The Problem With Mathematics...

...is that it is impervious to ideology, in the main.

Math just is!

Paul Krugman is someone I respect and read, and do not often agree with.

But, he does know how to do math.  In the short post below, he provides with a graph that tells us we need about 2% growth in GDP to create a 1% growth in the employment numbers.

It's just numbers, just math, which just is.  And that's what is most damning about the current set of clowns in charge.  They think math doesn't matter, that it's like language, something to be fabricated for the day's usage. But the simple math tells the terrible story.

Growth and jobs - Paul Krugman Blog - NYTimes.com

So, does Krugman of the New York Times now go on the White House Enemies List, because he dares publish a graph displaying the mathematical results of the past sixty years of the US economy?

Mish also knows how to do math.

He calculates the cost per 'job', using the numbers published by the Federal Government and the White House. 

He takes the White House numbers at face value, and then simply says(hang on to your calculators, you won't like what you see!):

Let's do the math.



Math To Date
Funds paid out so far = $83.8 billion + $52.1 billion + $71.4 billion = $207.3 billion
$207,300,000,000 / 640,329 = $323,739.83 per job created

Plan Goals Math
Now let's assume this stimulus package will eventually create (or save) 3.5 million jobs and all the money (but no more) will be spent.

Here's the math again.
$787,000,000,000 / 3,500,000 = $224,857.14 per job created
  
Math just is.

Until we elect a Congress and White House that understand this, and know how to do math, very little will improve.

 

Scary Thought for Halloween: The White House Might Actually Believe Their Own Fantasies!

Be afraid.  Be very afraid.

The White House is trumpeting to the world just how successful 'The Stimulus' has been--millions of jobs 'saved', hundreds of thousands 'created', and we can all sleep well tonight, knowing that the goblins of economic malaise dare not mess with The One, The 2009 Nobel Peace Prize Winner, The Prez!  And, they actually seem to believe it themselves.

He's got it all under control.  Let's just not talk about 115 bank closures to date(nine yesterday!), or the $100 billion dollars we borrowed from the world last week. Or the true unemployment figure that approaches 20%. Or GMAC coming back for more love from the TARP. Or Fannie and Freddie on life support.
Or the FDIC. Or...

He's got it all hammered out. He's The One.  Just ask Oprah. She knows about these things.

However, even CBS News is finally beginning to locate its spine, and in the embed below, tells us that the numbers being released bear no relation to reality.  This is CBS, not Glenn Beck, finally admitting that they cannot pass on this information as if it were true.

Which leads us to the next scary thing to ponder:  If CBS begins to report the truth(finally), will they also be considered not a news organization by the Obama White House? 

Old English Prayer:

From ghosties and ghoulies, long-leggedy beasties, and things that go 'bump' in the night, good Lord, deliver us!


Watch CBS News Videos Online

The Choice, aka The Testimony The House Democrats Refused to Hear or Publish

It isn't just what happens that we should notice.

It's what doesn't happen.

It's the voices of dissent, however reasoned, that are suppressed, the testimony deliberately never entered into the record or published, that also must be noticed.

Robert Johnson, whose credentials are noted below, was called at the last minute to testify before the House Banking Services Committee this week. He warned starkly of the dangers of the bill proposed.

Five minutes into his testimony, he was cut off by the acting chair. He submitted his testimony, which was subsequently never published.

The account can be found here.

The full testimony can be found here.

Johnson is no tin-hat Tea Party type.  He is an experienced executive in the financial world, and is employed by the Franklin and Eleanor Roosevelt Institute!  If his voice is to be suppressed, what then?

Here is the summary of his testimony, which runs twenty-sen pages.  Little wonder the Committee did not wish it entered in the record!

THE CHOICE: REFORM OR ENDORSEMENT OF A MAN MADE FAULTLINE

Wall Street's leaders cannot control their urge to seek protection despite the fact that it is demeaning to their reputations. Yet the members of this Committee and your counterparts in the Senate are responsible for resisting their demands for the good of society. I do believe that this is no minor matter. The financial security and strength of our nation is in the balance. Confidence in the U.S. dollar as the world's foremost reserve currency depends upon the integrity of our financial system. As I stated at the outset, I believe that the intersection between the OTC derivatives market and the large financial institutions is the financial equivalent of the San Andreas fault. Yet there is one difference. The San Andreas fault is a natural occurrence that we must all cope with to mitigate the consequences of an earthquake. It is beyond our power as people to eliminate. The current state of OTC derivatives regulation and its relation to the guarantees of large financial institutions are a man made fault that is the product of past human errors financial legislation and regulation. It has been revealed by catastrophic events to have devastating consequences. It has produced an avoidable earthquake.  That earthquake and its consequences need not be repeated. One can only imagine the consequences for the reputation of those public officials who would choose to act to codify into law this fault line and expose our society to a repetition of the financial crisis that has devastated the world in recent months.

To avoid reform would be harmful enough. We know the fault lines of past human error regarding the regulation of OTC derivatives continue to threaten us. But to affirm the status quo with new legislation that codifies these structural flaws and deems them to be healthy would be far worse. This is not about just leaving a few crumbs on the table for big financial institutions and asking the rest of us to pay a little more. This is about the representative government of our society choosing to affirm a dangerous financial structure that could explosively harm us all again just after we experienced a severe and unnecessary crisis that resulted from these very failures of design. It would be both dangerous and demoralizing for America and the world if our legislators choose to take that path forward in deference to the parochial desires of a few firms in the financial sector. 


Robert Johnson is the director of the Economic Policy Initiative at the Franklin and Eleanor Roosevelt Institute and is a regular contributor to NewDeal 2.0. He serves on the United Nations Commission of Experts on Finance and International Monetary Reform. Previously, Dr. Johnson was a managing director at Soros Fund Management, where he managed a global currency, bond and equity portfolio specializing in emerging markets. He was also a managing director at the Bankers Trust Company. Dr. Johnson has served as chief economist of the U.S. Senate Banking Committee under the leadership of Chairman William Proxmire and was senior economist of the U.S. Senate Budget Committee under the leadership of Chairman Pete Domenici.

Fox News Soars After Snub From Obama

Just too good not to pass along.

The White House draws the knife on Fox News, and...

Fox News ratings soar.

(Giggle...)

Inside Alan Jackson's Home(Which can be yours for a mere $38 million)

Michael Jackson wasn't the only Jackson making large amounts of money and living large back when the recorded music business sold records. Alan Jackson--I can assure you, no relation, did quite well, and continues to, I'm certain.

But we all must eventually downsize, must we not?

For the Wall Street banksta or Arab oil sheik who has everything, but longs for that simple life down south in the country, country music star Alan Jackson offers his estate for sale, at the bargain asking price of a mere $38 million.

The link takes you to an impressive slide show, a veritable celebration of music industry over-the-top life.

(I know what I pay to keep the grass mowed on my little bit of Tennessee acreage. God only knows what Alan's monthly nut must be, what with seventeen HVAC units to run, the pool, the outbuildings, and then the grass-cutting bill. Whoowee, that's a lot of pickin' and grinnin' to keep that up!)

For those of you with rather less cash to burn, or less grandiosity, luxury condos in Nashville, some with views overlooking the studios where Mr. Jackson made his magic, are available at auction this week.

Much to the chagrin, of course, of those poor rubes who bought in the final golden days of the bubble.

I expect an awkward silence to prevail at the opening of the auction, if the developers think they'll be flogging these puppies off at even 40% off.

The folks who made the bubble possible, and are making out like bandits, will of course be bidding on Mr. Jackson's property...

I'm sure the neighbors will be most welcoming.

A Well Turned Phrase Is Always A Joy

'More and more, I see this government (and some before it) as resembling Homer Simpson, pushing a button on the nuclear generator console just to see what happens, and rewarded by the sight of people suddenly fleeing a wall of flame in the corridor.'

Sackerson was describing the Labour government soon to exit power in the UK, but it aptly describes ours as well.

It's a great article about immigration, education, and societal breakdown.

And very cleverly phrased!

Inspirational Thought for the Day...

The Fat Lady Has Begun To Vocalize

Mish had posted a most informative article Friday about CitiBank's pending meltdown and its issuance of millions of letters to its cardholders, informing them that their interest rate would be 29.99% from henceforth--even if they had a stellar credit rating!

Well, by this afternoon, the damage control efforts were underway.  The chief executive in charge of spin had emailed Mish.

That was quick!

I'll let Mish take it from here:

Email From Citi's Vice President, Public Affairs

This morning, in response to Citi-Grinch I received the following Email from Citi's Vice President, Public Affairs:

Hi Mr. Shedlock,

I have read your blog posting from Mish's Global Economic Trend Analysis, which appeared earlier today.

I am wondering if we can have a background discussion at your convenience.

Best regards,

Samuel Wang
Vice President, Public Affairs
Citi
153 East 53rd Street
New York, New York 10022

Cordial Conversation

I gave Mr. Wang a call and the conversation was quite cordial. He explained that customers could opt out of the rate hikes, and that in some instances consumers could keep using their card up to the expiration date of the card at their old rate.

What I asked Mr Wang:

• How many total cards do you have?
• How many received the letter?
• What percentage could keep using the card at the old rate until the card expiration date?
• What is the percentage breakdown by FICO score of those those receiving rate hikes or lowered credit limits?
• Is Citigroup setting up to exit the credit card business?

Whatever answers I get, I will post.

Did these people think they could do this and not have a firestorm on their hands?

Did they think that someone wouldn't publish one of these letters, and that thousands of people wouldn't read them?


What planet, I ask again, do these clowns live on? (Certainly not ours!)


Just wait until thousands upon thousands of their customers decide to just give them the finger, and stop paying.  Then, add to that, the thousands of depositors who can take their business down the street to a small, locally owned bank, where every customer is known by name. (I bank with two such firms.)

It's dawned upon the customers that they have some power in the relationship, and if enough of them rebel, no one can save Citibank.

And, given odious events lately, no one will want to; especially in Congress, one year away from facing an enraged electorate.

There's the old joke about opera: It ain't over until the fat lady sings.
 
The fat lady has begun to vocalize.

OOPS!

If you have ever traveled I-40 between Tennessee and North Carolina, you never forget that particularly harrowing bit of it across the mountains at the border.

Now, to make the journey even more unforgettable, a rock slide has closed lanes in both directions for up to three months.

Joel Setzer, a division engineer with the state Transportation Department, said the freeze and thaw of recent rains could have contributed to the slide.  Setzer says geologists and geo-technical experts with the Transportation Department did a preliminary assessment and agreed with the engineers’ estimate of up to three months to clear the area.  “An estimated 22,000 to 25,000 vehicles pass through this section of Interstate 40 daily, about half of which are commercial trucks,” Setzer said.

That's some 10 to 12 thousand truckloads of stuff that will have to take other, longer routes across the mountains.  Every day.

That's a lot of stuff!  And I keep noticing that retailers like WalMart have been cutting way back on inventory on the shelf.  It will be interesting to see what actually begins to arrive where and when.

oops...no one planned for this one.

A Prayer for Our Day

Fishers

Tangled in the nets of our wild philosophy,

Caught in the backlash of ideas ill-cast;

Heaving the lead into unplumbed infinity,

Baffled we stand beside the shore at last.

Snagged barbs, snarled lines, torn sails,

What fishers we!

Teach us Thy ways

O Man of Galilee.

attributed: Albert Reginald Gold

And, Since It's Sunday, Some Rays Of Hope

It's not all doom and gloom out there in America.  Some good things are happening here in The Great Recession.  Culture shapes economy, and here we have some successful cultural examples.

1. Trader Joe's
These guys have reconnected with the idea that food should be good, and shopping should be fun. The prices are generally very good, the quality is very high, and almost every item on the shelf carries their brand name. Last night, we cooked up salmon patties purchased from the freezer section, and they were wonderful. Trader Joe's understands the power of THE BRAND, and that everything that bears their brand should be first rate, to reinforce loyalty to the brand.(Something GM and Chrysler forgot long ago.)

2.  Cracker Barrel
Same idea, but in a family restaurant context. The food is plentiful, tasty, comforting, served up cheerfully. Often, you have to wait for a table, especially on Sundays. No problem, they have one of the most cleverly-merchandised gift store operations on the planet. They have become a major recorded music retailer via their private-brand (that brand thing again!) label. In time for this Christmas, they're expanding to a co-branded line of merchandise with country star Alan Jackson.

In both places, the employees are genuinely happy to be there. The brand trumps all. They deliver good product and good fun to boot.

On the not-for-profit front:

1. The American Choral Directors Association
This organization is actually growing in the face of The Great Recession! Under the energetic leadership of Tim Sharp, the organization seems to have relocated its 'mojo'. Choral singing is a fabulous tool for music education, and its benefits extend far beyond arts alone. It is also relatively inexpensive, since everyone comes born with a voice, and there is no upper limit to the numbers who can participate. It's recession-proof art that everyone can participate in.

2. The University of Louisville
In the midst of The Great Recession, and in spite of some truly embarrassing scandals, U of L managed to raise $98 million from donors in the year just ended. President James Ramsey was a great hire seven years ago. In the wake of chaos left by his egoist predecessor, Ramsey brings a refreshingly level-headed leadership rooted in both his career in economics, and the fact that he was raised in Louisville--a graduate of Fern Creek High School. His roots and family are there. Both his children attend U of L. His full resume is published on the website, complete with home address and phone!  The opening paragraph of the 2009 State of the University address, delivered by the provost, is inspiring reading. 

Again, attention to the brand, the mission, the employees, the customers--they just don't seem to go out of vogue.

They prosper because they serve.

Gone For Good

David Altig, senior vice president and research director at the Atlanta Fed, summarizes what he sees as an ongoing challenge for America's future: a lot of the jobs that are going away now are not likely to ever come back.

He reports that many job losses are running through the small business sector(the traditional 'petri dish' that grows jobs), many more employed people involuntarily placed on part-time status, and the reluctance of recovering businesses to rehire.

His chart is here, truly a wonder to behold. It resembles a fighter plane on an afterburner climb.

His article is here, worth pondering.

Remember, this isn't somebody in a tin hat living in Mom's basement.  This is a wonk for the Federal Reserve in Atlanta.

I have a buddy who works for Whirlpool in Evansville.  Those manufacturing lines are moving to Mexico next summer.  Given this bit of cheery news, you have to wonder what they were thinking.

(But, they're MBA's, most likely, so thinking isn't part of the job description.)

He reports a huge overcapacity of manufacturing capacity compared to demand, and Mexican compensation packages that are only 1/6 the US cost, plus lower taxes.

Those jobs aren't coming back, ever.


Now, add on the Brave New Health Care Bill, Cap and Trade, and the unfunded obligations already in place in our federal government, and the taxes that will be required to fund all that.

So, where are the new businesses and jobs to come from?  Has anyone in either Congress or the Executive Branch given this serious thought?

President Hopey-Changey's Mortgage Refi Morass

This from an editor at Miller-McCune magazine, who innocently sought to refinance his mortgage via one of the Obama Administration's programs...

If a guy who doesn't need a refi, with an advanced education and lucrative job goes through this torture, what happens to the truck driver who really needs to refi in order to stay in his house?

Business & Economics Articles | Obama Refinancing Plan Needs Work | Miller-McCune Online Magazine