Daily Digest

Daily Digest 4/17 - Tax Programs For The Wealthy And The Poor, Argentina To Acquire Oil Company, Too Early For Iran Answers

Tuesday, April 17, 2012, 9:47 AM
  • To Make Money In This Bubble-and-Bust World, You MUST Be A Contrarian
  • For Two Economists, the Buffett Rule Is Just a Start
  • Romney Talks of Ending Some Tax Deductions for Wealthy
  • In Conversation: Barney Frank
  • Antipoverty Tax Program Offers Relief, Though Often Temporary
  • Argentina to Seize Control of Oil Company
  • Too Early To Talk Success or Failure in Iran Nuclear Talks
  • If Food Is In Plastic, What's In The Food?

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Economy

To Make Money In This Bubble-and-Bust World, You MUST Be A Contrarian (David B.)

At the U.S. Federal Reserve, no Fed Chairman in history — not even notorious easy-money advocates like Arthur Burns or Allen Greenspan — had EVER run the money printing presses for any extended period of time.

But Fed Chairman Bernanke changed all that. Soon after the debt crisis hit in 2008, he nearly TRIPLED the size of the Fed’s balance sheet from about 6% of GDP to almost 17% of GDP.

For Two Economists, the Buffett Rule Is Just a Start (jdargis)

Both admire, even adore, the United States, they say, for its entrepreneurial drive, innovative spirit and, not least, its academic excellence: the two met while re-searchers in Cambridge, Mass. But both also express bewilderment over the current conversation about whether the wealthy, who have taken most of America’s income gains over the last 30 years, should be paying higher taxes.

Romney Talks of Ending Some Tax Deductions for Wealthy (jdargis)

“While President Obama is interested only in offering excuses and blaming others for his failures, Governor Romney is discussing some of the ideas he has to tackle the big issues facing America,” said Andrea Saul, a spokeswoman for Mr. Romney. “Governor Romney has also laid out a bold set of policy proposals that will grow our economy, cut spending and get our massive debt under control.”

In Conversation: Barney Frank (jdargis)

The main reason for the increase in partisanship is Newt Gingrich and the success of his decision [as Speaker] to demonize the opposition as a way to win. That was reinforced by the right-wing takeover of the Republican Party. And finally, modern communications: Twenty years ago, people had a common set of facts that they read. They read opinion journalists, but they got their information generally from newspapers and from broadcasts. Now, the activists live in parallel universes, which are both separate and echo chambers for each. If you’re on the left, you listen to MSNBC, you go to the blogs, Huffington Post, et cetera, and you basically hear only what you agree with. If you’re on the right, you watch Fox News and the talk shows, and you hear only what you agree with. When we try to compromise, what you find is not people simply objecting to the specific terms of the compromise, but the activists object even to your trying to compromise, because they say, “Look, everybody I know agrees with us, so why are you giving in?”

Antipoverty Tax Program Offers Relief, Though Often Temporary (jdargis)

It is tax time, the season when the country’s largest antipoverty program, the earned income tax credit, plows billions of dollars into mailboxes and bank accounts of low-income working Americans like Ms. Spain. It is the most important financial moment of the year for many people in the bottom half of the wage bracket, a time to pay off old bills, make car repairs, buy children clothes and maybe make a big purchase like a refrigerator or a TV.

Energy

Argentina to Seize Control of Oil Company (jdargis)

Under Mrs. Kirchner’s plan, which she announced on national television, Argentina’s government would take a 51 percent controlling stake in YPF, which is now majority-owned by a Spanish energy company, Repsol YPF. Of that new stake, Argentina’s central government would get 51 percent and the country’s provinces 49 percent. The plan is part of a bill submitted to Argentina’s Congress that is widely expected to be approved.

Too Early To Talk Success or Failure in Iran Nuclear Talks (James S.)

While we may be able to forgive the mainstream media for its lack of depth and insight, it is more difficult to extend the same courtesy to academically tethered think tanks. A piece published on the Council on Foreign Relations website is particularly unforgivable for its decidedly lazy and unprofessionally flippant synopsis of the Istanbul talks.

Environment

If Food Is In Plastic, What's In The Food? (jdargis)

How common are these chemicals? Researchers have found traces of styrene, a likely carcinogen, in instant noodles sold in polystyrene cups. They’ve detected nonylphenol – an estrogen-mimicking chemical produced by the breakdown of antioxidants used in plastics – in apple juice and baby formula. They’ve found traces of other hormone-disrupting chemicals in various foods: fire retardants in butter, Teflon components in microwave popcorn, and dibutyltin – a heat stabilizer for polyvinyl chloride – in beer, margarine, mayonnaise, processed cheese and wine. They’ve found unidentified estrogenic substances leaching from plastic water bottles.

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

9 Comments

saxplayer00o1's picture
saxplayer00o1
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Bill Hicks
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Drug War FAIL: Cocaine Is Cheaper Than Ever

billhicksisdead.blogspot.com/2012/04/drug-war-fail-cocaine-is-cheaper-than.html

So how's that whole drug war thing working out for you?   

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Poet
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Got A Crisis? Roll The Printing Press...

Jim Jubak: Got A crisis? Roll The Printing Press - Get Ready For The Age Of Bad Money (April 17, 2012)
"...we can expect the extreme pressure that has led countries to abandon strong currency policies to be irresistible over time. The decision by the Swiss National Bank, for example, to link the franc to the euro to limit the pain that a strong currency was inflicting on national exporters is an example of things to come. The Swedish central bank, Sveriges Riksbank, faces similar pressure from exporters to depress the value of the krone.

"It also means that such efforts aren’t likely to succeed in the long-term. As long as the Swiss and Swedish national budget and deficits don’t look like those of the Eurozone, there will be continued upward pressure on those currencies and the central banks in those countries won’t be able to spend money indefinitely selling their currencies to keep them from appreciating. It also suggests that efforts like those of Brazil to depress its currency also won’t succeed in the long-term unless Brazil is willing to slap on currency restrictions that resemble those on the Chinese yuan."
http://jubakpicks.com/2012/04/17/got-a-crisis-roll-the-printing-press-get-ready-for-the-age-of-bad-money/

Poet

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Poet
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U.S. Standard of Living Has Fallen More Than 50%

U.S. Standard of Living Has Fallen More Than 50% (April 3, 2012)
"On several occasions, I have glibly referred to how it now takes two spouses working to equal the wages of a one-income family of 40 years ago. Unfortunately, that is now an understatement. In fact, Western wages have plummeted so low that a two-income family is now (on average) 15% poorer than a one-income family of 40 years ago."
http://www.thestreet.com/story/11480568/1/us-standard-of-living-has-fallen-more-than-50-opinion.html

My thoughts: Laws of supply and demand, along with technological innovation and cheap transport costs. Exponentially larger labor supply (both nationally and globally), more educated workers (40% of adults in the U.S. have at least an associate's degree) competing for fewer jobs, and improving technology that both enables workers to be more productive, and require fewer workers to accomplish the same job.

Poet

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"Not if, but when" for Spanish bailout, experts believe

"Not if, but when" for Spanish bailout, experts believe

rjs's picture
rjs
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Poet wrote:U.S. Standard of Living Has Fallen More Than 50%

Poet wrote:

U.S. Standard of Living Has Fallen More Than 50% - My thoughts: Laws of supply and demand, along with technological innovation and cheap transport costs. Exponentially larger labor supply (both nationally and globally), more educated workers (40% of adults in the U.S. have at least an associate's degree) competing for fewer jobs, and improving technology that both enables workers to be more productive, and require fewer workers to accomplish the same job.

Poet

"fewer workers to accomplish the same job" would mean that our standard of living would rise, all other things being equal...

Poet's picture
Poet
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Who Said Standard Of Living Had To Rise

Rjs:

I'm not sure where you get that.

If 5 farmers who don't know each other, all show up at your front door to each offer a bushel of tomatoes to sell and you only need one bushel, do you think the price you'll be paying will be higher, or lower, than if only one farmer showed up, if you wanted to be a good steward of your hard-earned money?

In the same way, suppose 5 employers in a town previously needed 5 workers each (25 total), but now only needs 1 worker each (5 total) to handle machinery that previously required 5 times more workers doing things manually. You can bet each of the 5 who do ge the job will not be able to get top dollar, but may accept lower wages, while the remaining 20 workers will be unemployed or trying to "retool" at a school, or desperate enough to accept jobs lower down the value chain that pay less.

We have had working age population increases (women joining the work force by the millions, immigrants each year joining, and additional young people joining)... as well as technological improvements and advances that both increase worker productivity while decreasing the need for workers.

Who said standard of living had to rise, except maybe for the one making the profits?

Poet

rjs wrote:

Poet wrote:

U.S. Standard of Living Has Fallen More Than 50% - My thoughts: Laws of supply and demand, along with technological innovation and cheap transport costs. Exponentially larger labor supply (both nationally and globally), more educated workers (40% of adults in the U.S. have at least an associate's degree) competing for fewer jobs, and improving technology that both enables workers to be more productive, and require fewer workers to accomplish the same job.

Poet

"fewer workers to accomplish the same job" would mean that our standard of living would rise, all other things being equal...

rjs's picture
rjs
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Joined: Aug 8 2009
Posts: 377
standard of living

Poet wrote:

Rjs:

I'm not sure where you get that.

if everyone produces more in less time than they did previously, more is produced & overall standard of livings rise...dont mistake monetary values of their production for the overall increase in real assets they produce...

if someone steals half of it, of course standards of living might fall...

Poet's picture
Poet
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Oversupply Of Labor Due To Increased Competition & Productivity

Rjs:

If everyone produces more in less time than they did previously, then like farmers who produce a bumper crop, the commodity prices fall due to a glut of oversupply.

Some might feel compelled to produce more just to make up in volume what they fail to profit on per unit. But ultimately some who invested time and effort and other expensive material inputs, and may have incurred debt to do so, will suffer even more.

In any case, no, you don't necessarily have an overall rise in standard of living except for those who are not farmers, who buy the crop. In a labor market where the glut of oversupply is continuous and multi-decadal, you get a serious problem for everyone except employers, except the employers themselves may face problem from lack of consumer demand - just as agricultural fertilizer sellers may have problems selling to farmers who can't afford material inputs.

Poet

rjs wrote:

Poet wrote:

Rjs:

I'm not sure where you get that.

if everyone produces more in less time than they did previously, more is produced & overall standard of livings rise...dont mistake monetary values of their production for the overall increase in real assets they produce...

if someone steals half of it, of course standards of living might fall...

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