My comments on Thoma's Economist's View blog today

My comments on Thoma's Economist's View blog today: http://economistsview.typepad.com/economistsview/2011/04/paul-krugman-the-intimidated-fed.html#tpe-action-replied-6a00d83451b33869e201538e34ff2c970b


Last I heard inflation is the cheap way to pay down enormous debt -- and isn't inflation the way to "painlessly" reduce the real price of real estate; the classic way severe housing slumps (caused by burst bubbles) end?

What exactly is the big need for under 2% inflation anyway? Most of my long life until recently inflation has run between 3% and 5% a year -- except for the double digit inflation of the late 70s. What's the big harm?

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First and foremost is inflation the cheaper and quicker way out of federal (Chinese) debt and out of our busted housing bubble (historical average time to get out I just read in one of David McWilliams' books: 5-7 years)? Which busted bubble is threatening us with a lost decade or two. Is it or is it not; let's get the giant positive(s, plural) established before we weigh the trade offs.

Is it or isn't it?

Second, if we had an adequate safety net we would only have to worry about some retired people living a little less enjoyably versus pulling out of two economic tailspins that threaten to crash us fatally. But since as a country we never worried about adequate safety nets before why start now?

We work people for less and less and less every year for the same work even as average outputs doubles (since 1968 -- back when the minimum wage was $10/hr adjusted and the median wage was but 20% lower than today's average person's wage) and then we set them out to pasture -- or should I say to sleep in the street. Minimum SS and maximum food stamps together come to about $900/mo -- eat or stay indoors, your choice.

Why start worrying about the elderly now? ???

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What the great majority of workers in the American labor market -- not the European -- suffer is a total collapse of economic bargaining power along with the necessarily concomitant loss of political muscle -- Americans not Europeans.

Which has left in its wake a federal minimum wage that is now $1/hr below Eisenhower's (really senate majority leader LBJ's) 1956 minimum wage and $3/hr below LBJ's 1968 minimum wage -- following the "big" 2007 raise! !!! Meantime the median (average person's) wage has grown 25% since 1968. All the above while average income grew 100%! !!!

15% of income share shifted from the bottom 90% to the top largely 1% -- disproportionately to the top 1/10 of 1%. I think we can agree that the doubling of per capita output over two generations is brought about by (maturing not brand new) technologies (what tripped up Malthus) and not by 25X better paid linebackers, TV news readers or even CEOs. Just my amateur guess but shifting that 15% back could cause 30% inflation over whatever time period with the back and forth adjustments: a perfect place to start, killing every bad bird with one stone?

Across the better paid OECD world and even in the second (Argentina) and third (Indonesia) worlds there is a DECADES OLD answer to America's race-to-the-bottom: legally mandated sector-wide labor agreements -- an elegant theory that unarguably works.

Ask your favorite progressive economist about sector-wide as the answer to the race-to-the-bottom. You will have to ask I am afraid; they will not volunteer the knowledge. They have understood the benefits and hopefully the absolute necessity of sector-wide agreements all their professional lives (started in post-war Germany to moderate a potential labor race-to-the-top -- works just as well opposite polarity) but they will never tell anybody -- too lost in diagnosing today's symptoms, they never ponder or at least never mention out loud the easy cure.

You know, 10 MLKs would not have gotten the 1964 Federal Civil Rights Law past the murderous US Senate of the time with JFK or Obama president. LBJ (not known as a giant intellectual policy wonk) got it through because he had the fire in his belly -- he told Senate nothing else was ever going to happen until that bill passed and he meant it -- he out waited the filibuster 84 days (also passed Medicaid, Medicare, $10/hr minimum wage, etc., etc.).

Supermarket and airline employees would kill for sector-wide agreements: good place to start (try German heavy or Canadian lite).

MORE FROM THE SAME THREAD:

"i am not so fond of "inflating our way out" myself. i prefer "taxing our way out" and paying our bills."

Not when the overseas debt becomes so large it is building a vicious cycle-potential tail spin from which we may not be able to recover -- we are said to be approaching that trap; ask a Republican.

Not when the economy may be stuck in doldrums for another 5-7 years if our housing over-supply/prices-stuck-too-high trap is not resolved (by inflation one way or the other -- slow or fast); people have to get back to work. I'm not worried about paying back the Chinese in discounted dollars -- the Chinese have been pegging the yuan artificially low to increase their exports forever. Manipulating currency is standard operational procedure for all nations.

Must be noted here that the first $4 trillion of recent deficits were Bush II tax cuts for the rich -- which bankers who got the trillions from people who couldn't even spend it used it fuel the housing bubble -- all the while Republicans rashly deregulated banks so they would have no trouble at all getting all that cash out of deposits to people who could not even pay back. Whence the burst bubble forced Democrats to go more trillions into national debt to avoid a depression.

Inflation caused by shifting 15% of income share back to the lower 90 percentile earners (causing price rises from pay raises) could end up killing all three giant birds (great wage depression is number three) with one stone.

Play money, real money, online poker and the First Amendment

Play money poker should be covered by the First Amendment -- like passing jokes around -- like any board game -- recreational speech?

If so -- big if?; but could they outlaw Monopoly? -- then poker is covered by the First Amendment per se -- including real money poker. Once a constitutional right is involved the legislature may no long outlaw something just because they feel like it is reasonable. Once a constitutional right is involved the legislature must be able to present a "compelling" reason to outweigh the right.

The snuck-by Congress legislation bars online poker for moral reasons. They waited too long to enforce it. By the time tens of millions from every continent are playing the game online -- with no reports of massive (or any) moral collapse -- the idea of infringing freedom of speech to protect our morals is not merely arguable, it is universally laughable.

Internet poker US cashout problem solved with overseas cash payouts?

Say Pokerstars had a cash window (like a racetrack) in England where you could travel to to pick up your payouts. Sounds perfectly legal for you to pick up your own payout outside the US. Matter of fact you could pick up a Pokerstars money order in England and cash it in in the English bank it was drawn or check cashing store (if they have such) -- and reconvert the cash into a money order to send to yourself in the US. No foreign bank account needed -- just you in person. No gambling enterprise would be sending a financial instrument to a US bank -- that is all the law prohibits AFAIK.

NEXT STEP: Say a player's personal rep goes and does the same thing for him: same legal payout process. Or, suppose, instead, some smart cookie opens a business in the US where they charge players (plural) a fee to travel to Pokerstars cash payougt window in England -- or just as legally open the same business in England to act as player pickup rep -- to pick up our winnings in cash for us -- not working for Pokerstars; working for us -- and then send checks or money orders to us in the US. No gambling enterprise would be sending a financial instrument to a US bank -- that is all the law prohibits AFAIK.

NEXT STEP: Say Pokerstars sends cash to US players. When I worked as a truckers helper for a Wall Street Bank in the early 1970s we took tons of mail to the Post Office some of which was registered mail containing cash going to South America. I was told that Registered mail must to be signed for by every person whose hands it passes through all the way to the recipient. Pokerstars could send small to medium payouts by registered mail right now. Really large deliveries could be done by armed insured messenger (you might want to make an appointment to meet the messenger in a bank). No gambling enterprise would be sending a financial instrument to a US bank -- that is all the law prohibits AFAIK.

Problem solved? I hope this looks as good in the morning as it does at 4AM. :-)

[PS. See the following legal essay on the unlikelihood of anyone ever standing trial -- not talking about copping out either: http://www.gamblingandthelaw.com/blog/299-federal-poker-indictments-revisiting-prohibition.html]

The Settler State -- Uri Avnery

"Some weeks ago I wrote that the problem may not be the annexation of the West Bank by Israel, but the annexation of Israel by the West Bank settlers."


The Settler State
http://avnery-news.co.il/english/index.html
You-u-ul have to look for the Headline (after the first week out: 4/17).

Medical insurance double and redouble and re-redouble -- while doctors income's have not even kept up with average income gains

AFAIK Doctors' income have not even kept up with average income gains -- the latgter doubled since 1968. AFAIK average income for doctors was $150,000 before Medicare and Medicaid, after which the average rose to $180,000. AFAIK, today, $360,000 is the average income for the highest paying specialty, radiology.

Medical insurance double and doubles and redoubles -- what is with focusing on doctor's incomes?

A doctor in my cab told me that in his other career as a Navy helo pilot the new beast (Blackhawk) has three engines and 60 miles of wiring -- everybody can see the difference between that and the Huey. When people go to the hospital all they see is the bed.

Ever think unions are unrealistic not wanting management to count the ever increasing cost of medical insurance in negotiations? Isn't the whole country like that? Do we really expect to pay the same for more and more and more medical advances?

How to get the cost down to European costs level -- half? Simple; govern ourselves like Europe. Govern ourselves -- instead of left and right elites taking turns governing us. RE-UNIONIZE THE ONLY WAY THAT ACTUALLY WORKS: SECTOR-WIDE LABOR AGREEMENTS. Cut the Gordian knot at the heart of almost every other poliltical issue -- re-balance the labor market -- and simultaneously the political forum -- so the labor market actually works to insure fair prices -- automatically -- just like Republicans say markets do. Then all the common sense reforms will be absorbed (automatically?).

Say the words: S-E-C-T-O-R W-I-D-E L-A-B-0-R A-G-R-E-E-M-E-N-T-S.

My comment on Open Salon to: Carry a big stick -- when I was ordered to paddle students

My comment on Open Salon to: http://open.salon.com/blog/jlw1/2011/03/30/carry_a_big_stick--when_i_was_ordered_to_paddle_students

The same principal who smashes away on kids for being late (not usually an animal) might feel unable to beat an adult the same way for breaking into school, breaking into lockers and spray painting cars in the parking lot all at the same time. Something goes missing when we are not beating social equals or something (we are talking dumb social instinct here).

If the principal's boss paddled him for the above mentioned crimes the principal would not hate him. If the principal's boss paddled him for being late the principal would hate him -- a violent assault over efficiency, mere office management.

Let principals contemplate these contradictions (and why some kids hate them forever).

There is a hole in the law against violent assault. There is provably no justification for the hole -- provably by the common policy in the worst hitting states (where 90% of the beating of girls and 75% of the beating of boys is for tardies) : it is often optional for the student -- take detention or suspension or a beating. If the school lets the student decide how can the school tell the courts that it is so necessary the court should allow a hole in the law against violent assault with a weapon?

Unfathomable social instinct can be at work on students here: if everyone else chose a beating over an hour's detention so would I. Instinctively must accept the same danger as the rest of the hunting pack? ??? Sometimes like in the famous YouTube video the student will miss a days work as with the boy or as with the class president girl miss the prom if they do not take a tardy bend over for a behind beating by the (male) principal. Sometimes a student fears even a tardy suspension may affect college admission. None constitutionally justifies a hole in the prohibition against violent assault -- especially on children.