The horizon is not so far as we can see, but as far as we can imagine

The Fed Hikes

So, the Fed has raised its rate by .25 percent. This is bad policy, and it is bad politics.

Employment Population Ratio

Employment Population Ratio

The unemployment rate is at 4.7 percent. As I have discussed before, the primary use for the unemployment rate is to determine wage push pressure, not whether people can get jobs (they can’t, and have given up).

Even by that policy, whose intention and largely successful result has been to keep employees from getting raises much higher than inflation, thus flushing money to the rich, 4.7 percent is not full employment. This raise is early.

That leads us to the politics. Yellen has been quite clear in her opposition to Trump’s avowed economic policies and that she intends to use Federal Reserve policy to neuter them. Given Trump hasn’t done anything yet but make promises he may well break, this seems premature, but the perception on the right will be, and possibly accurately, that Yellen, who barely raised at all in eight years of Obama’s economy, is suddenly raising when a Republican is President.

It’s not a good look, and I don’t see any reason to give Yellen the benefit of the doubt. Americans have only barely begun to get raises that put their income higher than before the financial collapse, with millions still unable to find work, and she raises rates?

The Federal Reserve is both irredeemably corrupt and anti-democratic, as well as an incompetent tool of the rich. At the least it needs to be brought back under Democratic control, a wing of the Treasury department, as it was before 1951.

In the meantime, this is another spike in Trump’s chances of a good Presidency, another spike in the jobless coffins of too many Americans, and another way of making sure that the rich get all the gains while everyone else eats their scraps.

(See Also: Trump’s Coming War With the Fed.)

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Trump Couldn’t Buy Coverage Like This


Trump Is Now Breaking His Core Promises


  1. Anti Schmoo

    I don’t know about America (which one); but I do know the U.S. is fucked; purely and thoroughly fucked!!!
    And Usian’s seem buggered as how to fix the problem.
    Fact; it can’t be “fixed” because Usian’s are not in control; and haven’t been for over a decade.
    Austerity is the rule of the day; there’s still some wealth that can be stolen; and it will be.
    Usaian’s have abdicated all responsibility for their own lives and will, therefore, suffer the consequences; impoverishment, domination, loss of constitutional rights (already there), extreme violence by the militarized police (aka Gestapo), and general malaise…

  2. Anti Schmoo

    …and if you think Trump is your savior; you’re beyond delusional and all hope.
    Trump is so vulnerable to the deep state, he was owned on his first day as president.
    If you all weren’t so bloody ignorant and just plain stupid, I could almost feel sorry for you…NOT!

  3. hidflect

    I think the people around Trump have all worked out, or been advised, how to play him. It seems he really is handicapped when it comes to critical thinking. Hillary was similarly owned but hers was a knowing obeisance. And there’s no sign of change in the wind. The DNC refuses to let the dirty, unwashed Progressives in not only because they want to preserve their donor income base but also because their owners don’t want any fresh inspection of their cherished “values”. What would an influx of Hispanics, Blacks and young Caucasians make of the extreme pro-Israel policy, for example?

  4. Brian

    Sorry Ian, Trump was never going to have a good presidency, even if the Fed was cooperative.

    Even if he really wanted to “bring jobs back” and give people great health care with “so many choices” or otherwise make people’s lives better (and I don’t think he cares beyond hitting the applause lines at his rallies), he lacks the focus, discipline, work ethic, and knowledge to push anything through. Combine that with his fragile ego, ignorance, pettiness, and inability to work the bureaucracy and he was always going to be a disaster.

    His Presidency is going to be a standard issue GOP Presidency, but even meaner and more dysfunctional then Dubya’s. He’s not the end of neoliberalism, just a more savage and destructive iteration of it.

  5. The Stephen Miller Band

    Brian nailed it and he brings up an important point that underscores what I’ve been asserting, and that is, true evolutionary societal change will not emanate from or through the current dominant political paradigm. Trump is certainly & obviously not the answer for all the reasons Brian has mentioned and more, but what Trump’s fake populist message and agenda has revealed is that true, radical and long-overdue evolutionary change will be thwarted if you try to use the System to inculcate and engender it. It will not happen by conventional means. The Evolution will most certainly not be televised, nor should we want it to be.

    The Fed is only raising the rate by 0.25. That’s really not that much. It’s practically immaterial. Maybe it’s a shot across the bow but I’m inclined to believe it will be nothing more than that. The stock market is riding a prolonged, chronic bull market tsunami of irrational exuberance and I can’t see the wealthy popping the happy happy bubble anytime soon since it’s the wealthy who are invested in the stock market and own all the golden eggs and the golden goose that lays them.

    As well, considering the rise in the price of insurance premiums and so much else for all socioeconomic stratifications, a prodigious increase in rates will despoil any feigned notion of a recovery because people will increasingly be unable to afford anything since most everything Americans purchase these days is done so increasingly on credit. For example, the auto industry and the housing industry will tank if rates rise too high.

    The Fed has backed itself into a corner with low interest rates. There is no way out without totally eviscerating the economy and throwing America into an UNDENIABLE prolonged and perhaps permanent depression.

  6. StewartM

    Fact; it can’t be “fixed” because Usian’s are not in control; and haven’t been for over a decade.

    Longer than that. (Certain aspects of our current mess go as far back as Truman, but Reagan is probably the biggest single devil). Like I have said, USians are like the person frantically pressing buttons on the TV remote, yet no matter what buttons they press, the programming never changes.

  7. Dan Lynch

    I have to disagree with you, Ian. Interest rates have little net impact on the economy. A big rate increase would hurt housing and construction, but a small increase not so much, and housing is not very strong in the U.S., anyway.

    The economy is impacted much, much more by fiscal policy. If Trump wants to grow the economy, he will need to spend like a drunken sailor. Instead, he is proposing to slash spending on everything other than the military.

    Congress controls the budget, but the president sets the tone and can twist arms to get the budget he wants. The people hold the president accountable for the economy and rightfully so.

  8. Dan Lynch

    My previous comment was not intended to dismiss the possibility that there will be a recession. To the contrary, a recession has been brewing for some time, and no doubt there will be one on Trump’s watch. The question is, how will Trump respond?

    Tax revenues shrink during recessions, making the budget deficit bigger. Conservatives will use that as an excuse for even more cuts to social programs, which shrinks the economy even more. Lather, rinse, and repeat.

    Will Trump go along with the conservatives to cut spending, as he has so far, or will he push hard for more deficit spending to stimulate the economy? That will be one of the litmus tests of the Trump presidency.

    Forget the Fed. It’s the fiscal policy that matters.

  9. If only the Czar knew!

  10. The Stephen Miller Band

    I guess if you think about it, raising interest rates significantly is a good thing as far as destruction of our habitat and biosphere is concerned. Higher interest rates, say ~ 10%, will impede growth and anything that impedes growth is good for the habitat and the biosphere overall.

    If Trump wants to be a good president, or even make it to the point that can even be evaluated, he’s going to need his own personal defining war. It seems like he’s being set up for a conflict with North Korea and it could be a real doozy since it could involve a nuclear exchange. If it happens, I don’t believe he’ll have much choice in the matter, but nonetheless, it will define him just as Libya & Syria define Obama and Iraq & Afghanistan define Dubya and The Balkan Wars define Clinton.

    I had to laugh when Trump touted the official labor statistics a few weeks prior when he is on record saying during his campaign, many times in fact and always emphatically, that the very same official statistics are fake and shouldn’t be trusted. I believe they are misleading and do not include what Ian mentioned, meaning those who have been unemployed for so long they drop out of the statistical measures and have given up.

    It’s not their fault they’ve given up. Yellen mentioned productivity — that it’s a concern or something to be managed, but we need to understand that at this point in history, productivity gains necessarily mean higher unemployment because productivity gains these days equate to replacing human labor with automation. There is no tenable plan, or at least not one publicly espoused and acknowledged, that purports to deal with and mitigate the unemployment calamity to come. It’s unavoidable at the current pace that shows no signs of subsiding. No doubt Ray Kurzweil gets a woody when he reads the following. Less people equals less germs and Ray’s a Germaphobe.

    Nearly Half Of US Jobs Could Be At Risk Of Computerization, Oxford Martin School Study Shows

  11. The Stephen Miller Band

    Here’s a great comment from that article, and yes, the future of unemployment is pertinently on topic since Ian himself says in this blog post, “the primary use of the unemployment rate is to determine wage push pressure.” I’d say Ian is being kind. The reason the official statistics are misleading is precisely because those who own the world seek to suppress wages in perpetuity and this is one of many ways they obscurely justify doing that.

    In the intervening coming years, as the True Unemployment Rate climbs closer and closer to the informed Oxford prognostication, the ruse will become almost entirely transparent, so one has to ask, how long does the ruse continue? How long do these deceitful & misleading statistics get published that are completely contrary to everyone’s shared, yet also somewhat unique, reality?

    This is going to be a mess since our elected representatives are largely stuck in a nineteenth-century “punish the poor” mentality. If you don’t have a traditional job you are evil, although our representatives don’t work very hard for [their] lifetime medical and retirement. They seem to do nothing at all lately.

    “They also serve who only stand and wait.” And many, such as homemakers who raise good children, do a very valuable and totally unrecognized job for society, “earned” income or not.

    Our science is blazing ahead but our economics and politics are centuries behind, and not moving at all. We are throwing away the potential science keeps giving us. Productivity increases geometrically, yet human want remains the same. It’s basically absurd.

  12. BlizzardOfOz

    Mandos is still stuck in “what’s the matter with Kansas” liberalism circa 2006. Mandos, don’t you know it’s 2017? The bien-pensant position is “white Kansas is dying — and that’s a good thing!”

    By the way, isn’t it quite remarkable how quickly that change happened? It’s almost as if those dumb flyover hicks knew the score all along.

  13. Ian Welsh

    *Shrug*, if Trump is just more neoliberalism then he will massively contribute to the end of it. My analysis never required him to be sincere and effective, if he was: end of Neoliberalism, if he wasn’t, more gas on the brakes of a system plunging towards failure.

    Neoliberalism is the sort of system whose method of governing meant it would destroy itself if not stopped, the questions were only when, and how much damage going down.

    Trump destroying it might well have been the good case scenario.

  14. Brian

    Eh, fair enough.

  15. The Stephen Miller Band

    Dina Powell — the Neoliberal Nexus.

    She’s only 43 years old and Deputy National Security Advisor with no specific credentials in National Security, but she is Goldman Sachs. Go figure. She was highly-favored in Dubya’s administration at the height of the Iraq invasion and occupation. She is an Egyptian-born Coptic Christian though, so that should sit well with all the various Arab Muslim sects.

    Check this Edward Snowden tweet out from February 2016. Edward, what do you say now that Trump has stacked his cabinet with Neoliberal Wall Streeters? It’s time to be honest.

  16. Duder

    “Trump destroying it might well have been the good case scenario.”

    This is the point that is not yet appreciated by most of these commentators. Yet me try to explain from my perspective.

    Neoliberalism as an organizing idea for society is on its way out. Much like Kenyesianism before it, neoliberalism has out lived its purpose. Most importantly, for the elites themselves. The ruling class however remains divided as how to go forward. Most just want to ignore the crisis brought on by the death of neoliberalism and carry on as if nothing of substantive consequence is underway. That is how Clinton built her big tent. Trump represents a faction that recognizes the crisis and has some cobbled together ideas about how to fix it, a mix of economic nationalism, know-nothing nativism, and elements of fascism. That they appear poised on the political front to achieve their vision does not change the fact of an underlining crisis in the dominant ideology of contemporary capitalism. That crisis will continue to persist.

    What is more likely now is what many predicted if Clinton had won. That in the next decade an event more potent and dangerous version of Trumpism will emerge and take power. Travel bans won’t be blocked by court order in that scenario. Things can get worse, people. My understanding is that only a left alternative can halt such an advance. But that has not yet emerged in any serious way as a political force. Sure, people like Sanders, but affect by itself is not politics. Hopefully it can, but unlike the 1930s, no Soviet Union exists as a counter organizing pole to contemporary capitalism from which a “third way” like Kenyenianism can emerge. As the saying goes, “Barbarism or Socialism” and we are all out of socialism in this 21st century.

  17. Tom

    Eh, Trump is imploding the deep state in a vicious self-feeding frenzy.

    He still has time to correct course, but if he can’t bitchslap his Cabinet and Congressional Republicans in line, he is done for and it will be his own damn fault for not sticking on message and delivering change.

  18. EmilianoZ

    When Piketty’s book came out a few years ago, he came to the US and discussed inequality in some debates. He said that inequality was now at about the same level as in the beginning of the 20th century. He also pointed out that there was no reason to believe it couldn’t go even higher. I think it means that neoliberalism still has plenty of room to grow.

    Trump looks like a neoliberal “with characteristics”. The main characteristic being nationalism. But even this conviction doesn’t seem strong enough for him to act upon.

  19. Shh

    If the system weren’t so obviously propped up by every means unnecessary, I might argue that raising the overnight rate would alter the risk free money gambit that’s been running since Clinton I was enthroned, err elected. My bad.

    There’s a shit ton of money being made in sweep accounts because the overnight rate is effectively negative.

  20. StewartM

    To reinforce your point in this article, Ian, there’s this:

    Employed Americans are quitting their jobs like crazy in another sign that under President Donald Trump, confidence across the U.S. economy is rising.

    In January, the number of Americans quitting their jobs rose to a seasonally-adjusted total of 3.22 million, the highest number since February 2001. The quits rate rose in January to 2.2%.

    People quitting their jobs in droves is seen as a sign of confidence among workers, as folks are unlikely to quit a job unless they are confident they can get another one

    This trend, of course, is what the Fed seeks to stop by hiking rates. Can’t have the serfs thinking that they can improve their lot, nosirree. The Fed wants workers to be desperate for a job, any job, and wants them fearful of losing the one they have (makes them more compliant, ya know).

  21. StewartM


    The bien-pensant position is “white Kansas is dying — and that’s a good thing!”

    By the way, isn’t it quite remarkable how quickly that change happened? It’s almost as if those dumb flyover hicks knew the score all along.

    Well, then one Donald J. Trump is willing apparently to lend a hand on the great white die-off with TrumpCare: to his own base:

    The Bloomberg analysis Carlson referenced found that taxpayers in counties that voted for Hillary Clinton in the election would receive a disproportionate share of the tax cut compared to those in counties that voted for Trump. That’s because the plan cuts an additional Medicare tax that generally only more wealthy people, like those who live in or near the cities that voted for Clinton, have to pay. There were, in fact, several hundred counties that voted for Trump in which not a single person paid the tax, so literally nobody in those counties would benefit from the tax cut.

    That’s beside the fact that things would actually get worse for many Americans. Under the Republican health plan, the Congressional Budget Office estimates that 24 million people would lose their health insurance by 2026, and the White House’s own analysis put that number at 26 million. Premiums would ultimately go down, but only because older people would no longer be able to afford insurance, so insurance companies would no longer be on the hook for covering their expensive treatments. As a result of all this lost coverage, approximately 17,000 people could die next year who’d otherwise live, and that number would climb to 29,000 people dying per year in 2026.

    So TrumpCare (doesn’t matter Paul Ryan is pushing itl, Trump could kill it with a single tweet) will mean that insurance premiums alone for those in their early 60s will be up to half of the median individual income, with higher out-of-pocket costs too on top of that. All gifted to his own base by the Great White Hope himself.

  22. Not the fed can do. Pres and Cong won’t do anything. Wait, it is only 4 years.

    (Fon d’parikulur – 16 )

  23. BlizzardOfOz

    @StewartM, I guess it’s possible that Trump’s top legislative priority is to re-brand Obamacare as Trumpcare. We’ll see.

  24. realitychecker

    @ Ian

    “*Shrug*, if Trump is just more neoliberalism then he will massively contribute to the end of it. My analysis never required him to be sincere and effective, if he was: end of Neoliberalism, if he wasn’t, more gas on the brakes of a system plunging towards failure.

    Neoliberalism is the sort of system whose method of governing meant it would destroy itself if not stopped, the questions were only when, and how much damage going down.

    Trump destroying it might well have been the good case scenario.”

    Can’t say it too often, Ian; it’s amazing how few seem to get it even at this late date. That was precisely my rationale in voting for Trump. Nothing else seemed as likely to get us to a place where real change could happen.

  25. StewartM


    Here in very white Appalachia a lot of Trumpians would be devastated by wiping out the Medicaid expansion. Note that the neoliberals aren’t really against Obamacare/RomneyCare–heck, Paul Ryan “hates” Obamacare SO MUCH that he essentially wants to turn Medicare into Obamacare. What bothers them is a government program that actually delivers real health care to people, as opposed to mandating that people send their life’s savings to private insurance companies (and via that, to Wall Street).

  26. Linda Merrill

    It was already understood Yellen would raise the rate if Trump were elected. No one thinks the Fed is America’s friend. This is just another piece of the onslaught against him–and, I would say, us. JFK tried to stop it; Johnson reversed it right on the plane home. Trump “absolutely” wants to audit….Good luck. But it is not like the single determinant that may possibly sink him. I would not doubt this result has already been planned for by Trump admin, certainly Bannon. Millions losing healthcare before increase in economy and jobs and some hope for a viable future? Maybe that.

  27. BlizzardOfOz

    @StewartM, right, but isn’t Medicare the one that’s projected to finally do the unthinkable and bankrupt the US? The whole problem is cost, already excessive and growing exponentially, which for some reason no one is willing or able to address. If DC with its reverse-Midas touch implements single-payer, shouldn’t the assumption be that they’ll just lock in current prices (exhibit)?

    I never quite understood why Trump would want to touch this thing at all. It’s unwinnable – even Obama with his friendly media wasn’t able to sell his polished turd.

  28. realitychecker

    Eating and exercising right would reduce health costs tremendously, but nobody wants to give up their “freedom” enough to live with actual rules about that.

    In the future, we will probably have implanted chips that keep a running account of every penny of cost/benefit we get from the society at large. It will be very efficient, but it won’t feel very free.

  29. Hugh

    The Federal Reserve was established in 1913 by President Woodrow Wilson. Wilson was the quintessential liberal in both the current and pre-New Deal sense of the term: corporatist, elitist, paternalistic, virulently anti-populist, and interventionist.

    The jobs report covering February showed a very good real, as in not seasonally adjusted, increase of 552,000 in the private sector compared with 2014-2016 (300,000 to 400,000 range), but this is just one month, and weather could have been an important factor. For example, in 2014, only 311,000 private sector jobs were created in February, but overall 2014 > 2015 > 2016. So again one month is not indicative.

    I have stopped looking at the unemployment rate. The definition of unemployment upon which the rate is based simply does not correspond to the reality and economy which we have.

    The BLS report on real, as in inflation adjusted, wages, for February just came out. It showed that average weekly wages compared to February 2016 for production and nonsupervisory employees, i.e. the bottom 82.2% of employees in the private sector, fell 0.4% Feb.-Feb.

    Also the increase in the CPI-U was a meager 0.1% in February.

    So let’s see, one good month in private sector jobs that could very well be a one off. No inflationary wage pressure as shown by the drop in real wages and a very low Consumer Price Index number. So yeah, Yellen is pulling any rationale for a rate increase out of her ass. (Pardon the technical terminology)

  30. These years of 0% interest rates have been tough on retirees hoping to supplement their social security with interest on their savings. Instead, they are spending their savings. When the principle is gone, it is SS only. And SS is not much.

  31. mike

    As a 64 year old who hasn’t received interest on his savings for years I think this is great news. Interest on savings will generate hundreds of billions of dollars, stimulate the economy. Fabulous news for seniors, pension plans, any organization public or private that has money in the bank.

  32. Some Guy

    “and another way of making sure that the rich get all the gains while everyone else eats their scraps.”

    That is the intention certainly. Last time they raised rates they nearly brought the roof down on their heads. I guess we’ll see what happens this time.

  33. Lisa

    “The unemployment rate is at 4.7%. ” Ba ha ha ha…the real rate in the US (and Australia) is closer to 15% and if you add in the underemployment rate around 20-25%…not that far from Great Depression levels.

    If you take the time in many countries (as I have done) downloaded the various stats and combined them ..then you get the real picture

  34. Tom

    Feeding Frenzy.

    Well I guess I’ll have Popcorn.

  35. The Stephen Miller Band

    I thought Trump was going to take on The Creature From Jekyll Island and slay it once and for all. I guess he realized no one would lend to him any more, except Russian Oligarchs so long as he does what he’s told, so he shit-canned that crazy notion.

    Trump would never have ascended if it were not for The Media to include Social Media, and more specifically Twitter. I have approximately twenty items on my To-Do-Immediately list when I’m elected POTUS and one of those items is to smash the Mainstream Media and Twitter and Facebook into more pieces than current technological innovation can count.

    As well, I will reverse the Citizens United decision allowing the Oligarchs to freely & openly purchase politicians and governance.

    Also, I will abolish and refuse to recognize Special Interests of any stripe. America will no longer be a country by and for Special Interests because Special Interests are not The People.

    In addition, the military will be cut to the bone and the nuclear arsenal will be overhauled and modernized. As America withdraws from hegemony across the planet, that nuclear arsenal will be necessary for the barracudas that are Russia and China and a few choice others who will take it as a sign of weakness and attempt to encroach on America. They will be forewarned that it will be pure folly on their part to interpret America’s reversal of hegemony as a sign of weakness rather than leading by example, and if they ignore that forewarning, they will never ignore another because there won’t be any more warnings.

    If America is going to lead by example and repudiate its former imperialistic tendencies it must implement a Klaatu Option that prevents other aspiring imperialists from filling the power vacuum left in America’s wake.

    Oh, I almost forgot, the most important item. I will Deport The Rich and those little piggies, when we surround them like the terrorized, tortured & tyrannized East Germans surrounded KGB headquarters in East Germany after the fall of the wall, well, we won’t let them go like those naive folks did in East Germany. The little piggies will also be deported with the big piggies they supported and protected all these years.

    Great article. They’re all connected.

    This Is What Oligarchy Looks Like

  36. rkka

    “Given Trump hasn’t done anything yet but make promises he may well break, this seems premature, but the perception on the right will be, and possibly accurately, that Yellen, who barely raised at all in 8 years of Obama’s economy, suddenly is raising when a Republican is President.”

    An even more egregious example of this is how rethuglican Alan Greenspan continually raised interest rates during the 2000 election, despite no inflation and a quarter trillion dollar budget surplus, only to drop them to a negative real rate once Bush the Lesser was selected.

    Thus was the housing bubble born…

  37. The Stephen Miller Band

    If Merkel is as classy as Trump, she will tell The Media today after they’ve met that “Donald Trump is ruining America.” I doubt she will. She’s not very classy. It’s her Communist roots that keep holding her back.

  38. The Stephen Miller Band

    rkka, that housing bubble was inflated via bipartisan cooperation, despite feigned opposition, that crossed administrations. The repeal of Glass-Steagall transpired under Clinton’s watch and so too did the expansion & exploitation of the Community Reinvestment Act legislated into law under Carter’s watch.

    No one has been held to account for any of this. What’s wrong with you people? What’s wrong with us? Does no one care about Justice? There can be no progress without appropriate & effective Justice. Those responsible for the housing bubble, the ones who greased the skids and set it all in motion and continued to feed it steroids, need to be brought to Justice. They need to be stripped of all their wealth, because it’s our wealth really, and forced to live in HUD housing their remaining days. I think that’s appropriate Justice, don’t you?

    Not only has no one been brought to Justice, instead, they’re still free to do the same in other obscured forms and so they decided they would put one of their own in as POTUS so he can facilitate the cleaning of the carcass before they all “take the money and run.”

    The feast isn’t over until the orange fat man takes his last dump.

  39. Hugh

    How delusional. Over the last nearly 40 years, Fed interest rate policy has been primarily about transferring wealth upward. When the Fed increases interest rates, banks multiply that increase in their loan rates. Most of the profit resulting from those increased loan rates goes to the bank and those who own stock in the banks, very little of it goes to any particular depositor, say a retiree. The people subsidizing that retiree are other non-rich people in the community. So what you have is a wealth transfer. Most of that wealth is transferred to the bank and the rich who own it, and some, not much, to your retiree. But the justification is “It helps retirees!” At what expense and at whose cost doesn’t rate apparently even the asking.

    If you want more money for retirees or for anyone or anything else, there is really only one way to do it: tax the rich and corporations because they have all the money. If you are an MMTer, you would probably say that the government can spend money into creation. But seeing as the government, probably unConstitutionally, ceded almost all of its money making power to the Fed in 1913, nahgonnahappn. Same thing for the blogger beowulf’s ingenious though misunderstood idea of reclaiming the government’s money making power through a legislative loophole, i.e. minting of a multi-trillion dollar platinum coin, nahgonnahappn. Of course, taxing the rich, nahgonnahappn either. So basically if you want retirees to get more money through interest income, it will be by screwing over some other non-rich segment of the population.

  40. V. Arnold

    Of course, taxing the rich, nahgonnahappn either. So basically if you want retirees to get more money through interest income, it will be by screwing over some other non-rich segment of the population.

    Or getting out of the U.S. to a country that is much cheaper to live in; and there are myriad choices on this large and shrinking planet.
    Extreme circumstances require extreme measures.
    Usian’s need to seriously face up to their fears and loyalties.
    When a government you can’t control, has so thoroughly fucked you over; just what keeps you so captive?
    That’s a serious question, begging serious inquiry.
    And another serious question; how much longer will you have that choice?
    I think not much longer; trends for emigration are fast narrowing across the globe; think about it…

  41. StewartM


    right, but isn’t Medicare the one that’s projected to finally do the unthinkable and bankrupt the US?

    No, that’s the Wall Street bailouts and Middle Eastern Wars (at a very conservative estimate, $12 trillion and counting). You know, the spending “vitally important to the security of the United States”? (yeah, right). Our military budget is within spitting distance of WWII in inflation-adjusted dollars with only a fraction of the manpower and an even small fraction of the weaponry (you want to talk about “waste, fraud, and abuse?”….look no further. I am convinced that utterly ruthless management could buy the same military force for no more than one-third the cost).

    We are spending almost $18 % of GDP on health care, almost half on Medicare/Medicaid and the rest on private insurance/out-of-pocket costs. Medicare and Medicaid covers the sickest and poorest population of the US with the biggest bang for the buck, and while we’re at it VA care covers an often very sick portion of the population (veterans) at lower cost and yet delivers the best care ( ). So if we were really interested in not “bankrupting America” we’d be going to Medicare-for-All or VA-for-All, or some combination of the two (my solution: VA-for-All with hospitals and clinics everywhere, and Medicare-for-All for covering you if you go to a private hospital, with prices/reimbursements set on VA costs).

    Looking at other countries, you see this:

    The US spends at least 50 % more (sometimes twice as much) of its GDP on health care with worse outcomes. Moreover, despite the conservative/libertarian nonsense about Americans supposedly having it too good and health care costs going up because we’re just seeing our doctors way too much, the charts show we utilize health care services far *less* than these other countries. Japan, that nation of octogenarians, use medical services *three times more* than Americans yet Japan as a country only pays slightly more than half of what we pay. All these countries outlive us too, precisely because people there *don’t* have to put off going to the doctor that we do because of worrying about medical bills bankrupting them.

    A few years back, I traveled to Taiwan. Back before 1995, Taiwan used to have the same problem as us–spiraling health care costs, and worse with an aging population akin to Japan’s, and soaring health care costs (13 % of GDP). Taiwan looked at health care options, and quickly (despite their admiration of everything Western, which troubles me) decided that the US model was a horrible one to emulate. So they decided to institute more of a Canadian model and lo and behold, the cut health care expenses in half (around 6 % now).
    TaiwanCare is now quite good.

    So why does US health care cost so much? The short answer is: price gouging due to a for-profit health care model. Almost any conceivable operation or service you can imagine, insurance aside, even if you were paying out-of-pocket for everything, would cost multiples more here than say in Germany, France, the UK, Japan, or Taiwan. Take a lookie:

    Why the price-gouging? That is not a bug, but a feature! You see, for-profit healthcare creates all the wrong incentives: if any indigent person or person with lousy insurance shows up, you try to give them two aspirin and show them the door because actually treating their ailment is a money-losing proposition. By contrast, with someone who is wealthy or has great insurance, the incentive becomes to run up the biggest damn bill you can possibly run up to increase profit. Is there any wonder then we spend so much in the aggregate and yet die younger?

    And yes, we could pay for this, one way or another, and actually save money. My solution, if we both increased the minimum wage to $15 an hour plus (while raising tax rates), doubled the standard deductions and personal exemption to reflect what it really costs to live in the US (to help those on lower and middle incomes), is a flat Medicare tax of 12 % on all sources of income–no exceptions. That would capture 12 % of GDP, and as other countries cover everyone with that or less, so that should give us a great system. And as everyone would be paying for it, it would be considered “fair” and not as “welfare”.

  42. shargash


    “Trump looks like a neoliberal ‘with characteristics’. The main characteristic being nationalism.”

    IMO, one of main goals of neoliberalism is to replace the nation state with the corporation as the basic unit of sovereignty. That’s why nationalist parties everywhere are opposed by neoliberals. I see Trump’s nationalism as being diametrically opposed to neoliberalism.

    I think that is part of the Trump-Putin connection. Whereas Yeltsin was perfectly happy to sell out Russia to the west, Putin is a nationalist. The neoliberals hate him for that. Same for Trump. Same for Le Pen for that matter.

    The goal of the ruling elite is to keep the neoliberal elements of Trump’s policies while neutering the nationalism. If they can do that, Trump stays. If not, I think they’ll try to remove him.

  43. Sanctimonious Purist

    This might be pertinent:

  44. Ed


    Regarding military spending–argh. The problem isn’t the “fraud and abuse” part nearly as much as it is the way the bureaucracy is set up and how it handles incentives.

    First, the military is so risk adverse that they require a bazillion tons of paper “proving” that the system will work. Unfortunately, paper doesn’t make hardware better, and complex systems will always have some element of risk–it’s unavoidable. But the taxpayers still pay for the paper. My day job has proof that if we cut the paper to what’s required by commercial customers, we drop the price by 2x-4x.

    This is in part tolerated because the incentives for the colonels etc. who oversee military procurements is all negative. If there’s a screw-up on their watch, their career is over. However, if they can push the screw-up down to the next guy (since they’ll rotate out of the position in 2 years), they can continue to get promoted. The colonel who actually takes a risk is likely to get burned.

    Finally, a very large fraction of military procurements are simply jobs programs for political purposes. It’s not what the military needs or wants–it’s how much money goes into which Congressional Districts. The B-2 is unkillable because they managed to secure a subcontractor in every single congressional district (think how hard that is!). Who cares how many B-2 bombers we need? We’re going to keep manufacturing them indefinitely because no Congressman will get re-elected if he cuts the jobs program in his district.

    It’s a mess that’s not easy to undo.

  45. The Stephen Miller Band

    I don’t think Trump is a Nationalist. Just because he says shit that makes you believe he’s a Nationalist doesn’t make him a Nationalist. Remember, those within in his circle are advising us not to take him literally. I take this to mean don’t pay any attention to his insane rhetoric and instead focus on the actions taken under his “watch.”

    Despite the campaign slogan, I’ve yet to see any substantial actions that make Trump a Nationalist. Hell, he’s hosting President Xi Jinping at Mar-a-Lago. They have “business” to discuss, don’t you know.

    Did anyone else take note that Don likes to entertain The Boys at Mar-a-Lago but not The Girls? How does Don know Merkel doesn’t play golf? How does he know President Xi Jinping does? Or did Don figure Merkel wouldn’t help him secure the proper licenses to set up Trump Towers & Hotels all across Germany but President Xi Jinping will help him do so in China?

    I think it’s the latter.

  46. StewartM


    I actually have a close friend who works in the military, who echoes what you say.

    Still, ruthless management would involve the military demanding and knowing exactly how much something costs and dictating (slender) profit margins. With Halliburton being able to charge $20 per soft drink, or even paying a company like Blackwater to do security, plus all the private contractors involved in logistics (yes, we’re all paying their profit margins) instead of the military doing the same work for less (there’s an analogy with for-profit prisons here), there’s plenty of room for cuts.

    Remember, we’re talking about inflation-adjusted dollars. In WWII the same amount of money bought us 24 fleet carriers, 10 battleships (1,200 ships total), built 80,000 tanks and SP guns, built over 300,000 planes (70,000 in the AAF by war’s end), had over 12,000,00o personnel, etc. Contrast that to the paltry numbers of today’s military (230 commissioned ships, 5400 planes, 8,800 AFV, 1.1 million personnel).

    And don’t counter with “but we’re so high tech today” because the weapons of WWII were quite high tech for their time (the B-29 bomber, the gyroscopic stabilizer system on US tanks, radar-directed naval gunnery, plus the whole damned Manhattan Project–that’s not high tech?) A better counter-argument would be that mass produced weapons are cheaper, I’ll grant that, but that too is a conscious decision. Even allowing the fact we’re not mass producing, we’re still being massively ripped off.

  47. OneForAll

    realitychecker: “Eating and exercising right would reduce health costs tremendously, but nobody wants to give up their “freedom” enough to live with actual rules about that.”

    Since everyone is different, you couldn’t have effective rules anyway, even if you wanted to.

    Also, no amount of eating right, or exercising, is going to magically get rid of genetic and congenital disorders, old or new injuries, lack or loss of body parts, or other disabilities such as blindness and deafness, and mental disabilities.

    Try telling the mother of a child with spina bifida that the child ought to eat and exercise right and then report back on her reaction – if you survive. It’s true that the mother’s diet is likely to have caused the disorder in utero, but even then, the cause of the poor diet was almost certainly poverty, with low education second in the queue of probabilities.

    I’ve noticed a very strong correlation between people who tell us all to take responsibility for ourselves instead of relying on “hand-outs”, and people with circumstances that allowed them to make it.

    Those people usually are born with all parts of their body fully functional, they naturally look good, they had a good education, they overcame other disadvantages because they had a cheerful constitution (mainly genetic) and so were able to persist and succeed and network easily, they are more intelligent (again, not something you can choose), and in cases where both apply, they also have sociopathic traits, meaning they
    (a) are able to ignore the needs of others enough to succeed enough in pursuing their own interests and
    (b) think others can (and therefore should) do what they have been able to do.

  48. The Stephen Miller Band

    Not to mention, considering Trump’s goal to deregulate everything including finally sticking the last knife in the EPA, the environment will become even more of a cesspool than it already is. Soon enough, all the major metropolitan areas will look like Beijing. If that’s the case, what’s the point of eating well & exercising? In fact, eating well & exercising will probably be more deleterious to your health since the more you eat, drink and breath, the more toxins you consume and subsume. It will be important when that time finally arrive sin a few short years to eat, drink and breath as little as possible in order to maximize your life expectancy.

    Nice. Make healthcare completely unaffordable and inaccessible to the majority of the population and then deregulate the demons who wish to poison the planet many times over and drown your opponents & supporters in poison so their life expectancy plummets by twenty years at least and call all of that magnanimous goodness Make America Great Again.

  49. Ed


    What’s the saying? It’s not what’s against the law that’s the true crime. It’s what’s legal that’s the true crime.

    I am a military contractor. We’ve been ‘ruthlessly’ audited many times. We are experts at pointing to where in the Federal Acquisition Regulations (the FAR) we’re allowed to charge what we do. If you want true reform, you have to change the FAR.

    Now doing so won’t be easy. My bosses will fight it as much as Hedge Fund Managers fight the elimination of the carried interest rule that lets them only pay Capital Gains tax rates instead of income tax rates. The solution has to be political.

    Essentially, the Government has tilted the rules of how tax dollars are spent to favor the contractors over the rest of the citizens of the nation. I’ve got a ton of detailed examples* and they all feed into Ian’s overall point. The current economic/political system is biased towards upper middle class whites and if we want that to change, we have to change the system.

    *Easiest example. We have a 3% annual raise built into our contract as a ‘cost of living adjustment.’ That’s standard in military contracting, though not for the soldiers who actually do the fighting (since they’re govt employees and not contractors). Do folks on Social Security, welfare, unemployment, or any other government payment program get that high of a guaranteed annual raise? Hell, no. But they don’t have multi-billion dollar corporations lobbying Congress for them.

  50. StewartM


    Also, no amount of eating right, or exercising, is going to magically get rid of genetic and congenital disorders, old or new injuries, lack or loss of body parts, or other disabilities such as blindness and deafness, and mental disabilities.

    You don’t have to go that far. Compared to people in many other countries that outlive us, USians are actually health nuts. They exercise less, they smoke more, and they drink more than we (the Brits in particular gawk at Americans hitting the gym while they knocking out pint after pint in the pub). Nor are their diets much healthier (though much of our obesity rates I think are just due to our dependency on the automobile; in mass transit cultures you walk a LOT more).

    Being able to go see a doctor, anytime you want, without having to worry about bankrupting you, is a huge advantage. Comparisons of US life expectancy versus other countries have an analogy with Finnish versus American education (Finns likewise outscore us on tests); the Finns tried for equality in education and, by serving the needs of those having the most trouble, ended up with the highest scores. Likewise, countries that help those most in-need of medical services “score” the highest life expectancy statistics.

  51. realitychecker

    @ OneForAll

    So, apparently you DO NOT believe that eating right and exercising reasonably would lower health care costs tremendously.

    Congratulations. You are now an official Science Denier, moron.

    But, you have also established your entitlement to the Grand Prize for most straw men and baseless assumptions ever packed into a single comment.

    Now please go drown yourself. We will all be better off for your absence, if you can’t think any better than that. Which apparently you can’t.

  52. Lisa

    realitychecker : As usual it is far more complex than all that.

    Yes obesity is linked to many diseases, almost always caused by too much sugar, but it has been shown that people who are moderately overweight live just a long (and maybe longer) than ‘ideal weight’ people…Plus we have no idea what ‘ideal weight’ really is, BMI, for example, is nonsense.

    Then there is exercise…what type and how long? Lots of people around with stuffed knees and hips due to their running (etc)…

    Then there is ‘eating right’ ..we have no real idea what that is…every ‘fad’ that has come out has been refuted ..including the much hyped ‘anti saturated fat’ nonsense or the ‘carbohydrate’ rubbish.

    Then that is no guarantee of anything, take cholestoral, it is largely genetic and your diet will have very little effect on your blood levels.

    So all we really know is a good general diet, with low sugar, moderate exercise (like lots of walking) and keep your body fat levels under 20% (bit less for men especially around the stomach) are good for you and that is about it.

    And it might reduce some risks a lot for some people but very little for others.

    Plus you have no control over environmental exposures to lots of nasty, often cancer causing things, that’s the job of people like the US’s EPA and so on. Then there are your work risks that again you have no control over those …that’s health and safety people’s.

    That is the myth, that you can control everything yourself, but it is a scam to blame people for their ‘own’ misfortune when often it is just sheer dumb luck.

  53. realitychecker

    @ Lisa

    Thanks for demonstrating just how much effort some people are willing to put into blowing smoke around a simple and direct common sense statement that was never intended to be taken as the sole and universal solution to every single physical ailment that ever afflicted any sentient being (including spinal bifida, for Christ sake, per OneForAll). Nor brain cancer, nor spinal meningitis, nor scabies, nor syphilis, nor, nor, nor, nor, nor . . . .

    Could it be that this illustrates a major character defect that explains why lefties are so ineffective at winning anything in the political arena, i.e., that unless they are given one single magic button to push, to transform our current hellish world into Nirvana, with zero risk and zero effort, they can’t agree on doing ANYTHING?

    Ponder that one for a month, then get back to me.

  54. musical interlude

    I’m sorry. I do stand by you. Maybe I was an asshole. OR, maybe YOU are the asshole.
    Either way, I guess I have to stand by you.

  55. OneForAll

    Thank you, Lisa: “That is the myth, that you can control everything yourself, but it is a scam to blame people for their ‘own’ misfortune when often it is just sheer dumb luck.”

    That was my point – not that good diet and exercise never does anyone any good!! And I think realitychecker knows that, and knows that I was not trying to find a single solution to everything.

    Western (and particularly American) culture focuses on personal responsibility to much, often to the exclusion of anything else. How many times do we hear, “You can be anything you want – if you just put the effort in.” This is plainly nonsense. Plenty of short people want to be taller, for example: taller people earn more money and find it easier to get jobs, mates, trust, and all sorts of other things. I’d like to be more intelligent and capable, especially in certain ways, but I have a limit and may well have hit it.

    No amount of effort can change these things; all we can do is make the best of what we’ve got – and what we’ve got includes our psychological make-up: where we are on the scales of introvert-to-extravert, big picture-to-detail, optimistic-to-pessimistic, sensitive-to-thick skinned, compassionate-to-callous, and so on. You can try to change these but that’s just like stretching a spring – it’ll snap back as soon as you let go.

    The victims of poorly regulated financial institutions are often blamed for their misfortune, too. And the victims of unjust laws, of disastrous education policies, of systemic voter suppression. It’s more comforting to think that some individuals screwed up than to face the fact that the society you live in is fundamentally unjust. Because if we open our eyes to that, we have to change how we view ourselves, how we view our society, our country, and our way of life, and how we live our lives.

    Yes, we need to take responsibility for ourselves, to the extent we can (and I do), but embedded in that Western attitude is a strongly implied blame and callousness for anyone who falls behind (blaming the victim of circumstances or of the system), or doesn’t make it, and it is THAT that I find extremely objectionable.

  56. realitychecker

    @ OneForAll

    “Thank you, Lisa: “That is the myth, that you can control everything yourself, but it is a scam to blame people for their ‘own’ misfortune when often it is just sheer dumb luck.”

    That was my point – not that good diet and exercise never does anyone any good!! And I think realitychecker knows that, and knows that I was not trying to find a single solution to everything.”

    You know, it’s times like this that I really wish I could reach through my computer screen and hand a particular commenter a mirror, and demand that he/she look at him/herself.

    Because, it would be so nice to get you to see that I also was not trying to offer a single solution to solve every single problem, and yet you responded to me as though I was offering a total universal solution, and listed all the supposed shortcomings of that solution.

    When all I was saying is that good diet and regular exercise would be a big help and save a lot of money and avoid a lot of health issues. NOT ALL OF THEM. It’s hard for me to imagine the mindset of someone who would disagree with that, unless it be one suffering from terminal political correctness, such that every victim must be individually salved or else someone has been shown to be a cold-hearted barbarian.

    So, just imagine that I am handing you a mirror, OK? And take a good look at yourself.

    Same to you, Lisa.

  57. b.

    The Fed Hike is a sideshow. I am with Hussman on this – the low interest policy has accomplished nothing but putting us back where we started – several times already. To give Bernanke and Yellen any credit at all is to overstate the case – it is not that their interventions have any actual traction, it is the mob psychology of the profiteering classes that feeds on their voodoo banking.

    Obama had the same good luck as Clinton – Bush did not get the blame for 9/11 he well deserved, but did get the blame for 2001 which he did not, and for 2008 which he only partially deserved. It would have been better – especially for the Democratic 2016 primaries – if Obama had gotten the full credit for the coming Obama-Bernanke crash, which will now likely be associated with Trump.

  58. b.

    Specifically: “The crisis ended – and in hindsight, ended precisely – on March 16, 2009, when the Financial Accounting Standards Board abandoned mark-to-market rules, in response to Congressional pressure by the House Committee on Financial Services on March 12, 2009.”

    Sanders is making the same disappointing statements about possible Fed interest rate increases. Given the damage that Greenspan have inflicted over the last 20 years, it is astonishing to read about “ill-timed rate hikes”. Given the damage that this does specifically to low fixed income earners with no power to shop and bargain for better returns except by buying into the risk, it is outright infuriating. But then, so is Sander’s idiotic buy-in into the Russia Dodge. I had hoped he would have the foresight to not eat the 2016 version of the yellowcake and tell the Clintocrats that “The American people are sick and tired about hearing about your damn Russians”, alas, it is not Sanders foreign policy or coherent critique of the military-imperial complex that makes him the last, best honest man in this blighted nation.

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