What's with this white stuff?

When Doreen and I left Florida we absolutely packed the van with lots and lots, even oodles of nice warm weather and brought it home with us. Guess we'll have to take a trailer with us next year. Brrr! Or did someone just return from the arctic?

By the way, the theological definition of that white stuff is frozen angel tingle. You can always tell when theirs been a party in heaven.

Econ: Supply Side vs Demand-Side II

Paul here, I liked your earlier economics post so much I thought it deserved a follow-up. Economics is always a balance of supply and demand. Production and consumption. Capital and Labor. Ultimately the problem with both Demand-Side Economics and Supply-Side Economics is they rely too heavily on just half of the equation. As a result, if carried too far in policy, they each have failure points.

In a healthy fluid economy, production and consumption are in balance enough that the market demands of the consumers are steadily met with production, which in turn feeds compensation and buying power of the consumers as workers.

A) In an economy where forces or policies have become too weighted to the demand-side, consumption demand outweighs investment and production. You get too many dollars chasing too little production -- result: inflation of consumer goods.

B) In an economy where policies are too heavily weighted towards investment and capital, you get too many dollars in the investment world chasing too few productive investments -- result: asset bubbles. Nasdaq 5000. The dot-com bubble of 1999-2000. The real estate bubble of 2006-2007. The commodities bubble of 2008. You can also get corporations sitting on huge cash balances in a recession without a clear idea of how to deploy it into production, because the demand out in the consumer marketplace can'tit anymore.

In case (B), you basically have an economy that has become slow to respond to monetary policy because the wealth distribution has gotten too putzed up, making demand less elastic among the broader consumer base. The Fed cuts interest rates, but it has little effect as it amounts to 'pushing on a string' -- this is a sign that supply-side economics has been pushed to its ultimate limit. It marks the end of an economic 'long cycle'. To reset the clock, demand-side forces need to be enabled to somehow set the trend.

A confounding problem is that the traditional feedbacks are no longer reliable in a global market: the US isn't a closed system, so increasing productive capacity no longer translates into more wages in the consumer base. It may mean increasing wages in China, and unless those wage-earners spend their money on American goods, it does us no good. The next best thing that they do is they buy our bonds so we can borrow the money to maintain our standard of living with low taxes in lieu of rising wages. A dubious bargain, to be sure.

Wordplay

My friend Lloyd sent these to me, one of the few pieces that were funny and printable.


The Washington Post's Mensa Invitational once again invited readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition.

Here are the winners:
 
1. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period of time.

2 Ignoranus : A person who's both stupid and an asshole.
 
3. Intaxicaton : Euphoria at getting a tax refund, which lasts until you realize it was your money to start with.
 
4. Reintarnation : Coming back to life as a hillbilly.
 
5. Bozone ( n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future

6. Foreploy : Any misrepresentation about yourself for the purpose of getting laid.
 
7. Giraffiti : Vandalism spray-painted very, very high
 
8. Sarchasm : The gulf between the author of sarcastic wit and the person who doesn't get it.
 
9. Inoculatte : To take coffee intravenously when you are running late.
 
10. Osteopornosis : A degenerate disease. (This one got extra credit.)
 
11. Karmageddon : It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer.
 
12. Decafalon (n): The grueling event of getting through the day consuming only things that are good for you.
 
13. Glibido : All talk and no action.
 
14. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.
 
15. Arachnoleptic Fit (n.): The frantic dance performed just after you've accidentally walked through a  spider web.
 
16. Beelzebug (n): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.
 
17. Caterpallor ( n.): The color you turn after finding half a worm in the fruit you're eating.
 
The Washington Post has also published the winning submissions to its yearly contest, in which readers are asked to supply alternate meanings for common words.
 
And the winners are:
1. Coffee, n. The person upon whom one coughs.
 
2. Flabbergasted, adj. Appalled by discovering how much weight one has gained.
 
3. Abdicate, v. To give up all hope of ever having a flat stomach.
 
4. Esplanade, v. To attempt an explanation while drunk.
 
5. Willy-nilly, adj. Impotent.
 
6. Negligent, adj. Absentmindedly answering the door when wearing only a nightgown.
 
7. Lymph, v. To walk with a lisp.
 
8. Gargoyle, n. Olive-flavored mouthwash.
 
9. Flatulence, n. Emergency vehicle that picks up someone who has been run over by a steamroller.
 
10. Balderdash, n. A rapidly receding hairline.  

11. Testicle, n. A humorous question on an exam.
 
12. Rectitude, n. The formal, dignified bearing adopted by proctologists.
 
13. Pokemon, n. A Rastafarian proctologist.

14. Oyster, n. A person who sprinkles his conversation with Yiddishisms.
 
15. Frisbeetarianism, n. The belief that, after death, the soul flies up onto the roof and gets stuck there.

16. Circumvent, n. An opening in the front of boxer shorts worn by Jewish men

The past 48 hours...

As many of you know, I have a new man in my life. His name is Ej. (Edward John) He lives in Nashville and he turned 40 yesterday (Wednesday). Some of his friends contacted me and wanted me to come to Nashville for his birthday even though we were going to his cousins wedding in Ann Arbor this tomorrow (Friday). So on Monday, I found a ticket to fly in and I had his buddy Keith pick me up from the airport. Rewind, I wasn't supposed to get into Nashville until 6:10 p.m. and the party started at 5- so they were going to put a blindfold on Ej and put him on stage at the place where the party was then bring me in. I went to the Milwaukee airport to see if I could get onto the 6:05 a.m. flight into Baltimore and then onto a standby flight into Nashville. They couldn't get me onto the plane. But as I am speaking with the Gate agent, she asked if I wanted to fly out of Midway-Chicago. I'd been there a million and one times and said sure, check it out. She then found me a direct flight from MDW to Nashville at 11:55. I was ready to go, so I headed straight to Chicago. Plus I wanted to avoid as much traffic as possible. I parked, walked in and got through security quite quickly. Gate #2 had a plane boarding and ironically it was to Nashville. I jetted up to the counter and asked them to get me on a standby list. They did and I sat and crossed my fingers. Thank goodness Keith was flexible to pick me up! The door was about to close and they called my name. I got the LAST seat on the 9:35 flight to Nashville. I landed about 10:50 and called Keith. Then the dilemma was that of how to surprise him. So Keith and I both knew that his "big" bosses were going to take him out for lunch. He also had invited Keith for his birthday lunch. So Keith told him that he had a present for Ej at the lunch. (at this point he knew I was going to be there) So we got a couple of Ej's employees involved. One came down by us in the lobby and took me up the freight elevator to the 11th floor. And Keith headed up the regular elevators. Keith headed into Ej's office and pulled him into one of the other guys offices. At this point, I was sneaking around the back side of the building. Universal is the entire 11th floor of a building right downtown Nashville. They put me into Brian Wright's office... this is just some guy that gives people record deals.... and plop me down on the couch. Brian then called down to where all the guys were and asked them to come and listen to a new song. At this point, Ej was starving as he usually eats lunch right at noon and it's almost 12:30 so he's a little bit feeling like - hey it's my birthday...let's go to LUNCH! So I hear them coming, Brian is videotaping this whole thing. Ej rounds the corner and they all yell, HAPPY BIRTHDAY... and he just stares at me. Seriously about 3 seconds of NOTHING... so I get up and he finally processes it and gives me a hug. He says he's never been surprised before. After that we went to lunch, then I went and took a nap and he went back to work. His party started at 5 and there were 200 people who came through the entire night. A friend of Ej's said, there is no other event they've ever seen where competitors all came together to celebrate anything, much less one person. (There were record label people there from every label in Nashville) Inquiring minds... If you are wondering how we met.... six years ago I was in Nashville with some friends and met him and a couple of his friends. It was at the same bar that the party was held at and we were at a booth at the front of the bar. Hank Williams Jr. walked in and sat down with us, he had just recorded "Are you ready for some football!" and had a little Jack Daniels in him.... and was singing to us. That was pretty incredible. Ej then moved to Dallas. And when I was traveling I had a LOT of clients there. So when I would visit we'd go to dinner or go out. I was actually at a dinner with Ashton Sheppard and all the Executives from Universal which was pretty awesome. (Ashton is a newer artist on the Country music scene) Then a few months before I decided I was moving home, about September of 2008 - during CMA week in Nashville, a client wanted me to come and see them. So I flew in and during CMA week all employees of Universal are in town. He took me to see The Randy Rogers Band (one of Sami's favorites) and Billy Currington and then we went out afterwards. Since then, Ej has moved back to Nashville. We've stayed in touch over the years and now have decided to become a couple. It's been great this far! All except the distance... but we went to San Antonio and Sami & Devan went to dinner with us and then we spent some time at their beautiful house. He's been to Milwaukee and met mom, Megan and Bob and the kids. He's also met the majority of my friends here. This weekend we are heading to Ann Arbor, Michigan and will be attending his cousins wedding. His parents will drive down (through Canada) from North Tonawanda, New York (North of Buffalo) So, in my next edition.... I am sure it will be about that. If I can get my hands on the video I will upload that too!

Globall Warming Information

For all those noodnincks (technical term) who think Global warming is just liberal propaganda. 10 myths about global warming, and what the science really says. By John Cook

The reasons for raising doubts about the human causes of global warming, explains Skeptical Science's John Cook, are often political rather than scientific. Cook hears from climate change skeptics that '"it's all a liberal plot to spread socialism and destroy capitalism.' ... However, what is causing global warming is a purely scientific question." Cook tries to remove the politics from the debate by concentrating on the science. Below is Cook's list of the most-used arguments of climate change skeptics, compared to what the science actually says. Myth 1:  "It's the sun." Fact: In the last 35 years of global warming, the energy from the sun has been decreasing while the earth’s temperature has been increasing. Myth 2: "The climate's changed before." Fact: The climate reacts to whatever forces it to change. Humans are now the dominant force causing change. Myth 3: “There is no scientific consensus on climate change."Fact: More than 95 percent of scientists working in the disciplines contributing to climate studies accept that climate change is almost certainly being caused by human activities. Myth 4:  "Global warming has stopped and a cooling is beginning."Fact: Empirical measurements of the Earth’s heat content show the planet is still accumulating heat and global warming is still happening. Myth 5: "Climate models are unreliable." Fact: While there are uncertainties with climate models, they successfully reproduce the past and have made predictions that have been subsequently confirmed by observations. Myth 6: "The surface temperature record is unreliable, and affected byartificial heat sources." Fact: The warming trend is the same in rural and urban areas, measured by thermometers and satellites. Confidence in climate science depends on the correlation of many sets of these data from many different sources in order to produce conclusive evidence of a global trend. Myth 7: "For the years 1998 to 2005, the Earth’s temperature hasn't increased." Fact: Globally, 2010 was the hottest year on record, tied with 2005. Surface temperatures show much internal variability due to heat exchange between the ocean and atmosphere. Due to a strong El Niño climate pattern, 1998 was an unusually hot year. Myth 8:  "An ice age was predicted in the 1970s." Fact: Ice age predictions during the 1970s were predominantly media-based. The majority of peer reviewed research at the time predicted global warming due to increasing CO2. Myth 9:  "Antarctica is gaining ice." Fact: Overall, Antarctica is losing land ice at an accelerating rate while Antarctic sea ice is growing -- despite a strongly warming southern ocean. Myth 10:  "A rise in carbon dioxide doesn’t precede a rise in temperatures, but lags behind it." Fact: In the case of warming, the lag between temperature and CO2 is explained as follows: As ocean temperatures rise, oceans release CO2 into the atmosphere. In turn, this release amplifies the warming trend, leading to yet more CO2 being released. In other words, increasing CO2 levels become both the cause and effect of further warming. John Cook, author of "The Scientific Guide to Global Warming Skepticism," lives in Queensland, Australia, and maintains the Skeptical Science website (skepticalscience.com), from which this is adapted.

From the Handbook of Religion and Health

To quote: ‘In the majority of studies, religious involvement is correlated with:

[1] Well-being, happiness and life satisfaction

[1] Hope and optimism

[1] Purpose and meaning in life

[1] Higher self-esteem

[1] Adaptation to bereavement

[1] Greater social support and less loneliness

[1] Lower rates of depression and faster

recovery from depression

[1] Lower rates of suicide and fewer positive

attitudes towards suicide

[1] Less anxiety

[1] Less psychosis and fewer psychotic

tendencies

[1] Lower rates of alcohol and drug use and

abuse

[1] Less delinquency and criminal activity

[1] Greater marital stability and satisfaction…

We concluded that, for the vast majority of

people, the apparent benefit of devout

religious belief and practice probably outweigh the risks’.

Macroeconomics: theories underlying political debate

Demand Side Macroeconomics vs. Supply Side Macroeconomics

I decided to take a new tack on the ongoing economic debates currently going on between the political parties (and always has.) You can also look at it as a mini macroeconomics primer.

First, there is a big difference between microeconomics and macroeconomics. We all are used to microeconomics as that is how we run our own lives. We get income, we spend, save, donate etc. that income according to our wishes. Macroeconomics is how countries, governments operate, and the two are definitively not the same, though many would like you to think so.

I’ll start first with the economic theory developed by John Maynard Keynes called Demand Side Economics. I just take it from Wikipedia:

 Keynesianism and Keynesian theory) is a macroeconomic theory based on the ideas of 20th century English economist John Maynard Keynes. Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.^[1] The theories forming the basis of Keynesian economics were first presented in The General Theory of Employment, Interest and Money, published in 1936; the interpretations of Keynes are contentious, and several schools of thought claim his legacy.

Keynesian economics advocates a mixed economy—predominantly private sector, but with a large role of government and public sector—and served as the economic model during the later part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the stagflation of the 1970s. The advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought. The former British Prime Minister Gordon Brown, former President of the United States George W. Bush, President Barack Obama, and other world leaders have used Keynesian economics through government stimulus programs to attempt to assist the economic state of their countries

Next we have Supply Side Economics using the same source.

Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. According to the theory, consumers will then benefit from a greater supply of goods and services at lower prices. Typical policy recommendations of supply-side economics are lower marginal tax rates and less regulation.^[1]

Current supply-side economics is primarily concerned with economic growth in general, and does not hold that decreasing taxes increases government revenue. It is true that many early proponents argued that the size of the economic growth would be significant enough that the increased government revenue from a faster growing economy would be sufficient to compensate completely for the short-term costs of a tax cut, and that tax cuts could, in fact, cause overall revenue to increase.^[2] However, in 2003, the Wall Street Journal declared the debate over the ability of supply-side economics to reduce taxes without cost has ended "with a whimper," after extensive modeling performed by the Congressional Budget Office (CBO) failed to support that possibility.^[3]

The term "supply-side economics" was thought, for some time, to have been coined by journalist Jude Wanniski in 1975, but according to Robert D. Atkinson'sSupply-Side Follies ^[4] [p. 50], the term "supply side" ("supply-side fiscalists") was first used by Herbert Stein, a former economic adviser to President Nixon, in 1976, and only later that year was this term repeated by Jude Wanniski. Its use connotes the ideas of economists Robert Mundell and Arthur Laffer. Today, supply-side economics is viewed by some as a form of "trickle-down economics"

Current history. In the 70’s during Johnson’s administration the economy was a mess; remember the Vietnam war? The Great Society Programs lead to a good deal of inflation and the Mideast found power in their control of oil (the price of which tripled in 1978.) High priced caused production cut backs, high prices less to less spending; it was called stagflation.

The usual inflation solution was for government to raise interest rates, cut spending and slow down demand. To counter unemployment the government cuts interest rates, increasing demand. Problem was both were going on.

Here comes supply side economics. The government should cut taxes on the wealthy to jump start the economy, the wealthy then would take the new money and invest it, thus new factories creating lower priced good. Wow, inflation and unemployment fixed at the same time. Remember the old saying, if it sounds too good to be true it probably isn’t true.

Nevertheless, Ronald Reagan in 1980 promised to cut taxes, raise military spending and the government could spend and the budget would be balanced. George H.W. Bush called it voodoo economics and it was. In 1982, the first full year for this plan the economy shrank 2% and Reagan created the greatest deficit in history. The deficit was 208 billion by ’83 (in contrast to Carter’s $77 billion.) This continued with Bush approached $300 bill a year in deficits. The national debt in 1980 was a bit below $1 trillion and by the end of ’82 it was $4.35 trillion. There is supply side economics for you.

Clinton reversed supply side economics. He raised taxes on the wealthy and lowered them for the middle on lower classes; every Republican voted against this decision. The economy enjoyed the longest sustained expansion in history creating 22 million jobs (lowest unemployment in 30 years. Economic growth averaged 4% per year vs 2.8% during the Reagan/Bush era. That is Demand Side Economics or Keynesian economics.

Then came George W. Bush who of course returned to supply side economics, lowering taxes on the very rich (“his base” as he called them.) This amounted to $1.6 trillion in tax cuts 45% given to the top 1% of the country. GDP (gross domestic product) grew at 2.8% almost a full percentage behind the previous times. Jobs increased 1.3% vs 8.8%  in earlier upswings. It is a terrible weak recovery.

What the Bush administration did do extremely well was increase debt. Clinton had a $136 billion suplus which Bush turned into a $158 billion deficit in his first year. The national debt was at $5.8 trillion and moved to $12 Trillion in 2009.

Had enough? It seems perfectly clear to me that supply side macroeconomics benefits the ultra rich and the ultra rich only, for most of us it has lowered our standard of living. Keynesian macroeconomics, demand side economics is better for the whole country.

The current budget decreases lie mainly at the expense of the poor and the ultra wealthy will hardly feel a hiccup.

There are certainly better economists around than me, but I have a basic understanding of economics from the college days and a bit of teaching. The above material took relative little time to accumulate if you but do a bit of research.

It seems to me that Obama trying to return to Keynesian/Demand side economics and the Republicans wish to have supply side economics. Most of this gets lost in all the rhetoric of modern sound bites debates.

I hope it helps you a bit in understanding current debates on these important issues.