Monday, November 23, 2009

Quote of the Day:

Marko goes all Econ 101 on UC Berkeley students (which is like going all Astronomy 101 at a Flat Earther rally, but still...):
Look, kids: your home state is broke as shit. It’s broke because you folks voted yourself free everything with crunchy gratis glaze and no-cost sprinkles on top, and even the super-sized tax rates your state collects aren’t enough to pay for everything. The money to run stuff has to come from somewhere, and when your state cuts education budgets (see “broke as shit” above), then the only way to keep the lights on is by raising user fees.


Anonymous said...

Talk about casting pearls before swine...
Will the standard People's Republic of california be, "Wah! But I WANT it!"

BobG said...

"Will the standard People's Republic of california be, "Wah! But I WANT it!""

It'll probably be: "Tax the rich! It's Bush's fault!"

Joanna said...

Too bad they're too broke to pay for a whaaaaambulance.

OA said...

I think trust-funders grow up with a "just take it from the rich" mentality because they see the money as what kept momma and daddy from actually raising them (hence the Che t-shirt and materialism is bad act). It just never occurs to the pudding-brained communalists that it'll trickle down to them, or that one day they'll pupate from hippie to yuppie.

"Sorry, sweetie, but you're going to have to get a job."

"I'm what!? That's so not fair!"

Anonymous said...

Being you, I wouldn't be so gleeful. Americans, not just their gov't have been living above their means for some time. If you check the figures as former Autodesk CEO Walker did, you'll find out that total(public, corporate, personal) debt is at 330% of GDP... Guess when was the last time that happened?

Well, before long, DC attitude will be "wah, I want it". And there won't be any money for all the shiny death tech or welfare to appease the voters, since the printing presses can't really create value.

Then, both you and the rest of the world will be royally screwed, as an Argentine-style collapse of USA will pretty much drag most of the developed world down.

When that happens, whom should I thank for that?
You really can't chalk that one to Ozzie...


Dave R. said...

Being you, I wouldn't be so gleeful. ... total(public, corporate, personal) debt is at 330% of GDP... Guess when was the last time that happened?

So... Schmidt's devastating critique of anyone cheerfully mocking those demanding public subsidies of personal over-spending is to glumly point out the problem of... personal over-spending. Except, I somehow doubt Marko and Tam and their readers are among the most indebted and least prepared come the Greatest Depression and resulting Mad Max wasteland.

Schmidt, you've got a serious point in there otherwise, but your desire to score an anti-American point obscures the fact that the jesters are basically on your side on this issue.

Yosemite Sam said...

"Americans, not just their gov't have been living above their means for some time."

But isn't that the whole point of the critique against .gov spending. People can't live beyond their means unless the .gov enables and subsidizes their behavior.

Giving out low interest and subsidized loans for housing, university degrees, etc. are prime examples. Bailing out credit card companies that lent money to bad risks is another. The .gov spending fuels personal spending and visa versa.

Unknown said...

Boy am I dumb. I paid all my taxes, have no debt, and still think my government is stupid for spending monies it does not have.

I live within my means,without government help, and still save money.

How can I be soooo stupid?

See Ya

OA said...

"Then, both you and the rest of the world will be royally screwed, as an Argentine-style collapse of USA will pretty much drag most of the developed world down."

Indeed. I reckon that's why the world's been lining up for so long with their hands out. Get it before it's gone, eh?

It's still all the fault of the States, though, I'm sure...

Tam said...


"Being you, I wouldn't be so gleeful. Americans, not just their gov't[sic] have been living above their means for some time."

Being you, I'd put a sock in it: My total mortgage, credit card, and car note debt every month adds up to Zero dollars and Zero cents.

How 'bout you?

Ed Foster said...

I bought some gold (not enough, but it was all I had, sudden windfall) the day after Obamoid was elected. Paid about $740 as I recall. Seven little one ounce coins, since bumped to eleven, soon to be twelve.

Gold has about the same real, industrial value now, in terms of what it can buy, as it did a year ago. $1,174 at today's close.

$740 plus 59% equals $1,176, close enough fer gummint work. Basically, I shorted the dollar, same as the traders did, but I did it in cash, without taxes or the IRS. It hardly took Kondratiev to see it coming, and for once I didn't piss away a bit of manna from heaven.

For reference, I'm bailing into silver, which has a bigger upside.

The sad thing is that money put into gold or siver has no multiplier effect. It's not in circulation making new jobs, buying new machinery,or giving overtime.

It actually makes the recession/depression longer, as it denies the economy needed real money, fuel, to rebuild.

When things bottom out and the valuta is put back into newly hard paper currency, it will have the same intrinsic value it did when it was first converted. Several years of compounding interest gone, perhaps a real increase of 50% or more.

That's the real sin of profligate government spending/taxation/counterfitting.

It chases the solid money out of circulation, either into the stasis of valuable metals, or worse, into foriegn markets to develop our competition at the expense of America.

I wish I'd had some kind of productive option. I wonder how long it will be before we end up with inflation adjusted savings accounts like Argentina?

In effect, saying the dollar doesn't exist anymore, and everything owed can be paid off with worthless scrip. Nifty, unless the company holding that debt also contributes to your 401k or company pension plan.

And you think we're bad? The Europeans do the same thing, but worse, by holding the Euro at a rediculously overpriced value. How long can you pay twice as much in interest as you charge to loan it out? A balloon at least as big as the Chinese Yuan.

Interesting times indeed.

rickn8or said...

Did it MY way, Tam, Ed and (oh by the way)me are what's screwing it up for everybody else.
I agree with Ed; gold and silver is a good way to tread water while until the fallout finishes falling out. For me, I'm investing in heavy metals, too. Copper, lead, brass, machined steel, etc. I figure to do it now while $500 will buy such things, rather than a breakfast roll.

Anonymous said...

Marko is the one who apparently doesn't understand Econ 101.

Would you lecture a dog begging for scraps? Of course not. The family dog knows economics - take what you can, beg for what you can't take. Nothing lost by trying. They kids likewise understand economics - beg for somebody else to give, throw a tantrum if it might help.

The kids are pursuing their own vested interests. Being honest, even with themselves, won't get them college. Why shouldn't they riot and protest? California isn't suddenly going to become a state that protects property rights. They are going to continue stealing from one class to give to another. Might as well fight to be a getter rather than a givee.

Schmidt said...


I'm a so-called a miser with a pedigree. I agonize endlessly over moderate expenditures, and hate buying stuff as a result.

When I worked in IT before starting school I saved ~70% of my paycheck. I was fine living in a bedsit and not having a car and not eating fancy food.
I mean, even inexpensive food tastes nice and I can take a train or ride my bicycle.. (and every crown saved on non-essential stuff can get me interesting stuff, like books, electronics or hardware)

I suspect my parents(damned be their names) save roughly 40% of their monthly income. I keep trying to convince them to buy some stuff that can't be inflated..but no such luck.

We don't use credit cards, and the only thing we ever bought on credit was about one fifth of our new house.

Mind you, many people here have a mortgage, but the debt-happy lifestyle hasn't really taken hold, and I hope for my country's sake that it won't.

What's wrong with spending only the money you have?
Material goods aren't everything, even the dumb commie* rednecks who populate the local hinterlands know that.

I'd take a crummier house over losing my peace of mind. Nowadays, canny companies actually compute how hard can they fuck with certain employees, from data such as number of dependents, debts, chance of finding work elsewhere and the like.

*stupid people tend to be conservative(doesn't imply the converse, mind you), and here conservative means communist..a funny inversion.

Schmidt said...

@ as to subsidized schooling.

Well, I'd prefer my country spending money on making university education inexpensive rather than say, force projection capabilities. All you need to from keeping other countries from fucking with your borders is lots of guns, explosives, and various assorted missiles, and those are not that expensive. Much cheaper to defend against a carrier group than to have one..

Funding university education for the top 10% ought not be that expensive. I don't like this modern angle of trying to force as many people into universities. It's not like they are going to get smarter, you know?

God, I hate that nurture crap. Typical fuzzy western leftist thinking.

Ed Foster said...

Schmidt, I agree with you about not trying to force everyone into college.

Here in the U.S., we have a top 20% who go to serious colleges (serious as in important majors taken at schools reputable enough to give them leverage in the job market), and 45% who at least start college at a watered down, imitation form of the genre.

Since employers can't use aptitude tests in the U.S., even a mediocre college degree shows a minimal degree of "stick-to-it-ivness" and work ethic. Better than nothing.

Where it fails in comparison to a country like Ireland (I'm familiar with that one) is that there is no education in the trades.

This leaves the companies to paw through large numbers of moderately intelligent people with a college education, hoping to find some willing to retrain as machinists, precision welders, assembly foremen, whatever, or to take the easy route and hire an immigrant.

For some reason they usually take the easy route. Go figure.

Here in Connecticut it's common to see CNC machinists making $60-65K per year, and mid-level office help making half that.

As for the carrier group, there we disagree. Force projection keeps the fighting on the badguy's doorstep, and gives one the option of squashing small problems before they become big ones.

Having the option of being proactive on your terms, rather than reactive on the other guy's terms, can make all the difference in the world.

No American chauvanism there, just a sense of history. Dual citizenship, American/Irish, plus a daughter and grand-daughter in Ireland.

A Maginot Line sensibility turns a country or, in Europe's case, a culture, into an inflexible and vulnerable target. It's a lot easier to get a nuke or biologicals into Europe than it is the U.S.

And work on your parents. General consensus of the people who's brains I pick, all of them with good track records, is that the Euro is on borrowed time. Like "in the next few months" borrowed time.

Get them into gold or, better yet, a mix of gold and silver. You can't buy bread with a $1,000 gold piece.

I gather Soros and his friends are getting ready to sell the Euro short, the way they did the British Pound a few years ago.

Borrow massive amounts of money from a shakey currency, switch it into gold or oil futures, then announce you've done it to scare the shakey currency into collapse.

Pay back your debts in devalued currency, then when it finally hits rock bottom, convert your gold and oil into a newly stabilized currency and watch it grow.

Panic always drives a falling currency below it's real value, and people with real money can profit both from the devalued payback and the bounce after the Euro or Pazooza or whatever crawls back up from the hole it dug itself.

If they won't convert to gold, have them move their money into an account that lets them save in Australian dollars. The AussieBuck is easily the steadiest currency around.

Anonymous said...

@Ed Foster

If euro is on borrowed time, what is the dollar on? Dead, lowered into the ground, not yet buried?

I suspect that most currencies are that way... in the longer view.

But you have given me motivation to look deeper at it. I know that euro is screwed long-term, with the shaky credit outlook of Western Europe, they will resort to printing money to cover welfare expenses before 2030.

@CNC machining.
I am studying mechanical engineering right now, but I want to get vocational school diploma in metalworking too. I like the actual process of machining, I will probably have that as a hobby. And it is a not bad fallback position.
Besides, with a degree in M.E., I can probably learn CNC machining in a short time. I have some course on it next year, but not as much as I would like..

As to Soros..
What is the point of such trading? Is it useful or beneficial to anyone but the manipulator? I suspect that it is not. Why is it even legal? I guess we can blame paper money for it.. though, such malicious shorting manipulation can be performed on anything that is traded. Seems like pure greed to me, with no redeeming aspects.


Ed Foster said...

Schmidt,the dollar is still the default currency, plus the fact that, other than oil consumption, the U.S. has a really good balance of trade.

It feeds, in whole or major part, one third of the world, makes aircraft engines for everybody in the business (including Europe), produces most of the world's airframes, and is still the prime mover in computers and telephone switching.

Plus, it exports 2.5 times China's annual dollar value, mostly in high value, high quality product that's not as easy to do without as China's cheap tools and toys.

Again, it's not as steady as the Aussie dollar, but the Euro has a lot further to fall, something that will hurt relatives of mine in Ireland very much.

As for selling short, how do you tell it from people who buy solid wealth in times of trouble and simply get lucky?

Also, it only works if the currency is in massive trouble and heading for hell anyway. You don't want the currency to rise after you sell it short, or you're wiped out by repaying at a loss.