Tuesday, September 1, 2015

Chatting with Rolo and ODM...




An article from Zero Hedge...

$  $  $  $  $

There are few truisms about the world economy, but for decades, one has been the role of the United States dollar as the world’s reserve currency. It’s a core principle of American economic policy. After all, who wouldn’t want their currency to be the one that foreign banks and governments want to hold in reserve?

But new research reveals that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status.

* I DISAGREE.

* THE AUTHOR SEEMS TO PUT THE CART BEFORE THE HORSE, INCORRECTLY ARGUING THAT IT IS THE "RESERVE STATUS" OF THE DOLLAR THAT CAUSES CONGRESS AFTER CONGRESS AND PRESIDENT AFTER PRESIDENT TO ACT IRRESPONSIBLY AND ABUSE THE "PRIVILEGE." NO. HUMAN NATURE BACKED BY MODERN PRECEDENT IS BEHIND OUR NATIONAL RECKLESSNESS! TRUE... THE "DOLLAR WORLD" ALLOWS US TO GET AWAY WITH IT... BUT... ABSENT DOLLAR DOMINATION WE'D BE GREECE - NOT SWITZERLAND!

(*GUFFAW*)

* I CAN JUST "HEAR" ROLO REACTING AS HE READS THIS THAT "NO! WE WOULDN'T BE ABLE TO ACT AS WE DO!" TO THIS... I CALL "BULL$HIT." SELDOM DOES REALITY SWAY POLITICIANS FROM SETTING THEIR NATIONS ON A COURSE OF "FULL SPEED AHEAD; AIM FOR THE ROCKS!" THAT'S SIMPLY THE HISTORICAL RECORD.

(*SHRUG*)

* ANYWAY... THE AUTHOR CONTINUES..

The reasons are best articulated by Kenneth Austin, a Treasury Department economist, in the latest issue of The Journal of Post Keynesian Economics (needless to say, it’s his opinion, not necessarily the department’s). On the assumption that you don’t have the journal on your coffee table, allow me to summarize.

It is widely recognized that various countries, including China, Singapore and South Korea, suppress the value of their currency relative to the dollar to boost their exports to the United States and reduce its exports to them. They buy lots of dollars, which increases the dollar’s value relative to their own currencies, thus making their exports to us cheaper and our exports to them more expensive.

* ALL TRUE...

In 2013, America’s trade deficit was about $475 billion. Its deficit with China alone was $318 billion.

* YEP...

Though Mr. Austin doesn’t say it explicitly, his work shows that, far from being a victim of managed trade, the United States is a willing participant through its efforts to keep the dollar as the world’s most prominent reserve currency.

* ABSOLUTELY! (NO ONE IS ARGUING!)

(*STILL CHUCKLING*)

When a country wants to boost its exports by making them cheaper using the aforementioned process, its central bank accumulates currency from countries that issue reserves. To support this process, these countries suppress their consumption and boost their national savings. Since global accounts must balance, when “currency accumulators” save more and consume less than they produce, other countries — “currency issuers,” like the United States — must save less and consume more than they produce (i.e., run trade deficits).

* SOMETIMES.

(*SHRUG*)

* BUT THE U.S. - WE DELIBERATELY DRIVE DOWN THE DOLLAR. (AND WE SURE AS HELL DON'T DO SO BY "INCREASING NATIONAL SAVINGS!" JUST THE OPPOSITE, IN FACT...

(*SMIRK*)

This means that Americans alone do not determine their rates of savings and consumption.

* YEAH... WE DO. I MEAN I "GET" THE POINT - THE MACRO POINT - THE AUTHOR IS MAKING... BUT... I REJECT THE INEVITABILITY OF THE EQUATION. NO... OBVIOUSLY AMERICANS - AS INDIVIDUALS... AS A COLLECTIVE - DO NOT "ALONE" DETERMINE OUR RATES OF SAVINGS AND CONSUMPTION, BUT I REJECT THE NOTION THAT WE DON'T HAVE THE UNDERLYING ABILITY TO SIMPLY IGNORE WHAT WE'RE TOLD... DISREGARD THE "SIGNALS" OF THE FED AND TREASURE AND EVEN WALL STREET... AND ACT AS RATIONAL LONG-TERM THINKERS.

(*SHRUG*)

Think of an open, global economy as having one huge, aggregated amount of income that must all be consumed, saved or invested. That means individual countries must adjust to one another. If trade-surplus countries suppress their own consumption and use their excess savings to accumulate dollars, trade-deficit countries must absorb those excess savings to finance their excess consumption or investment.

* NOT QUITE SURE WHAT THE AUTHOR IS BABBLING ABOUT. TAKE CHINA FOR EXAMPLE. THEY'VE BEEN TRYING TO MAINTAIN TRADE SURPLUSES (SUCCESSFULLY - AT LEAST WITH THE U.S.) WHILE ALSO PUSHING FOR RISING DOMESTIC CONSUMER SPENDING AND DOMESTIC RISING STANDARDS OF LIVING. (NOW IT'S TRUE THEY HAVEN'T BEEN TOTALLY SUCCESSFUL... BUT THIS WAS THE POLICY.)

Note that as long as the dollar is the reserve currency, America’s trade deficit can worsen even when we’re not directly in on the trade. Suppose South Korea runs a surplus with Brazil. By storing its surplus export revenues in Treasury bonds, South Korea nudges up the relative value of the dollar against our competitors’ currencies, and our trade deficit increases, even though the original transaction had nothing to do with the United States.

* Er... SOMETIMES... AND SOMETIMES NOT.

(*SHRUG*)

* THE TEXTBOOK EQUATION SOUNDS REASONABLE... AND SIMPLE; THE PROBLEM IS... IN THE REAL WORLD IT HASN'T ALWAYS WORKED THAT WAY. MY GENERAL POINT: STRONG DOLLAR vs. WEAK DOLLAR IS DETERMINED NOT BY SOME STRAIGHT-LINE LINEAR EQUATION, BUT BY A NUMBER OF FACTS BOTH CONCRETE AND PSYCHOLOGICAL.

This isn’t just a matter of one academic writing one article. Mr. Austin’s analysis builds off work by the economist Michael Pettis and, notably, by the former Federal Reserve chairman Ben S. Bernanke.

* BUT... BUT... BUT... I THOUGHT WE WERE ALL AGREED - BEN S. BERNANKE IS A MORON!

(*HUGE FRIGGIN' GRIN*)

A result of this dance, as seen throughout the tepid recovery from the Great Recession...

* "RECOVERY..." HA! HA! HA! HA! HA! OH... THAT'S FUNNY...

(*SNORT*)

...is insufficient domestic demand in America’s own labor market. Mr. Austin argues convincingly that the correct metric for estimating the cost in jobs is the dollar value of reserve sales to foreign buyers. By his estimation, that amounted to six million jobs in 2008, and these would tend to be the sort of high-wage manufacturing jobs that are most vulnerable to changes in exports.

* Er... BY MY ESTIMATION IT'S FED, TREASURY, CONGRESSIONAL, PRESIDENTIAL, AND BUREAUCRATIC POLICIES - IDEOLOGY... THE PURPOSEFUL GROWTH OF THE WELFARE STATE - ETC., ETC., ETC., THAT HAS COST US JOBS.

(*ANOTHER SMIRK*)

* ASININE TRADE POLICIES... INSANE TAX POLICIES... COUNTER-PRODUCTIVE REGULATORY POLICIES...

(*SIGH*)

(*ROLLING MY EYES*)

* MUST I GO ON...?

Dethroning “king dollar” would be easier than people think. America could, for example, enforce rules to prevent other countries from accumulating too much of our currency.

* Er... WHY WOULD WE NEED "RULES" IN THIS BRAVE NEW WORLD OF THE U.S. DOLLAR NO LONGER BEING THE WORLD RESERVE CURRENCY?

* WHY WOULD OTHER COUNTRIES WANT TO STOCKPILE A NON-RESERVE CURRENCY? (AND IF THEY DID... WOULDN'T THEY END UP SPENDING THOSE ACCUMULATED DOLLARS HERE? AND WOULDN'T THAT BE GOOD?

(*BIT OF A HEADACHE*)

In fact, others do just that precisely to avoid exporting jobs. The most recent example is Japan’s intervention to hold down the value of the yen when central banks in Asia and Latin America started buying Japanese debt.

* AGAIN... IT'S NOT THE RESERVE DOLLAR THAT HAS DEINDUSTRIALIZED AMERICA; IT'S AMERICAN TAX POLICIES... TRADE POLICIES... REGULATORY POLICIES... AND SO ON AND SO FORTH.

Of course, if fewer people demanded dollars, interest rates - i.e., what America would pay people to hold its debt - might rise, especially if stronger domestic manufacturers demanded more investment. But there’s no clear empirical, negative relationship between interest rates and trade deficits, and in the long run, as Mr. Pettis observes, “Countries with balanced trade or trade surpluses tend to enjoy lower interest rates on average than countries with large current account deficits, which are handicapped by slower growth and higher debt.”

* HEY! I'VE BEEN CALLING FOR RAISING INTEREST RATES SINCE THE 1990's! I ANTICIPATED THE HOUSING COLLAPSE! THE AUTHOR IS PREACHING TO THE CHOIR!

Others worry that higher import prices would increase inflation.

* NO. HIGHER IMPORT PRICES WOULD STIMULATE DOMESTIC PRODUCTION - AND DOMESTIC JOB/ECONOMIC GROWTH!

But consider the results when we “pay” to keep price growth so low through artificially cheap exports and large trade deficits: weakened manufacturing, wage stagnation (even with low inflation) and deficits and bubbles to offset the imbalanced trade.

* WE DON'T HAVE LOW INFLATION. THAT'S A LIE. THE PAST YEAR'S OIL COLLAPSE HAS OF COURSE HELPED A GREAT DEAL... BUT DON'T LET THESE CHARLATANS GET AWAY WITH SELLING YOU A BILL OF GOODS.

But while more balanced trade might raise prices, there’s no reason it should persistently increase the inflation rate. We might settle into a norm of 2% to 3% inflation...

(*SIGH*)

* PAY NO ATTENTION TO THE GOVERNMENT NUMBERS; THEY'RE BULL$HIT.

...versus the current 1% to 2%.

* ABSOLUTE NONSENSE...

(*ROLLING MY EYES*)

(*SPITTING ON THE GROUND*)

But that’s a price worth paying for more and higher-quality jobs, more stable recoveries and a revitalized manufacturing sector. The privilege of having the world’s reserve currency is one America can no longer afford.

* SO... TO CLOSE... TWO POINTS:

* FIRST... NO... IT'S GOOD TO BE THE WORLD'S RESERVE CURRENCY.

* TWO... WHAT THE HECK THIS HAS TO DO WITH OBAMA'S IRAN DEAL...

(*SNORT*)

* FOLKS... JUST SO YOU KNOW... THAT WAS THE ORIGINAL TOPIC THAT THIS POST IS RIFFING OFF; MY BUDDY ROLO WAS ARGUING FOR THE TREATY AND ARGUING THAT SOMEHOW THE IRAN DEAL IS ACTUALLY ALL ABOUT THE DOLLAR - NOT NUCLEAR WEAPONS.

(*SHRUG*)

* ANYWAY... PERHAPS ROLO AND ODM WILL COMMENT FURTHER.

 

Friday, August 21, 2015

The 14th Amendment... Course Number "Intro 101"




I'm content to simply leave it to Ann Coulter to demolish the morons at Fox News... and the half-wits within the RINO Ruling Class.

(*HEADACHE*)

*  *  *

Based on the hysterical flailing at Donald Trump — He’s a buffoon! He’s a clown! He calls people names! He’s too conservative! He’s not conservative enough! He won’t give details! His details won’t work! — I gather certain Republicans are determined to drive him from the race.

These same Republicans never object to other candidates who lack traditional presidential resumes — Carly Fiorina, Ben Carson, Newt Gingrich and Herman Cain, to name a few. 

I’m beginning to suspect it’s all about Trump’s opposition to mass immigration from the Third World.

(*GRIN*)

Amid the hysteria, Trump is the only one speaking clearly and logically, while his detractors keep making utter asses of themselves.

* CRUZ IS DOING OK...

(*SHRUG*)

By my count — so far — Fiorina, Chris Christie, Rick Perry and the entire Fox News commentariat are unfamiliar with a period of the nation’s history known as “the Civil War.” They seem to believe that the post-Civil War amendments were designed to ensure that the children of illegal aliens would be citizens, “anchor babies,” who can then bring in the whole family. (You wouldn’t want to break up families, would you?)

* ET TU, FIORINA...? (OH, WELL... AT LEAST - HOPEFULLY - SHE'S EDUCABLE.)

As FNC’s Bill O’Reilly "authoritatively" informed Donald Trump on Tuesday night: “The 14th Amendment says if you’re born here, you’re an American!”

I cover anchor babies in about five pages of my book, Adios, America, but apparently Bill O’Reilly and the rest of the scholars on Fox News aren’t what we call “readers.”

(*SNORT*)

* SERIOUSLY... I BELIEVE SHE'S CORRECT ON THIS. I HAVE NEVER SEEN A LICK'S WORTH OF EVEN CIRCUMSTANTIAL EVIDENCE THAT O'REILLY READS... er... BOOKS. (SERIOUS BOOKS...)

* FOLKS... THIS IS WHY WHILE I USED TO WATCH O'REILLY... I NO LONGER DO. MY HEAD WOULD EXPLODE LISTENING TO THE STUPID THINGS THE MAN WOULD SAY! "HARVARD EDUCATED...?!?!" SERIOUSLY...?!?!

(*JUST SHAKING MY HEAD*) 

Still, how could anyone — even a not-very-bright person — imagine that granting citizenship to the children of illegal aliens is actually in our Constitution? I know the country was exuberant after the war, but I really don’t think our plate was so clear that Americans were consumed with passing a constitutional amendment to make illegal aliens’ kids citizens.

Put differently: Give me a scenario — just one scenario — where guaranteeing the citizenship of children born to illegals would be important to Americans in 1868. You can make it up. It doesn’t have to be a true scenario. Any scenario!

You know what’s really bothering me? If someone comes into the country illegally and has a kid, that kid should be an American citizen!

Damn straight they should!

We’ve got to codify that.

YOU MEAN IT’S NOT ALREADY IN THE CONSTITUTION?

No, it isn’t, but that amendment will pass like wildfire!

* GOTTA FRIGGIN' LOVE COULTER!

It’s like being accused of robbing a homeless person. (1) I didn’t; (2) WHY WOULD I DO THAT?

“Luckily,” as FNC’s Shannon Bream put it Monday night, Fox had an “expert” to explain the details: Judge Andrew Napolitano, Fox’s senior judicial analyst.

Napolitano at least got the century right. He mentioned the Civil War — and then went on to inform Bream that the purpose of the 14th Amendment was to — I quote — “make certain that the former slaves and the native Americans would be recognized as American citizens no matter what kind of prejudice there might be against them.”

Huh. In 1884, 16 years after the 14th Amendment was ratified, John Elk, who — as you may have surmised by his name — was an Indian, had to go to the Supreme Court to argue that he was an American citizen because he was born in the United States.

He lost. In Elk v. Wilkins, 112 U.S. 94, the Supreme Court ruled that the 14th Amendment did not grant Indians citizenship.

The “main object of the opening sentence of the Fourteenth Amendment,” the court explained — and not for the first or last time — “was to settle the question, upon which there had been a difference of opinion throughout the country and in this court, as to the citizenship of free negroes and to put it beyond doubt that all persons, white or black … should be citizens of the United States and of the state in which they reside.”

American Indians were not made citizens until 1924. Lo those 56 years after the ratification of the 14th Amendment, Indians were not American citizens, despite the considered opinion of Judge Napolitano.

Of course it’s easy for "legal experts" to miss the welter of rulings on Indian citizenship inasmuch as they obtained citizenship in a law perplexingly titled: “THE INDIAN CITIZENSHIP ACT OF 1924.”

(*ROFLMAO*)

Yeah, Trump’s the idiot.

(*SNORT*)

Or as Bream said to Napolitano after his completely insane analysis, “I feel smarter just having been in your presence.”

* AGAIN...

(*JUST SHAKING MY HEAD*)

The only reason the 14th Amendment doesn’t just come out and say “black people” is that — despite our Constitution being the product of vicious racists, who were dedicated to promoting white privilege and keeping down the black man (Hat tip: Ta-Nehisi Coates) — the Constitution never, ever mentions race.

Nonetheless, until Fox News’ "scholars" weighed in, there was little confusion about the purpose of the 14th Amendment. It was to “correct” — as Jack Nicholson said in “The Shining” — the Democrats, who refused to acknowledge that they lost the Civil War and had to start treating black people like citizens.

On one hand, we have noted legal expert Bill O’Reilly haranguing Donald Trump: “YOU WANT ME TO QUOTE YOU THE AMENDMENT??? IF YOU’RE BORN HERE YOU’RE AN AMERICAN. PERIOD! PERIOD!” (No, Bill — there’s no period. More like: “comma,” to parents born “subject to the jurisdiction” of the United States “and of the state wherein they reside.”)

But on the other hand, we have Justice John Marshall Harlan II, who despite not being a Fox News legal expert, was no slouch. He wrote in the 1967 case, Afroyim v. Rusk, that the sponsors of the 14th Amendment feared that:

“Unless citizenship were defined, freedmen might, under the reasoning of the Dred Scott decision, be excluded by the courts from the scope of the amendment. It was agreed that, since the ‘courts have stumbled on the subject,’ it would be prudent to remove the ‘doubt thrown over’ it. The clause would essentially overrule Dred Scott and place beyond question the freedmen’s right of citizenship because of birth.”

It is true that in a divided 1898 case, U.S. v. Wong Kim Ark, the Supreme Court granted citizenship to the children born to legal immigrants, with certain exceptions, such as for diplomats. But that decision was so obviously wrong, even the Yale Law Journal ridiculed it.

* I RECOMMEND THE FOLLOWING, FOLKS.

The majority opinion relied on feudal law regarding citizenship in a monarchy, rather than the Roman law pertaining to a republic — the illogic of which should be immediately apparent to American history buffs, who will recall an incident in our nation’s history known as “the American Revolution.”

Citizenship in a monarchy was all about geography — as it is in countries bristling with lords and vassals, which should not be confused with this country. Thus, under the majority’s logic in Wong Kim Ark, children born to American parents traveling in England would not be American citizens, but British subjects.

As ridiculous as it was to grant citizenship to the children born to legal immigrants under the 14th Amendment (which was about what again? That’s right: slaves freed by the Civil War), that’s a whole order of business different from allowing illegal aliens to sneak across the border, drop a baby and say, Ha-ha! You didn’t catch me! My kid’s a citizen — while Americans curse impotently under their breath.

As the Supreme Court said in Elk: “[N]o one can become a citizen of a nation without its consent.”

The anchor baby scam was invented 30 years ago by a liberal zealot, Justice William Brennan, who slipped a footnote into a 1982 Supreme Court opinion announcing that the kids born to illegals on U.S. soil are citizens. Fox News is treating Brennan’s crayon scratchings on the Constitution as part of our precious national inheritance.

Judge Richard Posner of the 7th Circuit Court of Appeals is America’s most-cited federal judge — and, by the way, no friend to conservatives. In 2003, he wrote a concurrence simply in order to demand that Congress pass a law to stop “awarding citizenship to everyone born in the United States.”

The purpose of the 14th Amendment, he said, was “to grant citizenship to the recently freed slaves,” adding that “Congress would not be flouting the Constitution” if it passed a law “to put an end to the nonsense.”

In a statement so sane that Posner is NEVER going to be invited on Fox News, he wrote: “We should not be encouraging foreigners to come to the United States solely to enable them to confer U.S. citizenship on their future children. But the way to stop that abuse of hospitality is to remove the incentive by changing the rule on citizenship.”

Forget the intricate jurisprudential dispute between Fox News blowhards and the most-cited federal judge. How about basic common sense? Citizenship in our nation is not a game of Red Rover with the Border Patrol! The Constitution does not say otherwise.

Our history and our Constitution are being perverted for the sole purpose of dumping immigrants on the country to take American jobs. So far, only Donald Trump is defending black history on the issue of the 14th Amendment. Fox News is using black people as a false flag to keep cheap Third World labor flowing.