OP ED-"Little Timmy Wants to Know Why Nobody Likes Airplanes Anymore?

[marks]

Here on Martha's Vineyard it's easy to see that the airport has a bit less general aviation than in the past, but the harbors are so chocked with private yachts that scores of boats must anchor outside at night.  The size of these yachts is just too much, but one of the yachts in Vineyard Haven has a helicopter wrapped up in red cushioned tarps on the elevated back deck!  I suppose the owners must be creating jobs for members of the crew. - Not only is Obama on vacation here, but Hillary singlehandedly stopped all the traffic in my hometown yesterday by conducting a booksigning at the Bunch of Grapes bookstore.  This island doesn't have a single traffic light, McDonalds, Dunkin' Donuts or any other chain restaurant.  There's no bridge to get here, so it's either by plane or boat, and it seems the boats are winning. 

[Mooneymite]

My gut tells me that with all of the video games out there, the kids are getting all of the excitement they need in front of a computer screen. I don't know, I hope I'm wrong. Nobody seemed to really care. Sigh...

My gut says your gut is right. For young adults (screen-agers), the virtual world provides a much more cost effective thrill than aviation. When young people get on board the jet, the only technical question they ask is, "Does it have Wi-Fi?".

[1964-M20E]

I think you are right video games offer instant gratification and do overs.  Unlike real life which requires effort and you need to pay attention to everything else going on around you.

 

Myself I prefer real life over simulators I find it is actually easier than the simulators.

[Tom]

AHHHHHhhhhh, compare me to a Sith Lord you will?

No.  Instead to the well-meaning young man who has grand ambition coupled with naivety and weakness in controlling his emotion such that his otherwise extraodrinary skills are susceptible to being manipulated by others in a manner that causes him to act against his own best interest.  If you ever see your fellow Americans as terrorists then you have been played.

 

[flyboy0681]

PS-Thanks Wall Street. Thanks AIG...Thanks Frank, Ben and the gang at the Fed.

To Big to Fail.

Beautiful...

 

I actually place a lot of blame on Greenspan. He had assumptions that worked well during the 80's and 90's but not in a post Glass-Steagall world.

 

I agree with your assertion to vote, but with gerrymandering and shaping of congressional districts, it's very difficult to get rid of incumbents regardless of party. Nothing like having things stacked against you.

[WardHolbrook]

One of the easiest things in the world to do is spend other people's money.  So your vote does matter. Who you vote for matters. Their experience and background matters What policies they promote and support matters. Their personal integrity matters. 

[Cruiser]

One of the easiest things in the world to do is spend other people's money.  So your vote does matter. Who you vote for matters. Their experience and background matters What policies they promote and support matters. Their personal integrity matters. 

 

Not any more!

 

Congress has for some years now reduced itself to ONE Republican vote and ONE Democrat vote. The membership being strong armed into voting the party line or else. What we now have is rule by majority control.

 

Unfortunately there is no compromise and it just seems to be getting worse.

 

Perhaps ALL new leadership is in order. Let's start a grass roots movement for term limits. Vote new representation in every four years, No more incumbents.

[flyboy0681]

Not any more!

 

Congress has for some years now reduced itself to ONE Republican vote and ONE Democrat vote. The membership being strong armed into voting the party line or else. What we now have is rule by majority control.

 

Unfortunately there is no compromise and it just seems to be getting worse.

 

Perhaps ALL new leadership is in order. Let's start a grass roots movement for term limits. Vote new representation in every four years, No more incumbents.

 

There has been no compromise with the current occupant. Let's see what happens with the next one.

 

Term limits? Who in their right mind vote against their own self-interest by sponsoring a constitutional amendment that limits their time on the job? 

[marks]

OK Scott, I'm going to try one last time to explain the overwhelmingly accepted modern theories of economics.  It's possible that you have the truth and are better informed than all the brains at the Wharton School and those long-hairs that impress the Noble Prize economic committee, and maybe it's guys like me that are to blame for all the losses of your money and that we offered nothing to any of your successes, but I'm going to do my best to talk you out of your views: -  Money is a commodity.  If the American system doesn't print more money when more products are made and expansion of the economy is desired by producers, then producers can borrow wealth from investors in other countries as demand dictates. -  If the population grows by 50% but we don't "print" any more money, prices will have to fall because there won't be as much money per capita.  If you build a house for $300,000 but next year deflation makes the house worth $290,000 no one will build houses with a fixed mortgage as prices fall.  -  Remember the rest of the world (including the Bundesbank) work to match money supply (not just currency in circulation) to total production.  In fact money per product is what inflation is all about.  -

Now it's true that our nation has a terrible National Debt, but please don't confuse the National Debt with the Federal Reserve's spread sheet.  Now here's the other half of the problem you haven't mentioned:  It's true the Federal Government owes 17 trillion dollars,  but did you know that home mortgages borrowed by homeowners now totals 13.3 Trillion Dollars?  (Do you borrow mortgage money Scott?)  College loans in this country now account for 1.1 Trillion dollars.  Nine-tenths of another trillion is owed by the citiznes in static credit card debt.  Eight-tenths of another trillion is owed for auto-loans.  These household loans total over 16.1 trillion dollars, very close to the debt of the Federal Government, but I'm not done. -  Corporations borrow money in the bond market, and you probably didn't know that in total capital, the bond market is bigger than the Stock Market!!

Now I have to tell you that your theories have been discredited all around the world and even the Chinese Communists recognise that currencies must trade as per demand and supply and can't manipulate both supply and price.  A free non-communist economy must do it's best to match money supply (that's currency times velocity) to the production of the nation and let supply and demand determine the day to day relative values.

Your ideas have been falling out of favor since the 1930's and are truly nothing new at all.  If there was an easy way to change the laws to make the people richer I would be happy to do it, but it just doesn't work. 

[flyboy0681]

Mark,

 

You also should have mentioned that deflation feeds upon itself and in many ways is worse than inflation.

[Austrian]

Marks, your statements are techno-babel.   Money is a medium to facilitate trade and is analogous to a catalyst in chemistry.  It allows a farmer to trade corn for money, and then money for diesel fuel.  That way the farmer doesn't need to trade corn directly for diesel.  For money to be effective, it needs to preserve wealth.  When governments print money, it destroys it value, just the same as when banks lend money which they don't own (which is what the federal reserve system allows).  Wrap it up any way you want, but Keynesian economics is responsible for the currency failures around the world.  It is an unsustainable scheme destine to fail.  The only way to win the Keynesian game is to never hold currency.  It does not preserve wealth.

 

Also, your analogies are not correct.  Lots of folks would build a house for $300K, only to have it be worth $290K in the future.   They would do so, because they need or want a place to live.  If this sounds crazy, ask how many folks would spend $40K for an engine overhaul, 30K for avionics upgrades, and 20K for paint.  All for a plane worth 50K when they are done. 

[marks]

Scott:  Here's the answer:  I don't want the total debt of the nation to grow any faster than the Gross National Product.  During the eight years Reagan was president the deficit and the total National Debt grew every year. However, as a percentage of the Gross National Product, the debt fell during each of the last five years Reagan was President.  Because Reagan slowed down the growth rate of debt more "printed" money was available for capital markets.  Interest rates fell.  The economy and real total production soared.  As a percentage of the GDP, debt also fell under George Bush the first, and finally under President Clinton.  The debt as a percentage of the GDP fell until the deficit was completely wiped out.  The country grew faster than the debt and the ecomomy grew without a single recessionary quarter for seventeen years.  Then in March of 2000 we finally suffered the "internet market bubble bust" and tax collections began to slow and finally on Sept. 11th 2001 we suffered the attack of 9/11 and a whole new Federal Bureaucracy was born, the TSA.

Austrian, I have to tell you that Japan has been suffering deflation since 1989 and it's a disaster.  Back when Reagan was elected the dollar could buy 360 yen and today the dollar buys only about 102 yen.  So it was, that if the Japanese sold a $10,000 car here back in 1981 they had 3.6 million yen to pay their workers.  Today the same $10,000 would only exchange to one-million yen.  The yen is so strong and the dollar so weak than Japan can hardly sell a Japanese built car here anymore.  So now Hondas are made in Marysville Ohio.  Nissans are built in Smyrna TN.  Volkswagons are built in Chattanooga. Even though Japan has a very strong currency the result is an export of their production jobs to the US and southeast Asia.  A weak dollar makes a Boeing 747 sell for less in euros.  In fact many countries in this world are angry with the US because it's hard to compete with a weak dollar.  China is trying to keep their currency weak to fuel their exports but the result of an undervalued currency means more of it is necessary to do stuff.  That = inflation.  Shanghai and other cities truly see terrible inflation.  -  But hey, I'm just talking techno-babel.  What do I know.

 

Scott:  Like I said, I'm done and I've certainly had my say in this forum.  Please just tell me the name of the leader of your political party or the name of the talk show host you listen to.  I'd love to see who has "educated" you.

[marks]

Scott, regards your home loan:  I only meant that people think they have a "balanced budget" if they can pay their bills.  If they buy something with any type of loan they don't consider themselves "in Debt" like the federal goverment.  I thought that you might not want to be "in debt", but I was sure you had debt and that your bank got the cash for the debt from the fed funds window.  Why don't we give each other a break. 

[alex]

Smarter than thou tumor at work?

[marks]

Alex, I'm not a liberal democrat.  I am a registered Rupublican.  The big problem is that I have tried to explain how the monetary system works, big I agree with Scott regarding fiscal policy.  I would love to cut Federal spending and taxes.  I would be happy to live without the TSA and take my chances on any airliner so long as there are two steel doors to the cockpit and both can't be opened no matter the threat.  I have no problem with an armed airmarshall on board looking like any regular passenger, but lets get rid of all those new government employees and their lifetime pensions.  I'd eliminate federally subsidized home and college loans.  If any taxpayer money goes to a college, the taxpayer would have to be sure that college employees, from the President to the football coach, would have their salary rates somehow be connected as a percentage of tuition, but if a school chose to take no subsidies and be truly "private" they would be free to charge any tuition they want.  -  Cutting taxes and the growth of government spending would work again like it worked for Reagan.  If we could cut, cut, cut, that would be the best job creation bill available and would the best medicine for the economy, but eliminating the Federal Reserve and paying no attention to expanding the money supply comensurate with an increase in production is more restrictive than the gold standard.  At least with the gold standard we could print $35 from nowhere whenever a prospector found an ounce of gold.  A few babies get born, you find a little gold, print the money from nowhere and send the gold to Fort Knox.  But Scotts idea to stop printing money no matter the size of the economy would be a disaster.  In the best economy the government borrows nothing but you still have to expand the money supply as the economy grows. -  Let's not confuse Monetary and Fiscal policies.  God Bless Reagan.

[flyboy0681]

Smarter than thou tumor at work? image.jpg

 

Don't say I'm not fair and balanced

[Austrian]

 In fact many countries in this world are angry with the US because it's hard to compete with a weak dollar.  China is trying to keep their currency weak to fuel their exports but the result of an undervalued currency means more of it is necessary to do stuff.  That = inflation.  Shanghai and other cities truly see terrible inflation.  -  But hey, I'm just talking techno-babel.  What do I know.

Marks,  Finally we agree on something.  Printing money to prop up the economy will lead to terrible inflation.    

[flyboy0681]

  Cutting taxes and the growth of government spending would work again like it worked for Reagan.  

 

I'm not Reagan bashing but trying to understand the principals being discussed. Reagan's tax cuts (and subsequent tax raises) resulted in huge deficits and took the national debt from $950 billion to over $3 trillion. In the end, Dave Stockman has gone on record as saying that Reaganomics did not work and that the Laffer Curve is nonsense. He also said that trickle down economics is of little value and that we would need "rain down" economics to make it worthwhile. I believe the word he actually uses now is "myth".  I don't believe, as others do, that Stockman is a turncoat but a man who looked objectively at the policies through the prism of time and realized that it didn't prove itself as successful as once thought.

[WardHolbrook]

 

 

Any wonder why we're so screwed?

[marks]

Scott, I will try to answer your questions, but please remember that the money supply as adjusted by the Federal Reserve makes consumer loans and mortgages easier or more difficult to get and thereby affects mortgage and loan interest rates and has almost nothing to do with the federal deficit or taxes or government spending.  -  The estimated 2014 GDP is now estimated to top out at about 16.9 Trillion Dollars.  So the nation is like a working man who earns a $100,000 per year and has a mortgage about the same size.  In 2011 the Federal deficit was 1.3 Trillion which was added to total debt.  This year the deficit appears to be headed down to 649 billion.  So over three years the annual deficit added to the Federal debt has been cut in half. 649 billion is a 3.8% increase to the Federal total debt of about 17 trillion.  However, with each percent increase of growth in the economy, tax collections rise disproportionately.  So clearly if we can continue to grow things should be fine.  By comparison, the ratio of debt to growth at the end of WWII was about four time worse than what we face today.  It is true that excess government spending and borrowing is a drag on investment and growth.  The second drag on growth is that American citizens spent and borrowed too much at about the same level of debt in trillions as the goverment. Lastly, government regulations such as forcing businesses to pay the lion share of health care expenses of employees but not if they work "part time".  Clearly if it costs more to hire employees, fewer employees will be hired, and part-time work will take over.

When it comes to "printing money", the money2 supply that includes all bank deposits and money market cash in the country (some of our cash is sent out of the country) as of the end of July totaled 11.4 trillion.  At the end of July two years ago the M2 supply was 10 trillion.  The quantitative easing program by the Fed was expanding the money supply by 85 billion a month just a few months ago and now we are down to 25 billion.  If the economy grows a little more people will all count more money as the money changes hands more quickly and the Fed aims to stop quantitative easing then or the velocity of cash changing hands more quickly added to more quantitative easing would likely stimulate inflation.

One thing to remember: when other countries cut their central bank interest rates, it's a bit like raising our rates. This makes imports cheaper while making it harder for us to export.  The balance of trade also affects demand for the dollar and resulting interest rates too.  Medicine is good for you and makes you feel better, but the doctor wouldn't give it too you unless you were sick.   American citizens treated their homes like ATM machines, but the spending spree is over.

[marks]

Flyboy,  Reaganomics worked.  Think for yourself what things were like during the Carter administration.  Think about unemployment, inflation and follow the production of the nation during the eighties and nineties.  If this nation had to burn down all the homes and businesses and throw out all the IRA's and 401k plans from that time then the wealth would truly be gone.  As a practical matter, not only did the deficit fall as a percentage of the GDP starting two years after Reagan got in office, but that relationship continued for 17 years. During those years home ownership grew to it's highest level ever (as a percentage of the population) so you might say the percentage difference in quality of life was for the middle class not the rich.  Meanwhile the Soviet Union couldn't make their system work and talk that our economy should be like "Japan Inc." came to an end.  Salaries rose faster than inflation because we had a "labor shortage" under Reagan.  At that time we became a "brain drain" for the world.  Whether you were a software engineer or a doctor, you packed your bags and headed for America.  What a country!!

[alex]

-More unemployed

-More on welfare

-More Part-Time vs. Full Time employment

-More Taxation

-Higher Health Care Costs

-Still a large percentage uninsured

-The Middle East at War after US withdrawal from Iraq

-Rioting in Missouri

Leaders decisions have consequences...

You're forgeting the influx of undocumented democrats from the southern border

[marks]

Back in the 1930's and 40's if a teenage girl became an "unwed mother' the social worker would visit the girl in the hospital and would want to know how the mother would provide for the baby and where she intended to live.  If the parents or "Aunt Mabel" would take you in everything would be fine.  Some unwed mothers were sent away to live on "grandpa's farm".  Other times if your church had a "home for unwed mother's" you might start out there. However, if there was no one to support you or provide a place to live the situation was often considered a case of "benign neglect" and the child would end up being offered up for adoption.  During the great depression in some locations the number of children that couldn't be cared for became so great that we had orphanages like the Home for Little Wanderers in Boston.  By the 1950's many cities and some states would pay a small cash relief to "Aunt Mable" to help pay for certain necessities for the baby.  This was sometimes termed "milk money".  - -  LBJ came into power and he believed that the Federal Government had a responsibility to provide for our most needy.  He introduced Aid to Families with Dependent Children. Section 8 Housing provided the construction of "The Projects" and food stamps were introduced.  Later other programs like the Women Infants and Children (WIC) and eductional programs such as "Head Start" were available near the section 8 housing projects.  The unwed mother didn't have to face the possibility of giving up her child for adoption.  The unwed father would not have to "man up". Instead the government would provide all the family needs.  However if a working man married the woman she might get kicked out of section 8 housing and lose many benefits.  Clearly all the programs resulted in all sorts of unintended consequences and multi-generational dependence. - - - I believe it was Grover Cleveland who observed that, "If you start feeding the bears and suddenly stop, they'll tear down your house."  He also said, "Though the people must support the government, the government can not support the people."  We must remember that the government can't produce anything without first taking it away from the people.  - - I am very much a conservative, but I am also a capitalist.

[flyboy0681]

-More unemployed

-More on welfare

-More Part-Time vs. Full Time employment

-More Taxation

-Higher Health Care Costs

-Still a large percentage uninsured

-The Middle East at War after US withdrawal from Iraq

-Rioting in Missouri

Leaders decisions have consequences...

 

I can only imagine what you would have said this time, 1980. America is doomed, inflation is here to stay, high unemployment is the new reality, gas prices will never come down, interest rates will always be above 20%....

[marks]

Flyboy, that's a great observation, but if Paul Volker didn't push the discount rate to 20% and if Reagan have never been elected, but Carter had been reelected and he continued with his energy plan, and if Ted Kennedy had had his way to ration gasoline because he claimed that allowing gas to seek it's own level was only rationing according to the wealthy, and if IRA accounts had never been allowed because they were tax breaks for wealthy investors, so that Bill Gates and Steve Jobs woiuld have had to seek capital from the banks instead of from the capital equity markets and those little companies like Microsoft and Apple had never existed.... Well then things might have gone the way they were going.  It took changes to start the boom of the eighties and nineties.  I don't even think that Reagan was fully against tax increases, but he would always say that if we tried to raise taxes to fight the deficit, then for each dollar raised congress would spend two.  -  There is no way that Carter was going to dismantle the Civil Aeronatics Board that used to set the minimum price for the cost of flying between any two cities.  There was no way Carter would have deregulated trucking.  Perhaps a majority of Americans believed at the time that the best way to slow Japanese imports was to fight them with tariff taxes.  Reagan was a true capitalist.  The liberals hated him and still do.   I think that if any other member of congress had been elected president at the time, that they would have just gone with the flow and our economy would have gone flat the same way things went flat in Japan.  Japan had a huge real estate bubble followed by terrible deflation and recession that still continues today.