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Archive for the ‘economics’ Category

According to a new study, withdrawing from NAFTA would cost 18 million jobs in the United States during the first year alone.

So where would those jobs be lost? Well, large swathes of the economy are dependent upon Mexico and China now. U.S. automakers Ford and Chrysler would be especially hard hit. I know Chrysler best, so here’s the scoop on what repealing NAFTA would do to Chrysler:

Roughly 40% of Chrysler’s engines are built in their Saltillo, Mexico engine plant, including 100% of their world-famous Hemi V8 engines and roughly 60% of their Pentastar V6 engines. 100% of Chrysler’s best-selling minivans are assembled in Windsor, Canada, and roughly 60% of their pickup trucks are assembled in Saltillo, Mexico, accounting for a significant portion of their profits. 100% of their large cars — the Charger, Challenger, and 300 — are assembled in Brampton, Canada.

In short, if NAFTA is repealed, Chrysler has no engines for their large vehicles, and many of their most profitable vehicles get stranded on the other side of the new Iron Curtain that Trump is trying to build. It’s unclear whether Chrysler would survive. Jeep is about the only thing actually built in the United States today, but Jeep isn’t enough to sustain an auto company, especially a Jeep that has no access to V8 engines and limited numbers of V6 engines.

But hey, gotta keep them darkies on the other side of the border. And make sure that none of them benefit from money spent by white folks. But there’s an interesting thing about walls. They not only keep people out. They keep people in, too.

Just like the original Iron Curtain.

– Badtux the Walls Penguin

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Did the economy do better under Ronald Reagan than under Jimmy Carter? There’s lefties who argue that Republicans are *always* worse than Democrats, but then Republicans shout, “Jimmy Carter!”. Was it true?

Technically yes. According to the St. Louis Fed, GDP in chained billions of dollars was 5732.462 in on 1/1/1977, and 6635.726 on 1/1/1981 when Reagan took office, for an average increase of 3.9% per year. GDP in chained billions was 8831.544 when Reagan left office, for average increase of 4.1% per year. So yeah, technically, you’re right, Reagan’s economy performed better than Jimmy Carter’s, but it’s like claiming that your guy will give us 11 cents rather than the other guy’s 10 cents. Nobody’s going to get too excited about the minimal difference there.

When you look at wages, on the other hand, things look different. In inflation adjusted dollars (taking Bureau of Employment Statistics numbers and feeding them into the official inflation calculator), average hourly wage for non-supervisory workers fell from $21.82 in January 1977 to $20.07 in January 1981, or an average of 2% per year. From there they then fell to $19.35 in January 1989. So: average hourly wages for non-supervisory workers fell by 0.45% per year under Reagan, as versus 2% per year under Carter.

In both cases the working class was fucked. But they were fucked less under Reagan than under Carter.

So I call foul on the notion that Republicans are *always* worse for the economy (and for wages) than Democrats. It is true that Clinton and Obama did better than any Republican president back to Eisenhower, but Jimmy Carter is the counter-example that proves that the rule really isn’t a rule.

On the other hand, Reagan’s policies decidedly set up today’s situation where wages are in free-fall for everybody who’s not one of us technology elites, so this isn’t saying that Reagan was a great President or anything. I mean, real wages fell during his Presidency. You can’t say a President is great if real wages fall during his presidency. On the other hand, he was not the Worst president of the past fifty years. That honor falls on Jimmy Carter, a nice man who tried (and tries) to do right, but a lousy President.

– Badtux the Numbers Penguin

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As some of you know, my cat has been diagnosed as diabetic and requires insulin injection. He was prescribed Lantus, which is a long-acting insulin called “glargine insulin” that slowly infiltrates the body from the injection site during the course of the day rather than hitting in one big insulin hit. This is sort of the Gold Standard of insulin, controlling blood sugar far better than anything other than an insulin pump. Sometimes you can bring a cat with Type 2 diabetes back to non-insulin-dependent status by using this stuff to regulate his blood sugar until his body readjusts to operating with normal level blood sugar. Tapering off then lets his pancreas take over insulin production again and you have your cat back, albeit with severe dietary restrictions to keep his weight and blood sugar down. Yeah, that doesn’t really happen with people, but cats are weird.

TMF probably isn’t going to be in that cat-egory because his blood sugar was so high, but my vet said it was worth trying. my vet said “Okay, it’s expensive, but this is the gold standard and a $180 vial will last you several months.”

Well, it was a $180 vial in 2014, the year before its patent expired. Today it’s a $290 vial.

What happened? Competition happened. Two competitors entered the market, releasing two competing products, Basaglar and Toujeo. So, what happened? Why did prices go up rather than down the way the free market maniacs are always claiming competition will do in healthcare?!

Well: The maker of Lantus has a fixed amount of profit they want to make from Lantus. If volume goes down — which happened with competition — then they raise the price to make that amount of profit. And the competitors have similar price desires, so try to compete based on something other than price –Toujeo is more concentrated than Lantus (more doses per milliliter). Or if they’re wanting to compete on price, they price 10% below the market leader, because that’s what maximizes their profit (see: Basaglar). Every time Lantus raises their price to meet their profit goals, the other two raise their prices in lockstep to maximize their *own* profits.

So competition nearly doubled the price of my cat’s insulin within three years.

So much for that healthcare “reform” nonsense about “competition reduces prices!”. It just doesn’t seem to work that way in the real world, at least not for healthcare.

– Badtux the “Free Market Orthodoxy is religion, not fact” Penguin

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Those things have to arise elsewhere, because they are not natural attributes of capitalism or markets. As the following example makes clear.

So, you’re a retailer. A hurricane has hit your city and the city water plant was wiped out. The water won’t be back on for weeks at the earliest.

You have four cases of water in your store. Four people come into your store:

Person A: A wealthy banker with $250,000 in the bank and $500 cash in hand who wants to buy all four cases of water at $80 apiece.
Persons B,C,D: Three single mothers with two kids making $400/month at a minimum wage job while living in subsidized housing. Most of her money goes to food, utilities, or the car that is all that allows her to get to her job, and she has a total of $20 cash left over from paying that month’s bills. She wants to buy a case of water at the normal $4.95 price in order to keep her family alive until FEMA water deliveries start.

What do you do?

If you’re a follower of Ayn Rand, a worshipper of capitalism, you say “Sell the water to the wealthy banker.” It’s what gets you the most money. Which is the whole point of capitalism, right?

If you’re a worshipper of the Free Market Fairy, you’ll say “well, I’m sure those mothers will find some resources *somewhere* to buy water if they really need it,” and shrug your shoulders. If they don’t find water elsewhere, or can’t raise the money in any way, well, they must not have tried hard enough, right?

If you’re a typical economist, you say “well, there’s not enough water to fulfill demand, so high prices ration it amongst the multiple parties.” Ignoring the fact that the rich person can buy more water than he needs because he has money coming out of his ears, while the single mothers even combining all their resources can’t even afford $80 for the single case of water that one of their families needs to stay alive. But dead single mothers aren’t a concern of economists, they’re all about abstractions. Ignoring the fact that their rationing abstraction ends up with 75% more people dead than if the rationing was done according to need rather than according to wealth.

If you’re a Republican sociopathic lizard person (but I repeat myself), you say “those poor people don’t contribute anything to the economy, while the rich man does, so I’ll sell it to the rich man because he’s the only one who deserves to live.” Ignoring the fact that the average rich person would starve to death if it wasn’t for all those poors stocking shelves and cashing out people at supermarkets, and waiting tables and cooking the food at restaurants.

If you’re a moral person, you ration the water — you give each person who comes through a fixed amount that they need to get through the next couple of days, and that’s that. So you sell one case of water to each single mother at the regular price, and one case of water to the rich banker at the regular price, and four people survive to live to see FEMA come in, rather just one. Four people surviving is more moral than only one person surviving, right?

But there seems to be fewer and fewer moral people each year. Perhaps what we need to be selling are moral compasses. Sadly, the vast majority of them seem to be defective right out of the box. Maybe because we outsourced production to China. In the absence of a moral compass, we rely on government to impose morality on the market via, e.g., anti-profiteering laws. When government doesn’t do that… we get dead bodies.

And nobody seems to care.

– Badtux the Morality Penguin

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Laid-off coal miners are refusing to retrain for other work because they actually believe Donald Trump’s lies about coal coming back.

It’s not. Not within the next 20 years anyhow. Coal power plants have been shut down all over the country because of the fracking industry flooding the market with cheap natural gas. Natural gas powered plants are cheaper to operate than coal powered plants and now that their fuel is cheap too, utilities are falling all over themselves to shut down ugly dirty coal powered plants, and those plants are not coming back. Hell, some of those plants were so decrepit that they had boilers with swastikas on them. Not because their owners were neo-Nazis. Rather, because their boilers were looted from the rubble of post-war Nazi Germany. Yep, we’re talking about 80 year old boilers, still hard at work generating steam to power the steam turbines at these antique power plants. Needless to say, the efficiency of these antiques is not up to modern standards…

But never underestimate the ability of human beings to be delusional. Training for some other form of work involves risk and maybe putting yourself into an intellectually uncomfortable position. If you’re training to be a health aide, for example, you’re going to have to change adult diapers and clean adult bums. That’s just part of the job. If your coal mining job is coming back, why do something so icky, right?

Of course it’s not coming back, but hey, this is the United States of Delusion, so that little factoid just doesn’t mean anything, apparently…

– Badtux the Delusions Penguin

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Wesa just be slaves on da massa’s plantation, dependent upon them for the very food we eat, which is provided by giant corporate entities owned by our feudal overlords. But there’s always the worry of slave uprisings. Especially in those places where that nasty “democracy” stuff has taken hold.

Thus why our massas be doing their best to subvert or eliminate democracy via, e.g., laws that restrict voting rights, un-auditable electronic machines that can be easily rigged, threats of violence if the “wrong” people show up to vote, etc. Because if democracy would outlaw feudalism, then obviously it is democracy that is the problem, not feudalism. Right?

– Badtux the “Serfin’ USA” Penguin

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I already pointed out that the unique labor demands of growing and picking cotton led to slavery being extremely profitable in the pre-Civil War South, to the point where slavery would have never died out naturally until the advent of herbicides and mechanical cotton picker machines in the 1950’s. I mentioned how slavery was continued somewhat in the sharecropping system that arose after the war, and the system of segregation that insured that blacks had little choice but to work in the fields or starve since they were blocked from most other jobs by the segregation regime. I also mentioned that my grandmother and grandfather on my mother’s side, both poor whites, were sharecroppers when they married, living in a one-room tar-paper shack with no indoor plumbing or electricity (the toilet was an outhouse) and working like dogs to grow and pick cotton, and how one of my mother’s least-favorite memories was picking cotton as a child.

So back to my question: Why are there so many uneducated poor white trash people in the South?

Well, it’s for the same reason that the South embraced segregation so heavily: by keeping most white people poor and uneducated, it meant that the Southern aristocracy could obtain cheap labor for their fields.

In short, Southern poverty was a deliberate decision of the Southern aristocrats who lost the military phase of the Civil War but won the peace afterwards. They deliberately organized their society so that schools beyond K-8 were too expensive for poor people. They deliberately kept industries that might have employed large numbers of poor whites in high paying jobs out of their states. It wasn’t until the mechanization of cotton production that desegregation could happen in the South, nobody dared push it before then because the South *would* have risen up again. It wasn’t until the surplus poor white population was no longer needed for cotton that industries like textiles and the auto industry were allowed to come to the South to employ the surplus poor white population, and the taxes to build good schools were never passed even then because educated people were a threat to the aristocracy.

The end result of that third world society — a sea of poverty and a small set of aristocrats on top — was that these states were poor. The aristocrats didn’t care. They could have had more money if they’d allowed the peasants to become prosperous and educated, but they cared more about being on top than about absolute wealth. It’s no surprise that in the 1960’s and 1970’s, as the power of the old Civil War descended aristocrats collapsed, the affluence of the South grew immensely. Even into the 1980’s, it seemed that the South was going to rejoin the rest of the United States.

Then progress stopped. Because a new aristocracy arose. An aristocracy that, like the old one, also was more interested in maintaining their power than in absolute wealth, though in many cases, like the Koch brothers of Oklahoma, they do have immense absolute wealth. And maintaining their power is easier with an uneducated populace. Thus the constant attempts to prohibit accurate teaching of biological science in Southern schools (modern biology simply cannot be explained without the theory of evolution), the prohibiting of teaching critical thinking skills in most Southern schools, and so forth. By keeping the poors stupid, ignorant, and superstitious, the poors don’t look up at their aristocrats and start measuring the aristocrats’ necks for nooses. By keeping the poors fixated on guns, gays, god, and godless Liberals, the poors don’t notice that the aristocrats have been fucking them up every goddamn orifice for the past two hundred forty fucking years.

All in all, it’s a nice scam. But it *has* required that they shut down prosperity again, which they’ve done via de-industrialization, replacing high-paying factory jobs with low-paying service jobs. Yet the rubes still haven’t caught on: their poverty isn’t accidental. It’s planned.

And the motherfuckers who planned it are getting away with it. Again. Because turns out that not only are the majority of Southerners ignorant, they’re also stupid, lacking the common sense to realize that it’s no accident that the Northeast and the West Coast are affluent and prosperous while they are mired in poverty…

So it goes. As it was, it is again, yessiree. When you have an entire class of people that benefits from keeping the majority poor and ignorant, only an idiot would blame liberals for that. But idiots are one thing not in short supply.

– Badtux the Economics Penguin

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