bmagnus

Interest Rates Must Go Up

It is my theory that beneath certain levels, low interest rates do not stimulate the economy. There are several factors which combine to this result: First, when rates are very low, there is no incentive for lenders to extend credit to individuals and companies. Since the available rate of return is so low, they would rather take the sure thing on government bonds. Housing lending has continued partly because there is a real asset involved, and partly because such loans can be sold to aggregators such as Fannie Mae. [edit: this was before the housing bubble burst; the last sentence isn’t entirely true any more.]

Second, when interest rates are very low, corporate borrowers — who are supposed to be goaded into action by super low rates — are mindful that the Powers That Be feel the economy is lousy. It is a bad idea to incur debts and invest in infrastructure when the economy is lousy. What will the stockholders say? What cash they do have they will sit on until the moment is right [edit: leaving them in a position to, say, buy out a competitor who imprudently overspent]. After all, if the economy is lousy, they may well need the cash cushion. As for loans, they will wait for some kind of signal that things are improving — an increase in interest rates, maybe — before calling for cash.

Finally, the third leg of the economic table, Joe and Jane Average do not experience added liquidity. While the banks are more than happy to lend them money for concrete things like houses and cars, the banks are reluctant to lend them cash for things that have a lasting impact on the economy. They can’t get cash to start a business (or to help along their existing business) because it’s too risky — for the bank, that is.

Here we are, 5 years later. The Fed Funds Rate has been 0-0.25% for two years. That means banks are able to borrow essentially free money, and have been for two years! Mortgage rates did rise this week, after 12 weeks of declines and record lows, including the lowest rates since this data has been tracked. Under traditional economic theory, all kinds of growth should be stimulated!

So where’s the jobs that should be created by all this stimulation? Oh, right.

The truth is that monetary policy can’t fix what’s really wrong with our economy: banks and businesses we won’t admit are really failing; a workforce that can neither take advantage of job opportunities in other regions nor start small businesses because their houses have lost so much value as to leave them underwater; businesses that pay millions upon millions to executives and stockholders while paying as little as possible to laborers here, overseas, and/or illegal; tax and regulatory policies that encourage bad corporate behavior; a still-broken health insurance system that discourages hiring and will soon force all of us to pay tribute to profitable insurance companies; a failure to manufacture much of anything that somebody somewhere in the world would want.

But it gets worse. Those super low interest rates create one more problem for our economy. It punishes people who are trying to prudently save money for retirement, college, or just a rainy day. A side effect of this is that the Social Security Trust Fund is also getting low rates on their investments — which directly impacts the future of the system and gives future seniors a double-whammy even if they do everything “right.” Further, the low interest rates encourage people (and the government) to borrow money they might have a hard time paying back. While this might boost the economy in the short run, in the long run it’s just a longer bit of rope with which to hang.

Interest rates must rise. Bernanke must stop hiding the fact that some banks are already busted without effectively no-interest loans from the Fed. Institutions that are not solvent or are “too big to fail” must be broken up and turned into organizations that serve their customers. Investors must own up to the fact that their Mortgage Based Securities are worth no more than 70% of the face value and allow homes to be properly valued. Tax code must encourage corporations to spend money instead of hoarding it. And there must be incentives to hiring people here for decent wages, and better yet making something here that can be sold and exported. Let’s stop pretending we can build an economy on cheap credit and lattes.

In Closing: pants; T-shirts; it’s more intellectually honest than Megan’s Law; school reform hasn’t done much for learning; people with a prescription for painkillers might have painkillers in the house; and am I the only person with a tape measure in her bag?

Good Riddance

Yesterday, Mayor Daley the Younger of Chicago — not to be confused with his father — announced that he would not seek a 7th term in office. Quicker than most people can eat a Chicago-style hot dog, speculation began that Rahm Emanuel would run for the position. This speculation is serious enough that even CNN is speculating about who might replace Mr. Emanuel as White House Chief of Staff.

My answer? Is James Baker available?

I kid of course. But the point remains that leaving the White House would be the best thing to happen for the Obama Administration, even if President Obama doesn’t know it. Mr. Emanuel is the biggest problem facing the Democratic Party today, alienating core constituencies by saying stuff like “F*** the UAW” and completely ignoring the grass-roots support that got his boss elected. He’s a symptom of a faux-populist White House that gives half-measures on everything and then wonders how come nobody is happy with the half-assed results.

Seriously. Run, Rahm, Run! Get your tuchus out of Washington and back to Chicago, where that kind of “Because I’m in charge and said so” politics actually works. It’s the best thing for everybody.

I wanted to embed this, but it’s disabled. Try this version instead:

In Closing: low Vitamin D levels linked to heart failure and schizophrenia; bike helmets; antibiotic beer; caught evolving; more people might vote if there were better candidates; instant karma; rich people sure are different; how to save Social Security; how to study; War is Over??; on Craigslist; infrastructure is not a boondoggle; dumbass; Ms.; tuition; we know the economy sucks!; and let Isaiah Mustafa do your voicemail message. On a horse.

Oh, and Happy New Year.

Thoughts for Labor Day

I think it’s appropriate to focus on jobs for Labor Day.

The good news is that employers did add new jobs last month. Unfortunately they didn’t add nearly enough to make a dent in unemployment. Even as private employers are adding positions, cash-strapped state and local governments have had no choice but to cut them. Drowning government in the bathtub sounds great until you realize there’s lots of things government does to make the private sector possible.

The flipside of employment is, of course, unemployment. Real unemployment is much higher than the “headline” number. That’s because the number you hear on the news doesn’t include people who have given up on jobs, people who went back to school because there’s no jobs/to get training/hoping the market will be better when they graduate, part time workers who would rather work full time, etc.. Of course, it’s also alarming how long many of the unemployed have been unemployed.

It doesn’t help matters that the current administration thinks they can create jobs by encouraging companies to borrow money. Banks are still being stingy and real property is no longer something with which truly small businesses can secure loans. Besides, what bank in their right mind is going to lend money to some unemployed guy who figures he can start his own business?

We’re one of the only modern countries with no maternity leave, no mandated sick leave, and no guarantee of health care (merely an upcoming mandate that we pay the profitable insurance companies that created our unaffordable system). We also trail every modern nation when it comes to vacation time. Heck, some people have to fight for their lunch break!

Let’s hear it for Labor this Labor Day.

Acute Angle: Looks like the Review Journal is going to actually sue Sharron Angle for copyright infringement!

In closing: any prison term can turn into a death sentence; why people believe lies; fired for being paid so little she qualifies for food stamps; advice for college freshmen; Enron exec to stay in prison during appeal (good!); this is not good; Thank you, Digby, for saying what I’ve said for years, If Social Security is running out of money, how is less money supposed to fix it??; parents’ worries vs children’s actual risks; Abigail Disney on the Estate Tax; VW wants to be #1; on debt; I wouldn’t treat a dog this way; “Moby Dick with Dragons“; on racism, bad neighborhoods, and the news; and Mac Vs. PC.

Dear Teacher: Get Real

Mr/Ms Teacher:

As you are no doubt aware, each of your students has 5 other classes. Each of these classes has their own supply requirements, although some things like “pencils” and “notebook paper” are universal. There is only a 5 minute or so passing period between your class and the previous or next class. While it seems like many schools are set up with an area dedicated to students at one particular grade, the fact remains that some of your students will have classes in another part of the building (such as gym, choir, art, or foreign language) and not have an opportunity to visit their respective lockers during some passing periods. Furthermore, it is highly likely that a student might have homework in multiple subjects, requiring that quite a few things be taken home.

These are things that I would have thought obvious to a professional in your position. However, it seems clear that some teachers have not considered the idea that students might have no choice but to carry supplies for multiple subjects at once. I can think of no other explanation for the extraordinary supply lists that have come home for the last several years, including fact that several of your colleagues each require a minimum 1″ binder, and a couple have required 2-3″ three ring binders.

Really? They need that much stuff for one class? Do you really think it’s important for them to carry around every scrap of paper issued in your class from now until June? Is every assignment, every graded quiz, every set of scribbled class notes of such critical importance? Can’t we use this opportunity to teach prioritization? Frankly, I didn’t need multiple 3″ binders per semester in graduate school!

Further, there is the issue of space and weight. These are still kids we are talking about. There is a finite amount of physical room in their book bags, and heaven forbid they should need to cram a book in there. Experts recommend that they put no more than 10-15% of their bodyweight in a backpack — including the weight of the bag itself. Let’s say for the sake of argument that these kids weigh the same 120 pounds I do. That means no more than 12-18 pounds. Have you considered putting your required supplies on a scale to see how much you are contributing to the load? The 500 sheets of paper that will fit in just one of those 3″ binders is 5 pounds alone.

Please understand that I don’t even want to address the expense of all these supplies despite the fact that 1 in 5 American workers is living paycheck to paycheck. I consider myself fortunate that I can just go out and get all this stuff without worrying about whether I can pay all my bills.

Just do parents a favor and think about the whole picture rather than your one class when preparing your list of required supplies.

In Closing: On illegal immigration: on the broken mess we euphemistically call an economy; the chicken sexers of Japan; why doesn’t Bernanke know??; insurance companies scramble to raise prices before somebody tries to institute price controls, results in people talking about price controls who weren’t before; I told you the mandate was a screw-job; shut up and do what you’re told, authority figures are the enemy, and other things we are inadvertently teaching children; energy; click for the first paragraph, stay for the rest; the first dinner party; the miracle farms of Brazil; and fast food.

Compare and Contrast

Over the weekend, the people who brought us TaintedEggs™ said that anybody who got sick? It was their own damn fault. Yes, that’s right, it’s our fault for enjoying eggs over easy, Hollandaise sauce, and Caesar Salads. These aren’t your grandmother’s farm fresh eggs, sweetie! Treat them like toxic waste that must be incinerated to be healthy!

Today the FDA pointed out that maybe, just maybe, letting 8 foot tall piles of chicken poop accumulate and having rats around might be part of the problem. I wonder how long until they find a way to make that our fault too.

In closing: it‘s still the economy, stupid; and giant raptor.

Hold Your Nose and Pick One

The Nevada race for Senate continues to be close. But this week the Las Vegas Review Journal — our paper of record, serving roughly 75% of the state’s population — did a different poll. They found that 2/3 of people who support Sharron Angle wish the Republican candidate were someone else, along with 8 in 10 undecided voters.

Senator Reid isn’t out of the doghouse either: “Some 49 percent said they would have preferred another Democrat nominee over Reid, including 28 percent from his party, 66 percent of Republicans and 62 percent of the undecided or those aligned with other candidates.”

CBS has picked up the story, pointing out:

Before Angle’s nomination, Republicans were salivating over the likelihood that Reid would fall in the midterm elections in what was expected to be a demoralizing, high-profile defeat for Democrats. But Angle’s controversial positions on a variety of issues gave the majority leader an opening to portray her as too extreme for Nevada voters. Her nomination, coupled with Reid’s relative unpopularity, appears to have forced many in the state to have to choose between a pair of candidates about whom they have little enthusiasm.

So there is a question that we have to ask ourselves when we look at poll results: how many of those people who say they support one candidate will really go into that polling booth and select the other one? Where do the 66% of Republicans who wish Reid wasn’t the candidate overlap with the 68% who wish Angle wasn’t the candidate, and will some of them secretly vote for Reid? Will Angle say something between here and November so crazy that not even most Republicans can stand by her? Can Reid do anything to win over those who aren’t happy with her? Will voter turnout programs target at the unemployed matter in a state with one of the highest unemployment rates in the nation?

All these questions and more will be answered by November 2, 2010.

In closing: stop the rape; American birthrate at a new low; the Department of No Shit Sherlock (where did Susie find these great people to cover her blog while she’s away??); fighting for freedom, free of freedom; what on earth was the woman who tried to smuggle a baby tiger in a suitcase full of stuffed tigers thinking?? (cute little guy); when it comes to the GDP revisions, don’t forget to look at the huge gap between imports and exports (latte, anybody? Shame we can’t seem to export those); someone did a study showing children are likely to be underinsured (remember, children have no employers); 5 years after Katrina; how huge families make ends meet; garden porn??; riiight, nothing to do with fear-mongering talking-heads; and two blasts from the past that are relevant again, on public schools and Social Security. School starts Monday in Vegas and many other places; drive carefully.

Inflation

That’s one expensive yearbook!

In closing: “Maybe we can get Yaphet Kotto to play Captain Picard”; inside Trader Joe’s; a criminally misleading article about what doctors make; investors are nervous; Japanfilter double feature, Space Cruiser Yamato and the truth about Kobe beef; banks still only follow laws that they want to follow; 5 fastest growing occupations (the top two paying jobs reflect a premium for people willing to work the overnight shift); orders for durable goods — things that last longer than a latte — are up a whopping 0.3%; Turn Off Fox; when you start calling the citizenry “a cow with 310 tits [sic]”, you shouldn’t hold down a government position; Direct Instruction is a little more complicated than “nuns in a classroom,” but his point is taken that it in fact works; the smartest thing on unemployment that you’re likely to read this week; “cut government spending… someplace else!”; the next Dalai Lama could be an attractive woman?; you’ve got the time, get out and vote; Righthaven is perfectly willing to go after bloggers, but not a Senate candidate; on American Apparel; mysterious heiress (Clark County, Nevada is named for her father); and finally, The Doctor is In.

While I Was Asleep, a Man Had His Life Turned Upside Down

I thought I was going to spend the morning talking about the fact that American Apparel may well be headed out of business, not because it’s too damn expensive to make clothes in the United States without the 1800 illegal workers that were lost in a raid (although I’d like to point out that they could have gotten legal workers for the same price in someplace with lower costs than Los Angeles), but because the banksters have maneuvered them into a place where they may have to default on debt. How dare they disrupt the Latte Economy by making stuff here!

But I had the audacity of sleep.

Somehow I must have missed last night that WikiLeaks founder Julian Assange had been arrested on rape charges. Doesn’t matter any more, as the charges have already been dropped.

What the heck happened? Was it a simple mistake, quickly corrected? Or was it as Mr. Assange suggests, “a dirty trick,” a clumsy attempt to shut up WikiLeaks for saying something that somebody in power doesn’t like? And no, I am not accusing anybody in the current administration, as surely a site like WikiLeaks has made more than one enemy. Heck, maybe it was the Mormons!

More to the point, how are various news sources going to treat this story? Will it quickly die down like the nothing story it ought to be (“man accused of something, charges dropped, everything back to normal”)? Or will this linger, with the incident being brought up every time WikiLeaks makes the news (“accused rapist Julian Assange…” “WikiLeaks, headed by suspected rapist…” etc.)?

Rape is a serious crime. This incident shows one of two things: that anybody can accuse a man of rape without any evidence and get charges brought; or that anybody can get off of rape charges if they know the right people, have enough money, get enough publicity, whatever. Either way sucks for everybody, both male and female. Accusations like this, that are decided to be without merit, do more to harm victims of rape than any stupid comic. (For the record, I laughed at the comic and the answer to criticism as well).

This thing is too heavy. Have some amusing images!

Ok, In Closing: If you can help a kid near you afford school supplies, please do; don’t take your checkbook or anything else you won’t critically need to the airport; teddy; 8 banks taken over by the Feds yesterday; new normal?; funny, when you add “profit” to something it costs more; “Is it smart to redshirt boys?” (Usually, NO!); unemployment rates suck (CNN’s interactive map will show foreclosure activity too!); why books are better than e-books; on visiting a Creation Museum. Have a great weekend.

I’m going to speak slowly….

Pedant aside: please note that I did not say “Imma” in place of “I’m going to”.

The end of August is upon us. This is normally I time of year that I republish A Little Message for the College Crowd, updated with the newest Beloit Mindset List. As important as I still believe that message is — and I encourage you to send that link to the college students you know — there’s something else I have to say this year.

What is with you parents and your dorm room obsessions? Have you lost your minds?

Ok, yes. The kid is “out on his/her own” for what is probably the first time (heaven forbid you sent them to summer camp for a couple of weeks). Still, the space they will be occupying is a room. Not an apartment. Not a luxury suite. They are unlikely to have access to a kitchen, and there will be restrictions on what cooking implements they are allowed to have in their room. Also remember that they will not have a lot of room for, well, anything. And finally, remember that they will have a roommate. The aforementioned roommate may have his/her own ideas about the space — or worse yet, roommate’s mom might.

Here’s what you need to send to the dorm: school appropriate clothes (including pajamas and a jacket); bedding and towels; personal toiletry items; a travel bag (1); an alarm clock; school supplies, including stuff that would normally live on the student’s desk; laundry supplies including a basket, hangers, and soap; a few small items of decor (favorite poster, fun lamp, picture of the kid’s dog, stuff like that); essential personal electronics (computer, cell phone, MP3 player, etc.). Ask whether they need a trash can. If you’ve missed something really essential, I bet there’s a store near the school.

Here’s stuff that’s nice to have but not necessary: mini-fridge, if allowed; microwave, if allowed; calendar; white-board or cork memo board; a small stereo system and a few favorite CDs (assuming his/her whole collection isn’t on the computer and/or MP3 player); a little tote for getting toiletries to and from the shower; an electric fan (check dorm rules for when it may be used).

Every dorm room I have ever seen has two beds, two desks, two chairs, two dressers, and two rather small closets. Usually there’s lamp or flourescent light, and sometimes a task lamp on the desk. Do not send furniture to the dorm. And no, the kid doesn’t need a 42″ flatscreen in his room. He doesn’t really even need a TV! There’s one of those in the floor lounge, and he should really be studying anyway! Sure, make a list so you don’t forget important stuff. But if you have to rent a truck to get it all there, you’ve got way too much junk.

In short, treat the dorm like a bare bones hotel room instead of Baby’s First Apartment and you’ll do fine. The kid is legally an adult; now let the kid get on with his or her life. Please.

Now I get to sit back and wait for Calvin’s Mom to tell us what all those little darlings say when they arrive….

Obtuse Angle: Just a little rundown of the various Sharron Angle stories out there. At an event where she wasn’t expecting recordings, she said that evolution is a theory (just like phrenology, right?) and NPR has too small an audience for debates so Harry Reid needs to agree to meet her on Fox News. Both candidates think Cordoba House shouldn’t be built (is it sacrilege to have an apartment near Ground Zero? And if so, is it alright to *ahem* make whoopie there?) Here she is trying to sound sane repudiate clarify all her previous positions. Here’s our local politics guy calling her out on it. Here’s a blast from Sharron’s past. If you wonder what became of the Chicken Lady, this link is for you. And as a bonus? I’m Voting Tea Party T-Shirts.

Phoney Argument: Right, because just what we all need is to turn our $400 smart phones into $5 transistor radios.

Finally, In Closing: If “the easy answer is yes,” what are all the extra words for?; turns out everybody is cutting back, Boomers and retirees more so; the things you can dig up; we can hope; Thanks to E.B. Misfit for pointing out that the U.S. Chamber of Commerce thinks that women need to “make the tough choices about work-life balance” including “choosing the right place to work and choosing the right partner at home.“; what does it take to get shut down??; on arguing with conservatives; and more than you wanted to know about Death and Sesame Street.

The Girl who Played with Shorties

And They Wonder Why the Peasants are Revolting: Even the market news pundits at Marketwatch get it: “In one America, one in 10 of those able to work are unemployed. In the other, Wall Street’s America, bonuses are set to increase.”

Social Security Round Up: I thought about doing a Social Security post, but so many people have already said what needs saying. To whit, most of us have small enough “savings,” “home equity,” and/or “market gains” that we expect to depend at least partly on Social Security (some people depended on it before they even fully appreciated what it was). Social Security needs to be the issue in November, because “saving,” “privatizing,” and all those other words mean nothing more than “destroy.” All those people talking about how “broke” Social Security don’t understand how it works and have an ulterior motive for “reforming” (again, synonym for “destroying”) it. Don’t look at Chile without seeing the whole picture.

Speaking of the Reid vs. Angle race: If this weren’t a race with truly nationwide implications, I wouldn’t spend so much time on elections in an entire state with a population lower than the Dallas-Fort Worth Metroplex. But Senator Reid is the Majority Leader, and Sharron Angle is one of the highest profile teabaggers running. The press is rightfully all over it. Anyway, it’s a tight race.

The Party of Personal Responsibility: Oh! And our other Senator is blaming a “liberal organization” for his woes: namely that he had an adulterous affair and then tried to cover it up by making sure his mistress’s husband was, ahem, taken care of monetarily. Right. ‘Cause his “can’t keep it in his pants” problem? That’s totally the fault of liberals.

Everybody has seen this by now, right?: How dare unemployed people not accept low paying jobs or opportunities that require them to move halfway around the world, ungrateful wretches. Meanwhile, first time unemployment insurance claims are up.

China Knows Better: They know they can’t make do with a Latte Economy. There’s more to a vibrant economy than egg rolls and laundromats. They build stuff, and when they don’t know how to build it they make the West teach them how.

Chuck is Right: Seriously, he’s just a tweak more conservative than I, but this is spot on: “If the number of illegal aliens in this country is something like 20M, you can be real sure that drugs and other criminal activities isn’t what needs addressed. The job picture is what needs [to be] addressed. Enforcement of the pissant employment laws is virtually non-existent, employers know that the chance of getting caught out is tiny and the fines small enough to cover with their illegal hire profits.” Fewer fences, more crackdowns on employers who like workers that don’t stand up for any rights.

They like to call it an “Emergency Department” now: At least there are fewer uninsured people showing up in the ER.

Oh just come out and call Abe Lincoln a damn Liberal: “The genius of Lincoln — and it’s really the greatest historical legacy of the Republican Party — is that all individuals were to be treated based who they are, not who their parents were.” The 14th Amendment is brilliant in its simplicity. It does not need to be repealed, revised, or “interpreted“. Speaking of which, screaming over Anderson Cooper on national television is not a way to be taken seriously.

Priorities: when you think Jimmy Carter outranks Tim McVeigh, the Rosenbergs, John Wilkes Booth, and Benedict Freaking Arnold as worst person in American History, you have some truly messed up ways of thinking. Where’s Lee Harvey Oswald? Oh right, he killed a liberal so that makes him a hero I guess. I’m guessing the criteria included that they be American, which is why Osama and Emperor Hirohito are left out.

This one’s for you, JP: Hal Turner is guilty.

Popularity Counts: Over 25 most popular things. Take it for what it’s worth. I’m glad my car isn’t a “popular” color. I had a devil of a time finding that silver Civic on a parking lot!

I don’t intend to discuss Ground Zero again: Barbara lays it out.

What were they thinking?: No, you can’t legally prevent people from talking to one another at the mall.

Listen up, Ladies: a new “morning after” contraceptive is now approved by the FDA, and is good up to 5 days later.

Things are tough all over: Kroger is expanding their selection of store brand beauty products.

Blame the GOP: So says a Reagan Insider!

Are… Are World Leaders Supposed to Look Like That?: The caption makes the image even stranger.