Category: Politics

The truth about this crisis – and it isn’t pretty!

The coincidence of events

Today started like most days in that after a breakfast with Jean it was time to switch on the PC and review the news that had come in over night and think about what material might be appropriate for the Blog.  But that’s as far as it went for a normal day.

Because a number of items came together in a way that left me reeling.  Not because it was necessarily new information but because together they represent the most compelling evidence as to why this economic crisis happened and, more importantly, the terrible likelihood that our leaders aren’t go to fix it and that the future will bring an even worse calamity.

Read more about this critically important subject

The US personal savings rate.

What, You Think The Savings Rate Can’t Go Higher?

This Post is entirely indebted to others. It is too important a message not to warrant dissemination on this Blog. (But read to the end to see a valuable tutorial from our own Dr.Jarrell.)

So thanks: First to Naked Capitalism for providing the link (Yves does such an amazing job).  Then to Business Insider for the actual article, which is the bulk of this Post, as follows.  Finally to David Goldman who provides the data behind the chart.

The article starts thus:

This chart should give chills to anyone hoping that Americans will stop saving and start spending again.

Read more about the Savings Rate

Sunflowers in the desert

Stop doing what you are doing and watch Jacqueline Novogratz!

Small things add up to make larger things! This concept of “integration” is seen everywhere that we look.

The subject and content of this presentation are fundamental to the future of the world. And the presenter is showing what can be done.

I found this presentation particularly poignant.

By John Lewis

The Plain Truth about Government Spending

Core differences about how society spends that really need to be understood.

Government spending is fundamentally a different animal than private spending!

Private spending is the essence of the freedom of choice.  When you mull over the decision to purchase an item, you are making a very personal decision based on your current income or resources, the prices of the other goods and services you currently purchase or may purchase, and your personal tastes, risk preferences, needs, and wants.

You make so many mental comparisons and tradeoffs when you consider a purchase that they truly cannot be listed.  And then you live with the consequences of your choice, for better or worse.  If bad, you learn.  If good, you enjoy.  And the process repeats itself every time you make a buying or investing decision, updated with new personal, private information on the circumstances, choices, and preferences of the individual.

Read more about spending

Defence forces and integrity

A personal reflection on the emotions stirred by the PBS series on the USS Nimitz

The last three days have seen Posts on the USS Nimitz.  On the 2nd there was the first part of air carrier operations specifically looking at the challenges of a pitching deck.  On the 3rd came the second part as the pilots and crew operated into night, still with the deck of the USS Nimitz pitching significantly. Yesterday, the Post carried links to background information including the excellent web site that PBS have on the USS Nimitz series.

So why raise the question of integrity?

Read more of this Post

Health Care vs. Health Insurance

Being clear about the terms Care and Insurance when it comes to US health.

The issue for the day is the distinction between health CARE and health INSURANCE.

As we all know, they are not the same thing.  But, as we all have noticed, the two are often confused and the distinctions ignored by many, if not most, in the media, Congress, and the White House.

Health Care and Health Insurance are certainly interdependent. But it helps first to separate the two and take each in turn.

Let’s start with health insurance.  And let’s think of it first as just any “insurance,” like a policy on your house or car.

What is insurance?  It’s a contract that you buy to limit your losses if a bad event happens, even though the likelihood of the bad event occurring is usually very low.

Read more about this important issue

Rationing by Government or the Market?

Rationing.  First of all, what does rationing mean?

It means that there is a finite or limited supply of a good or service, and that not everyone will get all of it that they want.  Rationing can occur through the price that is charged for the good, or through limiting the quantity of the good by some centralized authority.

Yes, it is true that regardless of whether we get our health insurance from private insurers or from a government program, there is rationing.   But there is a huge difference between the type and scope of rationing by the market through price, and rationing by the federal government through control. When the service is rationed by an insurance company, a doctor, or a hospital, if we don’t like the decision, we have a recourse.  We have options. We have choices.  We can go to a different doctor, a different insurer, a different plan; we can report the company, sue the company, fire the company.

When your health care is rationed by government-sponsored single-payer health insurance, that’s it. If you don’t like the rationing decision, you can’t get “another government,” you can’t sue the government, you can’t fire the government, you can’t pay a higher price to get more services out of the government (not legally anyway).  You have no recourse.  The government decision is the end of the road.

So rationing in and of itself is not the point, is not the problem.  Government rationing is the problem.

By Sherry Jarrell

“What does economics mean?” by an economist

Keynes, macro economics and other terms need to be more widely understood.

Macroeconomics as a field is not very impressive, frankly.

In my view, it is more glorified accounting and policy than anything remotely related to testable economic theory!

Keynesian economics — the stuff that most macro courses are made of — smacks of a model created to justify a pre-conceived belief that government can run businesses better than private industry can.  Keynes spoke strictly of demand-side policies, namely fiscal and monetary policies, which create a large role for government intervention, as opposed to supply side policies, which basically get government out of the way by lowering taxes, fees, paperwork, and restrictions, and allow private industry to take risks and create value and manifest economic freedom.

Read more about economics

Very few really saw this crisis coming; are we still in the dark?

Who really understood the forces of destruction building up in the global economy?

(This Post is longer than usual but doesn’t lend itself to being divided into multiple Posts – trust it is worth the read.)

Part One – How investing in the 80s was so hit and miss.

My education with respect to the sound management of one’s wealth came from a propitious mistake by a global insurance company, one of Britain’s largest insurance companies as it happens.  Here’s the story.

Read the rest of this Post

Another one of the few who saw the crisis coming.

Steve Keen – Associate Professor of Economics & Finance at the University of Western Sydney.

I know didly squat about economics.  I know a lot about the effect of economics in the sense of government policies, of inflation and debt, international trade and much more only in how they have impacted me over a lifetime of working, buying homes, raising a family, running a couple of businesses and now contemplating retirement.  I can sum up my personal strategy – LUCK!  I have been lucky.  The other Post out today shows an example of that luck.

Frankly, economists haven’t figured widely in my role call of people that I admired, probably because I don’t really understand what they are talking about.  (That’s why this Blog has a real live economist as part of the team, to help educate me and all the rest of the readers who come to this Blog!)

The other Post on this subject spoke of David Kauders, who clearly saw it coming.  Now here’s an economist who also saw it coming, Steve Keen.

Read more about Steve Keen