The tendency from the panelists is still to blame the consumer for buying houses (or derivatives) thy should not have. But it was the presence of lots of money looking for an outlet to invest in that led to cheap money. Each purchaser of a house saw that prices were going up on ALL houses (true) and the press and financial leaders were bullish about its continuing. The individual house buyer would have had to stay were they were, couldn’t move for a job for example, because they faced nothing but rising prices. I think individuals, even with less education, basically understood this system, a system riggeed against them.

Posted at Economistsview

Fed Watch: Monetary Policy on Autopilot

Tim Duy:

Monetary Policy on Autopilot, by Tim Duy: The first quarter GDP number was profoundly disappointing. I always look back to the benchmark of the mid-80’s to measure the pace of the recovery, paying close attention to real final sales:


The pace of the current recovery pales by comparison. Indeed, even the meager 1.6% average final sales growth is inflated by the blowout 6.7% gain in the final quarter of last year. Excluding that quarter, the average is a miserable 0.9%. It was the that fourth quarter data that gave me hope the economy was actually turning a corner; that hope was so quickly dashed

People still expect that the economy’s natural state is cyclical, and expands and contracts like a rubber bank or bouncing ball. The reality of lost jobs with nothing on the horizon to replace them doesn’t sink in. The idea of the stimulus is it will create jobs because it creates demand. Little understanding that more demand will employ more robots, or the stimulus money goes immediately overseas for investment there. Only when we get past this illusion of rebound and recovery can we face the real problem of production, income distribition, and environment (and population).

Government spending and government debt across countries:

To spend is to owe?, by Lane Kenworthy: A high level of government spending doesn’t necessarily produce heavy government debt. Nor does low spending guarantee low debt. Debt levels are a function of government expenditures and revenues and economic growth.

Just seeing this as a system would be a move forward.

My concern is that however spending would not create jobs.

Libération – France

Nuclear phaseout a long-winded affair

The head of the company operating the damaged nuclear reactor in Fukushima announced on the weekend that it will take another three months to ensure the adequate cooling of the reactors and the storage pool on site. The left-liberal daily Libération writes that it will be a lot longer before the world can fully turn its back on nuclear energy: “There is no end to the drama, the emergency lags on. The feeling of abandonment will never have been so strong among the survivors in the region and the 80,000 displaced persons who still don’t know if they’ll ever be able to go back home. … The countdown concerns not only the Japanese, but also all the major powers. Serious researchers confirm it will take at least three or four decades to come up with a realistic alternative to nuclear energy. So no one has put nuclear technology behind them yet, or Fukushima and its devastating consequences either, for that matter.” (18/04/2011)

The momentum of contemporary society is huge.

More on anger

April 18, 2011

Frustration over established parties

The remarkably high voter turnout of around 70 percent in the Finnish general elections was mainly due to the mobilisation achieved by the right-wing populist True Finns party, writes the daily Eesti Päevleht: “Many Finns were lured to the polling stations by the good weather, but an even more important factor was the True Finns party: many Finns voted for it because they’ve had enough of the three big parties and their financing scandals, but at the same time many other Finns are afraid of this group and its politicians and went to the ballot to vote against them. … Whether they will be included in the government or not is not just a Finnish internal matter but affects all Europe. This will determine for example what course the rescue of the struggling euro countries takes.” (18/04/2011)

same logic as the last.

anger at change

April 18, 2011

Protest against social change

The right-wing populist True Finns have today’s rusty political and social structures to thank for their success in Sunday’s parliamentary elections, writes the tabloid Iltalehti: “Neither the scandal over party financing nor the euro crisis caused this landslide. Many are fed up with the party structure that’s been in place now for over a century, in which differences between the three large parties are increasingly difficult to discern. Above all the vote marks a wave of protest against social change, which many view as taking place too rapidly. Globalisation has rendered prospects uncertain, while it seems no one has the competence to make decisions. … The True Finns must now be given a real chance to shoulder responsibility.” (18/04/2011)

This fits the view that people are angry at the direction of society and use local methods to express it. Tea party the same, and, as our own two parties asymptote themselves, the same anger.

Progressive humanism or sane conservationism must negotiate this churn.

I largely agreed with Joseph Stiglitz’s article in Vanity Fair, which my colleague describes as an example of self-refutingly absurd liberal ideology. To sum up the basic thrust of what I agree with in Mr Stiglitz’s piece: I think the rich are getting much, much richer, while regular people (in the developed world, which is what we’re talking about here) are at best treading water. I think that wealth brings power, and the fact that the rich are getting much, much richer relative to everyone else means that the rich also exert increasing influence over the economy, government and society. I think income mobility and equality of opportunity have declined in America over the past 40 years, to the point where America is now more segregated by class divisions than many European countries. I think a major reason for these shifts has been the increasing dominance, since the Reagan era, of an ideology that is indifferent to or actively celebrates inequality of income.