May We Live in Interesting Times

Tonight in Texas, Tea Party challenger Ted Cruz defeated a more establishment Republican in a runoff election, making him a shoe-in for the Texas Senate seat.  A supporter at his victory rally was quoted in the NY Times as saying "I love it, we need more conservative Christians in office".  Read the Times' report here

On the opposite side of the aisle, Democrats are rallying around party support for gay marriage and healthcare, and upholding women's rights.

Clearly faith and social opinions are polarizing topics, but should these issues cause so much anger as to prevent any kind of compromise, the way they have in Congress since 2010.  Even in a single household, people don't agree on everything, and compassionate family members give and take to help each other find happiness and achieve their goals.

Here are eight serious problems that effect liberal and conservative alike, and have nothing to do with social or religious issues.

1.  Excessive private debt, mortgages in 2009, student loans up next.

2.  Increasing high school drop outs and unemployment due to lack of job encouragement in the economy,

3.  Decaying infrastructure.

4.  Excessive public debt that will not be solved in the foreseeable future.  -The answer is not as simple as shutting government down

5.  Unfunded tax cuts, unfunded pension liabilities, unfunded Medicare. In other words, the government is going broke.

6.  Increasing gap between the rich and the poor. Social instability.

7.  Embracing wishful thinking "this time is different, the Fed will solve our problems, etc." [the end is nigh]

8.  An idiot class of politicians. [on both sides of the aisle]

Courtesy of: http://www.businessinsider.com/can-america-resolve-its-major-problems-2011-8#ixzz22Gg7jPyO

What would it take to leave gay marriage, abortion and Christian faith at the doorstep and fix this mess together before it destroys our Nation?

Conservatives couldn't be happier with Obama's recent "You didn't build that" remark but this blogger has been agreeing with him for years.  To claim that ANY business owner has not directly benefited from America's electric grid, internet networks, highway system and financial institutions (which he/she has paid for in part with taxes) is to take the side of the brooding teenager who scorns his parents after they have so painstakingly raised him.  These investments take time, paying taxes is a form of transfer between generations: we help fund for our children the same advantages which our parents funded for us.

Am I wrong dude?

Mitt Romney Creates a Job, Below the Poverty Line

We all have heard about Mitt Romney's overseas investments, his Swiss bank account, and his $100 million IRA, so what, he's rich.  But wait there's more! The campaign itself admitted that Mitt's tax return is hundreds of pages long and full of tasty bits of information, so I took it upon myself to find something to write about that the national news hadn't already dragged through the street on prime time.  Thankfully for my rigorous exercise schedule, it didn't take long.

As most people already know, Mr. Romney has refused to release more than his most recent (2010) tax return.  The one which, as his father put it, was "done for show."  You can read about it here at CNN.  The overriding theory is that following the 2008 stock market crash, the Romney's investment accounts lost so much value that they wrote the loss off, and paid no taxes at all in 2009.

So I eagerly dug into the one return Mitt was generous enough to let "us people" have.  You can read along here, it's very dense.  It's true Mitt made a staggering amount of money that year, $21.6 million to be more specific.  He also paid a very low tax rate of 13.9% (much lower than this blogger's tax rate), but that isn't unusual for very wealthy people, and it isn't the point of this article.

The point is that not only is the Romney household dripping with cash and Olympic horse muck, it is also a job creation machine!  It is a household that had at least one employee in 2010 - this means it employed more people than 80% of all small businesses is the United States!

Yes friends the Romney household did indeed employee someone - maid, cook, masseuse, shoe-shine boy, we simply don't know.  What we do know however is that Mr. and Mrs. Romney paid that person only $20,603 in 2010.  Staggering I know, but out of this mighty salary, the Romneys withheld $4,119 in Federal taxes from these wages, making their employee's take-home pay $1,373 per month, and their tax rate 20%**

Mitt Romeny and Co. clearly cannot understand what anyone who is out of work - or simply struggling to make their Ferrari payment - is going through right now.  A candidate as secretive as him, whose campaign is funded by more private donations than any in history, is fraught with risk for the country at large.  And after watching his performance in Europe and Israel this week, let's all hope to see a bit more compassion and transparency from the Republican's only hope to defeat the President this Fall.



**The tax return reports the unemployment, SS and Medicare taxes the employer (Mittens & Co.) paid.  The employee's share is usually about the same, but it varies from state to state, and since I don't get paid to do this, and I don't live in MA, I did not do my due diligence on this one.

Buzz Off Inflation Hawks, We Need Higher Prices

A little digging into the St. Louis Federal Reserve database reveals that the US economy has been charting a textbook course along the Phillips Curve over the past few years.  As the chart shows, the trade off between unemployment and inflation is this: Inflation rises (wages and prices go UP), this results in a more robust economy where people (excited by the higher wages, or astounded by the higher prices) find jobs with more vigor, thus unemployment falls!

As you can see, 2010-2012 has seen two separate ticks up in the inflation rate (as measured by the year/year rate of change in core CPI) which have been followed like clockwork by a decrease in the unemployment rate - small decrease you say? Remember that each percentage point on the unemployment scale includes millions of people, so not a trivial amount by any means.  In fact, unemployment is currently at the lowest levels it's been since the 2008 financial crisis!

Simple as it may be, I'd say this one chart is proof that the macroeconomy is indeed on the path to recovery. However, danger is afoot:

The International Monetary Fund recently reported that the Euro zone is in danger of slipping again into a period of deflation.  This could send another shock wave through the world financial markets as falling asset prices (stocks, and homes) translate into falling wages and deeper global recession.

As anyone who knows much about monetary policy will tell you, deflation is worse than inflation almost any day of the week.  Simply because not only does it take the wind out of the sails of the economy, it slices off huge portions of household net worth in the form of falling home prices and shrinking retirement accounts.

Bottom line: the US has just endured a bout of deflation, and it should be in no mood to try another one.  Federal Reserve chairman Ben Bernanke said yesterday that the Fed would not consider further stimulus if the inflation rate did not fall below 2%.  Considering the notable lag time that you must account for in monetary policy, maybe he should consider a 3% target...

Welcome friends to the beginning of the end, to the start of something truly penultimate, to the very genesis of the Mayan apocalypse! 

This new blog - if blog is the word I'm groping for - promises to be the manifestation of an idea that, like the economic theory for which it is so hilariously named, sounded absolutely fantastic at first but in practice revealed itself to be a complete farce, the proverbial "emperor in sheep's clothing".

So stay tuned! Sit back, relax and click upon the interstitial google advertisements.  Along the way I hope we'll poke some good fun at some very serious issues, explore the deepest chasms of this boson-infested universe and have a hearty laugh at the rich and famous. Heck, we might even make a poop joke or two!  Whatever we do, I'm certain you won't want to miss it, I know I won't...

>> Laughs