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2010 November 01 — Why Now?
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I Know, Let’s Start A War!

I’ll go with Krugman’s little blurb, Wag The Dean. about David Broder’s column in the WashPoo that would seem to suggest that starting a war with Iran would be one way of “stimulating the economy”.

While a lot of people have commented on it, they haven’t looked at the underlying issue – would a war provide any real stimulus to the US economy?

While World War II certainly stimulated the US economy at that time, we have been in two wars for some time, and they haven’t been very beneficial. If you look at the numbers, the way things are, another war won’t help, and will probably destroy the US economy. The Republicans have screwed war up in addition to everything else.

First off, war with Iran would bring down the global economy as oil from the Persian Gulf would be cut off, so that should be off the table. Just forget it.

But the way the US military has been configured, and the way it operates, it will do real damage to the US economy. There isn’t going to be any huge draft of the unemployed, as happened beginning in 1940, the current practice is to use the Guard and Reserve for additional manpower. During the Hedgemony this resulted in cuts in income for thousands, and the destruction of small businesses that lost the services of critical people.

Many of the support functions performed by the military in World War II are now contracted out, and those services tend to be structured so the corporations that receive the contracts hire almost no US workers, and pay almost no US taxes. All of the benefits will flow out of the US to multinational corporations. That is exactly what is going on in Iraq and Afghanistan.

Sorry, Dean, but your plan won’t work economically or morally, no matter what the conventional wisdom of the Villagers says. Why don’t you just go back to watching the Mickey Rooney-Judy Garland DVD and leave the rest of us to get on with real life.

November 1, 2010   6 Comments

Unexpected By Whom?

The BBC reports that US personal income falls unexpectedly in September

US personal income registered an unexpected fall in September, while consumer spending was also weak, data from the Commerce Department shows.

Households saw their earnings fall at an annualised rate of 0.1% compared with August, the largest fall in personal income in 14 months

In August, incomes rose by a revised 0.4%.

The market is expecting that the Federal Reserve will announce a new round of quantitative easing this week.

Analysts had expected earnings to rise by 0.3%

However, analysts say the data does reveal a sharper slowdown than expected in consumer spending that could be a drag on growth during the remainder of the year.

When these “analysts” interpret the recent increase in manufacturing as anything other than the expected increase in inventories for the Christmas season, you know they have lost the thread and are disconnected from the real world.

In the real world, purchases increased because of the start of school, and nothing more. It happens every year if the “analysts” bothered to check. It was not the beginning of anything other than school, because governments below the Federal level are laying off people due to budget constraints, and are not giving raises for the same reason.

Quantitative easing won’t do anything but change numbers in the Fed’s spreadsheet, because the banks are not going to lend money when they can see deflation coming, which is why people are buying Treasury bonds at what amounts to negative rates.

November 1, 2010   2 Comments

It’s The Economy!

CNN confirms reality with its latest poll:

Washington (CNN) — The number of Americans who say things are going badly in the country, at 75 percent, is higher than it has been on the eve of any midterm election since the question was first asked in the mid-1970s, according to a new national poll.

A CNN/Opinion Research Corporation survey released Monday also indicates that the economy remains, by far, the top issue on the minds of Americans. Fifty-two percent of people questioned say the economy’s the most important issue facing the country.

“That’s more than the deficit, education, health care, terrorism, energy, illegal immigration and the wars in Afghanistan and Iraq combined,” says CNN Polling Director Keating Holland. “No other issue was named as the country’s top problem by more than 8 percent.”

The economy has been the issue most on the mind of Americans in CNN polling since the end of 2007.

Everyone with more than two brains cells has known this for years, but the White House and Village have been obsessed with secondary issues, like the deficit and terrorism. If you get the economy moving, the deficit will go down naturally. Wall Street is not the economy, nor is the financial industry. They are problem, not the solution, and they don’t intend to cooperate.

Corporations have been outsourcing jobs, not creating them. Policies that help corporations, do not help the US economy. They are off-shoring their profits, just like they are off-shoring the jobs, and they are doing it while getting US tax credits.

November 1, 2010   5 Comments

Tropical Storm Tomas – Day 4

Tropical Storm TomasPosition: 13.5N 70.5W [10 PM CDT 0300 UTC].
Movement: West [270°] near 12 mph [19 kph].
Maximum sustained winds: 45 mph [ 70 kph].
Wind Gusts: 55 mph [ 90 kph].
Tropical Storm Wind Radius: 140 miles [220 km].
Minimum central pressure: 1005 mb.

Currently about 365 miles [590 km] South-Southeast of Port au Prince, Haiti.

Still being battered by wind shear.

Here’s the link for NOAA’s latest satellite images.

[For the latest information click on the storm symbol, or go to the CATEGORIES drop-down box below the CALENDAR and select “Hurricanes” for all of the posts related to storms on this site.]

November 1, 2010   Comments Off on Tropical Storm Tomas – Day 4