... combined with Public Health Care can short-circuit a large majority of the people pushed to the worst extremes in the sequence above.

Indeed, one little recognized aspect of the Job Guarantee policy is that shelter for "economic homelessness" shifts into "providing places that can be rented on the JG wage".

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

Same here in Mountain Home, north-central Arkansas, AKA Geezerville.  In the fourth quarter the only reporting district in the State of Arkansas to report an increase in home sales over the previous year contained our county, Baxter, and the adjoining county, Marrion.  Between them, ( see map ,) they comprise the Twin Lakes area and also contain three rivers.  The two main industries here are health care and tourism.  Most of the tourism is by relatively well off types, lots of well to do small contractors and other relatively prosperous families who enjoy hunting, fishing and, in the summer, water sports.  Summer will tell the tale about tourism.

Arkansas, including the Twin Lakes area, has seen unemployment increase due to layoffs by national companies and a collapse of housing construction, but the state tax revenues exceeded estimates during the fourth quarter and we appear to remain on schedule to reduce the sales tax on food by another penny this year.  I saw an article, (can't find but found the original from a blog,) about the resilience that a large population of retirees and an emphasis on the environment can bring.  (They could still use some work on the environmental part with respect to developers, but construction has slowed down, so we get a little more time there.)

Real estate here never went up like in California, Nevada and Florida and the local banks are in good shape and are profitable.  Our home may still be worth a little more than we paid for it and I may be able to find a decent job when I need one.  Considering what I see in the rest of the world, I feel fortunate.  (Knock, knock!)  

"It is not necessary to have hope in order to persevere."

"Is this really an issue? Aren't even in the US school busses to transport children to school?"

Of course there are busses to take kids to school.

There are also paranoid soccer moms who won't let their kids out of sight, and so have to drive them 1 km to school. And there is school choice, which means going to an out-of-district school with no transportation. And how are the kids to get home after soccer practice?

Saw that, Jerome. The Kos comments were a bit disappointing- at least the first hundred or so,- except for the actually off-topic photoshops of Bush administration figures- I highly recommend them for good laugh material.
I was hoping the question that Miguel brought up might get more play.
I've branded myself a commie dingbat for almost two decades by trying to get Americans to realize that their whole prosperity scene peaked about 1974, and that family income- a phony number if there ever was one- has remained almost the same since then---but with twice the number of workers to generate it. They still don't get it- even those who comment perceptively on the numbers somehow haven't really realized just how savagely and thoroughly they've been robbed.

Capitalism searches out the darkest corners of human potential, and mainlines them.

GDP is at 190 and income at 125. Both are at 100 in 1973 (oil shock). 125/190 ~ 0.65, hence -35%.

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith

Monetizing future cash flows which were not even there to begin with, and calling that GDP growth.

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith

When the price of your stock market portfolio goes up in a speculative bubble, it does not produce any real wealth (railroads, factories, ball bearings, y'know stuff). That's the point of a speculative bubble: That asset prices go up faster than asset values. But the GDP counts only prices, not values. So when the price goes up faster than the value, phony GDP growth happens.

Now, of course you can strip this phony GDP growth out - which is what you attempt to do by inflation-adjusting GDP. But (quite aside from the fact that inflation rates have been gimmicked considerably) asset prices are not part of the inflation indices, so asset price inflation will not be stripped out of your corrected GDP figure.

Hence, asset price inflation (above and beyond consumer price inflation) creates a mirage of increasing GDP that does not represent any tangible value in the real world.

Or, to put it more bluntly - when asset price inflation is different from consumer price inflation, GDP numbers are nonsense (even moreso than usually).

- Jake

Friends come and go. Enemies accumulate.

but the higher revenues came from transforming cheap debt into apparent income via financial shenanigans. Apparent being the operative word.

What was real was the income capture this allowed, and indeed, the inequitable distribution they made possible.

Seriously, you have to see this as 7 of income from outside the finance sector, and 3 of 'income' from the finance sector (monetization of future cashflows on the basis of unrealistic assumptions of growth of asset prices, revenues and profits), with the financiers claiming 3/10th of the overall result.

Now that the financial bubble has burst, the financiers still cling to their 3/10th of the 7 that still exist, and want everybody to participate ot the clean up of the disappeared 3 (leveraged over the next 20 years, so who knows how much that will be).

In the long run, we're all dead. John Maynard Keynes

That's actually a good question. Let me get back to you.

blimey, there's a crystal ball award, for sure...

Asia Times Online :: Asian news and current affairs

Henrgy Blodgett observed on his "Clusterstock" blog that "Tim Geithner is transforming into a weird reverse Robin Hood who takes money from regular people and shovels it into banks that vaporize it."

Charles Gasparino of CNBC says the entire point of all this generosity is to provide Citi with a capital cushion sufficient to sell the toxic securities from its portfolio at cheap, market prices without driving it into bankruptcy. It's a nice sentiment, but, to me, Gasparino's wishing upon a star seems more the triumph of hope over experience, since no Citi official, certainly not Citi chief executive Vikram Pandit, has suggested that the bank intends to do anything close to what Gasparino suggested with the government largesse.

Historical legend has it that Spanish Conquistador Hernanado Cortez burned his own ships in the harbor of Veracruz, Mexico, in 1519, in order to convince his men that there was no going back from their destined role as conquerors of the New World. What Geithner seems to have done here is something along these lines. As nationalization talk proceeded in February, from the likes of those red radicals such as Greenspan and Lindsay Graham, a general assumption was heard in the markets that such a move would inevitably be followed by bank shareholders seeing the value of their holdings cut to zero. Of course, bank share prices fell sharply as a result.

Geithner's move seems to have been an attempt to convince skeptical markets that nationalization was not in the cards by, in essence, jumping into Cortez's boats. "I'm not going to bankrupt the shareholders of Citi - with my 36% ownership of the joint, I'm the biggest shareholder of them all! Now do you believe me when I say that I'm not going to nationalize?"

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

OK so that's settled. Should've checked before posting. My most sincere and humble apologies to all the honest people who read my partially fake post.

where they deserve to be led

hmmmmmmm.

Any idiot can face a crisis - it's day to day living that wears you out.

we would have had a chance at a better standard of living

oh, I agree. He fooled people into thinking he would make things better and in fact made them worse.  All part of the illusion.

One analyst I follow has noted that, in order for the Dow to fall to levels comparable to those attained after 1929 it would have to decline to about 1500.  He thinks this one will be worse, at least for stocks.

"It is not necessary to have hope in order to persevere."

You just have to look at the mood of the business class. They don't see this bottomming out any time soon. IMHO you will have to "stabilize the zombie banks" before that happens, and that will take all of 2009.

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith

> increased values prices of NEW home sales

Less the value purchase price of the land it's built upon.

- Jake

Friends come and go. Enemies accumulate.

is it properly measured? What about the hedge fund industry, the shadow banking system, and the insurance players that jumped in (à la AIG)?

The fact that 40% of corporate profits came from the financial sector in 2006-07 has to mean something.

In the long run, we're all dead. John Maynard Keynes