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Candy coated propaganda

June 13, 2012

There are two articles linked by a friend of mine on Facebook (a friend in real life as well) found here:

http://www.businessinsider.com/dear-america-you-should-be-mad-as-hell-about-this-charts-2012-6?op=1

And here:

http://www.businessinsider.com/how-to-fix-the-economy-2011-10

The idea that America’s economic problems stem from some sort of ‘unfair play’ by the “rich” or the banks or wall street is simply propaganda from those who wish to have the state run our lives. While the true causes of our current economic problems (and specifically our current economic problems, free economies have periods of growth and recession, it’s a natural part of the process), the government interference with the housing market via Federal housing programs like Fannie Mae, Freddie Mac, USDA, VA, HUD and FHA that forced and continue to force banks to lend to minorities and so called “underprivileged” folks who have no business buying a house, which led to the natural consequences of most of those folks defaulting, and the banks reacting as they have to so as to remain solvent and a triggered chain reaction down through the housing market and the rest of the economy.  But at the heart of the matter we have a very serious problem of too much government in every part of our lives.

Wait you say, that guy is only talking about economics! He doesn’t want to have the government in charge of every single part of our lives!
Well, he may or he may not, but the ideas and arguments he puts forward in his articles are parts of a greater world view, which is the Marxist worldview of state control.

Yes and that my friends is what we call unfair, though I’m probably the only one who is going to complain that the rich are clearly paying 5% more in taxes than they should.

Now, I’m going to go through this step by step because it is just so obviously propaganda that it will be fun tearing it into little bitty shreds.
I’m not sure if I believe this guy is actually a full blown Marxist or not, he certainly hits the high points of a Marx influenced worldview in this article, and fully admits to being a Keynesian in the other one. So while I lean to COMMIE I’m not totally sure. Anyhow on we go.

Fully dealing with article #1.

Quotes from him in quote fields my responses below in bold:

In November, Americans will have a chance to speak their minds.

Oh boy! Will we ever!

And there’s one thing everyone should agree on:

That Obama is an utter moron and failure as a human being and president.

America just isn’t working right now.

Not really what I had in mind but go on and explain yourself

It’s not just Americans who aren’t working. It’s America itself, a country whose economy once worked for almost everyone, not just the rich.

Um…

In the old America, if you worked hard, you had a good chance of moving up.

Well, that’s true

In the old America, the fruits of people’s labors accrued to the whole country, not just the top.

… as opposed to now when I work and you get paid?

In the old America, there was a strong middle class, and their immense collective purchasing power drove the economy for decades.

Still does

No longer.

Says who?

Over the past couple of decades, the disparity between “the 1%” and everyone else has hit a level not seen since the 1920s. And there is a widespread and growing sense that life here is not fair or right.

Since when did fair = right and since when do we care about what’s fair in real life grown up land?

If America cannot figure out a way to fix these problems, the country will likely become increasingly polarized and de-stabilized. And if that happens, the recent “Occupy” protests will likely be only the beginning.

You mean polarized like one half of the nation wanting to tear it down and rebuilt it in the image of the Soviet Union polarized or what? Cause brother were already there!

Oh and occupy wasn’t so much of a harbinger of discontent as it was entertaining to watch communist idiots try and campout in the middle of the city.

The problem in a nutshell is this:

The government keeps breaking things right?

Well I doubt you’re going to go down that road so let’s see what your retarded ass is gonna say.

In the never-ending tug-of-war between “labor” and “capital,” there has rarely—if ever—been a time when “capital” was so clearly winning.

Sometimes it’s hard to be right all the time sheesh.

1)      Define your terms and 2) wtf are you talking about? I must have missed when they made starting your own business illegal or when working hard, getting an education and furthering yourself was met with a trip to siberia. I’m afraid your idiot is hanging out sir.

And that’s not just unfair.

lol

It’s un-American.

Sure, because you said so.

 Let’s start with the obvious: Unemployment. Three years after the financial crisis, the unemployment rate is still at one of the highest levels since the Great Depression.

Yes because clearly if there are unemployed people then AMERICA IS BROKEN!!!!!!1!!one!!

Dumb ass

A record percentage of unemployed people have been unemployed for longer than 6 months.
Our 8% unemployment rate, by the way, equates to about 13 million Americans—people who want to work but can’t find a job.

And when you include people working part-time who want to work full-time, plus some people who haven’t looked for a job in a while, unemployment is at 15%

Yes, the number of jobs has started to grow again, and unemployment’s coming down slowly. But we still have miles to go. We haven’t yet recovered even half of the jobs we lost in the recession.

Put differently, a lower percentage of Americans are working than any time since the early 1980s (And the boom prior to that, by the way, was from women entering the workforce).

So that’s the jobs picture. Not pretty.

It’s true, unemployment is high and it’s probably worse than admitted and certainly too bad.

Not really sure how it equates to broken America though, these people are still mostly free (except for those who live in New York, DC, Illinois and California of course) and can leave home and find new work, or even start a taco stand or something.

And now we turn to the other side of this issue … the Americans for whom life has never been better. The OWNERS.

I can see by your all caps this was your point all along wasn’t it?

Corporate profits just hit another all-time high.

Nice, I wonder how much more education I need get so I can land one of those jobs?

Corporate profits as a percent of the economy also just hit an all-time high. Profits are now VASTLY higher than they’ve been for most of the last half-century.

Excellent! … wait I thought you said there was a problem here?

If corporations are doing so well, everyone who works for them should be doing great, right? Wrong. The folks who are doing well are at the top. CEO pay is now 350X the average worker’s, up from 50X from 1960-1985.

QUICK! Someone is doing what they want with their own money!
Also
RUN AWAY! People are willing to work for what someone else is willing to pay! AHHHHHHH!

CEO pay has skyrocketed 300% since 1990. Corporate profits have doubled. Average “production worker” pay has increased 4%. The minimum wage has dropped. (All numbers adjusted for inflation).

And?

After adjusting for inflation, average hourly earnings haven’t increased in 50 years.

Maybe because people still just work one hour, per hour? 

In short … while CEOs and shareholders have been cashing in, wages as a percent of the economy have dropped to an all-time low.

OMG HAIR ON FIRE RUN AWAYAHHH! … jackass.

I included the graph this time because I wanted yall to see this graph and compare it to this one:


The first graph is apparently supposed to show us how the corporate fat cats are fleecing the ever living daylights out of us.

But the second graph, well it tells the truth of the matter, while perhaps the wages as a percentage of the economy have been going down, we have increasingly had more money to do with as we want and its been going up at a steady pace for the last 60 years or so. So who freaking cares what our income is on some weird chart, we have more purchasing power. And yes that chart is adjusted to 2005 dollars across the board.

 In other words, in the struggle between “labor” and “capital,” capital has basically won. (This man lives in a tent city in Lakewood, New Jersey, about a hundred miles from Wall Street. He would presumably be “labor,” except that he lost his job and can’t find another one.)

Mmk Nice use of the heart string tugging there, not sure how the homeless dude has anything to do with AMERICA and its alleged brokenness. Freedom includes risk and risk includes loss. Life isn’t fair and people lose everything, but other folks gain everything that is what we call life in a free country, it surely sucks for some but all other systems suck for everyone!

Of course, life is great if you’re in the top 1% of American wage earners. You’re hauling in a bigger percentage of the country’s total pre-tax income than you have at any time since the late 1920s. Your share of the national income, in fact, is almost 2X the long-term average!

First off whoopdedoo second off your numbers are suspect as they come from a study called “Income Inequality in the United States” me thinks someone has an axe to grind.

And the top 0.1% in America are doing way better than the top 0.1% in other first-world countries.

What can I say? It’s good to be an American!

It wasn’t always this way … From 1917 to 1981, the bottom 90% of wage earners in this country (blue) captured 69% of the total wage growth. The richest 10%, meanwhile, got 31% of the wage gains.

Between 1981 and 2008, however, things changed. The richest 10% grabbed 96% of the income gains in those years, leaving only 4% for the bottom 90%.

I would like to point out again how suspect this data is, the Economic Policy Institute is fairly well known for its leftist, anti-free market / anti-capitalist bias. But even if we simple accept his data at face value, we still are left with a great big MEH! It takes money to make money, especially in uncertain economic times. Its not as though the eeeeeevil rich folks are sneaking into your bank accounts and pilfering your savings (that is clearly what the government is for), they invested and made money they took the risk and they got the reward. If there was skullduggery going on here then out with it and we will hightail them to the hooscow. Otherwise stfu.

In fact, income inequality has gotten so extreme here that the US now ranks 93rd in the world in “income equality.” China’s ahead of us. So is India. So is Iran.

First off: LOL

Secondly: OH My GOD Your either a wonderful idiot or a statist political shill. Since when has “income equality” meant anything at all? Hmm? The only reason China, India, Egypt etc. rank above us in freaking “Income Equality” is because their people are equally miserable! Sure you can tax the day lights out of anyone who makes  more than your paper boy and your gonna be all as equal as the day is long but by god life is going to suck great big rocks up off the ground.

And, by the way, few people would have a problem with inequality if the American Dream were still fully intact—if it were easy to work your way into that top 1%. But, unfortunately, social mobility in this country is also near an all-time low

Well bud its never been easy to work your way up from the bottom but that’s why they call it work. Also this time NO data reference at all, possibly the G. William Domhoff link from the previous idiocy?

So what does all this mean in terms of net worth? Well, for starters, it means that the top 1% of Americans own 42% of the financial wealth in this country. The top 5%, meanwhile, own nearly 70%.

This assumes both that this is a problem and that something needs to be done about it. I think it also assumes that the amount of wealth is static and it simply gets redistributed, when in actuality you create wealth as you participate in the economy.

That’s about 60% of the net worth of the country held by the top 5% (left chart).

So what? They earned or inherited it, which would mean their progenitors worked for it.

And remember that huge debt problem we have—with hundreds of millions of Americans indebted up to their eyeballs? Well, the top 1% doesn’t have that problem. They only own 5% of the country’s debt.

Well, maybe its because they knew enough not to go into insane debt to begin with. Also at a certain point of wealth you can pay for everything in cash up front. This is simply the continuation of the class warfare we have seen throughout this article.

And then there are taxes … It’s a great time to make a boatload of money in America, because taxes on the nation’s highest-earners are close to the lowest they’ve ever been.

And yet tax revenues are among the highest (adjusted) than they have ever been. Well more than we need to cover the constitutional portion of our national budget. But bleeding hearts and suckers decided that we needed entitlements… morons.

The aggregate tax rate for the top 1% is lower than for the next 9%—and not much higher than it is for pretty much everyone else.

I agree, we need to reduce everyone’s taxes. But the reasons for the figures are because the truly wealthy get much of their income from sources that are taxed less than simple W-2 taxable income. It’s the system your buddies in the government erected (probably so they themselves could dodge taxes) so hack it down and build a better boat or stfu.

As the nation’s richest people often point out, they do pay the lion’s share of taxes in the country: The richest 20% pay 64% of the total taxes. (Lower bar). Of course, that’s because they also make most of the money.

Now that is pretty clearly unfair!
The top 20% are clearly paying at least 4.8% more than their share of taxes!

And now we come to the type of American corporation that gets—and deserves—a big share of the blame: The banks. Willie Sutton once explained that the reason he robbed banks was because “that’s where the money is.” The man knew his stuff.

Oh goody, this will be fun.

Remember when we bailed out the banks? Remember WHY we bailed them out? We bailed them out, we were told, so that the banks could keep lending to American businesses. Without that lending, we were told, society would collapse …

I am amused you have a picture of GW Bush here, not of Nancy Pelosi, Hairy Reid, and Barak Obama because elbushy couldn’t have authorized squat if those three in their roles as senate majority leader, House Majority Leader and senator not authorized him to do so (they are all from the other team buddy I know that’s why they aren’t here).

But your right, the bail outs were probably the most retarded thing we’ve done as a nation since the 1934 National Firearms Act, and that’s saying something.

So, did the banks keep lending after we bailed them out? No. Bank lending dropped sharply, and it has yet to fully recover.

Ah you give them money and don’t like what they do with it? I think that’s a bit foolish don’t you?

Real-estate loans are still down …

I notice how through both of these graphs, that the line is still higher than it was in 07, what your complaining is that they haven’t continued to give out more and more money right?

So, what have banks been doing since 2007 if not lending money to American companies? Lending money to America’s government! By buying risk-free Treasury bonds and other government-guaranteed securities.

Well duh! Banks first responsibility is to their shareholders, and notice how the words “risk-free” appear in the description of what they have been doing? Yeah, that’s what I would do too.

And, remarkably, the banks have also been collecting interest on money they are NOT lending—the “excess reserves” they have at the Fed. Back in the financial crisis, the Fed decided to help bail out the banks by paying them interest on this money that they’re not lending. And they’re happily still collecting it. (It’s AWESOME to be a bank.)

Yeah, if true that’s actually pretty stupid , but then so is the federal reserve system. Not that a gold standard is any better. 

Meanwhile, of course, the banks are able to borrow money FOR FREE. Because the Fed has slashed rates to basically zero. And the banks have slashed the rates they pay on deposits to basically zero. So they can have all the money they want—for nearly free!

When you can borrow money for nothing, and lend it back to the government risk-free for a few percentage points, you can COIN MONEY. And the banks are doing that. According to Institutional Risk Analytics, the “net interest margin” made by US banks in the first six months of last year was $211 Billion. Nice!

And that helped produce $58 billion of profit in the first six months of the year.

That may be true, but the graph you posted doesn’t relate to that statement whatsoever, at least as far as I can tell. According to the Federal Reserve website your full of crap: http://www.newyorkfed.org/aboutthefed/fedpoint/fed15.html

The FedFundsRate that your chart is displaying is the rate at which banks loan money to each other through the Federal Reserve System. They aren’t getting the money from the government, they are getting it from other banks! Now if I read that wrong ok, but if I didn’t you’re acting as a political shill but might just be wrong.

But if your actually telling the truth, then we do need to correct the system a little and increase those lending rates.

And it has helped generate near-record financial sector profits—while the rest of the country struggles with its 8% unemployment rate.

Again this assumes that this inequity is a bad thing, and that if the top is making money while the bottom isn’t then there is a problem. This is a fallacy known as begging the question, there is no evidence aside from Marxist  political/economic theory that suggests this to be the case ever.

And these profits are getting back toward a record as a percentage of all corporate profits.

Those profits, of course, are AFTER the banks have paid their bankers. And it’s still great to be a banker. The average banker in New York City made $361,330 in 2010. Not bad!

If you repeat a lie often enough, eventually folks will start believing it. The same holds true for beating an idea into people, all ya gotta do is keep swinging.  This is NOT a problem folks this is what banks DO they make money for their employees and shareholders. Only commies and socialists have a problem with that.

This average Wall Street salary was 6X the average private-sector salary (which, in turn, is actually lower than the average government salary, but that’s a different issue).

So it REALLY doesn’t suck to be a banker.

Yep it sure don’t! But this isn’t what we call a problem.
What we can call a problem is how much the government workers make, at least the non-military ones.

So, the 1% is doing great, and the 99% are getting the shaft, but maybe the government’s stepping in to help everyone … by building roads or something?

Your evidence does not lead to this conclusion, at best you could say that the top 20 or 30% is doing great, the next 10% is ok, the next 10% is on the edge and the bottom 50% aren’t doing so hot. But you’ve bought into and are propagating this idea that the government can fix the economy at all, or that something like building roads is helpful to the economy.

 Nope. Public construction spending is falling.

Including on roads …

and transportation …

and schools.

This is what we call “a good thing” because we know one thing for sure, the federal government can’t spend any more money until they take care of the albatross around the neck of the nation known as entitlement spending.

In short, America just isn’t America anymore.

I’m pretty sure you don’t know what that means buddy. I actually agree with you but not on any of your talking points here.

American isn’t the America we knew even just 30 years ago.
The inundation of crazy unknowable federal, state and local laws makes just about everything we do illegal. The vast restrictions on our rights to privacy, to keep what we earn and the right to bear arms (note that the constitution never uses the word ‘gun’ because the 2nd Amendment isn’t just about small arms) we have lost much or even most of the freedom and liberty that made America such a shining city on a hill for the rest of the world. And quite frankly it’s the Keynesian policies just like the ones you advocate that were enacted by FDR and co. in the late 20s through the 40s that did us in. Government meddling is destroying the very fundamental values and ideas that make America, well, America. And the only reason we look like a shining city on a hill today is because the rest of the world is so far down in the depths of darkness that even a sputtering candle looks like a spotlight from heaven itself.  

 

Article number 2 doesn’t get the step by step treatment. It’s not worth it.

What you need to know about it is that he continues to insist that Government can fix the problem, Government can spend us out of this mess (and then pay off the debt) but he makes several major points that need some treatment.

In his “Acknowledgement Phase” of the article he says this:

Acknowledge that, raising taxes and/or cutting spending sharply right now will wallop the economy

Um, no. Actually if we just slashed the hell out of government spending and cut the living daylights out of taxes (say down to a flat 10% income tax rate for all) then we might just see the biggest economic boom the world has ever seen. But that wouldn’t let government be the hero so we would NEVER even try that, even though that exact policy worked in the 80s.

The other point I want to deal with is his obsession with infrastructure. Yes, a role of government is to build roads. However this does not in any way lead to a general economic help to the country. At best you employ a few thousand workers short term. Long term you do bupkis. You simply can’t employ all the folks you would need to employ should you want to use infrastructure development to boost the economy out of the problem it’s in right now.

The only upside here is that he actually admits that government spending is too high, but then he goes right ahead and says “SPEND MORE!!!!”  I swear Keynesians are retarded.

 

The only way were going to get out of our economic mess is if the political wonks put on their big girl pants and man up to the reality we have to take a machete to the government across the board. Yes even the military needs some temporary cuts and possibly some restructuring to make it more efficient with its resources. But most of all the cuts HAVE to be in entitlements, and I don’t mean reform, I mean wholesale entitlement Armageddon. Cut everything in social security, Medicare and Medicaid for everyone under 50, restrict unemployment down to 2 weeks at most if not remove it completely. Welfare, food stamps, and all other government aid needs to go. Federal grants need to be eliminated until the budget crisis gets under control and close down the freaking department of education and eliminate all federal funding for schools!  Yeah, that would cause some temporary issues for some isolated people groups, people who quite frankly aren’t going to probably contribute to the economy or society anyhow. But it would help the country as a whole and increase individual and corporate freedom across the board. Also but the capital gains tax down to about 4% increase tariffs of goods coming into the country and give a tax credit for all goods manufactured and sold to end users inside the USA.

 

There! Economy fixed, nation saved all in under 4,500 words.
And please beware of falling idiots!

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3 Comments leave one →
  1. Nick Terry permalink
    June 14, 2012 2:34 am

    Disclaimers: Economics is my hobby, so there may be an economic bent to all of this…
    Also, I favor Anarcho-capitalism(http://en.wikipedia.org/wiki/Anarcho-capitalism) over any other system. Yes, I know the pitfalls; I think I’d end up on top, and it’s good to be the king, right?. But I’m also a realist; at one time a GOP supporter, now Libertarian is my Party, and Austrian/Mises economics is my preference.

    First, the politics… both Parties are lost (along their respective ideological paths) at this point. The Dems less so then the GOP. Dems are Dems; always with the big gov etc. But in the past few years, the GOP is just as guilty of that notion. I blame the citizen. Not enough people care to get involved, so the system has been left to run itself. Basically, we bitch at Congress because they dont do their job when we, as citizens, havent done ours. But that’s another story…

    I agree with most, if not all, of what you said. That guy is pure Keynesian. But some things popped out at me as I read your comments:

    In November, we get the chance to choose between 2 candidates handpicked for us by kingmakers in DC. To any nay-sayers, yes, these exist; stop kidding yourself and get on with it. Or you can cast the protest vote for an outlier candidate or just stay home.

    Purchasing Power has increased somewhat (I have no idea how much) because of the lending practices of the banks. I suspect the majority of the bad data here started post 2000 with the rising housing boom. Banks let loose the “coffers”. Because of that and the subsequent bailouts, wtf knows what’s going on anymore. All valid economic data has been corrupted by meddling with economics. Prices have also gone up… way up… on most things…

    Evil rich bankers are pilfering my money from my bank account. But I don’t blame them. If I could be a banker, I would be a banker. They just operate within whatever confines the government gives them. In this case, the fractional reserve system (and isn’t she lovely?.).
    (The Fractional System explained by Rothbard, an Austrian economist http://mises.org/daily/2882#3 – even if you don’t agree, it’s a very informative article; I read Keynesian stuff too, but it leaves a bad taste in my mouth).

    The gold standard isn’t better than the Federal Reserve system? Austrian stuff here, be prepared: it isn’t about what the standard is; it’s about having a standard that doesn’t shift. Money should be static. Value is what changes. Value is fluid depending on the desire/need of an individual to buy/sell something. Value is assigned by individuals. We do this naturally on a daily basis with everything. It works best this way.
    Being realistic in today’s America, a standard isn’t going to happen. That means that banks wins, no contest. Unless, we allow free-market competition with banks. Right now, legal tender laws dictate that trade must be in dollars. Although, I think they allow a gold-clause on contracts now. My point is, we can’t escape the federal reserve system directly. Too many advocates. Let the economics do what they do without any meddling and see what happens. This gets my vote every time.

    The solutions this guy gives cracked me up. First he says we spent too much on housing, then he says we need to spend on infrastructure. Hmmm… Ok, lets make nice new roads for all of these empty houses. Keynesians belong in Antartica.

    I’m loving the current climate BTW. How else would we get to see global scale economic collapse? Greece was awesome. Let’s keep this up. Let’s drive this bitch right off a cliff.
    Nick

    • June 14, 2012 11:57 am

      Spot on Nick!
      My point RE the gold standard is more that right now its not a good instant alternative to the FED. ergo not any better.

      And my view of the November election is hardly a decision between a devil and an angel, more of a decision between immediate desolation of our nation and desolation delayed.

      Totally have marshmallows ready for watching the Eurozone collapse into a giant fireball!
      Way to entertaining haha!

  2. Nick Terry permalink
    June 14, 2012 12:44 pm

    The Eurozone is an animal and the French are involved(yeesh). I think some of them have realized that Germany is the one who is screwed there. They’ll be “forced” to shoulder the debt burdens of everyone else until the citizens say screw austerity (like Greece). You won’t see a complete collapse, but some nations will jump ship. I am most interested in the aftermath.
    Post Euro, Greece is in an awesome spot economically. They just declared bankruptcy and will have a new currency(probably the old Greek currency), and they have no giant natural resource to be coerced by the bigBullyNations. Its the perfect climate for a non-government run economic recovery. To ice the cake, Greece’s biggest asset is its amazingly awesome climate/landscapes. Were I in Greece, I’d be hitting up my fellow businessmen to make a “Come see how amazing Greece is and everything is cheap now BTW” vacation advert, complete with shots of farms, people not rioting, awesome beaches, historical sites, beautiful people, and kids playing. Being a train ride away for most Europeans, I suspect they’ll do well, especially when things start souring in those other European nations.

    As for us, it is coming. Everything is going to be peachy through November, of course, and getting “better”… I do love me some election season propaganda. After that, wheeee its gonna be a wild ride. Not sure what the Keynesian’s are going to try to pull since according to Keynesians, “bad things can’t possibly happen and be unfixable under a Keynesian Economy”. But it will be interesting. Then there will be fire. Then there will be badness. Then we’ll start getting on with it and America will start to grow again. And soon after that (hopefully), we’ll be mining asteroids (an economic game changer!).

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