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Interview with Vlado Plaga in the German magazine FAIRCONOMY, September 2017.

Originally, you didn’t want to become an economist. How did it come that you changed your plans and digged so deep into economics?

I found economics aesthetic, as beautiful as astronomy. I came to New York expecting to become an orchestra conductor, but I met one of the leading Wall Street economists, who convinced me that economics and finance was beautiful.

I was intrigued by the concept of compound interest. and by the autumnal drain of money from the banking system to move the crops at harvest time. That is when most crashes occurred. The flow of funds was the key.

I saw that there economic cycles were mainly financial: the build-up of debt and its cancellation or wipe-out and bankruptcy occurring again and again throughout history. I wanted to study the rise and fall of financial economies.

But when you studied at the New York University you were not taught the things that really interested you, were you?

I got a PhD as a union card. In order to work on Wall Street, I needed a PhD. But what I found in the textbooks was the opposite of everything that I experienced on Wall Street in the real world. Academic textbooks describe a parallel universe. When I tried to be helpful and pointed out to my professors that the texbooks had little to do with how the economy and Wall Street actually work, that did not help me get good grades. I think I got a C+ in money and banking.

So I scraped by, got a PhD and lived happily ever after in the real world.

So you had to find out on your own… Your first job was at the Savings Banks Trust Company, a trust established by the 127 savings banks that still existed in New York in the 1960s. And you somehow hit the bull’s eye and were set on the right track, right from the start: you’ve been exploring the relationship between money and land. You had an interesting job there. What was it?

Savings banks were much like Germany’s Landesbanks. They take local deposits and lend them out to home buyers. Savings and Loan Associations (S&Ls) did the same thing. They were restricted to lending to real estate, not personal loans or for corporate business loans. (Today, they have all been turned into commercial banks.)

I noticed two dynamics. One is that savings grew exponentially, almost entirely by depositors getting dividends every 3 months. So every three months I found a sudden jump in savings. This savings growth consisted mainly of the interest that accrued. So there was an exponential growth of savings simply by inertia.

The second dynamic was that all this exponential growth in savings was recycled into the real estate market. What has pushed up housing prices in the US is the availability of mortgage credit. In charting the growth of mortgage lending and savings in New York State, I found a recycling of savings into mortgages. That meant an exponential growth in savings to lend to buyers of real estate. So the cause of rising real estate prices wasn’t population or infrastructure. It was simply that properties are worth whatever banks are able and willing to lend against them.

As the banks have more and more money, they have lowered their lending standards.

It’s kind of automatic, it’s just a mathematical law…

Yes, a mathematical law that is independend of the economy. In other words, savings grow whether or not the economy is growing. The interest paid to bondholders, savers and other creditors continues to accrue. That turns out to be the key to understanding why today’s economy is polarizing between creditors and debtors.

You wrote in “Killing the Host” that your graphs looked like Hokusai’s “Great Wave off Konagawa” or even more like a cardiogram. Why?

Any rate of interest has a doubling time. One way or another any interest-bearing debt grows and grows. It usually grows whenever interest is paid. That’s why it looks like a cardiogram: Every three months there’s a jump. So it’s like the Hokusai wave with a zigzag to reflect the timing of interest payments every three months.

The exponential growth of finance capital and interest-bearing debt grows much faster then the rest oft he economy, which tends to taper off in an S-curve. That’s what causes the business cycle to turn down. It’s not really a cycle, it’s more like a slow buildup like a wave and then a sudden jjunkecon vertical crash downward.

This has been going on for a century. Repeated financial waves build up until the economy becomes so top-heavy with debt that it crashes. A crash used to occur every 11 years in the 19th century. But in the United States from 1945 to 2008, the exponential upswing was kept artificially long by creating more and more debt financing. So the crash was postponed until 2008.

Most crashes since the 19th century had a silver lining: They wiped out the bad debts. But this time the debts were left in place, leading to a masive wave of foreclosures. We are now suffering from debt deflation. Instead of a recovery, there’s just a flat line for 99% of the economy.

The only layer of the economy that is growing is the wealthiest 5% layer – mainly the Finance, Insurance and Real Estate (FIRE) sector. That is, creditors living of interest and economic rent: monopoly rent, land rent and financial interest. The rest of the economy is slowly but steadily shrinking.

And the compound interest that was accumulated was issued by the banks as new mortgages. Isn’t this only logical for the banks to do?

ORDER IT NOW

Savings banks and S&Ls were only allowed to lend for mortgages. Commercial banks now look for the largest parts of the economy as their customers. Despite the fact that most economic textbooks describe industry and manufacturing as being the main part of economy, real estate actually is the largest sector. So most bank lending is against real estate and, after that, oil, gas and mining.

That explains why the banking and financial interests have become the main lobbyists urging that real estate, mining and oil and gas be untaxed – so that there’ll be more economic rent left to pay the banks. Most land rent and natural resource rent is paid out as interest to the banks instead of as taxes to the government.

So instead of housing becoming cheaper and cheaper it turns out to be much less affordable in our days than in the 1960s?

Credit creation has inflated asset prices. The resulting asset-price inflation is the distinguishing financial feature of our time. In a race tot he bottom, banks have steadily lowered the terms on which they make loans. This has made the eocnomy more risky.

In the 1960s, banks required a 25-30% down payment by the buyer, and limited the burden of mortgage debt service to only 25% of the borrower’s income. But interest is now federally guaranteed up to 43% of the home buyer’s income. And by 2008, banks were making loans no down payment at all. Finally, loans in the 1960s were self-amortizing over 30 years. Today we have interest-only loans that are never paid off.

So banks loan much more of the property’s market price. That is why most of the rental value of land isn’t paid to the homeowner or commercial landlord any more. It’s paid to the banks as interest.

Was this the reason for the savings and loan crisis that hit the US in 1986 and that was responsible for the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995?

The problem with the savings and loan crisis was mainly fraud! The large California S&L’s were run by crooks, topped by Charles Keating. Many were prosecuted for fraud and sent to jail. By the 1980s the financial sector as a whole had become basically a criminalized sector. My colleague Bill Black has documented most of that. He was a prosecutor of the S&L frauds in the 1980s, and wrote a book “The best way to rob a bank is to own one”.

That’s a famous quotation, I also heard that.

Fraud was the main financial problem, and remains so.

Since 2007 Americans were strangled by their mortgages in the sub-prime crisis…

These were essentially junk mortgages, and once again it was fraud. Already in 2004 the FBI said that the American economy was suffering the worst wave of bank fraud in history. Yet there was no prosecution. Essentially in the United States today, financial fraud is de-criminalized. No banker has been sent to jail, despite banks paying hundreds of billions of dollars of fines for financial fraud. These fines are a small portion of what they took illegally. Such paymets are merely a cost of doing business. The English language was expanded to recognize junk loans. Before the financial crash the popular press was using the word “junk mortgages” and “Ninjas”: “No Income, No Jobs, no Assets”. So everybody knew that there was fraud, and the bankers knew they would not go to jail, because Wall Street had become the main campaign contributer to the leading politicians, especially in the Democratic party. The Obama Administration came in basically as representatives of the bank fraudsters. And the fraud continues today. The crooks have taken over the banking system. It is hard for Europeans to realize that that this really has happened in America. The banks have turned into gangsters, which is why already in the 1930s President Roosevelt coined the word “banksters”.

I also heard the nice English sayings “Too big to fail” or “Too big to jail”…
But what has become of those 10 million households that ended up losing their homes to foreclosure? How are their economic and living conditions today? What has become of their houses? The economy has recovered…

Most of the houses that were foreclosed on have been bought out by hedge funds for all cash. In the wake of 2008, by 2009 and 2010 hedge funds were saying “If you have $5,000,000 to invest, we’re going to buy these houses that are being sold at distress prices. We’re going to buy foreclosed properties for all cash, because we can make a larger rate of return simply by renting them out.” So there has been a transfer of property from homeowners to the financial sector. The rate of home-ownership in America is dropping.

The economy itself has not recovered. All economic growth since 2008 has accrued only to the top 5% of the economy. 95% of the economy has been shrinking by about 3% per year… and continues to shrink, because the debts were kept in place. President Obama saved the banks and Wall Street instead of saving the economy.

That’s why we live in an “age of deception” as the sub-title of your latest book suggests, I guess?

“People have the idea that when house prices go up, somehow everybody’s getting richer. And it’s true that the entry to the middle class for the last hundred years has been to be able to own your own home…”

What is deceptive is the fact that attention is distracted away from how the real world works, and how unfair it is. Economics textbooks teach that the economy is in equilibrium and is balanced. But every economy in the world is polarizing between creditors and debtors. Wealth is being sucked up to the top of the economic pyramid mainly by bondholders and bankers. The textbooks act as if the economy operates on barter. Nobel prices for Paul Samuelson and his followers treat the economy as what they call the “real economy,” which is a fictitious economy that in theory would work without money or debt. But that isn’t the real economy at all. It is a parallel universe. So the textbooks talk about a parallel universe that might exist logically, but has very little to do with how the real economy works in today’s world.

ORDER IT NOW

If you had a picture you’d see me nodding all the time, because that’s what I also found out: if you look at the mathematics, it is polarizing all the time, it is de-stabilizing. Without government interference we’d have crash after crash… It is not under control anymore.

But you also suggest that there’s another factor that makes housing prices go up – and that’s property tax cuts. Why?

“Taxes were shifted off the Donald Trumps of the world and onto homeowners….”

Whatever the tax collector relinquishes leaves more rental income available to be paid to the banks. Commercial real estate investors have a motto: “Rent is for paying interest.” When buyers bid for an office building or a house, the buyer who wins is the one who is able to get the largest bank loan. And that person is the one who pays all the rent to the bank. The reason why commercial investors were willing to do this for so many decades is that they wanted to get the capital gain – which really was the inflation of real estate prices as a result of easier credit. But now that the economy is “loand up,” prospects for further capital gains are gone. So the prices are not rising much anymore. There is no reason to be borrowing. So the system is imploding.

So, how could we change the situation and make land a public utility?

There are two ways to do this. One way is to fully tax the land’s rental value. Public investment in infrastructure – roads, schools, parks, water and sewer systems – make a location more desirable. A subway line, like the Jubilee tube line in London, increases real estate prices all along the line. The resulting rise in rents increases prices for housing. This rental value could be taxed back by the community to pay for this infrastructure. Roads and subways, water and sewer systems could be financed by re-capturing the rental value of the land that this public investment creates. But that is not done. A free lunch is left in private hands.

The alternative is direct public ownership of the land, which would be leased out to whatever is deemed to be most socially desirable, keeping down the rental cost. In New York City, for instance, restaurants and small businesses are being forced out. They’re closing down because of the rising rents. The character of the economy is changing. It is getting rid of the bookstores, restaurants and low-profit enterprises. Either there should be a land tax, or public ownership of the land. Those are the alternatives. If you tax away the land’s rent, it would not be available to be paid to the banks. You could afford to cut taxes on labor. You could cut the income tax, and you could cut taxes on consumption. That would reduce the cost of living.

To me that’s pretty close to the position of Georgists on how to handle land, isn’t it?

I don’t like to mention Henry George, because he didn’t have a theory of land rent or of the role of the financial sector and debt creation. The idea of land tax came originally from the Physiocrats in France, François Quesnay, and then from Adam Smith, John Stuart Mill, and in America from Thorstein Veblen and Simon Patten. All of these economists clarified the analysis of land rent, who ended up with it, and how it should be taxed. In order to have a theory of how much land rent there is to tax, you need a value and price theory. Henry George’s value theory was quite confused. Worst of all, he spent the last two decades of his life fighting against socialists and labor reformers. He was an irascible journalist, not an economist.

The classical economists wrote everything you need to know about land rent and tax policy. That was the emphasis of Adam Smith, John Stuart Mill… all the classical economists. The purpose of their value and price theory was to isolate that part of the economy’s income that was unearned: economic rent, land rent, monopoly rent, and financial interest. I think it is necessary to put the discussion of tax policy and rent policy back in this classical economic context. Henry George was not part of that. He was simply a right-wing journalist whom libertarians use to promote neoliberal Thatcherite deregulation and anti-government ideology. In Germany, his followers were among the first to support the Nazi Party already in the early 1920s, for instance, Adolf Damaschke. Anti-Semitism also marked George’s leading American followers in the 1930s and ‚40s.

So I guess I have to go back a bit further in history, to read the original Physiocrats as well…

John Stuart Mill is good, Simon Patten is good, Thorstein Veblen is wonderful. Veblen was writing about the financialization of real estate in the 1920s in his Absentee Ownership. I recently edited a volume on him: Absentee Ownership and its Discontents (ISLET, Dresden, 2016).

Germany’s land tax reform seems to go in the wrong direction. Germany has to establish new rules for it’s “Grundsteuer” that in fact is a mingled tax on land and the buildings standing on it, based on outdated rateable values of 1964 (in the West) and 1935 (in the East). The current reform proposals of the federal states will maintain this improper mingling and intend a revenue neutral reform of this already very low tax. It brings about 11 billion Euro to the municipal authorities, but this is only 2% of the total German tax revenue, whereas wage tax and sales tax make up for 25% each. We need a complete tax shift, don’t we?

Germany is indeed suffering from rising housing prices. I think there are a number of reasons for this. One is that Germans have not had a real estate bubble like what occurred in the US or England. They did lose money in the stock market, and many decided simply to put their money in their own property. There is also a lot of foreign money coming into Germany to buy property, especially in Berlin.

ORDER IT NOW

The only way to keep housing prices down is to tax awat the rise in the land value. If this is done, speculators are not going to buy. Only homeowners or commercial users will buy for themselves. You don’t want speculators or bank credit to push up prices. If Germany lets its housing prices rise, it is going to price its labor out of the market. It would lose its competitive advantage, because the largest expense in every wage-earner’s budget is the cost of housing. In Ricardo’s era it was food; today it is housing. So Germany should focus on how to keep its housing prices low.

I’d like to come back to the issue of interest once more. The English title of “Der Sektor” is “Killing the host – How Financial Parasites and Debt Bondage Destroy the Global Economy”. It’s much more coming to the point. It struck me that you mention John Brown. He wrote a book called “Parasitic wealth or Money Reform” in 1898. I came across his book some years ago and thought that he was somehow America’s Helmut Creutz of the 19th century. He was a supporter of Henry George, but in addition John Brown analyzed and criticized the interest money system and its redistribution of wealth. He said that labour is robbed of 33% of its earnings by the parasitic wealth with subtle and insideous methods, so that it’s not even suspected. Why does almost nobody know this John Brown?

John Brown’s book is interesting. It is somewhat like that of his contemporary Michael Flürscheim. Brown’s book was published by Charles Kerr, a Chicago cooperative that also published Marx’s Capital. So Brown was a part of the group of American reformers who became increasingly became Marxist in the 19th and early 20thcentury. Most of the books published by Kerr discussed finance and the exponential growth of debt.

The economist who wrote most clearly about how debt grew by its own mathematics was Marx in Vol. III of Capital and his Theories of Surplus Value . Most of these monetary writers were associated with Marxists and focused on the tendency of debt and finance to grow exponentially by purely mathematical laws, independently of the economy, not simply as a by-product of the economy as mainstream economics pretends.

So you recommend reading his book?

Sure, it is a good book, although only on one topic. Also good is Michael Flürscheim’s Clue to the Economic Labyrinth (1902). So is Vol. III of Capital.

Brown’s plan of reforms included the nationalization of banks and the establishment of a bank service charge in lieu of interest. The latter sounds remarkably up-to-date. In Germany the banks are raising charges because of the decrease in their interest margins. How is your view on the matter of declining interest rates?

Well, today declining interest rates are the aim of central bank Quantitative Easing. It hasn’t helped. The most important questio nto ask is: what are you going to make your loans for? Most lending at these declining interest rates has been parasitic and predatory. There’s a lot of corporate take-over lending to companies that borrow to buy other companies. There is an enormous amount of stock market credit that has helped bid up stock prices with low-interest credit and arbitrage. This has inflated asset prices for stocks, bonds and real estate. If the result of low interest rates is simply to inflate asset prices, the only way this can work is to have a heavy tax on capital gains, that is asset price gains. But in the US, England, and other countries there are very low taxes on capital gains, and so low interest rates simply make housing more expensive, and make stocks and buying a flow retirement income (in the form of stocks or bonds that yield dividends and interest) much more expensive.

I guess Brown is getting to the positive aspects of low interest also.

What Brown was talking about were the problems of finance. In the final analysis there is only one ultimate solution: to write down the debts. Nobody really wants to talk about debt cancellation, because they try to find a way to save the system. But it can’t be fixed so that debts can keep growing at compound rates ad infinitum. Any financial system tends to end in a crash. So the key question is how a society is NOT going not to pay debts that go bad. Will it let creditors foreclose, as has occurred in the US? Or are you going to write down the debts and wipe out this overgrowth of creditor claims? That’s the ultimate policy that every society has to face.

Very topical, the German Bundesbank sees the combination of low interest rates and a booming housing market as a dangerous cocktail for the banking sector. “The traffic lights have jumped to yellow or even to dark yellow”, Andreas Dombret said, after the Bundesbank had denied the problem in the last years by dismissing it as Germany’s legitimate catch-up effects. The residential property prices have gone up by 30% since 2010, in the major cities even by more than 60%. The share of real estate loans in the total credit portfolio is significantly rising. The mortgage loans of the households have increased in absolute terms as well as relative to their income. It’s only due to the low interest rates that the debt service has not increased yet. But the banks and savings companies are taking on the risk: the mortgages with terms of more than ten years have risen to more than 40% of the residential real estate loans. The interest-change risks lie with the banks. Don’t we have to face up to the truth that interest rates shouldn’t go up again?

What should be raised are taxes on the land, natural resource rent and monopoly rent. The aim should be to keep housing prices low instead of speculation. Land rent should serve as the tax base, as the classical economists said it should. Adam Smith, John Stuart Mill… all urged that the basis of the tax system should be real-estate and natural resource rent, not income taxes (which add to the cost of labor), the cost of labor and not value-added taxes (which increase consumer prices). So tax policy and debt write-downs today are basically the key to economic survival.

Banking should be a public utility. If you leave banking in the present hands, you’re leaving it in the hands of the kind of crooks that brought about the financial crisis of 2008.

Couldn’t the subprime-crisis have been prevented if the Fed had introduced negative interest rates in the 1990s?

ORDER IT NOW

No. The reason there was the crash was fraud and speculation. It was junk mortgages and the financialization of the economy. Pension funds and people’s savings were turned over to the financial sector, whose policy is short-term. It seeks gains mainly by speculation and asset price inflation. So the problem is the financial system. I think the Boeckler foundation has annual meetings in Berlin that focus on financialization and explain what the problem is.

Yes, that’s a big topic. The financial sector is interested, as you said, in short-term gains, but people who want to save for their retirement are interested in long-term stability – that is contradictory. Do you know the “Natural Economic Order by Free Land and Free Money” by Silvio Gesell?

It is not practical for today’s world, it is very abstract. The solution to the financial problem really has to be ultimately a debt write-down, and a shift to the tax system, as the classical economists talked about.

Gesell was also advocating the taxing of land. I think he had something in mind with bidding for the land, letting the market fix the prices.

He did not go beneath the surface to ask what kind of market do you want. Today, the market for real estate is a financialized market. As I said, the basic principle is that most rent is paid out as interest. The value of real estate is whatever a bank will lend against it. Unless you have a theory of finance and the overall economy, you really don’t have a theory of the market.

You are advocating a revival of classical economics. What did the classical economists understand by a free economy?

They all defined a free economy as one that is free from land rent, free from unearned income. Many also said that a free economy had to be free from private banking. They advocated full taxation of economic rent. Today’s idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime. The Obama Administration de-criminalized fraud. This has attracted the biggest criminals – and the wealthiest families – to the banking sector, because that’s where the money is. Crooks want to rob banks, and the best way to rob a bank is to own one. So criminals become bankers. You can look at Iceland, at HSBC, or at Citibank and Wells-Fargo in the news today. Their repeated lawbreaking and criminal activities have been shown tob e endemic in the US. But nobody goes to jail. You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution. It’s much like drug dealers paying off crooked police forces. So crime is pouring into the financial system.

I think this is what’s going to cause a return to classical economics – the realization that you need government banks. Of course, government banks also can be corrupted, so you need some kind of checks and balances. What you need is an honest legal system. If you don’t have a legal system that throws crooks in jail, your economy is going to be transformed into something unpleasant. That’s what is happening today. I think that most Europeans don’t want to acknowledge that that’s what happened in America (USA). There is such an admiration of America that there is a hesitancy to see that it has been taken over by financial predators (a.k.a. “the market”).

We always hear that oligarchies are in the east, in Russia, but hardly anyone is calling America an oligarchy… although alternative media says that it’s just a few families that rule the country.

Yes.

Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet). His new book is J is For Junk Economics. He can be reached at mh@michael-hudson.com

(Republished from Counterpunch by permission of author or representative)
 
• Category: Economics • Tags: Counterpunch Archives, Neoliberalism 
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  1. It is absolutely urgent that Richard Spencer and the Alt Right adopt the ideas and framework of Michael Hudson and and Ha Joon Chang(Kicking away the ladder.)

    Support Socialism!!!=violation of free market principles…

    Pinochet=Neoliberal free market terrorism!!!

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    • Replies: @anonymous
    The ADL can't get enough of guys like Spencer - a rock star who swells their coffers. The public will associate anyone who has a problem with Bankster organized crime with well educated evil actors who quote Hitler. Mafioso Gary Cohn who advocates financial rape, debt servitude and fraud to sustain the status quo will be protected from those evil doers who slander his judiasm. Shrieking from the top of idiocy mountain into a honey pot!
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  2. Albertde says:

    It is always a joy to read Michael Hudson but he is always discreetly incomplete as he never discusses the role of the privately owned US Federal Reserve, the other privately owned central banks and the BIS (Bank for International Settlements), which collectively force governments to borrow money from their central bank in order to create new money instead of these governments unilaterally creating the money themselves as they theoretically could.

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    • Replies: @Linda Green
    This is a good point.

    I believe Hitler made the same point, but due to our education consisting of largely being told what to think, rather than being taught how to think, we have had it pounded into our heads that such ideas as monetary sovereignty only come out of the minds of truly evil men. We are repeatedly told the only way to prevent Weimar style inflation is to run our economy as we presently do, no improvements are possible and to even consider such is a sign of sociopathology. Our betters for some reason want the children of the white stock that founded the country to hate themselves and become submissive to the advancing immigrant hordes while our politicians figure out ways to sell off large chunks of our infrastructure, like our roads for instance, so they can they can charge us and all the new immigrants they are letting in to drive on them.

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances. The media & leftist politicians (both Dem & Republican) teamed up on an alternative story of the event and allowed a group of paid communist thugs to come in and beat them while the media reported the white group to be the aggressor.

    If I didn't know better, I would swear the United States has been taken over by a hostile globalist elite, that cares not one bit for the natives of our country.

    Exciting times are ahead in our nation, this is for sure.

    As to Michael Hudson's article, it is more gibberish from a lefty economist, he dances around facts but always in the end puts a disingenuous spin on it. The article is garbage and awfully loose with the facts.

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  3. @Albertde
    It is always a joy to read Michael Hudson but he is always discreetly incomplete as he never discusses the role of the privately owned US Federal Reserve, the other privately owned central banks and the BIS (Bank for International Settlements), which collectively force governments to borrow money from their central bank in order to create new money instead of these governments unilaterally creating the money themselves as they theoretically could.

    This is a good point.

    I believe Hitler made the same point, but due to our education consisting of largely being told what to think, rather than being taught how to think, we have had it pounded into our heads that such ideas as monetary sovereignty only come out of the minds of truly evil men. We are repeatedly told the only way to prevent Weimar style inflation is to run our economy as we presently do, no improvements are possible and to even consider such is a sign of sociopathology. Our betters for some reason want the children of the white stock that founded the country to hate themselves and become submissive to the advancing immigrant hordes while our politicians figure out ways to sell off large chunks of our infrastructure, like our roads for instance, so they can they can charge us and all the new immigrants they are letting in to drive on them.

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances. The media & leftist politicians (both Dem & Republican) teamed up on an alternative story of the event and allowed a group of paid communist thugs to come in and beat them while the media reported the white group to be the aggressor.

    If I didn’t know better, I would swear the United States has been taken over by a hostile globalist elite, that cares not one bit for the natives of our country.

    Exciting times are ahead in our nation, this is for sure.

    As to Michael Hudson’s article, it is more gibberish from a lefty economist, he dances around facts but always in the end puts a disingenuous spin on it. The article is garbage and awfully loose with the facts.

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    • Replies: @in the middle
    Linda Green:

    What is needed is to use a different approach when protesting. Why not call it, 'American pride parade?" Or, "love the USA parade?", others use different naming conventions when in reality its other objectives that they sought after. For example, the federal reserve act=taking over the economy of the USA. Patriot act=taking your rights away, etc. So whomever is trying to even the field in 'pride' such as the T-shirts that read: 'brown pride', 'black pride', etc. Whities should have 'American pride', and who will fight that? So then American pride=White pride, period. That will put an end to the rabid attacks from the fake news media, and all its dumb followers.
    , @Wally
    The entire Charlottesville event was a staged event, a classic provocation operation.

    “We have been working on the ground and behind the scenes leading up to, during, and after the rally."
    - violent Zionist Jew, Anita Gray, regional director of the Anti-Defamation League.
    must read: http://www.unz.com/article/how-the-jews-won-the-battle-of-charlottesville/

    Read on.

    The facts about Charlottesville that the Zionist dominated MSM do not allow:
    http://www.unz.com/article/narrative-collapse-is-charlottesvilles-james-alex-fields-the-next-george-zimmerman/

    and:
    Proof of staging, see video:
    different cars, different driver than alleged driver Fields, photo shopped 'flying people' & crash backgrounds, lot's more.
    It's not difficult, just open your eyes.
    https://youtu.be/o3De-coZyGc

    Charlottesville, a set-up
    http://www.americanthinker.com/articles/2017/08/charlottesville_and_its_aftermath_what_if_it_was_a_setup.html

    , @Jim Christian

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances.
     
    Fair enough. In the media, a "moral" victory for the left. On the ground however, you have to include blood in the tally. Body count. For the Left, up North and on campuses and liberal cities, the Left counts the meat. They are largely unopposed. even the Democrat Party was careful not to include too many children in Trump-Campaign protests for fear of getting the elite's children hurt or killed. They know these are folks that will fight back.

    Down South, the meat counts the Left. In little Charlottesville, a few dozen or a hundred rednecks fought back. And one of them mowed down a substantial number and killed one of the Lefties. And there are lots more where he came from. I suspect the Left won't be dipping their toes too deeply into the pools of White resentment further South where men with guns and Stand Your Ground statutes apply. Protest is all in good fun when you're unopposed. When your victims fight back however, media declaring "victory" rings hollow when you're licking your broken bones in the UVA Hospital, when you're at funerals. One day the injured participants will wonder, when the body count piles up, why they do this, who inspired it all and why. Human nature doesn't change. Just because the Civil War was 160 years ago doesn't mean it's obsolete. It was just put on hold for a bit.
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  4. Mr. Hudson is interesting as usual. I almost always learn something new from one of his interviews. I’m not sure how “taxing the land” squares with MMT, unless he is suggesting that we should shift taxes off the middle class to free up money for circulation.

    In other words, fiscal policy (taxing and spending) is part economic policy and part social policy. It’s a political economy.

    Here is a primer on MMT for people who haven’t looked into it yet.

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    • Replies: @another fred
    I would like to offer an observation about "taxing the land". In my home state property taxes are among the lowest in the nation and this is a significant political issue. I cannot offer a "correct balance," but since it is an issue that has been front and center in local politics I think I can offer some relevant observations.

    Because property taxes are low in my state "persons" (including corporate) have been able to tie up large tracts for agricultural (including silvicultural) and mineral (including speculative) purposes. Most of it is in pine forest which offers very low returns and then there is the occasional mineral "jackpot" when somebody strikes oil or opens a mine (usually coal). The low tax cost means that it is not expensive to hold land for these purposes. Other beneficiaries are family farms where the land is actively worked, but does not yield a high rate of return.

    While family farms are pretty bulletproof politically, there is strong opposition to the large corporate interests. The main argument against these interests has been that they inhibit "growth." Arguments "for" (besides the campaign contributions) are that we are better off with a more stable, steadily growing agricultural (silvicultural) economy as rapid "growth" creates instability, i.e. that "creative destruction" is not an unalloyed good, of which the rate should be maximized.

    There IS a tendency towards old rich families, some of whom are degenerate, but some of whom are "pillars of the community" who support charitable organizations that benefit "everybody" if one thinks slower moving societies are a good thing.

    My general impression is that Mr. Hudson thinks that lots of "growth" is a good thing, but he thinks he knows a better way to achieve it (better than Trump, e.g.). Obviously, since I put "growth" in scare quotes I am not sold on the idea no matter how it is achieved.

    Outside the issue of "growth" there is the issue of how much a community benefits from having "pillars."

    You makes your choice and you takes your chance. Personally, I don't think the universe gives a damn one way or the other - if it works, it works, if it doesn't, "batter up!"

    Nature bats last.

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  5. I am familiar with MMT.

    All that needs to be done at present is to change the FED’s charter to allow infrastructure to be funded with some degree of monetary financing to prevent the selling off of the commons to global finance. I suggest this form of financing should only be used for maintenance of the commons, i.e. infrastructure.

    All the rest will remain theoretical.

    While not perfect the FED has all the tools and statistics to facilitate some level of monetary financing of infrastructure. I will take an independent federal reserve with a revised charter over selling off the commons to investors who will then charge us to use them. Funding our infrastructure the way it is presently done through congress is a joke, we need a better system, the economists at the FED are presently in a good position to speak to how best this might be accomplished. We need a plan, not a patchwork of resolutions and stop gap measures as to how the nations infrastructure will be funded.
    It could be dollar matching to other funding sources, percentages, econometric models, etc. but unemployment levels and inflationary concerns would need to be considered.

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  6. One does not have to project too far into the future to see that the future needs for “money” to “pay” the unfunded obligations of the Federal government are going to require some serious changes in the monetary system.

    The US cannot politically survive, and therefore will not allow, a repeat of the Great Depression where economic activity collapses to the same extent it did in 1929-30 (roughly 40%).

    It seems to me likely that something on the order of MMT will be followed where the government issues “money” directly rather than funding its creation through debt instruments.

    I think it is naive, however, to believe that this will be some kind of panacea, a cure for all our ills. In order to institute MMT, or anything like it, the government will have to have far more power as it will have far more responsibility.

    More power in the hands of fewer people – what could possibly go wrong?

    https://en.wikipedia.org/wiki/Iron_law_of_oligarchy

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    • Replies: @dc.sunsets
    I think it's also naive to think there's a solution to $200 trillion in IOU's (which underlie all the rationalizations for asset prices here in the stratosphere) that doesn't involve a debt collapse & the chaotic collapse in the money supply that must accompany it.

    It's a MARKET. It has experienced an historic bull run. Anyone who thinks this bull won't be followed by the inevitable bear misunderstands how human social behavior operates.
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  7. While the topic is dry one for me, Hudson makes it somewhat interesting and I like that he calls a fraud a fraud.

    In fact pretty much the whole system, financial and political and all their appendages such as schools and the media, is a huge fraud. A pox on all the SOBs.

    How could anyone argue against this, for instance?

    Today’s idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime.

    I’ve long been impressed that what we have is not a free market, but a free-for-all market that excludes all but the richest from obtaining much by way of benefits.

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    • Replies: @jilles dykstra
    There is no such thing as a free market.
    A (good) market is highly regulated.
    Foreign visitors to Holland in the 17th century were amazed at the quality of the butter sold in Dutch markets, they discovered that this was the result of extensive regulation, and oversight of these regulations.
    The big mistake about derivates was not regulating them.
    The 1929 Wall Street crash was possible because at the time USA financial regulation was far worse than German regulation of 1890.
    , @annamaria
    Correct.
    The fraud is not only unpunishable - the fraud has been encouraged. This is why Obama deserves his grand name Obama the Fraud.
    "All economic growth since 2008 has accrued only to the top 5% of the economy. 95% of the economy has been shrinking by about 3% per year… and continues to shrink, because the debts were kept in place. President Obama saved the banks and Wall Street instead of saving the economy.
    ...
    The Obama Administration de-criminalized fraud. This has attracted the biggest criminals – and the wealthiest families – to the banking sector, because that’s where the money is. Crooks want to rob banks, and the best way to rob a bank is to own one. So criminals become bankers. .... You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution." -- This is just another manifestation of unaccountability in the highest echelons of power in the US. (Don't we remember the "missing" $6 trillions that the Pentagon cannot account for?) The US is ruled by an oligarchy, and the US oligarchy is made of the financial crooks. As Hudson writes, "You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution. " The moral decay has penetrated everything and it this shows everywhere, from the crumbling infrastructure to the obscenely dishonest MSM. The whole country has been dumbed down and smothered with amorality and thievery by the "haves."
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  8. I, along with many others wish we were renting an apartment instead of “owning” our house free and clear and unsellable for 50% of what I paid for it in 1993 due to my neighborhood being targeted by AFFH on steroids.

    And set aside my abject racism to see how easy it is to understand why younger people (highly skilled and otherwise) with absolutely nothing resembling job security would not want to own a home when they are forced on a wholesale basis to move frequently hundreds or thousands of miles away to find another unstable replacement job.

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    • Replies: @Skeptikal
    What is AFFH?
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  9. An interesting but (alas…) incomplete and lop-sided view of the world. A couple comments:

    The sheer size of the government apparatus (over 40% gdp in the US, more in most of the rest of the West) ensures rampant and intentional mis-allocation of capital, backed by the full police and judicial power of those various levels of government. This is an unavoidable aspect of human nature.

    The fiscal and monetary fraud is no more than one aspect of many alluded to in the paragraph above. We have allowed charlatans masquerading as Utopian saviors and Paradigm Changers to capture police power to enforce laws and regulations obviously designed to shear the sheep, and reward the wolves. Too Big To Fail? More like Too Big To be Held to Account lest me and my friends and their children have to get real jobs instead of stealing from the rubes.

    Last, it will be interesting to see how the debt is dealt with. It is a truly global issue, with too many people having to pledged to pay more money than can possibly be paid. It is so bad that the very accounting of the fiction has become near-impossible. Sooner or later, the accounting will become impossible, and some sort of reset (which will include a default and repudiation of most public and private debt instruments and their associated derivatives) will be… agreed on? Implemented? Forced upon? By whom? Using what legal structure and in what currency denomination? Not any currency now in circulation, I think. Unclear to me, It will be fascinating to watch.

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  10. If the options for infrastructure finance (maintenance and expansion of roads in particular) are basically:

    - Soak the rich (taxes go up on the haves to pay)
    - Some degree of monetary finance (money will be earned into existence rather than loaned into existence)
    - Selling off the commons (the rich buy the infrastructure and charge the masses to use it)
    - Continued patchwork of debt finance and can kicking

    I would say monetary finance would make everyone short of the greedy asshole that wants to buy the highways happy.

    I am fully aware that we have the appearance of a shortage of responsible enough parties to handle this sort of proposition. If it were widely known and the left got wind of it they would likely have brawndo water fountains on every corner. But Gary Cohn has not left the White House yet, and he is just the sort of guy that can pull something like this off through some acronym backed with hard facts and a near guarantee of success. We need to back away from socialism writ large and focus on long term sustained full employment with a gradual return to free market principles in all area of commerce.

    In my economic utopia full employment and maintenance of infrastructure would be at the top of central bank or FED area of concern.

    Medical care is expensive because it is subsidized and corrupted. Let the medical care bubble burst and let doctors compete for patients like other area of commerce. Until we figure out how to do that there will be no affordable medicine for the masses.

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    • Replies: @Miller
    Your comment re the cost of medical care can be applied to the bloated cost of higher education as well as defense spending, prescription drugs, etc. Whenever the Govt offers subsidies or debt guarantees and fails to use this leverage to negotiate price limits as a condition, "inflation" in that sector will surely follow. It is intended to do so.

    Medical inflation also a result of residency requirements and limits, keeping supply of foreign doctors low.

    One of the stated Fed mandates is "Full Employment" but one would never imagine this to be the case.

    Good stuff, I've enjoyed your posts on this topic.

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  11. Furthermore there is discussion in some circles of guaranteed minimum income. What a horrible idea. Let me guess, the people will drive to pick up their money on some pothole filled road, right? What a misguided notion. Can we please put off all that talk until all the roads are fixed, every tree is trimmed, every sidewalk fixed, every park glisteningly beautiful, etc until we even remotely consider it a possibility. The ghettos already give everyone free money and they line up in their own filth stepping over garbage to pick up their checks. Give me a break!

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  12. Bayan says:

    Not every land owner is happy when roads or sewer systems are built close by. They may lose in terms of historical, cultural, and environmental values they attach to their surroundings. How are you going to compensate them? Nationalizing land does not solve this problem. One way of making people lose their attachment to a particular surrounding is to force them move every few years. But why do you want do that? To celebrate Bolshevist craziness? Why?

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  13. @Linda Green
    This is a good point.

    I believe Hitler made the same point, but due to our education consisting of largely being told what to think, rather than being taught how to think, we have had it pounded into our heads that such ideas as monetary sovereignty only come out of the minds of truly evil men. We are repeatedly told the only way to prevent Weimar style inflation is to run our economy as we presently do, no improvements are possible and to even consider such is a sign of sociopathology. Our betters for some reason want the children of the white stock that founded the country to hate themselves and become submissive to the advancing immigrant hordes while our politicians figure out ways to sell off large chunks of our infrastructure, like our roads for instance, so they can they can charge us and all the new immigrants they are letting in to drive on them.

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances. The media & leftist politicians (both Dem & Republican) teamed up on an alternative story of the event and allowed a group of paid communist thugs to come in and beat them while the media reported the white group to be the aggressor.

    If I didn't know better, I would swear the United States has been taken over by a hostile globalist elite, that cares not one bit for the natives of our country.

    Exciting times are ahead in our nation, this is for sure.

    As to Michael Hudson's article, it is more gibberish from a lefty economist, he dances around facts but always in the end puts a disingenuous spin on it. The article is garbage and awfully loose with the facts.

    Linda Green:

    What is needed is to use a different approach when protesting. Why not call it, ‘American pride parade?” Or, “love the USA parade?”, others use different naming conventions when in reality its other objectives that they sought after. For example, the federal reserve act=taking over the economy of the USA. Patriot act=taking your rights away, etc. So whomever is trying to even the field in ‘pride’ such as the T-shirts that read: ‘brown pride’, ‘black pride’, etc. Whities should have ‘American pride’, and who will fight that? So then American pride=White pride, period. That will put an end to the rabid attacks from the fake news media, and all its dumb followers.

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  14. myb6 says:

    Nationalizing all, or even most, land-rent only makes sense if the national government will take on the financial responsibility of funding local infrastructure, which seems like a disaster in the making.

    Socializing all, or even most, land-rent even at the local level would completely destroy the balance sheets of millions of productive citizens. Cruel and arbitrary. As far as the response, “torches and pitchforks” would be understatement.

    The only fair solution is to grandfather current land-rents and then tax the increment. Still discourages speculation. You could even phase-out the grandfather without destroying innocent families so long as it’s gradual over a very long term, say 50 years.

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  15. TG says:

    A very interesting and intelligent commentary, as always from this source.

    I would like to suggest that there is, in addition to what has been described here, another factor influencing rent, and that’s demographics.

    In the middle ages, Europe was essentially fully populated relative to its technology and infrastructure. All land was owned by a handful for wealthy families, and they could charge peasants rents so high that wages were hardly more than subsistence.

    Then the Black Death came, and, unlike most plagues that quickly burned themselves out, it held the population low for generations. Suddenly the rich could not just coast on unearned interest from inherited land, because land was no longer a limiting factor. The rich tried reigning in wages via statute, but it’s hard to beat supply and demand, and the rich failed. This caused the renaissance. It is little appreciated, but the physical standard of living of late medieval England was higher than many s0-called modern third-world countries…

    I suggest that, not in replacement of what has been mentioned here, but in addition, that demographics and population pressure also play a signficant role. When there is more land than people, it gets hard to collect rent (in the ante-bellum American South, the plantation owners had to resort to slavery. In the North, you had a lot of owner-operator farmers).

    I would also think that, with a stable or slowly growing population, eventually every family pays off their mortgage, all the roads that need to get built are built, and then the children inherit, and debt goes away. A rapidly growing population means that big sums must constantly be borrowed to fund new construction and infrastructure, both public and private…

    And finally, I would posit that anything which reduces wages – such as too-rapid population growth – will also cause financialization, but for a different reason. I propose that in a low-wage society, where losing a job likely means a lifetime sentence of poverty, that people become wage-slaves, and beholden to their employers – and this includes economists and journalists etc. In this case only the occasional saint will take a stand on principle, and most of us are not saints. On the other hand, in a tight labor market, if an employee defies their boss (CNN, the University of Chicago, etc.), and is fired, it’s not a big issue – they can easily find comparable well-paid work elsewhere.

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  16. @Si1ver1ock
    Mr. Hudson is interesting as usual. I almost always learn something new from one of his interviews. I'm not sure how "taxing the land" squares with MMT, unless he is suggesting that we should shift taxes off the middle class to free up money for circulation.

    In other words, fiscal policy (taxing and spending) is part economic policy and part social policy. It's a political economy.

    Here is a primer on MMT for people who haven't looked into it yet.

    https://www.youtube.com/watch?v=GXjWeucTyFU

    I would like to offer an observation about “taxing the land”. In my home state property taxes are among the lowest in the nation and this is a significant political issue. I cannot offer a “correct balance,” but since it is an issue that has been front and center in local politics I think I can offer some relevant observations.

    Because property taxes are low in my state “persons” (including corporate) have been able to tie up large tracts for agricultural (including silvicultural) and mineral (including speculative) purposes. Most of it is in pine forest which offers very low returns and then there is the occasional mineral “jackpot” when somebody strikes oil or opens a mine (usually coal). The low tax cost means that it is not expensive to hold land for these purposes. Other beneficiaries are family farms where the land is actively worked, but does not yield a high rate of return.

    While family farms are pretty bulletproof politically, there is strong opposition to the large corporate interests. The main argument against these interests has been that they inhibit “growth.” Arguments “for” (besides the campaign contributions) are that we are better off with a more stable, steadily growing agricultural (silvicultural) economy as rapid “growth” creates instability, i.e. that “creative destruction” is not an unalloyed good, of which the rate should be maximized.

    There IS a tendency towards old rich families, some of whom are degenerate, but some of whom are “pillars of the community” who support charitable organizations that benefit “everybody” if one thinks slower moving societies are a good thing.

    My general impression is that Mr. Hudson thinks that lots of “growth” is a good thing, but he thinks he knows a better way to achieve it (better than Trump, e.g.). Obviously, since I put “growth” in scare quotes I am not sold on the idea no matter how it is achieved.

    Outside the issue of “growth” there is the issue of how much a community benefits from having “pillars.”

    You makes your choice and you takes your chance. Personally, I don’t think the universe gives a damn one way or the other – if it works, it works, if it doesn’t, “batter up!”

    Nature bats last.

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  17. Wally says:
    @Linda Green
    This is a good point.

    I believe Hitler made the same point, but due to our education consisting of largely being told what to think, rather than being taught how to think, we have had it pounded into our heads that such ideas as monetary sovereignty only come out of the minds of truly evil men. We are repeatedly told the only way to prevent Weimar style inflation is to run our economy as we presently do, no improvements are possible and to even consider such is a sign of sociopathology. Our betters for some reason want the children of the white stock that founded the country to hate themselves and become submissive to the advancing immigrant hordes while our politicians figure out ways to sell off large chunks of our infrastructure, like our roads for instance, so they can they can charge us and all the new immigrants they are letting in to drive on them.

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances. The media & leftist politicians (both Dem & Republican) teamed up on an alternative story of the event and allowed a group of paid communist thugs to come in and beat them while the media reported the white group to be the aggressor.

    If I didn't know better, I would swear the United States has been taken over by a hostile globalist elite, that cares not one bit for the natives of our country.

    Exciting times are ahead in our nation, this is for sure.

    As to Michael Hudson's article, it is more gibberish from a lefty economist, he dances around facts but always in the end puts a disingenuous spin on it. The article is garbage and awfully loose with the facts.

    The entire Charlottesville event was a staged event, a classic provocation operation.

    “We have been working on the ground and behind the scenes leading up to, during, and after the rally.”
    - violent Zionist Jew, Anita Gray, regional director of the Anti-Defamation League.
    must read: http://www.unz.com/article/how-the-jews-won-the-battle-of-charlottesville/

    Read on.

    The facts about Charlottesville that the Zionist dominated MSM do not allow:

    http://www.unz.com/article/narrative-collapse-is-charlottesvilles-james-alex-fields-the-next-george-zimmerman/

    and:
    Proof of staging, see video:
    different cars, different driver than alleged driver Fields, photo shopped ‘flying people’ & crash backgrounds, lot’s more.
    It’s not difficult, just open your eyes.

    Charlottesville, a set-up

    http://www.americanthinker.com/articles/2017/08/charlottesville_and_its_aftermath_what_if_it_was_a_setup.html

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  18. @Linda Green
    This is a good point.

    I believe Hitler made the same point, but due to our education consisting of largely being told what to think, rather than being taught how to think, we have had it pounded into our heads that such ideas as monetary sovereignty only come out of the minds of truly evil men. We are repeatedly told the only way to prevent Weimar style inflation is to run our economy as we presently do, no improvements are possible and to even consider such is a sign of sociopathology. Our betters for some reason want the children of the white stock that founded the country to hate themselves and become submissive to the advancing immigrant hordes while our politicians figure out ways to sell off large chunks of our infrastructure, like our roads for instance, so they can they can charge us and all the new immigrants they are letting in to drive on them.

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances. The media & leftist politicians (both Dem & Republican) teamed up on an alternative story of the event and allowed a group of paid communist thugs to come in and beat them while the media reported the white group to be the aggressor.

    If I didn't know better, I would swear the United States has been taken over by a hostile globalist elite, that cares not one bit for the natives of our country.

    Exciting times are ahead in our nation, this is for sure.

    As to Michael Hudson's article, it is more gibberish from a lefty economist, he dances around facts but always in the end puts a disingenuous spin on it. The article is garbage and awfully loose with the facts.

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances.

    Fair enough. In the media, a “moral” victory for the left. On the ground however, you have to include blood in the tally. Body count. For the Left, up North and on campuses and liberal cities, the Left counts the meat. They are largely unopposed. even the Democrat Party was careful not to include too many children in Trump-Campaign protests for fear of getting the elite’s children hurt or killed. They know these are folks that will fight back.

    Down South, the meat counts the Left. In little Charlottesville, a few dozen or a hundred rednecks fought back. And one of them mowed down a substantial number and killed one of the Lefties. And there are lots more where he came from. I suspect the Left won’t be dipping their toes too deeply into the pools of White resentment further South where men with guns and Stand Your Ground statutes apply. Protest is all in good fun when you’re unopposed. When your victims fight back however, media declaring “victory” rings hollow when you’re licking your broken bones in the UVA Hospital, when you’re at funerals. One day the injured participants will wonder, when the body count piles up, why they do this, who inspired it all and why. Human nature doesn’t change. Just because the Civil War was 160 years ago doesn’t mean it’s obsolete. It was just put on hold for a bit.

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    • Replies: @Stonehands
    Jim, you are keeping me up all night- l have been catching up on all your prior comments. There is much wisdom and solace in what you have to say!
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  19. Isn’t Hudson one of MMT guys? He is professor of economics at the University of Missouri in Kansas City and I think that they are advocating MMT.

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  20. ” I got a PhD as a union card. In order to work on Wall Street, I needed a PhD. But what I found in the textbooks was the opposite of everything that I experienced on Wall Street in the real world. Academic textbooks describe a parallel universe. When I tried to be helpful and pointed out to my professors that the texbooks had little to do with how the economy and Wall Street actually work, that did not help me get good grades. I think I got a C+ in money and banking. ”

    I happen to be an economist, based on this statement, and the rest of the article, that is incomprehensible to me, my conclusion is that the writer is one of the many in these days thinking they are economists, while they are not.
    ‘Economics is common sense made difficult’, it is said, but during my now long life I discovered that common sense is rare.

    The problem is that academic standards since the 60ties in the whole western world went down, as Varoufakis states ‘since the 70ties macro conomics was not taught anywhere in the western world’.
    I studied in the 60ties.
    A recent Dutch investigation into what Dutch ‘economists’ understand had devastating outcomes.
    Those that rule us studied in the seventies or later.

    All the articles about the derivates catastrophe were gibberish to me until I read the explanation by the German macro economist Sarrazin.
    Sarrazin is, with Varoufakis, one of the very few economists who understand that the euro cannot function, as 70 Dutch economists in 1997 already stated in a big advertisement, paid by themselves.
    Sarrazin, member of the Board of the Bundesbank was fired, the 70 Dutch economists felt what happens when you publish politiclly unwanted truths.
    Van Rompuy agrees with them ‘the ECONOMIC consequences of the euro were insufficiently analysed’.
    This statement alas dates from a few years back, too late to prevent the disaster.

    And so Gresham’s law was confirmed in economics ‘bad money drives out good money’, in this case ‘bad economists drive out good economists’.
    Agriculturist Dijsselbloem ‘leads’ the euro group, Schulz was educated in book binding, Merkel is a physicist, Hollande is a teacher in german, Rutte is a historian who knows very little about VOC history, and so on and so forth.
    Varoufakis was driven out as minister of finance after a few weeks in office.

    Thilo Sarrazin, ‘Europa braucht den Euro nicht, Wie uns politisches Wunschdenken in die Krise geführt hat’, 2012 München

    Yanis Varoufakis, ‘The Global Minotaur, America, Europe and the Future of the Global Economy’, London, New York, 2013

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    • Replies: @Eryximachus
    It really saddens me that someone can entirely dismiss Michael Hudson. The man, beginning with Super Imperialism, has done more to explain how money functions as a political concept that anyone who has lived in my lifetime. He is a giant, and anyone who hasn't heard of him is simply not an economist, or even capable of understanding international economics.
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  21. @jacques sheete
    While the topic is dry one for me, Hudson makes it somewhat interesting and I like that he calls a fraud a fraud.

    In fact pretty much the whole system, financial and political and all their appendages such as schools and the media, is a huge fraud. A pox on all the SOBs.

    How could anyone argue against this, for instance?


    Today’s idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime.
     
    I've long been impressed that what we have is not a free market, but a free-for-all market that excludes all but the richest from obtaining much by way of benefits.

    There is no such thing as a free market.
    A (good) market is highly regulated.
    Foreign visitors to Holland in the 17th century were amazed at the quality of the butter sold in Dutch markets, they discovered that this was the result of extensive regulation, and oversight of these regulations.
    The big mistake about derivates was not regulating them.
    The 1929 Wall Street crash was possible because at the time USA financial regulation was far worse than German regulation of 1890.

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  22. As I read this, the proposed fix for excess credit creation is state seizure of land, or high property taxes? Talk about a non sequitur.

    Our $200 trillion debt load rests on widespread, manic social trust…the animal spirits of a secular bond bull market under fiat money. No theory or proposal that ignores this is relevant.

    Credit created from nowhere has the same effect in the marketplace as counterfeiting, except it comes with the burden of repayment (unless, as we’ve seen there’s really no intention of ever paying off the IOU.)

    For nearly 4 decades Congress has not needed to tax, nor have people needed to work in order to consume. Say’s Law is apparently repealed, right?

    Americans can be wealthy without producing. Taxes and jobs are superfluous. We know this because the sky hasn’t fallen as Congress cut taxes, ramped spending, manufacturing was exported and tens of millions of working age people became unemployed.

    BS. All that’s occurring is that the Chamber of Commerce crowd is engaged in arbitrage between low cost manufacturing (where the jobs are) and high cost retailing (where the consumers are. ) Support for open borders is nothing more than pushing more consumers into the retail side, where jobs aren’t required for people to consume.

    America is now just a huge Pawn Shop. And sooner or later there won’t be anything left to pawn.

    If today is debt deflation, just wait until debt collapse begins in earnest.

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  23. @another fred
    One does not have to project too far into the future to see that the future needs for "money" to "pay" the unfunded obligations of the Federal government are going to require some serious changes in the monetary system.

    The US cannot politically survive, and therefore will not allow, a repeat of the Great Depression where economic activity collapses to the same extent it did in 1929-30 (roughly 40%).

    It seems to me likely that something on the order of MMT will be followed where the government issues "money" directly rather than funding its creation through debt instruments.

    I think it is naive, however, to believe that this will be some kind of panacea, a cure for all our ills. In order to institute MMT, or anything like it, the government will have to have far more power as it will have far more responsibility.

    More power in the hands of fewer people - what could possibly go wrong?

    https://en.wikipedia.org/wiki/Iron_law_of_oligarchy

    I think it’s also naive to think there’s a solution to $200 trillion in IOU’s (which underlie all the rationalizations for asset prices here in the stratosphere) that doesn’t involve a debt collapse & the chaotic collapse in the money supply that must accompany it.

    It’s a MARKET. It has experienced an historic bull run. Anyone who thinks this bull won’t be followed by the inevitable bear misunderstands how human social behavior operates.

    Read More
    • Replies: @another fred
    I would watch China over the next few years. If they avoid a crisis, that will be the model our "leaders" try to emulate.

    The losses created by malinvestment are real and must be assigned somewhere, but the nation has become too overcrowded and dependent to survive a washout as typical of classical economics. That predicts that the government will try to take control and assign losses. It will eventually be very, very, bad, but the constraints placed on the system by population and dependency mean that it will take enormous stresses to bring a collapse.

    The response to every crisis will be greater government involvement to try to keep things running until the government is overwhelmed (I predict by war involving WMD, most likely bio weapons).

    , @another fred
    BTW, I understand there will be a bear market, likely beginning fairly soon, but what I believe the government will avoid for quite a while is cascading bankruptcies and liquidation where economic activity falls on the order or 40% as it did in '29-'30.
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  24. Joe Hide says:

    To Michael Hudson. This is an article that seems to present difficult concepts at a level that people like me can somewhat grasp. I give You praise for this.
    Also, how about mandating sophisticated and evidence based testing of people in positions of power for excessive traits of psychopathy, sociopaths, sadism, narcissism, and insanity? That way we can know our enemy?

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  25. anonymous says: • Disclaimer
    @War for Blair Mountain
    It is absolutely urgent that Richard Spencer and the Alt Right adopt the ideas and framework of Michael Hudson and and Ha Joon Chang(Kicking away the ladder.)


    Support Socialism!!!=violation of free market principles...


    Pinochet=Neoliberal free market terrorism!!!

    The ADL can’t get enough of guys like Spencer – a rock star who swells their coffers. The public will associate anyone who has a problem with Bankster organized crime with well educated evil actors who quote Hitler. Mafioso Gary Cohn who advocates financial rape, debt servitude and fraud to sustain the status quo will be protected from those evil doers who slander his judiasm. Shrieking from the top of idiocy mountain into a honey pot!

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  26. @dc.sunsets
    I think it's also naive to think there's a solution to $200 trillion in IOU's (which underlie all the rationalizations for asset prices here in the stratosphere) that doesn't involve a debt collapse & the chaotic collapse in the money supply that must accompany it.

    It's a MARKET. It has experienced an historic bull run. Anyone who thinks this bull won't be followed by the inevitable bear misunderstands how human social behavior operates.

    I would watch China over the next few years. If they avoid a crisis, that will be the model our “leaders” try to emulate.

    The losses created by malinvestment are real and must be assigned somewhere, but the nation has become too overcrowded and dependent to survive a washout as typical of classical economics. That predicts that the government will try to take control and assign losses. It will eventually be very, very, bad, but the constraints placed on the system by population and dependency mean that it will take enormous stresses to bring a collapse.

    The response to every crisis will be greater government involvement to try to keep things running until the government is overwhelmed (I predict by war involving WMD, most likely bio weapons).

    Read More
    • Replies: @dc.sunsets
    Here I thought I was pessimistic. (Grin)

    I enjoy the comfortable, orderly life I lead. I don't take it for granted like most people do. I doubt the next 20 years will see its continuation.
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  27. @another fred
    I would watch China over the next few years. If they avoid a crisis, that will be the model our "leaders" try to emulate.

    The losses created by malinvestment are real and must be assigned somewhere, but the nation has become too overcrowded and dependent to survive a washout as typical of classical economics. That predicts that the government will try to take control and assign losses. It will eventually be very, very, bad, but the constraints placed on the system by population and dependency mean that it will take enormous stresses to bring a collapse.

    The response to every crisis will be greater government involvement to try to keep things running until the government is overwhelmed (I predict by war involving WMD, most likely bio weapons).

    Here I thought I was pessimistic. (Grin)

    I enjoy the comfortable, orderly life I lead. I don’t take it for granted like most people do. I doubt the next 20 years will see its continuation.

    Read More
    • Replies: @another fred

    I doubt the next 20 years will see its continuation.
     
    Having put in my 3 score and 10 (+), I don't expect to see my continuation for 20 years.
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  28. @dc.sunsets
    I think it's also naive to think there's a solution to $200 trillion in IOU's (which underlie all the rationalizations for asset prices here in the stratosphere) that doesn't involve a debt collapse & the chaotic collapse in the money supply that must accompany it.

    It's a MARKET. It has experienced an historic bull run. Anyone who thinks this bull won't be followed by the inevitable bear misunderstands how human social behavior operates.

    BTW, I understand there will be a bear market, likely beginning fairly soon, but what I believe the government will avoid for quite a while is cascading bankruptcies and liquidation where economic activity falls on the order or 40% as it did in ’29-’30.

    Read More
    • Replies: @dc.sunsets
    The theory to which I subscribe holds that such conditions are not under the control of the people who manage government, business or any other sector. 2008 reminds us of their impotence. The next time will remove all doubt.

    I expect a wave of failures and tsunamis of social change that lie in uncharted waters ahead. By the theory of alternation what's coming will be different in specifics from the other 1930's, and will thus fool people.

    I expect the crisis, when it arrives in earnest, to look like a shortage of money (because most money now is credit, and little of today's credit will survive in a low-social-trust environment.

    And who knows, you might be a long-lived person "fortunate enough" to navigate through the uncharted waters ahead.
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  29. @dc.sunsets
    Here I thought I was pessimistic. (Grin)

    I enjoy the comfortable, orderly life I lead. I don't take it for granted like most people do. I doubt the next 20 years will see its continuation.

    I doubt the next 20 years will see its continuation.

    Having put in my 3 score and 10 (+), I don’t expect to see my continuation for 20 years.

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  30. wayfarer says:

    Can’t stay ahead of the exponential greed curve or unchecked corporate rents in San Diego California, any longer.

    At the bottom 10% of the annual income bracket and well below the federal poverty line, I technically qualify for HUD housing. Unfortunately in San Diego there’s a 10-year waiting list for HUD vouchers (“Se Habla Español!”). On top of that I don’t have the monthly income on paper, to qualify for “low-income tax credit housing.“

    So, I’ll soon be moving into a used car. In a lot of ways this beats paying unreasonable rents, as long as I can remain in San Diego. Keep in mind, today it’s absolutely illegal (jail time/cash fine/auto impound) to be poor and homeless in the progressive alt-left sanctuary sunshine state of California.

    Read More
    • Replies: @jilles dykstra
    This reminds me of Dutch citizens unable to make ends meet, and thus of paying taxes, are fined severely by Dutch tax authorities.
    But Dutch common sense is prevailing here, there now is legislation ordering all those who try to get money from one household to work together, and not to individually fine, thus making a solution ever more difficult.
    But is not the USA the country of 'I have no compassion with the poor', McCain?, or 'deplorables', Hillary.
    On the other hand, many here with mortgages they cannot pay any more envy USA citizens, which, after leaving the house, and handing over the keys to the bank, are also handing back their debt to the bank.
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  31. @wayfarer
    Can't stay ahead of the exponential greed curve or unchecked corporate rents in San Diego California, any longer.

    At the bottom 10% of the annual income bracket and well below the federal poverty line, I technically qualify for HUD housing. Unfortunately in San Diego there's a 10-year waiting list for HUD vouchers ("Se Habla Español!"). On top of that I don't have the monthly income on paper, to qualify for “low-income tax credit housing.“

    So, I'll soon be moving into a used car. In a lot of ways this beats paying unreasonable rents, as long as I can remain in San Diego. Keep in mind, today it's absolutely illegal (jail time/cash fine/auto impound) to be poor and homeless in the progressive alt-left sanctuary sunshine state of California.

    This reminds me of Dutch citizens unable to make ends meet, and thus of paying taxes, are fined severely by Dutch tax authorities.
    But Dutch common sense is prevailing here, there now is legislation ordering all those who try to get money from one household to work together, and not to individually fine, thus making a solution ever more difficult.
    But is not the USA the country of ‘I have no compassion with the poor’, McCain?, or ‘deplorables’, Hillary.
    On the other hand, many here with mortgages they cannot pay any more envy USA citizens, which, after leaving the house, and handing over the keys to the bank, are also handing back their debt to the bank.

    Read More
    • Replies: @wayfarer
    "What difference does it make to the dead, the orphans, and the homeless, whether the mad destruction is wrought under the name of totalitarianism or the holy name of liberty or democracy?" -- Mahatma Gandhi

    https://thumbs-prod.si-cdn.com/eahUktQ7xwnvHZjazdIvKeocEpw=/800x600/filters:no_upscale()/https://public-media.smithsonianmag.com/filer/d4/b2/d4b2db2e-bccc-4f64-9c0d-02139c0d6864/12_11_2014_gentriication.jpg
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  32. @another fred
    BTW, I understand there will be a bear market, likely beginning fairly soon, but what I believe the government will avoid for quite a while is cascading bankruptcies and liquidation where economic activity falls on the order or 40% as it did in '29-'30.

    The theory to which I subscribe holds that such conditions are not under the control of the people who manage government, business or any other sector. 2008 reminds us of their impotence. The next time will remove all doubt.

    I expect a wave of failures and tsunamis of social change that lie in uncharted waters ahead. By the theory of alternation what’s coming will be different in specifics from the other 1930′s, and will thus fool people.

    I expect the crisis, when it arrives in earnest, to look like a shortage of money (because most money now is credit, and little of today’s credit will survive in a low-social-trust environment.

    And who knows, you might be a long-lived person “fortunate enough” to navigate through the uncharted waters ahead.

    Read More
    • Replies: @peterAUS
    I've been interested in the topic for quite some time now.
    Purely amateur interest of course.
    Read tons of stuff; most of it rightful critique, some suggestions. Problem with those suggestions, they got rejected by other, apparently equally, competent people.
    It appears we know that the system is wrong but we are not quite sure what to replace it with. Let alone HOW to replace it.

    So, say, if you were US President, how would you try to prevent that crisis?
    Is it even possible?

    Maybe...it's just what we, humans, do.
    We live well, then get into crisis, lose a lot, and start from the start.

    Some expect that coming crisis to create opportunities for their own version of change.
    , @another fred
    The difference in our outlooks is partly an argument over how much pressure the boiler can stand before it blows, but the system is far more complex than the old fashioned single chamber boiler so the argument is also more complex.

    To me the system is composed of the entire growing human population and the earth that supports it (with its systems). The financial credit system is one component, one subsystem. The system of supply and distribution of goods is another, and, I contend, the system that is at issue on the maintenance of the population. Certainly the two subsystems are interconnected.

    I contend that because in our increasingly fragile world the failure of the financial system would collapse the supply and distribution of goods, the financial system will be "modified" (essentially discarded) in a similar (not "identical") fashion to the "saving" of General Motors. I do understand that this scrapping will affect other dependent, interconnected, subsystems (see below), but I believe there will be lags between them that will obscure to most eyes the fact that one failure makes the next inevitable.

    The law(s) to enable the scrapping of the financial system are already on the books, primarily in the form of the Defense Production Act(s) and the Patriot Act (The Patriot Act provides the enforcement "muscle"). Notice that the laws were passed in response to very real threats to the increasingly fragile system, as was the law creating the Federal Reserve system. The powers of the executive branch dwarf the powers that Hitler had once an emergency is declared.

    The most important two subsystems that will be affected by the scrapping of the financial system will be the system of "international cooperation" and the "Pax Americana". These two subsystems are so interconnected that one is barely distinguishable from the other, but they both depend on credit growth.

    "International cooperation" could actually increase, but if it does it will only do so by crushing dissent (one man's terrorist is another man's freedom fighter). On the other hand it seems more likely to me that we might see the world evolve down into more well defined "spheres of influence." Neither circumstance is conducive to stability in a world where the ability to create bio weapons capable of significantly reducing human population is expanding at an exponential rate.

    As Le Chatelier tells us, a system under stress acts in a direction to relieve the stress. Some futurists argue that accelerated human evolution, aided by technology, will avoid the above course. They'd better hurry up.

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  33. wayfarer says:
    @jilles dykstra
    This reminds me of Dutch citizens unable to make ends meet, and thus of paying taxes, are fined severely by Dutch tax authorities.
    But Dutch common sense is prevailing here, there now is legislation ordering all those who try to get money from one household to work together, and not to individually fine, thus making a solution ever more difficult.
    But is not the USA the country of 'I have no compassion with the poor', McCain?, or 'deplorables', Hillary.
    On the other hand, many here with mortgages they cannot pay any more envy USA citizens, which, after leaving the house, and handing over the keys to the bank, are also handing back their debt to the bank.

    “What difference does it make to the dead, the orphans, and the homeless, whether the mad destruction is wrought under the name of totalitarianism or the holy name of liberty or democracy?” — Mahatma Gandhi

    Read More
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  34. peterAUS says:
    @dc.sunsets
    The theory to which I subscribe holds that such conditions are not under the control of the people who manage government, business or any other sector. 2008 reminds us of their impotence. The next time will remove all doubt.

    I expect a wave of failures and tsunamis of social change that lie in uncharted waters ahead. By the theory of alternation what's coming will be different in specifics from the other 1930's, and will thus fool people.

    I expect the crisis, when it arrives in earnest, to look like a shortage of money (because most money now is credit, and little of today's credit will survive in a low-social-trust environment.

    And who knows, you might be a long-lived person "fortunate enough" to navigate through the uncharted waters ahead.

    I’ve been interested in the topic for quite some time now.
    Purely amateur interest of course.
    Read tons of stuff; most of it rightful critique, some suggestions. Problem with those suggestions, they got rejected by other, apparently equally, competent people.
    It appears we know that the system is wrong but we are not quite sure what to replace it with. Let alone HOW to replace it.

    So, say, if you were US President, how would you try to prevent that crisis?
    Is it even possible?

    Maybe…it’s just what we, humans, do.
    We live well, then get into crisis, lose a lot, and start from the start.

    Some expect that coming crisis to create opportunities for their own version of change.

    Read More
    • Replies: @dc.sunsets
    I believe that attempts to control complex systems are based entirely on an illusion.

    For this reason I believe all attempts to steer, up, down, left, right, all are simply part of the complex system and thus meaningless. "Navigation inputs" that appear to work were already baked into the cake, and those that do not align with the system's spontaneously organized direction will fail.

    The future is a product of the past and present, and there's actually nothing of substance to do one way or another. Specific events matter, but the character of things that will occur is basically preordained.

    For a better exposition of this viewpoint, try socionomics dot net.

    No one knows the future, but lots of people charge good money for slick forecasts anyway.

    I prefer to cultivate an "antifragile" state and enjoy life to the fullest, knowing that my ancestors surely survived worse.

    Just my 2 cents, that's all.
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  35. @peterAUS
    I've been interested in the topic for quite some time now.
    Purely amateur interest of course.
    Read tons of stuff; most of it rightful critique, some suggestions. Problem with those suggestions, they got rejected by other, apparently equally, competent people.
    It appears we know that the system is wrong but we are not quite sure what to replace it with. Let alone HOW to replace it.

    So, say, if you were US President, how would you try to prevent that crisis?
    Is it even possible?

    Maybe...it's just what we, humans, do.
    We live well, then get into crisis, lose a lot, and start from the start.

    Some expect that coming crisis to create opportunities for their own version of change.

    I believe that attempts to control complex systems are based entirely on an illusion.

    For this reason I believe all attempts to steer, up, down, left, right, all are simply part of the complex system and thus meaningless. “Navigation inputs” that appear to work were already baked into the cake, and those that do not align with the system’s spontaneously organized direction will fail.

    The future is a product of the past and present, and there’s actually nothing of substance to do one way or another. Specific events matter, but the character of things that will occur is basically preordained.

    For a better exposition of this viewpoint, try socionomics dot net.

    No one knows the future, but lots of people charge good money for slick forecasts anyway.

    I prefer to cultivate an “antifragile” state and enjoy life to the fullest, knowing that my ancestors surely survived worse.

    Just my 2 cents, that’s all.

    Read More
    • Replies: @utu
    All kinds of things could be done within the system that would change many outcomes w/o changing the system itself.

    There are plenty of parameters that control the actual system. The values of the parameters are changeable. There might not be a political force that could enact the changes but they are within the realm of possibility. Different set of parameters will produce different outcomes. Imagine that you can change tax on stock market transactions from 0% to something larger than 0%. Or imagine that in the fractional reserve system you change the fraction amount required by banks to keep when creating money. Or imagine that you force all stocks to pay annual dividends of no less than x percent of the profit.

    And there one can imagine different system.
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  36. Skeptikal says:
    @Jim Bob Lassiter
    I, along with many others wish we were renting an apartment instead of "owning" our house free and clear and unsellable for 50% of what I paid for it in 1993 due to my neighborhood being targeted by AFFH on steroids.

    And set aside my abject racism to see how easy it is to understand why younger people (highly skilled and otherwise) with absolutely nothing resembling job security would not want to own a home when they are forced on a wholesale basis to move frequently hundreds or thousands of miles away to find another unstable replacement job.

    What is AFFH?

    Read More
    • Replies: @Jim Bob Lassiter
    Affirmatively Furthering Fair Housing-- comin' to hood near you!!
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  37. utu says:
    @dc.sunsets
    I believe that attempts to control complex systems are based entirely on an illusion.

    For this reason I believe all attempts to steer, up, down, left, right, all are simply part of the complex system and thus meaningless. "Navigation inputs" that appear to work were already baked into the cake, and those that do not align with the system's spontaneously organized direction will fail.

    The future is a product of the past and present, and there's actually nothing of substance to do one way or another. Specific events matter, but the character of things that will occur is basically preordained.

    For a better exposition of this viewpoint, try socionomics dot net.

    No one knows the future, but lots of people charge good money for slick forecasts anyway.

    I prefer to cultivate an "antifragile" state and enjoy life to the fullest, knowing that my ancestors surely survived worse.

    Just my 2 cents, that's all.

    All kinds of things could be done within the system that would change many outcomes w/o changing the system itself.

    There are plenty of parameters that control the actual system. The values of the parameters are changeable. There might not be a political force that could enact the changes but they are within the realm of possibility. Different set of parameters will produce different outcomes. Imagine that you can change tax on stock market transactions from 0% to something larger than 0%. Or imagine that in the fractional reserve system you change the fraction amount required by banks to keep when creating money. Or imagine that you force all stocks to pay annual dividends of no less than x percent of the profit.

    And there one can imagine different system.

    Read More
    • Replies: @dc.sunsets
    Even thinking you can exist outside of the Matrix is itself part of the Matrix.
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  38. Miro23 says:

    This is an interesting interview.

    So the cause of rising real estate prices wasn’t population or infrastructure. It was simply that properties are worth whatever banks are able and willing to lend against them.

    It looks like this is true. There’s no property boom without a credit boom.

    Most crashes since the 19th century had a silver lining: They wiped out the bad debts. But this time the debts were left in place, leading to a massive wave of foreclosures. We are now suffering from debt deflation. Instead of a recovery, there’s just a flat line for 99% of the economy.

    An aspect of this is that removal of excess debt (bankruptcy or high inflation) moves wealth around. Bankruptcy: Creditors get property at fire sale prices. High inflation: Creditors get property by repaying their loans in devalued currency. Although they can lose through the reduced value of their stock holdings.

    The only layer of the economy that is growing is the wealthiest 5% layer – mainly the Finance, Insurance and Real Estate (FIRE) sector. That is, creditors living off interest and economic rent: monopoly rent, land rent and financial interest. The rest of the economy is slowly but steadily shrinking.

    I would say more capital gains in financial markets and excess outsourcing profits than interest and rent.

    My colleague Bill Black has documented most of that. He was a prosecutor of the S&L frauds in the 1980s, and wrote a book “The best way to rob a bank is to own one”.

    And it’s even better to also own the FED and the Treasury.

    So everybody knew that there was fraud, and the bankers knew they would not go to jail, because Wall Street had become the main campaign contributor to the leading politicians, especially in the Democratic party. The Obama Administration came in basically as representatives of the bank fraudsters. And the fraud continues today. The crooks have taken over the banking system.

    True, and the Treasury is full of Wall St. people who shouldn’t be anywhere near this public institution.

    We’re going to buy foreclosed properties for all cash, because we can make a larger rate of return simply by renting them out.”

    If rental income is greater than interest payments then property prices can only rise. A feature of very low interest rates.

    There is an enormous amount of stock market credit that has helped bid up stock prices with low-interest credit and arbitrage. This has inflated asset prices for stocks, bonds and real estate. If the result of low interest rates is simply to inflate asset prices…

    Agreed, QE = low interest rates = speculative real estate purchases + share buy backs etc. = rising asset prices.

    So the key question is how a society is NOT going not to pay debts that go bad. Will it let creditors foreclose, as has occurred in the US? Or are you going to write down the debts and wipe out this overgrowth of creditor claims? That’s the ultimate policy that every society has to face.

    There’s also the inflation option. The 0,1% are very well placed to borrow very large amounts of money, invest it in real assets and pay it back in “confetti money” as they did in Weimar Germany in 1923 (they kept the real assets – making one of the quickest and largest transfers of real assets ever seen in an advanced economy).

    Banking should be a public utility. If you leave banking in the present hands, you’re leaving it in the hands of the kind of crooks that brought about the financial crisis of 2008.

    True.

    Their repeated lawbreaking and criminal activities have been shown to be endemic in the US. But nobody goes to jail. You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution. It’s much like drug dealers paying off crooked police forces. So crime is pouring into the financial system.

    True.

    If you don’t have a legal system that throws crooks in jail, your economy is going to be transformed into something unpleasant.

    And not only the economy. When Special Interests own Congress and the MSM they can loot the economy, fabricate fake WMD stories and launch their macabre 9/11 theatre show with no fear of reprisal.

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  39. Miller says:
    @Linda Green
    If the options for infrastructure finance (maintenance and expansion of roads in particular) are basically:

    - Soak the rich (taxes go up on the haves to pay)
    - Some degree of monetary finance (money will be earned into existence rather than loaned into existence)
    - Selling off the commons (the rich buy the infrastructure and charge the masses to use it)
    - Continued patchwork of debt finance and can kicking

    I would say monetary finance would make everyone short of the greedy asshole that wants to buy the highways happy.

    I am fully aware that we have the appearance of a shortage of responsible enough parties to handle this sort of proposition. If it were widely known and the left got wind of it they would likely have brawndo water fountains on every corner. But Gary Cohn has not left the White House yet, and he is just the sort of guy that can pull something like this off through some acronym backed with hard facts and a near guarantee of success. We need to back away from socialism writ large and focus on long term sustained full employment with a gradual return to free market principles in all area of commerce.

    In my economic utopia full employment and maintenance of infrastructure would be at the top of central bank or FED area of concern.

    Medical care is expensive because it is subsidized and corrupted. Let the medical care bubble burst and let doctors compete for patients like other area of commerce. Until we figure out how to do that there will be no affordable medicine for the masses.

    Your comment re the cost of medical care can be applied to the bloated cost of higher education as well as defense spending, prescription drugs, etc. Whenever the Govt offers subsidies or debt guarantees and fails to use this leverage to negotiate price limits as a condition, “inflation” in that sector will surely follow. It is intended to do so.

    Medical inflation also a result of residency requirements and limits, keeping supply of foreign doctors low.

    One of the stated Fed mandates is “Full Employment” but one would never imagine this to be the case.

    Good stuff, I’ve enjoyed your posts on this topic.

    Read More
    • Replies: @dc.sunsets

    Medical inflation also a result of residency requirements and limits, keeping supply of foreign doctors low.
     
    Is this satire? Have you actually been in any hospital lately? Half of the white coats are Indian (dot, not feather.) I think there are more Brahmans in the USA than South Asia.

    The Medical-Insurance-Industrial Cartel is a make-work scheme for what is becoming known as the Working Wealthy.

    The last 36 years have seen the largest credit bubble in recorded history arise. This fueled credit inflation on a similarly grand scale, but since that purchasing power went into asset prices (FIRE), medical services, higher ed and the good-ole' Military Industrial Complex, Joe Citizen is relatively okay with it...it's not COUNTED as inflation. Joe is especially happy if he has a nice-paying job in one of those bubble-supported industries. They're the last places a person can get a decent-paying job.

    When the bubble bursts, credit inflation will evaporate, taking with it both the mechanical and mental support for all those industries. Demand in them (and prices) will collapse vertically when the ability to borrow purchasing power into existence from nowhere ceases.

    This is perhaps the most interesting experiment in monetary madness ever.

    You can't have an economy based on mutual robbery last forever.

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  40. @Skeptikal
    What is AFFH?

    Affirmatively Furthering Fair Housing– comin’ to hood near you!!

    Read More
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  41. Where is the money? (Purchasing power)
    This analysis is a nonsens.

    Read More
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  42. @Miller
    Your comment re the cost of medical care can be applied to the bloated cost of higher education as well as defense spending, prescription drugs, etc. Whenever the Govt offers subsidies or debt guarantees and fails to use this leverage to negotiate price limits as a condition, "inflation" in that sector will surely follow. It is intended to do so.

    Medical inflation also a result of residency requirements and limits, keeping supply of foreign doctors low.

    One of the stated Fed mandates is "Full Employment" but one would never imagine this to be the case.

    Good stuff, I've enjoyed your posts on this topic.

    Medical inflation also a result of residency requirements and limits, keeping supply of foreign doctors low.

    Is this satire? Have you actually been in any hospital lately? Half of the white coats are Indian (dot, not feather.) I think there are more Brahmans in the USA than South Asia.

    The Medical-Insurance-Industrial Cartel is a make-work scheme for what is becoming known as the Working Wealthy.

    The last 36 years have seen the largest credit bubble in recorded history arise. This fueled credit inflation on a similarly grand scale, but since that purchasing power went into asset prices (FIRE), medical services, higher ed and the good-ole’ Military Industrial Complex, Joe Citizen is relatively okay with it…it’s not COUNTED as inflation. Joe is especially happy if he has a nice-paying job in one of those bubble-supported industries. They’re the last places a person can get a decent-paying job.

    When the bubble bursts, credit inflation will evaporate, taking with it both the mechanical and mental support for all those industries. Demand in them (and prices) will collapse vertically when the ability to borrow purchasing power into existence from nowhere ceases.

    This is perhaps the most interesting experiment in monetary madness ever.

    You can’t have an economy based on mutual robbery last forever.

    Read More
    • Replies: @Miller
    The AMA does not recognize residency performed in other countries, prospective doctors have to fulfill residency here. Just because many ARE foreign, doesn't mean we couldn't do with a whole lot more. This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation. No one in the gravy train wants this to happen despite a very real shortage of GPs and geriatric specialists.

    In all reality an insured person should be able to travel to another country for treatment and have the same $ coverage they get in the US, same for prescription meds. Not even to a third world country, an MRI in Europe is 1/5 the US price, prescription drugs offer even bigger savings. That's how competition works, or doesn't in the case of health care in the US.

    From an article on the subject:

    ----In order to become practicing physicians, graduates must complete at least three years of residency training, usually in large teaching hospitals. Without more residency slots, the number of physicians entering the workforce cannot increase. (If the number of U.S. medical school graduates increased, but the cap were left in place, graduates of U.S. medical schools, who have preference for residency slots, would replace graduates of foreign schools, but that would have no net impact on total physician supply.)

    The logjam in residency openings stems from the 1997 Balanced Budget Act. At that time, the number of residency slots funded by Medicare (the principal source of residency funding) was capped at around 100,000, and that cap has remained in place ever since.----
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  43. @dc.sunsets
    The theory to which I subscribe holds that such conditions are not under the control of the people who manage government, business or any other sector. 2008 reminds us of their impotence. The next time will remove all doubt.

    I expect a wave of failures and tsunamis of social change that lie in uncharted waters ahead. By the theory of alternation what's coming will be different in specifics from the other 1930's, and will thus fool people.

    I expect the crisis, when it arrives in earnest, to look like a shortage of money (because most money now is credit, and little of today's credit will survive in a low-social-trust environment.

    And who knows, you might be a long-lived person "fortunate enough" to navigate through the uncharted waters ahead.

    The difference in our outlooks is partly an argument over how much pressure the boiler can stand before it blows, but the system is far more complex than the old fashioned single chamber boiler so the argument is also more complex.

    To me the system is composed of the entire growing human population and the earth that supports it (with its systems). The financial credit system is one component, one subsystem. The system of supply and distribution of goods is another, and, I contend, the system that is at issue on the maintenance of the population. Certainly the two subsystems are interconnected.

    I contend that because in our increasingly fragile world the failure of the financial system would collapse the supply and distribution of goods, the financial system will be “modified” (essentially discarded) in a similar (not “identical”) fashion to the “saving” of General Motors. I do understand that this scrapping will affect other dependent, interconnected, subsystems (see below), but I believe there will be lags between them that will obscure to most eyes the fact that one failure makes the next inevitable.

    The law(s) to enable the scrapping of the financial system are already on the books, primarily in the form of the Defense Production Act(s) and the Patriot Act (The Patriot Act provides the enforcement “muscle”). Notice that the laws were passed in response to very real threats to the increasingly fragile system, as was the law creating the Federal Reserve system. The powers of the executive branch dwarf the powers that Hitler had once an emergency is declared.

    The most important two subsystems that will be affected by the scrapping of the financial system will be the system of “international cooperation” and the “Pax Americana”. These two subsystems are so interconnected that one is barely distinguishable from the other, but they both depend on credit growth.

    “International cooperation” could actually increase, but if it does it will only do so by crushing dissent (one man’s terrorist is another man’s freedom fighter). On the other hand it seems more likely to me that we might see the world evolve down into more well defined “spheres of influence.” Neither circumstance is conducive to stability in a world where the ability to create bio weapons capable of significantly reducing human population is expanding at an exponential rate.

    As Le Chatelier tells us, a system under stress acts in a direction to relieve the stress. Some futurists argue that accelerated human evolution, aided by technology, will avoid the above course. They’d better hurry up.

    Read More
    • Replies: @another fred

    Neither circumstance is conducive to stability in a world where the ability to create bio weapons capable of significantly reducing human population is expanding at an exponential rate.
     
    To clarify, I contend that there are two significant sub-populations in a Venn diagram of the world, those with the ability to create such weapons and those with the willingness to deploy them. The Venn diagrams of these two sub-populations do not currently intersect but I contend that both populations exist.

    The population of those with the ability is assuredly growing as the technology expands both in its power and its simplicity (more people have access as the technical and financial requirements decrease). I argue that the population of the willing will increase, but that is not required.

    The "Mission Impossible" is to keep the two circles from ever touching.
    , @dc.sunsets
    I think you're giving way too much credit to the ability of Central Planning to succeed.

    My viewpoint is based on very, very simple axioms, one of which is implied by Say's Law: You can't consume that which hasn't been produced.

    The modern debt-saturated economy cannot be sustained, and it can't be reformed either. Anyone who tells you otherwise is misinformed or lying, because I really don't care if it's GM or the Pentagon, central planning cannot allocate resources efficiently (enough.)

    Mises proved this in 1922, almost a century ago, yet here we are with people still trying to square that circle. Allocation of the factors of production cannot be accomplished in the absence of factor prices, and those don't exist apart from a market.

    Our current morass is such a caricature of a market that we know, without even looking, that resource allocation is indescribably wasteful. I was just in a huge hospital yesterday and it looks to me like a vast albatross, unable to survive any shrinkage of (misallocating) resources that feed it.

    We have a division of labor economy that has become so rigidly fixed by sclerosis and regulatory fiat that entire industries will simply lock up, tetanus-like, if perturbed. And protecting them from perturbation will be like juggling a dozen chainsaws running at full speed. [And our political economy is morphing into a division of entitlement version.]

    It. Doesn't. Work. They tried it in the 1930's and all "they" did was make things worse. The bust in 1936/37 was so bad that, had it not occurred DURING the Great Depression, it would have qualified for its own label as a depression.

    Robert Higgs has done yeoman's work documenting that living standards in the USA, utterly crushed by the initial decline in 1930-32, did not recover until 1946. The war simply extended deprivation of the depression under the label "War Socialism."

    No man or group of men is wise enough to plan a complex system. It's axiomatically impossible. And politics, not reason, is what drives interventions. Even if someone did know what was a good idea (example: listen to Karl Denninger on the medical cartel and enforce the Sherman Act against price collusion), it would NEVER be implemented because too many politically-relevant oxen get gored. FDR's attempts to end the GD were in fact political handouts that went almost exclusively to swing-states for upcoming elections. It was naked vote-buying, not wise stewardship. Would anyone care to claim anything less vicious and corrupt would occur now?

    We got this cesspool of a monetary/financial/economic system because that's what the complex system ultimately served up. We'll get what follows this the exact same way, spontaneously.

    As to the bioweapon thing, yeah, I get that. Frankly, it applies to nukes, too. Every single thing that exists, weapon wise, will eventually be used. The only question is when. Given centuries or millennia, the human race will certainly experience a full scale nuclear and/or biological war. Whether the species survives is unknown. Nothing lasts for ever.

    What makes us interesting, tool-making apes, got completely out of hand once each generation was able to capitalize on the accumulated knowledge of its ancestors. We are not all that smart, individually, but our collective capacity for destruction, when amplified that way, seems infinite.

    I'm an ant, riding on a leaf that floats down a wide river. I don't change the course of the river; no one can.
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  44. Miller says:
    @dc.sunsets

    Medical inflation also a result of residency requirements and limits, keeping supply of foreign doctors low.
     
    Is this satire? Have you actually been in any hospital lately? Half of the white coats are Indian (dot, not feather.) I think there are more Brahmans in the USA than South Asia.

    The Medical-Insurance-Industrial Cartel is a make-work scheme for what is becoming known as the Working Wealthy.

    The last 36 years have seen the largest credit bubble in recorded history arise. This fueled credit inflation on a similarly grand scale, but since that purchasing power went into asset prices (FIRE), medical services, higher ed and the good-ole' Military Industrial Complex, Joe Citizen is relatively okay with it...it's not COUNTED as inflation. Joe is especially happy if he has a nice-paying job in one of those bubble-supported industries. They're the last places a person can get a decent-paying job.

    When the bubble bursts, credit inflation will evaporate, taking with it both the mechanical and mental support for all those industries. Demand in them (and prices) will collapse vertically when the ability to borrow purchasing power into existence from nowhere ceases.

    This is perhaps the most interesting experiment in monetary madness ever.

    You can't have an economy based on mutual robbery last forever.

    The AMA does not recognize residency performed in other countries, prospective doctors have to fulfill residency here. Just because many ARE foreign, doesn’t mean we couldn’t do with a whole lot more. This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation. No one in the gravy train wants this to happen despite a very real shortage of GPs and geriatric specialists.

    In all reality an insured person should be able to travel to another country for treatment and have the same $ coverage they get in the US, same for prescription meds. Not even to a third world country, an MRI in Europe is 1/5 the US price, prescription drugs offer even bigger savings. That’s how competition works, or doesn’t in the case of health care in the US.

    From an article on the subject:

    —-In order to become practicing physicians, graduates must complete at least three years of residency training, usually in large teaching hospitals. Without more residency slots, the number of physicians entering the workforce cannot increase. (If the number of U.S. medical school graduates increased, but the cap were left in place, graduates of U.S. medical schools, who have preference for residency slots, would replace graduates of foreign schools, but that would have no net impact on total physician supply.)

    The logjam in residency openings stems from the 1997 Balanced Budget Act. At that time, the number of residency slots funded by Medicare (the principal source of residency funding) was capped at around 100,000, and that cap has remained in place ever since.—-

    Read More
    • Replies: @anarchyst
    The same situation applies to military medics and corpsmen. Their military training (and battlefield medical experiences) cannot be used for "credit" in any institution that trains medical professionals, here in the USA. Many of these military medics and corpsmen have done procedures in the field that only doctors would do here in the USA, but due to shortsighted decisions by our "educational institutions", none of that valuable experience counts. A medic or corpsman has to start at the bottom, regardless of field medical experience. THAT needs to change...
    , @dc.sunsets
    Medicine does not price via supply and demand. This was proved decades ago in studies that showed that the more hospitals a town has, the HIGHER are costs.

    There are very simple reasons for this, having to do with the "insurance" model (which is not insurance at all, but prepaid, open-ended services processed through "insurance" companies who are guaranteed a certain profit margin, therefore they have zero incentive to reduce billings (in fact, insurance companies encourage high billings outright.)

    More doctors doesn't mean lower doctor prices. Your entire premise is flawed.

    It is my assertion that upwards of 80% of medical services in the USA are either unnecessary or outright harmful (example: prescription drugs administered to treat adverse drug effects of OTHER prescription drugs; it's assumed that anyone on 5 or more meds experiences such ADEs.) The notion that Americans need MORE medical intervention is simply not supported.

    In point of fact, Americans have an ADDICTION to facile "solutions" promised by our modern Snake Oil salesmen. Fat? Take a pill, or undergo a procedure. Got osteoporosis? Take a pill, don't get off your butt and do some weight-bearing exercise. Pre-diabetic? Take a few pills, don't cut out the carbs from your diet.

    (I argued with an internist not long ago; he objected to my claim that doctors push high carb diets. I pointed out that when doctors push low fat diets, what do they think is substituted? FTR, protein in excess of need is simply broken into nitrogenous compounds and-----carbs, so he was quite literally a fool, albeit a well-credentialed one. If you say Lower your intake of A, and the available choices are A, B or C and B in excess is cleaved into C anyway.... duh.)

    Americans spend more time with physicians, getting more drugs and undergoing more procedures than anyone on Earth, yet Americans have far from the best healthcare outcomes. More of what ails us is far from a good prescription.
    , @MarkinLA
    This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation.

    You need to go to places like Monterey Park full of Chinese immigrants - especially the Medicare eligible parents of immigrant children on family unification visas to see how they operate. The more Chinese doctors there are, the more those people see them on a regular basis (for any ache or pain) and the more the Chinese doctors bill Medicare. The good doctors don't even charge the copay which makes the hypochondriacs see them even more. The doctors are happy to lose the income from the copay to make sure you visit them every week.
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  45. anarchyst says:
    @Miller
    The AMA does not recognize residency performed in other countries, prospective doctors have to fulfill residency here. Just because many ARE foreign, doesn't mean we couldn't do with a whole lot more. This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation. No one in the gravy train wants this to happen despite a very real shortage of GPs and geriatric specialists.

    In all reality an insured person should be able to travel to another country for treatment and have the same $ coverage they get in the US, same for prescription meds. Not even to a third world country, an MRI in Europe is 1/5 the US price, prescription drugs offer even bigger savings. That's how competition works, or doesn't in the case of health care in the US.

    From an article on the subject:

    ----In order to become practicing physicians, graduates must complete at least three years of residency training, usually in large teaching hospitals. Without more residency slots, the number of physicians entering the workforce cannot increase. (If the number of U.S. medical school graduates increased, but the cap were left in place, graduates of U.S. medical schools, who have preference for residency slots, would replace graduates of foreign schools, but that would have no net impact on total physician supply.)

    The logjam in residency openings stems from the 1997 Balanced Budget Act. At that time, the number of residency slots funded by Medicare (the principal source of residency funding) was capped at around 100,000, and that cap has remained in place ever since.----

    The same situation applies to military medics and corpsmen. Their military training (and battlefield medical experiences) cannot be used for “credit” in any institution that trains medical professionals, here in the USA. Many of these military medics and corpsmen have done procedures in the field that only doctors would do here in the USA, but due to shortsighted decisions by our “educational institutions”, none of that valuable experience counts. A medic or corpsman has to start at the bottom, regardless of field medical experience. THAT needs to change…

    Read More
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  46. @another fred
    The difference in our outlooks is partly an argument over how much pressure the boiler can stand before it blows, but the system is far more complex than the old fashioned single chamber boiler so the argument is also more complex.

    To me the system is composed of the entire growing human population and the earth that supports it (with its systems). The financial credit system is one component, one subsystem. The system of supply and distribution of goods is another, and, I contend, the system that is at issue on the maintenance of the population. Certainly the two subsystems are interconnected.

    I contend that because in our increasingly fragile world the failure of the financial system would collapse the supply and distribution of goods, the financial system will be "modified" (essentially discarded) in a similar (not "identical") fashion to the "saving" of General Motors. I do understand that this scrapping will affect other dependent, interconnected, subsystems (see below), but I believe there will be lags between them that will obscure to most eyes the fact that one failure makes the next inevitable.

    The law(s) to enable the scrapping of the financial system are already on the books, primarily in the form of the Defense Production Act(s) and the Patriot Act (The Patriot Act provides the enforcement "muscle"). Notice that the laws were passed in response to very real threats to the increasingly fragile system, as was the law creating the Federal Reserve system. The powers of the executive branch dwarf the powers that Hitler had once an emergency is declared.

    The most important two subsystems that will be affected by the scrapping of the financial system will be the system of "international cooperation" and the "Pax Americana". These two subsystems are so interconnected that one is barely distinguishable from the other, but they both depend on credit growth.

    "International cooperation" could actually increase, but if it does it will only do so by crushing dissent (one man's terrorist is another man's freedom fighter). On the other hand it seems more likely to me that we might see the world evolve down into more well defined "spheres of influence." Neither circumstance is conducive to stability in a world where the ability to create bio weapons capable of significantly reducing human population is expanding at an exponential rate.

    As Le Chatelier tells us, a system under stress acts in a direction to relieve the stress. Some futurists argue that accelerated human evolution, aided by technology, will avoid the above course. They'd better hurry up.

    Neither circumstance is conducive to stability in a world where the ability to create bio weapons capable of significantly reducing human population is expanding at an exponential rate.

    To clarify, I contend that there are two significant sub-populations in a Venn diagram of the world, those with the ability to create such weapons and those with the willingness to deploy them. The Venn diagrams of these two sub-populations do not currently intersect but I contend that both populations exist.

    The population of those with the ability is assuredly growing as the technology expands both in its power and its simplicity (more people have access as the technical and financial requirements decrease). I argue that the population of the willing will increase, but that is not required.

    The “Mission Impossible” is to keep the two circles from ever touching.

    Read More
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  47. @Miller
    The AMA does not recognize residency performed in other countries, prospective doctors have to fulfill residency here. Just because many ARE foreign, doesn't mean we couldn't do with a whole lot more. This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation. No one in the gravy train wants this to happen despite a very real shortage of GPs and geriatric specialists.

    In all reality an insured person should be able to travel to another country for treatment and have the same $ coverage they get in the US, same for prescription meds. Not even to a third world country, an MRI in Europe is 1/5 the US price, prescription drugs offer even bigger savings. That's how competition works, or doesn't in the case of health care in the US.

    From an article on the subject:

    ----In order to become practicing physicians, graduates must complete at least three years of residency training, usually in large teaching hospitals. Without more residency slots, the number of physicians entering the workforce cannot increase. (If the number of U.S. medical school graduates increased, but the cap were left in place, graduates of U.S. medical schools, who have preference for residency slots, would replace graduates of foreign schools, but that would have no net impact on total physician supply.)

    The logjam in residency openings stems from the 1997 Balanced Budget Act. At that time, the number of residency slots funded by Medicare (the principal source of residency funding) was capped at around 100,000, and that cap has remained in place ever since.----

    Medicine does not price via supply and demand. This was proved decades ago in studies that showed that the more hospitals a town has, the HIGHER are costs.

    There are very simple reasons for this, having to do with the “insurance” model (which is not insurance at all, but prepaid, open-ended services processed through “insurance” companies who are guaranteed a certain profit margin, therefore they have zero incentive to reduce billings (in fact, insurance companies encourage high billings outright.)

    More doctors doesn’t mean lower doctor prices. Your entire premise is flawed.

    It is my assertion that upwards of 80% of medical services in the USA are either unnecessary or outright harmful (example: prescription drugs administered to treat adverse drug effects of OTHER prescription drugs; it’s assumed that anyone on 5 or more meds experiences such ADEs.) The notion that Americans need MORE medical intervention is simply not supported.

    In point of fact, Americans have an ADDICTION to facile “solutions” promised by our modern Snake Oil salesmen. Fat? Take a pill, or undergo a procedure. Got osteoporosis? Take a pill, don’t get off your butt and do some weight-bearing exercise. Pre-diabetic? Take a few pills, don’t cut out the carbs from your diet.

    (I argued with an internist not long ago; he objected to my claim that doctors push high carb diets. I pointed out that when doctors push low fat diets, what do they think is substituted? FTR, protein in excess of need is simply broken into nitrogenous compounds and—–carbs, so he was quite literally a fool, albeit a well-credentialed one. If you say Lower your intake of A, and the available choices are A, B or C and B in excess is cleaved into C anyway…. duh.)

    Americans spend more time with physicians, getting more drugs and undergoing more procedures than anyone on Earth, yet Americans have far from the best healthcare outcomes. More of what ails us is far from a good prescription.

    Read More
    • Replies: @Miller
    I agree with the premise that most medical care is not needed or otherwise easily avoided with some simple lifestyle choices.

    That said, the "modern" life, in the US anyway, is one that leaves us bathed in chemicals and environmental toxins, from water to air to food. The increase in MS, food allergies and other autoimmune disorders is not psychosomatic. Chronic inflammation leads to depression and a host of other problems.

    Anyway...you're actually asserting that supply and demand are not at work, when other factors explain your findings.

    Communities that have more medical centers are liable to be more affluent in the first place. A budget car costs more in Westchester than in Buffalo, not because there are more Chevys in Buffalo but because the cost of living is higher in Westchester.

    Another factor is that when you aren't competing on availability, you're competing on quality. When it comes to health care people will pay more for an increase in quality. If all you have is WalMart, sneakers are pretty cheap. Throw in a Footlocker and the average price of sneakers goes up, and people will pay the higher price if they can. Throw in more outlets and everyone cuts their prices...or offers even better quality/more expensive sneakers for sale.

    Excess protein is only converted to carbs in the absence of carbs from other sources. Some is converted to carbs and would then be converted to fat...assuming you aren't burning enough carbs or fat (or are ingesting too much fat in your diet). Most is excreted and eliminated through sweat.

    When the Dr recommends lowering fat intake he isn't implying you make it up with carbs, though the proportion of carbs and proteins to fats will increase. They're telling you to eat less overall. If a Dr makes this recommendation without asking you what your average diet looks like you should ignore him/her and talk to a nutritionist.
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  48. @another fred
    The difference in our outlooks is partly an argument over how much pressure the boiler can stand before it blows, but the system is far more complex than the old fashioned single chamber boiler so the argument is also more complex.

    To me the system is composed of the entire growing human population and the earth that supports it (with its systems). The financial credit system is one component, one subsystem. The system of supply and distribution of goods is another, and, I contend, the system that is at issue on the maintenance of the population. Certainly the two subsystems are interconnected.

    I contend that because in our increasingly fragile world the failure of the financial system would collapse the supply and distribution of goods, the financial system will be "modified" (essentially discarded) in a similar (not "identical") fashion to the "saving" of General Motors. I do understand that this scrapping will affect other dependent, interconnected, subsystems (see below), but I believe there will be lags between them that will obscure to most eyes the fact that one failure makes the next inevitable.

    The law(s) to enable the scrapping of the financial system are already on the books, primarily in the form of the Defense Production Act(s) and the Patriot Act (The Patriot Act provides the enforcement "muscle"). Notice that the laws were passed in response to very real threats to the increasingly fragile system, as was the law creating the Federal Reserve system. The powers of the executive branch dwarf the powers that Hitler had once an emergency is declared.

    The most important two subsystems that will be affected by the scrapping of the financial system will be the system of "international cooperation" and the "Pax Americana". These two subsystems are so interconnected that one is barely distinguishable from the other, but they both depend on credit growth.

    "International cooperation" could actually increase, but if it does it will only do so by crushing dissent (one man's terrorist is another man's freedom fighter). On the other hand it seems more likely to me that we might see the world evolve down into more well defined "spheres of influence." Neither circumstance is conducive to stability in a world where the ability to create bio weapons capable of significantly reducing human population is expanding at an exponential rate.

    As Le Chatelier tells us, a system under stress acts in a direction to relieve the stress. Some futurists argue that accelerated human evolution, aided by technology, will avoid the above course. They'd better hurry up.

    I think you’re giving way too much credit to the ability of Central Planning to succeed.

    My viewpoint is based on very, very simple axioms, one of which is implied by Say’s Law: You can’t consume that which hasn’t been produced.

    The modern debt-saturated economy cannot be sustained, and it can’t be reformed either. Anyone who tells you otherwise is misinformed or lying, because I really don’t care if it’s GM or the Pentagon, central planning cannot allocate resources efficiently (enough.)

    Mises proved this in 1922, almost a century ago, yet here we are with people still trying to square that circle. Allocation of the factors of production cannot be accomplished in the absence of factor prices, and those don’t exist apart from a market.

    Our current morass is such a caricature of a market that we know, without even looking, that resource allocation is indescribably wasteful. I was just in a huge hospital yesterday and it looks to me like a vast albatross, unable to survive any shrinkage of (misallocating) resources that feed it.

    We have a division of labor economy that has become so rigidly fixed by sclerosis and regulatory fiat that entire industries will simply lock up, tetanus-like, if perturbed. And protecting them from perturbation will be like juggling a dozen chainsaws running at full speed. [And our political economy is morphing into a division of entitlement version.]

    It. Doesn’t. Work. They tried it in the 1930′s and all “they” did was make things worse. The bust in 1936/37 was so bad that, had it not occurred DURING the Great Depression, it would have qualified for its own label as a depression.

    Robert Higgs has done yeoman’s work documenting that living standards in the USA, utterly crushed by the initial decline in 1930-32, did not recover until 1946. The war simply extended deprivation of the depression under the label “War Socialism.”

    No man or group of men is wise enough to plan a complex system. It’s axiomatically impossible. And politics, not reason, is what drives interventions. Even if someone did know what was a good idea (example: listen to Karl Denninger on the medical cartel and enforce the Sherman Act against price collusion), it would NEVER be implemented because too many politically-relevant oxen get gored. FDR’s attempts to end the GD were in fact political handouts that went almost exclusively to swing-states for upcoming elections. It was naked vote-buying, not wise stewardship. Would anyone care to claim anything less vicious and corrupt would occur now?

    We got this cesspool of a monetary/financial/economic system because that’s what the complex system ultimately served up. We’ll get what follows this the exact same way, spontaneously.

    As to the bioweapon thing, yeah, I get that. Frankly, it applies to nukes, too. Every single thing that exists, weapon wise, will eventually be used. The only question is when. Given centuries or millennia, the human race will certainly experience a full scale nuclear and/or biological war. Whether the species survives is unknown. Nothing lasts for ever.

    What makes us interesting, tool-making apes, got completely out of hand once each generation was able to capitalize on the accumulated knowledge of its ancestors. We are not all that smart, individually, but our collective capacity for destruction, when amplified that way, seems infinite.

    I’m an ant, riding on a leaf that floats down a wide river. I don’t change the course of the river; no one can.

    Read More
    • Replies: @another fred

    I think you’re giving way too much credit to the ability of Central Planning to succeed.
     
    I didn't say it would work in any long term sense, just that it is the next logical phase as opposed to a total breakdown. I do not believe that government taking over finance will lead to any long term stability.

    Perhaps you do not believe that allowing cascading financial failures would lead to a catastrophic collapse of economic activity on the scale I describe. I contend that since small farms and businesses that can survive on barter are effectively gone, and since very few businesses operate on cash, a breakdown of the system would be far worse than '29-'30 if allowed to take its natural course. If credit cards stop working and government support does not flow, many millions of people will be starving and that will lead to changes, pronto

    As you have said, there will be social changes.

    As I said in my first comment, watch China. Our systems are so trade interconnected that it is not possible to separate everything that goes on, but they do have an isolated banking system. Some say they have the ability to keep bank failures from spreading when their debt web starts to unravel. The key will be their ability to keep business failures from cascading in the usual chain reaction in response to bank failures and maintain social order when some businesses inevitably fail putting people out of work.

    There are a lot of ways to skin that cat besides central planning. I believe that a lot of people are watching to see how China manages it.

    The supply and demand network is interconnected with the financial network, but they are not the same thing.
    , @another fred
    The important difference between nukes and biological weapons is the amount of infrastructure and time needed to develop them. A builder of nukes, by definition, has something to lose and that restrains him (therefore the fear of them falling into the "wrong hands"). With biological weapons the calculus changes.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  49. @dc.sunsets
    I think you're giving way too much credit to the ability of Central Planning to succeed.

    My viewpoint is based on very, very simple axioms, one of which is implied by Say's Law: You can't consume that which hasn't been produced.

    The modern debt-saturated economy cannot be sustained, and it can't be reformed either. Anyone who tells you otherwise is misinformed or lying, because I really don't care if it's GM or the Pentagon, central planning cannot allocate resources efficiently (enough.)

    Mises proved this in 1922, almost a century ago, yet here we are with people still trying to square that circle. Allocation of the factors of production cannot be accomplished in the absence of factor prices, and those don't exist apart from a market.

    Our current morass is such a caricature of a market that we know, without even looking, that resource allocation is indescribably wasteful. I was just in a huge hospital yesterday and it looks to me like a vast albatross, unable to survive any shrinkage of (misallocating) resources that feed it.

    We have a division of labor economy that has become so rigidly fixed by sclerosis and regulatory fiat that entire industries will simply lock up, tetanus-like, if perturbed. And protecting them from perturbation will be like juggling a dozen chainsaws running at full speed. [And our political economy is morphing into a division of entitlement version.]

    It. Doesn't. Work. They tried it in the 1930's and all "they" did was make things worse. The bust in 1936/37 was so bad that, had it not occurred DURING the Great Depression, it would have qualified for its own label as a depression.

    Robert Higgs has done yeoman's work documenting that living standards in the USA, utterly crushed by the initial decline in 1930-32, did not recover until 1946. The war simply extended deprivation of the depression under the label "War Socialism."

    No man or group of men is wise enough to plan a complex system. It's axiomatically impossible. And politics, not reason, is what drives interventions. Even if someone did know what was a good idea (example: listen to Karl Denninger on the medical cartel and enforce the Sherman Act against price collusion), it would NEVER be implemented because too many politically-relevant oxen get gored. FDR's attempts to end the GD were in fact political handouts that went almost exclusively to swing-states for upcoming elections. It was naked vote-buying, not wise stewardship. Would anyone care to claim anything less vicious and corrupt would occur now?

    We got this cesspool of a monetary/financial/economic system because that's what the complex system ultimately served up. We'll get what follows this the exact same way, spontaneously.

    As to the bioweapon thing, yeah, I get that. Frankly, it applies to nukes, too. Every single thing that exists, weapon wise, will eventually be used. The only question is when. Given centuries or millennia, the human race will certainly experience a full scale nuclear and/or biological war. Whether the species survives is unknown. Nothing lasts for ever.

    What makes us interesting, tool-making apes, got completely out of hand once each generation was able to capitalize on the accumulated knowledge of its ancestors. We are not all that smart, individually, but our collective capacity for destruction, when amplified that way, seems infinite.

    I'm an ant, riding on a leaf that floats down a wide river. I don't change the course of the river; no one can.

    I think you’re giving way too much credit to the ability of Central Planning to succeed.

    I didn’t say it would work in any long term sense, just that it is the next logical phase as opposed to a total breakdown. I do not believe that government taking over finance will lead to any long term stability.

    Perhaps you do not believe that allowing cascading financial failures would lead to a catastrophic collapse of economic activity on the scale I describe. I contend that since small farms and businesses that can survive on barter are effectively gone, and since very few businesses operate on cash, a breakdown of the system would be far worse than ’29-’30 if allowed to take its natural course. If credit cards stop working and government support does not flow, many millions of people will be starving and that will lead to changes, pronto

    As you have said, there will be social changes.

    As I said in my first comment, watch China. Our systems are so trade interconnected that it is not possible to separate everything that goes on, but they do have an isolated banking system. Some say they have the ability to keep bank failures from spreading when their debt web starts to unravel. The key will be their ability to keep business failures from cascading in the usual chain reaction in response to bank failures and maintain social order when some businesses inevitably fail putting people out of work.

    There are a lot of ways to skin that cat besides central planning. I believe that a lot of people are watching to see how China manages it.

    The supply and demand network is interconnected with the financial network, but they are not the same thing.

    Read More
    • Replies: @dc.sunsets
    I'm afraid I must disagree, perhaps only on terms, but it matters to me.

    There is the market.
    There is planning.
    There is no half measure. There is only a question of how much of the market is prevented from operation.

    I'm not a market zealot anymore. For instance, I really don't care if GDP might rise if the USA increased legal immigration from 1 million to 8 million per year. GDP is a terrible measure, WHO gets rich and on whom the costs fall (not the same people, of course) is THE problem with concentrated benefit, diffuse cost (also known as economic pollution.)

    But the degree to which you posit that something can be massaged in my opinion completely subsumes the market.

    What I fully expect, consistent with your views, is an ATTEMPT to take over the structure of production by either bureaucratic regimentation or the US military. It will fail spectacularly, Venezuela-style.

    Ditto the monetary system. Economists think electronic, fiat money that is nearly 100% credit somehow better lubricates the gears of commerce. They're NUTS. It puts money entirely (instead of just partly) under the control of animal spirits.

    Who creates credit? And how is it turned into money? I submit that few people understand this (I only vaguely do.) But one thing I'm pretty sure of is that credit is synonymous with trust. Bank credit all but froze up in 2008. But it wasn't quite time for it, so a thaw arrived (right at market capitulation, where it should.)

    Let me ask you a question. What is interest? I see it as the cost of renting money. What did zero interest rates imply? There was nearly zero demand to rent money, so its price fell to essentially zero. Credit becomes money only when it's borrowed. But borrowers can hit a point where they have no more means of carrying the payments. Demand falls to zero.

    Now if the state (or its corporate minions) step in and borrow like drunken sailor loose in a whorehouse with a no limit credit card, does that occur in a vacuum? No. If people are generally waxing toward distrust, they'll see that as vicious politicians lining their pockets, showering their buddies with loot, buying the next election by burdening taxpayers with the payments.

    The bums will be thrown out in a PILE. (It's coming.)

    I submit to you that we got to this place NOW already because TPTB have moved heaven and earth to keep the game running. They're almost out of rope, and then it's hanging time.

    I understand your position on the chaos that results from this. I see it too, but my view is that people are innovative, and given the necessity, they'll be inventive. I see regionalism rising Big Time. I'd not be shocked to see a couple states get together, flip the bird to Uncle Sam and then watch Uncle Sam pull a USSR and simply evaporate. Not in the next couple years, but in 20? Sure. Depending on what happens between now and then, of course.

    My position is, what you posit as the reflex to a crisis was already rolled out in 2002-3 and in 2009-10. The next time it won't work, because the next time really is different. Bottoms like 02/03 and 09 come amidst capitulation. Now, people have learned to NEVER capitulate.

    That's a very bad thing, the necessary precursor to a 95% collapse in asset values and an historic collapse in the (credit) money supply.

    By its end, I have no doubt that those in Authority will literally try reflating the economy with banknotes. I expect that first they'll introduce printed notes of very large denomination "just for inter-bank use." But eventually it will prove too tempting to run the presses red-hot, and the government will suffer a catastrophic breakdown in trust called hyperinflation. You and I know that's the endgame for this cycle, and then something new will come along.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  50. @dc.sunsets
    I think you're giving way too much credit to the ability of Central Planning to succeed.

    My viewpoint is based on very, very simple axioms, one of which is implied by Say's Law: You can't consume that which hasn't been produced.

    The modern debt-saturated economy cannot be sustained, and it can't be reformed either. Anyone who tells you otherwise is misinformed or lying, because I really don't care if it's GM or the Pentagon, central planning cannot allocate resources efficiently (enough.)

    Mises proved this in 1922, almost a century ago, yet here we are with people still trying to square that circle. Allocation of the factors of production cannot be accomplished in the absence of factor prices, and those don't exist apart from a market.

    Our current morass is such a caricature of a market that we know, without even looking, that resource allocation is indescribably wasteful. I was just in a huge hospital yesterday and it looks to me like a vast albatross, unable to survive any shrinkage of (misallocating) resources that feed it.

    We have a division of labor economy that has become so rigidly fixed by sclerosis and regulatory fiat that entire industries will simply lock up, tetanus-like, if perturbed. And protecting them from perturbation will be like juggling a dozen chainsaws running at full speed. [And our political economy is morphing into a division of entitlement version.]

    It. Doesn't. Work. They tried it in the 1930's and all "they" did was make things worse. The bust in 1936/37 was so bad that, had it not occurred DURING the Great Depression, it would have qualified for its own label as a depression.

    Robert Higgs has done yeoman's work documenting that living standards in the USA, utterly crushed by the initial decline in 1930-32, did not recover until 1946. The war simply extended deprivation of the depression under the label "War Socialism."

    No man or group of men is wise enough to plan a complex system. It's axiomatically impossible. And politics, not reason, is what drives interventions. Even if someone did know what was a good idea (example: listen to Karl Denninger on the medical cartel and enforce the Sherman Act against price collusion), it would NEVER be implemented because too many politically-relevant oxen get gored. FDR's attempts to end the GD were in fact political handouts that went almost exclusively to swing-states for upcoming elections. It was naked vote-buying, not wise stewardship. Would anyone care to claim anything less vicious and corrupt would occur now?

    We got this cesspool of a monetary/financial/economic system because that's what the complex system ultimately served up. We'll get what follows this the exact same way, spontaneously.

    As to the bioweapon thing, yeah, I get that. Frankly, it applies to nukes, too. Every single thing that exists, weapon wise, will eventually be used. The only question is when. Given centuries or millennia, the human race will certainly experience a full scale nuclear and/or biological war. Whether the species survives is unknown. Nothing lasts for ever.

    What makes us interesting, tool-making apes, got completely out of hand once each generation was able to capitalize on the accumulated knowledge of its ancestors. We are not all that smart, individually, but our collective capacity for destruction, when amplified that way, seems infinite.

    I'm an ant, riding on a leaf that floats down a wide river. I don't change the course of the river; no one can.

    The important difference between nukes and biological weapons is the amount of infrastructure and time needed to develop them. A builder of nukes, by definition, has something to lose and that restrains him (therefore the fear of them falling into the “wrong hands”). With biological weapons the calculus changes.

    Read More
    • Replies: @dc.sunsets
    Stealth with bugs is perhaps more plausible. And perhaps not.

    As with homemade bombs, homemade pathogenic bacteria have a tendency to kill the maker before he gets too far. Swatting up some Bacillus anthrasis isn't for kids, and don't begin to discuss the difficulties of virus engineering. The Japanese were way into that during WWII, so much so that at war's end, all of their research was swept into dark corners of the Pentagon. They were using (mostly) Chinese as both guinea pigs and production vessels.

    It still takes infrastructure. And biological agents still have traceable DNA. Notice that the Anthrax attacks in 2001 were with an AMERICAN bioweapon variety. Or don't notice...because that all went down the Memory Hole so fast there was a sonic boom.

    If there's a biological war, it will still be extremely well-funded adversaries that field it. Nowadays that includes tech billionaires, and half of them are nuttier than fruitcakes, so your venn diagram intersection is still a worry.

    The ideological war in place now between left and right ends from the left perspective when there are no more people still alive who MIGHT harbor evil thoughts. That's an end with one survivor left standing. ONE.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  51. Miller says:
    @dc.sunsets
    Medicine does not price via supply and demand. This was proved decades ago in studies that showed that the more hospitals a town has, the HIGHER are costs.

    There are very simple reasons for this, having to do with the "insurance" model (which is not insurance at all, but prepaid, open-ended services processed through "insurance" companies who are guaranteed a certain profit margin, therefore they have zero incentive to reduce billings (in fact, insurance companies encourage high billings outright.)

    More doctors doesn't mean lower doctor prices. Your entire premise is flawed.

    It is my assertion that upwards of 80% of medical services in the USA are either unnecessary or outright harmful (example: prescription drugs administered to treat adverse drug effects of OTHER prescription drugs; it's assumed that anyone on 5 or more meds experiences such ADEs.) The notion that Americans need MORE medical intervention is simply not supported.

    In point of fact, Americans have an ADDICTION to facile "solutions" promised by our modern Snake Oil salesmen. Fat? Take a pill, or undergo a procedure. Got osteoporosis? Take a pill, don't get off your butt and do some weight-bearing exercise. Pre-diabetic? Take a few pills, don't cut out the carbs from your diet.

    (I argued with an internist not long ago; he objected to my claim that doctors push high carb diets. I pointed out that when doctors push low fat diets, what do they think is substituted? FTR, protein in excess of need is simply broken into nitrogenous compounds and-----carbs, so he was quite literally a fool, albeit a well-credentialed one. If you say Lower your intake of A, and the available choices are A, B or C and B in excess is cleaved into C anyway.... duh.)

    Americans spend more time with physicians, getting more drugs and undergoing more procedures than anyone on Earth, yet Americans have far from the best healthcare outcomes. More of what ails us is far from a good prescription.

    I agree with the premise that most medical care is not needed or otherwise easily avoided with some simple lifestyle choices.

    That said, the “modern” life, in the US anyway, is one that leaves us bathed in chemicals and environmental toxins, from water to air to food. The increase in MS, food allergies and other autoimmune disorders is not psychosomatic. Chronic inflammation leads to depression and a host of other problems.

    Anyway…you’re actually asserting that supply and demand are not at work, when other factors explain your findings.

    Communities that have more medical centers are liable to be more affluent in the first place. A budget car costs more in Westchester than in Buffalo, not because there are more Chevys in Buffalo but because the cost of living is higher in Westchester.

    Another factor is that when you aren’t competing on availability, you’re competing on quality. When it comes to health care people will pay more for an increase in quality. If all you have is WalMart, sneakers are pretty cheap. Throw in a Footlocker and the average price of sneakers goes up, and people will pay the higher price if they can. Throw in more outlets and everyone cuts their prices…or offers even better quality/more expensive sneakers for sale.

    Excess protein is only converted to carbs in the absence of carbs from other sources. Some is converted to carbs and would then be converted to fat…assuming you aren’t burning enough carbs or fat (or are ingesting too much fat in your diet). Most is excreted and eliminated through sweat.

    When the Dr recommends lowering fat intake he isn’t implying you make it up with carbs, though the proportion of carbs and proteins to fats will increase. They’re telling you to eat less overall. If a Dr makes this recommendation without asking you what your average diet looks like you should ignore him/her and talk to a nutritionist.

    Read More
    • Replies: @dc.sunsets
    I understand your attributions of cost, but I disagree.

    Communities with more hospitals are NOT more affluent. Take Rockford IL. NOT affluent, three hospitals, way more costly care than other communities with one hospital.

    Why?

    They compete on the basis of services offered. Each had to have the latest and greatest technology.

    My point is, you are (IMO) entirely wrong in your premise. There is no bargain-basement care option vs the Mercedes Benz care option. Everyone expects and demands the Mercedes. Unless people are paying their own bills directly (and not socializing the costs) there cannot possibly be demand-based pricing.

    And your position re: diet makes no sense. Low fat recommendations are not "eat less" recommendations. If your doctor wishes to say, eat less, are you suggesting he or she is incapable?
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  52. @another fred
    The important difference between nukes and biological weapons is the amount of infrastructure and time needed to develop them. A builder of nukes, by definition, has something to lose and that restrains him (therefore the fear of them falling into the "wrong hands"). With biological weapons the calculus changes.

    Stealth with bugs is perhaps more plausible. And perhaps not.

    As with homemade bombs, homemade pathogenic bacteria have a tendency to kill the maker before he gets too far. Swatting up some Bacillus anthrasis isn’t for kids, and don’t begin to discuss the difficulties of virus engineering. The Japanese were way into that during WWII, so much so that at war’s end, all of their research was swept into dark corners of the Pentagon. They were using (mostly) Chinese as both guinea pigs and production vessels.

    It still takes infrastructure. And biological agents still have traceable DNA. Notice that the Anthrax attacks in 2001 were with an AMERICAN bioweapon variety. Or don’t notice…because that all went down the Memory Hole so fast there was a sonic boom.

    If there’s a biological war, it will still be extremely well-funded adversaries that field it. Nowadays that includes tech billionaires, and half of them are nuttier than fruitcakes, so your venn diagram intersection is still a worry.

    The ideological war in place now between left and right ends from the left perspective when there are no more people still alive who MIGHT harbor evil thoughts. That’s an end with one survivor left standing. ONE.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  53. @another fred

    I think you’re giving way too much credit to the ability of Central Planning to succeed.
     
    I didn't say it would work in any long term sense, just that it is the next logical phase as opposed to a total breakdown. I do not believe that government taking over finance will lead to any long term stability.

    Perhaps you do not believe that allowing cascading financial failures would lead to a catastrophic collapse of economic activity on the scale I describe. I contend that since small farms and businesses that can survive on barter are effectively gone, and since very few businesses operate on cash, a breakdown of the system would be far worse than '29-'30 if allowed to take its natural course. If credit cards stop working and government support does not flow, many millions of people will be starving and that will lead to changes, pronto

    As you have said, there will be social changes.

    As I said in my first comment, watch China. Our systems are so trade interconnected that it is not possible to separate everything that goes on, but they do have an isolated banking system. Some say they have the ability to keep bank failures from spreading when their debt web starts to unravel. The key will be their ability to keep business failures from cascading in the usual chain reaction in response to bank failures and maintain social order when some businesses inevitably fail putting people out of work.

    There are a lot of ways to skin that cat besides central planning. I believe that a lot of people are watching to see how China manages it.

    The supply and demand network is interconnected with the financial network, but they are not the same thing.

    I’m afraid I must disagree, perhaps only on terms, but it matters to me.

    There is the market.
    There is planning.
    There is no half measure. There is only a question of how much of the market is prevented from operation.

    I’m not a market zealot anymore. For instance, I really don’t care if GDP might rise if the USA increased legal immigration from 1 million to 8 million per year. GDP is a terrible measure, WHO gets rich and on whom the costs fall (not the same people, of course) is THE problem with concentrated benefit, diffuse cost (also known as economic pollution.)

    But the degree to which you posit that something can be massaged in my opinion completely subsumes the market.

    What I fully expect, consistent with your views, is an ATTEMPT to take over the structure of production by either bureaucratic regimentation or the US military. It will fail spectacularly, Venezuela-style.

    Ditto the monetary system. Economists think electronic, fiat money that is nearly 100% credit somehow better lubricates the gears of commerce. They’re NUTS. It puts money entirely (instead of just partly) under the control of animal spirits.

    Who creates credit? And how is it turned into money? I submit that few people understand this (I only vaguely do.) But one thing I’m pretty sure of is that credit is synonymous with trust. Bank credit all but froze up in 2008. But it wasn’t quite time for it, so a thaw arrived (right at market capitulation, where it should.)

    Let me ask you a question. What is interest? I see it as the cost of renting money. What did zero interest rates imply? There was nearly zero demand to rent money, so its price fell to essentially zero. Credit becomes money only when it’s borrowed. But borrowers can hit a point where they have no more means of carrying the payments. Demand falls to zero.

    Now if the state (or its corporate minions) step in and borrow like drunken sailor loose in a whorehouse with a no limit credit card, does that occur in a vacuum? No. If people are generally waxing toward distrust, they’ll see that as vicious politicians lining their pockets, showering their buddies with loot, buying the next election by burdening taxpayers with the payments.

    The bums will be thrown out in a PILE. (It’s coming.)

    I submit to you that we got to this place NOW already because TPTB have moved heaven and earth to keep the game running. They’re almost out of rope, and then it’s hanging time.

    I understand your position on the chaos that results from this. I see it too, but my view is that people are innovative, and given the necessity, they’ll be inventive. I see regionalism rising Big Time. I’d not be shocked to see a couple states get together, flip the bird to Uncle Sam and then watch Uncle Sam pull a USSR and simply evaporate. Not in the next couple years, but in 20? Sure. Depending on what happens between now and then, of course.

    My position is, what you posit as the reflex to a crisis was already rolled out in 2002-3 and in 2009-10. The next time it won’t work, because the next time really is different. Bottoms like 02/03 and 09 come amidst capitulation. Now, people have learned to NEVER capitulate.

    That’s a very bad thing, the necessary precursor to a 95% collapse in asset values and an historic collapse in the (credit) money supply.

    By its end, I have no doubt that those in Authority will literally try reflating the economy with banknotes. I expect that first they’ll introduce printed notes of very large denomination “just for inter-bank use.” But eventually it will prove too tempting to run the presses red-hot, and the government will suffer a catastrophic breakdown in trust called hyperinflation. You and I know that’s the endgame for this cycle, and then something new will come along.

    Read More
    • Replies: @dc.sunsets
    I might add, regarding interest rates, that as they rise now (in the shadow of Mt. Vesuvi-debt), it won't be because demand to rent money is rising.

    It will be because debt-holders begin to wonder if they'll get their money back, and become less willing to lend (demanding higher compensation for the risk of being stiffed.)

    It will be truly amazing to watch the last 36 years go into reverse, moving from holding long term debt as a risk-free capital gains generator to holding long term debt being the graveyard of capital.
    , @another fred
    I neglected to hit "REPLY" before my last comment.

    You and I know that’s the endgame for this cycle, and then something new will come along.
     
    I doubt that we can see a new beginning with the population we have (both numbers and composition must be considered). Maybe population will drop by some slow process, but a sudden drop looks more probable.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  54. @dc.sunsets
    I'm afraid I must disagree, perhaps only on terms, but it matters to me.

    There is the market.
    There is planning.
    There is no half measure. There is only a question of how much of the market is prevented from operation.

    I'm not a market zealot anymore. For instance, I really don't care if GDP might rise if the USA increased legal immigration from 1 million to 8 million per year. GDP is a terrible measure, WHO gets rich and on whom the costs fall (not the same people, of course) is THE problem with concentrated benefit, diffuse cost (also known as economic pollution.)

    But the degree to which you posit that something can be massaged in my opinion completely subsumes the market.

    What I fully expect, consistent with your views, is an ATTEMPT to take over the structure of production by either bureaucratic regimentation or the US military. It will fail spectacularly, Venezuela-style.

    Ditto the monetary system. Economists think electronic, fiat money that is nearly 100% credit somehow better lubricates the gears of commerce. They're NUTS. It puts money entirely (instead of just partly) under the control of animal spirits.

    Who creates credit? And how is it turned into money? I submit that few people understand this (I only vaguely do.) But one thing I'm pretty sure of is that credit is synonymous with trust. Bank credit all but froze up in 2008. But it wasn't quite time for it, so a thaw arrived (right at market capitulation, where it should.)

    Let me ask you a question. What is interest? I see it as the cost of renting money. What did zero interest rates imply? There was nearly zero demand to rent money, so its price fell to essentially zero. Credit becomes money only when it's borrowed. But borrowers can hit a point where they have no more means of carrying the payments. Demand falls to zero.

    Now if the state (or its corporate minions) step in and borrow like drunken sailor loose in a whorehouse with a no limit credit card, does that occur in a vacuum? No. If people are generally waxing toward distrust, they'll see that as vicious politicians lining their pockets, showering their buddies with loot, buying the next election by burdening taxpayers with the payments.

    The bums will be thrown out in a PILE. (It's coming.)

    I submit to you that we got to this place NOW already because TPTB have moved heaven and earth to keep the game running. They're almost out of rope, and then it's hanging time.

    I understand your position on the chaos that results from this. I see it too, but my view is that people are innovative, and given the necessity, they'll be inventive. I see regionalism rising Big Time. I'd not be shocked to see a couple states get together, flip the bird to Uncle Sam and then watch Uncle Sam pull a USSR and simply evaporate. Not in the next couple years, but in 20? Sure. Depending on what happens between now and then, of course.

    My position is, what you posit as the reflex to a crisis was already rolled out in 2002-3 and in 2009-10. The next time it won't work, because the next time really is different. Bottoms like 02/03 and 09 come amidst capitulation. Now, people have learned to NEVER capitulate.

    That's a very bad thing, the necessary precursor to a 95% collapse in asset values and an historic collapse in the (credit) money supply.

    By its end, I have no doubt that those in Authority will literally try reflating the economy with banknotes. I expect that first they'll introduce printed notes of very large denomination "just for inter-bank use." But eventually it will prove too tempting to run the presses red-hot, and the government will suffer a catastrophic breakdown in trust called hyperinflation. You and I know that's the endgame for this cycle, and then something new will come along.

    I might add, regarding interest rates, that as they rise now (in the shadow of Mt. Vesuvi-debt), it won’t be because demand to rent money is rising.

    It will be because debt-holders begin to wonder if they’ll get their money back, and become less willing to lend (demanding higher compensation for the risk of being stiffed.)

    It will be truly amazing to watch the last 36 years go into reverse, moving from holding long term debt as a risk-free capital gains generator to holding long term debt being the graveyard of capital.

    Read More
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  55. annamaria says:
    @jacques sheete
    While the topic is dry one for me, Hudson makes it somewhat interesting and I like that he calls a fraud a fraud.

    In fact pretty much the whole system, financial and political and all their appendages such as schools and the media, is a huge fraud. A pox on all the SOBs.

    How could anyone argue against this, for instance?


    Today’s idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime.
     
    I've long been impressed that what we have is not a free market, but a free-for-all market that excludes all but the richest from obtaining much by way of benefits.

    Correct.
    The fraud is not only unpunishable – the fraud has been encouraged. This is why Obama deserves his grand name Obama the Fraud.
    “All economic growth since 2008 has accrued only to the top 5% of the economy. 95% of the economy has been shrinking by about 3% per year… and continues to shrink, because the debts were kept in place. President Obama saved the banks and Wall Street instead of saving the economy.

    The Obama Administration de-criminalized fraud. This has attracted the biggest criminals – and the wealthiest families – to the banking sector, because that’s where the money is. Crooks want to rob banks, and the best way to rob a bank is to own one. So criminals become bankers. …. You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution.” — This is just another manifestation of unaccountability in the highest echelons of power in the US. (Don’t we remember the “missing” $6 trillions that the Pentagon cannot account for?) The US is ruled by an oligarchy, and the US oligarchy is made of the financial crooks. As Hudson writes, “You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution. ” The moral decay has penetrated everything and it this shows everywhere, from the crumbling infrastructure to the obscenely dishonest MSM. The whole country has been dumbed down and smothered with amorality and thievery by the “haves.”

    Read More
    • Agree: John Jeremiah Smith
    • Replies: @jacques sheete
    "Yup" to all.
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  56. Let me ask you a question. What is interest? I see it as the cost of renting money. What did zero interest rates imply?

    The “cost of renting money” is a fair enough approximation. The “time value of money” is another. A “risk premium” has to be added to either.

    When rates fell (to zero and negative with higher risk lagging but following) I believe that was for a combination of reasons

    1.) Some people were willing to take low returns from a sovereign because of fear of a classic crisis where people were more worried about the return of capital than a return on capital.

    2.) There was/is so much money sloshing around that it filled all available harbors, safe or not.

    3.) Some people are so desperate for returns that satisfy their needs they buy risky assets and just hope the worst will not come to pass.

    Some of the above may seem contradictory, but we are dealing with a variety of people with a variety of motives, needs, and perspectives.

    What is money?

    To me it is a store of value, a stand-in for goods. One might call me a neo-physiocrat. At the base of all financial systems lie the goods that allow people to live. These goods ultimately come from farms, forests, fisheries, and mineral exploitation – all won by human effort and ingenuity. The amount of money they print is an accounting matter.

    The financial system is in many ways a confidence game, but it serves the purpose because of the fungibility of money. MMT will face the problem of loss of confidence when they print too much, but they understand this, and I doubt they will go straight to Venezuela or Zimbabwe style. Governments try to walk the tightrope between loss of confidence and the mob turning on them because of hunger.

    Read More
    • Replies: @another fred

    What is money?
     
    BTW, I take this quote from Von Mises literally.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
     
    Most people do not realize that since the closing of the gold window, which effectively ended Bretton Woods, we do not have a formal currency system. It is all ad hoc - they have just made it up as they have gone along.

    For the most part people are just using dollars because they have a hard time doing anything else. There is a little direct exchange going on and its growth may be an ominous sign, but there is no formal system.

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  57. @dc.sunsets
    I'm afraid I must disagree, perhaps only on terms, but it matters to me.

    There is the market.
    There is planning.
    There is no half measure. There is only a question of how much of the market is prevented from operation.

    I'm not a market zealot anymore. For instance, I really don't care if GDP might rise if the USA increased legal immigration from 1 million to 8 million per year. GDP is a terrible measure, WHO gets rich and on whom the costs fall (not the same people, of course) is THE problem with concentrated benefit, diffuse cost (also known as economic pollution.)

    But the degree to which you posit that something can be massaged in my opinion completely subsumes the market.

    What I fully expect, consistent with your views, is an ATTEMPT to take over the structure of production by either bureaucratic regimentation or the US military. It will fail spectacularly, Venezuela-style.

    Ditto the monetary system. Economists think electronic, fiat money that is nearly 100% credit somehow better lubricates the gears of commerce. They're NUTS. It puts money entirely (instead of just partly) under the control of animal spirits.

    Who creates credit? And how is it turned into money? I submit that few people understand this (I only vaguely do.) But one thing I'm pretty sure of is that credit is synonymous with trust. Bank credit all but froze up in 2008. But it wasn't quite time for it, so a thaw arrived (right at market capitulation, where it should.)

    Let me ask you a question. What is interest? I see it as the cost of renting money. What did zero interest rates imply? There was nearly zero demand to rent money, so its price fell to essentially zero. Credit becomes money only when it's borrowed. But borrowers can hit a point where they have no more means of carrying the payments. Demand falls to zero.

    Now if the state (or its corporate minions) step in and borrow like drunken sailor loose in a whorehouse with a no limit credit card, does that occur in a vacuum? No. If people are generally waxing toward distrust, they'll see that as vicious politicians lining their pockets, showering their buddies with loot, buying the next election by burdening taxpayers with the payments.

    The bums will be thrown out in a PILE. (It's coming.)

    I submit to you that we got to this place NOW already because TPTB have moved heaven and earth to keep the game running. They're almost out of rope, and then it's hanging time.

    I understand your position on the chaos that results from this. I see it too, but my view is that people are innovative, and given the necessity, they'll be inventive. I see regionalism rising Big Time. I'd not be shocked to see a couple states get together, flip the bird to Uncle Sam and then watch Uncle Sam pull a USSR and simply evaporate. Not in the next couple years, but in 20? Sure. Depending on what happens between now and then, of course.

    My position is, what you posit as the reflex to a crisis was already rolled out in 2002-3 and in 2009-10. The next time it won't work, because the next time really is different. Bottoms like 02/03 and 09 come amidst capitulation. Now, people have learned to NEVER capitulate.

    That's a very bad thing, the necessary precursor to a 95% collapse in asset values and an historic collapse in the (credit) money supply.

    By its end, I have no doubt that those in Authority will literally try reflating the economy with banknotes. I expect that first they'll introduce printed notes of very large denomination "just for inter-bank use." But eventually it will prove too tempting to run the presses red-hot, and the government will suffer a catastrophic breakdown in trust called hyperinflation. You and I know that's the endgame for this cycle, and then something new will come along.

    I neglected to hit “REPLY” before my last comment.

    You and I know that’s the endgame for this cycle, and then something new will come along.

    I doubt that we can see a new beginning with the population we have (both numbers and composition must be considered). Maybe population will drop by some slow process, but a sudden drop looks more probable.

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  58. @Miller
    I agree with the premise that most medical care is not needed or otherwise easily avoided with some simple lifestyle choices.

    That said, the "modern" life, in the US anyway, is one that leaves us bathed in chemicals and environmental toxins, from water to air to food. The increase in MS, food allergies and other autoimmune disorders is not psychosomatic. Chronic inflammation leads to depression and a host of other problems.

    Anyway...you're actually asserting that supply and demand are not at work, when other factors explain your findings.

    Communities that have more medical centers are liable to be more affluent in the first place. A budget car costs more in Westchester than in Buffalo, not because there are more Chevys in Buffalo but because the cost of living is higher in Westchester.

    Another factor is that when you aren't competing on availability, you're competing on quality. When it comes to health care people will pay more for an increase in quality. If all you have is WalMart, sneakers are pretty cheap. Throw in a Footlocker and the average price of sneakers goes up, and people will pay the higher price if they can. Throw in more outlets and everyone cuts their prices...or offers even better quality/more expensive sneakers for sale.

    Excess protein is only converted to carbs in the absence of carbs from other sources. Some is converted to carbs and would then be converted to fat...assuming you aren't burning enough carbs or fat (or are ingesting too much fat in your diet). Most is excreted and eliminated through sweat.

    When the Dr recommends lowering fat intake he isn't implying you make it up with carbs, though the proportion of carbs and proteins to fats will increase. They're telling you to eat less overall. If a Dr makes this recommendation without asking you what your average diet looks like you should ignore him/her and talk to a nutritionist.

    I understand your attributions of cost, but I disagree.

    Communities with more hospitals are NOT more affluent. Take Rockford IL. NOT affluent, three hospitals, way more costly care than other communities with one hospital.

    Why?

    They compete on the basis of services offered. Each had to have the latest and greatest technology.

    My point is, you are (IMO) entirely wrong in your premise. There is no bargain-basement care option vs the Mercedes Benz care option. Everyone expects and demands the Mercedes. Unless people are paying their own bills directly (and not socializing the costs) there cannot possibly be demand-based pricing.

    And your position re: diet makes no sense. Low fat recommendations are not “eat less” recommendations. If your doctor wishes to say, eat less, are you suggesting he or she is incapable?

    Read More
    • Replies: @Miller
    I have to admit not being able to find any studies showing that with more hospitals per capita the prices go up. I suspect if it is true (and the data is recent enough to be relevant) it is not reliable, it will not be consistent enough across markets to be predictive of cost.


    As for health care, every time you agree to see a PA or RN for basic care/initial visit instead of an MD (get an appt tomorrow vs two weeks from tomorrow), you are getting bargain care. It might not be billed that way, but it should...

    Ultimately the only place where higher quality care really kicks in (aside from basic availability) is under the knife, and a good surgeon might not only be in a high supply or high population density area. Better facilities usually are, though, with more expensive markets having purpose built surgical theater/recovery wards in stand-alone facilities. Poorer communities might have additional services in a trailer in the back parking lot.


    I have found evidence that fewer networks in an area will lead to higher cost regardless of supply - the networks buy out local practices and the price goes up. This supports a supply and demand theory but leaning toward a more fundamental explanation - the cost of a good or service is determined by what the market will bear - a person will liquidate their retirement for medical care if necessary. More facilities does not reduce cost because a major component is administrative cost per unit of care, yet seemingly unaffected by number of facilities per unit. Also known as price-fixing or fleecing.

    Another factor is that cost is indeed to some extent regional - so cost of living is a major driver. Per unit expense trends seem to hold across markets to some extent as well - the price nationally goes up at a similar rate.


    Re diet, if your Dr tells you to change your macronutrient ratios without first determining what your diet actually is and your average activity level, they might as well be recommending hernia surgery based on your age and gender without doing an exam = incompetent.


    FWIW, I've never had a Dr recommend eating less fat. If I came in high in the charts I've been told to eat less. I ignored this advice - I was 7% bodyfat and could benchpress over 1.5 times my bodyweight. When your lower abs are vascular, you don't need to eat less of anything. But I was overweight for my height according to the charts..."Sure thing doc"


    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.

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  59. @another fred

    Let me ask you a question. What is interest? I see it as the cost of renting money. What did zero interest rates imply?
     
    The "cost of renting money" is a fair enough approximation. The "time value of money" is another. A "risk premium" has to be added to either.

    When rates fell (to zero and negative with higher risk lagging but following) I believe that was for a combination of reasons

    1.) Some people were willing to take low returns from a sovereign because of fear of a classic crisis where people were more worried about the return of capital than a return on capital.

    2.) There was/is so much money sloshing around that it filled all available harbors, safe or not.

    3.) Some people are so desperate for returns that satisfy their needs they buy risky assets and just hope the worst will not come to pass.

    Some of the above may seem contradictory, but we are dealing with a variety of people with a variety of motives, needs, and perspectives.


    What is money?

    To me it is a store of value, a stand-in for goods. One might call me a neo-physiocrat. At the base of all financial systems lie the goods that allow people to live. These goods ultimately come from farms, forests, fisheries, and mineral exploitation - all won by human effort and ingenuity. The amount of money they print is an accounting matter.

    The financial system is in many ways a confidence game, but it serves the purpose because of the fungibility of money. MMT will face the problem of loss of confidence when they print too much, but they understand this, and I doubt they will go straight to Venezuela or Zimbabwe style. Governments try to walk the tightrope between loss of confidence and the mob turning on them because of hunger.

    What is money?

    BTW, I take this quote from Von Mises literally.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

    Most people do not realize that since the closing of the gold window, which effectively ended Bretton Woods, we do not have a formal currency system. It is all ad hoc – they have just made it up as they have gone along.

    For the most part people are just using dollars because they have a hard time doing anything else. There is a little direct exchange going on and its growth may be an ominous sign, but there is no formal system.

    Read More
    • Replies: @dc.sunsets
    I'm glad you quoted Mises. I think that quote might be the ultimate support for my position in the first place.

    I concur with you that floating the dollar free of any commodity standard (gold in 1971 for inter-nation trade, silver in 1964 for domestic) destroyed any consistent measure of the money supply, and set the stage for the largest credit bubble in history.

    "Money" became a floating abstraction in '64/'71.
    In 1981 the bond market ended it's secular bear market. Any brake on debt issuance evaporated.
    A social mood rally began in 1982 (as measured by the S&P500) and it entered a full-scale asset mania in 1995. Stocks, it seems, only go up and only fools ever sell. Never, ever capitulate.

    These are the fundamental conditions that underlie every nominal price for intangible assets, commodities and real estate. They caused massive warpage in the entire structure of the economy. Entire industries employing tens of millions of people arose to meet artificial, temporary demand.

    Final and total catastrophe? Yes, and I still submit that no force on Earth will control the process by which this house of cards collapses, once the ebullient social trust animating the nominal value of $200-$1,000 trillion in IOU's starts eroding in earnest.
    , @Eryximachus

    Most people do not realize that since the closing of the gold window, which effectively ended Bretton Woods, we do not have a formal currency system. It is all ad hoc – they have just made it up as they have gone along.

    For the most part people are just using dollars because they have a hard time doing anything else. There is a little direct exchange going on and its growth may be an ominous sign, but there is no formal system.
     
    This is a fundamental misunderstanding of exchange rates. They most certainly do not "make it up as they have gone along". Sovereign debt is about account for balance of payments differentials. The entire point of the BRetton Woods Conference (Aka, when the UN was founded) was to prevent any one country from competitively devaluing their currency. While in theory this COULD happen today, Bretton Woods was abandoned so the US could control the global economy with the USD. Exchange rates may not be codified in international law as it was under Bretton Woods, but the exchange rates of today are just as political as they always have been.

    As to your second point, you don't understand money at all. People are "just using dollars" because they are required to pay taxes in United States Dollars and our civil court system only adjudicates debts in United States Dollars.

    As it stands, we are transitioning to a new Bretton Woods system that will function a lot more like what Keynes proposed originally. In a short period of time, foreign exchange will be restricted only to something like the Bancor, and with it libertarian goldbuggery will be dead.
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  60. Miller says:
    @dc.sunsets
    I understand your attributions of cost, but I disagree.

    Communities with more hospitals are NOT more affluent. Take Rockford IL. NOT affluent, three hospitals, way more costly care than other communities with one hospital.

    Why?

    They compete on the basis of services offered. Each had to have the latest and greatest technology.

    My point is, you are (IMO) entirely wrong in your premise. There is no bargain-basement care option vs the Mercedes Benz care option. Everyone expects and demands the Mercedes. Unless people are paying their own bills directly (and not socializing the costs) there cannot possibly be demand-based pricing.

    And your position re: diet makes no sense. Low fat recommendations are not "eat less" recommendations. If your doctor wishes to say, eat less, are you suggesting he or she is incapable?

    I have to admit not being able to find any studies showing that with more hospitals per capita the prices go up. I suspect if it is true (and the data is recent enough to be relevant) it is not reliable, it will not be consistent enough across markets to be predictive of cost.

    As for health care, every time you agree to see a PA or RN for basic care/initial visit instead of an MD (get an appt tomorrow vs two weeks from tomorrow), you are getting bargain care. It might not be billed that way, but it should…

    Ultimately the only place where higher quality care really kicks in (aside from basic availability) is under the knife, and a good surgeon might not only be in a high supply or high population density area. Better facilities usually are, though, with more expensive markets having purpose built surgical theater/recovery wards in stand-alone facilities. Poorer communities might have additional services in a trailer in the back parking lot.

    I have found evidence that fewer networks in an area will lead to higher cost regardless of supply – the networks buy out local practices and the price goes up. This supports a supply and demand theory but leaning toward a more fundamental explanation – the cost of a good or service is determined by what the market will bear – a person will liquidate their retirement for medical care if necessary. More facilities does not reduce cost because a major component is administrative cost per unit of care, yet seemingly unaffected by number of facilities per unit. Also known as price-fixing or fleecing.

    Another factor is that cost is indeed to some extent regional – so cost of living is a major driver. Per unit expense trends seem to hold across markets to some extent as well – the price nationally goes up at a similar rate.

    Re diet, if your Dr tells you to change your macronutrient ratios without first determining what your diet actually is and your average activity level, they might as well be recommending hernia surgery based on your age and gender without doing an exam = incompetent.

    FWIW, I’ve never had a Dr recommend eating less fat. If I came in high in the charts I’ve been told to eat less. I ignored this advice – I was 7% bodyfat and could benchpress over 1.5 times my bodyweight. When your lower abs are vascular, you don’t need to eat less of anything. But I was overweight for my height according to the charts…”Sure thing doc”

    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.

    Read More
    • Replies: @dc.sunsets

    It might not be billed that way, but it should…
     
    (Chuckle) You just murdered your entire point.


    the networks buy out local practices and the price goes up
     
    .

    It's called a "facility fee," something our increasingly monopolistic, vertically structured system drives. An x-ray once $100 at a private practice now costs $700 because the hospital system bought out the orthopedic practice. Once again, you make my point.

    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.
     
    A mostly carb diet only works for people on the edge of starvation. Your long-lived communities are rapidly becoming cesspits of diabetes, cancer and early atherosclerosis because their caloric intake has skyrocketed.


    FWIW, I’ve never had a Dr recommend eating less fat.

     

    So you've never seen the current dietary recommendations, and no physician has ever suggested keeping your saturated fat intake low? You must lead a charmed life.

    Everything I originally stated still stands.
    , @dc.sunsets
    Late in the discussion here, but I'm not alone in noticing that "low fat" diets are dominant in medical recommendations.

    http://www.pharmaceutical-journal.com/20203046.article?clearcache=1

    tl;dr version: the endless demand to reduce fat in the diet, and the 24/7 saturation blitz to get everyone taking statin drugs, are astonishingly STUPID, costly products of a monopoly system characterized by corporatism.

    Excessive consumption of refined carbohydrates (especially sugar) and the resultant glycaemic load can overwhelm hepatic mechanisms that regulate the body’s blood glucose levels[35]. Evidence surrounding the use of low carbohydrate, high fat diets for the prevention and treatment of CVD, type 2 diabetes, and obesity is accumulating[36]. Unfortunately, other than Brazil, there has been little change to any nation’s dietary guidelines, which continue to recommend a low fat diet, which often results in diets high in refined carbohydrates (especially sugar).

    Furthermore, dietary guidelines (as well as a recent presidential advisory by the American Heart Association) recommend replacing saturated fat with unsaturated fat in order to reduce LDL-C[37]. In practice, this translates to recommending vegetable oils and margarines rich in omega-6 polyunsaturated fatty acids (PUFA). Hence, the consumption of omega-6 PUFA has skyrocketed in recent decades and dwarfed the intake of omega-3 PUFA.

    In traditional societies, the ratio of omega-6 to omega-3 polyunsaturated fatty acids was 1:1[38]. This came about due to diets rich in fish, plant foods and free-grazing animals, and eggs from chickens that ate plants high in omega-3 fats. But now in industrialised countries, the dietary ratio is closer to 20:1. This is a more ‘pro-inflammatory’ mix of PUFAs and may contribute to worsening of inflammatory atherosclerotic plaques. The benefits of the Mediterranean diet have been attributed to its high alpha-linolenic acid (omega-3) and polyphenol content present in nuts, extra virgin olive oil, vegetables and oily fish, which act to dampen the inflammatory response. What little carbohydrate there is exists along with its inherent fibre, thus reducing glycaemic load, liver fat, and insulin response.

    Furthermore, even minimal exercise can help to reverse insulin resistance. A recent article stated that regular brisk walking, just 30 minutes per day more than three times per week, can reverse insulin resistance[39], while another study suggested that just 15 minutes of moderate-intensity exercise per day can increase lifespan by 3 years[40].

    Time to redefine CVD risks

    In summary, for many patients at high risk of CVD, one of the safest and most effective ways to reduce the risk of heart attack and stroke is to consume a high fat and low glycaemic load Mediterranean diet and engage in regular exercise. At the very least, exercise interventions are often similar to drug interventions in terms of their mortality benefits in the secondary prevention of coronary heart disease, and do not come with side effects[41].

    Currently 75% of healthcare dollars are spent treating chronic metabolic disease. Instead of funnelling billions to drug research and development, perhaps more of that money could be spent encouraging the implementation of policy directives that encourage population-wide behavioural change (similar to the efforts to combat tobacco and alcohol) to reverse insulin resistance. Even a 20% reduction in sugar consumption can evidence marked cost savings[42]. Public health should work primarily to support the consumption of real food that help protect against neurohormonal and mitochondrial dysfunction, and not continue to promote calorie-directed messages that blame victims, and exacerbate these pandemics. Then, and only then, might we achieve the goal of attenuating the prevalence of CVD and the other chronic diseases of the metabolic syndrome.
     
    emphasis added.
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  61. @utu
    All kinds of things could be done within the system that would change many outcomes w/o changing the system itself.

    There are plenty of parameters that control the actual system. The values of the parameters are changeable. There might not be a political force that could enact the changes but they are within the realm of possibility. Different set of parameters will produce different outcomes. Imagine that you can change tax on stock market transactions from 0% to something larger than 0%. Or imagine that in the fractional reserve system you change the fraction amount required by banks to keep when creating money. Or imagine that you force all stocks to pay annual dividends of no less than x percent of the profit.

    And there one can imagine different system.

    Even thinking you can exist outside of the Matrix is itself part of the Matrix.

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  62. @Miller
    I have to admit not being able to find any studies showing that with more hospitals per capita the prices go up. I suspect if it is true (and the data is recent enough to be relevant) it is not reliable, it will not be consistent enough across markets to be predictive of cost.


    As for health care, every time you agree to see a PA or RN for basic care/initial visit instead of an MD (get an appt tomorrow vs two weeks from tomorrow), you are getting bargain care. It might not be billed that way, but it should...

    Ultimately the only place where higher quality care really kicks in (aside from basic availability) is under the knife, and a good surgeon might not only be in a high supply or high population density area. Better facilities usually are, though, with more expensive markets having purpose built surgical theater/recovery wards in stand-alone facilities. Poorer communities might have additional services in a trailer in the back parking lot.


    I have found evidence that fewer networks in an area will lead to higher cost regardless of supply - the networks buy out local practices and the price goes up. This supports a supply and demand theory but leaning toward a more fundamental explanation - the cost of a good or service is determined by what the market will bear - a person will liquidate their retirement for medical care if necessary. More facilities does not reduce cost because a major component is administrative cost per unit of care, yet seemingly unaffected by number of facilities per unit. Also known as price-fixing or fleecing.

    Another factor is that cost is indeed to some extent regional - so cost of living is a major driver. Per unit expense trends seem to hold across markets to some extent as well - the price nationally goes up at a similar rate.


    Re diet, if your Dr tells you to change your macronutrient ratios without first determining what your diet actually is and your average activity level, they might as well be recommending hernia surgery based on your age and gender without doing an exam = incompetent.


    FWIW, I've never had a Dr recommend eating less fat. If I came in high in the charts I've been told to eat less. I ignored this advice - I was 7% bodyfat and could benchpress over 1.5 times my bodyweight. When your lower abs are vascular, you don't need to eat less of anything. But I was overweight for my height according to the charts..."Sure thing doc"


    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.

    It might not be billed that way, but it should…

    (Chuckle) You just murdered your entire point.

    the networks buy out local practices and the price goes up

    .

    It’s called a “facility fee,” something our increasingly monopolistic, vertically structured system drives. An x-ray once $100 at a private practice now costs $700 because the hospital system bought out the orthopedic practice. Once again, you make my point.

    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.

    A mostly carb diet only works for people on the edge of starvation. Your long-lived communities are rapidly becoming cesspits of diabetes, cancer and early atherosclerosis because their caloric intake has skyrocketed.

    FWIW, I’ve never had a Dr recommend eating less fat.

    So you’ve never seen the current dietary recommendations, and no physician has ever suggested keeping your saturated fat intake low? You must lead a charmed life.

    Everything I originally stated still stands.

    Read More
    • Replies: @Miller
    Your entire point - that medical care does not respond to market dynamics, only makes a strong case for single payer and private insurance for anything over very basic and emergency services. Ironically this is how just about every other industrialized country does it already. Med prices were skyrocketing prior to ACA, really going back to the advent of for-profit HMOs, an epic fail depending on your perspective.



    Current dietary guidelines are constantly changing with every new discovery about gut bacteria and alternative diets such as the Ketogenic.


    Blue zones aren't turning into a cesspit of anything, but when Blue Zone folk move elsewhere and alter their habits/diet they do tend to suffer for it.


    If you live an active life and eat primarily whole foods, your diet will never be a topic of discussion with your Dr. Just as well because your average GP is pretty clueless about proper nutrition and exercise.
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  63. @another fred

    What is money?
     
    BTW, I take this quote from Von Mises literally.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
     
    Most people do not realize that since the closing of the gold window, which effectively ended Bretton Woods, we do not have a formal currency system. It is all ad hoc - they have just made it up as they have gone along.

    For the most part people are just using dollars because they have a hard time doing anything else. There is a little direct exchange going on and its growth may be an ominous sign, but there is no formal system.

    I’m glad you quoted Mises. I think that quote might be the ultimate support for my position in the first place.

    I concur with you that floating the dollar free of any commodity standard (gold in 1971 for inter-nation trade, silver in 1964 for domestic) destroyed any consistent measure of the money supply, and set the stage for the largest credit bubble in history.

    “Money” became a floating abstraction in ’64/’71.
    In 1981 the bond market ended it’s secular bear market. Any brake on debt issuance evaporated.
    A social mood rally began in 1982 (as measured by the S&P500) and it entered a full-scale asset mania in 1995. Stocks, it seems, only go up and only fools ever sell. Never, ever capitulate.

    These are the fundamental conditions that underlie every nominal price for intangible assets, commodities and real estate. They caused massive warpage in the entire structure of the economy. Entire industries employing tens of millions of people arose to meet artificial, temporary demand.

    Final and total catastrophe? Yes, and I still submit that no force on Earth will control the process by which this house of cards collapses, once the ebullient social trust animating the nominal value of $200-$1,000 trillion in IOU’s starts eroding in earnest.

    Read More
    • Replies: @another fred
    We're talking in circles, but I'll make one last attempt at clarifying. The "final and total catastrophe" of which Von Mises wrote was of the currency system not the system of supply and demand of goods. As Adam Smith said, there is a great deal of ruin in a nation.

    For example, from the Weimar inflation to the start of WWII was 15 years and it was 20 years until the Gotterdammerung of the Nazis. When the final catastrophe for the present currency system arrives there will certainly be social consequences all over the world, but I believe that governments will not just roll over and die - they will, particularly in the US, "do something" probably along the lines of MMT.

    MMT does not equal hyperinflation, per se. The government will most likely cut back on many social obligations - starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

    I believe that those who believe that the "remedy" (whatever it may be) for this crisis will be the start of a new beginning will be many years too soon, the worst will be yet to come and will not follow for a decade or two. The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.

    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  64. Miller says:
    @dc.sunsets

    It might not be billed that way, but it should…
     
    (Chuckle) You just murdered your entire point.


    the networks buy out local practices and the price goes up
     
    .

    It's called a "facility fee," something our increasingly monopolistic, vertically structured system drives. An x-ray once $100 at a private practice now costs $700 because the hospital system bought out the orthopedic practice. Once again, you make my point.

    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.
     
    A mostly carb diet only works for people on the edge of starvation. Your long-lived communities are rapidly becoming cesspits of diabetes, cancer and early atherosclerosis because their caloric intake has skyrocketed.


    FWIW, I’ve never had a Dr recommend eating less fat.

     

    So you've never seen the current dietary recommendations, and no physician has ever suggested keeping your saturated fat intake low? You must lead a charmed life.

    Everything I originally stated still stands.

    Your entire point – that medical care does not respond to market dynamics, only makes a strong case for single payer and private insurance for anything over very basic and emergency services. Ironically this is how just about every other industrialized country does it already. Med prices were skyrocketing prior to ACA, really going back to the advent of for-profit HMOs, an epic fail depending on your perspective.

    Current dietary guidelines are constantly changing with every new discovery about gut bacteria and alternative diets such as the Ketogenic.

    Blue zones aren’t turning into a cesspit of anything, but when Blue Zone folk move elsewhere and alter their habits/diet they do tend to suffer for it.

    If you live an active life and eat primarily whole foods, your diet will never be a topic of discussion with your Dr. Just as well because your average GP is pretty clueless about proper nutrition and exercise.

    Read More
    • Replies: @dc.sunsets
    Theoretically, any version of Single Payer fails on monopoly axioms, but I'll aver that nation-states that run some form of it do seem to be better off than is the USA's populace. That could be due to several artifacts, for example: The real costs are being buried, ignored or (more often) deferred via the magic of debt, or the measurements of well-being are skewed to one visible population vs a less visible one, or (very significant) a homogeneous nation like Japan can do things that a heterogeneous nation (like Diversity, Inc.'s USA) may not successfully implement.

    What will be, will be, and today's morass is an utter disaster, High Expense/Low Benefit system that is rapidly approaching the point where 100% of wealth is sucked into it...something will change.


    If you live an active life and eat primarily whole foods, your diet will never be a topic of discussion with your Dr. Just as well because your average GP is pretty clueless about proper nutrition and exercise.
     
    You must be young. Eventually, no matter how much whole food and proper exercise you get, your labs will move into a zone where your doctor wants to give you a drug to "treat" them. This is a game...I ought to know, I used to be a pharmaceutical salesman. As you noted earlier, your high muscle-mass body type puts you in "overweight" despite your being far from it. Been there, done that. The entire point of all these guidelines is not longevity or health, it's to put as many people into the "treatment range" as possible. The people who write those recommendations are nearly 100% bought and paid for by Merck, Lilly, Johnson & Johnson, Pfizer, Astra-Zenica, Glaxo-Smithkline, etc., etc., etc.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  65. @dc.sunsets
    I'm glad you quoted Mises. I think that quote might be the ultimate support for my position in the first place.

    I concur with you that floating the dollar free of any commodity standard (gold in 1971 for inter-nation trade, silver in 1964 for domestic) destroyed any consistent measure of the money supply, and set the stage for the largest credit bubble in history.

    "Money" became a floating abstraction in '64/'71.
    In 1981 the bond market ended it's secular bear market. Any brake on debt issuance evaporated.
    A social mood rally began in 1982 (as measured by the S&P500) and it entered a full-scale asset mania in 1995. Stocks, it seems, only go up and only fools ever sell. Never, ever capitulate.

    These are the fundamental conditions that underlie every nominal price for intangible assets, commodities and real estate. They caused massive warpage in the entire structure of the economy. Entire industries employing tens of millions of people arose to meet artificial, temporary demand.

    Final and total catastrophe? Yes, and I still submit that no force on Earth will control the process by which this house of cards collapses, once the ebullient social trust animating the nominal value of $200-$1,000 trillion in IOU's starts eroding in earnest.

    We’re talking in circles, but I’ll make one last attempt at clarifying. The “final and total catastrophe” of which Von Mises wrote was of the currency system not the system of supply and demand of goods. As Adam Smith said, there is a great deal of ruin in a nation.

    For example, from the Weimar inflation to the start of WWII was 15 years and it was 20 years until the Gotterdammerung of the Nazis. When the final catastrophe for the present currency system arrives there will certainly be social consequences all over the world, but I believe that governments will not just roll over and die – they will, particularly in the US, “do something” probably along the lines of MMT.

    MMT does not equal hyperinflation, per se. The government will most likely cut back on many social obligations – starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

    I believe that those who believe that the “remedy” (whatever it may be) for this crisis will be the start of a new beginning will be many years too soon, the worst will be yet to come and will not follow for a decade or two. The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.

    Read More
    • Replies: @dc.sunsets
    I know, we seem to be arguing past each other.

    The government will most likely cut back on many social obligations – starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

     

    Means testing SS & Medicare will kill them RIGHT NOW. One thing I'm quite certain of is that no one within the 20% of the populace who actually pays net taxes will keep paying 16% of their incomes (esp. if the SS earning cap is removed, as seems likely) if those programs are turned into explicit welfare state wealth transfers. (Hopefully no one is stupid enough to think "employees" only pay half that.)

    Ain't. Gonna'. Happen. The only thing sustaining them is the fiction that you'll get back out what you paid in. Hell, FDR couldn't have passed such silliness in the 1930's.

    Cut medical benefits? How many oxen will be gored there? The working wealthy (i.e., physicians, who pay A LOT of taxes, for instance?) Cut retirement benefits? On whom, exactly? Have you seen the abysmal figures on who has how much saved outside of their SS expectation? I'm quite sure that huge numbers of people averaging $100k/year for 20 years of work have NOTHING set aside, or they have 100% of it in Mr. Market.... Cut welfare? Tell me how that happens and the cities don't burn. Cut public pensions? Hell, we already have a near Blue Flu sickout in places like Chicago, and the murder/violent crime rate is rising rapidly. Police chases too expensive? No more chases...and watch carjackings skyrocket in real time.

    You and I may simply begin with premises too different to converge our dialogue. To me, every attempt to rein in the folly of today simply lights the Hindenburg somewhere and the whole thing crashes to the ground. In my view there are NO tweaks that matter, and anything that does matter will destabilize everything else anyway.

    As to Mises' view, it reconciles quite nicely: The near-term collapse will be financial. In Elliott Wave terms, that's wave "A." What follows and A wave is a B wave (in this case, a rally, a recovery.) It is the final decline, wave C in a three wave correction, that leads to the real catastrophe.

    1930-32 was simply the financially destructive wave. Things began to recover, but then another downturn, a decline severe enough to be counted as its own separate depression had it not occurred within the Great Depression, witnessed economic hardship increase into at least 1937. World War Two followed shortly thereafter, and FDR all but remade the US Constitution at the low, ushering in a revolutionary form of government even if today's preferred historians don't call it that.

    Economic/financial forecasting is largely a waste of time, but to what little extent it remains interesting, I think we're very near the beginning of that A wave within a larger three or five wave correction, a period that should last a very, very long time (theoretically, the last time there was a correction in the English speaking world of this degree of trend, it manifested as a 64 year bear market on the London Stock Exchange, and by the same theory, this one should be longer...much longer.)

    I think we'll see 2017-2021 be a financial collapse of historic proportion, but the real social/political fireworks will come after there's a 15 year recovery and another crushing collapse wave, perhaps sometime out nearer 2034. Who knows--- Nostradamus?

    It really doesn't matter now. Just as in the 1930's, everything that the central government attempts will be harmful. The more they intervene, the worse they make things and the more protracted the decline. It's really that simple. But the same social mood that causes the boom causes the bust, and also causes the actions to be undertaken. It's all part of Human Social Behavior (right out of the book.)
    , @dc.sunsets

    The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.
     
    1. The USSR survived for 70 years with a lot of outside help.
    2. Even with your assumption, I date the beginning of the USA's following an absurd, axiomatically impossible economic course to 1964 (when domestic use of dollars was fully floated away from any commodity standard.)

    Ironically, 1964+70=2034, the date I suggested for when the "C" wave might be bottoming and political revolution arrives. (PS: The USSR's political revolution in 1991 came at a social mood high. Political revolutions that come at or shortly after social mood lows tend to look more like the Bolshevik Revolution and the rise of the Leninist/Stalinist mass murder programs. For more on that, youtube has an English-dubbed 1992 Russian movie about Lenin's nice little secret police, titled The Checkist. Paradoxically, the movie ends up being sympathetic to the man who orders the cold-blooded murder of untold numbers of his fellow citizens. That tells you something about Russians, I think.)
    , @dc.sunsets

    starting with means testing for medical and retirement benefits, plus there will be tax increases
     
    So......
    Albert makes $50k/year, lives way below his means, foregoes trips, buys small, saves up a nice nest egg.
    Bruce makes $50k/year, buys every toy that catches his eye, reaches 65 or 68 with a bunch of landfill fodder (old boats, old cars, old motorcycles, fading photos of all the trips he took) and $0.

    Even worse: Chuck works TWO jobs, and lives way below his means, practically killing himself to accumulate what his peers would call very respectable wealth. And Bruce (and his buddies) vote for politicians who will TAX IT INTO OBLIVION to sustain the benefits Bruce (and his buddies) want.

    Means testing:
    Albert gets nothing because "he has savings."
    Bruce gets mucho dinero because "he's poor."
    Chuck gets robbed blind because he's "rich."

    And we watch as decivilizing behavior metastasizes like cancer across the formerly wealthy West.

    You always get more of what you reward. Reward profligacy and waste and sloth. Get hell on Earth.

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  66. @Miller
    Your entire point - that medical care does not respond to market dynamics, only makes a strong case for single payer and private insurance for anything over very basic and emergency services. Ironically this is how just about every other industrialized country does it already. Med prices were skyrocketing prior to ACA, really going back to the advent of for-profit HMOs, an epic fail depending on your perspective.



    Current dietary guidelines are constantly changing with every new discovery about gut bacteria and alternative diets such as the Ketogenic.


    Blue zones aren't turning into a cesspit of anything, but when Blue Zone folk move elsewhere and alter their habits/diet they do tend to suffer for it.


    If you live an active life and eat primarily whole foods, your diet will never be a topic of discussion with your Dr. Just as well because your average GP is pretty clueless about proper nutrition and exercise.

    Theoretically, any version of Single Payer fails on monopoly axioms, but I’ll aver that nation-states that run some form of it do seem to be better off than is the USA’s populace. That could be due to several artifacts, for example: The real costs are being buried, ignored or (more often) deferred via the magic of debt, or the measurements of well-being are skewed to one visible population vs a less visible one, or (very significant) a homogeneous nation like Japan can do things that a heterogeneous nation (like Diversity, Inc.’s USA) may not successfully implement.

    What will be, will be, and today’s morass is an utter disaster, High Expense/Low Benefit system that is rapidly approaching the point where 100% of wealth is sucked into it…something will change.

    If you live an active life and eat primarily whole foods, your diet will never be a topic of discussion with your Dr. Just as well because your average GP is pretty clueless about proper nutrition and exercise.

    You must be young. Eventually, no matter how much whole food and proper exercise you get, your labs will move into a zone where your doctor wants to give you a drug to “treat” them. This is a game…I ought to know, I used to be a pharmaceutical salesman. As you noted earlier, your high muscle-mass body type puts you in “overweight” despite your being far from it. Been there, done that. The entire point of all these guidelines is not longevity or health, it’s to put as many people into the “treatment range” as possible. The people who write those recommendations are nearly 100% bought and paid for by Merck, Lilly, Johnson & Johnson, Pfizer, Astra-Zenica, Glaxo-Smithkline, etc., etc., etc.

    Read More
    • Replies: @anarchyst
    Even in countries with "single payer healthcare", supplemental insurance policies are almost always required, if one wants a semblance of decent health care.
    Even that "showplace" of socialized medicine (Canada) has private healthcare insurance and yes (gasp!) private hospitals and doctors that operate on a "fee for services" basis.
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  67. @another fred
    We're talking in circles, but I'll make one last attempt at clarifying. The "final and total catastrophe" of which Von Mises wrote was of the currency system not the system of supply and demand of goods. As Adam Smith said, there is a great deal of ruin in a nation.

    For example, from the Weimar inflation to the start of WWII was 15 years and it was 20 years until the Gotterdammerung of the Nazis. When the final catastrophe for the present currency system arrives there will certainly be social consequences all over the world, but I believe that governments will not just roll over and die - they will, particularly in the US, "do something" probably along the lines of MMT.

    MMT does not equal hyperinflation, per se. The government will most likely cut back on many social obligations - starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

    I believe that those who believe that the "remedy" (whatever it may be) for this crisis will be the start of a new beginning will be many years too soon, the worst will be yet to come and will not follow for a decade or two. The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.

    I know, we seem to be arguing past each other.

    The government will most likely cut back on many social obligations – starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

    Means testing SS & Medicare will kill them RIGHT NOW. One thing I’m quite certain of is that no one within the 20% of the populace who actually pays net taxes will keep paying 16% of their incomes (esp. if the SS earning cap is removed, as seems likely) if those programs are turned into explicit welfare state wealth transfers. (Hopefully no one is stupid enough to think “employees” only pay half that.)

    Ain’t. Gonna’. Happen. The only thing sustaining them is the fiction that you’ll get back out what you paid in. Hell, FDR couldn’t have passed such silliness in the 1930′s.

    Cut medical benefits? How many oxen will be gored there? The working wealthy (i.e., physicians, who pay A LOT of taxes, for instance?) Cut retirement benefits? On whom, exactly? Have you seen the abysmal figures on who has how much saved outside of their SS expectation? I’m quite sure that huge numbers of people averaging $100k/year for 20 years of work have NOTHING set aside, or they have 100% of it in Mr. Market…. Cut welfare? Tell me how that happens and the cities don’t burn. Cut public pensions? Hell, we already have a near Blue Flu sickout in places like Chicago, and the murder/violent crime rate is rising rapidly. Police chases too expensive? No more chases…and watch carjackings skyrocket in real time.

    You and I may simply begin with premises too different to converge our dialogue. To me, every attempt to rein in the folly of today simply lights the Hindenburg somewhere and the whole thing crashes to the ground. In my view there are NO tweaks that matter, and anything that does matter will destabilize everything else anyway.

    As to Mises’ view, it reconciles quite nicely: The near-term collapse will be financial. In Elliott Wave terms, that’s wave “A.” What follows and A wave is a B wave (in this case, a rally, a recovery.) It is the final decline, wave C in a three wave correction, that leads to the real catastrophe.

    1930-32 was simply the financially destructive wave. Things began to recover, but then another downturn, a decline severe enough to be counted as its own separate depression had it not occurred within the Great Depression, witnessed economic hardship increase into at least 1937. World War Two followed shortly thereafter, and FDR all but remade the US Constitution at the low, ushering in a revolutionary form of government even if today’s preferred historians don’t call it that.

    Economic/financial forecasting is largely a waste of time, but to what little extent it remains interesting, I think we’re very near the beginning of that A wave within a larger three or five wave correction, a period that should last a very, very long time (theoretically, the last time there was a correction in the English speaking world of this degree of trend, it manifested as a 64 year bear market on the London Stock Exchange, and by the same theory, this one should be longer…much longer.)

    I think we’ll see 2017-2021 be a financial collapse of historic proportion, but the real social/political fireworks will come after there’s a 15 year recovery and another crushing collapse wave, perhaps sometime out nearer 2034. Who knows— Nostradamus?

    It really doesn’t matter now. Just as in the 1930′s, everything that the central government attempts will be harmful. The more they intervene, the worse they make things and the more protracted the decline. It’s really that simple. But the same social mood that causes the boom causes the bust, and also causes the actions to be undertaken. It’s all part of Human Social Behavior (right out of the book.)

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  68. @another fred
    We're talking in circles, but I'll make one last attempt at clarifying. The "final and total catastrophe" of which Von Mises wrote was of the currency system not the system of supply and demand of goods. As Adam Smith said, there is a great deal of ruin in a nation.

    For example, from the Weimar inflation to the start of WWII was 15 years and it was 20 years until the Gotterdammerung of the Nazis. When the final catastrophe for the present currency system arrives there will certainly be social consequences all over the world, but I believe that governments will not just roll over and die - they will, particularly in the US, "do something" probably along the lines of MMT.

    MMT does not equal hyperinflation, per se. The government will most likely cut back on many social obligations - starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

    I believe that those who believe that the "remedy" (whatever it may be) for this crisis will be the start of a new beginning will be many years too soon, the worst will be yet to come and will not follow for a decade or two. The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.

    The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.

    1. The USSR survived for 70 years with a lot of outside help.
    2. Even with your assumption, I date the beginning of the USA’s following an absurd, axiomatically impossible economic course to 1964 (when domestic use of dollars was fully floated away from any commodity standard.)

    Ironically, 1964+70=2034, the date I suggested for when the “C” wave might be bottoming and political revolution arrives. (PS: The USSR’s political revolution in 1991 came at a social mood high. Political revolutions that come at or shortly after social mood lows tend to look more like the Bolshevik Revolution and the rise of the Leninist/Stalinist mass murder programs. For more on that, youtube has an English-dubbed 1992 Russian movie about Lenin’s nice little secret police, titled The Checkist. Paradoxically, the movie ends up being sympathetic to the man who orders the cold-blooded murder of untold numbers of his fellow citizens. That tells you something about Russians, I think.)

    Read More
    • Replies: @dc.sunsets
    BTW, I follow a view that has us near the apogee of a large wave up dating to 1784. The War of Southern Secession, the Great Depression (and lovely experiences like WW1 and the Bolshevik Revolution) were simply corrections within that long boom.

    We're coasting into the top amidst fiat money and debt on a scale unimaginable until quite recently, even as economic production looks to be 20% of the USA passing pieces of paper to each other, while the rest all sit and watch TV for 16 hours a day. Extraordinary inventions 100 years ago like harnessing electricity and the internal combustion engine are now minor fads like social media or Uber. For all of our comforts and cleverness, our modern "inventions" pale to insignificance by comparison. As I said, we're coasting into a once-in-300-years top.

    I adhere to the general (but not specific) forecast from the current primary exponent of this theory, Robert Prechter, Jr. In this, I expect a series of up and down waves in finance, the economy, peace and war (respectively), etc., lasting pretty much a century, with each declining wave resulting in more intense social catastrophe.

    The first will be financial. The next will be political. The next will be social (as in world war on a scale larger than that of the World War twins of 1914/1938.) Going to be a wild ride for my descendants, for whom I retain great hope.

    So sit back, enjoy a mint julep and bask in our antebellum times. Disinterested observers are not allowed.
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  69. @another fred
    We're talking in circles, but I'll make one last attempt at clarifying. The "final and total catastrophe" of which Von Mises wrote was of the currency system not the system of supply and demand of goods. As Adam Smith said, there is a great deal of ruin in a nation.

    For example, from the Weimar inflation to the start of WWII was 15 years and it was 20 years until the Gotterdammerung of the Nazis. When the final catastrophe for the present currency system arrives there will certainly be social consequences all over the world, but I believe that governments will not just roll over and die - they will, particularly in the US, "do something" probably along the lines of MMT.

    MMT does not equal hyperinflation, per se. The government will most likely cut back on many social obligations - starting with means testing for medical and retirement benefits, plus there will be tax increases and cuts on benefits to the poor.

    I believe that those who believe that the "remedy" (whatever it may be) for this crisis will be the start of a new beginning will be many years too soon, the worst will be yet to come and will not follow for a decade or two. The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.

    starting with means testing for medical and retirement benefits, plus there will be tax increases

    So……
    Albert makes $50k/year, lives way below his means, foregoes trips, buys small, saves up a nice nest egg.
    Bruce makes $50k/year, buys every toy that catches his eye, reaches 65 or 68 with a bunch of landfill fodder (old boats, old cars, old motorcycles, fading photos of all the trips he took) and $0.

    Even worse: Chuck works TWO jobs, and lives way below his means, practically killing himself to accumulate what his peers would call very respectable wealth. And Bruce (and his buddies) vote for politicians who will TAX IT INTO OBLIVION to sustain the benefits Bruce (and his buddies) want.

    Means testing:
    Albert gets nothing because “he has savings.”
    Bruce gets mucho dinero because “he’s poor.”
    Chuck gets robbed blind because he’s “rich.”

    And we watch as decivilizing behavior metastasizes like cancer across the formerly wealthy West.

    You always get more of what you reward. Reward profligacy and waste and sloth. Get hell on Earth.

    Read More
    ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
  70. anarchyst says:
    @dc.sunsets
    Theoretically, any version of Single Payer fails on monopoly axioms, but I'll aver that nation-states that run some form of it do seem to be better off than is the USA's populace. That could be due to several artifacts, for example: The real costs are being buried, ignored or (more often) deferred via the magic of debt, or the measurements of well-being are skewed to one visible population vs a less visible one, or (very significant) a homogeneous nation like Japan can do things that a heterogeneous nation (like Diversity, Inc.'s USA) may not successfully implement.

    What will be, will be, and today's morass is an utter disaster, High Expense/Low Benefit system that is rapidly approaching the point where 100% of wealth is sucked into it...something will change.


    If you live an active life and eat primarily whole foods, your diet will never be a topic of discussion with your Dr. Just as well because your average GP is pretty clueless about proper nutrition and exercise.
     
    You must be young. Eventually, no matter how much whole food and proper exercise you get, your labs will move into a zone where your doctor wants to give you a drug to "treat" them. This is a game...I ought to know, I used to be a pharmaceutical salesman. As you noted earlier, your high muscle-mass body type puts you in "overweight" despite your being far from it. Been there, done that. The entire point of all these guidelines is not longevity or health, it's to put as many people into the "treatment range" as possible. The people who write those recommendations are nearly 100% bought and paid for by Merck, Lilly, Johnson & Johnson, Pfizer, Astra-Zenica, Glaxo-Smithkline, etc., etc., etc.

    Even in countries with “single payer healthcare”, supplemental insurance policies are almost always required, if one wants a semblance of decent health care.
    Even that “showplace” of socialized medicine (Canada) has private healthcare insurance and yes (gasp!) private hospitals and doctors that operate on a “fee for services” basis.

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  71. @dc.sunsets

    The Soviet Union lasted for 70 years as a command economy. Expecting the US to go for, maybe, 20 does not seem excessive to me.
     
    1. The USSR survived for 70 years with a lot of outside help.
    2. Even with your assumption, I date the beginning of the USA's following an absurd, axiomatically impossible economic course to 1964 (when domestic use of dollars was fully floated away from any commodity standard.)

    Ironically, 1964+70=2034, the date I suggested for when the "C" wave might be bottoming and political revolution arrives. (PS: The USSR's political revolution in 1991 came at a social mood high. Political revolutions that come at or shortly after social mood lows tend to look more like the Bolshevik Revolution and the rise of the Leninist/Stalinist mass murder programs. For more on that, youtube has an English-dubbed 1992 Russian movie about Lenin's nice little secret police, titled The Checkist. Paradoxically, the movie ends up being sympathetic to the man who orders the cold-blooded murder of untold numbers of his fellow citizens. That tells you something about Russians, I think.)

    BTW, I follow a view that has us near the apogee of a large wave up dating to 1784. The War of Southern Secession, the Great Depression (and lovely experiences like WW1 and the Bolshevik Revolution) were simply corrections within that long boom.

    We’re coasting into the top amidst fiat money and debt on a scale unimaginable until quite recently, even as economic production looks to be 20% of the USA passing pieces of paper to each other, while the rest all sit and watch TV for 16 hours a day. Extraordinary inventions 100 years ago like harnessing electricity and the internal combustion engine are now minor fads like social media or Uber. For all of our comforts and cleverness, our modern “inventions” pale to insignificance by comparison. As I said, we’re coasting into a once-in-300-years top.

    I adhere to the general (but not specific) forecast from the current primary exponent of this theory, Robert Prechter, Jr. In this, I expect a series of up and down waves in finance, the economy, peace and war (respectively), etc., lasting pretty much a century, with each declining wave resulting in more intense social catastrophe.

    The first will be financial. The next will be political. The next will be social (as in world war on a scale larger than that of the World War twins of 1914/1938.) Going to be a wild ride for my descendants, for whom I retain great hope.

    So sit back, enjoy a mint julep and bask in our antebellum times. Disinterested observers are not allowed.

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  72. peterAUS says:

    Well…from the post 35 with

    No one knows the future, but lots of people charge good money for slick forecasts anyway.

    to recent couple of posts, quite a difference.

    You have put a timetable for events.
    Can’t say how correct it is, but, there is another angle.
    The Powers That Be know all that (again, correct or not isn’t important).
    I am sure they have contingencies in place.

    I think what’s missing from the debate is a definition of “bad/crisis/catastrophe” etc.
    What is a terrifying catastrophe for one social group can be, and usually has been, an opportunity for another.
    Russia 1917 for example; BAD thing for most, blessing for Lenin and his team.

    So, the same applies to the coming bad thing.

    Save WMD exchange on strategic level, some social group(s) will benefit from that and some won’t.

    Now, looking at the state of affairs now, it looks as people on a losing side as we speak could well be on the same side again in that scenario.
    Just not smart enough.

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    • Replies: @dc.sunsets
    In a social mood bear market, most people will suffer, and often it's the most vicious who thrive.

    Forecasting is addictive because everyone wants to be able to say, "I told you so," or, "You heard it here first."

    Unfortunately, getting the timing right tends to be accidental.

    As to TPTB knowing, I doubt they pay any attention. After all, they are Ozymandias.

    , @MarkinLA
    Steven Forbes said his Dad told him - "There is more money in giving advice than in taking it".
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  73. @peterAUS
    Well...from the post 35 with

    No one knows the future, but lots of people charge good money for slick forecasts anyway.
     
    to recent couple of posts, quite a difference.

    You have put a timetable for events.
    Can't say how correct it is, but, there is another angle.
    The Powers That Be know all that (again, correct or not isn't important).
    I am sure they have contingencies in place.

    I think what's missing from the debate is a definition of "bad/crisis/catastrophe" etc.
    What is a terrifying catastrophe for one social group can be, and usually has been, an opportunity for another.
    Russia 1917 for example; BAD thing for most, blessing for Lenin and his team.

    So, the same applies to the coming bad thing.

    Save WMD exchange on strategic level, some social group(s) will benefit from that and some won't.

    Now, looking at the state of affairs now, it looks as people on a losing side as we speak could well be on the same side again in that scenario.
    Just not smart enough.

    In a social mood bear market, most people will suffer, and often it’s the most vicious who thrive.

    Forecasting is addictive because everyone wants to be able to say, “I told you so,” or, “You heard it here first.”

    Unfortunately, getting the timing right tends to be accidental.

    As to TPTB knowing, I doubt they pay any attention. After all, they are Ozymandias.

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  74. MarkinLA says:
    @Miller
    The AMA does not recognize residency performed in other countries, prospective doctors have to fulfill residency here. Just because many ARE foreign, doesn't mean we couldn't do with a whole lot more. This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation. No one in the gravy train wants this to happen despite a very real shortage of GPs and geriatric specialists.

    In all reality an insured person should be able to travel to another country for treatment and have the same $ coverage they get in the US, same for prescription meds. Not even to a third world country, an MRI in Europe is 1/5 the US price, prescription drugs offer even bigger savings. That's how competition works, or doesn't in the case of health care in the US.

    From an article on the subject:

    ----In order to become practicing physicians, graduates must complete at least three years of residency training, usually in large teaching hospitals. Without more residency slots, the number of physicians entering the workforce cannot increase. (If the number of U.S. medical school graduates increased, but the cap were left in place, graduates of U.S. medical schools, who have preference for residency slots, would replace graduates of foreign schools, but that would have no net impact on total physician supply.)

    The logjam in residency openings stems from the 1997 Balanced Budget Act. At that time, the number of residency slots funded by Medicare (the principal source of residency funding) was capped at around 100,000, and that cap has remained in place ever since.----

    This would depress Dr earnings though, and rapidly depress what Med Schools could charge, and what banks can lend for a degree, eventually the price of care would go down or at least stop exploding relative to other measures of inflation.

    You need to go to places like Monterey Park full of Chinese immigrants – especially the Medicare eligible parents of immigrant children on family unification visas to see how they operate. The more Chinese doctors there are, the more those people see them on a regular basis (for any ache or pain) and the more the Chinese doctors bill Medicare. The good doctors don’t even charge the copay which makes the hypochondriacs see them even more. The doctors are happy to lose the income from the copay to make sure you visit them every week.

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  75. MarkinLA says:
    @peterAUS
    Well...from the post 35 with

    No one knows the future, but lots of people charge good money for slick forecasts anyway.
     
    to recent couple of posts, quite a difference.

    You have put a timetable for events.
    Can't say how correct it is, but, there is another angle.
    The Powers That Be know all that (again, correct or not isn't important).
    I am sure they have contingencies in place.

    I think what's missing from the debate is a definition of "bad/crisis/catastrophe" etc.
    What is a terrifying catastrophe for one social group can be, and usually has been, an opportunity for another.
    Russia 1917 for example; BAD thing for most, blessing for Lenin and his team.

    So, the same applies to the coming bad thing.

    Save WMD exchange on strategic level, some social group(s) will benefit from that and some won't.

    Now, looking at the state of affairs now, it looks as people on a losing side as we speak could well be on the same side again in that scenario.
    Just not smart enough.

    Steven Forbes said his Dad told him – “There is more money in giving advice than in taking it”.

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    • Replies: @peterAUS
    Well...reply to both you and dc.sunsets, and the thread in general would be:
    It's not about economy, it's about power.

    I believe the next step, save some miracle, is variation of modern feudalism or Brasil type social structure.

    For the owners, managers and enforcers it will be good (in decreasing levels but even for enforcers good enough, especially compared to the rest).

    The rest will be managed and enforced; if good enough taken into enforces (exceptional even into lower level management).
    Perception management, breads and circuses, small scale wars and prisons.
    Dystopian and bleak for 80 %.
    That's the group where I'll complete my life in this incarnation (if one believed in that, of course)

    After that, no idea.
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  76. peterAUS says:
    @MarkinLA
    Steven Forbes said his Dad told him - "There is more money in giving advice than in taking it".

    Well…reply to both you and dc.sunsets, and the thread in general would be:
    It’s not about economy, it’s about power.

    I believe the next step, save some miracle, is variation of modern feudalism or Brasil type social structure.

    For the owners, managers and enforcers it will be good (in decreasing levels but even for enforcers good enough, especially compared to the rest).

    The rest will be managed and enforced; if good enough taken into enforces (exceptional even into lower level management).
    Perception management, breads and circuses, small scale wars and prisons.
    Dystopian and bleak for 80 %.
    That’s the group where I’ll complete my life in this incarnation (if one believed in that, of course)

    After that, no idea.

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    • Replies: @dc.sunsets
    Eh. Me and mine seem to generally be in the managerial/producer class, so the conditions you posit would actually be okay for my clan. But I don't think the Ruling Oligarchy will be any more successful in perpetuating this weird system we "enjoy" than were their counterparts in past empires.

    In general, it does not pay to be stupid or useless. Idiocracy is not a comedy.
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  77. @peterAUS
    Well...reply to both you and dc.sunsets, and the thread in general would be:
    It's not about economy, it's about power.

    I believe the next step, save some miracle, is variation of modern feudalism or Brasil type social structure.

    For the owners, managers and enforcers it will be good (in decreasing levels but even for enforcers good enough, especially compared to the rest).

    The rest will be managed and enforced; if good enough taken into enforces (exceptional even into lower level management).
    Perception management, breads and circuses, small scale wars and prisons.
    Dystopian and bleak for 80 %.
    That's the group where I'll complete my life in this incarnation (if one believed in that, of course)

    After that, no idea.

    Eh. Me and mine seem to generally be in the managerial/producer class, so the conditions you posit would actually be okay for my clan. But I don’t think the Ruling Oligarchy will be any more successful in perpetuating this weird system we “enjoy” than were their counterparts in past empires.

    In general, it does not pay to be stupid or useless. Idiocracy is not a comedy.

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    • Replies: @peterAUS

    Eh. Me and mine seem to generally be in the managerial/producer class, so the conditions you posit would actually be okay for my clan.
     
    True.
    As long as they don't overstep their assigned roles.
    Also, every now and then a member of that layer is sacrificed, given to the mob, for failures of the system. The catch is not to be one of them.

    But I don’t think the Ruling Oligarchy will be any more successful in perpetuating this weird system we “enjoy” than were their counterparts in past empires.
     
    Agree.
    As feudalism before.
    The catch is nukes and really accumulated expertise of control.
    So...who knows

    In general, it does not pay to be stupid or useless. Idiocracy is not a comedy.
     
    True.
    For two reasons.
    First one is that above (be smart not be given as sacrifice).
    Second, be aware how things really work.

    To survive all that requires, usually, a lot of luck, smarts and highly developed doublespeak/doublethink.
    Spiritual death, in fact.
    Nice a?
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  78. @Miller
    I have to admit not being able to find any studies showing that with more hospitals per capita the prices go up. I suspect if it is true (and the data is recent enough to be relevant) it is not reliable, it will not be consistent enough across markets to be predictive of cost.


    As for health care, every time you agree to see a PA or RN for basic care/initial visit instead of an MD (get an appt tomorrow vs two weeks from tomorrow), you are getting bargain care. It might not be billed that way, but it should...

    Ultimately the only place where higher quality care really kicks in (aside from basic availability) is under the knife, and a good surgeon might not only be in a high supply or high population density area. Better facilities usually are, though, with more expensive markets having purpose built surgical theater/recovery wards in stand-alone facilities. Poorer communities might have additional services in a trailer in the back parking lot.


    I have found evidence that fewer networks in an area will lead to higher cost regardless of supply - the networks buy out local practices and the price goes up. This supports a supply and demand theory but leaning toward a more fundamental explanation - the cost of a good or service is determined by what the market will bear - a person will liquidate their retirement for medical care if necessary. More facilities does not reduce cost because a major component is administrative cost per unit of care, yet seemingly unaffected by number of facilities per unit. Also known as price-fixing or fleecing.

    Another factor is that cost is indeed to some extent regional - so cost of living is a major driver. Per unit expense trends seem to hold across markets to some extent as well - the price nationally goes up at a similar rate.


    Re diet, if your Dr tells you to change your macronutrient ratios without first determining what your diet actually is and your average activity level, they might as well be recommending hernia surgery based on your age and gender without doing an exam = incompetent.


    FWIW, I've never had a Dr recommend eating less fat. If I came in high in the charts I've been told to eat less. I ignored this advice - I was 7% bodyfat and could benchpress over 1.5 times my bodyweight. When your lower abs are vascular, you don't need to eat less of anything. But I was overweight for my height according to the charts..."Sure thing doc"


    And, a higher carb % diet is not a bad thing anyway, as long as those carbs are predominantly from whole foods and not Wonderbread. Is the diet practiced by some of the longest living communities on the planet.

    Late in the discussion here, but I’m not alone in noticing that “low fat” diets are dominant in medical recommendations.

    http://www.pharmaceutical-journal.com/20203046.article?clearcache=1

    tl;dr version: the endless demand to reduce fat in the diet, and the 24/7 saturation blitz to get everyone taking statin drugs, are astonishingly STUPID, costly products of a monopoly system characterized by corporatism.

    [MORE]

    Excessive consumption of refined carbohydrates (especially sugar) and the resultant glycaemic load can overwhelm hepatic mechanisms that regulate the body’s blood glucose levels[35]. Evidence surrounding the use of low carbohydrate, high fat diets for the prevention and treatment of CVD, type 2 diabetes, and obesity is accumulating[36]. Unfortunately, other than Brazil, there has been little change to any nation’s dietary guidelines, which continue to recommend a low fat diet, which often results in diets high in refined carbohydrates (especially sugar).

    Furthermore, dietary guidelines (as well as a recent presidential advisory by the American Heart Association) recommend replacing saturated fat with unsaturated fat in order to reduce LDL-C[37]. In practice, this translates to recommending vegetable oils and margarines rich in omega-6 polyunsaturated fatty acids (PUFA). Hence, the consumption of omega-6 PUFA has skyrocketed in recent decades and dwarfed the intake of omega-3 PUFA.

    In traditional societies, the ratio of omega-6 to omega-3 polyunsaturated fatty acids was 1:1[38]. This came about due to diets rich in fish, plant foods and free-grazing animals, and eggs from chickens that ate plants high in omega-3 fats. But now in industrialised countries, the dietary ratio is closer to 20:1. This is a more ‘pro-inflammatory’ mix of PUFAs and may contribute to worsening of inflammatory atherosclerotic plaques. The benefits of the Mediterranean diet have been attributed to its high alpha-linolenic acid (omega-3) and polyphenol content present in nuts, extra virgin olive oil, vegetables and oily fish, which act to dampen the inflammatory response. What little carbohydrate there is exists along with its inherent fibre, thus reducing glycaemic load, liver fat, and insulin response.

    Furthermore, even minimal exercise can help to reverse insulin resistance. A recent article stated that regular brisk walking, just 30 minutes per day more than three times per week, can reverse insulin resistance[39], while another study suggested that just 15 minutes of moderate-intensity exercise per day can increase lifespan by 3 years[40].

    Time to redefine CVD risks

    In summary, for many patients at high risk of CVD, one of the safest and most effective ways to reduce the risk of heart attack and stroke is to consume a high fat and low glycaemic load Mediterranean diet and engage in regular exercise. At the very least, exercise interventions are often similar to drug interventions in terms of their mortality benefits in the secondary prevention of coronary heart disease, and do not come with side effects[41].

    Currently 75% of healthcare dollars are spent treating chronic metabolic disease. Instead of funnelling billions to drug research and development, perhaps more of that money could be spent encouraging the implementation of policy directives that encourage population-wide behavioural change (similar to the efforts to combat tobacco and alcohol) to reverse insulin resistance. Even a 20% reduction in sugar consumption can evidence marked cost savings[42]. Public health should work primarily to support the consumption of real food that help protect against neurohormonal and mitochondrial dysfunction, and not continue to promote calorie-directed messages that blame victims, and exacerbate these pandemics. Then, and only then, might we achieve the goal of attenuating the prevalence of CVD and the other chronic diseases of the metabolic syndrome.

    emphasis added.

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  79. peterAUS says:
    @dc.sunsets
    Eh. Me and mine seem to generally be in the managerial/producer class, so the conditions you posit would actually be okay for my clan. But I don't think the Ruling Oligarchy will be any more successful in perpetuating this weird system we "enjoy" than were their counterparts in past empires.

    In general, it does not pay to be stupid or useless. Idiocracy is not a comedy.

    Eh. Me and mine seem to generally be in the managerial/producer class, so the conditions you posit would actually be okay for my clan.

    True.
    As long as they don’t overstep their assigned roles.
    Also, every now and then a member of that layer is sacrificed, given to the mob, for failures of the system. The catch is not to be one of them.

    But I don’t think the Ruling Oligarchy will be any more successful in perpetuating this weird system we “enjoy” than were their counterparts in past empires.

    Agree.
    As feudalism before.
    The catch is nukes and really accumulated expertise of control.
    So…who knows

    In general, it does not pay to be stupid or useless. Idiocracy is not a comedy.

    True.
    For two reasons.
    First one is that above (be smart not be given as sacrifice).
    Second, be aware how things really work.

    To survive all that requires, usually, a lot of luck, smarts and highly developed doublespeak/doublethink.
    Spiritual death, in fact.
    Nice a?

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    • Replies: @dc.sunsets
    Doublethink is believing two mutually exclusive ideas at once.

    What you're positing is just being a decent actor, a role we all play in meatspace.
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  80. @peterAUS

    Eh. Me and mine seem to generally be in the managerial/producer class, so the conditions you posit would actually be okay for my clan.
     
    True.
    As long as they don't overstep their assigned roles.
    Also, every now and then a member of that layer is sacrificed, given to the mob, for failures of the system. The catch is not to be one of them.

    But I don’t think the Ruling Oligarchy will be any more successful in perpetuating this weird system we “enjoy” than were their counterparts in past empires.
     
    Agree.
    As feudalism before.
    The catch is nukes and really accumulated expertise of control.
    So...who knows

    In general, it does not pay to be stupid or useless. Idiocracy is not a comedy.
     
    True.
    For two reasons.
    First one is that above (be smart not be given as sacrifice).
    Second, be aware how things really work.

    To survive all that requires, usually, a lot of luck, smarts and highly developed doublespeak/doublethink.
    Spiritual death, in fact.
    Nice a?

    Doublethink is believing two mutually exclusive ideas at once.

    What you’re positing is just being a decent actor, a role we all play in meatspace.

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    • Replies: @peterAUS
    Well.......be that as it may, I do believe the acting will be getting tougher and tougher.
    Aren't most of us here to offset that in our real life? Online therapy, writing what we really think (well, more or less, of course.............limits of current free speech and such).

    Maintaining the position in "management" layer will require being very good at it.

    Thinking about that, probably something our offspring should focus getting very good at.
    A part of curriculum/education/professional development even.

    Still....soul destroying.
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  81. peterAUS says:
    @dc.sunsets
    Doublethink is believing two mutually exclusive ideas at once.

    What you're positing is just being a decent actor, a role we all play in meatspace.

    Well…….be that as it may, I do believe the acting will be getting tougher and tougher.
    Aren’t most of us here to offset that in our real life? Online therapy, writing what we really think (well, more or less, of course………….limits of current free speech and such).

    Maintaining the position in “management” layer will require being very good at it.

    Thinking about that, probably something our offspring should focus getting very good at.
    A part of curriculum/education/professional development even.

    Still….soul destroying.

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    • Agree: dc.sunsets
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  82. @annamaria
    Correct.
    The fraud is not only unpunishable - the fraud has been encouraged. This is why Obama deserves his grand name Obama the Fraud.
    "All economic growth since 2008 has accrued only to the top 5% of the economy. 95% of the economy has been shrinking by about 3% per year… and continues to shrink, because the debts were kept in place. President Obama saved the banks and Wall Street instead of saving the economy.
    ...
    The Obama Administration de-criminalized fraud. This has attracted the biggest criminals – and the wealthiest families – to the banking sector, because that’s where the money is. Crooks want to rob banks, and the best way to rob a bank is to own one. So criminals become bankers. .... You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution." -- This is just another manifestation of unaccountability in the highest echelons of power in the US. (Don't we remember the "missing" $6 trillions that the Pentagon cannot account for?) The US is ruled by an oligarchy, and the US oligarchy is made of the financial crooks. As Hudson writes, "You can steal as much money as you want, and you’ll never go to jail if you’re a banker and pay off the political parties with campaign contribution. " The moral decay has penetrated everything and it this shows everywhere, from the crumbling infrastructure to the obscenely dishonest MSM. The whole country has been dumbed down and smothered with amorality and thievery by the "haves."

    “Yup” to all.

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  83. ghost says:

    …Digged? Seriously?
    No spellcheck?

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  84. @jilles dykstra
    " I got a PhD as a union card. In order to work on Wall Street, I needed a PhD. But what I found in the textbooks was the opposite of everything that I experienced on Wall Street in the real world. Academic textbooks describe a parallel universe. When I tried to be helpful and pointed out to my professors that the texbooks had little to do with how the economy and Wall Street actually work, that did not help me get good grades. I think I got a C+ in money and banking. "

    I happen to be an economist, based on this statement, and the rest of the article, that is incomprehensible to me, my conclusion is that the writer is one of the many in these days thinking they are economists, while they are not.
    'Economics is common sense made difficult', it is said, but during my now long life I discovered that common sense is rare.

    The problem is that academic standards since the 60ties in the whole western world went down, as Varoufakis states 'since the 70ties macro conomics was not taught anywhere in the western world'.
    I studied in the 60ties.
    A recent Dutch investigation into what Dutch 'economists' understand had devastating outcomes.
    Those that rule us studied in the seventies or later.

    All the articles about the derivates catastrophe were gibberish to me until I read the explanation by the German macro economist Sarrazin.
    Sarrazin is, with Varoufakis, one of the very few economists who understand that the euro cannot function, as 70 Dutch economists in 1997 already stated in a big advertisement, paid by themselves.
    Sarrazin, member of the Board of the Bundesbank was fired, the 70 Dutch economists felt what happens when you publish politiclly unwanted truths.
    Van Rompuy agrees with them 'the ECONOMIC consequences of the euro were insufficiently analysed'.
    This statement alas dates from a few years back, too late to prevent the disaster.

    And so Gresham's law was confirmed in economics 'bad money drives out good money', in this case 'bad economists drive out good economists'.
    Agriculturist Dijsselbloem 'leads' the euro group, Schulz was educated in book binding, Merkel is a physicist, Hollande is a teacher in german, Rutte is a historian who knows very little about VOC history, and so on and so forth.
    Varoufakis was driven out as minister of finance after a few weeks in office.

    Thilo Sarrazin, 'Europa braucht den Euro nicht, Wie uns politisches Wunschdenken in die Krise geführt hat', 2012 München

    Yanis Varoufakis, 'The Global Minotaur, America, Europe and the Future of the Global Economy', London, New York, 2013

    It really saddens me that someone can entirely dismiss Michael Hudson. The man, beginning with Super Imperialism, has done more to explain how money functions as a political concept that anyone who has lived in my lifetime. He is a giant, and anyone who hasn’t heard of him is simply not an economist, or even capable of understanding international economics.

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  85. @another fred

    What is money?
     
    BTW, I take this quote from Von Mises literally.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
     
    Most people do not realize that since the closing of the gold window, which effectively ended Bretton Woods, we do not have a formal currency system. It is all ad hoc - they have just made it up as they have gone along.

    For the most part people are just using dollars because they have a hard time doing anything else. There is a little direct exchange going on and its growth may be an ominous sign, but there is no formal system.

    Most people do not realize that since the closing of the gold window, which effectively ended Bretton Woods, we do not have a formal currency system. It is all ad hoc – they have just made it up as they have gone along.

    For the most part people are just using dollars because they have a hard time doing anything else. There is a little direct exchange going on and its growth may be an ominous sign, but there is no formal system.

    This is a fundamental misunderstanding of exchange rates. They most certainly do not “make it up as they have gone along”. Sovereign debt is about account for balance of payments differentials. The entire point of the BRetton Woods Conference (Aka, when the UN was founded) was to prevent any one country from competitively devaluing their currency. While in theory this COULD happen today, Bretton Woods was abandoned so the US could control the global economy with the USD. Exchange rates may not be codified in international law as it was under Bretton Woods, but the exchange rates of today are just as political as they always have been.

    As to your second point, you don’t understand money at all. People are “just using dollars” because they are required to pay taxes in United States Dollars and our civil court system only adjudicates debts in United States Dollars.

    As it stands, we are transitioning to a new Bretton Woods system that will function a lot more like what Keynes proposed originally. In a short period of time, foreign exchange will be restricted only to something like the Bancor, and with it libertarian goldbuggery will be dead.

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  86. @Jim Christian

    Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances.
     
    Fair enough. In the media, a "moral" victory for the left. On the ground however, you have to include blood in the tally. Body count. For the Left, up North and on campuses and liberal cities, the Left counts the meat. They are largely unopposed. even the Democrat Party was careful not to include too many children in Trump-Campaign protests for fear of getting the elite's children hurt or killed. They know these are folks that will fight back.

    Down South, the meat counts the Left. In little Charlottesville, a few dozen or a hundred rednecks fought back. And one of them mowed down a substantial number and killed one of the Lefties. And there are lots more where he came from. I suspect the Left won't be dipping their toes too deeply into the pools of White resentment further South where men with guns and Stand Your Ground statutes apply. Protest is all in good fun when you're unopposed. When your victims fight back however, media declaring "victory" rings hollow when you're licking your broken bones in the UVA Hospital, when you're at funerals. One day the injured participants will wonder, when the body count piles up, why they do this, who inspired it all and why. Human nature doesn't change. Just because the Civil War was 160 years ago doesn't mean it's obsolete. It was just put on hold for a bit.

    Jim, you are keeping me up all night- l have been catching up on all your prior comments. There is much wisdom and solace in what you have to say!

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  87. Yeah well, keep reading, you’ll get over it..

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