The American Story Is A Mystery Only to Economists
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DPC Launch of freighter Howard L. Shaw, Wyandotte, Michigan 1900 I think I should accept that I will never in my life cease to be amazed at the capaci
[See the full post at: The American Story Is A Mystery Only to Economists]Ilargi – brilliant post. Thank you for nailing it down. “I’m wondering how it ever got to this. How did the capacity for critical thinking disappear from the field of economics? And from journalism?” Maybe their grey matter shrunk in all that cold weather? Or maybe they realize their cupboard is bare and they’re saving up what little brain cells they have? If they’re told they must write pieces like this and they’re not holding their noses, they ought to be.
I have for a long time now (at least 30 years) been shaking my head at some of the research conclusions that people come up with. It’s as if there isn’t an investigative bone in their bodies, as if they went into the field just because it was there in front of them and not because they wanted to think critically about something or that they actually cared passionately enough about dissecting a topic and going deep. It’s surface fluff, conclusions a grade school class might come up with, and that’s probably being unfair to the class.
Maybe the thesis should be the possible reason the collapse in petrol prices is not showing up in increased spending is because petrol is being bought with debt rather than income, or some factor resembling debt. Debt is just another form of asset as long as debt is being serviced, that is being returned with the agreed interest that covers the cost of not using someone’s savings by that person and the risk factor that those savings are lost either in part or in whole in the utility those savings represent.
But this would require a story that is not being told, a story missed by mythology except in small pieces scattered over that terrain of presentation of a world view, how the world works. Myths are only a way of teaching, of presenting experience, of explaining complex concepts, of establishing coherency. Real myths are reality based; fantasy also uses myths to stimulate the imagination, sometimes fantasy can better reflect some aspects of nature with less distortion than any other way, more often though, not; the danger being confounding the two forms.
Beliefs, when not employed in stating incomplete knowledge, are nothing but fantasy. Beliefs are like banners in the wind, showing the direction of that wind and are as fickle as the wind’s orientation is wont to be and only indicating the strength of the wind at only the place the banner is, no where else is exactly the same. All too often beliefs are taken to be measure of qualities measured by other means, like measuring girth by scale, many an erroneous results pursue the assumptions needed.
Stories too are prone to the caprice of telling and the vagaries of ear of the listener. One such story, about a princess who needed some gold for a long weekend in Ibiza since Margate was becoming all too familiar a getaway place. Her father, the King was saving up for a new castle and couldn’t spare anything just then. The princess had heard about a smallish (that is instead of dwarf to calm the PC crowd) who spun gold out of straw and would do so if any could guess its name. The princess thought long and hard and then some more. Finally she had her answer.
Bloomberg!
and had enough to take her friends to Marbella instead. Finis.
(the above is in recompense for abusing the bandwidth a few posts ago)
In a world full of inflation and distorted prices many people believe they are rich although they are not. Share prices are treacherous – how many shares bid get the full price if a downswing sets in? Free annual cash-flow after taxes should be a reasonable indicator. Russians at 12% income tax likely do better than Germans at 50% (including church tax). Nations that call themselves “productive” and have high taxes and an efficient tax collection system are likely to show a low median wealth because they squeeze their population like lemons and are less attractive to wealthy residents. That should explain why countries such as Cyprus and Italy show a high level of median wealth although their economy is weak.
Raleigh: Most journalists are not free to write what they think. Most people have lost track of understanding financial developments after two decades of fabricated statistics in the US and elsewhere, distorted pricing mechanisms and the successive development of various asset bubbles. Confronted with billions and trillions galore even the journalists make the most silly mistakes confusing themselves and their readers.
Raúl, I couldn’t agree more with the sentiment you express in the first line of this article. My strong suspicion is that so far as journalists are concerned, the newspapers they work for are more concerned with maintaining a good flow of advertising income, so telling it as it is would be considered unhelpful so far as this source of revenue and profit was concerned, as well as their own job security.
I must say, the Bloomberg article does take your breath away for its shear lack of insight into what is really going on, unlike Richard Koo’s pithy phrase that’s worth repeating
“When no one is borrowing money, monetary policy is largely useless…”
If I had my way, this phrase would be tattooed on the forehead of every bau neoliberal economist, politician and business journalist to ensure they could never forget it.
The article on rising net worth gets my goat. Net worth is only useful as a banker tool for borrowing more money. Net worth does not put food on the table and never will. My father, who was a poor farmer, taught me this when I was a child. Just another example of twisted economic measurement by people who don’t understand reality.
“I’m wondering how it ever got to this. How did the capacity for critical thinking disappear from the field of economics?”
Silly! It was BORN that way!
<b>critical thinking</b>
My extra cash !!!!! …. what extra cash????https://www.peacearchnews.com/business/294749811.html
Gas prices soar above $1.30 despite lagging crude oil
The average Metro Vancouver price for regular gas of $1.31 as of Monday afternoon is back to approximatey the same level it was in early October. Back then, crude oil was above $85 a barrel compared to about $50 now after a slight rebound from its January lows.
MJ Ervin officials expect a further gradual rise in retail gas prices in the months ahead.Vancouver Historical Gas Price Charts Provided by GasBuddy.com
===“The Fed is very aware that the bottom 80% of Americans own less than 5% of US equity markets.”
NOW, tell me about that herd that will go over the cliff. Who is manipulating the market for what percentage of the population?
The market was/is rigged for the people, by the people who are in it.
Those with the biggest say about the rules are those that are affected the most.“Rest assured, That, the Fed has seen the light. And they don’t actually hate working class America, they just don’t give a flying f#ck about them.”
“That recovery will never come, simply because all 90% of Americans do is pay for the other 10% to get richer.”
NOW, tell me again, who is getting a “free lunch”? Is it those getting poorer? OR Is it those getting richer?
<b>critical thinking</b>
The PTB have spent the last ten years doing everything they can to convince us it’s raining, while pissing on our leg. As soon as the sleeping 80% figures it out, they’ll change the rules of the game so they can continue the wealth extraction. I agree the only mystery is that the patients haven’t figured out the weight loss is due to the abundance of leeches. By the time they do, our friendly government will find a patsy (China, Russia, Iran…) to blame the collapse on, will reconfigure the con, and will get on with another hundred years of enjoying being a “john”.
Nobodies borrowing say the journalists? Via Doug Noland’s Credit Bubble Bulletin.
“The Federal Reserve released its Q4 Z.1 “flow of funds” report Thursday. Total Non-Financial Debt (NFD) expanded at a seasonally-adjusted and annualized (SAAR) rate of $1.938 TN, the strongest growth since Q4 2012. Total Business borrowings expanded SAAR $845bn, up from Q3’s SAAR $581bn to the highest level since Q1 2008. Federal government borrowed at SAAR $700bn, down from Q3’s SAAR $913bn. Total Household borrowings increased SAAR $361bn, little changed from Q3.
For all of 2014, NFD expanded $1.701 TN, up from 2013’s $1.463 TN. With 2014 federal borrowings ($667bn) about half the 2012 level, 2014 NFD growth somewhat lagged 2012’s $1.828 TN. Yet 2014 Household borrowings of $376bn were up significantly from 2013’s $197bn to the highest level since 2007 ($913bn). Total 2014 Business borrowings of $672bn were up from 2013’s $546bn to the strongest growth since 2007 ($1.116 TN).
On a percentage basis, NFD expanded 4.3% in 2014, up from 2013’s 3.8%. Business debt growth accelerated to 7.2% from 2013’s 5.0%. Although mortgage debt growth remained below 1%, total Household borrowings increased 2.9%. Outstanding State & Local borrowings contracted 0.5% in 2014. ”
https://creditbubblebulletin.blogspot.com/2015/03/my-weekly-commentary-em-contagion-new-z1.html
It has been a mainstream meme that outstanding credit is shrinking, the deleveraging meme, or growing very slowly. Always be careful when adopting MSM memes. What they mean, or would mean if they thought about it, is that credit isn’t expanding fast enough. Of course they wouldn’t know why it needs to grow faster exactly but they feel it must because that’s what the Fed and financial world say.
It all gets back to the biggest stupidity of the world of Economics. Outright hostility or quiet burial of any discussion of what money is. It’s debt of course so everyone wants more debt because everyone thinks we need more money. That much debt can’t and won’t be repaid cannot be considered or even conceived of so the end game has arrived. Let central banks buy all the debt that can’t be repaid and forget about it. Forget in other words that no asset backs the money making it worthless. But never mind it makes no difference. As long as everyone accepts the money why does it matter if it represents no store of value.
All of us interested or obsessed with debt have to consider the possibility that we could be wrong for a much longer time about its collapse and thus monetary collapse. Money is always an abstraction, even gold money. Money has become a profound abstraction but one that virtually everyone accepts. That my friends is our reality.
Come-and-take-it,
No one is going to enjoy anything around today for 100 years. Although the MSM may be telling us that US oil production will rise indefinitely, the Bakken tells a different story. Click the Bakken link. Production is down in January 2015 from December 2014 (production was up Dec 2013 to Jan 2014). There were only 57 additional wells. If the Bakken is representative of US oil production, this glut will disappear soon enough unless the USA wants to import more oil.
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