Sunday, May 1, 2016
Have you ever wondered what the Federal Reserve is all about? I can assure you that you're not alone. Fortunately, while there's a conspiratorial tone to the clip below, when it comes to explaining some of the broader aspects of what the Federal Reserve is about, the 7 minute clip below does a pretty good job of introducing you to the topic ...
In the FYI category, one of the first academic articles I wrote in 1993 compared the German central bank, the Bundesbank, with our Federal Reserve. You can access it by clicking here (it's in Spanish).
More recently I've written numerous posts on my blog that discuss what's been happening at the Fed, and how they're making financial matters worse in America, which you can access here. In brief, rather than focusing on "maximum employment" and "stable prices" - per a 1977 Federal Reserve amendment - the Fed has concentrated on acting like a financial hammock for our nation's largest financial institutions.
To give you an idea of the "financial hammock" I'm talking about take a look at the chart below. The red section represents what Wall Street's biggest financial institutions got ($4.76 trillion) from the Federal Reserve and the Treasury Department as part of the post-2008 bailout. The blue section represents what trickled it's way through the economy for the rest of us (via the Fed's infamous "quantitative easing" programs) up through 2011.
To be clear, I believe there is a strong and positive role for a central bank as an institution. Our nation's Federal Reserve, however, is not fulfilling that role.
Friday, April 29, 2016
In the past I've explained (here, here and here) how the United States redistributes wealth on a regular basis. Specifically, I provided data showing that for every $1.00 California - or Californians - pay into the federal tax system that the state gets far less than $1.00 back from the feds. Other "Blue States" - like Illinois and New York - also get less than $1.00 for every dollar they pay in to the system.
Poorer states, like Alabama, Mississippi, and New Mexico, however, will get anywhere from $1.25 and well over $2.00 back for every dollar they pay in taxes.
This wealth redistribution game is a pretty sweet deal. That is, if you're one of the poorer states - who, strangely enough, are politically conservative and like to complain about needing to get the federal government out of our lives.
Anyways, the 2016 Tax Foundation report is out and it has some interesting numbers when it comes to understanding which states depend most on "big gubmint" for their - let's be frank - survival. When it comes to Federal Aid as a Percentage of State General Revenue we find:
* For every $100 Alabama spends, $36.15 of that comes from the federal government.
* For every $100 Montana spends, $37.42 of that comes from the federal government.
* For every $100 Louisiana spends, $41.94 of that comes from the federal government.
* For every $100 Mississippi spends, $42.89 of that comes from the federal government.
|Red-State, Blue-State summary election results for 2000, 2004, 2008 and 2012.|
Things are much different when it comes to the dreaded "liberal" Blue States, like California and New York.
For every $100 California spends, $24.96 of that comes from the federal government.
For every $100 New York spends, $28.01 of that comes from the federal government.
For every $100 Washington spends, $27.30 of that comes from the federal government.
There's more, but you get the point.
The real takers in our national redistribution of wealth scheme are not the the liberal Blue States. It's the conservative Red States who talk a good game about rugged individualism, but can't seem to stand on their own two feet without being subsidized with Blue State federal tax dollars.
So, yeah, some of the biggest federal tax takers are the nation's conservative southern states. In one estimate, South Carolina got almost $8.00 from the federal government for every dollar they paid in federal taxes. This suggests that, contrary to the political rhetoric, conservative southern states really have no problem with "big gubmint" - as long as it's taken from the liberal Blue States and redistributed into their state coffers.
What does this all mean for you and me?
For starters, we need to acknowledge that we live in a country that redistributes wealth, big time.
We also need to acknowledge that the states who depend the most on our wealth redistribution policies are mostly conservative and southern states.
Then we have this little nugget to think about: If the state of California had simply received $1.00 for every dollar it paid into the federal tax system between 1990 and 2009 it would have an additional $336.2 billion sitting around. This is more than enough to pay off the state's $250 billion retirement and health care obligations that's now being tossed around politically as evidence of California's immediate debt problem.*
Even after paying California's long-term obligations off - which no sensible economist or financial adviser would advocate - we could use what's left from our $336.2 billion (about $83 billion) and fund the entire California State University budget ($5.1 billion, 2016) for the next 15 years.
Or we could simply eliminate student tuition in the CSU system for the next 40 years.
What all of this really means is that the Red State takers need to rethink what they're talking about when they complain about the role the federal government plays in their lives. They are wards of the state, and need to be a little bit more grateful (and realistic) when it comes to acknowledging how our federal system of government actually works.
* These are incremental long-term obligations, rather than what critics like to suggest are immediate debt obligations.
Wednesday, April 27, 2016
“I Saw the Crown of
France Laying on the Ground,
So I Picked It Up With My sword.”
So I Picked It Up With My sword.”
- Napoleon Bonaparte
In my International Relations Theory class we're getting further into the section on international regimes. Here we discuss why cooperation at the international level happens, in spite of the fact that fear and distrust guarantee that aggression and war are always just around the corner. The story of Napoleon, and the quote above, always move our discussions in the right direction.
Another Napoleon quote - "The more I study the world the more I am convinced of the inability of brute force to create anything durable" - helps most students see that one of history's greatest soldiers understood both the limits and the inefficacy of the military option in the modern world.
We have a mid-term tomorrow in my International Political Economy class (PS 404). Below are links to issues I have discussed on my blog, which tie directly into lectures I have given and, not coincidentally, are important for answering the questions that will be asked tomorrow. The focus of tomorrow's exam is on the states historical transformation from Feudalism to Mercantilism and, now, towards the modern Liberal state. These are areas that my students should be familiar with for tomorrow's exam. So, yeah, what's below is a list of ancillary "cliffs" notes for my class. To be sure, my regular readers (and those who have read my book) will understand the broader story.
Of course, for those who are just interested in knowing about this stuff, you can begin by reading the links below.
EXAM-BLOG NOTES FOR PS 404
From War to Mercantilism: The historical role the Renaissance, Reformation, and the Enlightenment had in paving the intellectual path for Market Capitalism to arrive.
Waves of Imperialism ... War and Markets: Why Great Wealth is not a product of individual initiative alone. Here we learn about the three waves of imperialism, which were driven by successive but distinct eras of mercantilism after 1648, 1815, and 1919,
The Moral Justification of Capitalism is on the Ropes ... Here's Why. This is a review of the transformation from feudalism and mercantilism towards the modern liberal state.
Waves of Imperialism, II ... It's not free markets ... the state creates the conditions under which wealth is created (with an all too brief discussion-mention of John M. Keynes and Friedrich List).
A flood of dollars, new competition, and a crumbling economic framework ... yet we do nothing, still (OK, this one is part of the Bretton Woods lecture, and will be part of the next mid-term).
Monday, April 25, 2016
A writer at Wicked Rural Homestead wrote about Boulder Creek, the small town where I grew up. In "Time May Heal All Wounds - But it Makes Homesickness Worse" the author tells the reader about living in Boulder Creek, which is nestled in the middle of the Santa Cruz mountains (just south of San Jose, CA). It's well written, and makes me wish I was there again.
And, yes, the place looks almost exactly as it did 40 years ago.
Thursday, April 21, 2016
|John Maynard Keynes, the man who saved capitalism, died 70 years ago (4-21-1946).|
Planned Parenthood gunman opposed abortion and the selling of baby parts ... dreamed of meeting aborted fetuses in heaven, who would thank him (Reuters).
Groupies for hire! (fainting on cue costs extra) (Ozy).
The mental disease of late-stage capitalism (Medium).
Atheist Mom forced into court-ordered Christian counseling (Patheos).
TWO DIFFERENT WORLDS
Kansas Secretary of State Kris Kobach's office puts out Spanish voter guide with wrong registration deadline (days after the real deadline). Effectively says, "Oops, my bad" (TPM).
California Counts: Project aims to pair U.S. citizens with immigrants to vote 'together' (SCPR).
Black and Latina girls walk off soccer field after whites chant 'Donald Trump, build that wall' (Raw Story).
The simple truth about Creationists: They're too stupid to understand science (Forward Progressives).
This is why Bakersfield is so great ... Sikh-American teenager who wrote bullying book forced to remove turban at Bakersfield's Meadows Field (Mic).
TEXAS, PLEASE LEAVE ... AND TAKE HIM WITH YOU The time Ted Cruz defended a ban on dildos (Mother Jones).
An open letter to Texas: Please, f**king secede already (The Daily Banter).
THINGS YOU SHOULD KNOW Disturbing new evidence about what common pesticides can do to brains (Mother Jones).
The really big one: An earthquake will destroy a sizable portion of the coastal Northwest. The question is when (The New Yorker).
The secret shame of middle-class Americans: Nearly half of Americans would have trouble finding $400 to pay for an emergency. I'm one of them (The Atlantic).
Sponsor of anti-LGBT "Bathroom Bill" caught sexually harassing 34 women, exiled from capitol building (Occupy Democrats).
Republican staffer quit because colleagues were 'giddy' about voter ID laws preventing votes (Daily Kos).
WELL, THIS IS GOOD Here's what happened when a group of scientists went to confront their congressional tormentors (Huffington Post).
Panama Papers: U.S. launches criminal inquiry into tax avoidance claims (The Guardian).
Joe Walsh nixes concert after GOP ties revealed (Rolling Stone).
YOU'RE KILLING ME ... SERIOUSLY
Elizabeth Báthory: History's most prolific female serial killer (Ozy).
Christians want to start World War III ... to force Second Coming (Washington Blog).
History's most sadistic serial killer (Ozy).
Economist tested 7 welfare programs to see if they made people lazy. They didn't (Vox).
Watch: Terrified 'Tea Party Patriot' realizes he could lose Obamacare if GOP wins in 2016 (Raw Story).
A black man brought three forms of ID to the polls in Wisconsin. He still couldn't vote (The Nation).
Bill Gates on America's secret weapon for creating jobs (Liberals Unite).
|Driving I-5 into Bakersfield, the worst place in America to breathe year-round.|
"When you hit a wrong note,
it's the next note that you play
that determines if it's good or bad."
- Miles Davis
Herbie Hancock explains how he learned how to adapt to life as it happens - the good and the bad - because of Miles Davis ...