Financial topics

[Higgenbotham]

Interesting you mention this idea, Higgenbotham. President Nixon actually suggested the concept back in the early 1970s, and as most know here, he was a Republican president. If Obama or most anyone else in his place today suggested a Guaranteed Minimum Income, we would likely have many howls of “Marxism!” and “Communism!” — in other words, something really for the commie heap in the minds of many. However, given the increasing wealth inequality today, there may be some palatable (or Generation-X “stealth” way) that it can be made into reality. We’ll definitely see. Thanks for the on-target insights. —Regards, Marc

You may be right about that. My thought was that after giving trillions to banks it would be hard to say no to giving up to $12,000 to poor Americans. But people may be so sick and tired of any kind of free money giveaway that nothing will be able to get done. We will see, one way or the other, as you suggest. Thanks for stopping in; your comments are always insightful.

[Reality Check]

Will selling assets cut worldwide production, or just transfer that production to the control of other corporations and/or other countries ?

I think that anything that is sold now in the initial rounds of selling will be assets that have not yet been put into production, and probably never will be. It will be like a game of "pass the trash" where someone will bid low enough that they are gambling they are getting a good deal, hoping that they hit the bottom and that the fundamentals change for long enough to make a profit on it. Meanwhile, the company selling the asset, who probably knows the fundamentals best, is most likely to be right.

I assume that means we are just speculating as to exactly what assets are being sold and to whom.

As long as we are just speculating, here are some alternative speculations:

1. The oil company is divesting itself from undeveloped resource assets in a region of the world that it believes will no longer be under the rule of law, but instead will be under the control of a political system not favorable to a European, or U.S. based corporation ( say in the South China Sea, East China Sea, Eastern Europe, Central Europe or the "stans" of Asia, Iraq, Nigeria, Southern Sudan, etc. ), and/or,

2. The sale is a way of selling assets below market value to a corporation secretly related to some of the owners of the oil company, and the new owning corporation will be more removed from the observation of the U.S. and E.U. tax collectors, when they resell the assets at a profit, and,

3. The assets are not resources, but instead limited availability resource development equipment, sold to a company with owners related to some of the owners of the selling oil company, that when this equipment is withdrawn from the world pool of available development equipment, will hold up the cost of oil for months and drive up competitors resource development costs, and/or,

4. The same scenarios as above, except it also allows repatriation of profits from the sales of the assets to the United States to take advantage of a one time amnesty from U.S. taxes that has been floated by members of both the U.S. political parties, and would likely easily pass if say, the largest oil companies supported that legislation right before a very expensive, unpredictable, potentially party in control changing, mid-term election ( 2014 ).

Granted some of the above activities would be criminal, but I believe the vast majority of us agree that most of the Generation X elites believe they will never be held accountable for breaking the rules, a belief, based on their life experience is at least rational.

[Reality Check]

Interesting you mention this idea, Higgenbotham. President Nixon actually suggested the concept back in the early 1970s, and as most know here, he was a Republican president. If Obama or most anyone else in his place today suggested a Guaranteed Minimum Income, we would likely have many howls of “Marxism!” and “Communism!” — in other words, something really for the commie heap in the minds of many. However, given the increasing wealth inequality today, there may be some palatable (or Generation-X “stealth” way) that it can be made into reality. We’ll definitely see. Thanks for the on-target insights. —Regards, Marc

You may be right about that. My thought was that after giving trillions to banks it would be hard to say to no giving up to $12,000 to poor Americans. But people may be so sick and tired of any kind of free money giveaway that nothing will be able to get done. We will see, one way or the other, as you suggest. Thanks for stopping in; your comments are always insightful.

What do you believe the earned income tax credit is, except a negative income tax ( aka a guaranteed minimum income ) for politically favored members of the U.S. society?

The earned income tax credit is something supported by both political parties and it is highly susceptible to fraud, and also to political corruption in the form of selective enforcement of the laws and regulations determining eligibility and prosecution of fraud, in favor executive order in favor of non-enforcement of rules related to political groups who vote for the political party holding the executive branch.

[Marc]

Thanks, Higgenbotham, for the kind, affirmative comments. I do agree that many Americans are surely sick of the government giveaways, which may act as a significant deterrent to some sort of guaranteed minimum income for Americans. I strongly conjecture, however, that there are possibly even more Americans shot-through with a kind of vindictive, fearful puritanism, who would loathe and fear such “degenerate welfare improvidence” allegedly inherent in a guaranteed minimum income. This loathing and fear would be in the same breath of tolerating or even advocating the big banker/corporate bailouts In many cases, in the spirit of saving “all-American, job-producing captains of industry who are a bulwark against the commie heap — and who were victimized by ‘their’ liar’s loans, ‘their’ irresponsible maxing out of credit cards, etc.” Three decades of neoliberalism and neoconservatism coming together has produced a kind of thinking that, I feel in many instances, is just not that healthy for the nation, without my picking political sides here.

In fact, I think that the proverbial 1 percent has been able to get away with so much of what they’ve gotten away with due to this mode of staunch-solidarity-with-the-patricians thinking — and I think that quite a bit of it is not because of a fanatical desire or expectation in joining them wealth-wise.

Just my take on this; others may disagree. Thanks again for the sharing and feedback. —Regards, Marc

[Higgenbotham]

What do you believe the earned income tax credit is, except a negative income tax ( aka a guaranteed minimum income ) for politically favored members of the U.S. society?

Do you believe a guaranteed minimum income for all Americans is likely to happen?

[Higgenbotham]

In fact, I think that the proverbial 1 percent has been able to get away with so much of what they’ve gotten away with due to this mode of staunch-solidarity-with-the-patricians thinking — and I think that quite a bit of it is not because of a fanatical desire or expectation in joining them wealth-wise.

Back in the Fall of 2008, when the TARP was first proposed, my recollection is the public was furious and was jamming the phone lines of Congress. Calls were running over 99 to 1 against the bailout. That and the Occupy Wall Street reaction were the last signs of life I have seen from the public. I see a Congress and more broadly a top 1% that is raiding the till for themselves and a public that for various reasons can't get any leverage on the situation, and now accepts that. My feeling about the public is that their behavior is now driven by the belief that they should passively and collectively accept whatever abuse and crumbs their betters bestow on them because it has been conclusively demontrated who is in charge. More crumbs in the form of a guaranteed minimum income might be passively accepted also. Whether one will be bestowed, if it can raise oil demand (and prices) enough to make the oil producers profitable on their marginal properties, or more broadly consumer demand, I think one will be. The actions of the oil producers seem to be saying that, for now, there are no plans for that to happen.

[Higgenbotham]

This is interesting.

New poll shows surprising support for anti-poverty plan: Hepburn
Canadians give backing for a guaranteed annual income to fight poverty.

The series prompts the question: Is it really possible to have a poverty-free Canada?

For many experts, the answer is a clear yes, and the best way to reach that goal is through a guaranteed annual income.

It’s a radical idea that to date has been largely dismissed by government leaders as too costly, too difficult to implement and lacking in public support.

Because of the perception that voters don’t generally like the idea, few politicians bother even to think about such a program, let alone come out in support of it.

However a major new polled conducted this fall may provide the evidence that some risk-averse politicians need before giving their support to a guaranteed annual income.

The survey showed more Canadians like the idea than oppose it.

A majority of Canadians with household incomes under $100,000 and those with no post-secondary education also backed the idea while support was lowest (38 per cent) amongst Canadians earning more than $100,000.

http://www.thestar.com/opinion/2013/12/ ... pburn.html

It might be possible to sell the idea that we can get rid of the complicated welfare programs and the army of bureaucrats who administer them and replace it with a simple guaranteed income plan, and it would be cheaper to do that. Especially if Canada or some other country does it first.

[Marc]

In fact, I think that the proverbial 1 percent has been able to get away with so much of what they’ve gotten away with due to this mode of staunch-solidarity-with-the-patricians thinking — and I think that quite a bit of it is not because of a fanatical desire or expectation in joining them wealth-wise.

Back in the Fall of 2008, when the TARP was first proposed, my recollection is the public was furious and was jamming the phone lines of Congress. Calls were running over 99 to 1 against the bailout. That and the Occupy Wall Street reaction were the last signs of life I have seen from the public. I see a Congress and more broadly a top 1% that is raiding the till for themselves and a public that for various reasons can't get any leverage on the situation, and now accepts that. My feeling about the public is that their behavior is now driven by the belief that they should passively and collectively accept whatever abuse and crumbs their betters bestow on them because it has been conclusively demontrated who is in charge. More crumbs in the form of a guaranteed minimum income might be passively accepted also. Whether one will be bestowed, if it can raise oil demand (and prices) enough to make the oil producers profitable on their marginal properties, or more broadly consumer demand, I think one will be. The actions of the oil producers seem to be saying that, for now, there are no plans for that to happen.

That’s a valuable further perspective. Much of my perspective, I will admit, has been shaped by comments I’ve seen on financial-blog postings and other media. And, I have also likewise already formed the opinion that there are many people who are truly angry with the proverbial 1 percent and the financial engineering that has taken place to really favor them.

I also think that a huge amount of apathy and techno-narcissism has been a factor in the limited protest against the financial state of things. When the Occupy Wall Street protests first broke out, it seems like these protests were dominated by highly-educated Whites, with minimal participation from other segments of society except as homeless hangers-on and the like. And, as we know, many of those who did participate in the OWS protests were utopian romantics and drama queens. Maybe due to the 1 percent being able so far in keeping the ship from sinking, we’re still in a kind of suspended Third Turning mode, where far too many people don’t give a crap, so long as they have their bread and circuses. Yet, the termites in the foundation keep eating away at it, and this probably won’t end well. —Regards, Marc

[Higgenbotham]

That’s a valuable further perspective. Much of my perspective, I will admit, has been shaped by comments I’ve seen on financial-blog postings and other media. And, I have also likewise already formed the opinion that there are many people who are truly angry with the proverbial 1 percent and the financial engineering that has taken place to really favor them.

I also think that a huge amount of apathy and techno-narcissism has been a factor in the limited protest against the financial state of things. When the Occupy Wall Street protests first broke out, it seems like these protests were dominated by highly-educated Whites, with minimal participation from other segments of society except as homeless hangers-on and the like. And, as we know, many of those who did participate in the OWS protests were utopian romantics and drama queens. Maybe due to the 1 percent being able so far in keeping the ship from sinking, we’re still in a kind of suspended Third Turning mode, where far too many people don’t give a crap, so long as they have their bread and circuses. Yet, the termites in the foundation keep eating away at it, and this probably won’t end well. —Regards, Marc

The Swiss will be voting on a guaranteed income this year. Wikipedia says this will be the first referendum of its kind on this issue, anywhere in the world.

http://en.wikipedia.org/wiki/Swiss_referendums,_2014

This quote from a report done about a year ago supports what you have said.

What allowed for GAI to be considered seriously by both Republicans and Democrats in the late-1960s and early 1970s? Why would the chances for a GAI proposal be so bleak today? And why are the answers to those questions critical to the outcome of virtually every other domestic public policy issue that exists today?

In the course of weeks of reporting — both through interviews and an exploration of the documentary record — Remapping Debate found that GAI proposals were given room to breathe in a social and political environment that took seriously the values of citizenship and mutual obligation, and that accepted the fact that social problems could be — indeed, should be — solved by governments.

That environment has disappeared, due in large measure, we found, to the rise of “market thinking,” a mindset that subordinated — and, in some respects, supplanted altogether — the values of citizenship and mutual obligation.

http://www.remappingdebate.org/article/ ... n?page=0,0

I find it interesting that Hayek, the Austrian economist, supported a basic income. I agree with the concept myself, for many reasons.

Winners of the Nobel Memorial Prize in Economic Sciences who fully support a basic income include Herbert A. Simon,[42] Friedrich Hayek,[43][44] James Meade, Robert Solow,[45] and Milton Friedman.[46]

http://en.wikipedia.org/wiki/Basic_income#United_States

[Marc]

Appreciate the report you posted. I think that the current Late Third/Early Fourth Turning ethos we seem to be currently in also affects much more than just financial thinking — even the craptastic Auto-Tuned, bad techno music and painfully bad rap and other pop that dominates today (along with the visual aesthetic that goes with it) really reflects societal values found in much of the American public. The majority of adult Americans, by and large, couldn’t give a rat’s behind about things such as LIBOR, Credit-Default Swaps, and re-hypothecation, which makes it really easy to anaesthetize these people with bad reality television, Justin Bieber, the Kardashians, Lady Gaga, Lil Wayne, highly vulgar tattoo art, etc. Combine these apathetic lumpenproletarians with many hyper-individualists and economic semi-reactionaries, and you get what you get today. —Regards, Marc