Friday, August 26, 2011

Mr. Crankypants Sez "I told you so."

Mostly I just wanted to cleanse the palate to move on to lighter topics, but first I needed to cough an "I told you so" hairball out of my bloggin' throat.

Ten-year T-bill returns are still well below where they were on the Aug. 5 downgrade of U.S. Credit. Despite everybody losing their mind during the second week of August, the stock market continues to limp along in stagnation. Here's a graph with the S&P 500, Dow Jones, NASDAQ, and 10-year t-bill rate all indexed to 100% at the close of business on Aug. 5:

This economy badly needs a major dose of economic stimulus and a huge jobs program. I know that idea gives people the heebie jeebies because we budgeted $800 billion in 2009 to deal with this economic disaster all we managed to do was to keep the Great Recession from turning into the second Great Depression. (Come to think of it, that's not all that bad for $800 billion.)

But we are losing trillions of dollars in potential productivity because we're stuck in neutral. And it's not just an economic disaster. It's a personal disaster for the millions of people who have lost their jobs and who now can't find good jobs.

I know the national debate has been focused obsessively on the long-term deficit -- which was created by the Bush tax cuts, by the way. But that deficit is a problem that gets much more manageable if you have a functioning economy. If you need an analogy, think of a second stimulus as electric paddles on a heart in defribulation. You wouldn't want it to be an ongoing treatment, but a good jolt is just what we need right now.

As for what shape that stimulus would take, I'd focus in two areas: infrastructure and jobs creation for the long-term unemployed. Our national infrastructure is still a mess, and continuing to fall behind our international competitors will only worsen our long-term prospects. Fortunately, although there's a lot of work that needs doing out there, there are also a lot of people who desperately need work. We can work out some pretty good ways of getting them together. (Want a starter? Municipal governments, state governments, libraries, and schools have all cut out tons of local services in the past few years to deal with their own fiscal crises. Let's get some three-year federal grants back into those areas to re-hire staff and rehire the teachers, cops, and firefighters that have been laid off over the past couple of years. That's easy AND good for our communities. It'd probably take a half-dozen Congressional staffers an afternoon to put together the whole program.)

Then let's just go ahead and build a high-speed rail system on the East Coast, the West Coast, and in the Midwest. And after that, maybe we can finally address our crumbling electric grid...

... What's that? Oh, you're still freaked out about the deficit? I have an easy solution if that's really your concern. Let's go back to the tax rates under Clinton, WHEN WE HAD OUR LONGEST, STRONGEST PERIOD OF ECONOMIC EXPANSION SINCE WORLD WAR II. Cutting taxes on the wealthy didn't lead to the giant economic boom and employment growth that it was sold with. And even that sales job relied on them "sunsetting" in ten years because even the most ridiculous projections couldn't make them work in the long run. So, here's another easy policy decision. Let's not do the thing that didn't work and led to economic disaster. Let's do the thing that worked.

What brought Mr. Crankypants back from his blogging exile, you ask? Sorry, I'm indexing part of a math book this afternoon, and preparing to index some economics charts and graphs on Monday. And I'm tired of policy debates that ignore math and economics.

Okay, Mr. Crankypants now returns you to your regularly scheduled and undoubtedly more-congenial-on-a-Friday-afternoon blog reading.

Monday, August 8, 2011

Mr. Crankypants Presents Remedial Economics 101

If you think that this morning's stock-market plunge is a validation of S&P's rating downgrade for U.S. debt, you don't understand the purpose of the ratings

Just a quick recap of the first morning of stock trading after S&P downgraded the rating of U.S. debt from AAA to AA-Plus. Here are the numbers from this morning's open to noon:

Dow 11,120.42 -324.19 -2.83%
Nasdaq 2,438 -94.54 -3.73%
S&P 500 1,157 -42.79 -3.57%

Bonds & Currencies
10 Year Yield 2.38% -0.17

Stocks down, bond rates down, cats & dogs living together, MASS HYSTERIA! Total validation for the S&P downgrade and the national debt as our #1 problem, right?


The decline in the rate on 10-year treasury bonds means that money is flowing into U.S. debt, not out. When more money tries to buy something the price -- in this case the interest rate -- goes down. S&P's rating was for U.S. Treasury bonds, not for stocks. Investors are actually moving their money out of stocks and into U.S. debt.

Why? Because what the smart money fears is not a U.S. debt default. The smart money fears the absolute sluggishness of a stagnant economy. Our nation's problem is not debt at 2.38%. Our problem is high unemployment and a lack of growth.

And from what I have heard out of Washington and on the news, both today and over the past few months, there are an awful lot of politicians and commentators who either have never studied history and basic macroeconomics, or who have chosen to ignore history and basic economics in favor of shilling for their pet policies.

So here's tip #1 for you today.

If you hear a politician or commentator saying today that the stock-market plunge validates the view that our economy's problem is our national debt, that person is either ignorant or lying to you. Either way, you should ask yourself if he or she really has your best interests or the nation's best interests at heart.

Thursday, August 4, 2011

Musings from the Navel Observatory

The manager of my friendly local comic-book shop asked me a pretty good question yesterday about the cover of a comic book that showed just about every anatomical detail *except* for the title character's belly button. It set off an exchange on navel arcana that I thought might be of interest to folks who have a belly-button of their own.

In an attempt to boost my hit count with the Google image crowd while pumping up my PG-13 street cred, I present the salacious-yet-belly-button-bereft cover in question for Warlord of Mars: Deja Thoris, issue #5:

Gretchen: Why does Dejah Thoris not have a belly button? I was looking at the cover for today's issue and no belly button. But then on the inside art she does. Then looking at a lot of older covers she has no navel. Is she not supposed to have one since she's an alien?


John Magee: That's a really good question. She's not human, that's for sure. (I've seen human anatomy, and what's on those covers ain't quite human.)

I've been meaning to go back and re-read my old Edgar Allen Burroughs John Carter books -- it's been a couple of decades -- and I'll try to see if there's anything in there on Martian birthing or umbilical cords.

In semi-related belly-button viewing information, I know that the costume designers on the original Star Trek had a lot of issues because they were prohibited from showing belly buttons during a prime-time broadcast in the late 60s. (Oh, the navel-gazing issues they had in the sixties....)


Gretchen: Whoa! my husband and I are watching the whole original star trek run; we just finished the first episode of season 2. Now i'm going to have to look for that. Strangely though, there was one episode with this girl wearing overalls and nothing more, and there were definite side-boob shots. Weird that they'd allow that but not navels...


John Magee:I came across another good nugget in the same interview with that costume designer for TOS. He said that what they tried to do for those sorts of outfits was to create the appearance that something could slip and expose more. That *that* was much sexier than just exposing the skin in the first place. It's something I've always noticed in costuming since then, and it's quite true.

Also on the navel observatory front, the possible exposure of America to Barbara Eden's belly button was rumored to be a constant challenge for "I Dream of Jeannie." And supposedly Mort Walker used to always include Miss Buxley's belly button in panels of "Beetle Bailey" specifically because his comic syndicate forbid him to draw her belly button, so it always forced his editor to remove them from the panels with an exacto knife. He allegedly had an entire jarful of Buxley belly buttons by the time he retired.

I have no idea how I've picked up this much belly-button trivia over the years. Just imagine if I had spent that time putting useful knowledge into my head!