Google Groups
Join To Get Blog Update Notices
Visit the Hickory Hound Group

Sunday, March 16, 2014

Economic Stories of Relevance in Today's World -- March 16, 2014

David A. Stockman Interview on King World News - Former Director of the US Office of Management and Budget (USOMB) under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street where he joined Salomon Bros. He later became one of the original partners at New York-based private equity firm, The Blackstone Group.
King World News Interview - March 14, 2014

19 Signs That The U.S. Consumer Is Tapped Out - The Economic Collapse Blog - Michael Snyder - March 13th, 2014 - You can't get blood out of a rock.  Traditionally the United States has had a consumer-driven economy, but now years of declining incomes and rising debts are really starting to catch up with us.  In order to have an economy that is dependent on consumer spending, you need to have a large middle class.  Unfortunately, the U.S. middle class is steadily shrinking, and unless that trend is reversed we are going to see massive economic changes in this country.  For example, in poor neighborhoods all over America we are seeing bank branches, car dealerships and retail stores close down at an alarming rate.  If you didn't know better, you might be tempted to think that "Space Available" was the hottest new retailer in some areas of the nation.  On the other hand, if you live in San Francisco, New York City or Washington D.C., things are pretty good for the moment.  But as a whole, the condition of the U.S. consumer continues to decline.  Incomes are going down, the cost of living is going up, and debts are skyrocketing.  The following are 19 signs that the U.S. consumer is tapped out...                                #1 Real disposable income per capita continues to fall.  In the fourth quarter of 2012, it was sitting at $37,265.  By the time that the fourth quarter of 2013 had come around, it had dropped to $36,941.  That means that average Americans have less money to go shopping with than they did previously.                             #2 In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.                        #3 As disposable income decreases, major retailers are closing thousands of stores all over the country.  Some are even calling this "a retail apocalypse".

The end of restaurant tipping? - The argument that waiters and customers will be happier if all tip 0% - Wall Street Journal MarketWatch - Charles Passy - March 12, 2014 - Perhaps the policies at these establishments shouldn’t come as a surprise, since restaurant patrons are increasingly saying they don’t like to play the tipping game. A solid majority of Americans — 75% — say they tip less than the customary 20% when dining out, according to a new survey by, which researches consumer spending habits. Additionally, the website reports that 46% of Americans say they are tipping less in general than they did five years ago.                
Scott Rosenberg, owner of Sushi Yasuda, another no-tip restaurant in New York, believes that diners are simply tired of the meal-ending ritual of “grading” a server and then doing the math based on that judgment. “The meal should be there for you to enjoy without doing this calculus,” says Scott Rosenberg.                                To be clear, such restaurants are still paying their waiters — and the customers are still paying for the service as part of the overall bill. When Scott Rosenberg did away with tipping some months back, he raised menu prices by 15% to cover costs.

How the safety net leaves out poor, unmarried men - MSNBC - Suzy Khimm - March 10, 2014 -
When the modern safety net was first conceived, poor single men often weren’t even on the agenda.
The first priority was the poor children and the women who were often their primary caregivers. The assumption was that single adults without dependent children didn’t need the extra government help. “We’ve always thought about men being able to pull themselves up by bootstraps, who’ve never needed support,” says Joe Jones, President and CEO of the Center for Urban Families in Baltimore. “Women and children are considered to be more vulnerable.”                      But it’s becoming increasingly clear that designing the safety net this way has ended up excluding a group that’s become increasingly at risk: poor, unmarried men. Lawmakers from both parties are now looking at policy changes that would help bring them in.                         In his 2015 budget released this week, President Obama included a new proposal to double the Earned Income Tax Credit for childless adults and non-custodial parents. The administration has framed the plan as a broad poverty-fighting measure that would help an estimated 13.5 million working Americans, about 55% of them male.....

Ted Cruz: GOP can repeal “every single word” of Obamacare in 2015 - MSNBC - Benjamin Landy - March 9, 2014 - While Republican efforts to repeal the Affordable Care Act appear increasingly quixotic – House Republicans voted last week for the 50th time to suspend or repeal the president’s signature health care law – Texas Republican Sen. Ted Cruz shows no signs of giving up.                           “You know what they say, ‘50th time is the charm,’” Obama joked. “Maybe when you hit your 50th repeal vote, you will win a prize.”                          Cruz isn’t laughing. He told ABC’s This Week on Sunday that Republicans still have a chance to repeal “every single word” of Obamacare in 2015.                           ABC host Jonathan Karl was incredulous. “We can acknowledge that that’s not going to happen while Barack Obama is president, right?”                          “If there’s one thing that unifies politicians of both parties, you know, their top priority is preserving their own hide,” Cruz responded. “And if enough congressional Democrats realize they either stand with Obamacare and lose, or they listen to the American people and have a chance at staying in office, that’s the one scenario we could do it in 2015. If not, we’ll do it in 2017.”                         Asked if he honestly believes President Obama would agree to repeal his most significant legislative accomplishment, Cruz shifted his attention to the media: “You know, what’s funny, Jon, is the media treats that as a bizarre proposition.”...

Kremlin: If The US Tries To Hurt Russia's Economy, Russia Will Target The Dollar - Testosterone Pit - March 15, 2014 - Another warning shot was fired before an all-out assault on the dollar system begins. This time, an official shot: Alexey Ulyukaev, Russia’s Minister of Economic Development and former Deputy Chairman of the Central Bank, fired it. It was a major escalation, Valentin Mândrăşescu, editor of The Voice of Russia’s Reality Check, told me from Moscow.                       Last time, it was Sergei Glazyev, an advisor to Vladimir Putin who’d fired the shot. But he wasn’t a government official. “Anonymous sources” at the Kremlin claimed he wasn’t speaking for the government. As Mândrăşescu reported in his excellent article, From Now On, No Compromises Are Possible For Russia:
From the economic point of view, everyone should get ready for tough actions from Moscow. Sergei Glazyev, the most hardline of Putin’s advisors, sketched the retaliation strategy: Drop the dollar, sell US Treasuries, encourage Russian companies to default on their dollar-denominated debts, and create an alternative currency system (reference currency) with the BRICS and hydrocarbon producers like Venezuela and Iran.
Unlike radical-sounding Glazyev, Ulyukaev is part of Dmitry Medvedev’s Cabinet. And as former Deputy Chairman of the Bank of Russia, he doesn’t take currencies lightly. He told Rossia-24 news channel about possible retaliatory measures if Washington adds economic sanctions to the political sanctions. Moscow wouldn’t worry too much about political sanctions, he said, but if Washington tries to hurt Russia’s economy, Moscow would retaliate by targeting the US dollar.

The Tiger Awakens: China Warns of “Retaliatory Action” and “Unforeseeable Consequences” Over U.S. Monday Deadline - - Mac Slavo - March 14th, 2014 - Yesterday Secretary of State and flip-flopper extraordinaire John Kerry advised Russia that Vladimir Putin has until Monday to pull back his forces from Ukraine. Failure to do so would lead to serious repercussions. Kerry was light on details, but we can assume he was talking about some sort of economic sanctions:...               
It’s quite obvious, based on Kerry’s statement, that the Obama Administration really has no idea what to do, as they are still talking through “various options,” something that probably should have been worked out well before President Obama began slinging rhetoric over the crisis.                       What the Obama administration assumes will happen is that they’ll force Russia into compliance by coming after their economy. Obama will hit the Late Night TV circuit to tout his success, we’ll all laugh about it, and then go on our merry way. Putin will be left embarrassed and laying in the fetal position sucking his thumb. At least that’s the plan.                            But two can play at that game and China, which has stood by Russia’s show of force in Europe since the get-go, has now upped the ante.                              It’s a brilliant move designed, once again, to show the world that President Obama and the United States are no longer running the show.

Warren Pollock - Monopoly Pricing and Empire (Labor Allocation & The Loss of Purchasing Power & Jobs)

No comments: