The Fed Hikes

…and if you think Trump is your savior; you’re beyond delusional and all hope.
Trump is so vulnerable to the deep state, he was owned on his first day as president.
If you all weren’t so bloody ignorant and just plain stupid, I could almost feel sorry for you…NOT!

Sorry Ian, Trump was never going to have a good presidency, even if the Fed was cooperative.

Even if he really wanted to “bring jobs back” and give people great health care with “so many choices” or otherwise make people’s lives better (and I don’t think he cares beyond hitting the applause lines at his rallies), he lacks the focus, discipline, work ethic, and knowledge to push anything through. Combine that with his fragile ego, ignorance, pettiness, and inability to work the bureaucracy and he was always going to be a disaster.

His Presidency is going to be a standard issue GOP Presidency, but even meaner and more dysfunctional then Dubya’s. He’s not the end of neoliberalism, just a more savage and destructive iteration of it.

Fact; it can’t be “fixed” because Usian’s are not in control; and haven’t been for over a decade.

Longer than that. (Certain aspects of our current mess go as far back as Truman, but Reagan is probably the biggest single devil). Like I have said, USians are like the person frantically pressing buttons on the TV remote, yet no matter what buttons they press, the programming never changes.

My previous comment was not intended to dismiss the possibility that there will be a recession. To the contrary, a recession has been brewing for some time, and no doubt there will be one on Trump’s watch. The question is, how will Trump respond?

Tax revenues shrink during recessions, making the budget deficit bigger. Conservatives will use that as an excuse for even more cuts to social programs, which shrinks the economy even more. Lather, rinse, and repeat.

Will Trump go along with the conservatives to cut spending, as he has so far, or will he push hard for more deficit spending to stimulate the economy? That will be one of the litmus tests of the Trump presidency.

Forget the Fed. It’s the fiscal policy that matters.

I guess if you think about it, raising interest rates significantly is a good thing as far as destruction of our habitat and biosphere is concerned. Higher interest rates, say ~ 10%, will impede growth and anything that impedes growth is good for the habitat and the biosphere overall.

If Trump wants to be a good president, or even make it to the point that can even be evaluated, he’s going to need his own personal defining war. It seems like he’s being set up for a conflict with North Korea and it could be a real doozy since it could involve a nuclear exchange. If it happens, I don’t believe he’ll have much choice in the matter, but nonetheless, it will define him just as Libya & Syria define Obama and Iraq & Afghanistan define Dubya and The Balkan Wars define Clinton.

I had to laugh when Trump touted the official labor statistics a few weeks prior when he is on record saying during his campaign, many times in fact and always emphatically, that the very same official statistics are fake and shouldn’t be trusted. I believe they are misleading and do not include what Ian mentioned, meaning those who have been unemployed for so long they drop out of the statistical measures and have given up.

It’s not their fault they’ve given up. Yellen mentioned productivity — that it’s a concern or something to be managed, but we need to understand that at this point in history, productivity gains necessarily mean higher unemployment because productivity gains these days equate to replacing human labor with automation. There is no tenable plan, or at least not one publicly espoused and acknowledged, that purports to deal with and mitigate the unemployment calamity to come. It’s unavoidable at the current pace that shows no signs of subsiding. No doubt Ray Kurzweil gets a woody when he reads the following. Less people equals less germs and Ray’s a Germaphobe.

Nearly Half Of US Jobs Could Be At Risk Of Computerization, Oxford Martin School Study Shows

Mandos is still stuck in “what’s the matter with Kansas” liberalism circa 2006. Mandos, don’t you know it’s 2017? The bien-pensant position is “white Kansas is dying — and that’s a good thing!”

By the way, isn’t it quite remarkable how quickly that change happened? It’s almost as if those dumb flyover hicks knew the score all along.

Eh, fair enough.

Dina Powell — the Neoliberal Nexus.

She’s only 43 years old and Deputy National Security Advisor with no specific credentials in National Security, but she is Goldman Sachs. Go figure. She was highly-favored in Dubya’s administration at the height of the Iraq invasion and occupation. She is an Egyptian-born Coptic Christian though, so that should sit well with all the various Arab Muslim sects.

Check this Edward Snowden tweet out from February 2016. Edward, what do you say now that Trump has stacked his cabinet with Neoliberal Wall Streeters? It’s time to be honest.

http://imgur.com/aaThIXS

Eh, Trump is imploding the deep state in a vicious self-feeding frenzy.

He still has time to correct course, but if he can’t bitchslap his Cabinet and Congressional Republicans in line, he is done for and it will be his own damn fault for not sticking on message and delivering change.

If the system weren’t so obviously propped up by every means unnecessary, I might argue that raising the overnight rate would alter the risk free money gambit that’s been running since Clinton I was enthroned, err elected. My bad.

There’s a shit ton of money being made in sweep accounts because the overnight rate is effectively negative.

@Blizzard

The bien-pensant position is “white Kansas is dying — and that’s a good thing!”

By the way, isn’t it quite remarkable how quickly that change happened? It’s almost as if those dumb flyover hicks knew the score all along.

Well, then one Donald J. Trump is willing apparently to lend a hand on the great white die-off with TrumpCare: to his own base:

https://thinkprogress.org/trump-health-care-admission-dd759907622f#.pxwwsx6p0

The Bloomberg analysis Carlson referenced found that taxpayers in counties that voted for Hillary Clinton in the election would receive a disproportionate share of the tax cut compared to those in counties that voted for Trump. That’s because the plan cuts an additional Medicare tax that generally only more wealthy people, like those who live in or near the cities that voted for Clinton, have to pay. There were, in fact, several hundred counties that voted for Trump in which not a single person paid the tax, so literally nobody in those counties would benefit from the tax cut.

That’s beside the fact that things would actually get worse for many Americans. Under the Republican health plan, the Congressional Budget Office estimates that 24 million people would lose their health insurance by 2026, and the White House’s own analysis put that number at 26 million. Premiums would ultimately go down, but only because older people would no longer be able to afford insurance, so insurance companies would no longer be on the hook for covering their expensive treatments. As a result of all this lost coverage, approximately 17,000 people could die next year who’d otherwise live, and that number would climb to 29,000 people dying per year in 2026.

So TrumpCare (doesn’t matter Paul Ryan is pushing itl, Trump could kill it with a single tweet) will mean that insurance premiums alone for those in their early 60s will be up to half of the median individual income, with higher out-of-pocket costs too on top of that. All gifted to his own base by the Great White Hope himself.

@StewartM, I guess it’s possible that Trump’s top legislative priority is to re-brand Obamacare as Trumpcare. We’ll see.

@Blizzard:

Here in very white Appalachia a lot of Trumpians would be devastated by wiping out the Medicaid expansion. Note that the neoliberals aren’t really against Obamacare/RomneyCare–heck, Paul Ryan “hates” Obamacare SO MUCH that he essentially wants to turn Medicare into Obamacare. What bothers them is a government program that actually delivers real health care to people, as opposed to mandating that people send their life’s savings to private insurance companies (and via that, to Wall Street).

@StewartM, right, but isn’t Medicare the one that’s projected to finally do the unthinkable and bankrupt the US? The whole problem is cost, already excessive and growing exponentially, which for some reason no one is willing or able to address. If DC with its reverse-Midas touch implements single-payer, shouldn’t the assumption be that they’ll just lock in current prices (exhibit)?

I never quite understood why Trump would want to touch this thing at all. It’s unwinnable – even Obama with his friendly media wasn’t able to sell his polished turd.

The Federal Reserve was established in 1913 by President Woodrow Wilson. Wilson was the quintessential liberal in both the current and pre-New Deal sense of the term: corporatist, elitist, paternalistic, virulently anti-populist, and interventionist.

The jobs report covering February showed a very good real, as in not seasonally adjusted, increase of 552,000 in the private sector compared with 2014-2016 (300,000 to 400,000 range), but this is just one month, and weather could have been an important factor. For example, in 2014, only 311,000 private sector jobs were created in February, but overall 2014 > 2015 > 2016. So again one month is not indicative.

I have stopped looking at the unemployment rate. The definition of unemployment upon which the rate is based simply does not correspond to the reality and economy which we have.

The BLS report on real, as in inflation adjusted, wages, for February just came out. It showed that average weekly wages compared to February 2016 for production and nonsupervisory employees, i.e. the bottom 82.2% of employees in the private sector, fell 0.4% Feb.-Feb.

Also the increase in the CPI-U was a meager 0.1% in February.

So let’s see, one good month in private sector jobs that could very well be a one off. No inflationary wage pressure as shown by the drop in real wages and a very low Consumer Price Index number. So yeah, Yellen is pulling any rationale for a rate increase out of her ass. (Pardon the technical terminology)

As a 64 year old who hasn’t received interest on his savings for years I think this is great news. Interest on savings will generate hundreds of billions of dollars, stimulate the economy. Fabulous news for seniors, pension plans, any organization public or private that has money in the bank.

“The unemployment rate is at 4.7%. ” Ba ha ha ha…the real rate in the US (and Australia) is closer to 15% and if you add in the underemployment rate around 20-25%…not that far from Great Depression levels.

If you take the time in many countries (as I have done) downloaded the various stats and combined them ..then you get the real picture

I thought Trump was going to take on The Creature From Jekyll Island and slay it once and for all. I guess he realized no one would lend to him any more, except Russian Oligarchs so long as he does what he’s told, so he shit-canned that crazy notion.

Trump would never have ascended if it were not for The Media to include Social Media, and more specifically Twitter. I have approximately twenty items on my To-Do-Immediately list when I’m elected POTUS and one of those items is to smash the Mainstream Media and Twitter and Facebook into more pieces than current technological innovation can count.

As well, I will reverse the Citizens United decision allowing the Oligarchs to freely & openly purchase politicians and governance.

Also, I will abolish and refuse to recognize Special Interests of any stripe. America will no longer be a country by and for Special Interests because Special Interests are not The People.

In addition, the military will be cut to the bone and the nuclear arsenal will be overhauled and modernized. As America withdraws from hegemony across the planet, that nuclear arsenal will be necessary for the barracudas that are Russia and China and a few choice others who will take it as a sign of weakness and attempt to encroach on America. They will be forewarned that it will be pure folly on their part to interpret America’s reversal of hegemony as a sign of weakness rather than leading by example, and if they ignore that forewarning, they will never ignore another because there won’t be any more warnings.

If America is going to lead by example and repudiate its former imperialistic tendencies it must implement a Klaatu Option that prevents other aspiring imperialists from filling the power vacuum left in America’s wake.

Oh, I almost forgot, the most important item. I will Deport The Rich and those little piggies, when we surround them like the terrorized, tortured & tyrannized East Germans surrounded KGB headquarters in East Germany after the fall of the wall, well, we won’t let them go like those naive folks did in East Germany. The little piggies will also be deported with the big piggies they supported and protected all these years.

Great article. They’re all connected.

This Is What Oligarchy Looks Like

If Merkel is as classy as Trump, she will tell The Media today after they’ve met that “Donald Trump is ruining America.” I doubt she will. She’s not very classy. It’s her Communist roots that keep holding her back.

How delusional. Over the last nearly 40 years, Fed interest rate policy has been primarily about transferring wealth upward. When the Fed increases interest rates, banks multiply that increase in their loan rates. Most of the profit resulting from those increased loan rates goes to the bank and those who own stock in the banks, very little of it goes to any particular depositor, say a retiree. The people subsidizing that retiree are other non-rich people in the community. So what you have is a wealth transfer. Most of that wealth is transferred to the bank and the rich who own it, and some, not much, to your retiree. But the justification is “It helps retirees!” At what expense and at whose cost doesn’t rate apparently even the asking.

If you want more money for retirees or for anyone or anything else, there is really only one way to do it: tax the rich and corporations because they have all the money. If you are an MMTer, you would probably say that the government can spend money into creation. But seeing as the government, probably unConstitutionally, ceded almost all of its money making power to the Fed in 1913, nahgonnahappn. Same thing for the blogger beowulf’s ingenious though misunderstood idea of reclaiming the government’s money making power through a legislative loophole, i.e. minting of a multi-trillion dollar platinum coin, nahgonnahappn. Of course, taxing the rich, nahgonnahappn either. So basically if you want retirees to get more money through interest income, it will be by screwing over some other non-rich segment of the population.

@Blizzard

right, but isn’t Medicare the one that’s projected to finally do the unthinkable and bankrupt the US?

No, that’s the Wall Street bailouts and Middle Eastern Wars (at a very conservative estimate, $12 trillion and counting). You know, the spending “vitally important to the security of the United States”? (yeah, right). Our military budget is within spitting distance of WWII in inflation-adjusted dollars with only a fraction of the manpower and an even small fraction of the weaponry (you want to talk about “waste, fraud, and abuse?”….look no further. I am convinced that utterly ruthless management could buy the same military force for no more than one-third the cost).

We are spending almost $18 % of GDP on health care, almost half on Medicare/Medicaid and the rest on private insurance/out-of-pocket costs. Medicare and Medicaid covers the sickest and poorest population of the US with the biggest bang for the buck, and while we’re at it VA care covers an often very sick portion of the population (veterans) at lower cost and yet delivers the best care ( https://www.amazon.com/Best-Care-Anywhere-Everyone-Currents/dp/1609945174 ). So if we were really interested in not “bankrupting America” we’d be going to Medicare-for-All or VA-for-All, or some combination of the two (my solution: VA-for-All with hospitals and clinics everywhere, and Medicare-for-All for covering you if you go to a private hospital, with prices/reimbursements set on VA costs).

Looking at other countries, you see this:

http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective

The US spends at least 50 % more (sometimes twice as much) of its GDP on health care with worse outcomes. Moreover, despite the conservative/libertarian nonsense about Americans supposedly having it too good and health care costs going up because we’re just seeing our doctors way too much, the charts show we utilize health care services far *less* than these other countries. Japan, that nation of octogenarians, use medical services *three times more* than Americans yet Japan as a country only pays slightly more than half of what we pay. All these countries outlive us too, precisely because people there *don’t* have to put off going to the doctor that we do because of worrying about medical bills bankrupting them.

A few years back, I traveled to Taiwan. Back before 1995, Taiwan used to have the same problem as us–spiraling health care costs, and worse with an aging population akin to Japan’s, and soaring health care costs (13 % of GDP). Taiwan looked at health care options, and quickly (despite their admiration of everything Western, which troubles me) decided that the US model was a horrible one to emulate. So they decided to institute more of a Canadian model and lo and behold, the cut health care expenses in half (around 6 % now).
TaiwanCare is now quite good.

So why does US health care cost so much? The short answer is: price gouging due to a for-profit health care model. Almost any conceivable operation or service you can imagine, insurance aside, even if you were paying out-of-pocket for everything, would cost multiples more here than say in Germany, France, the UK, Japan, or Taiwan. Take a lookie:

https://www.washingtonpost.com/news/wonk/wp/2013/03/26/21-graphs-that-show-americas-health-care-prices-are-ludicrous/?utm_term=.b595b44d0de4

Why the price-gouging? That is not a bug, but a feature! You see, for-profit healthcare creates all the wrong incentives: if any indigent person or person with lousy insurance shows up, you try to give them two aspirin and show them the door because actually treating their ailment is a money-losing proposition. By contrast, with someone who is wealthy or has great insurance, the incentive becomes to run up the biggest damn bill you can possibly run up to increase profit. Is there any wonder then we spend so much in the aggregate and yet die younger?

And yes, we could pay for this, one way or another, and actually save money. My solution, if we both increased the minimum wage to $15 an hour plus (while raising tax rates), doubled the standard deductions and personal exemption to reflect what it really costs to live in the US (to help those on lower and middle incomes), is a flat Medicare tax of 12 % on all sources of income–no exceptions. That would capture 12 % of GDP, and as other countries cover everyone with that or less, so that should give us a great system. And as everyone would be paying for it, it would be considered “fair” and not as “welfare”.

This might be pertinent: https://blackagendareport.com/deep_statre_rules_in_us

I don’t think Trump is a Nationalist. Just because he says shit that makes you believe he’s a Nationalist doesn’t make him a Nationalist. Remember, those within in his circle are advising us not to take him literally. I take this to mean don’t pay any attention to his insane rhetoric and instead focus on the actions taken under his “watch.”

Despite the campaign slogan, I’ve yet to see any substantial actions that make Trump a Nationalist. Hell, he’s hosting President Xi Jinping at Mar-a-Lago. They have “business” to discuss, don’t you know.

Did anyone else take note that Don likes to entertain The Boys at Mar-a-Lago but not The Girls? How does Don know Merkel doesn’t play golf? How does he know President Xi Jinping does? Or did Don figure Merkel wouldn’t help him secure the proper licenses to set up Trump Towers & Hotels all across Germany but President Xi Jinping will help him do so in China?

I think it’s the latter.

realitychecker: “Eating and exercising right would reduce health costs tremendously, but nobody wants to give up their “freedom” enough to live with actual rules about that.”

Since everyone is different, you couldn’t have effective rules anyway, even if you wanted to.

Also, no amount of eating right, or exercising, is going to magically get rid of genetic and congenital disorders, old or new injuries, lack or loss of body parts, or other disabilities such as blindness and deafness, and mental disabilities.

Try telling the mother of a child with spina bifida that the child ought to eat and exercise right and then report back on her reaction – if you survive. It’s true that the mother’s diet is likely to have caused the disorder in utero, but even then, the cause of the poor diet was almost certainly poverty, with low education second in the queue of probabilities.

I’ve noticed a very strong correlation between people who tell us all to take responsibility for ourselves instead of relying on “hand-outs”, and people with circumstances that allowed them to make it.

Those people usually are born with all parts of their body fully functional, they naturally look good, they had a good education, they overcame other disadvantages because they had a cheerful constitution (mainly genetic) and so were able to persist and succeed and network easily, they are more intelligent (again, not something you can choose), and in cases where both apply, they also have sociopathic traits, meaning they
(a) are able to ignore the needs of others enough to succeed enough in pursuing their own interests and
(b) think others can (and therefore should) do what they have been able to do.

@Stewart

What’s the saying? It’s not what’s against the law that’s the true crime. It’s what’s legal that’s the true crime.

I am a military contractor. We’ve been ‘ruthlessly’ audited many times. We are experts at pointing to where in the Federal Acquisition Regulations (the FAR) we’re allowed to charge what we do. If you want true reform, you have to change the FAR.

Now doing so won’t be easy. My bosses will fight it as much as Hedge Fund Managers fight the elimination of the carried interest rule that lets them only pay Capital Gains tax rates instead of income tax rates. The solution has to be political.

Essentially, the Government has tilted the rules of how tax dollars are spent to favor the contractors over the rest of the citizens of the nation. I’ve got a ton of detailed examples* and they all feed into Ian’s overall point. The current economic/political system is biased towards upper middle class whites and if we want that to change, we have to change the system.

*Easiest example. We have a 3% annual raise built into our contract as a ‘cost of living adjustment.’ That’s standard in military contracting, though not for the soldiers who actually do the fighting (since they’re govt employees and not contractors). Do folks on Social Security, welfare, unemployment, or any other government payment program get that high of a guaranteed annual raise? Hell, no. But they don’t have multi-billion dollar corporations lobbying Congress for them.

@ OneForAll

So, apparently you DO NOT believe that eating right and exercising reasonably would lower health care costs tremendously.

Congratulations. You are now an official Science Denier, moron.

But, you have also established your entitlement to the Grand Prize for most straw men and baseless assumptions ever packed into a single comment.

Now please go drown yourself. We will all be better off for your absence, if you can’t think any better than that. Which apparently you can’t.

@ Lisa

Thanks for demonstrating just how much effort some people are willing to put into blowing smoke around a simple and direct common sense statement that was never intended to be taken as the sole and universal solution to every single physical ailment that ever afflicted any sentient being (including spinal bifida, for Christ sake, per OneForAll). Nor brain cancer, nor spinal meningitis, nor scabies, nor syphilis, nor, nor, nor, nor, nor . . . .

Could it be that this illustrates a major character defect that explains why lefties are so ineffective at winning anything in the political arena, i.e., that unless they are given one single magic button to push, to transform our current hellish world into Nirvana, with zero risk and zero effort, they can’t agree on doing ANYTHING?

Ponder that one for a month, then get back to me.

Thank you, Lisa: “That is the myth, that you can control everything yourself, but it is a scam to blame people for their ‘own’ misfortune when often it is just sheer dumb luck.”

That was my point – not that good diet and exercise never does anyone any good!! And I think realitychecker knows that, and knows that I was not trying to find a single solution to everything.

Western (and particularly American) culture focuses on personal responsibility to much, often to the exclusion of anything else. How many times do we hear, “You can be anything you want – if you just put the effort in.” This is plainly nonsense. Plenty of short people want to be taller, for example: taller people earn more money and find it easier to get jobs, mates, trust, and all sorts of other things. I’d like to be more intelligent and capable, especially in certain ways, but I have a limit and may well have hit it.

No amount of effort can change these things; all we can do is make the best of what we’ve got – and what we’ve got includes our psychological make-up: where we are on the scales of introvert-to-extravert, big picture-to-detail, optimistic-to-pessimistic, sensitive-to-thick skinned, compassionate-to-callous, and so on. You can try to change these but that’s just like stretching a spring – it’ll snap back as soon as you let go.

The victims of poorly regulated financial institutions are often blamed for their misfortune, too. And the victims of unjust laws, of disastrous education policies, of systemic voter suppression. It’s more comforting to think that some individuals screwed up than to face the fact that the society you live in is fundamentally unjust. Because if we open our eyes to that, we have to change how we view ourselves, how we view our society, our country, and our way of life, and how we live our lives.

Yes, we need to take responsibility for ourselves, to the extent we can (and I do), but embedded in that Western attitude is a strongly implied blame and callousness for anyone who falls behind (blaming the victim of circumstances or of the system), or doesn’t make it, and it is THAT that I find extremely objectionable.

The Fed Hike is a sideshow. I am with Hussman on this – the low interest policy has accomplished nothing but putting us back where we started – several times already. To give Bernanke and Yellen any credit at all is to overstate the case – it is not that their interventions have any actual traction, it is the mob psychology of the profiteering classes that feeds on their voodoo banking.

Obama had the same good luck as Clinton – Bush did not get the blame for 9/11 he well deserved, but did get the blame for 2001 which he did not, and for 2008 which he only partially deserved. It would have been better – especially for the Democratic 2016 primaries – if Obama had gotten the full credit for the coming Obama-Bernanke crash, which will now likely be associated with Trump.