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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2013
Port: Lake Pleasant, AZ
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The Truth About Socialism
Kimball Corson
01/26/2016, Pago Pago, American Samoa

The evidence is in and has been for a while, now . Capitalism is a failure because it does so poorly on the distribution side. It provides too much to too few and leaves too many with not enough (the US). Socialism is a failure too because it cannot coordinate production adequately and efficiently, and because it is too often is despotic or corrupt (North Korea, Cuba). But the mix of the two can be a success, in a democratic context, because each can be used to correct the deficiencies of the other. We have countries around the world which prove all three propositions.

Mixed capitalism - a mix of capitalism and socialism - is what most of the 33 advanced countries of the OECD are. However, some are much more successful mixes than others. The absence of corruption in government and an honest, law abiding population are the hallmarks of the most successful mixed economies. Most of these are found in northern Europe, especially Scandinavia.

America's economy, while nominally a mix, is largely a failure because the contribution of socialism is largely blocked by republicans and conservatives. No other democratic OCED nation faces this problem to a comparable degree. Anti-socialistic propaganda accounts for much of the problem. Corruption in government and much dishonesty, predation and lawlessness in the high end population accounts for the rest.

America is a failed mixed economy as is Mexico and many countries with huge income inequality disparities. The socialistic contributions in those countries are too largely token and restrained. Greed and predation in the upper classes control

The Truth About Socialism
Kimball Corson
01/26/2016, Pago Pago, American Samoa

The evidence is in and has been for a while, now . Capitalism is a failure because it does so poorly on the distribution side. It provides too much to too few and leaves too many with not enough (the US). Socialism is a failure too because it cannot coordinate production adequately and efficiently, and because it is too often is despotic or corrupt (North Korea, Cuba). But the mix of the two can be a success, in a democratic context, because each can be used to correct the deficiencies of the other. We have countries around the world which prove all three propositions.

Mixed capitalism - a mix of capitalism and socialism - is what most of the 33 advanced countries of the OECD are. However, some are much more successful mixes than others. The absence of corruption in government and an honest, law abiding population are the hallmarks of the most successful mixed economies. Most of these are found in northern Europe, especially Scandinavia.

America's economy, while nominally a mix, is largely a failure because the contribution of socialism is largely blocked by republicans and conservatives. No other democratic OCED nation faces this problem to a comparable degree. Anti-socialistic propaganda accounts for much of the problem. Corruption in government and much dishonesty, predation and lawlessness in the high end population accounts for the rest.

America is a failed mixed economy as is Mexico and many countries with huge income inequality disparities. The socialistic contributions in those countries are too largely token and restrained. Greed and predation in the upper classes control

Claims of Voter Fraud and Republican Fraud on Voters
Kimball Corson
01/26/2016, Pago Pago, American Samoa

This nicely sums up the informed consensus on voter fraud (from Forbes Magazine, Justice Department data and other sources):

Large-scale voter fraud is virtually non-existent today. Random examples do not color or alter electoral results. The Justice Department has found this to be true repeatedly. Yet the efforts to root it out of some states recall the horrid Jim Crow era. The former "party of Lincoln" has been most active in this fraudulent crusade. It has mostly prevented qualified people of color and older folks from voting. The problem is not voter fraud altering elections. It is republican efforts to block qualified voters that is the problem that tends more to alter elections. Here is an example.

Shades of 2000 and 2004 when somehow voting machines weren't delivered to African-American precincts in Ohio and Florida or unforeseen glitches prevented their ballots from counting. It's not that the disenfranchised voters weren't properly registered -- by and large they were. But a systematic campaign to keep them from voting was in place. It's been documented by several news organizations, most notably the Miami Herald.

One of the best studies on the subject was conducted by Justin Levitt of the New York University Law School. Its conclusion is simple: allegations of widespread voter fraud are greatly exaggerated.

"Many of the claims of voter fraud amount to a great deal of smoke without much fire...Most allegations of fraud turn out to be baseless--and that of the few allegations remaining, most reveal election irregularities and other forms of election misconduct, rather than fraud by individual voters. The type of individual voter fraud supposedly targeted by recent legislative efforts--especially efforts to require certain forms of voter ID--simply does not exist."

The creation and propagation of the voter fraud myth, which has gained huge currency in the GOP over the past decade, has been championed by Hans von Spakovsky, a lawyer who is also a fellow at the conservative Heritage Foundation. He was recently profiled by Jane Mayer in a New Yorker piece. His work has spawned numerous new rules in states like Florida and Ohio that not only promote strict voter ID laws, but end up restricting voting in minority-dominated areas. Many of these restrictions are likely violations of the Voting Rights Act, a landmark law that Lyndon Johnson signed in 1965 to end the Jim Crow era, well, until democracy foes like Spakovsky came on the scene.

This wasn't always true. Countless registered voters were found only in graveyards and perhaps aided in the election of John F. Kennedy in 1960 thanks to Richard J. Daley's political machine. He managed to put a lot of zombies in polling places -- even more than were in political office at the time. But those are times past.Now the Justice Department investigates claims of voter fraud and finds it is not a serious problem. But blocking qualified voters from voting is the problem now, according to Justice. Here is an example. Older voters get blocked from voting because they don't have the required drivers' licenses because they are to old to drive and have licenses. Very republican.The Justice Department has pending suits against several states for fraudulent and bogus voting restrictions.

Deceit and lies are much more the currency of republicans and conservatives these days. I say. There ought to be a law to check such evil.

Why Wall Street Loves Hillary
Kimball Corson
01/24/2016, Pago Pago, American Samoa

The 2007 crash is behind us, even if the effects of the Great Recession are not. The causes and effects of the crash are clear, even though republicans continually try to reargue them.

Banks turned junk mortgages into AAA securities through the alchemy of CDOs and securitization and thus generated hundreds of billions of profit and left the resulting financial mess to the rest of us. But the financial crisis is behind us, right? Why would Wall Street then shower Hillary Clinton with millions of dollars in speaking fees and tens of millions in campaign contributions?

The answer: it's an insurance policy. Wall Street wants a friend in the White House to protect the status quo, and if they can't get a Republican elected, Hillary is the next best thing. They need a friend in government because the industry could not survive an investigation into what they do, and how and from whom they actually make their profits. Just like the Fed needs a serious audit and investigation on its on-going collaborations with Wall Street, all as Bernie Sanders suggests.

Hillary is their man, so to speak. Sanders is anathema for Wall Street.

My Economic Forecast Clarified
Kimball Corson
01/20/2016, Pago Pago, American Samoa

It is: Continuing and persistent (worldwide) recession for the middle and lower class, with a recession for top 20 % later but not a total collapse.

We should be looking at GDP change for the 60% band around median income in each country (30 % on each side), not total GDP as income because the top 5% of U.S. households accounted for 22.3% of GDP as income, and the top 20% of households had 51.0% of all GDP as of 2015. We should look at how the 4/5th of Americans are doing not the top 5th or everyone together. That hides the real story. We get it all wrong, all the time and proceed cluelessly.

Part of the problem is the lack of data and part is growing inequality gets conflated with the continuing impact of the Great Recession. Americans cannot mentally separate the two that well. Almost half of the working age population doesn't have a job. They have been flushed out of the system, a big percentage earlier in the late 1990's and early 2000's and then another large percentage after the 2007 crash.

From about 1942 to from about 1973 to 1977, the share of GDP going to the top 10% of households, whether it included capital gains or not, was pretty constant at about 34% (with capital gains) or 32% (without such gains).

After then, in the mid 1980's, the share of GDP going to the top 10% rose to 35%, to 40% by 1992, to about 43% in 2002, to 46% (without gains) and 50% (with gains) in 2008, and to 47.5% (w/o gains) and 50.3% (w/ gains) in 2012.

What this means is the share of GDP going to the bottom 90% of Americans declined as follows --

66% from 1942 to about 1975,
to 65% in the mid-1980's,
to 60% by 1992,
to 57% by 2002,
to 50% by 2008 and
to 49.7% by 2012

All of this is in pretax GDP or income. Post taxes, some apparent relief is afforded by government -- 40% in transfers to those in the lower 80%, but a walloping 250% in transfers to the top percentiles. It is a bone toss to confuse and hide matters.

To put this change into perspective, if the US had the same income distribution it had in say 1975, each family in the bottom 80% of the income distribution would have $11,000 more per year in income on average, or $916 per month. That is what they have lost. Half of the U.S. population lives in poverty or is low-income, according to U.S. Census data. This is a huge impoverishment of Americans. But a very serious problem for them is recalling what part arises from developing income inequality and loss and what is due to the Great Recession. Memories blur except on when jobs were lost.

We have mega problems few are even understanding and no one is dealing with. Only Sanders is addressing the issues. He has been talking with Elizabeth Warren and Joseph Stiglitz which is no surprise.

What Is a Recession?
Kimball Corson
01/18/2016, Pago Pago, American Samoa

There is a serious problem of what is a recession. Most people reject the NBER's definition of three negative growth quarters in a row. And that is sensible enough. It makes -0.1, -0.03 and -0.2 a recession, but not 0.2, -4.5, -7.0 or -4.5, -7.0, 0.0. This breaches common sense. Middle class America will tell you we have never emerged from the Great Recession? Do we look to middle and lower class data only, say the 60% spread around the income median (now, there's an idea) or to how the top 5% in income are doing? Some markets are in better shape than others. When commodity prices collapse is that a recession? The talk of recessions and recession calls is too amorphous to be realistic, meaningful or useful. Worse, it leaves us talking about and arguing over whether a recession is coming or not, that is, arguing about what we don't know we are talking about. That could be taken as a definition of foolish.

It is much better, I suggest to understand how an economy operates, how its sectors interact, what the impact of various dislocations are, how various markets not performing well, affect various sectors. But that requires a good working knowledge of economics and much study of relevant data, both of which are more scarce than we would like. Ergo all the talk about "a recession" and "when it is coming" is forever upon us. Worse, all this is to say nothing of financial crashes which do create messes as we have seen, but are not at all necessary conditions to serious and prolonged economic malaise for many. We really do need to much better know what we are talking about and for whom.

To help in that regard, I suggest a taxonomic model of the economy to help us. For the US, we have the real sector which on the production side includes manufacturing for consumers, manufacturing for export, the service sector, the real estate sector, the real finance sector doing mostly intermediation, the production of raw materials and the agriculture sector with climate developments. Real investment, both public and private, operates to change aspects of real production, such as infrastructure and plant, equipment and robotics. On the consumption side the real sector includes consumption by consumers, consumption by governments and import consumption by both. The real finance sector doing intermediation includes classical banking, insurance and the like.

Then there is the financial non-intermediary side which is not the real economy. It includes the secondary financial markets for stocks and bonds, the activities of the Federal Reserve, including those intended to impact the real economy, and the speculative and rent seeking activities of banks, financial companies, hedge funds, private investors and others out for a fast return. The impact of the non-intermediation financial sector tends to be unstable, involves much buying and selling of blue sky and its creates bubbles to make fast money and busts which injure the real economy. This side of the non real economy tends to be predatory. The Federal Reserve is part of this and it is run and controlled for and by the big banks. (Three of the eight Fed Res banks are headed by GS guys alone, to say nothing of the other five.)

Game one in the non-intermediary financial sector is to make money fast and not lose any. Myriad ways are designed to do that. The new game in town is customized collateral debt obligations or CDO's. New financial products have a strong central tendency to be sophisticated financial scams more than providing true financial services or good intermediation. Economists hold this sector of the economy in low regard for the trouble it causes for the real sector.Some refuse to even consider it.

This is a useful framework to assess how our real economy is doing and the threats to it from the non-intermediary financial sector. You could actually chart it and do periodic checks on the sectors and get a better feel for what is happening. Then discussion could shift from is or is not a recession coming to where are we out of whack and why and what problems will it actually cause elsewhere.

The Basic Problem with Obama
Kimball Corson
01/15/2016, Pago Pago, American Samoa

The core problem with Obama is we needed a tireless, persistent and capable fighter, forever pressing a good progressive agenda hard and fast, like a pit bull fights, but Obama is no fighter, not very progressive and too much of a wimp.

Obama took the easy path from the get go. He followed Bush on the Wall Street Bailout, tossed Main street to the wolves, kept too many of key Bush people in top government, kowtowed to Wall Street on taxes, compensation and everything else, jailed no one, kept Guantanemo open, and above all avoided fights and open conflict. This is his core legacy.

He became weary way too soon, never mobilized the American people behind his efforts and let way too much of the republican agenda and anti-civil rights movement slip through with his approval.

Is Hillary So Bad that Sanders Is Viable?
Kimball Corson
01/13/2016, Pago Pago, American Samoa

Hillary's lead over Sanders is slipping and slipping badly, according to a new and large NY Times/CBS poll. Her commanding lead nationally in the Democratic primary has largely melted away.The tightened race between Mrs. Clinton and Senator Sanders is also revealing a sharp generational divide within the Democratic Party, with primary voters under 45 favoring Mr. Sanders by a roughly 2-to-1 ratio. This is bad news for Hillary.

Two state polls released Tuesday further underscored the stiff competition that Clinton is facing from Sanders. A Quinnipiac University poll found Mr. Sanders rising in Iowa, and a survey by Monmouth University gave Mr. Sanders a double-digit lead in New Hampshire.

Over all, 48 percent of Democratic primary voters across the country support Clinton, while 41 percent back Mr. Sanders, the poll found, but just a month ago, she led Sanders by 20 percentage points nationally. This is a major drop. And the FBI has yet to announce the results of its criminal investigation into Hillary's email problems. At a minimum, if she loses her security clearance -- a minimal consequence for even minor mishandling of classified materials -- could she be an effective president without it? You know there are some fierce political struggles going on at the FBI and the State Department. Can Hillary get her email problems whitewashed? We'll just have to wait and see.

Her money problems won't go away, however. She has taken so much money from so many of all the wrong people, she owes everyone to such an extent she is bought off and no longer her own woman. She owes, owes and owes. Bernie, on the other hand doesn't, and is the only candidate with useful ideas who understands what is going on economically and what is wrong economically. He has been in touch with both Stiglitz and with Warren. He has useful ideas.

Hillary, on the other hand, is sameol' sameol', doesn't understand much, and would just be a caretaker president. She is not a very good administrator either and she would be rejected by the republicans, too, just because she is a woman, just as Obama is rejected by them just because he is black. The unstated republican view at base is Hillary is a woman who belongs in the home, sewing and cooking, just as Obama is a black who belongs in the fields picking cotton and vegetables.

The scuttlebutt, too, is interesting. As several members of the slimy portion of the oligarchy running things and in control have candidly said, either Hillary or Jeb would be just fine. That should seriously tell us something if we have any sense or understanding of what is going on. But the idea is lost on most.

Sanders' basic problem is he is Jewish and not very presentable, although he is becoming more so lately. He is learning. I mean he just doesn't look very presidential like the governor of Indiana who does, but is a total fool. Hollywood's influence here is perverse. Glitz and glamour count, even if Hillary is not rolling in them either.

So what will happen in the primaries is not as clear as it could be. My sense all along is time is on Sander's side and it is shaping up that way, but we'll just have to wait and see.

Yet More on the Destruction of America's Middle Class -- Part III of III
Kimball Corson
01/13/2016, Pago Pago, American Samoa

Nearly 102 Million Working-Age Americans Are Jobless

Only 47% of Working Age Americans Have Full Time Jobs ...

"Tens of millions of white men have been expelled or checked out from mainstream American life - a reality with profound consequences for our economy, our children and families, our civic life, and our politics.

"At least 20 percent of the nation's 90 million white men have been pushed to the sidelines, either retreating or storming out of the mainstream of American life. They are not the men you see at work, who play with their children, go out with their wives or partners, are involved in their communities, and earn a living to save for their children's education and their own retirement. What they do doesn't register in either the gross domestic product or in the glimmer of a child's eye.

"Many of them are mad as hell. They have good reason to be angry, although their venom all too often is turned on scapegoats: women, immigrants, government, African Americans, and Latinos. Extremist, non-mainstream candidates have tapped these wells of anger, but most analyses stick to economics and politics, failing to see the many factors buffeting a sizable chunk of white male America."

http://www.washingtonmonthly.com/republic3-0/2016/01/whats_happening_to_failing_whi059237.php

Chart shows percentage of working age adults who are unemployed
The True Unemployment Figure without the BS

More on the Destruction of Middle Class America -- Part II of III
Kimball Corson
01/13/2016, Pago Pago, American Samoa

"The following ten statistics about these seemingly unrelated phenomena are intriguingly suggestive of a broader story and the scale of that story:

• Today, fewer than seven out of ten American men work; in the 1950s, nine out of ten worked.

• Since the 1970s, inflation-adjusted incomes for the bottom 80 percent of men have fallen, with the most dramatic declines occurring among the bottom 40 percent, most of whom have less than a college education.

• Today, just half of men are husbands; in 1960, three-fourths of men (and women, of course) were married.

• As Barack Obama leaves office, only two out of three children live with their fathers; when John Kennedy was elected President, nine out of ten children lived with their fathers.

• Today, 43 percent of 18-to-34-year-old American men live with their parents (compared to 36 percent of Millennial women); in 1960, about 28 percent did.

• There are 36 percent more women in college than men, whereas in 1970, there were about 35 percent more men than women in college.

• In 2013, mortality rates among less-educated, middle-aged white men and women were about 20 percent higher than they were in 1998.

• Men appear to be 50 percent less likely to trust government than women.

• In recent years, there has been a roughly 20-point gender voting gap, with white men being much more likely not only to vote for Republicans but to express disillusionment and anger toward government; until about 1980, men and women voted roughly evenly for Democrats and Republicans.

• Membership in civic groups - including primarily male service organizations like the Masons, Rotary, Elks, and Kiwanis - have fallen by between one-third and two-thirds since the 1960s.

"The likely economic, cultural, and political reasons for these changes could fill a book, but - needless to say - a lot has gone wrong for a lot of white men, a demographic that once signaled privilege and high expectations.

"None of this, of course, denies the continuing struggles of women and people of color, including men of color. African-American and Latino men's fortunes, especially when it comes to wages and fatherhood, have fallen even more. Men also still out-earn women on average (although the gender pay gap has been closing, due to declining average male wages and rising average female wages). And while mortality rates for less-educated, middle-aged whites are rising among men, they are rising at least as fast among women as well."

http://www.washingtonmonthly.com/republic3-0/2016/01/whats_happening_to_failing_whi059237.php

The Destruction of America's Middle Class -- Part I of III
Kimball Corson
01/13/2016, Pago Pago, American Samoa

Middle class America used to be pretty much defined as a young to middle aged couple with two children, Bill and Susan, a home with some equity in it, Dad working and later when the kids were in school, mom, too. They had some minor savings for emergencies and made ends meet well enough. Financial bumps came and went, but the scene largely held together -- until Wall Street basically crashed it.

It started out well enough, Easy money and policies encouraging home ownership started to push home prices up. Mom and Dad here saw that from year to year, their home value rose and their equity in it did too. They became wealthier. Feeling better about their financial position, they took out a second mortgage and remodeled the kitchen and bought a new car.

Meanwhile, Wall street worked itself into a frenzy developing and marketing mortgaged backed securities to any and all who would buy them. They got silly about it. The demand for mortgages and derivatively houses to feed this craze was considerable. Mortgage brokers and lenders across the land learned they could grab big up front fees by hawking mortgages to any and all including many not qualified. The mortgage loan would be sold off immediately so if it went south that was someone else's problem. Mostly Wall Street's and its buyers.The bubble burst when housing prices collapsed. The Crash of 2007 followed, the shadow banking business was wiped out and Wall Street's big banks were bailed out.

Mom, Dad and their two children saw the value of their home and their wealth wiped out almost over night. They owed more on their home than it was worth and, as a consequence of all they had bought and Mom losing her job as layoffs and unemployment rose, they had trouble paying their debts. There were layoffs all over the place. Worse, the bank foreclosed on their home and they found themselves having to rent a smaller place with all of their wealth and savings now wiped out.

Bill, now grown, sleeps on the couch in the living room and has student loans to go to the local community college. Susan ran off to get married because she couldn't stand living at home in the small rental unit. There was great emotional and psychological impact on the family as well. Dad started drinking. The family had become poor, both in wealth and income. As one author put it: "Between 2007 and 2010, the median net worth of U.S. households fell by 47 percent, reaching its lowest level in more than 40 years, adjusted for inflation. In other words, middle class wealth virtually evaporated in this country."

The following charts show us what happened to the housing, the income and the wealth of the middle class, their employment, their new status as renters and also show us that the income and the wealth of the rich rose as Mom and Dad's fell. The bailed out big banks did just fine, but middle class America got no help at all and laid dead on Wall Street's killing field. Social justice in America became a roaring joke, but most people didn't know who or what hit them, The middle class became a nation of impoverished low income renters and the rich laughed all the way to the bank.

Chart No. 1
Kimball Corson
01/13/2016, Pago Pago, American Samoa

The collapse of middle class wealth.

Chart No. 2
Kimball Corson
01/13/2016, Pago Pago, American Samoa

The demise of middle class income.

Chart No. 3
Kimball Corson
01/13/2016, Pago Pago, American Samoa

The collapse of employment, income and home buying.

Chart No. 4
Kimball Corson
01/13/2016, Pago Pago, American Samoa

From home owner and buyer to renter.

 

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