My Market Meltdown Fears

Are you frightened about what’s going on in markets these days? Perhaps you should be.

The EU’s euro is shrinking, like a summer ice cream scoop;
Our own overspending has left us, awash in that old debt soup;
The struggling Dow and Nasdaq, can’t seem to find a floor.
And investor fears are rising, rising, rising,
Investor fears are rising,
Are rising more and more.

The days are past when investors viewed all losers as fallen gems,
And rushed to their rescue with money, like nurturing mother hens;
Now good companies, too, go begging, and cut spending to the bone,
To avoid deeper fiscal trouble,
Escape the deflated bubble,
Flee from the spreading rubble,
And worst things still unknown.

Perhaps one darkened morning soon, to panicky echoes we’ll wake;
The equity holders will tremble, the bond investors quake;
And as global economies teeter, we’d best pray there appears,
A plausible confidence mender,
A deep pocket lender spender,
Who can calm all our white knuckle fears.


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The Yard Sale Economic Index

Economists have a lot of ways to measure how the economy is doing. I’ve got a measure of my own — at least about the local economy of my neighborhood and a few surrounding areas. It’s the number of yard sales every weekend, and the kind of things being offered.

Yard sales hereabouts used to be an adult version of kids’ lemonade stands. They were basically just fun affairs, a chance to sit around with friends for a few hours on a sunny weekend, and in the adult version, maybe unload a few items that had accumulated for heaven knows how long in the attic or garage. Items that if not bought for pennies by a passing stranger, often got dumped into the trash, rather than being hauled back into the house.

The yard sales I’m seeing in the last couple of weekends are of a different order.

These seem to be larger than in past years. Not only are more things being put out for sale, the quality of offerings seems to be better, too, things one might actually want to buy instead of castaways that can be packaged as a Christmas gift for one’s least favorite aunt.

Prices of goods are higher as well. And there’s a definite difference in the bargaining. Again, in years past, if the first price noted was a dollar, a prospective buyer might offer fifty cents, and a few minutes of jocular haggling would follow over whether the end price would be 70 or 80 cents. Now the sellers are bargaining harder for money rather than for fun’s sake.

So what is my personal neighborhood Yard Sale Economic Index saying this year compared to years past? The middle class squeeze is getting tighter. Every penny means more to more people. Local impulse buying is less in evidence. Both sellers and buyers look like they’re having less fun in a formerly fun-based exercise. And the recession continues to drag along in ever more painful ways in the part of the world where I live.

Official “recovery” nattering notwithstanding, I suspect these observations, and their import, hold true in most places.


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Take A Billionaire Out To Dinner — It’s The Least You Can Do

The New York Times today reported that a former associate of Mitt Romney at Bain Capital is writing a book that purports to show why greater income inequality is good for the economy, and also benefits the 99 percent-plus who haven’t been cunning or well connected enough to become super-rich.

His argument, in brief, is this: most of the money garnered by these super rich worthies isn’t spent on their own luxuries. Rather, it is invested in ways that generate wealth that ends up being shared by all — though admittedly, the less cunning and well-connected 99 percenters do have to settle for much, much smaller shares.

The fact this this love-thy-economic-betters author is a former Wall Street colleague of a guy who is now running for President, a guy who sadly (that darn old democratic system) must appeal to more than half of today’s economically aggrieved 99 percenters, is probably not appreciated by the Romney camp. Maybe they shouldn’t feel that way, however. Maybe the rest of us shouldn’t feel that way either.

Maybe extraordinarily high levels of wealth concentration are good for everyone. I mean sure, it hasn’t proven to make most Americans wealthier in recent years. It hasn’t generated huge numbers of well paying jobs (or any other kind for that matter) at a time when this concentration has grown and grown. Indeed, it hasn’t made for an economy nearly as satisfying and secure and productive as when such concentration wasn’t nearly as evident, as during the post-WW II period between 1945 and the coming of Reagan.

But heck. Why focus on current realities, or the realities of recent decades past? Let’s focus instead on the economic theorizing of a super rich former Bain partner of Mitt Romney. And let us all then genuflect in the appropriate manner.

If this doesn’t seem a good enough of show of appreciation, why not invite a 0.01 percenter out to dinner to show your gratitude for the wonderful things he’s done for us all? And if that requires cashing in pension savings to make this best and brightest person comfortable at table with the fare we provide, cash in your pension savings (or what’s left of it). It’s the least you can do.

All hail Bain Capital! All hail Wall Street and the increasing number of tasty morsels it provides for vulture funds like Bain! Let us now all tap our heels together, mutter “death to regulation and progressive taxation,” and queue up to follow Bain folk down the iron pyrite brick road being laid out for us this coming election day.


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Wisconsin: A Case Study In The Politics Of How Not To Create Jobs

Jobs aren’t coming back rapidly in most parts of the country. They are, however, coming back slowly in most places. One major exception is Wisconsin. The Bureau of Labor Statistics recently reported that Wisconsin was the only state in the country to experience “statistically significant job losses” in the 12 months ended in March. And though most of these loses were in the public sector, it lost more than any other state in the private sector as well.

Let’s put this into a political context. Republican Gov. Scott Walker, now facing a recall vote in early June, promised to make his state more business friendly. His most noteworthy effort in this regard involved coming down on the union bargaining rights of public employees.This has made Governor Walker a hero to the right, and an example of what the country can expect if Mitt Romney wins the White House.

Take it out on teachers as well as the poor, in other words, and they will come — “they” being job creating businesses that supposedly love a state where taxes don’t help the needy too much or pay attractive compensation to the state’s own workers.
Such is the theory. Except that while this approach might work beautifully in an Ayn Rand novel, its doesn’t seem to work that way in real life.

Why? The answers are obvious. Most businesses have a local customer base. If a lot of these customers lose already very modest government benefits, or receive less compensation from state employment, they will have less to spend at most local businesses. You know. Real Life. Not ideology.

Most businesses, when they are looking for a state to relocate or to set up a new facility, also consider factors that might appeal to their employees. One such factor, as any relocation specialist will tell you, is the local education infrastructure. A state where school teachers are a particular target of the governor doesn’t appeal to these specialists. You know. Real life. Not ideology.

Most businesses also don’t like to set up shop in combat zones. This is why, for example, places like Damascus are not attracting a lot of foreign capital these days.
Wisconsin, of course, is not a war zone. It is, however, a state polarized by the ideology-based actions of a Governor and his legislative supporters — actions totally unnecessary from a fiscal standpoint because state unions accepted compensation limits before their right to bargain collectively was taken away.

Why didn’t businesses approve of this action and expand or relocate in the Wisconsin? Because they prefer to locate in happy places, not angry ones. With so many other parts of the country vying for any job creating business with incentives similar to the ones offered by Wisconsin, being in the news month after month as the state where half the people won’t even talk to the other half isn’t a big draw.

Other states with governors calling themselves “conservatives” may have made a lot of state residents unhappy. But none has made so many of their own people so furious toward their leaders and so many of their fellow citizens.

Say what you will about the politics of Governor Scott Walker. From the perspective of job creation, such politics have proven to be dumb, dumb, dumb…


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Understanding The Term “Family Values”

I admit it. I’ve been having a lot of trouble understanding this family values thing. I knew it had something to do with gun ownership and undermining environmental regulations, of course. But its larger meaning had alluded me until this past week, when the family value-loving House of Representatives finally made the term’s meaning crystal clear to us all.

To fund government subsidies for student loans, House Republicans could either have come up with the money from eliminating some tax breaks for oil companies or eliminating a program that allows poor women to get breast cancer tests. And they opted to eliminate the latter.

The Republican dominated House also had to choose between cutting funding for the military or for food stamps. And opted for a food stamp trimming.

So subsidies for oil companies making near-record profits are more important that breast cancer screening. And another few tanks are more important than food for children, the prime beneficiaries of food stamp programs. Gotcha. Now I understand “family values.”

But I’m still trying to work through the relationship between the term “conservative” as used these days and some past meanings of the term. Herbert Hoover, before becoming President, was generally acknowledged to be one of the greatest humanitarians in history. This was due to his magnificent management of post-World I food programs in Western Europe and Russia.

Hoover, the proto-typical conservative, feed millions abroad. These days, though, “conservatives” in this country seem to have it out for food stamps that feed our own children.

Odd. Seems I have to think this one through a bit more.


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Selig Cartwright, Goldman Sachs Washroom Attendant: Helping Mr. B. Make A Major PAC Decision

Mr. B. You’re back again. Nothing bad on the digestive front, I hope.

No. Selig. I actually came by to talk with you about something important. To get your advice. Can we sit down and chat?

Sit down, sir? This is a washroom. The only places where we could…

Point taken. We can chat standing. Do you know what a political action committee is, Selig? A PAC?

Yes sir. They’re things that promote free speech. They free the media from the clutches of socialist indigents and allow decent rich people to finally get a hearing.

Exactly, Selig. Though I’m surprised a washroom attendant like yourself has this sophisticated level of understanding.

It’s because I listen to a lot of a.m. talk radio when no one else is around, sir. One of my friends is also the attendant at the Supreme Court men’s room in Washington, and he keeps me up to date on the court’s thinking about money and free speech.

The Supreme Court, you say. I’ve always wondered something about those people. Those long black robes they wear. When they have to use a washroom, how do they…you know…how do they manage…never mind. I need your advice on something else, Selig.

I live to serve, sir.

Indeed you do, Selig. Indeed you do. Here’s the thing. Some of the gang here at Goldman are thinking of contributing to a PAC. Naturally this will be chump change for us, but for people in Washington its crumbs to die for.

I’m a bit short of cash right now, Mr. B. Maybe you could come around at Christmas time if I get a bonus this year.

No need to grovel, Selig. I’m not here for a contribution. I just need some advice. The actual contributors would be the firm’s top earners, the best and brightest people, the job creators, the fighters for an opportunity society. Our problem is that being so bright and working so hard to create jobs, we don’t have time for much contact with little people like yourself. In my own case, except for a gardener who I can’t understand half the time, you’re the only little person I meet with on a regular basis.

Perhaps if you changed your diet, sir. That taco parlor you frequent. You might try eating lunches elsewhere, too.

Focus, Selig. Focus. The focus here is on which party — from your average little person perspective — should get our free speech. Should get our money. They both slobber for it. And no matter what they say at election time, they’ll both do our bidding after the election. But I still need your opinion on which to support with our free speech.

Why do you care about my opinion, sir, if both parties are in your pocket anyway?

Because, Selig, in the event that Wall Street brings the world economy to the brink of disaster yet again, people like you will be called upon for another massive bail out. And we want to be sure the folks in power in Washington then are folks who also had little people’s support this election season. So we all share the blame.

I hope you won’t think I’m sucking up, Mr. B, when I say your thinking here is brilliant, and you are one far-sighted investment banker.

Of course I think you’re sucking up, Selig. That’s expected. Now…into which trough do you suggest we throw some chump change slops?

What the heck, Mr. B. Give ‘em both a taste. It’s only fair to PAC the pair.

‘It’s only fair to PAC the pair.’ Very good, Selig. Even rhymes. I like it. I always seem to come up with good ideas — and good catch phrases like this — when I come down here.

A surprising number of Goldman guys achieve clarity in this very washroom, sir. Up for another visit to Booth #8?

Lead on, McDuff. With your help, I am now Booth 8 ready.


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Fifteen Feet Beneath Manhattan, art by Kay Wood ©2012              A Dyspeptic's Guide To Contemporary American Politics (In Verse) ©2012

An Earth Day Apology

Tomorrow is Earth day. Did you notice?

The New York Times didn’t mention the fact in today’s edition of the paper. Neither did the Wall Street Journal. Nor did the Los Angeles Times, though it did have a short piece about German environmentalists and nuclear power in their country.

Come Earth Day itself, of course, some notice of the natural environment will be on view. Doubtless the Obama Administration will use the day to strike out against Republicans’ non-existent environment protecting policies. Perhaps Mr. Obama and/or Vice-President Biden will even put on a flannel shirt a la Bill Clinton and Al Gore, and do a photo opportunity in a national park.

In fairness, it must be pointed out that some specific efforts to protect the environment have, in fact, been taken by Mr. Obama and Company. As a major priority pursued aggressively, however, it seems to rank on the level of raising more campaign funds from Wall Street. Indeed, it might be ranked exactly at that level, because an emissions trading scheme that Wall Street firms love because they would be doing the emission trading deals has been this Administration’s most energetic environmental initiative.

Other things hardly worth looking forward to this coming Earth day include media coverage of school children picking up trash at local parks. Alternative energy companies will also probably sponsor fairs and kindred events that only demonstrate that this country is falling woefully behind nations like Germany and even China in effectively promoting natural, non-polluting, ever renewable energy resources.

If you’re old enough you might remember the first Earth Day in 1970, when tens of millions of Americans marched for more stringent laws to protect the environment — and national leaders hastened to respond. You might also remember that in 2000, the largest-ever gathering of world leaders in Rio de Janeiro collectively promised to make the natural environment and its protection their number one priority.

That was then. Today, more contemporary priorities are what the media chooses to highlight. Like how much the two likely presidential contenders are raising from PACs for the coming election.

And there the focus will doubtless remain. Unless a dreadful environmental disaster forces even the likes of Fox News to pay attention to the reality that we are part of the natural order.

On behalf of humanity, I hereby apologize effusively to Mother Earth. And beg Her not to respond to our selfish and utterly foolish provocations in ways we so richly deserve.


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Fifteen Feet Beneath Manhattan, art by Kay Wood ©2012              A Dyspeptic's Guide To Contemporary American Politics (In Verse) ©2012

Coming Soon: The Bellman’s Revenge

A bizarre sewer-based ecology is the subject of my new comic novel, Fifteen Feet Beneath Manhattan, currently available on Amazon. In a soon to be published sequel, The Bellman’s Revenge, I explore the possibility that a new variety of humans might also be spawned, this time by coffee shop droppings.

Here’s an excerpt from The Bellman’s Revenge:

…People who patronized this coffee shop, slurping and chewing in a collective digestive chorus, might actually have mutated to fill some critical role in the shop’s own ecology. I could almost visualize the process.
One night a chocolate covered honey dip cinnamon raisin cruller stick, bathed in pastry sugar and fast-fried in cheap trans fat oils, fell to the floor. There it lay untended for weeks, the brooms of the cleaning crew missing it time and again because the sweepers’ minds were immersed in fantasies of copulation with Burt Reynolds.
The high-caloric, high-polymer cruller, impregnated with gene patterns from higher life forms — higher in the sense that they had often been clumsily pawed by various counter servers — underwent a bombardment of rays from sputtering overhead fluorescents. This fecund mass was then ground down into a cracked tile floor by shoe soles rich in tapeworm tainted dog shit.
Over time, abetted by the laws of chance and mid-wifed by an unendingly droll Mother Nature, the raw life stock coalesced, unbidden and unobserved, into mutagenic building blocks. From the floor of the doughnut shop this was fan and windblown to a local men’s shelter where it permeated the threads of clothing in the castoff bin, thence into the germ plasm of shelter denizens, returning finally to the very counter from whence it originally sprang.
Yes, this certainly would explain the genesis of the people sitting near me as I sipped from a coffee cup whose tarry contents could have been resold as road surfacing. I was thinking I might learn more about the future of human evolution by striking up a conversation with the person (or whatever it was) seated on an adjacent stool.
But no. I had an even higher priority. It was time to confront Vincent Delgado…


Until The Bellman’s Revenge is published, you might enjoy its equally funny predecessor, Fifteen Feet Beneath Manhattan.

Note To Democrats In 2012: Pick The Right People To Demonize

If Obama loses the presidency this fall, it will probably be because he ran against the wrong opponent. He ran against Mitt Romney.

Democrats used to know who and how to demonize Republicans in order to win elections. When FDR ran for reelection in 1936, he didn’t run against his official Republican opponent that year, Kansas Governor Alf Landon. He ran against Herbert Hoover. Against Hoovervilles. Against problems the New Deal had not yet fixed because the economic legacy of Herbert Hoover was too awful to fix quickly.

In 2004 the Democrats had another opportunity to demonize and triumph, but blew it that time around. The target they should have gone after that year but didn’t wasn’t sitting President George W. Bush, who, though he had gotten the country into an unpopular war in Iraq and wasn’t presiding over a booming economy, was actually a really likable guy. The demonizing target opportunity here was thus not President Bush. It was others in the Bush Administration.

The John Kerry slogan in 2004 should have been: “A president is known by the company he keeps.” And the demonizing targets should have included Dick Cheney, Donald Rumsfeld. Gale Norton and John Ashcroft, all of whom were generally disliked and distrusted by most Americans, and a few of whom were loathed by a goodly number — a vice-president and powerful cabinet members for whom the likable George W. Bush functioned as the perfect beard.

Which brings us to the current election campaign of 2012. There are early indications that the Obama campaign will focus on running against Mitt Romney, focus on Governor Romney’s own background and present nostrums to reanimate the economy.

Not an altogether bad approach, of course. Romney does come with a lot of baggage. He’s a former CEO of a Wall Street vulture fund. He changes his official views almost daily to accommodate near term political needs. And his nostrums to improve the economy, when you look closely at them, are just a formula to give more to the very rich in hopes they will give some back to everyone else.

All this, however, might not keep Mr. Obama in the White House as the Romney camp points out endlessly, and alas, quite correctly, that the economy hasn’t improved all that much since Obama took office.

What then, might this year’s Obama campaign learn from a past successful FDR campaign and a past unsuccessful Kerry campaign that might be effective in meeting the 2012 Romney challenge?

With regard to the former, endlessly demonize the eight years of George W. Bush in the White House, the massive economic disaster he left behind, and the aim of Mitt Romney to bring back these same Bush policies on an even greater scale. In other words don’t run against Romney, the would-be Obama fixer. Run against Romney the would-be Bush legacy repeater.

And with regard to the company Governor Romney keeps: Congress these days, especially the Republican dominated House of Representatives, has the lowest poll numbers in history. Demonize Romney as the man who will give this extremely unpopular Republican House of Representatives the power to impose its unpopular tax and other stances on the American people. Constantly place before voters the image of Romney the expediter of increasing unpopular Tea Party views and the views of extreme social conservatives.

The 2012 slogan of choice here: “Mitt Romney is known by the company he keeps in Congress, and the company he joined with on the road to his nomination.” Get the focus off the man. Get it on his unpopular associates.

Republicans have mastered the demonize and triumph technique. It’s not nice but it works. Democrats would benefit from playing the same game only better.


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Fifteen Feet Beneath Manhattan, art by Kay Wood ©2012              A Dyspeptic's Guide To Contemporary American Politics (In Verse) ©2012

The Good Inflation/Bad Inflation Story

Is inflation in this country well under control? You might think so if you listen to what’s coming from the Fed on the subject, or even from Paul Krugman, whose analysis of economic matters I usually find quite perceptive.

Unfortunately, however, inflation here is not well under control when you look at it more closely and distinguish between “bad inflation” and “good inflation” as these two measures affect most Americans.

Bad inflation takes the form of higher costs for basics like food and gasoline. Everyone eats and food prices are rising, especially on the most basic of items such as bread and milk products. The people most grievously hurt by these increases are the poorest among us, those on food stamps, now suffering more end-of-month hunger days because there has been no increases in the value of their food stamps.

The other most wide-spread example of bad inflation is the big price jumps at the gas pump. This most directly hurts working people who commute to their jobs, a kind of inflation tax on the working middle class.

Traditionally, in times past, bad inflation hikes on basics such as food and gasoline were offset by good inflation in the form of increases in working people’s wages. Not this time. Not only are wages flat, company paid benefits are shrinking, reducing real compensation still further.

For older Americans, bad inflation hikes on basics also had a traditional good inflation offset — higher interest rates on their savings. As any financial planner will tell you, older people generally put their savings, the capital they depend on to kick off income that supplements Social Security, into ultra safe investments like federal bonds. And as anyone who depends on such securities to generate supplementary income will also tell you, the payback here today is small to virtually non-existent, certainly less than the official overall inflation rate.

This, then, is the good inflation/bad inflation story in this country today. As is true in so many other ways, the poor, the working middle class, the elderly, are getting shafted a lot more directly than well cosseted one percenters. The reason? Because these lucky ones expend a far smaller percentage of their incomes on food and gasoline, and make far higher returns on their far larger capital from investments in Wall Street friendly gaming.

To learn more about a quirky novel (and a very unusual book of verse) from the author of this piece, hit one of these icons:

Fifteen Feet Beneath Manhattan, art by Kay Wood ©2012              A Dyspeptic's Guide To Contemporary American Politics (In Verse) ©2012