edward long

Association of Old Crows

This conversation is closed.

The Dow is steadily improving while the national quality of life is consistently worsening.

Barack Hussein Obama's first term is over. The numbers are: 1) National Debt up 54.7%. 2) Unemployment up 0.7%. 3) Poverty up 6%. 4) Approval rating down 18%. 5) Dow Jones Industrial Average up 72%!! Explain this disconnect between America's vital signs.

Closing Statement from edward long

25 contributors offered these points to ponder
~ we need new goals
~distribution of wealth is broken
~it's a bubble and it's going to burst soon
~statistics are inherently deceptive
~we are printing too much unbacked money
~the government is spending too much
~It's Barack Hussein Obama's fault
~5 folks said there is no more connection between Wall Street and Main Street
~we are loading debt onto future generations
~small investor confidence is at all time low
~younger folks American dream includes tech toys but no home ownership
~money can't but happiness
~the top secret TPP is to blame
~Big Pharma is parasitic
~the Military is a budget buster
~ It's NAFTA's fault
~we are living in the New World Order
~Deflation Depression
~Exessive China trade for shoddy merchandise
~Free Trade is good
~US corporate tax is world's highest
~the Landlord Bubble
~youth becoming deluded narcissists
~middle class being strangled by inflation
~the Media is way off target
~poor getting poorer is new phenomenon
~US is too big to fail
~need term limits for Representatives
~need to repeal the 17th Amendment
~need to revise the 16th Amendment
~need to reduce Cabinet positions to seven
~need to go Isolationist
~stop paying Dictators for permission to feed their starving masses
~we have a Placebo Democracy
~all profit comes from someone's pocket
~leaders are corrupt
~Government creates no wealth
~copyright laws benefit the elite only
~people are the whole problem
~Quantitave Easing
~Debt=Money
~all should read "The Creature From Jeckyl Island"
~only Economists can understand
~we elect politicians rather than people
~Debt and the Dow are proportional
~debt can be invested
~unemployment and wages are inversely proportional
~poverty causes wage reduction
~low wages stimulate profit and productivity
What was not mentioned, surprisingly to me, was if the DJIA got Barack Hussein Obama re-elected
Have a look at the 9 links in the post
Conclusion?. . . Wall Street and Main Street are independent!!

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    Jan 27 2013: I am not a supporter of Barack Obama, but the fact that you managed to include his middle name and misspell his first name reveals your political bias. With a 100+ TEDcred one would expect a person to be able to spell the first name of his/her president.
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      Jan 28 2013: Thank you for the correction of the first name of the POTUS. I am astonished that I have been misspelling it for these long four years. Is using his middle name an insult to him, his heritage, his supporters, or the people of the United States? I don't see how that could be unless there is some prevailing anti-Islamic sentiment. I do not consider the name to be anything to be ashamed of. You are proud of the name Faisel are you not? I will try to find a copy of his birth certificate to confirm the spelling, but I trust you are correct. By the way do you equate a 100+ TED Cred score with good spelling? Check some of the conversations and you will abandon that belief. Thanks again for your tutorial. Do you have anything on-topic to add Faisal?
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        Jan 28 2013: You're welcome Mr Ling.

        I don't see the inclusion of his middle name as an insult per se. But when it is deliberately included, whilst misspelling his first name; completely ignoring the impact of his predecessor; and ignoring the political climate in which he is forced to operate - the subtext becomes apparent.

        Again I'm not a supporter of Obama, but George Herbert Walker Bush didn't have to operate with a congress, where the majority saw it as their prime goal to obstruct all his policies to prevent him from being re-elected.

        I'm not attacking your ability to spell. What I am saying is that you are perfectly capable of spelling the name of your president. And you don't need a birth certificate for that. If you're in doubt you can use this website: www.google.com
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          Jan 28 2013: Again, Mr. Butt, thanks for the correctiive counsel you have given me. I assure you I did not intentionally misspell the POTUS's name for the last 4 years. Are you sure you are not an Obama supporter? Because you demonstrate heroic passion in defending him from imagined offenses. You do remember saying, "I am not a supporter of Barack Obama. . . " don't you? I hope you agree that ad hominem argument adds nothing to furthering understanding of the issue addressed by this post. Again, what do you think is the cause and/or significance of the conflicting statistics pointed out in this post? Thanks for the link, but I totally prefer Bing. For the record my surname is Long, not Ling. Be well sir!
        • Jan 28 2013: A fine retort Mr. Butt!
  • Jan 27 2013: We elect politicians instead of people.
  • Jan 25 2013: We are under the new system of quasi-constitutional democracy, but actually quite similar to the socialism of the past centuries. We all know that the solcialism failed because it takes out the incentive to enterprenuership; working hard and reaping the reward. The societal structure in the present system consists of 3 "classes". The upper class is the CEOs of multinational large corporations and a few Wall Street financiers. They keep the high profit mostly to themselves and even avoid paying taxes by keeping the profits off shore. So even the so-called "fair taxes" could hardly harm them. The second group contains the government bureaucrats who pay less taxes and have more pension and benefits than the rest of us.. Interestingly, the group also contains those who are on welfare, because they got paid without working for it and they don't pay tax on their "income" either. The last group are all the rest of us, especially the ordinary working class and the retirees. through the recent 4+ years, we had a negative increment in income when adjusted for inflation. For the retirees, their returns on income have been shrunk and yet subjected to higher taxes in state and local taxes as well as the price inflation in food, utilities ,fuel and medical expenses. We should also include our future generations into this group by the burden of rampant government deficit and debt in the future.
    Now it needs no rocket science to figure out what caused the situation you mentioned in your proposal. First, the stock market was up because the first group was doing well they can keep the major portion of business profits and have the money to lobby for their advantages from the government. Only a little scraps of the profits are distributed to the shareholders. However, the prosperity in the large corporations does not apply to small businesses which belong to the 3rd group. Because they can't avoid the taxes and regulations. That's why we have high unemployment and poverty.
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      Jan 25 2013: You shoot from the hip Mr. Hsi. If everything you say is true is there a way back? Please don't say a people's revolution. I'm too old for that. Thanks for the viewpoint!
      • Jan 26 2013: In my opinion, we are not going to have a "revolution" in the ordinary sense, but we will have a voters' revolt (the voters are not really satisfied with the present leaders according to the opinion ratings of the current Congress and the President) to choose some new leaders to lead us out of the crisis of rampant deficit and explosive national debt either before or after the default or bankruptcy by the U. S. government. However, the historical examples. including the present situation in the EURO ZONE, are quite poignant that they may suffer severe and long recession en route to recovery. Some like Brazil or Finland, they recovered after national default, some have never recovered such as Argentina. Of course, there have never been a national default by an economic superpower like the U.S,, But we haven't seen any drastic effects from the previous default by a few countries either. So that is an unknown and unpredictable event.
        Four years ago, there was only our Federal Reserve had Quantitative Easing by printing or creating credits to finance the government spending. Nowadays almost all the developed countries in the world are imitating us by means of QE. This GLOBAL MONETARY INFLATION will eventually come ashore to bite us in the form of buying up our real assets. This has already begun. For example, the Chinese are buying Canadian energy assets, then the Canadians are buying U. S. banks or investing in oil pipelines here. So the US$ are coming back and eventually will cause price inflation. We simply can't hope that the currency printing will always flow out and be kept by the foreigners forever. The stock market boom is also partially supported by such buying-up-assets-with-US$ too.
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          Jan 26 2013: It sure makes sense that the voters would be the way out of this mess since they (we) are the ones who elected the jackasses who got us into this train wreck. The more common way out of a fiscal crisis, historically, is to start a major war. So our future most likely holds some conbination of voter revolt, war, and/or debilitating inflation. God Bless America!
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    Jan 24 2013: Hi Ed,
    The system we used to have, I remember it well.
    I remember when it changed. At the dawning of the age of Aquarius. "Make love, not war!" " Peace" And the noble causes, "The mentally ill have rights, free them from those draconian asylums." " War on poverty," War on Drugs". there were kids, puppies, the sick, the lame, the lazy. Now, Don't miss understand me. These causes are not inherently bad, they are noble, they show compassion, spirituality, the best of mankind.
    BUT
    No good deed goes unpunished.
    The first thing was that there was no organization that could tackle these causes except the Federal Government
    and the federal government stood up and accepted the responsibility, disregarding the 10th amendment, and the people cheered. What everybody forgot or ignored is that government generates no wealth. Government only has capital that was taken from the people. Now our economic system is capitalism. And in this time, capitalism was spreading world wide broadening the base of activity. Further, the system is dynamic, with ebbs and flows and it is uncaring, you misstep and it will take all your capital. So, when capital was at its peak in the US, it generated capital for the people and for the government and the noble causes where addressed. Not that well, but that is cause for another conversation. But capital flowed away from the US, and the government had to adjust to lesser revenues, so it borrowed monies to sustain the noble causes, then the flow returned and the government took on more noble causes. ( I am beginning to think there are more noble causes then people)
    Then again the flow reversed and the government was short again...
    The dilemma.
    The government could borrow more, if they can find more
    They could abandon some noble causes, not nice
    They could take more capital out of the system, effecting the ebb and flow
    They could fake it and hope they don't get caught.
    Yes, a deserted island in the Pacific does looks good....
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      Jan 24 2013: Now there's a bedtime story for my Grandkids! It will be called "Then Came the Sixties.". Are the wheels just loose or have they come off completely? If we are sinking why haven't the rats left? From the cradle of civilization Man has spread to cover the Earth looking for a better life with more freedom. All the real estate has been claimed and there are no places to run to (on this planet anyway). Now we have to stay put and face our problems. Let's free ourselves from the bonds of apathy and ignorance. Let's blow the lid off the whole Emperor's new clothes deal. Let's get informed and involved. Let's vote and campaign, and hold elected officials accountable. Let's use the powerful genius of the Constitution to restore dignity, equity and fairness to America and Australia!
  • Jan 24 2013: This discussion, while needed and good, to me is much like politics. We look for answers through conversation, correlation, and collaboration. To me talking politics and maybe what this discussion is like; is to take the finest freshest most crisp vegetables and the best cuts of meats and preparing them for a fine stew. We take great care in our preparation the pieces are cut to the right size our seasonings are exacting to our tastes, the heat is perfect and our timing impeccable. I think the main problem is that no one has taken the time to properly clean the pot.

    We give billions to big pharma because (they say) it takes billions to bring new and promising drugs to market but their profits are bigger than the money we give them . They will sell their product to other countries cheaper than they will sell it to the people who gave them the money to develop it. And when we cross the border of our nearest and dearest neighbor to by it cheaper they say it may be tainted and want laws to discourage it.

    While this is only one example there are many contradictory examples to be found.
    I don't pretend to know the answers but I will say this.
    I embrace the greatest experiment of human kind. The constitution of the United States. To empower the people to decide their own fate. While our constitution has been found to be flawed and certainly circumvented it is still a great triumph over the forms that came before. We have never been a true democracy because we have a constitution. That is to say just because the majority votes for something it still needs to fall under the parameters of that constitution.
    We all want see a better and more just world. But without involvement in mass we will fall short almost certainly.
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      Jan 24 2013: Big pharma is sure being mentioned a lot in this debate. The "dirty pot" you mention is a metaphor for what?
      • Jan 24 2013: while our good and noble causes are very informative well intended. The corruption and misuse in the foundation of the system must be addressed first.
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          Jan 24 2013: Aha! Corrupt, self-serving politicians in the Juducial, the Legislative, and the Executive branches of government. A drop of good wine in a cask of sewage is no worse than a drop of sewage in a cask of good wine. We must clean everything or lose it all! Brilliant, Pat, brilliant. Let's do it! In 2014 we elect some new Senators and Representatives.
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      Jan 25 2013: There has been much said about the economic and political problems we face here in the USA and I bow to no one for respect for our constitution.
      So, Let's get this right. The USA is not a democracy. We are a constitutional republic. The federal governance was supposed to be for the 13 now 50 states. States have elected to use a populous vote to select the representatives and had appointed senators to represent them. The worry then was that a strong central government would become to much like a monarchy. So no titles, in Washington.
      So, every couple of years, we go through an election, no 50 elections, all on the same night.
      Now most of the first timers are noble people that want to represent their constituents. But something happens in Washington. After a few years they come back and not for elections but for coronation.
      I mean, have you ever met a four term congressman? They hold out their hand so you could kiss their ring. Unless you're a big contributor. Yes, we need to vote out the incumbents every election until there is an amendment to term limits. Then we need to void the 17th and bring the states back into the fold.
      The alternative is that the imperial city states of New York and LA will corrupt DC and subsequently divide this nation along the Mississippi. Sound like a wild rant? It is. But we need to do something bring the degradation of the constitution to an end.
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    Jan 24 2013: G'day Edward

    All I can say is we live in a placebo democracy these days, what is so democratic in having such a high volume of poverty-stricken & unprivileged people in high developed countries like the US & Australia? The wealth of the land certainly isn’t being democratically distributed evenly among the people of such well-off countries it’s being swallowed up by multinational dictators & they do dictate.

    These multinational dictators just don’t dictate what’s going to happen in a particular country but the world. Take a look at the history of the bond market & see how just through the bond market multinationals have been able to dictate events to their own benefit of course in the world & this is only one area multinational dictators affect us look at the energy magnates how they dictate.

    We live in a dictatorship & we don’t even know it, bring back true democracy & you will find that the unfair fluctuations we are having will just disappear.

    Love
    Mathew
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      Jan 24 2013: Everything you say rings true but I cannot believe we are truly post-democracy dictatorships. I'm hoping against all odds that it is not too late for people to wake-up and smell the effete demagogues who are fattening themselves at the trough while we ignorant, apathetic people who put them there wait for a scrap to be thrown our way. You Aussies revolt and we Yanks will watch. If it works for you we will stand up and shout "We're not gonna take it anymore!"
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        Jan 24 2013: I have to agree. Usually in the post democracy dictatorship, the government has taken control of the economy.
        I see economies have gone global. Right now, in the states, basic manufacturing has gone, leaving a void, leaving a vast untapped manpower resource available. Currently, there is confusion and loss of focus. However, there is an ace in the hole. Vast new gas supplies should provide a very inexpensive energy resource. Right now we are limping along on information and service industries. I foresee a new infusion of capital as profits fall in other parts of the world and as profits fell here in the past, they will fall elsewhere. It is said that Mother Nature demands a balance across the globe.
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        Jan 24 2013: G’day Edwars

        Could you imagine if us Aussies did revolt, I think the yanks would leave us to the dogs at our gates even though we have been quite supportive of the US. Probably China would take over where the US left off, hmmmmmm!!!!!!

        I don’t think it’s ever too late until the game is over or until the fat lady sings Edward, true democracy isn’t dead it’s just taken a wrong turn & we can only hope that the big boys wake up in time to this error of judgment. Greed is a very ugly, corruptive destructive obsession which could bring any true democracy down to its knees & maybe that’s what there trying to do which may be a part of this new world order.

        True democracy was about being heard through an elected spokesman in a democratically held forum; now look at these spokesmen who are supposed to be our voice, there more like lords.

        Love
        Mathew
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          Jan 24 2013: Is it the big boys who need to wake-up, or are we plebians the ones who have fallen into some kind of stupor? Hold-off on the revolt for now.
  • Comment deleted

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      Jan 21 2013: Which figures do you see as untruthful? The Dow, or the first term stats?
  • Jan 28 2013: I believe, there is a relationship. Part of the debt is being invested in the market, for that reason both indicators are up. High unemployment and poverty is also positive (for the market), because it results in cheaper labor, which increase profits and productivity, look at the record numbers of returns in Emerging markets.
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      Jan 28 2013: 1) Debt can be invested. 2) Debt and the Dow are directly proportional. 3) Elevated unemployment causes lower wages. 4) Poverty causes lower wages. 5) Lower wages stimulate profit and productivity. 6) Emerging economies support these five observations. Hmmm. That would explain the disconnect between vital signs. Thanks!
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    Jan 28 2013: We are wrapping-up this debate. But I think this excerpt from Zerohedge.com is helpful:
    "What would things look like if the Fed wasn't engaged in Monetary Malpractice?
    Interest rates would be higher,
    People would save more and spend less,
    Government would spend within its means,
    People would spend within their means,
    There would be decreased consumption,
    People would invest more,
    Stock values would track company value and efficiency more closely,
    Government would shrink,
    America would produce and manufacture more,
    Trade deficits would shrink,
    The economy would recover and become healthy."
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    Jan 27 2013: Hey Edward..important pint and true globally..through this time of global crisis when more and more people are worse off as the folk who brought us to collapse prosper the Dow will hit a record high tomorrow)..

    What that means is that the GDP of all nations is no longer connected up to creating jobs, building infrastructure, preserving the planet, creating housing opportunity, growing high quality food. We falsely feel secure when the dow hits new highs, housing starts rise, unemployment rates creep down a bit..

    We are not paying attention to the thrieavbility of our economy.

    We need new goals
    .
    New conversations about our economy that are more focused on equal opportunity and the distribution of wealth

    New performance measures..a high dow does not translate to public good..to common good.
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      Jan 27 2013: Finally, a Plutonomist chimes in! 14,000 for the Dow tomorrow huh? Thanks for two more eye-opening economics formulas: 1). The GDP is not directly proportional to Job Creation, 2). A high DJIA does not equal Greater Public Good. I have always thought a robust stock market meant Happy Days for the hoi polloi. If that is not true you are right about needing new goals. Clearly you agree there is no intersection between Wall Street and Main Street. So your advice is forget the Dow and focus on equal opportunity in the distribution of wealth? Sounds logical. Thanks!
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    Jan 26 2013: @ Frank G--
    I received an email saying you posted to this debate but I do not see it. Try gain.
    Edward Long
  • Jan 25 2013: I think The New World Order is not here to benifit we the people of any nation.
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      Jan 25 2013: Now there's a thought. . . . . we are living in the New World Order. Thanks for the thought Mr. Lenz.
  • Jan 25 2013: The DOW has been inflated like a ballon with massive amounts of money (i.e. debt). $1.5+ tillion from the FED in the way of treasury bonds, $5+ trillion of US debt from the Federal in US treasury bonds, $1+ trillion in Dept of Education backed Student loans, plus the entire housing "recovery" financed by the government entites like (FNMA, Freddie Mac, FHA, etc.) The ballon will soon pop.

    Check out Elliot Wave International at http://elliottwave.com/ for insights into how social mood drives markets and a discussion of the Deflation Depression we have been in since 2001.
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      Jan 25 2013: The jargon of Economics makes little sense to me. For example-- we have been experiencing Deflation since 2001 which would make me think the balloon is stretching less and less and the danger of bursting is diminishing. Another example-- Debt = Money ?? I don't get it but thanks for the exposure!
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        Jan 26 2013: I don't think it is designed to make sense to one not taught it. I have no formal eduction but I gather misuse of a valuable tool by those able to do so is to blame for such non-economy and that governmental growth and coporate growth are proportionate with certain market bubbles a bursting bubble is like, OOP all the stockholders of an entire sector chose to sell which puts those who catch it "right" more the richer and at advantage to ride a new bubble. Deflation at this point would make the populace more dependent and less able to perform. I cant find the sense in it other than a systemic complacency and negligence of the elected. How does a loaf of bread cost 2000% more to buy but the work to create that same loaf has decreased by maybe not 2000% but is considerately less than a century ago. How do luxeries become entitlements in a sensable nation without surplus and promise for future generations taken in consideration first? An indebted future is the antithesis of economy. Nice question. I wonder what the Dow with conditions you cite truely indicates about us as a People. Thanks
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          Jan 26 2013: QUOTE: "I place economy among the first and most important virtues, and public debt as the greatest of dangers. . . We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy."-- Thomas Jefferson. I am not trained in Economics but that makes perfect sense to me. I believe our founding leaders had it right. Too bad we pay no attention to them, or to the Constitution, today. Thank you for you observations!
      • Jan 26 2013: Debt equals money in the sense that money is not backed by gold or any precious substance. Money is now created and backed by your mortgage your car and any other thing you finance. In other words it is backed by your promise to pay back the amount you financed. I know this is an over simplified example but it's the quick answer. If you would like to understand it better a very good start would be a book called "The creature from Jeckle island" Warning it may boggle the mind.
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          Jan 26 2013: Economics 101: If I buy a hamburger from you and instead of paying on the spot I promise to pay later you will probably charge me a fee for such a transaction. If I pay on the spot you will not charge me the fee. That fee represents an increase in your net worth and is real "cash" flow. . . unless I default, in which case you are out the burger and the cost to make it, market it, distribute it, and deliver it at the point-of-sale. I got a burger and you got the shaft. Is that where we are? I realize as word spreads no one will trust me unless I pay on-the-spot. How does anyone amass wealth in that scenario?
  • Jan 25 2013: Human beings are ultimately the problem in the system, the economy no longer serves the net good of human beings. i.e. letting human beings allocate capital does not lead to a public good any longer.

    I've been thinking about this for a long time - in our current model money flow is "stopped" or "started" based on "return on investment". I think that whole dogma is fundamentally flawed when you look at the laws of nature. In nature there is no perpetual motion machine, how could there be perpetual profit machine?

    I've been thinking we should have money automatically flowing through peoples accounts by a certain percentage whether they are working or not and test fine tune this model by testing it out.

    Human beings are the problem ultimately in the system, I've become keen on 'computer managed' capital flows where you get a group of scientists/experts to design a 'flow model' economy. In our bodies the blood just doesn't stop and start at random, if our bodies worked how our current world works we'd be dead.
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      Jan 25 2013: You are right sir, economics is not biology. If there were no people there would be no problem. Who can argue with that? I think people should be free to pursue all the wealth they want through legal AND ethical means. If some want a mansion on the hill and others are happy with a country cottage, fine. But if you take unethical (even though legal) advantage of me to add to your own treasure then we have gone awry. I agree with you about human selfishness and greed being the root cause of this, and every, problem we have. I do not agree with you about "we should have money automatically flowing through peoples accounts by a certain percentage. . . ". I would need to surrender certain inalienable rights in order to participate in such a system, wouldn't I? Thank you!
      • Jan 26 2013: Problem is human beings are not equal in terms of their ethics or understanding, look at copyright laws infinite extension. People are not good/intelligent enough to keep people with lots of money in check. i.e. as soon as mots people get some money they go about transforming the laws and peoples morality.

        I've seen this in the game industry with DRM. No one should need permission to use the games and products they've bought. Right now the game industry has taken games hostage on the other side of the internet, you can google "diablo 3 auction house" for more info.
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          Jan 26 2013: It is too bad all of our laws do not defend and promote ethical behavior. Something like perpetual copyright laws can be made lawful by influencing legislators to pass certain laws, but it is still not ethical, or moral. The most prevalent way to influence legislators is a very expensive process so we have become an oligarchy. We fell asleep at the wheel and "they" took control. I am ashamed.
      • Jan 26 2013: ": You are right sir, economics is not biology"

        You're wrong, the body is an economy. Decisions must be made about biological resources on the cellular level all the time.
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          Jan 26 2013: I submit that Biology, a Science, always behaves in accordance with natural laws. Not so Economics, which is not a Science.
  • Jan 24 2013: Long term, the Dow has steadily risen. Long term, quality of life has steadily risen. Short term, they both fluctuate around a steadily increasing trend line. The Dow and the economy don't fluctuate up and down together at the same time. The Dow tends to lead in anticipation of economic changes. Economic prosperity, stock market investment, and economic profits all slosh back and forth between more wealthy countries now-days. The USA's "national quality of life" can be left holding an empty bag when, on average, there may have been quality-of-life improvements world wide.
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      Jan 24 2013: Maybe things are improving world-wide, I don't know. But the focus of this debate is about the apparent disconnect between Wall Street and Main Street in the USA. From January 2009 to January 2012 all vital signs of US economic health turned down, except one. This is not a momentary peak or valley, but a four-year trend. Does it indicate something has changed in the workings of our economy? Are the One World folks quietly redistributing American assets including money, technology, education, innovation, research and development, etc? Are we being dumb-downed to fit better into a politically homogenized global community?
  • Jan 24 2013: my guess would be that most of those companies make a lot of profit from either government contracts (why bother selling to the american people when you can talk the govt into just handing their money straight over), or overseas sales, where the average person is still paid well enough to be able to afford their stuff. there's a reason that walmart is the biggest retailer in the US, most americans can't afford to shop anywhere else.
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      Jan 24 2013: A few years back I saw a list of the 10 richest Americans. I think I recall 7 of them were Walmart executives. Their CEO donated $1Million (of his own money I guess) to Barak Hussein in the recent election. There seems to be a connection between hard times for most and meteoric increase of wealth for others. I agree your two suggestions may play a big role in the wrong turn our economy has taken.
      • Jan 25 2013: interesting information thanks for letting me know! it makes sense to me that a meteoric rise for a few must be a result of hard times for most, because though we use the expression "make money" we don't ever make money, it comes from someone else.
  • Jan 24 2013: Thanks for the article. I was informed by a knowledgeable source a few weeks ago that energy intensive businesses are migrating back to the United States because of our low natural gas costs. While oil is sold on the world market and easily transported the same doesn't hold true for natural gas. At an approximate cost of $2/MMbtu in the U.S. versus $11/MMbtu in Europe, we have a distinct competitive advantage which can make marginally profitable companies extremely profitable. Private equity is aware of this opportunity in energy intensive businesses and the politicians are going to take credit for this resurgence.
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      Jan 24 2013: What's this? A high note in this otherwise lugubrious debate? So, how will natural gas profits find their way to my paycheck? Does Al Gore, or some Rockefeller own it all? Three cheers for natural gas!
  • Jan 23 2013: The stock market is a leading indicator and approximately 40% of the S&P 500's profits are earned overseas. Looking at both the demographics and growth rate of other countries gives insight into where capital is invested.
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      Jan 23 2013: You may be on to the root cause of our malaise. . . . American companies not investing in American labor. This link is duplicated below but I'll put it here for you too. It supports your assertion. Thanks for the insight!
      http://online.wsj.com/article/SB10001424127887323301104578255663224471212.html?mod=rss_whats_news_us
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      Jan 24 2013: So, we are down on investors?
      Economics is now a global play. Worldwide investors are looking worldwide for the best return on their investments. If investors are not investing in american companies thus supporting american labor because they are not making a profit is this a fault of the investor? If an American company has global reach and moves jobs overseas to make a profit for their investors, is that the fault of the investor? What is being said here?
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        Jan 24 2013: I would do the same in terms of maximizing profits through legal and ethical means. So, no, I don't blame investors. I am looking for answers, not for blame. We are doing something wrong when the stock market is not a reliable indicator of national economic (and political?) health. The patient is lethargic and unable to function at anywhere near full potential as evidenced by all vital signs. . . except one. . . Wall Street is robust and thriving. Why are American companies traded on the NYSE posting good performance figures while the people they should be employing are losing ground? Is that the question? I think it is. How about you?
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          Jan 24 2013: It's like It's been said. Big companies are now global, therefore they can can retract anywhere.
          Consider, a location in the US, high taxes, high labor cost, lower profits, and there is another location somewhere else with higher profit potential... It's gone. Now, the US location, cuts taxes, labor takes lower pay, higher profit potential, Big companies move back. That's the NYSE.
          I think the real recovery will come from small entrepreneur. If we encourage the little guy he will try to expand using people where as the big companies holding large capital will automate and look at processes rather the people.
          BUT.
          According to what I read, new tax laws and regulations could really dampen efforts by small entrepreneurs. So here we are with policies that make it easy for Big Companies to go elsewhere and making it harder for the little guys. Remember Sylvania one of the worlds largest light bulb companies, thousand of employees. Incandescent bulbs are bad, EPA gets involved. Compliance costs are out of sight. Enter little Christmas light bulb company in Germany. Buys Syvania, a company over 100 times bigger. Sales price??? Sylvania assets go to Germany, Sylvania employees hit the line.
          Little guys are having banking problems effecting cash flow, increases in taxes on profits, regulatory compliance, increased labor benefit costs, etc. etc. So big boys are headed over seas and the little can't afford to pickup available labor. If it wasn't for WalMart building new stores, there would be nobody getting jobs.
          Forget about the NYSE, ask at the local McDonalds if they are changing full time jobs to part-time.
      • Jan 24 2013: I didn't imply fault in my post. I just stated what "is" , not what "ought" to be. I will let the other posters fight out the morality of their ingroup/outgroup parameters.
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        Jan 24 2013: Accurate and relevant thoughts Mike. You remind us that capitalism is profit driven. American industry has focused investment offshore as you say. That relects in the stark difference between the DOW and all other economic indicators. Wall Street is not causing the problem any more than a thermometer causes the temperature. I don't want to ask McDonalds about their hiring practices. I want to ask my Senators and Representatives why we have created a situation where it is more profitable to avoid long-term employees with full benefits. You know, the system we used to have? Thanks!
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    Jan 23 2013: Don't get me started on my half gallon of ice cream is down to a quart and a cup, but the price has stayed the same so I am not a victim of inflation. I learn recently that $3.50 gas is the new norm. So, in the last 4 years we have a new norm where we have expensive gas and no inflation. So, why is the stock market doing well? Well, my oil company is making a reasonable profit, my dairy company is getting a big market share since their half gallon container holds more then their competitors. There is a disconnect between us and them (the stock market people) Wait a minute, didn't I read that small investors are out of the market? That means the current players are those big retirement fund investors and Mr. Buffet.
    It's not all bad. When I was young, a long time ago, it would take me two trips to carry a $100 worth of groceries in the house. Now I can do it with one hand. Good living, I sure. When did a 3 lbs. can of coffee only weigh 39 ozs?
    What this country needs to be better is all our scales being readjusted..
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      Jan 23 2013: Thanks! There is always room for levity. Small-time investors have taken to burying gold coins in the back yard. Wall Street is an exclusive gated community now. Why have my tax bills never been reduced like the size of my ice cream cartons? That last bubble was just a preview of things to come? Read all the comments here. Some of these TEDsters are wise to the government's Master Plan. Immigration hell! Where is the Emigration Office?
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        Jan 23 2013: If you don't laugh, you will cry.

        Seriously, my only hope is that the USA is too big to fail, no matter how bad it is managed.

        Long ago I proposed term limits for house members, repeal of the 17th Amendment and amending the 16th to cap what congress can tax. Right now they can take it all.

        Cut the number of Departments in the administration to seven using the 10th amendment as a guide. I used to think that forward operating military bases would soften attacks on the homeland. I am rethinking this. With modern technology, maybe fortress American is a
        better way.
        I am reconsidering our foreign policy to spread freedom and democracy across the globe, I am finding those that want democracy, have it and those who don't have a dictatorial government protected by the UN. There are millions of starving peoples that we can feed, but to pay ransom to do so is so appalling.
        I have no answers.
        I wonder where honor and integrity in our society went. We are all victims, but the smartest, best looking and most deserving victims in history. When I was a child I went to Sunday School. We learned about all those thou shalt nots... I remember "thou shalt not covet thy neighbors goods." The new commandment is " He's got more then me, give me some of his".
        I have no answers.
        My friend tells me " not to be concerned with all this, pretty soon the dementia will set in and they will feed you pabulum and you won't remember a thing " One can hardly wait.
        Honest, I have no answers.
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          Jan 24 2013: For the last 45+ years The Constitution of the United States of America has been molested by SCOTUS and POTUS alike. The document is good as written, it should be the game plan but we are failing to stick to it. You have answers. We need to snap-out of our lethargy and change course to return to the Constitution, we should dance with them what brung us! I too as a younger man thought America should be either Imperialistic, or Isolationist. When the biggest, strongest kid on the playground is a decent, fair guy the playground can be a pretty cool place. Or, the big guy can stick to himself and let mayhem reign at the hands of the bullies. Fort America could be the planet Earth, or it could be 50 states. We can't keep peace on Earth if we don't dominate and control the opposition. I learned that in the 4th grade. :-)
  • Jan 22 2013: The rich are getting richer by making the poor people poorer. Nothing new here except that the rich are getting much better at it, especially the political aspects. The notion that the Dow reflects the well being of the economy as a whole was always a partial truth. Now, as Pat Gilbert said, the connection between Wall Street and main street is completely severed, and the only people who do not realize this are the folks in the media.
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      Jan 22 2013: it is new. 100 years ago, rich didn't get richer at the expense of the poor, and poor got richer too. life standards going down in the lower income percentiles is a recent "development".
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      Jan 22 2013: I always thought the players in the stock market were the folks who started and ran companies which employed people so the health of one indicated the health of the other. If that was true once, but is no longer, what changed? Have the folks with money found a way to prosper without hiring workers? That sucks! You mention the media folks. That is another sector of our (USA) modus operandi that seems to have morphed into something quite different. I no longer trust mainstream media to dispense truth. Damn! This post is turning into an alarming revelation!
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      Jan 23 2013: Cuidado

      The change between the rich and poor is greatly exaggerated by the media. I have gone over this before. It has to do with falsely reporting household income, not counting government transfers to the poor, tax changes that incentivized reporting taxes as individuals under chapter S corps instead of a C corp.

      Of course the rich people make more as it should be, otherwise it would be Russia where you could work hard or not, smart or not, with innovation or not, with the same pay. In which the only thing for sure is the increased consumption of Vodka.

      What is definitely stealing the income of the middle class is government caused inflation and taxes and regulations and ridiculous government employee pensions.
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        Jan 23 2013: It's like you said, confidence is down. Not enough risk takers to push things forward, a little greed is good and real estate in the States at this moment has never been better except where are the Americans who should be buying these houses? I hope it doesn't turn into a landlord bubble like it has in Nz.

        How friendly is the States in helping small business get up and running through tax incentives? I get this distinct feeling that a lot of the young have romantic dreams of instant statrtups and millions flowing out of nowhere.
        • Jan 23 2013: Ken, you mention a landlord bubble.....could you explain it to me please?

          And yes, so many homes for sale here....mostly foreclosures and auction...
          Lots of homes for sale for over 250 thousand in our coummunity. But when you visit some of the online real estate sites that keep a list of homes sold in the last week, you see the homes sold for the mid 100"s......asking price does not equal selling price.

          And many who bought a home in the last 10 years, are stuck in it because they are worth much less than what they paid for.

          Plus, it seems nobody can afford the homes that are for sale to begin with. Where are the people that should be buying these houses?..........ah, look in the unemployment lines. :(
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          Jan 24 2013: What they fail to mention is that the U.S. has the highest corporate tax rates in the world.

          The senate typically goes with a CBO report that is static and does not account for human behavior or praxeology which changes when the rates are changed and would result in a higher revenue rate.
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        Jan 24 2013: RE: "What they fail to mention. . . "
        American companies traded on Wall Street can make higher profits and pay better dividends to shareholders by investing in other countries rather than reinvesting profits here at home because of our high corporate tax rates? Is that correct?
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          Jan 24 2013: According to the article they are not paying dividends to the shareholders from foreign profits. Which is part of the problem because the core problem is lack of investment. So yes they are investing in foreign countries because of a higher domestic tax rate. But the money is kept in American accounts because of more stability in America but under accounts that are exempt from American taxes.

          Praxeology is the core of the problem, simply lower corporate taxes and the money will come to the domestic accounts.
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    Jan 22 2013: Here you go Ed.

    This may seem conspirawhako but it's not, as it has a lot of my people up and arms over the negotiations that was held in my country last year, it may seem to benefit your country but you won't see one dime of it.

    http://www.wakingtimes.com/2013/01/21/the-trans-pacific-slam-job/

    Most of what it describes is true as our protesters who can be quite scrappy resorted to violence which wasn't good but it got the media focused on the meetings that were top secret. Hopefully my country and Australia stick by their ambivalent attitude to the demands made by these vermin.

    Edit = So this might be a good excuse to lower the green back?
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      Jan 22 2013: Free trade is not a bad thing, it benefits both traders. But they become traitors when they use crony capitalism.

      This goes on in the states big time. One example Sugar has tariffs on it despite NAFTA, this makes corn syrup a viable alternative which has raised the price of corn (which effects the price of meat and drains the Ogallala Aquifer) and kept the price of sugar artificially high.
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        Jan 22 2013: I wouldn't mind seeing a lot more american products on our shelves to balance the substandard asiatic products we have now but cronyism only corners it for a select group. Our government stopped subsidizing our farmers in the late 80's, the only draw back is it pushes local prices up with anything to do with dairy but it also weeded out the chafe.
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          Jan 23 2013: But the market place wants the Chinese stuff. I suppose at some point the mentality will change when people realize yea the Chinese stuff is cheaper but I'm tired of replacing it every 6 months.
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        Jan 23 2013: I found that link for currency warning

        http://www.youtube.com/watch?v=XN7ZIrfqD7Q

        I'm all for trade though it will be more expensive for American made it will also give our dairy industry a slight boost even if they alter the packaging to state it is American grown, Canadian bacon is cheaper in Nz than our own bacon and some packaging states Nz pork. It makes a lot of us laugh.

        I don't know about you but you have got to try Uruguayan beef, it put's all I've ever tried except game and wild steer to shame, it makes my countries beef taste like rubber.
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          Jan 23 2013: That sort of thing is always going on to some degree. I remember in the mid 90's the Canadian dollar dropped from being equal to about 60 cents on the American dollar right after NAFTA, business sure got sucked out of the U.S. then, now the U.S. dollar is back equal to the Canadian dollar.

          I don't know the implications of this so I can't say anything else.

          This article is somewhat of a tangent but not to the OP and explains some things about inflation that Bob and I have talked about in the past. I hate to admit it but maybe some of the conservative rhetoric was a bit distorted?

          http://www.forbes.com/sites/pascalemmanuelgobry/2012/10/19/no-the-united-states-will-not-go-into-a-debt-crisis-not-now-not-ever/
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        Jan 24 2013: Great article but it was the comments that had the greatest knowledge pending who you believed. I remember reading this theory? a few years ago.

        What do you think if iran or israel started intimidation tactics to force the States to use more diplomacy in the region at the same time china and japan start getting real nasty with each other further pulling the States into a shaky position, wouldn't the market get a bit shaky?

        You guys have the Pacific Pivot in place i think and here's some good news.

        http://www.adelaidenow.com.au/news/south-australia/trillion-shale-oil-find-surrounding-coober-pedy-can-fuel-australia/story-e6frea83-1226560401043
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          Jan 24 2013: The whole deal with war is who is the third party, generally the military industrial complex.

          Does their influence trump the benefits of trade? Is it a coincidence that the people that go to war with the U.S. or vice versa don't have much trade with the U.S.?

          The thing about oil production is the units of energy required to retrieve energy. Shale oil is down there but technology changes things. But it will not be as cheap as sweet light crude. It just changes the economy for a while.
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      Jan 22 2013: Thanks (I think) for the link. At least I heard the acronym "NAFTA" being thrown about but this is the first I have heard of the apparently Top Secret TPP. Is this the Orwellian pigs making their move to secure their status as "more equal" than us other animals on the farm, the poor and working middle class? We have had a big news item regarding a severe criminal penalty being imposed on a young American found guilty of breeching copyright/royalty laws. Sadly he killed himself. We must give the enemy a name. The name "They" is impotent and ambiguous. Should "They" be re-named "Wall Street", or The Illuminatii", or "The Tri-Lateral Commission", or The Bilderbergers"? I think it is important to realize the health of Wall Street is no longer an indicatior of the health of America (read Mr. Gilbert below). Of course most farm animals will pay no attention to TPP or any of this, while some will shout "Conspiracy Alarmists! Whackos!" The POTUS will hone his skills at skirting Congress while looking for icebergs (read Mr. Winner below) with which to joust (sorry about the mixed metaphors). This ain't good.
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        Jan 22 2013: There is already a TPP in place if this falls through but what got us riled was the secrecy behind this change and amendment. I don't mind trade or concessions when breaking new markets except this doesn't benefit the little guy who has to pay extra for medicine when we have cheaper alternative currently available, Big Pharma doesn't hold sway here but even i know a bad deal when i see one.

        This year we are worried our dollar might reach parity or close to it and our exporters are screaming already, life is tough, this we all know but this is a first I've ever come across a blatant push for adopting a set of laws that wasn't put through the normal processes.

        EDIT = All countries benefit from trade and since my country changed it's tack with the States 25 years ago there was a cooling between the two over our non nuclear policy which it seems a little dated now. I just don't like this hardball stance.
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    Jan 22 2013: .
    .Your data explain why money can buy only INVALID happiness when its amount is more than its OPTIMAL point.
    .
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    Jan 22 2013: There is no correlation between main street and wall street.

    In either case the touchstone is confidence.

    Much money has come to the U.S. because it is a safer investment than Europe and is still the de facto world currency.

    The absurd amount of money that Bernanke has printed has created the apparency of prosperity. I'm sure in his mind he is just doing what his boss BHO has forced him to do.

    The two bubbles that I have seen the Austrians talk about are the bond rates which is definitely going to bust and the other one is health care which also will bust.

    My congressman sent out his weekly newsletter in which he points out that he has paid in 1/3 of the benefits that he will likely receive from medicare and social security. The only way to pay for this is to borrow money which mean the next generation will have to pay for this.

    Another factor is that the confidence level for investors is ostensibly at an all time low. This is the real benchmark for the real economy. This is not the stock market as this is companies who are below the level of an IPO, this is a guy who has an idea and needs money from small banks with a line of credit, a second on his house, borrowed money from his friends and family. Just think about the shark like unpredictable impetuous, impulsive, cavalier, conduct of the current POTUS does he give you confidence about the future?


    It is witnessed by the last election. The younger folks do not have hope of owning a house. Technology has distracted them from what is important in life, ie their attention span is short, their ability to confront what is real has atrophied.


    The culture of the country has changed from one of exchange to one of entitlement, this is HUGE.
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      Jan 22 2013: Interesting Pat. Your idea is that there is no disconnect between the Dow and the work-a-day world performance stats because they share no correlation. Hmmm. It is looking pretty grim for the land of the free and the home of the brave. I plan to steal your phrase "No intersection between Wall Street and Main Street". I think it may summarize my post rather well.
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      Jan 23 2013: From what I've heard of BHO's inauguration speech is "Climate change" "Gay rights" but when it comes down to it I think the average person would rather hear "Job creation" "Controlling debt" "Reflourishing America" Then all the rest.
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        Jan 23 2013: I know it is simplistic of me, but I sure have a strong urge to blame American citizens who are uninformed (ignorant) and apathetic (uninvolved) for this gigantic disconnect you describe between the ruling elite (Wall Street) and We the People (Main Street). "The times they are a changin'".--Bob Dylan
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    Jan 21 2013: Edward, Excellent. I wish I had clear answers I do not. I do, however, have some observations. Mike Trainor below stated that figures do not lie. They can however be presented in a manner that represents what you wish it to. The means of obtaining unemployment statistic is so corrupted that no one ever agrees. Currently the method is to use the number of NEW applications to determine the unemployed. That would exclude the number that are STILL on unemployment and those who have their benefits expired and those who just plain do not care any more. We count part time as full employment and also those with a less than 40 hour work week. With the scramble for employers to cope with the impact of Obamacare a less than 40 hour week will probally become the norm of the future.

    The fed producing "unbacked" money is a sure fire reciept for recession, inflation, and economic chaos.

    In my opinion, I see keynesian economics and big government as the sure path to follow Argentina and even todays Venseuela. The EU still insists on retaining massive social programs that inspire generational welfare. If you go to the national debit calculator there is a block on the right edge that states the number of unemployed it does not match any statistics that any agency presents. The whole generator is fasinating. The administration has earmarked where government spending could be reduced or deleted. If true than why are they still here ... cut the first 100 on the list.

    Yep the bubble is going to burst and massive inflation will occur. When it does there will be a political spin that says it is the fault of the tea baggers and the 1%. Argentina took the money from the rich and then the middle class because all of the money available could not support a big government and all of its entitlements.

    You have shown us one red flag waving in a sea of red flags. Avoid the ice bergs ... hell our ships skipper is seeking them out. Invest in life perservers.

    Bob.
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      Jan 22 2013: You're right Bob. Someone said statistics are like a bikini in that what they do not reveal is more important than what they do. The last burst bubble has still got us reeling. I wonder if we can endure another. Thank you!
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    Jan 21 2013: i would say it is a bubble. large brokerages and investment banks try to figure out what to do with the bailout money, and the FED generated new money. some of it ends up in the stock market. as prices rise, more and more money go there to ride the wave.
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      Jan 21 2013: There was a time when we could refer to every dollar the government spent as "tax dollars". You point-out that the bailout money was not from funds collected by the IRS but was fresh off the presses aka "new money". That bubble has got to burst pretty soon, no?