissed, without a stain
Who never thrilled me with a midnight cry.

What memories has a lonely barren tree
Of lovely birds who flew past one by one
Whose brief beguiling echoed "Nevermore?"
No memories of nests it's never known.

The Summer-song unsung holds fast to me
In Winter's age, more precious than before.

Copyright 2010 JazzBumpa 

Tuesday, November 23, 2010


As a companion piece to my last post, here is a rather too-long, nicely performed, moderately amusing, and totally wrong-headed take on the Dollar.  H/T to Naked Capitalism.


Dollars to Euros

I may have more to say about this later.  For now, here is a historical look at the Dollar to Euro exchange rate, from every graphers best friend, FRED, at the St. Louis Fed.

The dollar lost ground between the two most recent recessions.  Now it is strengthening, though in a rather choppy sort of way.  My prediction is that the dollar will continue to gain for at least another year or two, and eventually hit a bottom no higher than about $1:05 per Euro.  The next leg down for the Euro is just beginning.

Credit Where It's Due (It Could Be Inflationary!)

Most of the time, I don't even read Mish, though I have his link in my side bar.  And I've been known to point out his ass-hattery, on occasion.  But when Robert Murphy has to distort Mish in an attempt to make a point, I have to give Mish full credit for being right.  (This is easy for me on those points where we are in agreement -- go figure.)  Here is Mish's original post that prompted Murphy's alleged rebuttal.

I've only skimmed Mish's long article, responding to Murphy, but saw that he presents this graph to show how we are following Japan's route into deflation.  I've seen similar graphs other places - in Krugman's blog, perhaps.

This is what Mish gets, and the inflationistas don't (from his original post.)

Inflation/Deflation Definitions Once Again

  • Inflation is a net expansion of money and credit, with credit marked to market.
  • Deflation is a net contraction of money and credit, with credit marked to market.
Those are my definitions. I cannot force anyone to accept those definitions but they do explain what is happening quite nicely.


If you are focused on prices or money supply alone, you are focused on the wrong thing.

In a fiat credit-based economy, where credit dwarfs money supply, changes in credit is what's important, not changes in money supply, not nominal changes in prices.

It's as simple as that.

Anyway, when you're right, your right.  Mish has this right, and our lack of agreement on just about everything else in the known universe in not especially relevant.   The only downside is I'll probably need to go read Murphy's piece of dreck at the Ludwig von Mises Institute, linked above.

Update:  After a quick look at Murphy's post, I see that, in addition to the distortion Mish complains about, Murphy also cherry picks a five day span in the $ to Euro exchange rate to make Mish's basically correct argument look bad, and displays a general level of the very special brand of obtuseness that is only found in Libertarians and Austrians.  I will admit to some schedenfreude in seeing this exchange.  Shame on me.

Monday, November 22, 2010

Mellow Yellow Monday

A fine autumn day
To honor senior athletes;
But then - those Badgers . . .


Sunday, November 21, 2010

Sunday Music Blogging 11/21

Ample Make This Bed

Ample make this bed.
Make this bed with awe;
In it wait till judgment break
Excellent and fair.

Be its mattress straight,
Be its pillow round;
Let no sunrise' yellow noise
Interrupt this ground.

- Emily Dickenson

What do you do when
It is over too soon? You
Celebrate the life.


Shadow Shot Sunday - 11/22

My new friend and I
On a perfect autumn day
Cheering now, "Go Blue!"

Saturday, November 20, 2010

Six Word Saturday 11/20

Michigan Football game today - GO BLUE!

And thanks to son-in-law Joe for the invite.

Friday, November 19, 2010

Friday Music Blogging

In comments, nanute recommends Sinatra at the Sands.  With THE COUNT, no less.

You can find some tasty samples here.

Here they are from a TV performance.

Quote of the Day

From Ed at G&T.

Tom, please, I mean this sincerely: you need to find a new line of work. This is the dumbest argument I have ever seen, and I grade the work of 18 year old Georgia public high school graduates for a living.


We Are Become Argentina . . .

. . .    Only WORSE!

My point was that the wealthiest plutocrats now actually control a greater share of the pie in the United States than in historically unstable countries like Nicaragua, Venezuela and Guyana. But readers protested that this was glib and unfair, and after reviewing the evidence I regretfully confess that they have a point.
That’s right: I may have wronged the banana republics. 

You see, some Latin Americans were indignant at what they saw as an invidious and hurtful comparison. The truth is that Latin America has matured and become more equal in recent decades, even as the distribution in the United States has become steadily more unequal. 

The best data series I could find is for Argentina. In the 1940s, the top 1 percent there controlled more than 20 percent of incomes. That was roughly double the share at that time in the United States.

Since then, we’ve reversed places. The share controlled by the top 1 percent in Argentina has fallen to a bit more than 15 percent. Meanwhile, inequality in the United States has soared to levels comparable to those in Argentina six decades ago — with 1 percent controlling 24 percent of American income in 2007.

This is what 30 years of Reaganomics has done for to us.

H/T to B/T.

Republicans, All Wrong, All the Time, Pt. 20 -The Axis of Depression

Krugman explains why China, Germany, and the Repugnicants are acting as if they all HATE AMERICA.  (Emphasis added.)

So what’s really motivating the G.O.P. attack on the Fed? Mr. Bernanke and his colleagues were clearly caught by surprise, but the budget expert Stan Collender predicted it all. Back in August, he warned Mr. Bernanke that “with Republican policy makers seeing economic hardship as the path to election glory,” they would be “opposed to any actions taken by the Federal Reserve that would make the economy better.” In short, their real fear is not that Fed actions will be harmful, it is that they might succeed. 

Hence the axis of depression. No doubt some of Mr. Bernanke’s critics are motivated by sincere intellectual conviction, but the core reason for the attack on the Fed is self-interest, pure and simple. China and Germany want America to stay uncompetitive; Republicans want the economy to stay weak as long as there’s a Democrat in the White House. 

And if Mr. Bernanke gives in to their bullying, they may all get their wish.

Job 1 for the Rethugs is to make Obama fail.  If your job is destroyed, that's just collateral damage, and TOUGH SHIT!   Remember, they voted down unemployment benefits yesterday -- AGAIN!

I wasn't going to post this Carlin clip, but decided I might as well.  Cut through the foul language and the truth shines.   The topically relevant part starts around the 3 minute mark.  BTW - we're SCREWED!

Oh  -   All you idiots who pulled the lever for Rethugs in this past election - it's YOUR god-damned fault.

What The Hell?!? Friday - Random Thought Edition

Since none of those old three-masted sailing ships had computers, they were all barque and no byte.

Wednesday, November 17, 2010

Haiku Wednesday - Accident


If I go there now
I know - I KNOW she'll be there!
Will she wait for me?

Yes.    She waited.     We
Passed on the steps, said hello,
Love blossomed again.

An accident to
Meet this way - or is it part
Of a grand design?

A love, long ago
Once lost, now is found again.
An accident?  NO!

Join the fun!

L.A. Times Crossword Puzzle Blogging

Wednesday, November 17, 2010 Fred Piscop

Theme:  WURST PUZZLE EVER.  Add "WURST" to the first part of the theme answers, and you get some variety of sausage.  Vegetarians might find this the WURST PUZZLE EVER, but to an omnivore like me, it's quite tasty.

17. Lennon had one : LIVERPOOL ACCENT.  The fab four hailed from LIVERPOOL (nasty image if you think about it.) LIVERWURST, from the German Leberwurst, is liver sausage, obviously.  Love it or hate it, this staple of northern and eastern Europe is spreadable, high in fat, and contains pig's liver.  In Hungary, my ancestral home, it's used with cheese as a filling for baked pancakes.  The things you learn . . .

25. Go from pillar to post : KNOCK ABOUT.  This is not a great correspondence.  KNOCK ABOUT means travel widely or wander aimlessly.  To "go from pillar to post" is to search widely or be driven by circumstances beyond one's control.  KNOCKWURST is a soft sausage made of pork and beef spiced with garlic and other seasonings.  And, lest you BARQUE up the wrong tree, here is another KNOCKABOUT.

50. Josephine Tey title orphan : BRAT FARRAR.  "BRAT FARRAR is the story of a young man who takes part in a swindle, and suddenly finds himself the champion of the missing heir that he is impersonating against his victim's conceited twin brother." Tey was a Scottish author of mystery novelsBRAT FARRAR might be her best and most famous.  BRATWURST is a sausage made of veal and pork.  To a purist, it is made with veal only.  I guess I'm not a purist.

And the Unifier:
66. Based on the starts of 17-, 25- and 50-Across, what this crossword might be? : WURST PUZZLE EVER.  Reminds me of this.

Hi, gang, it JzB, your Hungarian, pig-devouring, Toledo trombonist.  I have to repost Dennis's "Did you know?" from yesterday.  "The average American eats the equivalent of 28 pigs in his or her lifetime."  We could do WURST, I suppose.

Monday, November 15, 2010

Mellow Yellow Monday

Flowers in Springtime:
Not so long ago, now a
Fading memory

For a companion shot, see here.


That Deficit Thang

No matter what Krugman says, no matter what data he posts, he gets repeatedly trolled in comments.  That's just life, I guess.   Here he posted a graph showing why we have a deficit.  Short answer:  It's the economy, stupid.

Here is data going back to 1990 to put the picture in perspective for deficit hawks.

Let's see -
Big deficits under Bush 1 - Check
Big deficits under Bush 2 - Check
Surpluses under Clinton, due to increased revenues and decreased spending growth -Check
Wheels come off under Bush 2 -- TWICE - Check.

I'd say that just about wraps it up for claims of Repugnicant fiscal responsibility.  But we knew that, didn't we.

Clinton inherited a Bush mesh, but the economy turned and he got bailed out.

Obama inherited a Bush mesh, but has had no luck at all.

Here's a close up.  Receipts flat lined in '07, and the bottom fell out in '08.  Note the '09 blip in expenditures - the stimulus package, and the corresponding increase in receipts that followed directly.  Both are now gone.

The Official Roster of the Pain Caucus

Any list that includes Niall Feguson, Amity Shlaes and William Kristol is obviously composed of very serious people.

Sunday, November 14, 2010

Shadow Shot Sunday

At Disney's Vero Beach Resort

Flip-flops, Pirate Golf:
A Spring-time vacation in
Florida shadows

Sunday Music Blogging 11/14

We went to the theater this afternoon. Granddaughter Rebekka has a chorus part in a local kids-only production of Rogers and Hammerstein's Cinderella.  I never knew there was such a thing, but some of the songs are familiar.  Here is an example, performed very nicely by another community theater group.

There's something to be said for Fairy Godmothers.

Unemployment, and the Power of an Accounting Identity

Kevin Drum quotes Dean Baker.

However, there is a relevent accounting identity which is always true. The trade surplus is equal to net national savings....The implication of a large trade deficit is that either public savings must be very low or negative (i.e. a large budget deficit) and/or we must have very low private savings. There is no possible way around this accounting identity.

This means that if the U.S. has a large trade deficit, as it currently does, then it must be the case that either households have very low saving or the country has a budget deficit. At the peak of the housing bubble, private saving was very low, since households spent based on their housing bubble wealth. Now that much of this bubble wealth has disappeared with the collapse of house prices, saving has moved back toward more normal levels. This means that to sustain the same level of output, the budget deficit must rise. There is no way around this identity.

 Drum, quoting Baker again, concludes (emphasis added):

So then what? If you have to reduce the trade deficit in order to reduce the budget deficit, but you want the dollar to remain strong, what are your options? Well, an economic slowdown would do the trick, since that means we'd buy less stuff from overseas. That worked a treat during our most recent recession. But that's pretty much it. In other words, as Dean says, if you want a lower budget deficit and you want to keep the dollar strong, "you must want the level of output in the United States to fall and its unemployment rate to rise. That is the only plausible way that the accounting identities can be kept in balance." Will somebody please tell John Boehner?

It's pretty hard for me to believe that TEH Boner would be convinced by anything like facts, reality, and the inexorable logic of an identity.  And getting TEH Boner to give as much as a rat's ass about the unemployed?  Well, good luck with that.

Update: Looking for something else, I found this from Krugman.

Saturday, November 13, 2010

Six Word Saturday - 11/13

I'm feeling sad and morose today.

A life far too short
Ends in the depth of despair:
Winter is coming.

Friday, November 12, 2010

Who Killed the M1 Money Multiplier --- and HOW and WHY!

I've been wondering about this for a while.

In comments here, reader nanute points me to the villain.

It is The Fed.

They do it by paying interest on excess reserves.

The reason is to prevent inflation.

Holy shit!   We are stumbling at the edge of deflation, and the Fed is fighting inflation.

I'm no economist (so somebody help me out here if I'm all wrong) but it seems to me that if the $1 Trillion, or so, being held in excess reserves were released into the economy, we would have no need for QE II.  And the $600 billion that the Fed is going to magically create via QE II will probably just  result in there being about $1.6 Trillion in excess reserves by next Summer.

Now, I must go hug a squid.

Update:  In comments, nanute fine-tunes the thinking.

I think the larger problem that is concerning the Fed and driving this policy is the fact that the major financial institutions are being permitted to carry high risk assets (think mbs, derivatives, etc.) at face value. I've argued for quite some time that allowing this change in policy to continue only prolongs the inevitable, and is the primary reason why the economy remains anemic. Until policy makers and financial institutions come clean, and flush all the bad debt from the system, no meaningful recovery can occur.

I do realize that such a severe shock to the system may in fact make things worse in the near term, but unless and until the individuals responsible for creating the mess are required to pay for the damage without taxpayer assistance, we will continue down the road of high unemployment and lack of demand for goods and services.

Robert Prechter pointed out years ago that debts must be repaid - If not by the borrower, then by the lender.  The third possibility is pass it off to the general population.  This is a drag on the system whose effects are difficult to calculate.  Talk about your dead-weight losses.

It's easy to believe that this is part of why the American economy has come undone.  Another thing Prechter has pointed out is that we get less bang for the debt buck now than in the past, and this mill stone could be part of the reason why.

Where I disagree with nanute is that I don't specifically relate this to the M1 collapse.  I think the case for the Fed's responsibility made at Washington's Blog is pretty compelling.

Write Your Congressperson - You should

The entire meme about the insolvency of Social Security, as put out by the Cat Food Commission, is bull shit, and anybody who understands the system, its funding, demographics, and  life expectancy knows it.

Here's Krugman.

. . .  since 1977, the life expectancy of male workers retiring at age 65 has risen 6 years in the top half of the income distribution, but only 1.3 years in the bottom half.

And Krugman again.

. . . that men in the bottom half of the earnings distribution saw their life expectancy at age 65 rise only 1.1 years from 1982 to 2006. Over the same period, by the way, the retirement age — under current law — rose 8 months.

 In simple terms, life expectancy is increasing for Lawyers and CEO's, but not for janitors and postal clerks.  The short stint in retirement that the latter might have some day is being eaten up by increases in the retirement age.

So - write your congressperson today.   Here is a model letter from commentor Jack at AB.

Needs some paragraph separation but the content is right on.

Also, sending this one to Alan (aka Homer) Simpson and Erskin Bowles is highly recommended.

Now - off to the Post office with you . . . .

What The Hell?!? (JOE) Friday - Clean Copper Clappers . . . and Cleveland!

Another H/T to Sharon.

Thursday, November 11, 2010

Stock Market Performance Before and After WW II

Thinking more about Henderson's MIRACLE, I wonder --- has there ever been an economic MIRACLE or Boom, or even a pretty good time that was not accompanied by strong gains, or at least some sort of an up-trend in the stock market?

Wouldn't you expect that if there were an actual economic MIRACLE following WW II, there would have been a big gain in the Dow Jones Industrial Average?  Let's have a look.

What we find is that the DJI rose over the year following VJ Day (Aug 15, 1945) from about 160 to around 212 in early-summer of 1946.  Then, Henderson's alleged miracle happened, and stocks fell back down to about 165 before the end of the year.   The 212 level wasn't reached again until spring of 1950.

Big DJI Deal!

While we're at it, have a look at how the market performed during the New Deal.  As you can see above, from the 1932 daily closing low of 41.2, it rose to 194 in the Spring of 1937.  That's when FDR tried to balance the budget, and the wheels came off the still-recovering economy.  The market never fully recovered from that blow until after the war was over.

Just for kicks, I put DJI performance from the 1932 low and the 1944 low on a percentage gain scale to see how they stack up.

X-axis is calendar days after the respective lows, running out for six years.

Speaks Volumes, doesn't it.  Even after the 1937-8 kick in the teeth, New Deal performance was still far above what the first few post-war years were able to accomplish.

Wednesday, November 10, 2010

Haiku Wednesday - Preparation


There's always something 
Coming - a performance, or
The next phase of life.

Join the fun!

Henderson Smack Down?

Over at AB, commenter MG (11/10; 1:24:27 AM)  objects to the way Mike Kimel (and I, I'm assuming) have dissected the data in order to refute Henderson.  I responded to one of his comments like this:

Tuesday, November 9, 2010

Serious Candidate for Best/Worst Joke of All Time

I'll leave that decision to you.

Joke posted at Swerve Left.

Private Investment Pre and Post WW II

This is another swipe at Henderson.

Data in his working paper (Table 2, Pg. 15) clearly indicates that gross private investment increased during the new deal at a higher and more enduring rate than in the post war period.  Mike Kimel makes this point at AB, using NIPA data, but you can use Henderson's own data against him, and I love that.

Here is growth of gross private investment following designated base years of 1933 and 1944, using both Henderson's data and the NIPA data.  Data sets match very nicely, though Henderson's ends in 1950 (more cherry picking.)  You can quibble over what year to take as your base, but it won't change things by very much.  Mike Kimel uses 1932 and 1944.

Once again, except for the anti-New Deal year of 1938, the New Deal trumps the post war period in rate of growth, and duration of growth.   And this information was staring Henderson right in the face.

The BIG IDEA to be gleaned here is that Government investment does not drive out private investment.  The pie can grow.

An Epitath for America

Over at MB, Karl speculates on why America is great, and basically gets handed his head in comments.
Bad Tux points out that the U.S. is now the economic equivalent of Mexico.

I made essentially the same comment in both places.  Economic disparity and a deterioration of equal protection under the law are moving us toward plutocracy.   I forgot to mention that our most recent former president is an admitted war criminal.

More Thoughts on the 1920-21 Depression

Barkley Rosser on the Laissez Faire approach.

Check it out.

Monday, November 8, 2010

Private Real GDP Growth Before and After WW II

Eyeballing values off of a graph is never easy, but I made an attempt here, to prove a point.

In a Working Paper that can be downloaded here as a PDF, David Henderson makes rather a big deal about an alleged post WW II economic miracle - all because government spending was greatly reduced, as a result of the war ending.

Henderson's big fundamental flaw is the kind of misrepresentation of Keynesianism that is all-pervasive, and generally not challenged.   Keynes only proposed government spending as an economic solution under certain circumstances:  aggregate demand shortfall, zero interest bound, monetary policy not working (kind of like now.)  To the pain caucus, all govt spending is Keynesian.  That's what Ron Paul said about the preceding decade

Mellow Yellow Monday

Falcon Cheerleaders:
Best in pom, best in cheer, they
Cheer for the best team!


Quote of the Day - Re: Friedman vis a vis QE II

David Beckworth muses on Friedman (Milton, not that ass-hat Tom.)

My original intent in publishing the Op-Ed was as a way to reach out to inflation hawks who claimed to be followers of Milton Friedman. I was hoping they would see Friedman's views were nuanced and that this would encourage them to take a more nuanced view. 

Well, David, thanks for fighting the good fight.  Too bad trying to make inflation hawks see the light is like igniting a candle in a cave full of bats.  Even when the guano flares up, they won't see it.

Sunday, November 7, 2010

Sunday Music Blogging 11/07

One of the all time great songs, performed by Chet Baker.

A Closer Look at Commodity Prices

Yesterday I took a sardonic look at commodity prices.  Let's dig in a bit deeper.

Update: In the original post I forgot to give a H/T to Krugman.  Better late than never.

There are cool graphs, and pointed opinions below the fold.

Shadow Shot Sunday - 11/06

Orb Weaver Builds her 
Home in the shadow of mine.
I guess I can share.

Saturday, November 6, 2010

Commodity Prices and Why the World Is About To End

There is a lot of opinion being offered these days to the effect that the sky is falling as a result of Obamanomics - first fiscal stimulus, and now QE II.

Well, wait a minute.  Since nobody has actually been hit by a chunk of the celestial ceiling since that scene in Chicken Little . . .

. . . maybe we should subject this notion to some sort of rational analysis.

One thing that is usually cited as evidence is the behavior of commodity prices since the inception of Obama's ill-advised quasi-tragic idiotically Keynesian stimulus package.   Well, since the International Monetary Fund conveniently has that information readily at hand as both a graph and a table of monthly values, (2005 Avg value = 100, includes both fuel and non-fuel) let's have a look.


After a bit of hyperventilating, it occurred to me that some skeptic out there might think I was cherry-picking the data.  We certainly can't have that.  And Krugman - who I have been known to disagree with - is not particularly concerned.

Given all that, let's look at the whole data set, which starts in 1992.

See - after 10 years in the doldrums, commodity prices really took off just about when we invaded Iraq, and then went through the hole in the roof made by that piece of falling sky!   

Oh - wait a minute.  That was in July, 2008.  And by the end of the year the index value was cut in half.

Damn. . . the data isn't fitting my narrative very well.  I know!  Let's change the data.  Here is just 2010.

See -The index has gone from 142.34 in January to 147.74 in September (latest data available.)  That's almost 3.9%!  Annualized, it's almost 5.2%!  And it's up fully 13 1/3% from the pre-bubble August, 2006 high of 130.37!  Doesn't that look like hyperinflation to you?

I suppose at this point some smart ass is going to point out that since April the Index has declined from 153.27 to 147.74, and that's negative 3.6%.

Look, we're on the verge of hyperinflation.  Just don't mess with a beautiful idea, dammit.

Six Word Saturday - 11/6

Falcon Freshmen win their Superbowl -- AGAIN!

Final: Falcons 35 - Orioles 12.

It's back-to-back Superbowl wins for the undefeated Falcons Freshmen (Grades 3 and 4.)

Can the JV and Varsity make it a repeat sweep?

UPDATE:  YES!  JV and Varsity both won.  It is a second straight Superbowl Falcons Sweep!

The Falcons did not score on this drive.  They turned the ball over on downs at the Falcons 2 yard line, then forced a safety on the next play.  The ensuing kick off from the Orioles 20 then led to a Falcons touch down

Team handshake after the game, including the cheerleaders.

Pix from my phone - not the greatest. Lo siento!

Friday, November 5, 2010

In which I Dare to Disagree with Paul Krugman

Usually my opinions line up with Paul Krugman's pretty much 4-square.

I can think of three areas of disagreement.

1) He says WW II ended the Great Depression. I say the output gap was filled before the Pearl Harbor invasion, and the Depression well and truely ended before we ever fired a shot.

2) He thinks expectations are important.  I find that disturbingly close to magical thinking. (OK - haven't yet read the wonkinsh little paper yet, so maybe I'll be convinced otherwise.)

3) He disagrees with Evan Bayh's assesment that Obama erred in promoting health care when he should have been focused on jobs:

Mr. Obama’s problem wasn’t lack of focus; it was lack of audacity. At the start of his administration he settled for an economic plan that was far too weak. He compounded this original sin both by pretending that everything was on track and by adopting the rhetoric of his enemies.

. . . 

I felt a sense of despair during Mr. Obama’s first State of the Union address, in which he declared that “families across the country are tightening their belts and making tough decisions. The federal government should do the same.” Not only was this bad economics — right now the government must spend, because the private sector can’t or won’t — it was almost a verbatim repeat of what John Boehner, the soon-to-be House speaker, said when attacking the original stimulus. If the president won’t speak up for his own economic philosophy, who will?

PK errs in his assesment of Obama.  What this illustrates, in bold red capital letters, is that President B. Hoover Obama is not and has never been any kind of true progressive.  He is bright, hard-working, and dedicated, to be sure.   And he does not lack either focus or a willingness to stand up for what he believes in.  What he lacks is the belief - a genuine belief in progressive principles and economics.  When the President talks of austerity he is being sincere.

At at time when we need a President like Franklin Roosevelt or Lyndon Johnson, we get a president like Herbert Hoover, who went to his grave believing that in 1930, he genuinely had the country on the right economic course.

We are so seriously screwed.

What The Hell?!? Friday - QE II Edition

My reaction to QE II is MEH!  Too little, too late, too short maturities, too little risk in the selection of securities.

Mish, OTOH, thinks "the Fed's misguided Quantitative Easing policy" is a prelude to the end times, and will be the ruin of world economies and civilizations.

I'll probably have more to say on this later. For now, read it and weep.  Or guffaw.  Your choice.

UPDATEKrugman reacts to QE Madness, almost using some of my same vocabulary.  Have I mentioned that I love it when Krugman agrees with me?


Wednesday, November 3, 2010

Haiku Wednesday - Direction


It can be forward
(Even if not bold,) or back.
We have chosen BACK.

Join the fun!