Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Tuesday, November 15, 2011

The Top 1%

In my post below about our kitchen flood, commenter Bubblehead Les asked me how it felt to be in the Top 1% (because I actually had enough emergency fund money set aside to pay cash for a $1,300 refrigerator). All snark aside, the ability to purchase luxury goods and services because I earned and saved some money is indeed nice. Make no mistake, refrigeration *IS* a luxury. Most of the world has to do without it.

Strictly speaking though, the top 1% worldwide is not a very high bar. Our poorest citizens, those making <$5,000 per year, are in the top 15% of income earners worldwide. Does this make them rich? It depends upon your perspective. In the abstract, it does. In our Second World economy with its high cost of living? Not really.

According to the Census Department, we have 118,682,000 households reporting income in 2010. Dividing this into fifths (quintiles), you get 23,736,000 households in each quintile.

In terms of quintiles, our bottom 20%, with incomes under $20,000 annually, are in the top 15% (that bar being only about $2500 per year).

The second quintile, with incomes between $20,000 and $38039, is in the top 10% worldwide.

Our middle fifth (the average earners in our nation), with incomes between $38,040 and $61,719, is in the top 1% worldwide.

I will let you refer to the charts to glean what information you can. Generally speaking those people who work, have some education, and make good choices about relationships tend to do better than those who don't.

We live in the greatest country the world has even known. We have the ability to do almost anything in an attempt to earn a living. We can choose to save, spend, invest, or squander whatever we earn. We have choices open to us that most of the world can only dream of.

Attempting to change our economic meritocracy into a system of cronyism, rent-seeking, Marxist-redistributionism, or Socialism in the name of "Democracy" and "Fairness" misses the fundamental aspects of our Republic: Equality of opportunity and preservation of property rights. What you work for, what you *EARN*, you get to keep (most of, anyway) or dispose of as you will. It is too bad that the useful idiots in the "OccupySomething" protests weren't taught this in college.

Make good choices, you can buy luxury goods and services. Make poor choices, live a life that is relatively poorer as a consequence. Works for me.

Pax,

Newbius

2010 Census data on Income Quintiles and Income Distribution
Worldwide data pulled from Globalrichlist.com

Thursday, July 28, 2011

Do you want a balanced budget?

No need to pass a Constitutional Amendment. Nope. If you want to get a balance budget here is what you ask your congresscritter to do:

NOTHING

Do nothing. We are at our statutory debt limit. NOTHING MORE can be borrowed. No more deficits can be run up. On August 3rd, the government will have to live within its means. It can NOT borrow more money.

Some hard choices need to be made, as the Free Stuff Army will still want their ice cream, skittles, and unicorn farts. The rest of us can breathe a little easier, because there is NO CRISIS. There is only the requirement that we spend only what revenue that we take in, and no more.

If TurboTaxTimmy chooses to default on the debt, then it will be a deliberate act of Treason, not the rational response to forced budgetary austerity due to statutory limits.

Keep an eye peeled. A crisis is what they want. They want you to scream "DO SOMETHING"...so that they can. Call them up and tell them to DO NOTHING. It is the best hope for our future.

Pax,

Newbius

Wednesday, March 23, 2011

Questions and suppositions

Suppositions first: Suppose that Obama is actually a committed Marxist whose intent is on overthrowing ("fundamentally transforming") the way America operates. Suppose that he intends to destroy life as we know it, to be replaced by top-down socialism/fascism, and wants to be able to claim that an outside agent is responsible. Suppose that he intends to weaken our country, our citizens, and our standing in the world. Suppose, also, that the Democratic Party (and their Union enforcement arm) are agents of this change and that it has been their desire for the last 75 years or so, too.

How do you achieve this without prematurely alerting the American public?

Do you wildly inflate the budget beyond any reasonable ability to fund it? (Current accounts deficit, $1.5 Trillion)

Do you force the entitlement spending to consume the entire revenue stream while leaving essential functions to be funded on borrowed money? (Projected actual entitlement spending, including Obamacare, will outstrip tax revenue in <10 years)

Do you engage in opportunistic wars that consume materiel, without funding the replacement of said materiel, so that the military is weakened? (Libya?)

Do you push more people into government dependency by creating onerous hurdles to private sector hiring?

Do you collapse consumer confidence by overwhelming the banking system? (Housing bubble was a direct result of the policies of FNMA and FHLMC)

Do you increase food costs by mandating cropland be used for fuel supplies? (Ethanol)

Do you prohibit the exploration and exploitation of existing natural resources under our control? (Bans on Oil and Natural Gas exploration in the Gulf of Mexico (near shore) and ANWR)

What happens when the nations currently funding 40% of our current expenditures decide that they want a better return on their money? What happens if they do not buy our bonds? What happens if they decide to collect on a bond default by force?

What happens if the food shortages (and/or food price increases due to our inflated currency) foment hunger riots?

With these questions in mind, what are the chances that China will decide that it won't buy our bonds? If that happens, then we will have to increase the rate paid on our bonds to entice buyers. Doing so will explode expenditures on interest payments to service the debt and will cause a funding crisis in the short term (and a budgetary crisis for the foreseeable future). The cascade effect of this will be that the Dollar collapses as a currency.

I can see a whole lot of plausible scenarios unfolding if the Dollar collapses. None of them are good. Most of them involve military intervention at home (and not necessarily to 'repel boarders'), and martial law. Most of them involve the suspension of civil rights until the 'crisis' abates (if it ever does).

Most people are willing to give Baby Barack Duvalier Obama the benefit of the doubt and chalk up his 'mis-steps' to naievete and disinterest. Most people are willing to apply Hanlon's Razor to his governance. However, what if it is not stupidity at all?

What if Obama's actions really are malicious to the long-term success of the United States? What if ideology really does drive every action or inaction on his part? What if the results are intended? What then? Because the already-visible results of his policies, if intended, make him an enemy of the Constitution - Domestic variety.

Are you ready to face that reality?

Newbius
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Sunday, November 14, 2010

Dear Airline Industry

You have lost me as a customer.

Just as I am entering into the years of my life where I planned to do a lot of travel, you enabled the thugs of TSA to completely and forever alter the relationship with your customers. Now, instead of responding to the millions of advertising dollars that you spend every year by purchasing a seat on the "friendly skies", I will travel by car.

The revenue that you hoped to see during the holidays? It will instead be spent at a string of Exxon, Texaco, and Unocal stations from sea to shining sea. Do not expect me to be helping you pay off your 777's and 787's any time soon.

In order for me to fly on your airline, I must:

Endure the indignity of shoe checks, naked scans, or groin gropes.
Leave my toiletries at home.
Leave my pocket knife at home.
Leave my handgun at home (because if it doesn't get damaged in-transit, your baggage handlers will steal it).
Arrive several hours in advance of my flight, get hassled by rejects from rent-a-cop school, get questioned about my destination, purpose for traveling, length of stay, and desire to remain a sane citizen (Papers, please!).
Be willing to submit to indignities under penalty of excessive fines without ability to appeal.
For the pleasure of enduring all of the above, I have to pay you, and pay extra if I wish to bring more than two changes of clothes.

No thanks.

You (the airline industry) are clamoring for the government to make you feel safe, while trampling the liberty of the citizenry. Too bad. I refuse to play any longer.

In the near future, I am embarking on a round-trip journey across the country, from Virginia to California and back. All-told, this could have generated a couple of thousand dollars of ticket sales for you, as I intend to stop in Tennessee, Arizona, Colorado, and Kansas along the way. Instead, I will take the lesson that you are trying to teach me to heart. Namely, you value your alleged security more than you value my liberty or my custom. So, I am taking away my custom and keeping my Liberty.

In opting out, you will lose my revenue, as you have lost my willingness to be subject to arbitrary rules without logical purpose (except to teach me subjugation). My schedule can tolerate a few extra days devoted to travel. Can your profit margin tolerate people like me boycotting your services? If so, how many, and for how long?

The traveling public wishes to know.

The traveling public is waiting for the Airline Transport Association to decide that the pendulum has swung too far. The public is waiting to see what breaks first: your industry, or the TSA. I am betting the former. The bureaucracy has finally gotten what it has always wanted: Carte-Blanche to inspect and detain citizens at-will, and without cause; and you are the smokescreen.

When the last airline is destroyed, sacrificed upon the altar of the Security god, don't whine that you "didn't know". You are all hoping to be the last one standing, to receive the final bailout and nationalization. In truth, the TSA parasite has already killed the Airline Industry host. All that remains to be seen are the agonizing throes of your demise.

I'll be the one with the popcorn.

Newbius
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Saturday, November 6, 2010

Lazy Saturday

Nothing much going on except doing some cleaning and making some pizzas...and, making sure that the rice, beans, jerky, and ammunition supplies are topped up.  Because, you just never know...

Pax,

Newbius

Wednesday, October 6, 2010

A dichotomy?

An interesting dichotomy showed up in the reports today. The first is that spending by the middle class is through the floor. Next, wages have fallen in actual dollars (New York, in this example). Usually, this results in the price of goods and services to go down as a result of Supply and Demand (market forces).

However, the most recent reports are that prices are actually going up. In the case of commodities, the prices are sharply up. Oil and Gas, Wheat, Corn, Pork Bellies (Bacon) are all up between 7% and 37% in recent months. Is this a dichotomy? Maybe. Maybe it is not supply and demand that is driving the prices of commodities right now.

Karl Denninger points out that the currency is being devalued at a rate (compared to commodities) >200% annually right now. For all goods and services which trade in Dollars, this means that it takes more of them to purchase the same value of goods in real trade terms. So, while your wages are going down in actual dollars, and your taxes are going up as a percentage of wages earned, your ability to purchase goods and services is being cut drastically by the Fed and their policies.

Recent stimulus acts pumped more than a TRILLION DOLLARS into the economy, with no immediate effect on inflation. The underlying reason for this was that the bulk of it went to prop up reserves at the banks (to prevent nationwide bank failures) and to cover the losses due to fraud in the mortgage industry. The Government helped their cronies in the banking industry (the Banksters) hide the true breadth of their fraudulent activities to prevent massive civil (un-civil?) disruptions by the general public.

Now those Billions upon Billions are starting to make it out to the market. Meaning that the flow of currency in the market is accelerating and we are seeing the start of massive inflation in commodities prices. Right now, the US Dollar is the world's reserve currency. What do you think the outcome will be globally when the reserve currency begins to rapidly inflate?
"...and I beheld a black horse; and he that sat upon it had a pair of scales in his hand. And I heard a voice...say, "a measure of wheat for a day's wages, and three measures of barley for a day's wages, but do not damage the oil and the wine""REV 6:6
Famine, perhaps? Or worse?

This nation is divided right now, more so than ever before. We are a nation of the Ruling Class on one side, and everybody else on the other. Those people of the ruling class depend upon your willingness to continue being fleeced by them. Everybody who is a member of the ruling class, and the bureaucracies that support them, depends on you to keep them fed. You keep them fed, sometimes at the expense of your ability to feed your own family, because you are law-abiding. For now.

Think about that. Then, Vote in November. Reverse this trend before it destroys our Country, if it hasn't done so already.

Pax,

Newbius

Wednesday, September 29, 2010

Snarky Stumbles Upon an Economic Plan

I admit, I laughed out loud at THIS. There are a few problems with it, of course. Foremost being that one million dollars isn't much these days, and the act of retiring everybody over 50 would leave a tremendous dearth of experience in the workforce.

But, I did laugh...

Pax,

Newbius

Thursday, June 10, 2010

QOTD - Ben Bernanke

“I don’t fully understand movements in the gold price”
Quoted in an article in the Wall Street Journal yesterday.

Really? Are you kidding?

Let me break it down for you Mr. Chairman. Gold is a store of value. Gold's price moves as a result of three primary motivators: Greed, Fear, or Relative Worth to your fiat trash from the Fed.

Let's take the last one first, Mr. Chairman. Your wanton profligate printing of paper currency with no backing has inflated said currency and diminished said currency's value relative to precious metals. An ounce of gold's utility is roughly the same as it was 3 years ago, but its ability to be purchased requires more of your worthless trash to acquire. Hence, the price has risen.

Next, the price of gold is also an indication of the relative stability of geopolitics. As world events unfold, the price of gold fluctuates with the level of tension among adversaries. More tension (as with Iran's saber-rattling) equates to higher prices of precious metals. If you couple an unstable world with your unrestrained printing presses, people get a little worried about their ability to buy bread in the future and tend to run to things which will store value for them. Fear is a factor in the price of gold. Your policies are not helping calm the sheep. Really. Go look it up.

Lastly, let's look at greed. Seriously. Your friends at Goldman Sachs, Lehman Brothers, and the other brokerages have been speculating that the price of gold might rise given your policies at the Fed. I am not sure where they would get this wild idea from, since they are not all Harvard-educated like yourself. Maybe you could ask George Soros about currency speculation...I hear he might know a thing or two. He might be able to explain to you that in every political and economic crisis there is profit to be extracted. Further, if you can manipulate the crisis to your advantage, you can get the other players in the global speculatory regimes to play along and thus milk them for some squeeze too. It was just a thought...you might not actually know George Soros personally. You might have to get Barry to introduce you two so that you can get an education at his knee about things like gold.

Mr. Chairman, in all of your years studying economic theory at MIT (Ph.D. 1979) and Harvard (BS, 1975)), and teaching it at Stanford (1979-1985), you never fully grasped the prime movers of the price of Gold? I find this truly baffling.

Perhaps I can recommend a book to you that would help you understand the basic concepts. Heck, I'll send you my copy.

Pax,

Newbius

Friday, January 29, 2010

I know how we got here

We got here through Progressive nanny-statists co-opting our systems of governance, education, and communication. The real question is this: What are you going to do about it?

How are you going to educate yourself on combating this menace to our Constitutional form of Government? What are you going to do to safeguard your children's minds and inoculate them against feel-good rhetoric, and instead teach them WHY our nation and the ideas which begat it were so revolutionary?

Beyond personal preparation for the potential impending societal collapse caused by the implosion of our currency, there is a very real need to relearn the fundamental truths of economics and freedom. I am continuing my education through extensive reading of the classics, and the new intellectuals. I encourage you to do likewise.

This month's reading list includes "Starving the Monkeys", "The Wealth of Nations", and "Liberty versus the Tyranny of Socialism". Always on my reading list is "The Federalist Papers".

After watching Glenn Beck's show tonight, I am adding one more book to my must have list: Liberal Fascism by Jonah Goldberg. I already have Mark Levin's Liberty and Tyranny, I just have to read it. It is not yet at the top of my list. Maybe next week...

The late Charlie "Tremendous" Jones had many timely and poignant quotes that were real truisms. I will leave you with two of them tonight. Think about them as you watch the news of the day and interact with the people around you.

Here they are:

"Leaders are readers"

"No one is a failure until they blame somebody else."


Pax,

Newbius

Monday, January 18, 2010

The power to tax

Basic economics lesson for the youngsters:

The power to tax is the power to control. Never forget that fact. Anybody who tells you that they are raising taxes to raise revenue is lying to you. They are raising taxes to control behavior and force changes in the way you run your life.

Whenever a politician tells you that he is raising taxes to pay for something, instead look at the depressive effect that those taxes will have on whatever is being taxed. Any government that wanted to raise REVENUE, lowered taxes. Kennedy, Reagan, Bush increased (actually, Congress increased) revenue by lowering taxes. This stimulates investment and frees up capital for the people to spend, and the effects trickle down through all strata of society.

Don't be fooled by the deficit numbers. These only track the delta between revenue and spending. Even if revenue skyrocketed, if the spending out-paces it, then the deficit will increase (and will give the spenders some fodder to make the claim that lowering taxes increases the deficits). Watch who complains when tax rates are lowered. It will ALWAYS be the people who want to exert more control over your life. These people are the enemies of freedom and Liberty.

Pax,

Newbius

Saturday, September 19, 2009

The First Rule of Blogging

... is "try and post something every day".

I am working on some ideas, but have no content of my own right now.

So, in the interest of pointing my readers (all 9 of you) to things I like, or care about (or just plain silliness if the mood strikes), and to honor "Rule One", I give you Walter Williams' three most recent columns - Washington's Lies, Inflation and Deficits, and Education

When the Hannah Giles bikini photos get back from the printer, I'll let you know...

Pax,

Newbius