“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Monday, October 31, 2011

“The difference between an optimist and a pessimist is that the pessimist is usually better informed.”

Every time I do a post on or by Pat Buchanan, there is some comment about Buchanan's character or his worthiness to be heard. The Belmont Club was loaded with effete Buchanan detractors. Buchanan would be called a racist or an anti-semite. Rarely would he be attacked for the specifics of his opinion or argument. Mostly, his detractors avoid specifics because they have paltry evidence to contradict him. Here is a book review on Buchanan's latest book and his dangerous truths:

Thomas Dunne, 488 pages, $27.99
I went to a dealership last weekend to check out an All-American muscle car, but it didn’t turn out to be all-American at all. As listed on the window sticker, the domestic content was only 55 percent. The transmission, one of the most important components on the vehicle - especially for a performance machine - was manufactured in China. On the same day, I dropped into a hardware store to pick up a box of nails, and they were all made in the People’s Republic, too. After a long day of trying to avoid purchasing products made by the communist Chinese, I settled down at home to eat a refreshing fruit cup. When I flipped the plastic container over to check out the nutritional information, there it was in black and white and all capital letters: PRODUCT OF CHINA. The reds had invaded my refrigerator.
Book Cover: Patrick J. Buchanan, Suicide of a SuperpowerBook Cover: Patrick J. Buchanan, Suicide of a Superpower
It doesn’t matter what you want; almost every consumer product on U.S. store shelves is made overseas, especially in China. It doesn’t matter how much you want to find it; almost nothing you need is made in the USA. From expensive manufactured equipment to swank plasma TVs to the simplest munchies for a kid’s lunchbox, that “Product ofChina” label is stamped on it all. Try taking the China Test for a month or two - maybe even a year. Any time you buy anything, flip it over and read the label to see if it was made in the Middle Kingdom. The results of a thorough China Test can be startling: Americans are dependent on the Maoist state for the necessities of life. Obviously, this dynamic cannot work forever. Eventually, a nation needs to produce something it can sell to have the revenue to consume anything - and America is making less all the time.
In his new blockbuster book, “Suicide of a Superpower: Will America Survive to 2025?” Patrick J. Buchanan chronicles the demise of American manufacturing. “From 2000 to 2010, America saw 50,000 factories close and 6 million manufacturing jobs disappear,” he writes. “Manufacturing, 27 percent of the U.S. economy in 1950, is down to 11 percent and accounts for only 9 percent of the non-farm labor force.” This is not only bad for the working class because service jobs pay half as much on average as manufacturing jobs, it is dangerous for national security as well. Military contractors are dependent on parts made abroad, which means America’s ability to project force is tied to foreign suppliers whose interests might not always coincide with our own. “The defense industry has been off-shored,” warned former South Carolina Sen. Fritz Hollings. “Today, we can’t go to war except for the favor of a foreign country.”
There are countless national policies that put U.S. manufacturers at a disadvantage in their own land and chase jobs overseas. Onerous federal taxes on income made abroad mean companies don’t bring cash home which could be invested in creating jobs. House Ways and Means Committee Chairman Dave Camp, Michigan Republican, estimates $1 trillion in U.S. corporate money is sitting in foreign bank accounts to avoid tax penalties here. That’s treasure not going to domestic research-and-development or facilities expansion. Backward labor laws also make it more expensive for the Big Three domestic automobile manufacturers to produce cars in America than foreign firms, which are free to set up in cheaper nonunion southern states without fear of a national strike. On top of all this is the fact that China can break every trade law on the books and nothing is done about it. These are policies of a nation that’s no longer serious about being competitive.
Meanwhile, as millions upon millions of private-sector jobs disappear, the government leviathan continues to grow unabated. In 1960, 8.7 million people worked for the government; today that number has ballooned to 22.5 million. “Between the passage of Obama’s stimulus bill in 2009 and September 2010, millions of private-sector jobs disappeared but 416,000 new government jobs were created,” Mr. Buchanan reports. On average, federal employees earn about $62,000 more per year than workers in the private sector. The burgeoning bureaucracy and all its big-government programs don’t come cheap and have brought the world’s most productive economy to the brink of bankruptcy.
Once the world’s largest creditor, now America is the biggest debtor nation in history. We are running trillion-plus-dollar deficits every year that add to a national debt closing in fast on $15 trillion. A nation is not free when it owes so much because there are strings attached when a foreign power maintains such a large financial stake in another state. Beijing, for example, owns over $1.2 trillion in U.S. debt, which gives it sway over U.S. affairs. The debt jam leads to worry that Washington will either go into default or inflate like crazy to be able to pay off debt with dollars worth much less. Both are options of a seriously diminished economy and will lead to punishing consequences for taxpayers. If liberal Democrats had their way and used revenue increases to balance the budget, taxes on everybody would have to go up by 67 percent.
America’s national crisis is a failure of leadership. Although the country is about to drive over the cliff, our elected representatives have proven incapable of taking action to change directions. We see the problems and understand the crisis but no longer have the will to do what’s right. President Obama has admitted that “At no time in human history has a nation of diminished economic vitality maintained its military and political primacy,” yet his policies have gutted the U.S. economy to its worst condition since the Great Depression. Clare Booth Luce quipped that, “The difference between an optimist and a pessimist is that the pessimist is usually better informed.” Pat Buchanan’s new book provides all the information anyone needs to be pessimistic about the future.
Brett M. Decker is editorial page editor of The Washington Times. He is coauthor of the new book “Bowing to Beijing” (Regnery, 2011).


  1. Part of the culture and the incentive to flee American workers like the plague.

    A new report says more than half the Long Island Rail Road workers who retired last year claimed they were disabled on the job and were thereby entitled to a bigger pension.

    The New York Times reports that nearly all those claims were approved. That rate is much higher than in any other U.S. railroad system.

    Federal prosecutors charged 11 people on Thursday with conspiracy in a decade-long fraud that authorities say poisoned the pension system used by employees of the nation’s largest commuter railroad. Authorities say some employees paid off doctors to say they couldn’t work.

    The FBI said the fraud could cost more than $1 billion and promised more arrests.

    The investigation was opened after The Times reported in 2008 that almost all LIRR workers were being declared disabled upon retirement.

  2. Imagine having to run a business where almost every worker retires with a disability annuity that you pay for. It is ugly, really ugly out there.

  3. The US foolishly thought that it could base its economy on the real estate and financial sector. The financial sector (worshippers of money over quality and process) crafted scheme after scheme until the post-Lehman era and the inevitable crash. It is all part of what Buchanan called the "culture war."
    Pat Buchannan did not 'instigate the culture'. The culture war, or rather this particular phase of it was instigated by the New Left in the 1960. It will end when the New Left, like Communism collapses of its own internal absurdity. Pat Buchanan is one of the few Americans that gets it right on a lot of things especially a less avante-garde (read - Zionist) foreign policy.

  4. Two, of the fifty Motley Fool Amazing Facts.

    45. "Just 1 in 7 U.S. workers is of normal weight without a chronic health problem," according to The Wall Street Journal, citing Gallup data.

    6. Only 2.7% of what Americans spend their money on are goods and services from China. 88.5% is on American-made goods and services.

  5. Pat must be shopping at Walmart.

  6. Our Trade Imbalance with China is approx 1.8% of our Economy. If that was our Only problem it would be manageable.

    Alas, it's not; and, it's not.

    Pat's right about several of the things he bitches about. However, his whole schtick is a few simplistic jingoisms that are great for selling books, but not of much use, otherwise.

    That said, he does need to be heard. There was a time when it seemed he was the only man in America that had the courage (or, chutzpah) to call bullshit on the establishment's lack of proper equestrian attire (including GW Bush's.)

  7. fin: Pat Buchanan is one of the few Americans that gets it right on a lot of things especially a less avante-garde (read - Zionist) foreign policy.

    Hey, Rat, break out der lederhosen, vee haff a vvvvriend!

    German Army Motto: "Third Time Lucky"

    German Chinese Food: Half an hour later you're hungry for power.

    German for "Beware of Dog": harkentabarkin

    German for "courting": parkanensparken

    German for "painful methane discharge": Ahfartenansmarten!

    German for bra: Haltsemfromfloppen!

    German for constipation - Farfrompoopin!

    German for virgin: Guttentight

    German word for Vaseline: weinerslider.

  8. That factoid on China is very cute. It does not take into account US transfer payments on debt payments to China. It ignores Chinese worldwide sales of purloined US technology and products based on that uncompensated theft.. It ignores the internal costs to the US economy of social programs regarding unemployment and subsidies required by reduced wages. It does not take into account the huge damage done to US forests because of pests introduced by untreated Chines shipping pallets.

  9. In 1986, timber was the most important agricultural crop in the U.S. in terms of dollar value of production, surpassing corn, soybean and hay. The delivered value of the 1986 U.S. timber output was $17.1 billion (in 1996 dollars). Total shipments of wood manufactured products were valued at $252 billion. If left unchecked, the USDA estimates the Asian longhorned beetle and other Chinese wood-boring insects could cause as much as $138 billion in damage to the U.S. economy.

  10. Add the costs to US security and you can come up with no conclusion other than to date, trade with China has had a negative impact on the US.

  11. When governor of New Jersey, John Corzine was doing 91 mph in a 65 mph zone on the Garden State Parkway. Corzine broke his left thigh bone, 11 ribs, collarbone and chest bone. He also fractured a vertebrae in his lower back. His ego was also bruised but not as big as it is today.

    MF Global Holdings Ltd., the company run by Jon Corzine that last week reported a record loss, had two of its credit ratings cut to junk and drained bank lines, faces a pivotal few days as the futures broker pitches itself to potential buyers to avert failure. He is expected to file bankruptcy today.

  12. When last Pat's ten-gallon hat was in the presidential ring and he was on the road doing his Will Roger's routine, it was discovered that he drove a German made Mercedes.

    Does this mean that he is now wrong? No. It does, however, go to the strength of his personal convictions.

    For all I know, Pat could be tooling around town in a BMW today. If so, that would make him as American as apple pie and Spartanburg, South Carolina.

    The problem is not China (or Germany, Korea or Japan - who have all faced past criticism). No. The problem is found, among other places, in a school system that cranks out perfectly PC ignorami. For instance, it is found in school systems, such as Atlanta's, where hundreds of teachers and "administrators" are charged with cheating on state aptitude tests. Furthermore, it is found in a state Republican political elite, too bigoted and cowardly to address the problem of ignorami and their enablers.

  13. Well it looks as if Cain's black cherry has burst.

  14. Romney's detectives got there first.

  15. The seven-billionth baby was born in the Philippines. That's pretty amazing, how they know that.

    The problem is found, among other places, in a school system that cranks out perfectly PC ignorami.

    Co-worker just passed the 8 hour FE/EIT exam to be licensed as an engineer, he won't have much competition from those ignorami you speak of.

  16. The Pontifical Council for Justice and Peace, an official Vatican body, last week published a sweeping scholarly tome calling for the end of capitalism, individualism, free markets, and national sovereignty.

    I will do my part! The Catholic Church doesn't get another penny from me.

  17. Deuce said...

    Romney's detectives got there first.

    Classic oppo dump. Won't work.
    Yield curves don't get euphoric when bureaucrats hold summits.

    At a bond auction Oct. 28, the euro area’s third- largest economy, Italy, had to pay investors a yield of 4.93 percent -- a euro-era high -- to take the risk of lending it 3 billion euros ($1.8 trillion) for three years.

  18. It is all part of the New World Order.

    Iraq will produce and sell 2 million tons of wheat this year and next, and I wouldn't be surprised if the U.S. is a buyer.

    And we are paying farmers to not cultivate 30 million acres.

    The beat goes on.

  19. How does linking to google with search for Fractional Reserve Banking support your statement that Fractional Reserve Banking created 5 trillion in new money, Rat?

    Just because you read something on the internet doesn't make it true. There was 1 link that stated all a bank had to do was have twenty some odd bucks to magically create a 160,000 mortgage for someone. That isn't how it works in case that was your thought. A Bank has to keep a proportion of what it loans in reserve i.e it has to have the money to loan in the first place.

  20. Oh, I would certainly admit that there has been a net negative, in the US relationship with China, if....

    ... all the observer was concerned with was the United States.

    The leadership of the US, though, has other concerns, than just the standard of living in the US.

    They are saving the whirled, by rebuilding it in our image.

    Viva la revolution!

  21. It receives that through the Fed, ash.
    The lender of last resort.

    As of 2006 the required reserve ratio in the United States was 10% on transaction deposits and zero on time deposits and all other deposits.

    0% in reserve required on FDIC insured accounts, is how that reads.

    Fractional reserve banking means that banks only have to keep a certain percentage of their deposits on reserve. Let’s say that you deposit $100 at a bank and the reserve requirement is 10%. This means the bank keeps $10 and can loan out the other $90, thus, creating $90 out of thin air, as both the depositor and the borrower have claim on that $90. That $90 will presumably be deposited in another bank and the process repeats itself as $81 will be created, and so on.

    In the end, for every $100 initially deposited, $900 new dollars will “magically” appear in the form of bank credit.

    That children, is money for nothin'
    The chicks, they're free, too.

  22. I do not believe everything I read on the Inet, ash.

    I do believe in factional reserve banking and I know how it "creates" money, not wealth.

    That is the essence of the reforms of 1913. When added to the killing of Bretton Woods, by Richard M. Nixon, well ...

    That was a shock that Ms T still has not assimilated.

  23. Rat, dude, that is wrong; they have to have the money to lend it. The fed does not simply print it up for the bank. The banks no longer create their own banknotes

  24. The question as I recall, how did the Banks create $15 trillion a year, on average, over the past decade.

    You have the answer, like it or not.

  25. You deposit $100 dollars, ash, in a passbook savings account.

    Your US bank can loan $100, or 100%, of that.

    The fella that got the loan, spends that $100 at the hardware store.

    The owner of the store deposits $100 in his account.

    The Bank can loan 100% of that deposit, to the pet store owner.

    The pet store owner deposits the money in his corporate checking account. While waiting for a shipment of rottweilers.

    The Bank can then loan 90% of it's value, to someone else.

    The original $100, it has become $290, in three transactions.

    All guaranteed by the Fed.

  26. rat quoted from somewhere:

    "In the end, for every $100 initially deposited, $900 new dollars will “magically” appear in the form of bank credit."

    That is factually wrong. It simply does not happen that way. If a depositor deposits 100 then, on a fractional reserve of 10%, they can lend 90 of that 100 back out. Even if that loaned 90 is deposited in another bank there is still the initial 100 dollars. It is NOT true that if 100 dollars is deposited in a bank that the bank has 900 more dollars to lend unless they've raised the capital from somewhere else. If the FED loans them that 900, which they don't do based simply on the fact of the deposit, then the FED would have created the money, not the bank. In any case the Fed does not supply money to banks based on that described scenario.

  27. You still have the $100 in your account.

    The first debtor, has $100 in hardware.

    The hardware store owner, he has $100 in his account.

    The pet store owner has a debt for $100 and the money in the bank, in his checking account.

    While the bank has now another $90 to lend.

  28. So, that is how the Banks "created" $15 trillion each year, for the past decade.

    It is not that complicated a process, ash.

  29. Since 2006, ash, no reserves have been required, on US banks, on the majority of accounts.

    As of 2006 the required reserve ratio in the United States was 10% on transaction deposits and

    zero on time deposits and all other deposits.

    That's a wiki quote, ash.

  30. Even if the reserve requirement is 0 no new money is therefore created simply none is held in reserve.

  31. No, ash.

    You still have claim to the initial $100 deposit.

    That is your money, guaranteed by the FDIC.

    The hardware store owner, the $100 he deposited, is his. Guaranteed by the FDIC.

    $100 has now become $200, with $100 being "created".

    The Pet store owner, he has $100 in his checking account. Guaranteed by the FDIC.

    $100 has now become $300
    With $200 being "created".

    And the Bank has another $90 waiting to become a loan.

    $100 has now become $390
    With $290 being "created" by the Bankers.

  32. How many times the "real" money is rolled over, well, that is a hypothetical.

    But rolled it is.

    It is how the Bankers create money.
    How ...

    Total global credit rose from $80 trillion in 2000 to $210 trillion today

    Keep those doggies rollin'


  33. More, from wiki

    Effective December 27, 1990, a liquidity ratio of zero has applied to CDs, savings deposits, and time deposits, owned by entities other than households, and the Eurocurrency liabilities of depository institutions.

    Deposits owned by foreign corporations or governments are currently not subject to reserve requirements.[5]

    When an institution fails to satisfy its reserve requirements, it can make up its deficiency with reserves borrowed either from a Federal Reserve Bank, or from an institution holding reserves in excess of reserve requirements. Such loans are typically due in 24 hours or less.

  34. Seems there is a formula, to figure the exponential growth of the money supply, through factional reserve banking.

    The reserve requirement can affect monetary policy, because the higher the reserve requirement is set, the less money banks will have to loan out, leading to lower money creation, and maintaining the purchasing power of the currency previously in use. The effect is exponential, because money that is loaned out can be re-deposited; a portion of that money may again be re-loaned, and so on. The effect on the monetary supply is governed by the following formula:

    MS=Mb*mm \,

    mm=(1+c)/(c+R) \,

    MS = Money Supply

    Mb = Monetary base

    mm = money multiplier

    c = rate at which people hold cash (as opposed to depositing it), equal to one minus marginal propensity to consume

    R = the reserve requirement (the percent of deposits that banks are not allowed to lend)


  35. ... the higher the reserve requirement is set, the less money banks will have to loan out, ...

    ... leading to lower money creation ...

  36. DR: That was a shock that Ms T still has not assimilated.

    If you want to know where I'm coming from, Rat, I look at life, the universe, and everything thermodynamically. Everything is a Carnot Engine, driven ultimately by the sun. That's why profit is not "evil", but necessary, to overcome regulations and taxes, which are friction. Debt is a lever that allows people to move profits from the future and stockpile them in the here and now to overcome an obstacle. It's never "found money". I am absolutely allergic to any perpetual motion scheme. I don't care about paper or metal or transistorized markers, but actual tangible assets.

  37. That is understandable, Ms T, but unrelated to the current state of the economic and political challenge facing the whirled and US.

    Even if there was public sentiment to return to "hard" currencies, which is not evident, it could not be done over night.

    It has taken forty years of incremental "change" to get us here, it would take at least a decade, more, to start determinable movement back to the future.

  38. DR: Even if there was public sentiment to return to "hard" currencies, which is not evident, it could not be done over night.

    You mean there is no desire to do it overnight. But the whole thing's coming down, because reality bats last. And then it will have to be booted up again, with real money, overnight.


  39. ... accept the things you cannot change; the courage to change the things you can ...

    ... and wisdom to know the difference. ...

  40. That's not true, Ms T.

    The problems are marginal, in the short term.

    Long term the US, well North America, all of the America's for that matter, is an island.

    A relatively under populated island, compared to Asian densities.

    Keep the faith, baby.

  41. And with the US consumer now paying off debt, and raising it's savings rate, there is ever more money not being created, by the Bankers.

    30. Household debt payments as a percentage of income are now at the lowest level since 1994.

    29. Despite record federal deficits, total debt throughout the economy -- public plus private -- as a percentage of GDP has been dropping since 2008. Households are shedding debt faster than the government can go into it.

    Demand for loans is down.

    While the economy is in a liquidity crisis, because of it.

    It is often said that the Fed is "out of ammo", regarding it's ability to further stimulate the economy.

    Which may well be true.

    The President, though, he has not even fired the first shot, from his economic arsenal.

  42. Rat, you are confusing a bank creating money with the banking system creating credit. When bank A takes in a $10,000 deposit and has a 10% reserve requirement, the bank keeps $1,000 in reserve and can loan $9,000 to another borrower. Banks consider deposits liabilities and loans as assets. The banking system creates money when the person that borrows the $9,000 and deposits it in his account in Bank B. Bank B takes $900 into its reserve account and now has $8100 in excess reserves to loan and that goes through the system. Notice that from the point of view of both banks, what was a $10,000 deposit became an asset of $17,100 ($9000 + $8100). That can be done repeatedly until the 10% reserve absorbs all of the original $10,000.

    I think I have that correct, but don't bank on it.

  43. That credit, Deuce, is real money.

    Created by the Banks.

    Bytes, transferred.

    Good as gold, at the current market price.

    Depending upon the type of account, there can be as little as 0% held in reserve.
    With 10% held in reserve on "household" accounts.

    But it's money created by the Federal Reserve member banks, whole clothe and by design, do not doubt that.

    Their current management of the System, what ash has been advocating for.

    But as folks have been saying, their tools are inadequate to the task.

    Only the President has the legal authority to create a "game changer". It's much more a political thing, than an economic one.

    $1.2 trillion, less than 10% of the money created annually in the credit markets, on average over the last decade.

  44. It's not "How we create" the money, but "what we spend it on."

    Do we waste it on imported oil to fuel our gas-guzzlers, or do we "Invest" it in Home-grown Energy, and "More Efficient" Transportation Systems?

    In one direction lies "Serfdom."

  45. I like the guy from last night who promised we will not be importing oil in ten years from anyone besides Mexico and Canada.

  46. In ten years, Deuce, Mexico will probably be a "Net" Petroleum Importer.

  47. That is more than doable, Deuce.

    Just with cellulosic ethanol, let alone factoring in an increased exploitation of our existing petroleum resources.

  48. And, remember, even though Canada Exports oil to us, they "Import" a Million Barrels/Day from N. Africa, and the Middle East.

  49. Brazil is, also, a "Net" Liquid Fuels Importer, and, according to Petrobras will probably still be a Net "Importer" in 2021.

  50. Mexico will be forced to begin the privatization of Pemex, which will enhance their production capacity, over time.

    But as the Mexican economy reaches for US levels of consumption, well...

    They will be exporting ever less.

  51. And, keep in mind, there is probably not a well producing, Today, in the Bakken that will be producing more than 10 barrels/day in ten years.

  52. Then again, we should be saving that petroleum, in the ground. It is our "real" National Heritage.

    Preserving that petroleum for its' non-fuel purposes, in the future, than burning it, today.

    Especially when our agricultural capacity can replace that foreign originated fuel.

  53. Yogi Berra said, "When you come to a fork in the road you need to take it."

    We are at a potentially "existential" fork in the road. We'd better take it.

  54. Do not doubt that within a decade that Venezuela will be a staunch US ally.
    On the list of American sources that can provide US oil, duty free.

  55. And, the only way Venezuela can arrest their multi-decade slide in oil production is by attracting Hundreds of Billions of Dollars to extract, and refine that horrible, nasty, sulfur-ridden, tar-like stuff out of the Rain Forest.

    Now, after Decades of screwing every oil company that's invested in their country, how are they going to attract that investment, and how much of that crap can they get out of the ground in the best of circumstances?

  56. Prudhoe Bay production is plunging, along with the North Sea Fields, and even the Gulf of Mexico is "off its highs."

    Indonesia is now an oil "Importer," and the word is Chinese production is starting to decline.

  57. We are rapidly approaching, in technical terms, a world of shit.

  58. We have a very narrow window to make an enormous move.

    Right now, we have the ability to raise capital. Cheaply. Who knows how long that will last?

  59. 6. "Only 2.7% of what Americans spend their money on are goods and services from China. 88.5% is on American-made goods and services."

    This comes nowhere near our family budget.
    What factual backup do the fools tm have to back up that assertion?

  60. "Right now, we have the ability to raise capital. Cheaply. Who knows how long that will last?"

    It seems to be the latest suicidal fantasy to act and believe as if the interest rate cycle is a thing of the past.
    As was history, until it wasn't.

    Real interest rates?
    THAT Shitstorm is gonna be a thing to behold.
    ...or to hold onto our diapers to.

  61. Doug, go to the "Import" numbers from China, and divide by GDP.

    I posted that link last night, on the previous thread.

  62. How Members Of Congress And Federal Employees Are Living The High Life At Our Expense

    Washingtonians now enjoy the highest median household income of any metropolitan area in the country, and five of the top 10 jurisdictions in America — Loudoun, Howard and Fairfax counties, and Falls Church and Fairfax City — are here, census data shows.

    The signs of that wealth are on display all over, from the string of luxury boutiques such as Gucci and Tory Burch opening at Tysons Galleria to the $15 cocktails served over artisanal ice at the W Hotel in the District to the ever-larger houses rising off River Road in Potomac.

    #1 When you total up all compensation (including health care and benefits), the average income for a federal worker in the Washington D.C. area last year was $126,369.

    #2 In 2005, 7420 federal workers were making $150,000 or more per year. In 2010, a whopping 82,034 federal workers were making $150,000 or more per year. That is more than a tenfold increase in just five years.

    #3 In 2005, the U.S. Department of Defense had just nine civilians earning $170,000 or more. When Barack Obama took office, the U.S. Department of Defense had 214 civilians earning $170,000 or more. In June 2010, the U.S. Department of Defense had 994 civilians earning $170,000 or more

    #4 Last year, federal employees "earned" approximately 447 billion dollars in total compensation.

    #5 According to a study by the Heritage Foundation, federal workers earn 30 to 40 percent more money on average than their counterparts in the private sector.

    #6 Today, one out of every 12 people living in Washington D.C. is a lawyer. In New York City, only one out of every 123 residents is a lawyer.

    #7 More than 50 percent of the members of the U.S. Congress are millionaires.

    #8 The median wealth of a U.S. Senator in 2009 was 2.38 million dollars.

    #9 Insider trading is perfectly legal for members of the U.S. Congress - and they refuse to pass a law that would change that.

    #10 The percentage of millionaires in Congress is more than 50 times higher than the percentage of millionaires in the general population.

    Meanwhile, most of the rest of America has been going through economic hell....

    -The standard of living in the United States has fallen farther over the past three years than at any other time that has ever been recorded in U.S. history.

    -According to the Federal Reserve, the combined net worth of American families has fallen by $5.5 trillion since 2007.

    -Half of all American workers now earn $505 or less per week.

    -According to Paul Osterman, a professor of economics at MIT, approximately 20 percent of all employed Americans are making $10.65 an hour or less.

    While the average American family is deeply struggling to pay the mortgage and put food on the table, the bureaucrats in Washington D.C. are busy shopping for the latest cell phones and trying to figure out what brand of new car to buy next year.

    Over the past couple of decades, the federal government has absolutely exploded in size, but this has not helped the poor. We now have more poor people in this country than ever before and over 2 million additional Americans slipped into poverty last year.

    No, the reality is that the people that have reaped the rewards of a much larger federal government are the lawyers, the lobbyists and the bureaucrats.

    This is the kind of thing that the American people should be protesting. Almost everybody in Congress is rich. Hundreds of thousands of federal employees are living the high life. The lawyers, the lobbyists and the bureaucrats are having a field day.

  63. "Reality bats last."

    That's good, that's good.

  64. That is absolutely correct, Doug.

  65. I'll do that, Rufus, but how do you explain the reality of family budgets, like ours, and millions of others, that expend far more on Chinese Goods than 3 percent?

  66. You'd have to ask them, Doug.

    It is said, at the US-China trade council that the US imported:

    $364.9 billion worth of product from Charlie, in 2010.

    US GDP was:
    ... estimated to be nearly $14.7 trillion in 2010

    That looks like 2.7%

  67. You and Pat, must all shop at the same stores.

  68. "US GDP was:
    ... estimated to be nearly $14.7 trillion in 2010.

    That has nothing to do with the percent of products that US Consumers purchase.

    Anymore than do Chinese GDP figures relate to the average Chinaman, Woman, or ...

  69. The percent of US made goods purchased by consumers would be a small fraction using that formula.

  70. Deuce said...
    "Well it looks as if Cain's black cherry has burst."

    Politico's Cherry was burst before birth.

    Clarence Thomas style high tech lynching attempts will only further motivate voters who want to nominate a real conservative.
    ...a real citizen, not another DC tested whore.

  71. Job's last words:

    "Oh, wow!"

    ...only Politico knows.

  72. Well, keep this in mind. 70% of what you spend is on "Services," only 30% is on "Goods."

    Most all of what we import from China are "Goods." So, we spend about $4.4 T on Goods.

    So $365 B / $4,400 = 0.0829

    Call it 8%

    But, then, a large part of that $4.4 T is Food, and Cars, etc - stuff that Is Not imported. Maybe, $2 Trillion is actually spent for day to day "goods." minus food.

    So, now, you have $365 B/ $2 T or about 18%.

    That sounds a little closer, eh?

  73. gettin there,
    but what percent of "Cars" is attributed to the USA?

    ...fer instance.

  74. I don know Doug. I was just making the point (or trying to) that the 2.7% number could be correct even though a very much larger percentage of the smaller products you buy on a day to day, or month to month basis do, indeed, come from China.

    Of course, some of the things you get from a factory in China, I might get from a factory in Mexico. Geography does matter. :)

  75. "Well, keep this in mind. 70% of what you spend is on "Services," only 30% is on "Goods.""

    Where does housing fit in?

  76. The "China thing" is a problem; but it is a problem that we will correct/will self-correct over time.

    Our dependency on ever-shrinking supplies of foreign petroleum, however, is a problem that we don't have a lot of time left to deal with.

    Our "drop-dead date," there, could be as little as a couple of years.

    And, our "politics" regarding this matter are FUBAR in the extreme.

  77. I don't have the foggiest, Doug. The lumber, and roofing materials, appliances, etc are definitely "Goods," but the "labor of construction?" Beats me. :)

  78. If you call a plumber to unclog your drain, that's a "service." But, if you call him to "plumb your new house . . . . . ?"

  79. Two crazy/corrupt Hawaiian Sisters here defeated Geothermal 15 years ago.

    Today, the older one is on the side of the company seeking to exploit this easy to use free resource.

    Maybe Hawaii will be first to disconnect from the terror network!

  80. A Des Moines Register poll released Saturday also showed Cain leading in the state's first-in-the-nation caucuses.

    In an appearance at DC's National Press Club later Monday, Cain joked, "As a result of today's big news story, I really know what it feels like to be number one."

    Asked whether he believed one of his Republican rivals was responsible for the story, Cain said, "I told you, this bull's-eye on my back has gotten bigger. I have no idea -- we have no idea the source of this witch hunt."

  81. "If you call a plumber to unclog your drain, that's a "service." But, if you call him to "plumb your new house . . . . . ?""

    Who the fuck knows this shit?
    Certainly not a Desert Dwelling Rat.

  82. .

    While the economy is in a liquidity crisis, because of it.

    I agree with Richard Fraser that there is no liquidity crisis. There is plenty of money out there.

    The problem is that it is lying fallow in the banks or chasing the carry trade.

    Demand for loans is down not for lack of money in the economy but because of lack of confidence in future growth by those who would normally be seeking those loans. Also, loans being granted to those actually looking for loans is down because of credit policies imposed on the banks on themselves internally or forced on them by agencies like the FED, an entirely different thing.

    Yet, you would 'top off' the available money by minting a few coins thus making it possible for even more money to remain fallow.

    Either that, or hand it out like candy directly to the populace which would provide a short-term pop to the economy (and make for a pleasant Christmas) but in reality merely be kicking the can down the road.


  83. Recently, a routine police patrol was parked outside a local neighborhood bar in
    Wisconsin. Late in the evening, the officer noticed a man leaving the bar so
    intoxicated that he could barely walk. The man stumbled around the parking lot
    for a few minutes with the officer quietly watching.

    After what seemed
    an eternity and trying his keys on five different vehicles, the man managed to
    find his own car which he fell into. He was there for a few minutes as a number
    of other patrons left the bar and drove off.

    Finally, he started his
    car, switched the wipers on and off (it was a dry night), flicked the hazard
    flasher on and off, tooted the horn and then switched on the lights. He moved
    the vehicle forward a few inches, reversed a little and then remained stationary
    for a few more minutes as more patrons left in their vehicles.

    At last
    he pulled out of the parking lot and started to drive slowly down the street.
    The police officer having patiently waited all this time, now started up his
    patrol car, put on the flashing lights, promptly pulled the man over and carried
    out a breathalyzer test. To his amazement the breathalyzer indicated no evidence
    that the man consumed alcohol at all.

    Dumbfounded, the office said "I'll
    have to ask you to accompany me to the police station. This breathalyzer
    equipment must be broken."

    "I doubt it," said the man. "Tonight I'm the
    designated decoy."

  84. You would think Geothermal would be a Natural for Hawaii, wouldn't you. Here's something that surprised me:

    The Geysers geothermal development spans an area of around 30 mi² (78 km²) in Sonoma, Lake and Mendocino counties in California, located in the Mayacamas Mountains. Power from The Geysers provides electricity to Sonoma, Lake, Mendocino, Marin, and Napa counties. It is estimated that the development meets 60 % of the power demand for the coastal region between the Golden Gate Bridge and the Oregon state line.[5]

    The Geysers - N. California

  85. Neat map. You can see the hot spot in Yellowstone but it looks like there's another one SE of there. Must be in Colorado somewhere.

  86. The Geysers,

    Yeah, PG&E used to be a great company, before it was bastardized by the Democrat Mafia in Sacramento.

    Okies from my home town used to make decisions on how to fix a bridge on our property that provided PG&E access to their powerlines.
    Now those decisions are made by trolls in cubicles in San Fran.

    ...which back in the day, I terrorised, by slipping past security and confronting them directly.
    Great was the drama.
    Lawyers prevailed, in the end.

  87. There are different types of Geothermal technologies. It turns out that even the pale oranges, and yellows will produce a lot of geothermal electricity. In some cases you just use a different technology, or drill a little deeper.

  88. hmm, that Wiki link does not mention PG&E at the geysors today.

    Pretty sure they were involved in the begining.

    PG&E = Pacific Gas and Electric.

    ...used to be a private company with public oversight...

  89. The island of Puna, Hi already gets 30% of its power from geothermal

    Puna is on the big island of Hawaii.
    That's where they could have exploited enough power for all the islands.
    Then, these two "Native Hawaiian" sisters intervened and convinced the powers that be that the release of Volcanic Gases from Mother Earth would suffocate the hippies that live in the area.

    The future came to a schreeching halt.
    Somebody has since got smart and co-opted (paid them off) them. we shall see.

  90. Okay, I was getting confused about how they were stating "Puna (Big Island.)"

    Now, I got it.

    People will listen to all kinds of nonsense when the alternative (in this case, oil) is Cheap.

  91. That plant is kind of hard to figure out:
    I wonder what all those green vertical cylinders are?
    Cooling fans for condensors?

  92. "POLITICO learned of the allegations against him, and over the course of several weeks, has put together accounts of what happened by talking to a lengthy roster of former board members, current and past staff and others familiar with the workings of the trade group at the time Cain was there.

    In one case, POLITICO has seen documentation describing the allegations and showing that the restaurant association formally resolved the matter. Both women received separation packages that were in the five-figure range.

    On the details of Cain’s allegedly inappropriate behavior with the two women, POLITICO has a half-dozen sources shedding light on different aspects of the complaints.

    The sources — which include the recollections of close associates and other documentation — describe episodes that left the women upset and offended. These incidents include conversations allegedly filled with innuendo or personal questions of a sexually suggestive nature, taking place at hotels during conferences, at other officially sanctioned restaurant association events and at the association’s offices. There were also descriptions of physical gestures that were not overtly sexual but that made women who experienced or witnessed them uncomfortable and that they regarded as improper in a professional relationship.

    Peter Kilgore, who was the association’s general counsel in the 1990s, and remains in that position today, has declined to comment to POLITICO on whether any settlements existed, saying he cannot discuss personnel matters.

    Read more:


    Good to know they are on the job.

    ...Just like they were w/Reverend Wright.


  93. Let us know when you figure it out. Some of us don't do "injineering."

  94. "episodes that left the women upset and offended."


    THAT's a first!

    I notice that black cunt that accused Justice Thomas has been making the rounds again lately.

  95. "There were also descriptions of physical gestures that were not overtly sexual but that made women who experienced or witnessed them uncomfortable and that they regarded as improper in a professional relationship"

    That takes the cake:
    Perhaps exceeding a Pube on a Coke Can. least that was before White Coke Cans were imagined.

  96. "Together we can help...

    Coca-Cola and the WWF ask you to join in the effort to protect our beloved polar bears this holiday season

    We CAN help, get it?

    Buy a white can, save a white bear.

  97. "It was here that Pacific Gas and Electric began operation of the first successful geothermal electric power plant in the United States in 1960.[11] The original turbine lasted for more than 30 years and produced 11 MW net power.[12]"

  98. Back in the good old days.

    When CA was first, rather than last, in the yew nited states.

  99. When Doug was still in charge. :)

  100. Was it the Wiki link where that old Hawaiin King tried to get the gubmint to develop Geothermal, and run a cable to the other islands?

    100 Years Ago?!?

  101. "Future

    The Geysers electrical plant reached peak production in 1987, at that time serving 1.8 million people. Since then, the steam field has been in gradual decline as its underground water source decreases. Currently, the Geysers produce enough electricity for 1.1 million people.

    Techniques developed from Enhanced Geothermal Systems research will increase the production of the region in the future. By reinjecting greywater from the nearby city of Santa Rosa, existing wells will be recharged. This water will be naturally heated in the geothermal reservoir, and be captured by the existing power plants as steam. The project should increase electrical output by 85 MW, enough for about 85,000 homes.[13]

    I wonder if Puna can just inject Seawater from the nearby Pacific?
    (not available to the Geysors)

  102. "Was it that old Hawaiin King tried to get the gubmint to develop Geothermal, and run a cable to the other islands? "


    That was King Puna Poontang,
    the greatest Hawaiian Warrior of all time.

  103. Yeah, that old bastard made it all the way to "Cherokee Nation," and nailed my ass more than a couple of times. :)

  104. Never could come up with a Defense against the "Vicious, All-Conquering Poontang."

  105. That's how The Herminator contracted colon cancer.

    Contrary to what Politico would have you believe.

  106. Ever time I scraped a few dollars together, there was Poontang, to take it away from me.

    Washers, Dryers, Houses, Diamond Rings, Cars - you name it. Poontang took it.

  107. Good thing the Poontang didn't like Ramen Noodles. I'd a starved to death.

  108. ...or Spam.

    Woulda wiped out the entire Island chain.

  109. In retrospect, I'd give up some Dryers and stuff for a little more strange Poontang.
    ...but that's water under the bridge.
    Or something.

  110. I never did stay out till 5:00 in the mornin, and blow a week's pay trying to get a washin' machine to go home with me. :)

  111. At least some washing machines don't look all that bad.

  112. Now you gone and made me lose my train of thought.
    Whatever that was.

  113. Here it was:

    "Adam and Ray recall some of their favorite Halloween costumes growing up. Adam also looks back at some of the jobs he held, and talks to Ray about some of the predictions he had. Later they talk about the benefits of Halloween for single dudes.

    In the second part of the show, Adam and Ray jump to the phone lines and hear some of your best Halloween stories. Adam discusses how you can measure the condition of your life based on how your Halloween is, and recalls a very lonely story. As the show wraps up, Adam and Ray talk about the time their buddy Chris was hit with a wine bottle, and Adam had to defend his honor.

    Can't wait to listen to this:
    Ray was the guy that peed all over everybody, including some chick in a hot tub.

    The neat thing about Adam is all his friends from when he was dirt-poor are still friends now that he's a mult-millionaire.

  114. Washin machines don't "wreck your car," "empty out your bank account, and max your credit cards," get "headaches."

    "Feel Neglected." Need "Me-time."

  115. Actually, now that I recall, the Ray hot tub story was this:

    Ray would sit on top of a jet in a hot tub and fill his guts with water, then he got out and unleashed the torrent on some poor newly met chick in the hot tub!

    ...and those bitches think Herman was bad!


  116. KENNEDY SPACE CENTER, Fla.--Boeing will process its proposed CST-100 commercial manned spacecraft in a now-vacant space shuttle processing hangar--a first-of-its-kind deal valued at up to $50 million in state incentives, facility upgrades and financing, officials said Monday.

    Using Orbiter Processing Facility No. 3 next to the Kennedy Space Center's huge Vehicle Assembly Building, Boeing expects to eventually bring up to 450 jobs to Florida's Space Coast, producing a flight-ready capsule by 2015. That's assuming the program is fully funded by Congress and Boeing's design wins NASA development contracts.


    The good old days:
    Adam is on the left.

    Reminds me of when I went as a gay guy to a Halloween Party.
    Gotta dig that picture up.
    I wore the wig I spent two weeks in in Seattle for summer camp, or whatever it's called when you're in the reserves.

    ...also a suede leather coat, and some high-heeled cork soled blue and brown shoes I picked up in Sausalito.

    And a pair of Rawhide Levis...

    Those were the daze.

  118. Boeing should be able to put the Shuttle to shame, where it belongs.

    The kid is now a Boeing employee here, tracking space junk, or some such.

    As long as Dan Inoyue lives, he's got job security.

    ...and plenty of good high-tech references when he finally croaks.

  119. Now, I can understand buying the tickets for US astronauts on the Russian bird, but wy, oh why, are we buying the tickets of the foreigners?

    NASA plans to award development contracts next spring to begin more detailed design work with additional government oversight. But funding remains a major question mark. The Obama administration's fiscal 2012 budget includes $850 million for commercial crew development. The House version of the budget cuts that to $312 million while the Senate supports $500 million.

    With full funding, the commercial providers believe operational manned spacecraft would be ready for test flights in 2015. If funding is reduced, initial flights could be delayed to 2017 or even 2018.

    In the meantime, NASA will be forced to continue buying seats on Russian Soyuz spacecraft -- at some $60 million per astronaut -- for U.S., European, Japanese and Canadian space station fliers.

    If those foreign governments cannot pay their own way, leave their people on the ground.

    No reason for the US to be picking up that tab.

  120. ...oops.
    You just click on that first b&w picture to enlarge it.

  121. "No reason for the US to be picking up that tab."

    DC has money to burn.
    Quit bitching.

  122. Blogger desert rat said...

    No, ash.

    You still have claim to the initial $100 deposit.

    That is your money, guaranteed by the FDIC.

    The hardware store owner, the $100 he deposited, is his. Guaranteed by the FDIC.

    $100 has now become $200, with $100 being "created".

    The Pet store owner, he has $100 in his checking account. Guaranteed by the FDIC.

    $100 has now become $300
    With $200 being "created".

    And the Bank has another $90 waiting to become a loan.

    $100 has now become $390
    With $290 being "created" by the Bankers.

    No, Rat, you've got it confused.

    Person A deposits 100 in bank Y. On a 10% reserve bank Y loans out 90 dollars to Person B (The FDIC insures the initial deposit of 100 dollars - they don't ship the bank a 100 dollars they simply will make the deposit 'good' should the bank fail). Person B deposits that 90 in Bank Z and Bank Z loans 81 dollars to person C. Person C deposits that money in another bank and that bank loans ect. In each of these case NO NEW MONEY is created, only a portion of it is held in reserve by the bank to cover deposit withdrawals. The Bank cannot simply create money, on a computer or anywhere else, by simply typing a number in. They too have to clear and settle their accounts with other banks and the central banks. They can borrow money from the central banks and that can increase the money supply.

    What happened with mortgage securities was a different kettle of fish.

  123. They create money, ash through the expansion of credit.

    The majority of deposits have no reserve requirements. Only some have a 10% reserve.

    Whether or not the expansion occurs at a 100% rate or at 90%, unimportant to the central theme, that of money creation through the expansion of fractional reserve banking.

    Which is what you asked, how did the Bankers create $15 trillion a year, over the past decade?

    The answer is, and remains, fractional reserve banking practices.

  124. The Bank professors developed that formula, ash, to gauge the rate of money creation, through fractional reserve banking.

    They have it figured, to a "T".

  125. Ok fellows, one thing that we can agree on is that banking clearly works for the economy as long as it doesn't become co-dependent with governments, namely, funding government runaway debt. Unfortunately we know that is what is happening. The unholy alliance between western governments and banks became endemic with the rise of the Rothschild financial family. It would be more PC if they were the Murphy's but no, they were the R's. The unholy alliance has been growing more or less ever since. (no, it is not a Jewish conspiracy, it just is what it is) The western financial industry has now created a purely debt-fueled global economy from which neither governments nor banks can wean themselves. I am not sure how it will end but hopefully the end is near. Hopefully the current banking system will burn to the ground if the global economy collapses.

    Smaller less intertwined banks and the end of Government debt would usher in a new age of prosperity. Smaller is far better.

    Here is where I agree with the Desert Rat. Either elimination of fractional banking or very much higher capital reserve requirements would make the financial industry resilient to shocks and have a much less call on government support.

    So what if it would not then be possible for red hot economies based on too easy and anonymous credit? At least we would not have all these booms and busts.

  126. I went back and re-examined your unreferenced formula and,yet again, it doesn't tell us how or why new money is created through fractional reserve banking. I mean, come on rat,it isn't rocket science where all you are doing is leaving a fraction of a deposit in reserve. One can argue that it increases instability but you haven't shown where the new money is created.

  127. "May those who have Eyes, See; and those who have Ears, Hear."

    The Pope has called for a New World Order.

    In related news, a young charismatic European named Nicholas has called for a European State. Not much is known about the mysterious man who is reported to have turned a $250K inheritance into $2.5B. It is said that he owns no property but travels the world living out of luxury hotels.

  128. How about that bastion of right-wing Ron Paul nutter, the New York Times?

    Having already reduced the key interest rate it controls nearly to zero, the central bank has increasingly turned to alternatives like buying securities as a way of getting more dollars into the economy, a tactic that amounts to creating vast new sums of money out of thin air.

    Sold yet?

  129. Wretchard: The Strategy Page notes that the going rate for a live Israeli soldier is now a cool million dollars

    And we ourselves give Egypt $1.8 billion dollars a year to buy the tanks they use to run over Coptic Christians.

  130. This comment has been removed by the author.

  131. At each level, ash, there is money created
    There is your initial $100.
    Deposited in the bank, in passbook savings which has a 0% reserve.

    Say the Bank only loans 90% of that, to boobie, who deposits it in his business checking account.

    The Bank can now loan 90% of that to gag.

    You still have claim to the initial $100.

    boob has his $90 in his business checking account.

    And gag spent his $81 loan on an Idaho hunting license.

    You still have $100, it is yours.
    And the Banks created $171, with it.

    You either are being willfully ignorant, or there is no purpose in continuing.

  132. Greece to go its own way

    Responding to the riots that followed last week’s proposal, as well as dissent from within his own Socialist party, Prime Minister George Papandreou said: “The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted.”

    They may as well start packing it in on the euro.

  133. If you're really interested in the source, ash, cut and paste the quote into google.

    Works every time.

  134. Rat, if you withdraw the original 100 the bank needs to raise 100 or get another deposit of 100 to keep up their capital ratio.

  135. Yes, they do.

    Which they get from depositors, or from a loan from a member bank with a surplus, or from one of the Fed Branches.

    It has to cover the $100, true.

    But the $171 is still created, regardless, even if the Bank fails to meet the reserve requirements and is seized by the Federals.

  136. You haven't established the 171. On a 100 deposit only 90 gets loaned (10% reserve)

  137. If person A is traveling West @45mph when he spends 100 dollars, and person B is traveling East @60 mph when he deposits 100 dollars, and person Y takes out a loan for 100 dollars while heading due North, as a Rocket Scientist makes a wire transfer of 100 dollars to South Africa via Western Union, while person Z is traveling South, Southeast, after having stolen 100 dollars from the Bank of America, in Kansas City, Missourri, what is the mean velocity and vector of the money flow in this example 12 hours later, in constant dollars?


  138. Oct. 22 (Bloomberg) -- Banks in Georgia, Florida and Colorado were shuttered by regulators and sold as U.S. lenders collapse under the weight of bad loans tied to real estate.

    The four closed banks held deposits totaling about $1.89 billion, the Federal Deposit Insurance Corp. said yesterday in statements on its website. The seizures drained $358.8 million from the deposit insurance fund, the FDIC said.

    Regulators have shuttered 84 lenders this year and more than 400 since the start of 2007, FDIC data show. Banks are closing under stress from commercial real estate loans, tied to property values that through April fell about 49 percent from the October 2007 peak ...

  139. The Almighty Dollar.
    Solid as the Rock of Gibralter, denominated in Euros.

  140. It compounds, ash.

    Something like a pyramid, as it were.
    Technically a scheme.

    A large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect.

  141. So, banks fail. Where is the new money created? It isn't from the fractional reserve system as you've stated. Sure money cam be printed to bail a failed bank but fractional reserve banking is not creating money exponentially.

  142. Again rat you have not demonstrated how or where it compounds leading to the creation of new money.

  143. GLOBAL MARKETS-Asian shares dip, dollar hits record low vs yen

    The dollar briefly fell as low 75.31 yen on electronic trading platform EBS in thin early Asian trade on Monday.

    I remember 244 yen and 6 dollar silver, back in the day.

    Brave New World

  144. The Treasury has a monopoly on printing dollars. They ship it out to banks (via the Fed) at a tiny bit of interest. When the banks pay back the principal, where do they get the extra dollars to pay the interest? From Kim Jong Il? No. So the Fed is forced to create more dollars all the time just to get their interest back.

  145. THAT'S how you pull money from a hat.

  146. .

    Ash I think you are getting confused over how they define money.

    It's true the fractional resurve system doesn't create new 'currency' but it does create 'money' defined as a component of M1, M2, and M3.

    What fractional reserve banking does do is create credit (and conversely, debt) with it's multiplier effect.

    Credit, the mothers milk of growth in the economy. Without credit, you would have to pay cash for cars and houses. Yet people complain about this aspect of the banking system. Fractional reserve banking is a tool to goose the economy. And there are ways to control it if aspplied properly.

    The problem has not been the tool but for many years the craftsmen we have selected to use it.

    The problem is not the hammer but the carpenter.


  147. You are missing the accounting part, the bank creates a loan so that the borrower has cash and an obligation. The bank credits the cash and debits the loan. The borrower spends the money or puts it in the bank where the bank enters it as a liability. When you deposit money, you are loaning to the bank. It is an obligation of the bank wheras a loan is an asset.

  148. Credit is expanded, denominated in money.

  149. As loans are repaid the money supply decreases.

  150. .

    Cain denies sex harassment allegations, says he’s the victim of a ‘witch hunt’

    A rather topical headline for halloween.


  151. Can't we just stipulate that power and politics require Alpha males and Alpha cougars? "A" stands for Alpha and "A" stands for Appetite. Men, normal men are mostly hounds and Alpha men are always attentive to the scent. Christ, one of the classic old time hound dogs was Martin Luther King.

  152. The man was late to a mid-morning rally at a Baptist Church in West Philadelphia for all those fine looking black women, told them he was doing God's work, not mentioning that one of those fine looking women was helping him the night before. woman are attracted to powerful men and who is not going to turn it down or miss a cue or misinterpret one every once in a while?

  153. .

    I throw this link in for my buddy Rufus as it seems to support his position. However, I personally disagree with a few of the statements in the editorial and especially with the hyperbole in the title.

    The U.S. infrastructure argument that crumbles upon examination


  154. .

    A nation of children.

    A key truth,

    It's not the act it's the lying about it that gets you.

    Quintus Pontificus


  155. everyone lies about sex. it's half the fun.

  156. they lie when they say they did it and they lie when they say they didn't.

  157. Can't we all just get along?

  158. .

    And if one wishes to talk about hypocrisy,

    It is usually the Chris Matthews and other dicks on the Democratic side we normally accuse of using the race card, but now it is Coultier and Limbaugh bringing up the spectre of Clarence Thomas in this instance.

    Cain is black. This must be a rascist plot.

    I'll have to dig up the post of Rush calling the OWS anti-semitic a short while back. It was a laugh riot.

    The commentariat on both sides never cease to amuse.


  159. I lie therefore I lie.

  160. Quirk: I'll have to dig up the post of Rush calling the OWS anti-semitic a short while back. It was a laugh riot.

    They probably mentioned the three large we give to you-know-who every year, and Rush was channeling WiO that day.

  161. Deuce said... they lie when they say they did it and they lie when they say they didn't.

    Frankly, it's nobody's business, except that WiO thinks I should have told my chain of command about all the poontang I was getting when I was in the pre-DADT Navy.

  162. .

    everyone lies about sex. it's half the fun.

    True enough. And I haven't even bothered to read the stories. I heard it was about some harrassment charge and that is all.

    However, whatever it was about, it started out as

    "I didn't do anything."

    to now

    "It's a witch-hunt."

    The guy is 65 years old. He may not be guilty of harrassment. I have no reason to disbelieve him when he says he believes he did nothing wrong. Under today's 'evolving social standards', I suspect I would be much more guilty than old Herm on a number of occasions in my life.

    But I am not running for president. If he can't remember the details, he should dig them up before some news agency or blogger does and get it behind him.

    Otherwise this will drag on and delute any message he wants to get across on other issues.

    Hell, even France is down on that ex chief of the IMF because of the the sexuall harrassment charges.

    The world is different now. Sigh.


  163. .

    Jeez, I just looked at my spelling over the past few posts.

    What were those signs of a stroke again?


  164. One of the signs of a stroke is not being able to remember the signs of a stroke.

    If I remember correctly. :)

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