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First of all, they aren't MY problems, so quit with the slanted ad hom attack.
Not your problem?
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First, we need to be realistic and not be entranced by the Libertarian bullcr*p......In reality, we ALL have been affected, but government slight-of-hand has kept it off our minds.
You dismiss Libertarian arguments as bullcr*p and then you imply that the problem applies to us all... it seems you have a problem with Libertarian arguments or is attacking them a sign that you don't have a problem with them? You don't like Libertarian arguments fine, as far as I know, no Libertarian wants a "pure" free market system, so you can stop with all that bullcr*p.... there is no "pure" democracy and no "pure" communist governments either...
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Secondly, I never blamed Libertarians for getting us here, so THAT part of your response is nonsense.
When did I ever say to you that Libertarians got us "here"?
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Thirdly I never implied that most Americans earn minimum wage. I stated that those 2 million or so who do are massively impacted by the current increases in fuel and food costs.
The population of the U.S. is currently a little under 300 M and that 2 M or so is about what? 0.6% of the U.S. population... the 0.6% is going to be "massively" impacted by rising fuel and food costs... yeah, I know that.. and?
I thought it was ALL our problems? Now its just 0.6% of the population? Which one is it? I don't disagree that 0.6% of the population is going to encounter a lot of financial problems but a lot of them are in colleges and working part time... so what? You don't think that most of the minimum wage workers are in college and dismiss a report that says the same? Okay, we will use the data from the U.S. Dept. of Labor then... in 2007, there were 1.7 M people earning at minimum wage or below... of those 1.7 M, only 915k were 25 years or higher (I assume they include graduate students in this group as well, keep in mind in 2004, there were 982k earning minimum wage or less... an IMPROVEMENT from 2004 to 2007)... that meant more than 50% were college age and younger (in fact, in 2004, there were 2 M people of which more than 50% were college students... 2007, less college students are even working at minimum wage... another IMPROVEMENT)... mostly college students and high school students are going to be heavily impacted by rising food and fuel costs? Umm... they are STUDENTS they aren't even really working yet... You want us to drastically change energy policies because of mainly poor college and high school students? That's why I pointed out that your hypothesis minimum wage was somehow linked to the end of the world was false... my argument has no merit, huh?
You bring up the point that "social security, federal, state, and sometimes even municipal taxes taken out" taken out then they have very little to bring them to minimum wage levels... um.... people near and around minimum wage levels pay almost NO federal or state taxes, they get all of it back + MORE at the end of each tax year. The government PAYS them for working at the end of each year. Social security tax? Are they planning on never claiming their social security income? Even then, I would say that a LOT of these people that earn income around minimum wage are ALSO college and high school students.... again, so what? Do I want to drastically change energy policy because students are suffering? I go out at night and I see TONS and TONS of students partying at night and going out... someone should them that they are suffering...
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Fourthly, the point (which I put in bold to assist those who were hard of seeing) works well for everyone in the country except those people speculating on oil. A moot point? I think not.
The speculators on oil aren't speculating at all... it was intentionally, the more they put on oil, the more their currency is worth more compared to the U.S. dollar.. they are making tons of money off of it... You don't want to have commodities for trade on the stock market? Take it off, put it on some other countries commodity market... You think the U.S. controls commodity prices?? You cannot stop it unless every exchange agrees to not trade commodities (not EVER going to happen)...
You want to control burdening food and fuel prices? You think adding the a surcharge to buying commodities will control the prices? What do you think the stock market is all about? Its about SPECULATION and betting on it... you hate the way the stock market was structured and what it was built for because oil prices are too high? Nobody complained when Google prices climbed to 600 points on speculation, should we add a surcharge to every stock that does well? I have ZERO invested in oil... but I don't complain when stocks perform well and spout to fix something that isn't broken... you end up making it worse...
I never said the Heritage Foundation did not have an agenda... everybody does... I don't dispute what they say however... they may not report everything but they report enough to make a sound judgment..
1) Yes, there are TWO type of people earning minimum wage: students and workers (apparently you didn't find that too insightful)... the minimum wage workers (not college students) CAN be married whose spouse makes significantly more than minimum wage (by their numbers the spouse makes enough to bring their household income to 33k)... where you get 50k from, I don't know... is it so hard for you to think that one's spouse can make more money than the minimum wage spouse? Apparently so...
2) Now you talk about the poor... first it was minimum wage workers, now its the poor... if you are going to talk about one group than talk about that group... not every minimum wage worker is in a family in poverty and not every family in poverty has a minimum wage job... Of the 37 M in poverty only 9 M of them has some kind of job and only 3 M of them has a full-time job.. so no, those in poverty don't exactly have jobs either... but that's a different topic... and I am not going to be pulled into debating poverty..
3) I don't care to compare income inequalities and that is off-topic... I am discussing minimum wage and your end of the world scenario of the "evils" of the stock market... stock market = speculation... that is what stock brokers DO... oil speculation is no different than speculation on the financial institution or other markets...
4) I never denied that oil speculation is driving up gasoline prices... and? I believe the topic was minimum wage workers and the rest of us heading into a depression because of speculation...
5) Again you attack Libertarians and claim that they don't affect you.. you ask for less restrictions... thats a Libertarian ideal... you ask for the Aptera to be released... thats a Liberatrian ideal... tax relief for everybody? Thats a Libertarian ideal... you ask a lot of Libertarian ideals and say not to do what a Libertarian would do... I guess you are one of those who like to use Libertarian ideals and claim them to be your own...
Something that isn't talked about in the press with regard to inflation and commodity prices....is that we could be in a period of a general commodity upcycle. Simple supply and demand at work. I never see supply and demand in these stories. There's nothing Bush or anyone can do about it.
In the 70's you had a huge bull market in commodities. Then eventually new supply comes on stream, supply over takes demand (as people drive less and turn down their thermostats). Supply got worked off over 20 years. There's little incentive to drill for oil if it's at $12 or 15 a barrel.
So, supply goes back down, demand chugs along (China, India, Asia). And now you've got a booming market. I wonder how much affect the rest of the world will have on prices, since many weren't in the game the last time around in the 70's.
Inflation adjusted, it seems like they're all going to go higher than where they were. There's simply more people now.
New commodities can't come out of the ground fast enough to offset demand. This is all Jim Rogers theory. Historically you have these periods of 14-22 year commodity bull markets because supply and demand get out of whack.
What has high gas done to other underclasses in other modern countries? But maybe we're unique, because we're so car crazy and SUV crazy.
And the impact on retail, I don't know. Any correlation between oil/gas and retail?
You know that gas has been increasing in the UK with prices approaching $12 per gallon... did you know that SUVs have been selling well in the UK as well when gas was $6 per gallon when I was over there... people were complaining that other people were buying SUVs in the UK... apparently even at $12 per gallon, people were still buying SUVs... as far as I can tell people are the same as they were when gas was $6 a gallon.. they complain more but otherwise nothing changed... the wages in the UK are similar in the US but taxes are higher in the UK (they have socialized health care and education)... albeit supply has not increased to meet demands with China and India consuming more (probably because their money is worth more now that the dollar is down to historic lows)... Prices at retail were higher when gas prices are higher... I expect the same to happen in the U.S.... the difference? We will probably need to change the way we live... less luxuries that we "thought" were necessities... unless they hand over more entitlements for us to consume luxuries then it will be toss on what is going to happen (my bet is that it isn't a good outcome)...
Bush weighs new measures to help stimulate economy - Yahoo! News (broken link)
Headline reads: "Bush weighs new measures to help stimulate economy"
I honestly can't think of anything he can remotely do right now to jump start the economy. Any Ideas?
And to be honest he needs to stay out of the way. I know he really can't because of the upcoming election. But he needs to let the chips fall where they may and let the market figure out what to do with this slowdown. Even if most of the market is screaming for help right now. I believe intervention should be held off until if/or when we reach close to depression era unemployment. Remember at this point we really don't know how deep the slowdown going to be. So we should not panic just yet and cry out for government assistance.
If Mr. Bush truly valued this country he would refrain from "doing" anything further that will only exacerbate our problems later. His "fiscal stimulus" has only added another $150-160 billion to our already 9 trillion+ debt.
Mr. Bush, the FED, and our U.S. congress should all take a "time out" for
egregious behaviour....and maybe have their knuckles whacked as in the times of yore
I have no idea what Bush is thinking, other than his looking forward to time in Texas.
My response rambles a little, but it does get to a point...
As to what could be done to stimulate the economy? Stimulating it across the board might be the worst thing to do. The potential of $5 gas or higher is pulling out the underpinnings of the underclass that supports the whole infrastructure of retail. Those are the people who need a boost, even more than the manufacturers or other industries. Stimulating growth of certain sectors without addressing the problems of the low paid workers is going to exacerbate core problems rather than help.
First, we need to be realistic and not be entranced by the Libertarian bullcr*p. Libertarian ideas assume a totally free market economy, which we have never had and never will have. This economy is micromanaged by laws and regulations, some of which were instituted by public demand, others because of special interests. For example, we have enough waste heat from industrial sources to increase our electric supply by 50% or more. It hasn't been done because of regulations that prohibit such ludicrous things as crossing a road with a private power line, all in the name of protectionism.
Why my focus on energy? Because, as I have said before, we exist on a default energy standard, not a gold or silver standard. Both gold and silver were artificial standards of monetary value designed to favor the upper classes. It was hard to get, they had a lot, the poor were locked out of wealth. In contrast, energy = work, and the United States has historically built wealth based on how much work a person can do on his own, or how much he can control.
The energy standard is literally the relationship between currency and the price of a standard unit of energy. In an honest economy where a newdollar is fixed at the price of 60kwh (the energy in a gallon of gas), just about all of the problems with inflation evaporate. The core cost of goods becomes the cost of the energy used to produce those goods, plus equipment and delivery costs, plus tax. Put a flat tax on everything, with a fixed percentage going to state and local governments, eliminate income tax and all local taxation and fees and suddenly, the economy all starts to make sense to the common man.
The problem with a fixed energy newdollar is... the deception of government sneaking unsupported money into the system no longer works.
Our economic problems are NOT because of the price of gas or a housing crisis. Our real problems stem from an ever increasing float, where inflation has been a hidden tax. Manipulation of the economy to cover the worst effects of that tax up has promoted unsustainable optimism and growth. We are past the point where that works, and the fake money is beginning to fall on its own.
What is going to happen now? We have to look at the Federal minimum wage as an indicator of the health of the underclass. For those who say that few employers pay only minimum wage, I won't even bother to argue the point. HOWEVER, those wages just above minimum have social security, federal, state, and sometimes even municipal taxes taken out, flipping them back to actual take home in line with, or even less than, minimum wage.
Year min wage adjusted for inflation
1970 1.60 6.47
1980 3.10 5.90
1990 3.80 4.56
2000 5.15 4.69
2007 5.85 4.41
See the downward trend in inflation adjusted dollars? That equates to a wage crunch, where people have to work more hours, or spouses have to work, to maintain a standard of living. Since many jobs have cost of living increases or just plain old raises, lots of folks in more stable industries might not have seen this as an issue, figuring that the fast food workers and grocery baggers were the only ones affected. In reality, we ALL have been affected, but government slight-of-hand has kept it off our minds.
The inflation adjusted minimum wage changed slowly and people had time to adjust, even if they had to work more hours. That was key in the subtle eroding of the economic safety net of minimum wage. Employers have likewise become detrimentally used to those low wages, and adjusted their business practices to take advantage of them. The rotation of floor employees through some of the fast food chains can be as much as 200% or more per year. Hire 'em, give 'em minimum training, use them until they quit, then rinse lather and repeat. The key is fast on-the-job training and a large pool of potential workers. That isn't a sustainable business model in a changing economy.
When did this all start? Not co-incidentally, about 1970. Fast food was fast taking off, and the government was just beginning to play with inflation as a tax tool. Take a look at a chart:
Now lets add a new column to our data points. The cost of minimum wage vs. the cost of gasoline. we'll add a column for that, and then put how many energy units (gallons of gas) can be bought at minimum wage in the last column.
Year min wage adjusted for inflation
1970 1.60 6.47 $0.40 4 gal
1980 3.10 5.90 $0.60 5.1 gal
1990 3.80 4.56 $1.00 3.8 gal
2000 5.15 4.69 $1.50 3.4 gal
2007/8 5.85 4.41 $4.50 1.3 gal
What becomes obvious, looking at the figures, is that the minimum wage jobs are rapidly becoming unsustainable. The folks working at them have not only been losing via inflation, but now are totally tanking because their real energy dollar is gone, unlike in the 1980s when the last serious economic problems occurred.
Workers will try to adjust by using public transport or walking or carpooling. Some will quit and find jobs closer to home. There will be increased rotation for a while, and there will be people who are out-of-work trying to make ends meet by taking low paying jobs. Businesses will be blessed with less motivated workers, and more shrinkage as underpaid workers start to steal to make up what they perceive as a living wage. High gas costs will also result in a loss of income in fast food and retail as people drive less, an increase in cost of supplies, forcing rising retail prices which will lower consumption. The decreased profits will hit an unforgiving stock market, encouraging further speculation in energy related companies. I expect a big shakeout in the entire fast food sector and retail in general.
But that isn't the worst of it. As the ripple effect of high energy increasingly hits the food supply, people will not be able to buy the foods they are accustomed to. I'm seeing and experiencing that even now. The last time I went to the store, I flat-out refused to buy tomatoes at $3/lb. Can you imagine a minimum wage worker having to work over a frikkin hour to buy two or three tomatoes???? That has never occurred before. The price of milk is bad enough, but when basic produce gets that far out of whack from wages, there will be more people who just plain give up and get off the treadmill.
In the old days, there would be a reversion to planting big gardens and maybe having a family cow or a few chickens. Those options are impossible for people with lot line houses, condos, or apartments, especially if they are trying to juggle two jobs. The high food and gas costs will mean late rent payments, another round of foreclosures, and more crime. At the same time, states are beginning to understand the cost crunch of keeping people in prison. Alabama now has a law that allows the release of ill and terminally ill people that have been serving life terms. The cost of care is too much compared to the risk to the community. Will sentences be shorter for people who commit crimes, simply because states can't afford to house all the prisoners? Quite possibly. That means even more crime on the streets.
So what could be done to stave off some of this? Free MREs for the public? Government subsidized lower gas prices? Nationalization of the oil industry? All of these "solutions" create problems of their own.
The underground economy and barter are beginning to pick up. Unless government is willing to lose tons of sales tax revenues, and spend more for corrections, it has to raise minimum wage immediately by an amazingly large amount. A true adjustment would be to raise it to about $12/hr, and a minimal fix would be $10/hr. This will drive some businesses into bankruptcy, but frankly they will fail anyway, and delaying will take even more businesses down that route.
The second longer term boost will be incentives for car makers to make fuel efficient cars and get them on the streets without bureaucratic red tape holding them back. Check this one out:
When WWII started, production of tanks and planes on a massive scale protected our country. We need that same fast ramp-up and increased production today, but of cars like the Aptera, and more fuel-efficient trucks, BUILT ENTIRELY IN THE U.S.. The use of diesel fuel to heat homes needs to be banned, even if it means returning to coal furnaces. Incentives and mandates to do this will short-circuit the oil speculation almost completely. Energy dollars can't be wasted like they have been in the past. The railroads learned that when they were forced to switch from steam to diesel, and the average Joe needs to learn that as we switch from moving around in a ton of steel to a cocoon of composites.
Without something to focus on and look forward to, the American people WILL slump into a depression. What we must also understand is that the level of speculation on oil now has become a matter of national security. The speculators are undermining the economy as certainly as termites eating away at the foundation of a house. Moving the speculation away from oil has to be a top priority of government.
hey genius you realize that a big reason prices are up so much is because the money supply of the dollar is up 40 percent in 2 ****ing years!!!!!!!!!!!
The govt keeps printing money, robbing money form yours and my pocket all the while handing out 600 dollar rebates while lemmings happily cash them smiling.
You know that gas has been increasing in the UK with prices approaching $12 per gallon... did you know that SUVs have been selling well in the UK as well when gas was $6 per gallon when I was over there... people were complaining that other people were buying SUVs in the UK... apparently even at $12 per gallon, people were still buying SUVs... as far as I can tell people are the same as they were when gas was $6 a gallon.. they complain more but otherwise nothing changed... the wages in the UK are similar in the US but taxes are higher in the UK (they have socialized health care and education)... albeit supply has not increased to meet demands with China and India consuming more (probably because their money is worth more now that the dollar is down to historic lows)... Prices at retail were higher when gas prices are higher... I expect the same to happen in the U.S.... the difference? We will probably need to change the way we live... less luxuries that we "thought" were necessities... unless they hand over more entitlements for us to consume luxuries then it will be toss on what is going to happen (my bet is that it isn't a good outcome)...
our education is socialized as well
as for the outcome. You know why UK is better off than us? Their urban design and mass transit = better than ours. Their cities are more like our Boston, Chicago, NYC. Centrally designed, less sprawl, better mass transit. Where as for the most part, America is one huge sprawled out oasis. Many here don't have the luxury of not driving if they don't want to or if they can no longer afford to.
Yes bflexty, I'm aware of the increase in the quantity of money printed. If you read some of my past posts here and elsewhere, you'll find that I was saying over two years ago that it would be the way that the war in Iraq would eventually be funded. There were only a couple of ways to pay for that war. The first would have been cheap oil, or an agreement similar to the concept of the old lend-lease agreement of WWII, where the new Iraqi government repaid the cost of "liberation." The second was to deflate the value of the money being used to fund the war. It doesn't take a genius to figure out which happened.
Since I seem to be the recipient of peanut gallery tossed gifts, I suppose that I need to clarify something for evilnewbie as well, who says "you ask a lot of Libertarian ideals and say not to do what a Libertarian would do... I guess you are one of those who like to use Libertarian ideals and claim them to be your own..."
Actually, it is the Libertarians who have claimed ideas to be their own. The proponents have concocted a pastiche of Jeffersonian idealism, old conservative values, and the economic mantras of Ayn Rand's failed "Objectivism philosophy." The ideas get credibility from some mainstream players, largely because Greenspan and Rand were philosphical and market-force buddies back in the 1960s and 1970s, and Greenspan was a star for many years.
To their credit, Libertarians do carry some of the old thinking that worked extremely well for the country while it was largely isolated and had minimal government that was supported largely by tariffs. That does not give Libertarians ownership of conservative ideas, any more than ownership of those ideas belongs to a parrot that repeats them on command.
Back during the 1970s, I studied Rand and Greenspan heavily. I have read every major work of Rand, (most of them numerous times) and even was one of the few subscribers to her newsletter. I visited her office in NYC. I was one of the first to see the rise of Greenspan in the political world. I was one of the first to witness the aftermath of the rift between Rand and Branden. I even wrote to her concerning some flaws in her Aristotlean "logic," and eventually was able to discern, without outside assistance, the core flaws in her romantic economic utopia, the one that Libertarians have embraced and defend. When I comment, I'm coming from a position of "I've seen this before, and I understand the downsides." You might not agree, and that is fine, if I had been told in the 1970s that my views would change as much as they have, largely through experience and exposure to other ideas, I wouldn't have thought it possible.
The concept of fast-tracking new automobile designs and stripping regulatory hurdles is somewhat politics neutral, in that the reduced regulation could appeal to Libertarians, the incentive to big business to the Republicans, and the end product to the Democrats and eco-nuts. In point of fact, accomplishes the goal by meddling in the market, creating an advantage for one sector that does not exist now. That isn't a strict Libertarian way of doing things.
Yes bflexty, I'm aware of the increase in the quantity of money printed. If you read some of my past posts here and elsewhere, you'll find that I was saying over two years ago that it would be the way that the war in Iraq would eventually be funded. There were only a couple of ways to pay for that war. The first would have been cheap oil, or an agreement similar to the concept of the old lend-lease agreement of WWII, where the new Iraqi government repaid the cost of "liberation." The second was to deflate the value of the money being used to fund the war. It doesn't take a genius to figure out which happened.
Since I seem to be the recipient of peanut gallery tossed gifts, I suppose that I need to clarify something for evilnewbie as well, who says "you ask a lot of Libertarian ideals and say not to do what a Libertarian would do... I guess you are one of those who like to use Libertarian ideals and claim them to be your own..."
Actually, it is the Libertarians who have claimed ideas to be their own. The proponents have concocted a pastiche of Jeffersonian idealism, old conservative values, and the economic mantras of Ayn Rand's failed "Objectivism philosophy." The ideas get credibility from some mainstream players, largely because Greenspan and Rand were philosphical and market-force buddies back in the 1960s and 1970s, and Greenspan was a star for many years.
To their credit, Libertarians do carry some of the old thinking that worked extremely well for the country while it was largely isolated and had minimal government that was supported largely by tariffs. That does not give Libertarians ownership of conservative ideas, any more than ownership of those ideas belongs to a parrot that repeats them on command.
Back during the 1970s, I studied Rand and Greenspan heavily. I have read every major work of Rand, (most of them numerous times) and even was one of the few subscribers to her newsletter. I visited her office in NYC. I was one of the first to see the rise of Greenspan in the political world. I was one of the first to witness the aftermath of the rift between Rand and Branden. I even wrote to her concerning some flaws in her Aristotlean "logic," and eventually was able to discern, without outside assistance, the core flaws in her romantic economic utopia, the one that Libertarians have embraced and defend. When I comment, I'm coming from a position of "I've seen this before, and I understand the downsides." You might not agree, and that is fine, if I had been told in the 1970s that my views would change as much as they have, largely through experience and exposure to other ideas, I wouldn't have thought it possible.
The concept of fast-tracking new automobile designs and stripping regulatory hurdles is somewhat politics neutral, in that the reduced regulation could appeal to Libertarians, the incentive to big business to the Republicans, and the end product to the Democrats and eco-nuts. In point of fact, accomplishes the goal by meddling in the market, creating an advantage for one sector that does not exist now. That isn't a strict Libertarian way of doing things.
ohhhhh dag
evilnewbie = own3d
man, people need to be careful who they are trying to belittle on the net.
Harry, your point is all moot... you imply incorrectly that most americans earn a minimal wage... so your argument was bullcr*p and you need to stop blaming libertarians for your problems...
Sorry, evilnewbie, I think this time you missed the point. Harry's analysis of gold in the pre-industrial age and energy in the industrial age as being the standard of real value is spot on. I think he used the minimum wage as a pivot to illustrate the point ...
... the tomato thing ... how many hours of work (energy) did it take for the peasant farmer or slave to make a pound of bread?
The problem nowadays, as mentioned, millions and millions of people are far away from food production, but then again massive starvation was hardly unknown in pre-industrial times.
Anyway, as Harry mentioned, what we need is new forms of energy, new ways of working, pronto.
The Bush Administration has not been creative in this sense and he is just thinking of ways to appear to be easing the burden, like most other politicians.
We need a statesman who understands the energy equation and a ruling class willing to implement the best ideas at hand at the moment. In the short run, we all have to accept a cut in the standard of living, but what politician is willing to state that baldly?
No quick fix or government project is going to fix things.
We need to get manufacturing back in America, folks, and it looks like it is never coming back.
With manufacturing, you had ALL levels and kinds of jobs. From maintenance, factory, engineering, research, administrative, secretarial...and all the spin off businesses that interfaced. Those companies needed computers, caterers for the business lunches, sales, blah blah blah.
This is all overseas now, and no Lego project here is going to fix it. Nor is pushing everyone into nursing.
The economy is not some river that finds its own best course, and whatever course that is, they let it go. We are not on a level playing field with the rest of the world. They have near slave labor out there.
Our ancestors worked to make this nation what it is, with a HIGHER standard of living.
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