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Politics.143

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Remember The Poor

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{Politics.143.907}: Senator Lampoon {yesdeer} Mon, 26 Jan 2015 18:31:13 EST (HTML)

You've been shown it isn't a good model of anything.

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{Politics.143.908}: Senator Lampoon {yesdeer} Mon, 26 Jan 2015 18:48:21 EST (HTML)

Consumer driven economics is hog wash

As Michael Mandel documents copiously in his Bloomberg Businessweek column, what government statistics call “consumer spending” is not — get this! — consumer spending. Most of it isn’t, anyway. Lots of that so-called consumer spending is in fact government spending; Medicare and Medicaid, for instance, are lumped in there, as is most health-care spending, which amounts to, oh, $2 trillion a year, which might tend to throw the consumer-spending numbers off a bit. Health-care spending isn’t really driven by consumers (which is why our health-care market is so messed up, incidentally!), but by insurance companies, government, and other non-consumer enterprises. Something on the order of 15 percent of health-care spending actually comes out of consumers’ pockets. Chickenfeed, in the vulgate.

All sorts of other stuff is dumped into that category: the money spent by nonprofits, for instance, along with political parties and campaigns. Never mind, for the moment, that a big chunk of that actual consumer spending goes to things like clothes and electronics and shoes made abroad (and the consumption of which therefore has little direct impact on domestic economic activity), the truth is that consumer spending, in reality, represents less than half of U.S. economic activity, probably around 40 percent.

That’s a specific kind of error to make. But let’s take a step back from the specific to the categorical: Whatever fraction of our economy is represented by household consumption, 100 percent of our economy — and every economy — is represented by production. We cannot consume that which has not been produced. Consumption is not really the problem: People like to consume. Americans consume eagerly, even to excess. In fact, when the economy is good, these same liberal scolds fretting at present about our momentarily lean consumption will lecture us about the evils of over-consumption, which makes Americans obesely face-stuffing SUV-ridden despoilers of pristine rainforests and Makes Them Hate Us, etc.

The problem of economic policy is not getting people to consume. It is getting them to produce. You can train a monkey to consume. (In fact, he requires no training, especially once you get him coked up on the taxpayers’ dime.) Americans are extraordinarily productive people, but our economy has taken a hit because we have a couple of trillion dollars’ worth of capital locked up in dead real estate, dead securities, and the swelling sovereign debt upon which our pet Leviathan battens. If you have a trillion dollars locked up in residential real estate that still is over-valued — its inflated price being sustained by hook and by crook by the geniuses in Washington — that capital can’t be put to real productive uses. (Also, people who could otherwise buy or rent cheap real estate will be paying too much for housing, taking yet more potentially productive capital out of the markets.)

It’s worth revisiting the sage words of the New York Times and its horror of the fact that “richer Americans tend to save, not spend, their tax cuts.” But jobs don’t come from consumption; jobs come from production. People have jobs because they make useful things and provide useful services, which people want, in any event (but not at any price). You want people to produce, you need capital. You need investments.

And you know where investment capital comes from? Savings, geniuses. Real savings, i.e. the savings that come from consuming less than you produce. Reich, the Times, Krugman, and every stimulus-happy pundit on the Democratic side of the aisle is arguing for an economic policy specifically and particularly designed to discourage saving and discourage investment, while encouraging consumption and encouraging borrowing. That’s the ultimate in magical thinking: We’ll just borrow another few trillion dollars and consume our way out of what ails us! You want fries with that?

I’ve got some bad news for you, Sunshine, some ancient and unalterable and inescapable bad news: As ye sow, so shall ye reap. We’re presently sowing jack, and the Obama administration, the Pelosi-Reid Congress, the Krugmans and Reichs of the world are working hard to make sure that we sow even less. Real prosperity only comes from real productivity, which means real savings and real investment. Everything else is a Beltway full-employment program for social engineers, unicorn wranglers, and fairie-dust sprinklers.

I might point out that Robert Reich was secretary of labor, is presently a chancellor’s professor at Berkeley’s Goldman School of Public Policy, is a former Harvard professor, and a former Brandeis professor, and apparently does not know what is in the U.S. Bureau of Economic Analysis data. But he wants a government composed of wise men such as himself to spend your money on your behalf, because you are too stupid to invest it yourself. Hell, a rube like you — you might even save it, much to the horror of the New York Times.

– Kevin D. Williamson is deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, to be published in January.

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{Politics.143.909}: Whadda buncha hogwash {cardo} Mon, 26 Jan 2015 21:14:40 EST (HTML)

I have nothing against high productivity; in fact I'm all for it. And so are Reich and Krugman of course.

With re: to savings that are put into investments:

All you need for that to occur are companies that look like they are gonna earn some big profits and need extra money, ASAP, to sink into company-based investments of their own (for upgraded or new equipment, more workers on the payroll etc.), and which are therefore prepared to accept investment money from stock market investors who are prepared to bet on that particular company and its well-organized efforts. And of course there will never be any shortage of such investors as long as the economy is stable and personal incomes are adequate.

Why no shortage? Because people with savings would like to make more money than they could make from buying a treasury certificate or making a bank deposit.

“The Democratic side of the aisle is arguing for an economic policy specifically and particularly designed to discourage saving and discourage investment”?

What nonsense. Dems have nothing against putting your savings into the stock market. Absolutely nothing.

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{Politics.143.910}: Senator Lampoon {yesdeer} Mon, 26 Jan 2015 21:50:18 EST (HTML)

>Dems have nothing against putting your savings into the stock market.<

That's not what the quote you posted said. It said the dems are arguing for a policy that discourages savings AND discourages investment. Didn't say anything about taking savings and put it into investments, which is a bad idea in any case.

Savings is savings and investment is investment.

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{Politics.143.911}: Richard Clark {cardo} Mon, 26 Jan 2015 22:07:31 EST (HTML)

<<< That's not what the quote you posted said. It said the dems are arguing for a policy that discourages savings AND discourages investment. >>>

It didn't say any such thing. If you think it _did_, reproduce that part of the quote to which you refer, so that we can all read it and discuss it.

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{Politics.143.912}: Senator Lampoon {yesdeer} Mon, 26 Jan 2015 22:27:00 EST (HTML)

You posted it. Are you doped up or drunk or something.

From your post, in quote marks and everything, by your own sticky fingers...

“The Democratic side of the aisle is arguing for an economic policy specifically and particularly designed to discourage saving and discourage investment”?

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{Politics.143.913}: {cardo} Mon, 26 Jan 2015 22:30:52 EST (0 lines)
{erased by cardo Mon, 26 Jan 2015 22:35:42 EST}

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{Politics.143.914}: Richard Clark {cardo} Mon, 26 Jan 2015 22:36:27 EST (2 lines)

Sorry, I'm too tired to focus on this right now.  Will be back
tomorrow morning.

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{Politics.143.915}: Otis Dill {Otis99} Tue, 27 Jan 2015 01:53:23 EST (1 line)

He'll be back when he awakens at noon

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{Politics.143.916}: Elizabeth Costello {lizcostello} Tue, 27 Jan 2015 08:10:11 EST (1 line)

  What a joke.

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{Politics.143.917}: Richard Clark {cardo} Tue, 27 Jan 2015 10:49:40 EST (HTML)

The short passage that I had put quotation marks around was something that I had understood you to say, Steve, and with the question mark that followed the quote, I was expressing my doubt that it was true. Sorry if that wasn't clear on the first go-round.

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{Politics.143.918}: Bloviation T. Cornpone {oldman} Fri, 30 Jan 2015 10:28:44 EST (54 lines)

Conservatives: Here’s one version of an anti-poverty agenda. Let’s see
what you’ve got.
By Jared Bernstein January 30 at 6:00 AM

Someone recently quipped that people with car elevators shouldn’t
complain about inequality, but I disagree. I welcome Mitt and Jeb and
Marco (sounds like a cool boy band, no?) to the debate over inequality
and poverty in America.

I am, however, not naïve. There are two tickets to admission to this
debate.

First, part of what’s going on here is that these guys want to whack
away at the president’s economic record, and they no longer have
growth and jobs to beat up on. That doesn’t mean everyone’s benefiting
from the growth — in fact, that’s the inequality point. But it does
mean you can’t credibly do the old Rep. John Boehner thing and just
wave each month’s jobs report around as a case against the president.

So when Romney complains about trends in inequality and poverty under
Obama, one must consider the outside chance that he’s less interested
about actually doing something about these economic blights than he’s
running out of other stuff to rail about.

Second, you have to bring something to the table beyond the old canard
that more growth will trickle down from the haves to the have-nots,
more than “getting taxes and regulations out of the way,” more than
shrinking government and repealing Obamacare. That is, you have to get
beyond old rhetoric and into new evidence.

Instead, you need to bring something like this: the new report from
the Children’s Defense Fund on how to lower child poverty by 60 percent.

I’ll get into details from the report in a moment, but let me be
clear. I’m of course not suggesting that these conservatives adopt
these measures. I’m saying they need to articulate their policy agenda
in similarly granular terms, measure its impact on poverty or
inequality, and suggest “payfors.”

If you’ve got such ideas and evidence of their effectiveness,
absolutely bring them to the table. I and others will give them a
sincere and objective look; Buddha knows, nobody has the ideas market
cornered in this critical space. But don’t think you can just add the
words “poverty” and “inequality” to your old campaign platforms and
expect anyone to take you seriously.

(Just in case you think I’m being a haughty liberal here, let me point
toward some recent posts by the smart conservative Jimmy Pethokoukis,
who’s been making a similar case: “[the] economic reality [is] that
cranking up GDP growth, while a necessity, may no longer be sufficient
to lift all boats…”)

[more]
"http://www.washingtonpost.com/posteverything/wp/2015/01/30/conservatives-heres-one-version-of-an-anti-poverty-agenda-lets-see-what-youve-got/?hpid=z12"

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{Politics.143.919}: Elizabeth Costello {lizcostello} Fri, 30 Jan 2015 10:45:19 EST (7 lines)

It seems to me that someone who has made it in this world is a lot
better equipped to help people who haven't figure out how to attain
success than a community organizer.  The numbers certainly bear me out
as Obama has put more people into poverty than any other president.
(and maybe than all other presidents' combined)

Is he evil or incompetent?

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{Politics.143.920}: {doorman} Fri, 30 Jan 2015 10:49:41 EST (2 lines)

Romney didn't "Make it" in the world.  It was handed to him by Daddy.
Remember George?

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{Politics.143.921}: Richard Clark {cardo} Fri, 30 Jan 2015 13:02:10 EST (HTML)

<<< Obama has put more people into poverty than any other president. (and maybe than all other presidents' combined). >>>

What caused more people than ever to sink into poverty is that the Pugs blocked almost every piece of progressive legislation that Obie and the Dems put before them. And now you goddam liars are trying to pretend otherwise. So who the hell do you think you're fooling?

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{Politics.143.922}: Bloviation T. Cornpone {oldman} Fri, 30 Jan 2015 13:39:09 EST (2 lines)

Voters.  You know, the folks who swept Republicans into control of the
Senate.  Those dirty dawgs!

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{Politics.143.923}: Richard Clark {cardo} Fri, 30 Jan 2015 13:46:43 EST (HTML)

Yes, I certainly agree that many voters have been fooled by the Pugs. If we had better schools and teachers for low-income folks, they wouldn't be so stupid as to fall for Pug tricks and lies. And of course the Pugs know that, and that is precisely why they want to keep schools and teachers inferior for low income communities and neighborhoods!

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{Politics.143.924}: Senator Lampoon {yesdeer} Fri, 30 Jan 2015 14:54:57 EST (HTML)

Low income voters are the dem base, Richard.

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{Politics.143.925}: Richard Clark {cardo} Fri, 30 Jan 2015 18:32:55 EST (HTML)

Read a book called "What's the Matter With Kansas" by Thomas Franks and you will find out otherwise. Or just read a summary of it:

"https://search.yahoo.com/yhs/search?p=what%27s+the+matter+with+kansas+summary&ei=UTF-8&hspart=mozilla&hsimp=yhs-001"

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{Politics.143.926}: Senator Lampoon {yesdeer} Fri, 30 Jan 2015 19:56:54 EST (HTML)

With the 2010 midterms come and gone, one question we at OOTS asked is how low-income Americans voted. According to CNN’s national exit polling, the lowest income bracket, those making under $30,000 a year, voted 56 percent Democrat compared to 41 percent Republican. This gap closes in the next income bracket, between $30,000 and $50,000, in which voters prefer Democrats over Republicans by a margin of 51 percent to 46 percent.

It’s worth noting that in this election only those earning less than $50,000 voted in the majority for Democrats. Above the $50,000 income line, voters swung Republican. Among those earning $50,000- $75,000, voters chose Republicans over Democrats at a rate of 52 percent to 46 percent. Those earning $75,000-$200,000 voted Republican 56 percent to 42 percent. And those making more than $200,000 voted for Republican candidates 62 percent of the time. - See more at:

"http://www.spotlightonpoverty.org/OutOfTheSpotlight.aspx? id=f733d09b-6808-4115-9b88-8c89262c7b3d#sthash.R2CAlb3d.dpuf"

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{Politics.143.927}: Richard Clark {cardo} Fri, 30 Jan 2015 21:39:04 EST (HTML)

<<< The lowest income bracket, those making under $30,000 a year, voted 41 percent Republican. >>>

And without those votes, the Republicans wouldn't stand a chance.

I rest my case. (Slightly modified, I admit, from my original claim, which was apparently incorrect.)

And thanks, Steve, for once again actually referring us to some useful and relevant data and findings.

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{Politics.143.928}: Marc S {marc_dc} Fri, 30 Jan 2015 22:20:20 EST (7 lines)

Income is one just demographic, some other things to consider:

The article does not break down the demographics of those low income
voters....gender, race/ethnicity and urban v rural.

The gender gap is big, the urban/rural gap is bigger, the
race/ethnicity gap is biggest.

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{Politics.143.929}: Richard Clark {cardo} Fri, 30 Jan 2015 22:46:38 EST (HTML)

I think those are probably very good points, but is there any chance you could elaborate just a bit more, so as to drive home your points?

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{Politics.143.930}: Marc S {marc_dc} Sat, 31 Jan 2015 10:31:58 EST (4 lines)

Rural poverty represents about 30-40% of poverty.

Rural votes genearlly are Repub voters; poor, low educated rural voters
are KKK repub voters.

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{Politics.143.931}: Richard Clark {cardo} Sat, 31 Jan 2015 11:02:20 EST (1 line)

I see.  So whaddaya say to that, Steve?

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