Dec 102017
 
 December 10, 2017  Posted by at 10:22 am Finance Tagged with: , , , , , , , , , ,  8 Responses »
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Robert Frank Motorama, Los Angeles 1956

 

Peak Fantasy Time (David Stockman)
Deflation Remains Biggest Threat As Lofty Stock Markets Head Into 2018 (F.)
Global Powers Lobby To Stop Special Brexit Deal For UK (G.)
The US Media Yesterday Suffered its Most Humiliating Debacle in Ages (GG)
Principles of Political Economy: The Opening Lines (Steve Keen)
Half A Salary, Half A Job, Half A Life (K.)
Erdogan, Tsipras Strike Secret Deal On Refugees (K.)
Refugee Arrivals in Greece Offset Decongestion Efforts (K.)
Super Rich Shown To Have Grown Out Of Ancient Farming (G.)
India Gov. Files Suits Against Monsanto et al Over Bollworm Cotton Attack (VoI)

 

 

Politics is the entertainment division of the military industrial complex.
-Frank Zappa

The decline in quality of jobs -and compensation- is as horrible as the jobs reports’ attempts at hiding that decline.

Peak Fantasy Time (David Stockman)

If you want to know why both Wall Street and Washington are so delusional about America’s baleful economic predicament, just consider this morsel from today’s Wall Street Journal on the purportedly awesome November jobs report. “Wages rose just 2.5% from a year earlier in November—near the same lackluster pace maintained since late 2015, despite a much lower unemployment rate. But in a positive sign for Americans’ incomes, the average work week increased by about 6 minutes to 34.5 hours in November…. November marked the 86th straight month employers added to payrolls.” Whoopee! Six whole minutes added to a work week that has been shrinking for decades owing to the relentlessly deteriorating quality mix of the “jobs” counted by the BLS establishment survey.

In fact, even by that dubious measure, the work week is still shorter than it was at the December 2007 pre-crisis peak (33.8) and well below its 2000 peak level. The reason isn’t hard to figure: The US economy is generating fewer and fewer goods producing jobs where the work week averages 40.5 hours and weekly pay equates to $58,400 annually and far more bar, hotel and restaurant jobs, where the work week averages just 26.1 hours and weekly pay equates to only $21,000 annually. In other words, the ballyhoed headline averages are essentially meaningless noise because the BLS counts all jobs equal – that is, a 10-hour per week gig at the minimum wage at McDonald’s weighs the same as a 45 hour per week (with overtime) job at the Caterpillar plant in Peoria that pays $80,000 annually in wages and benefits.

In fact, what has been the weakest expansion in history by far may now be finally running out of gas. During the last several weeks the pace of US treasury payroll tax collections has actually dropped sharply – and it is ultimately Uncle Sam’s collection box which gives the most accurate, concurrent reading on the state of the US economy. Some 20 million employers do not tend to send in withholding receipts for the kind of phantom seasonally maladjusted, imputed and trend-modeled jobs which populate the BLS reports.

Yet we we are not close to having recovered the 4.3 million goods producing jobs lost in the Great Recession; 40% of them are still AWOL – meaning they are not likely to be recovered before the next recession hits. Stated differently, the US economy has been shedding high paying goods producing jobs ever since they peaked at 25 million way back in 1980. Indeed, we are still not even close to the 24.6 million figure which was posted at the turn of the century.

By contrast, the count of leisure and hospitality jobs( bars, hotels and restaurants), or what we have dubbed the “Bread and Circuses Economy” keeps growing steadily, thereby filling up the empty space where good jobs have vacated the BLS headline total. Thus, when goods-producing jobs peaked at 25 million back in 1980, there were only 6.7 million jobs in leisure and hospitality. Today that sector employs 16.0 million part-time, low-pay workers..

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“.. the Fed has erroneously predicted 2% inflation for 66 months and continues to tell us that the low levels of inflation are “transitory.“

Deflation Remains Biggest Threat As Lofty Stock Markets Head Into 2018 (F.)

In the two weeks running up to the passage of the Senate’s version of the tax bill, the equity markets moved significantly depending on how any particular Republican senator intended on voting. Then, when the Senate finally passed the bill on the next business day, markets made new intra-day record highs, but then reversed course. Given the current sky-high market valuation levels, the tax benefits are already priced in. Economist David Rosenberg examined market reaction to the five major tax bills of the last 70 years. He found that, on average, the S&P 500 rises 14.3% (median 18.9%) in the year leading up to the passage of the tax legislation. In the year following, on average, the index falls 7.5% (median 13.1%). It could be he is on to something.

If it has been historically easy money that has propelled the U.S. and every other major stock market to record heights over the past few years, then it is noteworthy that the last 12 moves from the world’s central banks have been tightening moves. We know that the Fed is certain to tighten next week at its December 12-13 meeting. This, despite the fact that the Fed’s governing board is deeply divided on the outlook for interest rates and inflation. According to their own minutes, some Fed-governing members continue to hold to the academic view that the Phillips curve (i.e., inflation always rises when the unemployment rate is low) is alive and well. Under this view, inflation is just around the corner and the Fed had better be pre-emptive, lest inflation get ahead of them.

The other view is that today’s economy exhibits behaviors that are significantly different from those that dominated the 60+ years of post-WWII America, and that inflation is no longer the threat it used to be. In fact, deflation may be a bigger threat, especially given the high and rising debt levels. Regular readers know that I have espoused the latter viewpoint. I have pointed out several times that the Fed has erroneously predicted 2% inflation for 66 months and continues to tell us that the low levels of inflation are “transitory.” Fed Chair-Elect Powell espoused this viewpoint in his confirmation hearing, so, there is not much hope that they Fed will back off.

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US, Canada et al don’t want any special treatment for Britain. But that’s not their decision.

Global Powers Lobby To Stop Special Brexit Deal For UK (G.)

Theresa May’s hopes of securing a unique post-Brexit trade deal with the EU were under threat on Saturday night as Brussels said it was coming under international pressure to deny Britain special treatment. After a week that saw May reach a deal with the EU that will allow Brexit talks to move forward on to future trade relations, EU officials insisted a bespoke deal more favourable to the UK than other non-EU nations was out of the question. One EU source close to the talks said: “We have been approached by a number of [non-member] countries expressing concerns and making it clear that it would constitute a major problem for them if suddenly the UK were to get better terms than they get.”

The official said that once the UK is out of the single market and customs union in March 2019, there could be no replication of the terms of the current trading relationship, or anything close to it, and no special treatment. “It is not just an indication of some strange rigid principle. It is because things won’t work,” he said. “First and foremost we need to stick to this balance of rights and obligations, otherwise we will be undermining our own customs union and single market. Second, we cannot upset relations with other third countries,” the official said. “If we were to give the UK a very lopsided deal, then the other partners with whom we have been engaging and who entered into balanced agreements would come back and question those agreements.”

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Julian Assange on Twitter: “Is the fake news story about @WikiLeaks yesterday the worst since Iraq? It’s a serious question. Three outlets, CNN, NBC and ABC all independently “confirmed” the same false information. Has there previously been a serious triple origin fake news story? i.e not just re-reporting.”

The US Media Yesterday Suffered its Most Humiliating Debacle in Ages (GG)

Friday was one of the most embarrassing days for the U.S. media in quite a long time. The humiliation orgy was kicked off by CNN, with MSNBC and CBS close behind, with countless pundits, commentators and operatives joining the party throughout the day. By the end of the day, it was clear that several of the nation’s largest and most influential news outlets had spread an explosive but completely false news story to millions of people, while refusing to provide any explanation of how it happened. The spectacle began on Friday morning at 11:00 am EST, when the Most Trusted Name in News™ spent 12 straight minutes on air flamboyantly hyping an exclusive bombshell report that seemed to prove that WikiLeaks, last September, had secretly offered the Trump campaign, even Donald Trump himself, special access to the DNC emails before they were published on the internet.

As CNN sees the world, this would prove collusion between the Trump family and WikiLeaks and, more importantly, between Trump and Russia, since the U.S. intelligence community regards WikiLeaks as an “arm of Russian intelligence,” and therefore, so does the U.S. media. This entire revelation was based on an email which CNN strongly implied it had exclusively obtained and had in its possession. The email was sent by someone named “Michael J. Erickson” – someone nobody had heard of previously and whom CNN could not identify – to Donald Trump, Jr., offering a decryption key and access to DNC emails that WikiLeaks had “uploaded.”

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Steve is busy introducing economics to energy. Another thing the entire field entirely overlooked.

Principles of Political Economy: The Opening Lines (Steve Keen)

Labor without Energy is a Corpse; Capital without Energy is a Statue

Economics went astray from the very first sentence of Adam Smith’s Wealth of Nations in 1776: “The annual labour of every nation”, Smith asserted, “is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always, either in the immediate produce of that labour, or in what is purchased with that produce from other nations.” This paragraph mimicked the structure, and even the cadence (though not the brevity), of the opening sentence of Richard Cantillon’s 1730 treatise Essai sur la Nature du Commerce en Général (which Smith read). However, Smith made one crucial substitution: he asserted that “Labor … is the fund” from which our wealth springs, whereas Cantillon asserted that it was Land:

“Land”, Cantillon began, “is the source or matter from which all wealth is drawn; man’s labor provides the form for its production, and wealth in itself is nothing but the food, conveniences, and pleasures of life.” (21) Both these assertions are strictly false. The true source of the wealth that humanity has generated from production is neither Labor nor Land, but the Energy that humanity’s production systems harness and turn into useful work (now known as “Exergy”). However, Smith’s assertion is irredeemably false, whereas Cantillon’s merely needs generalization to make it consistent with the fundamental laws of the universe known as the Laws of Thermodynamics. These Laws are still poorly known by economists, which in part explains why economic theory has managed to be in conflict with them for so long. Illustrating why this is so, and why it is crucial, will take time, and effort on your part too to understand them (if you do not already).

But the fact that no theory that contradicts them can be taken seriously, was stated eloquently by the physicist Arthur Eddington in his 1928 book for lay readers The Nature of the Physical World: The law that entropy always increases—the second law of thermodynamics—holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations—then so much the worse for Maxwell’s equations. If it is found to be contradicted by observations—well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation. (37)

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Life in Greece. Every day gets worse.

Half A Salary, Half A Job, Half A Life (K.)

Two in three Greeks fail to pay their bills on time, mainly because they don’t have the money. Three in 10 private sector workers, meanwhile, work part time and get paid a salary of 407.15 euros a month, on average. The first case puts Greece at the top of the list of EU countries in terms of citizens that don’t keep up with their bills, according to the European Consumer Payment Report 2017, with the main reason being the lack of money. In the rest of Europe, the main causes of delays are simple absentmindedness or forgetfulness. The second case is something entirely different. In one sense, it can be interpreted as a reduction in unemployment, which dropped to 20.5% in September. Basically, unemployment falls as part-time work rises, with 30.6% of employees in the private sector working such jobs.

Is this something to be glad about? Should we welcome it as an improvement in the country’s economy? Flexible forms of labor that bring in a pittance of a salary strengthen the ranks of the nouveau pauvre, but at the same time bring down unemployment – albeit dragging down every index that points to a normal life along with it. This is the new normal. But how can 400 euros a month possibly be considered normal? We are beyond the viral videos of the first months of the crisis, of frenzied officials claiming that children were fainting of hunger at school, of images of people rummaging through trash cans looking for food, of pensioners falling over each other for a bag of free potatoes and other such dramatic scenes, real or contrived, that appeared on screens all over the world, and which the present government is quick to claim no longer exist.

Today, some really “lucky” Greeks are insured and have a daily wage of 51 euros, adding up to 1,193 euros a month. But the majority, the less fortunate – yet still fortunate enough to have a job – need to make do with 400 euros a month. It is a conundrum that requires a good deal of math. This month you’ll pay the water bill but not the electricity, you’ll limit your purchases to the bare essentials and you’ll adapt your diet to your budget. What’s left after that? A constant knot in your stomach that you have to learn to put up with. You won’t faint in the street, but each day will be a struggle. You will die a little bit inside, but this is not a measurable reaction and the indices don’t care. Neither does the government, whose slogan when it was in the opposition was that there are real people behind the data. Now the only number it cares to talk about is the shrinking unemployment rate.[..]

The line that defines normal is constantly being shifted and with it the definition of poverty.

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Erdogan was in Greece the past week and tried to stir up as much shit as he could. Refugees remain his main weapon.

Erdogan, Tsipras Strike Secret Deal On Refugees (K.)

As pressure due to overcrowding continues to build at reception centers for migrants on the islands of the eastern Aegean, Turkish President Recep Tayyip Erdogan accepted a request by Prime Minister Alexis Tsipras that Turkey take back migrants from the Greek mainland as well as the islands, Kathimerini understands. During a joint press conference with Erdogan on Thursday, Tsipras declared that “new measures have been agreed for cooperation in the context of the European Union-Turkey agreement,” referring to a deal signed between Ankara and Brussels in March 2016 to curb human trafficking across the Aegean. Tsipras’s comments spurred much speculation about what those measures might be. It appears that they would involve triggering the return of migrants to Turkey, a process that has largely halted as new arrivals often lodge applications for asylum, a lengthy process.

Thousands of migrants, particularly those deemed to be the most vulnerable such as children, pregnant women and the elderly, have already been transferred from cramped facilities on the islands to the mainland. But conditions remain overcrowded at the island camps amid a constant stream of new arrivals from neighboring Turkey. What remains unclear is whether officials in Brussels have approved the deal; as it stands, it would basically undermine the basis of last year’s EU-Ankara agreement, according to which migrants should remain on the islands until a decision has been reached on their status (whether they are considered to belong to vulnerable groups meriting priority treatment, to be granted asylum etc). In recent comments, Dutch Ambassador in Athens Caspar Veldkamp expressed concerns about the prospects of mass relocations to the mainland if returns are not being made to Turkey, noting that this could undermine the EU-Turkey deal and encourage human smugglers rather than averting them.

For the leftist-led government, however, moving migrants from cramped facilities to mainland camps would appease those in the party concerned about inhumane conditions on the islands. As winter looms, and hundreds of migrants continue to live in tents around the reception centers, Migration Minister Yiannis Mouzalas has conceded that he could not rule out the risk of people dying from hypothermia. In an interview with Der Spiegel that was published on Friday, Mouzalas said that authorities were making preparations to ensure that island camps are ready to deal with plunging temperatures. Everything should be in place by December 15, he said. “The key though is the number of new arrivals,” he said, adding that if there is no large increase in numbers “then we are well prepared.” Authorities might reserve some rooms at local hotels if necessary, he said.

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Haven’t heard this one before, and it feels like an ominous sign: “Migration Minister Yiannis Mouzalas told Germany’s Spiegel Online that he cannot guarantee that no one will die in the camps with the onset of winter.”

Refugee Arrivals in Greece Offset Decongestion Efforts (K.)

The effort to improve the living conditions of refugees and migrants stranded at overcrowded reception centers on the eastern Aegean islands of Lesvos, Chios and Samos by transferring some of them to the mainland will fail to yield the desired result as long as flows from Turkey continue. In its latest report, the UNHCR said that 17,764 people were transferred from the islands to the mainland in the period from July 2016 to November 2017. UNHCR sources clarified, however, that the number of those removed from the islands is significantly higher than the official figure. Many of the people who have completed the necessary procedures or are deemed to be vulnerable, and as such are allowed to depart for the mainland, do so at their own cost, the same sources said.

They also reckoned that in 2016 around 40% of transfers were conducted by the UNHCR but the%age rose to 80% in 2017 after a request by the Migration Policy Ministry. At the same time, however, in the period between early April 2016, when Ankara and Brussels reached a deal to limit migrant flows into Europe, until late November, some 48,600 people arrived in Greece. In November, 3,800 people arrived on the Greek islands from Turkey, while 2,128 asylum seekers were transferred to the mainland in the same month. The Migration Policy Ministry on Saturday dismissed rumors on Chios that there are plans for the immediate removal of some 1,000 people from the Vial hotspot. It said that removals will take place gradually.

Meanwhile, Migration Minister Yiannis Mouzalas told Germany’s Spiegel Online that he cannot guarantee that no one will die in the camps with the onset of winter. “What we can do,” he said, “is try the utmost to prevent death.” Moreover, the German newspaper Bild said that an increasing number of refugees in Greece are trying to get to other European Union countries using forged passports.

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There are multiple pieces coming out lately that prove the obvious: once mankind started gathering surpluses, hierarchies developed, and so did inequality.

Super Rich Shown To Have Grown Out Of Ancient Farming (G.)

To measure relative wealth in a society, the team worked with archaeologists studying 62 different societies in Europe, Asia and North America. Some of these were up to 10,000 years old and included digs in ancient Babylonia, Catalhoyuk (now in Turkey) and Pompeii. Researchers analysed the sizes of houses at these sites and used these as indicators of the variations of wealth that existed there at any one time. “House size gives a very good indication of wealth,” said Smith. This point was backed by Kohler. “We consider house size to be a proxy for wealth.” The figures produced by these analyses provided the team with an indication of a particular society’s wealth. The greater the diversity in house size, the greater the inequality. In turn this disparity was measured using a system based on the Gini coefficient.

“Gini coefficients range from zero for societies in which each person has exactly the same amount of wealth to a society in which a single person owns the resources of an entire society. Such a society would have a Gini coefficient of one,” Kohler said. The team found that ancient farming societies had an inequality with a coefficient of around 0.35. That is a higher level of inequality than the level that is likely to have existed in earlier millennia when humans lived as hunter gatherers and shared many resources. “However, this inequality among these, the first farmers, is an awful lot less than the inequality you find in the US today,” said Kohler. “Here we have a Gini coefficient of around 0.8 today.” In the ancient farms of the New World, inequality stayed more or less the same. However, in Eurasia it started to climb over time until it reached levels of around 0.6 a few thousand years ago. This rise coincides with the introduction of oxen and horses and their exploitation in the ploughing of fields.

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More. Monsanto. Mayhem.

India Gov. Files Suits Against Monsanto et al Over Bollworm Cotton Attack (VoI)

The Maharashtra government on Friday announced that it would file police complaints against seed companies like Monsanto, which supplied seeds of BT Cotton, the crops from which were destroyed in a large-scale bollworm attack. Maharashtra’s Revenue Minister Chandrakant Patil said on Friday more than 70% of the cotton crop in Vidarbha has been destroyed due to the bollworm attack. He added that companies like Monsanto had provided the BT Cotton seeds with the promise that they were immune to attacks by the pest. The Vasantrao Naik Shetkari Swavalamban Mission, a state government body, has estimated that the output of cotton in Maharashtra would fall to 43.10 lakh quintal as compared to 78.61 quintals in December 2016.

The opposition parties are however demanding that the Maharashtra government pay compensation to cotton farmers on the lines of the ongoing farm loan waiver extended to cultivators. The Nationalist Congress Party is demanding that the government provide a compensation of Rs 25,000 per hectare for farmers whose crop has been destroyed in the bollworm attack. NCP leader Dhananjay Munde said his party would hold protests in the cotton-growing areas of Vidarbha to force the government raise compesation to farmers. With the opposition parties likely to paralyse the state legislature during the Winter Session to be held in Nagpur from Monday, Chief Ministre Devendra Fadnavis’s government on Friday asked revenue officials to carry out panchnama of crops destroyed in the bollwork attack. “We are working on a compensation package for farmers,” Patil told reporters.

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Politics is the entertainment division of the military industrial complex.
-Frank Zappa

 

Dec 032017
 
 December 3, 2017  Posted by at 9:47 am Finance Tagged with: , , , , , , , , , ,  1 Response »
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Nicolas de Staël Paris la nuit 1954

 

Are We Too Optimistic On Global Growth? (Saxo Bank)
The Government Is Coming For Your Bitcoin (Black)
Bitcoin & Tax: The Coming Coinbase Fiasco (Mike Maloney)
Theresa May Faces New Crisis After Mass Walkout Over Social Policy (O.)
Corbyn Signals Labour Could Be Open to Second Brexit Referendum (BBG)
Theresa May Has Got To Come Clean About The Cost Of Brexit (Ind.)
The Coming Days Will Stretch The Politics Of Brexit To The Limit (RTE)
EU’s Net Starts To Close On Tax Havens (G.)
Greece, Creditors Strike Deal on the Conditions for Fresh Cash (BBG)
Islanders To Descend On Athens Over Refugee Crisis (K.)
US Pulls Out of UN’s Global Compact on Migration (AFP)
Why Did We Start Farming? (LRB)

 

 

Bits and pieces from A Saxo banks missive.

First graph: China credit impulse in the world economy plummeted 25% in Q2.

Second graph: Saxo smokes funny stuff. It says: Global trade but also non-construction investment in Western countries has been catching up with the pre-crisis long-term trend.. Well, not that I can see there.

Third graph: Stuff about inflation. Look, velocity is sinking through the floor. And Broad Money is not rising much (despite QE). Ergo: no inflation.

Are We Too Optimistic On Global Growth? (Saxo Bank)

Is economic growth on a solid footing?We have a contrarian view on global growth in 2018 and consider that the consensus is a bit too rosy. We expect lower GDP growth in the second and third quarters due to the contraction in the credit impulse in China. As mentioned by the IMF, China still represents one-third of the global growth impulse. In Q2’17, China’s credit impulse declined by 25% year-on-year, therefore reaching a new post-crisis low. Since this index leads the real economy by nine to 12 months, we expect worse data next year for China, but also for the global economy.

The global economic situation has been improving over the past years. Global trade but also non-construction investment in Western countries has been catching up with the pre-crisis long-term trend.

[..] Will inflation ever come back? Lowflation has been one of the main macroeconomic issues in recent years and it is expected to remain a thorn in the foot of central bankers for longer yet. Since September 2016, China – the main exporter of deflation – has started to export inflation along with higher global commodity prices (up 3% in October 2017 year-on-year, based on data from the World Bank), but global inflation still remains subdued. Central bankers, and particularly ECB president Mario Draghi, consider that low inflation is only a transitory phenomenon linked to hysteresis and underemployment and that job gains will eventually push inflation to target. Those elements certainly play a role in the short and medium terms but as pointed out by Benoit Coeuré, the problem is that the Phillips curve is “flatter, non-linear, mid-specified”.

We don’t expect that inflation will significantly pick up next year since, in our view, lowflation is primarily a structural phenomenon. More and more economists are agreeing with that take, including outgoing Federal Reserve chair Janet Yellen who recently confirmed that we don’t properly understand inflation dynamics. Monetarists explain low inflation by the slow rate of growth in broad money since the great recession. This might be part of the problem, but it is not completely convincing since the money stock has not been constant and has started to decrease since 1997 in the United States.

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Two pieces on the same issue: the IRS and bitcoin. First Simon Black, then Mike Maloney.

The Government Is Coming For Your Bitcoin (Black)

The same day Bitcoin cracked its all-time high above $11,000, the government dealt its first blow to the crypto world… On Wednesday, a federal judge in San Francisco ordered the popular Bitcoin exchange, Coinbase, to provide the IRS with information on over 14,000 account holders. The taxman noticed that only 800-900 people reported gains related to Bitcoin in each of the years between 2013-2015. It seemed unusual given Bitcoin’s meteoric rise. So the IRS went for its pound of flesh. Initially, the government wanted complete data on every Coinbase user that transacted between 2013 and 2015. The exchange’s website says it has 13 million users (more than the number of Schwab brokerage accounts).

But Coinbase pushed back… and the government agreed to only take limited data (including name, date of birth, address, tax ID number, transaction statements and account logs) for accounts that have bought, sold, sent or received at least $20,000 worth of Bitcoin in a given year. Don’t say I didn’t warn you about Coinbase. I told Sovereign Man: Confidential readers last month: “If you’re tempted to purchase Bitcoin from the popular Coinbase exchange, don’t bother. They’ve sold out to regulators.” The IRS is calling this a “partial win.” But you can be sure, there will be a public beheading. This is something governments almost always do. [..] Now that it’s at all-time highs, the government wants its piece.

I read the 400+ pages of the proposed tax code. How many lines in there do you think deal with cryptocurrency? ZERO. How many lines deal with e-commerce? ZERO. The government had every opportunity to set the rules for the 21st century. And they failed miserably. So the rules remain as clear as mud. Instead of trying to make it clear, their tactic is intimidation, force and coercion. This is just the beginning. There will be more. And my advice is don’t be one of those guys. Every transaction that you make in Bitcoin is potentially a taxable event.

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“And guess what they’re going to have to sell to come up with the cash [to pay the IRS]; because you can’t pay your taxes with bitcoin…

Bitcoin & Tax: The Coming Coinbase Fiasco (Mike Maloney)

Mike Maloney takes a look at a very important Bitcoin issue that could prove to be a market-mover in the new year: The IRS has realized that Bitcoin is a cash cow for them, but at the same time there is just a small percentage of Coinbase users who are filing gains or losses. What could this add up to?

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May’s problems grow fast. Her own people are starting to leave her. They fear for their own political futures. Cue Corbyn.

Theresa May Faces New Crisis After Mass Walkout Over Social Policy (O.)

Theresa May was plunged into a new crisis on Saturday night after the government’s social mobility adviser revealed he and his team were quitting, warning that the prime minister was failing in her pledge to build a “fairer Britain”. In a major blow to No 10, Alan Milburn, the former Labour cabinet minister who chairs the government’s social mobility commission, said that he and all three of his fellow commissioners were walking out – including a leading conservative, Gillian Shephard. The move will be seen as a direct challenge to May’s vow in Downing Street to place fairness and social justice at the heart of her premiership. In his resignation letter, seen by the Observer, Milburn warns that dealing with Brexit means the government “does not seem to have the necessary bandwidth to ensure the rhetoric of healing social division is matched with the reality.

“I have little hope of the current government making the progress I believe is necessary to bring about a fairer Britain,” he tells the prime minister. “It seems unable to commit to the future of the commission as an independent body or to give due priority to the social mobility challenge facing our nation.” The resignations come with the prime minister already under pressure, as she faces crunch Brexit talks and questions over the future of her most senior minister, Damian Green. Milburn says failing to deal with the inequalities that fuelled the Brexit vote would simply lead to a rise of political extremes. In a devastating assessment of the lack of progress, Milburn says: “The worst position in politics is to set out a proposition that you’re going to heal social divisions and then do nothing about it. It’s almost better never to say that you’ll do anything about it.

“It’s disappointing at least that the government hasn’t got its shoulder to the wheel in the way it should to deal with these structural issues that lead to social division and political alienation in the country. “In America for 30 years real average earnings have remained flat. Now here the chancellor is predicting that will last for 20 years. That has a consequence for people, but a political consequence as well. It means more anger, more resentment and creates a breeding ground for populism.”

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Very risky, but once he can make the costs clear, he might pull it off. He’ll need Tory defectors, though, and they won’t want to help him. But if things get bad enough with May, they may.

Corbyn Signals Labour Could Be Open to Second Brexit Referendum (BBG)

U.K. Labour Party leader Jeremy Corbyn hinted that he could be open to holding a second referendum on Brexit as the consequences of leaving the European Union become clearer. Asked if he was prepared to rule out a second vote after meeting with Portuguese Prime Minister Antonio Costa in Lisbon on Saturday, Corbyn said his party hasn’t fixed its position on the issue. “We’ve not made any decision on a second referendum,’’ Corbyn said at a European Socialist Party conference in the Portuguese capital. “What we’ve said is that we would respect the result of the first referendum.”

Britain’s main opposition party is trying to portray itself as a government-in-waiting after gaining seats in June’s general election and stripping Prime Minister Theresa May of her majority. Since going into that vote with a Brexit strategy similar to May’s Conservatives, Labour has diverged in recent months, saying it would keep open the options of remaining in the single market and customs union, both of which the premier has ruled out. “If we were in government, we would immediately legislate to guarantee British residence to all European Union nationals that live and work in Britain, and the right to bring their families to Britain as well,’’ Corbyn told reporters. “We will negotiate the issues of relations with Europe on the basis of a free-trade relationship with Europe.’’

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This is only about the divorce bill. Someone should ask about the total cost.

Theresa May Has Got To Come Clean About The Cost Of Brexit (Ind.)

We know what the Prime Minister is up to. She wants to keep quiet about the size of the exit fee she is offering to the European Union until after Monday’s lunch with Jean-Claude Juncker, the Europan Commission President, and Michel Barnier, the EU negotiator. Indeed, she does not want her own MPs to know the sum until after the European Council on 14 and 15 December, at which she hopes to secure agreement to move to the next phase of Brexit talks. Once again, the national interest is being subordinated to the higher cause of holding the Conservative Party together – the sort of thing that prompted David Cameron to get us into the mess we are now in.

It is a small consolation, therefore, that the official opposition, led on this question by Sir Keir Starmer, the Shadow Brexit Secretary, is holding the Government to account. Labour is tabling an amendment to the EU (Withdrawal) Bill on Wednesday that would require any financial settlement to be assessed by the Office for Budget Responsibility and the National Audit Office. Of course, The Independent regards the prospect of a settlement amounting to between £45bn and £55bn as reasonable in principle. The reasons Conservative Eurosceptics might find it hard to accept are obvious. One is that they ran a referendum campaign on the assumption that leaving the EU would save the British people vast sums that could be diverted to the health service or other popular causes. The divorce bill gives the opposite impression.

This impression is reinforced by the way the sum, made up of several separate items, is rolled up into one very big number. In fact, of the £45bn-£55bn, about £20bn represents the continuation of our net contributions for the two years of a transition period, in which we would continue to be an EU member in all but name (and influence). The rest, Ms May insists, is similarly money that we owe in any case as a consequence of our membership. f so, there can be no objection to its being scrutinised to confirm it – or to giving Parliament the chance to approve or reject it in a vote. As Lord Heseltine, the former Deputy Prime Minister, told The Independent, “What would a Conservative opposition do if a Labour Party proposed to spend £30bn, £40bn or £50bn without telling Parliament what it was doing with it?”

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And then there’s the Irish question.

The Coming Days Will Stretch The Politics Of Brexit To The Limit (RTE)

When it comes to the border on the island of Ireland, the coming days will stretch the politics of Brexit to the limit. “For a border community, it impacts on every aspect of everyday life. When you get up in the morning, which road do you go out on?” “In Dublin or Belfast they won’t understand.” These are the views of one resident reported in a comprehensive survey of people living along both sides of the border on how Brexit will impact their lives, economically, socially, and psychologically. The paper, Bordering on Brexit: The Views of Local Communities in the Central Border Region of Ireland/Northern Ireland, has been published by a Queen’s University research team led by Dr Katy Hayward.

“That very close, tight way that it affects everything you think about and everything you do” continues the respondent. “For example, the man who fixes my car lives in Newtownbutler, Co Fermanagh – to drive you’d go out the Cavan road into Co Fermanagh, then into Co Monaghan, then into Co Fermanagh and then you get to his house. I could do that journey in 10 or 15 minutes; what would that be like if crossing an international European border?” These parochial but very real concerns, from Derry to Dundalk, are this weekend the subject of intense international diplomacy, gripping London, Dublin, Belfast and Brussels in a seemingly irreconcilable tug of politics. Donald Tusk, the President of the European Council, has set Monday as an absolute deadline for Theresa May to tell the EU, during a working lunch with the Commission president Jean-Claude Juncker, how she intends to solve the border problem, as well as the issue of Britain’s financial settlement and the rights of EU citizens.

Whether that deadline can be met, and what happens between Monday and the summit of EU leaders on 14 and 15 December, will have untold implications for the history of Ireland and the United Kingdom. The outcome may determine whether there is a hard border, no border, or something in between. It will have ramifications for the civil war in the Conservative Party and the stand-off between Sinn Féin and the DUP in Northern Ireland. It will have implications for millions of euro in cross-border trade, for cross-border healthcare, education, energy, waterways and other daily activities whose very nature is encouraged and facilitated by the Good Friday Agreement (GFA). And it will have implications for the man in Co Cavan who gets his car fixed in Newtownbutler, Co Fermanagh.

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Just not their own., Ireland; Luxembourg; The Netherlands; Malta.

EU’s Net Starts To Close On Tax Havens (G.)

When Europe’s finance ministers sit down to a working breakfast in Brussels on Tuesday, after deciding whether to order the continental or the full English, the British delegation will be faced with an even tougher decision. Chancellor Philip Hammond and his counterparts will be asked to approve a list of those countries, island states and former colonies which the European Union has deemed to be “non-cooperative jurisdictions”. Put more plainly, the EU will be announcing a blacklist of tax havens. Coming as it does less than a month after the publication of the Paradise Papers – an investigation by the Guardian and 95 partners worldwide into a leak of 13.4 million files from two offshore service providers – the announcement is hotly anticipated. Campaigners, lobbyists and politicians on both sides of the offshore debate are on tenterhooks.

For the kind of small island economies whose GDP depends on selling secrecy and tax breaks, a blacklisting could be devastating, particularly if Brussels follows up with a series of sanctions for doing business in these countries. Speculation about who will be placed on the EU’s naughty step has reached fever pitch. The latest draft, according to reports last week, contains 20 names, down from a possible 92 at the beginning of the year. That number could be further whittled down – the horse-trading is continuing up to the wire. So fierce is the debate that some believe publication might be postponed. “The finance ministers of the member states must not let political considerations cloud their judgment when agreeing their final list next week,” says the influential tax reform campaigner and German MEP Sven Giegold.

One of the big questions is how many, if any, members of the UK’s sprawling offshore network will be named. Any decision taken by ministers on Tuesday will have to be unanimous. Britain may be exiting Europe, but it retains its veto until 2019 and Theresa May’s government has been pulling every lever to protect its dependencies. Whitehall sources have confirmed that those Caribbean territories which suffered the most damage during this year’s devastating hurricanes will be given extra time to get their house in order. It has been reported that seven jurisdictions, not all of them British, have been given a temporary reprieve in order to recover from the damage. This is likely to mean the British Virgin Islands, Montserrat and the Turks & Caicos Islands – all of which are UK territories that took a battering from hurricanes Harvey, Irma and Maria – are safe for now.

[..] In a recent report, Blacklist or Whitewash?, Oxfam applied the criteria the EU is using to draw up the blacklist to 92 countries screened by the union and its 28 member states. The criteria exclude EU member states, but if they did not, Oxfam concluded that four countries should be blacklisted: Ireland; Luxembourg; The Netherlands; Malta. It also concluded that 35 non-EU states should be on the list: Albania; Anguilla; Antigua and Barbuda; Aruba; Bahamas; Bahrain; Bermuda; Bosnia and Herzegovina; British Virgin Islands; Cook Islands; Cayman Islands; Curaçao; Faroe Islands; Macedonia; Gibraltar; Greenland; Guam; Hong Kong; Jersey; Marshall Islands; Mauritius; Montenegro; Nauru; New Caledonia; Niue; Oman; Palau; Serbia; Singapore; Switzerland; Taiwan; Trinidad and Tobago; UAE; US Virgin Islands; Vanuatu.

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Drip drip drip bloodletting.

Greece, Creditors Strike Deal on the Conditions for Fresh Cash (BBG)

Greece and its international creditors agreed on a set of economic overhauls the country must undertake in exchange for fresh loans, paving the way for a payment that will help it build a cash buffer as it seeks to prepare for its bailout exit. The so-called staff level agreement came after a week of talks in Athens saw the two sides reach common ground on politically sensitive issues such as reforms in the energy sector, public administration, the financial system, social-cohesion programs and fiscal performance among others. “We reached the staff-level agreement” Finance Minister Euclid Tsakalotos said after the last meeting with creditor’s representatives in Athens. Greece is going to implement as soon as possible all the measures needed in order to get fresh bailout money, he added.

After January’s Eurogroup, Tsakalotos expects that discussions will start for further debt relief, the fourth bailout review that is expected to conclude in May or June, and for exiting the crisis. The deal marks the completion of a key step in the negotiations between Athens and the auditors of its aid program – representing euro-area governments and the IMF – as the country is starting to prepare for its post-bailout life. A successful conclusion of the current review will not only entail the release of fresh loans but it will also help Greece regain the trust of investors, as it plans to tap financial markets again. The continent’s most indebted state was the first euro-area nation to seek a lifeline from its peers in 2010 and the only one still reliant on such concessional loans to stay afloat. Additional bond sales are a crucial step in the efforts to build up a post-program cash cushion and ensure it can stand on its own feet without external help. “Looking ahead, our baseline remains that Greece will achieve a clean exit from the bailout program when it ends next summer,” Wolfango Piccoli, co-president of Teneo Intelligence said in a note to clients.

“To this aim, Greece would need to build a buffer of around 12-15 billion euros ahead of its exit from the program.” Still, the Greek government will first have to implement a long list of around 100 overhauls before it can receive any fresh disbursements and formally conclude the ongoing audit of its bailout. Some measures will be voted in December while an omnibus bill to implement the remaining prior actions must be voted in parliament before Jan. 11. Once Greece has undertaken the agreed reforms, euro-area finance ministry deputies can examine whether Athens has fully complied with the conditions attached to its bailout at a meeting on Jan. 11 and green-light the disbursement of fresh loans, which could take place by mid-February, an EU official said on Dec. 1.

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Athens will end up bringing thousands to the mainland. And housing many in deplorable conditions.

Islanders To Descend On Athens Over Refugee Crisis (K.)

Protesters will converge outside the Immigration Policy Ministry on Tuesday to demand immediate relief for the eastern Aegean islands of Samos, Lesvos and Chios, where facilities for migrants and refugees are overflowing with thousands of stranded asylum seekers. The rally is being organized by the municipalities of the three islands and aims to publicize the plight of asylum seekers who have been trapped there for more than a year, testing local communities. “We have decided to protest and to demand again the immediate decongestion of our islands, so that the government reacts to the problem,” a joint statement by the municipalities read. To this end, Samos Mayor Michalis Angelopoulos is in contact with islander associations in Athens to get their support.

Currently the islands of the Aegean are home to a total of 15,486 refugees and migrants, of whom 6,520 are at Lesvos’s Moria hotspot, which was designed to hold 2,300 people. Similarly, on Samos there are 2,083 people sheltered at the center near Vathi which has a capacity of just 700, as does the Vial facility on Chios, which is currently sheltering 2,377 people. With winter arriving, hundreds of people – half of whom are children – at the Lesvos and Chios hotspots are still living in summer tents and exposed to the elements, without access to basic hygiene facilities.

Reports said that work to place prefabricated huts next to the Vial hotspot to help ease the crowded conditions at the center and to make improvements to existing facilities was put on hold on Friday by a local court, pending a January 16 trial which will examine a lawsuit filed by the Chios Municipality against the Immigration Policy Ministry over its decision to house migrants and refugees at that specific hotspot. Meanwhile, in a government bid to relieve some of the pressure on the islands, 500 people were transferred in the last two days alone from the islands to the Greek mainland. Nonetheless, 50 more people arrived on the islands’ shores from Turkey on Friday.

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Given what we see of refugee conditions globally, that Compact doesn’t seem to amount to much.

US Pulls Out of UN’s Global Compact on Migration (AFP)

The administration of President Donald Trump has withdrawn the United States from a United Nations pact to improve the handling of migrant and refugee situations, deeming it “inconsistent” with its policies, the US mission to the global body announced Saturday. “Today, the US Mission to the United Nations informed the UN Secretary-General that the United States is ending its participation in the Global Compact on Migration,” the Americans said in a statement. In September 2016, the 193 members of the UN General Assembly unanimously adopted a non-binding political declaration, the New York Declaration for Refugees and Migrants, pledging to uphold the rights of refugees, help them resettle and ensure they have access to education and jobs.

“The New York Declaration contains numerous provisions that are inconsistent with US immigration and refugee policies and the Trump Administration’s immigration principles. As a result, President Trump determined that the United States would end its participation in the Compact process that aims to reach international consensus at the UN in 2018,” the US statement said. US Ambassador Nikki Haley said the country would continue its “generosity” in supporting migrants and refugees around the world, but that “our decisions on immigration policies must always be made by Americans and Americans alone.” “We will decide how best to control our borders and who will be allowed to enter our country. The global approach in the New York Declaration is simply not compatible with US sovereignty.”

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Great discussion. Many false assumptions. Farming was not exactly a health booster.

Why Did We Start Farming? (LRB)

Fire changed humans as well as the world. Eating cooked food transformed our bodies; we developed a much shorter digestive tract, meaning that more metabolic energy was available to grow our brains. At the same time, Homo sapiens became domesticated by its dependence on fire for warmth, protection and fuel. If this was the start of human progress towards ‘civilisation’, then – according to the conventional narrative – the next step was the invention of agriculture around ten thousand years ago. Farming, it is said, saved us from a dreary nomadic Stone Age hunter-gatherer existence by allowing us to settle down, build towns and develop the city-states that were the centres of early civilisations. People flocked to them for the security, leisure and economic opportunities gained from living within thick city walls.

The story continues with the collapse of the city-states and barbarian insurgency, plunging civilised worlds – ancient Mesopotamia, China, Mesoamerica – into their dark ages. Thus civilisations rise and fall. Or so we are told. The perfectly formed city-state is the ideal, deeply ingrained in the Western psyche, on which our notion of the nation-state is founded, ultimately inspiring Donald Trump’s notion of a ‘city’ wall to keep out the barbarian Mexican horde, and Brexiters’ desire to ‘take back control’ from insurgent European bureaucrats. But what if the conventional narrative is entirely wrong? What if ancient ruins testify to an aberration in the normal state of human affairs rather than a glorious and ancient past to whose achievements we should once again aspire?

What if the origin of farming wasn’t a moment of liberation but of entrapment? Scott offers an alternative to the conventional narrative that is altogether more fascinating, not least in the way it omits any self-congratulation about human achievement. His account of the deep past doesn’t purport to be definitive, but it is surely more accurate than the one we’re used to, and it implicitly exposes the flaws in contemporary political ideas that ultimately rest on a narrative of human progress and on the ideal of the city/nation-state.

[..] But why did it take so long – about four thousand years – for the city-states to appear? The reason is probably the disease, pestilence and economic fragility of those Neolithic villages. How did they survive and grow at all? Well, although farming would have significantly increased mortality rates in both infants and adults, sedentism would have increased fertility. Mobile hunter-gatherers were effectively limited by the demands of travel to having one child every four years. An increase in fertility that just about outpaced the increase in mortality would account for the slow, steady increase in population in the villages. By 3500 BCE the economic and demographic conditions were in place for a power-grab by would-be leaders.

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Feb 272017
 
 February 27, 2017  Posted by at 2:04 pm Finance Tagged with: , , , , , , , , ,  21 Responses »
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Bruce Davidson Iran 1964

 

Let’s see. On February 18, I wrote an essay called “Not Nearly Enough Growth To Keep Growing”, in which I said “..the Automatic Earth has said for many years that the peak of our wealth was sometime in the 1970’s or even late 1960’s”.

That provoked a wonderfully written reaction from long-time Automatic Earth reader Ken Latta, which I published on February 23 as “When Was America’s Peak Wealth?”. Ken put peak wealth sometime in the late ’50s to early 60’s. As I said then, I really liked his definition of ‘wealth’ as being “best measured by the capacity to be utterly wasteful”. The article spawned a series of nice comments, for some reason largely by people in his age bracket (Ken’s 73).

Which is nice, but it poses as many questions as it provides answers. Like: why does the Automatic Earth have so many ‘older’ readers? Should that be a reason for worry? And also: why don’t the young react in equal numbers? Don’t younger Americans have as many ideas as the generation(s) before them about when America’s peak wealth might have occurred?

Must one have been an eye-witness to the decline to know that it happened? Do only old farts ponder these things? Are there lessons to be learned, be they personal or history-wide? Interesting, all of it, if you ask me. Do younger people not acknowledge that peak wealth is behind us, and perhaps occurred before they were even born? Me, I like history lessons, and Ken’s for sure.

Tomorrow, I’ll have another take on all this written by Charles A. Hall, Emeritus Professor at State University of New York College of Environmental Science and Forestry, Syracuse. Charlie thinks neither Ken nor myself have given nearly enough attention to the role energy plays in wealth, and the peak thereof.

But first, here’s Ken Latta’s response to the comments on his article.

 

 

Ken Latta: The responses to my article on peak wealth were so thought-provoking that a follow-up article seemed appropriate. You can’t cover the history of the world in one blog post and I appreciate the additional ideas from the commentariat.

John Day: I remember 1969 as better than 1970. That first moon landing was a real high point for all of us. Everybody thought 1971 sucked. Things were different after November 1963. LBJ was a “sonofabitch”, as he put it. It’s hard to nail a year down, but after we lost our president, things were never the same.

John Day: Reminded us of a substantial breaking point the assassination of John Kennedy represented to the flow of history. But, history has its own problems. The finer details are oh so often swamped by a popular narrative. JFK was way more beloved dead than alive. Like Trump he could draw big crowds, but he very narrowly beat Nixon. Detractors favored referring to him as weak on foreign affairs.

I clearly recall were I was when the news came in about him being shot in Dallas. I was hanging out with some of my squadron mates in our team office when our Captain came by to inform us. He was African-American and clearly disturbed by it. It was much less concerning to the enlisted ranks. He had not been popular with most of us. It was a divided nation even then. I think his mourners should not forget that JFK presided over the early stages of the Viet-Nam adventure. With Green Berets and meddling in the South Viet-Nam government’s affairs, as is our custom.

It was just another case of his bad luck really. The American War on Viet-Nam could have happened to Eisenhower. My older brother was staged in a Korean Port waiting for orders to board a troop ship for transport to what was then still usually known as French Indo-China to support the French Army in their losing battle against the Viet Minh. But, Ike was a fairly sensible man and called it off.

 

 

V. Arnold: Wow, great thread. I’m 72 and was there also; I remember it pretty much as you tell it. I’d agree with your time-line also as to when peak wealth occurred. The beginning of the downturn was very late in the 50’s/early 60’s with our war in Vietnam and then; Nixon going off the gold standard. That allowed the next chapter of crony capitalism.

I attribute an accelerating deterioration to Friedman and his Chicago School of Economics and the age of the neo-liberal. Don’t forget Reagan; I felt the effects of his union busting first hand with stagnant wages until I retired over seas in 2007. I hope to read more of your writings from time to time. Cheers.

V. Arnold: Wrote very derogatory words about Uncle Miltie Friedman and the Chicago School of Terror. For that I salute him or her. Hell is too good for Milton and his apostles.

Forget Reagan? Not as long as I live. I also remember where I was when he was declared the next president. Sitting in the nicest bar in the little mountain town of Boulder Creek, Ca, nursing a drink. The bar was crowded and broke into loud celebration at the news. All I could think of was how f**king doomed we were. How I wish I had been wrong.

 

 

Hotrod: Thank you for your thought provoking article. I sometimes look at the health of the surviving car companies after WWII as a bellwether to the shape of the economy. Hudson, Nash, Studebaker, Packard all were struggling mightily by the mid 50’s. For the farming community the peak was about 1952. After the post war demand had been met, and greatly exceeded, farming declined into a real recession during the middle and late 50’s and never was quite the same.

Since then, machinery and technology, mostly purchased on credit, has kept production up and prices down for farmers, typically at or below the cost of production. Many of these labor saving and production enhancing tools stand unused, but are still being paid for. The only exception to this situation is massive drought, or massive flooding which can temporarily insert profitability to those not affected.

Hotrod: Reminisced on the tribulations of many car makers [Hudson, Nash, Studebaker, Packard], some of them long established, in the early 1950’s. I remember that too. I think a substantial part of their problems probably stemmed from not having enough dealerships. People were traveling more and wanted reassurance that a dealer with parts and experienced mechanics would be available in the next town. I think it actually surprising that those companies lasted as long as they did. Actually Nash and I think it was Packard merged to become American Motors and lasted another three decades.

He (my assumption) also mentioned farming and its trials. Farming is not the easy route to riches. The compensation has always been that if you hadn’t pledged your feal to the Lord of a Manor or signed up to be a share cropper, you were your own boss.

The late 40’s thru early 50’s were pretty good on our farm. When I was a little tike, we had an already ancient Macormick-Deering 10-20 tractor and a team of draught horses. My eldest brother having been told of his tour of northern and central Europe under the guidance of a man named Patton, wrote to dad asking him to take the money he had been sending home and buy a new tractor. All dad could find at a local dealer was a Minneapolis-Moline as they were about the only company allowed to build tractors during the war.

Many of them were shipped to England to help the British increase their food production. That was the only brand new tractor our family has ever owned right up to this day. My nephew still has it, but it’s in bits and pieces now. By around 1950 we were fully mechanised. Shortly after dad died in 1959, my brother rented out the land got himself a factory job. The prices of equipment steadily increased. The value of crops did not.

Crop prices did increase substantially about a decade ago, but not nearly enough to pay for new equipment unless you operated a very large farm. And more recently crops have declined in value again. I think a lot of farmers are in trouble.

 

 

Patricia: I am worried. Everybody who comments here is in their 70s as I am. Is that because we have more time to reflect and write down our thoughts or is it because the youth of today aren’t interested in anything except Facebook? If that is the case then I am so glad I am at the end of my life but what about my darling grandchildren.

Patricia: Expressed concern over whether the prevalence here of geezers was due to us having too much time on our hands or the youth having no time for anything except Facebook. Based on my own family, I can say that their devotion to Facebook is tempered by addiction to gaming. I mean video not casino. I think we can say that Patricia is right on both counts.

I too feel a certain gratitude for having been born during the war years with the expectation that I may be expired before the ordure collides with the air circulator. We oldies do have a psychological quandary with regard to our descendants. Knowing as we do that it’s coming. I too have grandchildren and a great grandchild. I desperately wanted to make them aware and try to offer some guidance.

What I learned was that they are at least vaguely aware of the looming threats and don’t want to hear more about it. They know there isn’t really much they can do about it. I think they believe that when it happens they will just do what they can to deal with it. All things considered (apologies to the Canadian Broadcasting Corporation, I wonder if that program is still on) that is probably about the best attitude any of us can have.

What bothers me most about our youth is what they don’t seem to know. I’m talking about the kinds of knowledge that will likely be very useful when things get stinky. Larding debt onto the kids so they could go to college and learn computer science, physics, art history and how to be a social justice warrior was probably to their detriment.

I don’t exactly know what would be absolutely best for them to know, but I’m pretty sure it isn’t those kinds of things. I tend to believe that it will be good to know, as examples, how to shoot, how to fish, how to tell the difference between weeds and food, how to loosen rusted bolts and how to turn hemp into rope in addition to dope.