Monday, September 29, 2014

APPROACHING OUR FUTURE AS IF HISTORY NEVER HAPPENED ... WHY "A STUDY OF HISTORY" AND INEQUALITY MATTERS

After thinking about the importance of the topic, my previous post needs a little more context. A lot more. Here it is ...


Arnold Toynbee, author of the epic A Study of History, believed that there was nothing in the biology, geography, or mysticism of a civilization that determined their destinies. In his view, theories of master races, an abundance of natural resources, or Manifest Destiny-like visions don't determine history. What determines a society's ability to adapt, survive, and prosper as a civilization is the way it responds to challenges.

Toynbee believed how great civilizations - at least the 21 or so civilizations that he located - responded to challenges depended on how "creative minorities" acted when confronted with protracted problems.

It could be spiritual, as was the case when the Catholic Church responded to the Dark Ages by organizing Germanic tribes and kingdoms into a single religious (and Catholic) community. This helped make the Dark Ages less dark, and set the stage for the emergence of feudalism and, eventually, the rise of our modern nation-state system by 1648.

Historian Arnold J. Toynbee

Responding to challenges could also be physical, as when the Sumerians organized society to drain and reconstitute the swamps of present day Iraq, in the process building large scale irrigation systems that allowed the agriculture revolution in the region to take off. The ability of the United States to conquer the vast expanse of the continent with canals, the rail roads, and the Army Corps of Engineers is evidence of this too.


When civilizations stop responding to big challenges creatively they begin to spin into gradual collapse, with nationalism, militarism, and the tyranny of a despotic minority overshadowing and finally replacing the ingenuity of creative minorities. 




It's at this time that civilizations begin to swirl the drain of history.

According to Toynbee, apart from nationalism, militarism, and tyranny, one of the features of a civilization in decline was growing wealth inequality - or what Toynbee might have called the "schism" between the "satiated" and the "hungry."




Once incomes and wealth became more concentrated great civilization were on the path of decay. This path was paved by the reluctance of elites to participate in the maintenance of society and, especially, to the maintenance of those at the bottom rungs of society. This is what makes growing inequality today so troublesome.

Compared to history's financial gluttons - when there were fewer rules, and slavery was legal - the income (and wealth) gaps we're experiencing today tell us that history is whispering in our ear. And it's not good.




Our modern "schism" works like this. Conservatives today see a world where those with wealth earned it on their own. Liberals like Hedrick Smith - author of Who Stole the American Dream? - and me see wealth created by corporate lobbyists, who douse their clients in favorable legislation, bailouts, and business friendly tax cuts that effectively guarantee financial success and class dominance - all at the expense of America's middle class.

Put another way, growing inequality in America is a deliberate and on-going process. Arnold Toynbee would recognize it. We should recognize it, and understand what it means for our future. But we don't. We're acting like historical illiterates.

Worse, we're approaching our future as if history never happened.

- Mark

WAKE UP AMERICA, OUR SYSTEM OF REWARD ISN'T NORMAL

Even compared to history's financial gluttons - when there were fewer rules, and slavery was legal - the income gaps we're experiencing today is seriously out of whack ...


- Mark 

COOL DOORS


Via Science Dump we get this wall door ...



And the flip panel door ...



However, they're still not as cool as the Bat Cave door ...


- Mark

Saturday, September 27, 2014

TRAFFIC LIGHT DANCE


Neat idea. This traffic light is fun stuff ...


- Mark 

SATURDAY LAUGH: AGE GRACEFULLY, IF YOU CAN



- Mark 

IT'S TIME TO STOP WORSHIPING WALL STREET MONEY MANAGERS ... THEY'RE NOT MARKET GURUS

It's stuff like this that should have all of us pulling our hair out.

I received a faux editorial-ad that talks up the market skills of billionaire hedge fund manager David Tepper. His firm, Appaloosa Management, manages about $20 billion. Tepper was paid well over $3 billion in 2013.



Below is a snippet of an editorial-ad championing Tepper's market skills. It's partially written in market-speak. My translation follows below.

Recently, at the SkyBridge Alternatives Conference in Las Vegas, [Tepper] said, “The market is kind of dangerous in a way.” He cites a slow growing U.S. economy coupled with a complacent Federal Reserve as the reason for his nervousness. 
And who can blame him with the stock market trading at all time highs.Tepper has proven his ability to accurately time financial markets for maximum gains. Following the subprime crisis, he bought heavy into the financial sector and returned 132% to his investors.  
Then in September 2010, when the Federal Reserve virtually guaranteed a backstop to a fragile economy, he felt his only option was to increase his exposure to stocks — which proved to be the right move.
Today Tepper is more afraid of deflation than inflation, but he’s not recommending investors sell everything and hideout in a bunker with food and guns. He said, “I’m not saying go short, just don’t be too frickin long.” He does, however, feel investors would be wise to raise cash, which is always prudent advice when markets have gone nearly straight up for 5 years.
What the editorial-ad says is Mr. Tepper is worried about a weak economy because the Federal Reserve may no longer be dumping as much cheap money into the market as it has done in the past. At another level it says what I've been saying for years. The market gains we've been seeing are not real. It's all artificially inflated with Fed cash.

There is no magic of the market logic at work here. Tepper is no genius. He simply understands that when the federal government dumps trillions of dollars into the economy "the market" does better.

What makes all of this so frustrating is that the ad congratulates Tepper for having the foresight to buy "into the financial sector" and then the stock market after Washington came to the rescue with bailout cash and cheap money.

So, yeah, we're supposed to be impressed that Tepper - and every other wealth manager for that matter - jumped into a bailed out market that virtually guaranteed both the financial sector and the stock market would succeed.

This isn't extraordinary market foresight. It's common sense, built around bailout cash.

The piece ends with Tepper saying ("I'm not saying go short, just don't be too frickin long") don't put all your eggs in one basket, because no one knows what the Fed is going to do.

In effect, Mr. Tepper is charging his clients 20 percent for "market" successes and advise that, ultimately, are driven by what the federal government does. Take away the bailouts and the Fed's trillion dollar dumps and Tepper's clients are probably suing him instead of worshiping him.

My friends, Tepper isn't a mystical Wall Street guru drawing from market insights only he can see.



Mr. Tepper understands a good market subsidy - the bailouts and cheap Fed money - and is simply reacting to anticipated money flows from bailouts and the Federal Reserve's money dumps. His "insights" come from understanding what the man behind the curtain is doing for our markets.




Tepper making money in our markets is not a product of genius. A monkey throwing darts could have made money in our market over the past 30 years.

The point is, we need to stop worshiping the guys on Wall Street who handle our money. Their genius and successes are a product of bailouts, and trillions in cheap money. The game is rigged.

Today, all Tepper is doing is watching the Fed, and telling us what the simple country farmer has always known. Don't put all your eggs in one basket.

- Mark

Thursday, September 25, 2014

STAGNANT WAGES AND AMERICAN SERFDOM

In 2013 UC Berkeley economist Emmanuel Saez wrote "Striking it Richer: The Evolution of Top Incomes in the United States." The study showed how 95% of the income gains from 2009 through 2012 went to the top 1%. As revealing as this study was, this chart is stunning because of how it shows what's been happening to income in America since 1949.


In a few words, since Republicans started going after New Deal institutions, attacking labor, and granting favorable legislation and sweet tax deals to America's richest class the top 10% has been devouring the fruits of America's productivity - as if the rest of us don't matter.

With such a prolonged period of stagnant wages and rising debt levels - with little hope of change in sight - one could argue that a modern form of debt drenched serfdom is just around the corner. Only, instead of working a manorial lord's land we work to pay off the debts that the lords of Wall Street manage.


Oh, yeah. I already wrote that piece.

- Mark 

IN KOCH'S WORLD ... A BILLION MORE IS NEVER ENOUGH


What do the Koch brothers want? Click here to find out.

- Mark 

Wednesday, September 24, 2014

TEACHING GOP MEMBERS OF CONGRESS SCIENCE ... LIKE "PUSHING A MILLION POUNDS OF IDIOT UP A MOUNTAIN"

As a follow up to my earlier post explaining ignorance in Washington, we get Jon Stewart explaining what's wrong with our technologically illiterate Republican members of Congress. In a few words, getting GOP members who sit on House Committee on Science, Space and Technology to understand the science behind climate change is like "pushing a million pounds of idiot up a mountain" (3:25).



Since the GOP doesn't seem to care for symmetry or proof, this is what pushing "a million pounds of idiot" might look like if our U.S. House of Representatives were turned into rock form ...





- Mark