Friday, October 28, 2011

The Latest Eurodebt "Solution"

If there's anything the latest news out of Europe shows us, it's that markets bounce around like crazy on any news at all — even news that doesn't mean very much. Of course, the market professionals (and especially their computer algorithms) like volatility. Anyway, let's take a quick look at what's been announced.

First, even after their bondholders take their "voluntary" 50% haircut, the Greeks still can't afford to pay. All the extreme austerity measures the Greek government has been forced to accept have so crippled the Greek economy that the likelihood of Greece paying anything at all is very small.

Second, European banks have been required to increase their capital reserves. Granted, their capital reserves should be a lot larger — but rather than dilute their stock too far by selling shares to raise cash, they can be expected to cut back lending even more, stepping down even harder on Europe's economic brakes.

As for beefing up the European rescue fund enough to "ring-fence" Italy and Spain (and hopefully not France), the "plan" would inspire a lot more confidence if there were a real plan. Hoping the Chinese and Russians will come to the rescue is not a "plan."

I can't wait for next month's "solution."

Wednesday, October 26, 2011


So, just who is the president of Ubeki-beki-beki-beki-stan-stan, the guy Herman Cain never heard of? Cain, you will recall, recently said:
"When they ask me who is the president of Ubeki-beki-beki-beki-stan-stan I'm going to say, 'You know, I don't know. Do you know?' ... Knowing who is the head of some of these small insignificant states around the world I don't think that is something that is critical to focusing on national security and getting this economy going."
Assuming he was making an ignorant and probably racist comment about Uzbekistan, the former Soviet republic, I have some news for him. The president of Uzbekistan is Islam Karimov, and he is a really bad guy. He runs the most repressive regime in the region, will not tolerate dissent, and is accused of many human rights abuses.

By the way, he's also an ally of the United States in our "war on terrorism," and has the wholehearted support of Vladimir Putin as well. Hey, Herman! You do know who Vladimir Putin is, don't you?

We shouldn't be surprised by Rush Limbaugh'ss praise of the Lord's Resistance Army for being "Christians... fighting Muslims," while ignoring the fact that the LRA is the most brutal terrorist paramilitary cult in central Africa. We all know that Rush is an asshole.

Cain, however, is running for President of the United States. Unlike Rush, he should not have the opportunity to revel in his ignorance.

Wednesday, October 19, 2011


Herman Cain has been shooting himself in both feet from quite a few different angles lately, but now that some major media have started paying attention to what econometricians make of his 999 plan, we should not have to wait too long for the shot to his head. Although all of 999 is a shameless giveaway to the rich, the real "killer" is the national sales tax.

Even innumerate Americans can understand that a 9.1% federal sales tax on every gallon of milk, every pair of new shoes, every gallon of gas, and everything else except for "used" items (used milk?) will cost them a hell of a lot of money. Ordinary Americans, who spend most (or all) of their incomes would be hit the hardest. Even those willing to ignore how a 9% income tax would devastate the working poor will come to view that sales tax with horror.

The rich, of course, whose incomes far exceed whatever they conceivably could spend, would pay an even smaller proportion of their incomes in taxes than they do now. I'm far too lazy to do the math and construct a chart showing the impact of "999" on people in different income brackets, but I assume somebody will do it fairly soon — probably some anonymous somebody from the Romney campaign. (It won't be the Obamanistas, who will be happy to see Republican infighting go on for as long as possible.)

In the meanwhile, most of the Wall Street money is going to Romney — and as far as politics is concerned, Wall Street money is the smart money. Needless to say, though, the financiers are hedging their bets by contributing to Obama as well. Then again, once there's a clear leader — of whatever party — they'll flood him with money. They always like the winner to think he couldn't have won without them. (It sure worked with Obama!)

* * *

Following up on my previous post: recent polling shows that a majority of Americans are sympathetic to the "goals" of the Occupy Wall Street movement — which shows that you really don't need specific policy goals to win public support. Most Americans don't have specific policy goals. They just get it.

Friday, October 14, 2011

The Occupation

I don't believe the media really does not understand what it is the "Occupy Wall Street" crowd and their cousins around the country are demanding. Maybe news types are so accustomed to "specific" recommendations like Perry's call to drill for oil and gas in National Wildlife Refuges or Cain's idea for an immensely regressive national sales tax (more on that in a later post) that a simple idea like "Stop the goddamned plutocratic parasites from sucking our blood" is beyond their comprehension.

No, it's not beyond their comprehension. They just don't like to think about such a scary idea because the media are owned and controlled by goddamned plutocratic parasites. So who is left to explain the Occupation's simple, straightforward message to the long-deluded segment of the 99% who haven't quite caught on?

Simple. Those of us who do understand have to make every effort to explain, face to face, to those who don't. Most people catch on immediately, even those who never heard the word "plutocrat" before. Do not leave the task to organizations like, which are working hard to co-opt a populist movement on behalf of Obama and the Democrats. The Democrats — especially since Clinton — have done just as much to advance the parasitic/plutocratic agenda as the Republicans.

Screw the Democrats. It's time for us to do it ourselves.

Friday, October 7, 2011

Απονομή, η ελληνική κυβέρνηση!

(That is supposed to say, "Hey, Greek government!" but I must admit it's Greek to me.)

Anyway, I thought you guys were supposed to be Socialists — so what's with the sucking up to the ECB, the private banks, and the IMF? Those are your people in the streets. Don't fuck them over.

There's an odd chance your rocky, sunwashed little country could bring down multinational capitalism by tipping over banks like a row of dominos. That would present a big problem for the rest of the world, but in Greece you'd hardly notice the difference. Everybody knows you're going to default, so why keep torturing the Greek people when you could start helping them now.

First, of course, you have to leave the Eurozone. Yes, we all know there never was an orderly way provided for a country to do that, so you'll have to improvise: start printing drachmas, and use them to pay your very numerous government employees. Pick any conversion rate to the Euro you like. Close your banks long enough to replace all their euros with drachmas. Pretty soon, what's left of your private sector will be paying its employees with drachmas too, because they'll be a lot cheaper than Euros; and those who sell goods and services will have to accept them because they'll be the only currency around. The idea, of course, is to end up with a devalued currency. The tourists will love it.

There will be, of course, a black market in currency — which will help to devalue the drachma even more. Inside Greece, though, prices will adjust to the new (old) money. Imports will be very expensive. Local producers will sell more of whatever they produce. Maybe you can find something other than tourism to sell abroad.

Gather together all the euros you can get your hands on — it doesn't matter how many. Set some aside so you'll have a little foreign reserve for when you really need imports, and explain to your creditors that all they'll be getting is what you have left to give them. Their haircut might take some scalp along, but you can just shrug in that charming Greek way you have, and go about your business.

Granted, nobody will give you credit for quite a few years but, at last, you'll learn to live within your means — and don't worry about the Germans invading again. They can't get blood from a stone.

Saturday, October 1, 2011

The "Robin Hood" Tax

There has not been very much discussion of the European Commission's proposed "Robin Hood" tax on financial transactions on this side of the Atlantic, probably because it is seen as a dead issue here. Both Democrats and Republicans are far too deep in the pockets of big finance to even give the idea a hearing. Nevertheless, it deserves some attention, especially if it can be tweaked a little to address a problem we've seen a lot of lately: excessive volatility in the markets.

The heart of the European plan is a .01% tax on all financial transactions, including stocks, bonds, derivatives, and other financial instruments. Although only one one-hundreth of a percent, it is estimated that the tax would raise €210 billion annually to support the European Union.

So what's the tweak I'd suggest for the USofA? Simple. Do not tax the sale of an asset if it has been held for more than one month. Tax it at .005% if it has been held for at least one day, and tax it at .015% if it has been held for any shorter period of time. This would put the greatest burden on program (aka "high frequency") traders, who may make as many as 10,000 trades per minute, and would reward longer-term investments. Long-term investment — the kind used to finance real economic growth — is the kind of investment the United States needs right now.

I have no idea how much money this plan might generate, but I know for certain that it would royally piss off the big investment bankers, hedge fund managers, and anybody else bailed out by the taxpayers in 2008. Most Americans would get a good deal of satisfaction from that outcome alone, but, more important, getting big finance to repay taxpayers for their 2008 largesse also would be a form of justice.

Hey, Obama! Looking for another populist ploy for your 2012 re-election bid? Try it.