What's on your mind?

[JohanV]

11 hours ago, FatherAlabaster said:

Happy birthday dude, hope it's been a good one

Thanks. And you!

[Dead1]

The American mid term election reveals an interesting example of how media opinion has now become the main news, not actual events.

The media became obsessed with the "Red Wave."  There was no real evidence that Republicans would sweep away all comers.  It was literally hyped by the media.  So largely media opinion that red wave is coming was the news story, not actual events.

Then the Red Wave failed to eventuate (not surprising if you look at actual voting patterns etc).

So now the story is the media's opinion didn't happen.

We had the same happen here in Australia when a guy called Bill Shorten failed to get elected despite media's opinion he would get in with ease.

It's literally like making news out of a weatherman's wrong forecast.

 

I think what it really shows is that media is as dysfunctional as government these days.  Basically there are two sides  of the same debased battered coin.

[GoatmasterGeneral]

1 hour ago, Dead1 said:

The American mid term election reveals an interesting example of how media opinion has now become the main news, not actual events.

The media became obsessed with the "Red Wave."  There was no real evidence that Republicans would sweep away all comers.  It was literally hyped by the media.  So largely media opinion that red wave is coming was the news story, not actual events.

Then the Red Wave failed to eventuate (not surprising if you look at actual voting patterns etc).

So now the story is the media's opinion didn't happen.

We had the same happen here in Australia when a guy called Bill Shorten failed to get elected despite media's opinion he would get in with ease.

It's literally like making news out of a weatherman's wrong forecast.

I think what it really shows is that media is as dysfunctional as government these days.  Basically there are two sides  of the same debased battered coin.

You have to take into consideration that historically speaking, the party of the sitting President loses seats in the midterms. In the 22 midterm elections from 1934 -2018, the President's party has averaged a loss of 28 House seats and 4 Senate seats. The President’s party gained seats in the House only three times, but gained seats in the Senate on six occasions. The President’s party has gained seats in both houses only twice.

This particular election cycle has been affected by the cult of Trumplicans not being able to accept that their orange messiah lost the last election. This happened because even many moderate conservatives who have always traditionally voted Republican quietly voted against TFG. And they're not going to vote Republican again until their former party is no longer in thrall to the Cult of Trump.

I would also think that especially now in this age of polarized for-profit news media who "specialize" by catering to the core demographics of their audience and serve them exactly what they want to hear for ratings $$$ the pre-election polls and predictions really depend a lot on which media outlets you're looking at. The right-wing media certainly talks of a red wave leading up to the election every 4 years while the mainstream corporate neo-lib media hopes for a blue wave regardless of which party sits in the Oval. I didn't hear much about a red wave this time because I choose not to partake in any right-wing propaganda.

We are in an economic situation currently where we have high inflation partly due to supply chain issues related to the pandemic as well as the war in Ukraine, which has been compounded by oportunistic corporate price gouging which has seen year over year corporate profits spike by 25% this year. The energy sector, the 7 largest oil companies in particular have posted record net profits of $170 Billion USD this year which is double and triple their pre-pandemic numbers. Guess which party wouldn't vote for the bill to combat corporate price gouging? The same one that's crying about gas prices and infllation, because it gives them campaign talking points.

The right obviously wants to lay the blame for everything squarely on the POTUS (to be fair the left would try to do the same if they were the minority party) even though this is a global problem that the entire developed world is currently dealing with. But then this has been the typical cycle for American politics over the last 60 years or so: the Repubs create a big economic mess, run up the defecit and then blame it all on the left and obstruct everything they might try to do to fix it. Then they get to criticize them for not being able to clean it up fast enough, which causes uninformed voters to elect another Repub who makes another mess and the cycle repeats.

I know you like to insist that there's no difference between our two political parties, and I agree they're both corrupt and controlled to a large extent by oligarchs. But yet the economic statistics are pretty clear and say differently. One party is clearly worse for our economy. Not to mention that for the first time ever the Republican Party didn't even bother to declare a policy platform in 2020, apparently now they just stand for obstructing the Dems and kissing Benedict Donald's ass. And amazingly their low IQ voters are OK with that.

[Dead1]

2 hours ago, GoatmasterGeneral said:

I know you like to insist that there's no difference between our two political parties, and I agree they're both corrupt and controlled to a large extent by oligarchs. But yet the economic statistics are pretty clear and say differently. One party is clearly worse for our economy. Not to mention that for the first time ever the Republican Party didn't even bother to declare a policy platform in 2020, apparently now they just stand for obstructing the Dems and kissing Benedict Donald's ass. And amazingly their low IQ voters are OK with that.

 

I disagree on the economic bit...my $0.02:

First on the deficit

- it's not necessarily a bad thing.  In fact in times of economic issues Keynesian economics actually promotes deficits to stimulate spending.

- Government debt is not the same as household or business debt because government essentially controls supply of money.  

 Even if we assume a "corporate" attitude to government then deficits aren't bad.  Companies run deficits (ie fund via debt) all the time and it's viewed as a good thing as it ramps up return on owner's equity.    Indeed companies can be viewed as bad investments if they don't hold enough debt.

Similarly in government, if the debt is used to fund infrastructure, key services etc these provide boons to the economy.  

- Deficits are primarily a political, not economic problem,

Australian related but its universally applicable article:  https://thenewdaily.com.au/finance/2022/10/24/deficit-debt-economics-kohler/

 

Second on economic performance:

- Modern western governments have very little impact on economic performance because globalisation, deregulation and neoliberalism have removed their abilities to manage the economy.

- Most trade regulation, currency control and many other measures are now deregulated and up to the vagaries of the markets.

How do you manage production if you aren't allowed to place tarriffs or provide subsidies due to WTO or Free Trade Agreements?  How do you control inflows and outflows on capital when most controls have been removed?   How do you stop gas cartels price gouging when you've given them complete control over pricing?

- Government left with two measures - monetary (interest rates), and fiscal (government spending).

- Monetary measures barely work these days.  Eg Aussie government jacking up interest rates to control inflation doesn't work when the inflation is on things outside of Australian control eg gas prices, COVID, Ukraine, global production shortages etc etc.

-Fiscal  is limited as most governments aren't allowed to invest in productive assets (eg say factories), much of it is long term (eg infrastructure) and most of it is unpalatable to play with (eg social welfare or health spending).

https://www.theguardian.com/books/2022/oct/17/the-big-idea-do-governments-really-control-their-economies

 

Third - the historic results:

It's very hard to pinpoint who has mismanaged government because legislation and rules and policies are often cumulative.  Very often governments don't understand how certain policies work in synergy.  Very often they downplay it (as evidenced by Australian Finance Minister Matthias Corman admitting on TV that the low wages growth was deliberate feature of Australia's economic system - this includes industrial and tax policy, immigration, education etc etc).

So for example Subprime Crisis 2007

At the time the US president was George W. Bush

Key legislation that contributed to it:

Bill Clinton (Dem) era:

 - Gramm-Leach-Bliley Act - repealed Glass-Steagall Act which was part of Banking Act 1933 and regulated dealings with investment and commercial banking

- Commodity Futures Modernization Act - exempted credit-default swaps from regulation

- Community Reinvestment Act - added pressure on banks to make risky loans in low income areas to promote home ownership

- Now the first two were sponsored by a single Texan Republican BUT Bill Clinton signed them into law.

George Bush Jr (Rep) era

- No new legislation but he failed to push through Sarbanes-Oxley Act to ramp up regulation, and he also stopped SEC from trying boost regulation of mutual and hedge funds.

There are probably other even older bits of legislation across 60 years that also did their bit to contribute to subprime crisis under various presidents be they Reagan or LBJ or Nixon or Roosevelt.

So we can see Subprime developed over the course of a decade under both Republican and Democratic leadership.

The main culprits are the financial sector who exploited all the loopholes and new regulation over many years. 

Fourth - the deep state

No, not some sort of conspiracy but rather the whole machinery of government plus informal networks.  This is what I work for.

https://www.politico.com/magazine/story/2017/09/05/deep-state-real-cia-fbi-intelligence-215537/

Democratically elected politicians have very little control over running of government or implementation and interpretation of new laws and regulations.  The mass of bureaucrats does things regardless of elected officials.  There is massive inertia.  The top of the service is of course run by people with same socio-political viewpoints (because any organisation tends to promote "yes people").

Then there's informal networks eg between professionals etc that play a massive influence on how things are implemented or how things are done.

Your average modern public servant head is ironically a neoliberal who believes in the primacy of the market.  I see this all the time.  

Often they make decisions that promote deregulation or neoliberalism without any law.  They may simply be delegated to do so - eg selling government buildings and leasing them back (at exorbitant rents) doesn't  necessarily require a law.

It ensures consistency but it makes changing direction very difficult.  Indeed in the west there has been no significant change of economic direction since 1970s when neoliberalism was adopted.

Our current decaying  state of affairs in the west is arguably the result of decisions made over since 1970s from collapse of Bretton-Woods through the massive and constant deregulation of everything.

Five - the average person is clueless as to how complex this whole system is

So your average Joe on the street doesn't have a clue as to how this works.  They vote on completely wrong premises, often just parroting the line they liked most. 

   

The illusion of democratically elected government control is maintained because it suits the political narrative and assuages the public.

Because after all admitting this undermines the whole bloody system.  If we knew the system was basically rigged and our votes didn't make a lick of difference there would be blood on the streets.

Finally there is no modern left wing.  The left wing now is centre-right or even totally right wing when it comes to economics.  How many of your Democrats or our ALP types promote nationalisation of key industries or significantly heavier regulation of global trade (including capitals and labour flows).  

True left wing does not support globalisation, neoliberalism or the primacy of the market.  Left wing doesn't believe in self regulation or deregulation.

 

Doling out a few more shekels in welfare to the poor whilst letting likes of Jeff Bezos accumulated mega billions is not left wing.  Supporting mass migration which undermines power of labour and refusing to regulate decent wage increases and refusing to regulate price gouging in key services such as health, food and utilities is not left wing. 

I say this as one of the very few truly left wing people left on this planet.  We are nearly extinct.  The future belongs to the billionaires whilst the mass of humanity tolerates any kind of degradation in the idiotic hope that they too will one day be a Bezos or Musk.

[markm]

2 hours ago, GoatmasterGeneral said:

You have to take into consideration that historically speaking, the party of the sitting President loses seats in the midterms. In the 22 midterm elections from 1934 -2018, the President's party has averaged a loss of 28 House seats and 4 Senate seats. The President’s party gained seats in the House only three times, but gained seats in the Senate on six occasions. The President’s party has gained seats in both houses only twice...........

I must say you have an impressive way of crystalizing our politics from a liberal prospective.  I do think the story last night was partly about a correction to the middle. I'm left hoping there is a larger mainstream middle that is not quit as bat shit crazy as I was fearing.

[navybsn]

There's right wing, pseudo liberal, and the largest majority in America - the disinterested middle. I fall somewhere in between the last 2. White and financially independent enough to be disinterested, educated enough to be liberal, but raised in the traditionally conservative south with many of the inherent basic ideological tenets ingrained in my brain. Causes a lot of mental conflict at times which takes recognition and careful thought to overcome. Something the average American (and truthfully even myself quite often) cannot do or do easily. Unlike many of those who have come before me, I have moved in a liberal direction as I get older. Something I attribute to vastly different life experience than most. Interestingly, my wife who shares my life experience almost as close as any human possibly can has moved in the opposite direction. 

So what Navy? What's your fucking point? Point is that the predictability of what will happen over the course of our collective remaining years is about the same as predicting a poker hand pre-deal. If you would have told 20 year old Navy that he would see a rise of fascism and nationalism in his lifetime so soon after the abject defeat of those same ideals only a generation before his birth, he would have rolled his eyes and taken another hit from the bong. The past 27 intervening years have seen the advent of the 24 hour news cycle, the explosion of the internet and social media, and a hyper connected world that was science fiction only a few decades ago. Who knows what comes in the next 27. All I can say is that I feel particularly singled out by the galactic overlord to be chosen to exist in this particular period of social upheaval. But at least he gave us metal... and bourbon.

[GoatmasterGeneral]

True, there really are no left-wing governments in the western world anymore, just varying degrees of right. In the US our so-called "left" party is center/right and our right party is batshit crazy. Both parties keep their constituents distracted with culture wars while widening the wealth gap between the working class and the billionaire class. The funny thing is the Repubs like to demonize our center/right neolib Dems as being radical far-left commies. Which they know is BS but it keeps the riff-raff alarmed and voting red. Of course the Dems play a similar game, they just have to be a tad more sophisticated about their demonizing because their constituency is generally somewhat more educated. Currently in the post Trump era they have it pretty easy on the propaganda front as the right has gone so far over the edge as of late they demonize themselves. Dems and the mainstream corporate media don't have to do very much to make them look like the bad guys. Hence no red wave.

As far as the defecit is concerned, yeah I get that running a deficit each year is standard operating procedure, but isn't there a limit to how high we can let the debt go before it starts having adverse effects on our economy? How many trillions is too much? We've added 70% of our federal debt in the last 15 years. Our current $31.22 trillion federal debt is supposed to reach 138% of GDP by the end of the year. The interest payments on the debt are supposed to reach $580 Billion this fiscal year. I'm no economist, I don't even have a university degree of any kind. I'm just a metalhead. But that sure seems like an awful lot to me.

 

 

 

[Dead1]

1 hour ago, markm said:

I must say you have an impressive way of crystalizing our politics from a liberal prospective.  I do think the story last night was partly about a correction to the middle. I'm left hoping there is a larger mainstream middle that is not quit as bat shit crazy as I was fearing.

Until people get disinterested again.

 

I didn't expect a "red wave" simply because there would be a lingering/festering anti-Trump hatred to keep voter turnout higher.  This is the same thing that made 2020 election have high turnout and I would argue the same thing ramping up turnout in 2022 (https://www.usnews.com/news/articles/2022-11-04/early-vote-totals-point-toward-record-breaking-turnout-for-midterm-elections) .  

My thinking is that once memory of Trump recedes, they will lose interest in politics and stop voting again.

 

HOWEVER I don't expect Republicans to win much in the future.  Too white and too reflecting traditional values of a pre-2000 America.  Note I say "traditional" not "conservative."

My own theory is that the US will continue to become divided along "white and traditional*" Republican hinterland and "multi-ethnic and modern*" coastal areas.

At some point US stops being the current US and becomes something else - either a dictatorship or breaks up into several states the most powerful being California, Texas and some sort of agglomeration in the highly urbanised north east.

*Neither modern nor traditional are good here.  Traditional means all the problems of old America eg race, equality, anti-feminine and anti-LGBTIQ rights whereas modern means neoliberal, globalised, unequal, mass poverty.  None are return to greater equality and improved living conditions.

Maintenance of current USA is impossible once the value sets become too divergent.    In fact functional democracy anywhere will be unable to be maintained as inequality reaches dizzying new heights.  Most western states will probably become what what experts in the field call "illiberal democracies" or "hybrid regimes."  This is already happening in several EU/NATO states.

 

So I suspect current USA doesn't survive to 2100. 

----

On the upside for you Americans I don't think current Russia survives to 2050 - the gas station with nukes has been in terminal decline since 1970s.  Putin's 2000-2008 "success" merely arrested the decline and was based purely on fossil fuels.  Russia is too culturally and ethnically heterogeneous and is only held together through brute force and vassal like systems of regional government.

Once Russian Federation collapses, we're going to be left with a rump Russia that will continue to literally die due to demographics, endemic corruption, lack of economic sophistication etc (much like countries like Bulgaria or Croatia right now).

 

 

[Dead1]

1 hour ago, GoatmasterGeneral said:

 

As far as the defecit is concerned, yeah I get that running a deficit each year is standard operating procedure, but isn't there a limit to how high we can let the debt go before it starts having adverse effects on our economy? How many trillions is too much? We've added 70% of our federal debt in the last 15 years. Our current $31.22 trillion federal debt is supposed to reach 138% of GDP by the end of the year. The interest payments on the debt are supposed to reach $580 Billion this fiscal year. I'm no economist, I don't even have a university degree of any kind. I'm just a metalhead. But that sure seems like an awful lot to me.

 

 

 

 

The real answer is no-one knows.  Debt ceilings are artificial constructs and completely meaningless (Congress has raised them 78 times since 1960!).

Current thinking is as long as you can service it, it's not a problem (the same thinking has been applied to commercial debt and to lesser degree private debt).

Right now servicing debt is 8% of US Federal spending ($475B in 2022).  That's a lot of money. 

 

But if you wanted to go back to a balanced budget you would have to slash $1.4 trillion in spending (based on 2022).  Note this does not pay off the debt, it merely maintains it so you're still suck with $475 B in interest payments into perpetuity.

So which of these areas do you cut:

 

Social Security - $1.22 T

Health - $914 B

Income Security - $865 B

Defence - $767 B

Medicare - $755 B

Education - $677B

Interest on debt - $475 B - can't touch this.

Veteran Benefits - $274 B

Transportation - $132 B

General Government - $129 B

Other - $65 B

 

Revenue

Alternatively how much do you increase taxes by given you would have to increase revenue by nearly 29% just to balance the budget?

2022 Breakdown of taxes/revenue

- Individual Income Taxes - $2.63 T (54%)

- Social Security and Medicare taxes - $1.48 T (30%)

- Corporate income taxes - $425 B (9%)

- Miscellaneous - $135 B (3%)

- Customs Duties - $100 B (2%)

- Excise Taxes - $88 B (2%)

 

Sure companies should pay more taxes but increasing them 300% is impossible. 

Social security and Medicare combined ($1.98 T) costs far more than the taxes associated with that area ($1.48 T).  But how many people would suffer if you slashed these areas?

Even slashing defence to say something equivalent to what Germany does on a per capita would reduce defence spending to $220 B and save $547 B but you're still $853 B short.

 

Slashing has far greater impacts than the mere value of services involved.

Slashing spending has follow on effects that are much bigger than the spending. 

I'll use defence  as an example.  Say you have a large base and it costs $50 million to run it including all salaries and wages to service people and contractors.  But the base is worth more to the local economy than $50 million because  those soldiers and their families need services eg hairdressers or cinemas or schools.  And the hairdresser, cinema worker and teachers also need other services eg shops, healthcare, gardeners and so forth. 

So closing the megabase doesn't just remove $50 million from economy.  It removes hundreds of millions.

Same can be said for say health.  Not paying for health would result in far greater economic impacts than merely saving on a medical procedure.  It would mean people deferring expensive treatment which would lead to more incapacitating illness later, would remove people out of productive labour for longer, greater strain on families due to having to look out for incapacitated family members etc.  It would increase poverty in the long run.  Impact on society is massive.

 

My point

The current system is irreparable hence the need for ongoing budget deficits.  The barriers are cultural, political and economic.

The cultural elements are that people expect services from government yet don't want to pay taxes.  Companies are essentially the same (everyone wants a subsidy or a bailout or an exemption but again they don't want to pay taxes).

 

I think the solution is to go to 1960s European style social democracy but that is impossible given current cultural values and power of vested economic interests.

[GoatmasterGeneral]

I never said we had to actually balance the budget, just saying I think if your debt is 128% of GDP that might be a little too much. What do you cut? Good question! That's why we vote.

Repubicans want to cut basically everything on that list of yours except defense spending, their own salaries, and pet projects in their own districts so they can get reelected. Problem is they also love to cut taxes, but mainly just for the wealthy and the corporations. Trump cut corporate taxes to the tune of $1.5 T in lost tax revenue. Then he started spending like a teenager who stole his dad's credit card.

Repubs also never stop talking about "sunsetting" medicare and social security for the elderly. Just getting rid of them because they cost too much. I believe that would be disatrous. Some people seem convinced it won't ever come to that, they wouldn't fuck us all like that, would they? But a lot of people never envisioned they'd actually be able to overturn Roe v Wade either. I don't think there are any limits to what they would do if they thought they could get away with it. 

Democrats don't seem to want to cut much of anything at all except maybe defense spending. Not cut it in half or anything crazy, but many of us wonder, is $780 Billion really neccessary? Couldn't we shave 10% or 15% off of that number? Obviously no one likes paying taxes, but I think most of us understand it's neccessary if we want our government to be able to do things for the greater pubic benefit, including social security and maintaining the military.

I don't think we need to tax the wealthy and corporations into oblivion, I don't think you'd even need to raise the corporate rates any more than just back to normal 2016 levels. Just please let's close some of these myriad loopholes so that multi-billion dollar corporations like Amazon don't get to defer losses and write everything off and end up paying very minimal or even some years basically no taxes at all. That's what really pisses people off.

If you were born the same day as Jesus Christ in the year 0 and were given $50,000 USD a day (in 2022 dollars adjusted for inflation) every single day 7 days a week for 2022 years all the way up until until today (yes, you're not only rich but immortal) Elon Musk would still have 5 times more money than you. How much is enough? I would be quite happy with a nice low flat tax rate for all and just no loopholes whatsoever.

But I think the real problem with budget defecits is that in this century anyway, it seems like there is just one major crisis after another that requires the US govt to throw a trillion or two at this pandemic over here and a trillion or two at that war(s) over there. It never ends and none of that shit has been accounted for in the anual budget obviously, it all just gets tacked onto the debt, which is $32.22 Trillion at last count and rising.

I can't even fathom that much money. I don't know if that much paper money even exists worldwide. Alright I looked it up, all the physical money in the world, coins and notes totals about 40 Trillion. I'm sure our natl debt will surpass that within a few short years. And then I guess we'll have to keep taxes high forever just to service the ever expanding debt, forget about paying it down in any significant way. 

[markm]

There is another hope which is a growing class of center left/left educated whites who find commonality with a growing number of educated middle class peoples of color coalition. Remember a big part of the Trump coalition is working class whites without a college degree. The majority of of urban educated whites vote D.

[Dead1]

11 hours ago, markm said:

There is another hope which is a growing class of center left/left educated whites who find commonality with a growing number of educated middle class peoples of color coalition. Remember a big part of the Trump coalition is working class whites without a college degree. The majority of of urban educated whites vote D.

Educated people are the problem regardless of colour.  Our friends in Britain just proved this when a well educated black Chancellor, Kwasi Kwarteng, introduced such radical pro-rich reforms that were so destructive they crashed the economy.  Dude had a PhD in economic history.

Neoliberalism is the invention of extremely well educated people eg creators and subsequent adherents of the Chicago School of Economics which is the cornerstone of modern economic policy.  The various political advisers and lobby groups are all made up of very well educated people.  Your average CEO often has a Masters in something.

Colour is irrelevant - the new elites all share the same world view point.  And that viewpoint has more in line with the aristocracy of of dark age times and industrialists of 19th century than anything modern.

 

The less educated working class people voting for Trump are a symptom of a broken system.  These people once voted Democrats but the Democrats like every other supposedly centre-left party on the planet abandoned them in favour of neoliberalism.

 

Once Trump fades into memory, US politics reverts back to 1970-2017 status quo.  Good times to be rich, getting shitter to be poor.

 

We're seeing this in Australia - with our version of Trump gone (Scomo) both major parties are settling back into allowing companies to keep making exorbitant profits whilst everyday people are getting smashed with inflation and poorer working conditions. 

  

[Dead1]

16 hours ago, GoatmasterGeneral said:

 

But I think the real problem with budget defecits is that in this century anyway, it seems like there is just one major crisis after another that requires the US govt to throw a trillion or two at this pandemic over here and a trillion or two at that war(s) over there. It never ends and none of that shit has been accounted for in the anual budget obviously, it all just gets tacked onto the debt, which is $32.22 Trillion at last count and rising.

I can't even fathom that much money. I don't know if that much paper money even exists worldwide. Alright I looked it up, all the physical money in the world, coins and notes totals about 40 Trillion. I'm sure our natl debt will surpass that within a few short years. And then I guess we'll have to keep taxes high forever just to service the ever expanding debt, forget about paying it down in any significant way. 

 

It doesn't exist as paper money or coins.  It's literally just lines of computer code.

I agree there's a need for closing loopholes and revamping tax systems.

But that's just part of the fix.

The others include policies that empower people - eg fair wages for lower classes, access to good work, access to free or at at least cheap education and healthcare, access to affordable housing etc.

 

But this is increasingly impossible.  Deindustrialisation and deregulation means people are increasingly stuck in low value service jobs (eg retail or lower level health care such as attendants) instead of well paid and well protected manufacturing.

Property development is now a major economic activity with speculating and capital (ie price) growth taking priority over providing homes.

 

System is also increasingly built to support rent-seeking classes ie people who generate large amounts of profits without actually contributing anything new to the economy (eg renting existing property but also companies that seek outsize profits or gain unwarranted government assistance/protection and huge chunks of the financial industry eg derivatives trading, hedge funds and I would argue much of the insurance industry)

Again a major systemic factor that contributes to all the ills of the world is financialisation of the economy.  Basically there's a lot of money spinning around that is not productive.

 

I worked in stock broking and our most lucrative line was derivatives ie buying and selling of hedging assets.  This is classic financialisation.  In essence you were buying and selling options to buy/sell shares.  In many cases our clients didn't even own the shares they had options to sell or were selling the rights for someone else to buy.

These are Mark's educated people at work.  They are the bad guys.    

More on how rent seeking works:

https://medium.com/swlh/the-economy-is-broken-rent-seeking-broke-it-c1a4a94d77a6

https://www.forbes.com/sites/davidmarotta/2013/02/24/what-is-rent-seeking-behavior/?sh=7ec0d378658a

https://journals.sagepub.com/doi/full/10.1177/0539018420943077

https://www.opendemocracy.net/en/oureconomy/replacing-rentier-capitalism-one-defining-challenges-our-age/

 

 

[AlSymerz]

27 minutes ago, Dead1 said:

We're seeing this in Australia - with our version of Trump gone (Scomo) both major parties are settling back into allowing companies to keep making exorbitant profits whilst everyday people are getting smashed with inflation and poorer working conditions. 

  

 

What?

Scomo is gone?

We have a new PM?

Wow, I hadn't realised!!

Actually I had realised but there's been so little change it's hard to tell we've got a new figure head.

In fairness to me though I pay as little attention to politics as I can. I don't rush out every few years for my 'democratic sausage'. I don't believe either side when they open their mouths and I've even given up yelling at the TV when those monkeys come on talking shit. When it comes to US politics I know even less. I couldn't even say which team is red and which is blue.

Life is so much more relaxing these days, although I have to say I am one of the few who would be happy to see interest rates rise a bit.

[Dead1]

5 minutes ago, KillaKukumba said:

although I have to say I am one of the few who would be happy to see interest rates rise a bit.

Indeed for many of us those interest rate increases are a disaster.  I set up my home loan so I could withstand 10% interest rates but for a lot of people even the current homeloan rates would be problematic.

 

It didn't help the RBA promised no interest rate increases for 3 years (which I didn't believe) but then jacked up base rates from 0.1% to 2.85% in 6 months.

[Dead1]

And speaking of educated people and how little they care about the plight of everyday people:

Quote

Very smart people are nodding and suggesting the economy needs to slow to get inflation under control and, well, damn the consequence

s

https://www.theguardian.com/business/grogonomics/2022/nov/10/you-cant-eat-gdp-why-australian-households-are-in-for-a-massive-historic-hit

 

 

Indeed here in Australia taxes for low and middle income taxpayers will rise due to expiration of tax offsets whilst on the other hand tax rates for filthy rich will come down once legislated tax cuts come in. 

 

So there's smart educated people for you - smashing the poor with tax increases, jacked up interest rates and by allowing price gouging, whilst the rich get tax cuts.

 

The system doesn't need reform, it needs tearing down. 

 

[AlSymerz]

21 minutes ago, Dead1 said:

Indeed for many of us those interest rate increases are a disaster.  I set up my home loan so I could withstand 10% interest rates but for a lot of people even the current homeloan rates would be problematic.

 

It didn't help the RBA promised no interest rate increases for 3 years (which I didn't believe) but then jacked up base rates from 0.1% to 2.85% in 6 months.

Yeah maybe the RBA has got a few questions to answer, although they wont ever have too. But at the same time people themselves are largely to blame. Whether it's due to a lack of education or ignorance people have been taking out loans they couldn't service for years. Back in the 90's I dated a woman who was a Westpac branch manager, she quit because she was sick of head office laying quotas on her to process loans that should never have been created. This was a time when interest rates were dropping from the nearly 20% highs of the 80's and coming down under 10%. Too many people believed that as interest rates came down they were getting a bargain and able to borrow so much more, too few actually thought about what would happen if rates rose dramatically again.

25 years on and not much has changed, so few people still think about what to do if interest rates doubled. Then we have banks and the media saying 'lock it in' and those same people are convinced that locking in 3% today for 12 months is a great deal. Too many people fail to realise, or simply don't want to acknowledge, that banks aren't lending money as a favour to them. Until the banks stop writing all the rules borrowers will never have a fair game and people need to realise that when they take loans out.

TBH I'm glad now that I pulled out of the deal to buy the new F-Series last year. I was prepared to buy and service the loan, even with interest rates rising and my plan was to own it within 5 years. But since it didn't happen that money has now left me debt free and no longer watching interest rates rise. My kids have house loans (and one has a car loan) but both bought within their means and both did their research so that barring any major fuck ups these pissy little interest rates wont hurt them. For me these days it's all about interest rates on savings accounts and term deposits.

[Dead1]

 

26 minutes ago, KillaKukumba said:

Yeah maybe the RBA has got a few questions to answer, although they wont ever have too. But at the same time people themselves are largely to blame.

True, in my experience most Australians are completely financially illiterate (indeed 40% are functionally illiterate when it comes to reading and writing).

But we all know the banks and lenders act dishonestly - we even had a Royal Commission that aired a ton of their dirty washing (though no action undertaken to change this).

The government also wants us to get into debt hence poor regulation of credit cards and payday loans.  Debt drives consumption which is necessary for a consumer driven society.  Without massive private debt the economy stalls.  

 

I mean look at the importance of Christmas sales to the economic growth.  Note these aren't even selling Australian made goods but rather shit made in China and other third world slave labour hell holes.  You don't get those Christmas sale increases happening because workers are earning more (wages largely stagnant since 2007).  You get them through debt. 

 

The other issue is that of housing - we all need somewhere to live.   That means buying or renting a home.  Buying a home requires a massive loan.

 

But government made homes into an economic asset through various laws - eg negative gearing, capital gains tax offsets.

The government has also artificially ramped up demand for housing through one of the biggest  overseas immigration intakes on the planet on a per capita basis.

Deregulation, computing advances,  deindustrialisation and abandonment of regional development models (unlike say in 1940-60s) means that more and more services were centralised into major cities which in turn means massive demands on housing.  Indeed 66% of all new jobs are created in Sydney and Melbourne.  

And finally governments stopped or heavily curtailed building of public housing.  Here in Tassie a big chunk of public housing was sold off to private sector.

 

So now houses are valuable commodities that draw both investors and speculators.  Massive and often artificial demand keeps their prices and rents increasing every upwards.  Here in shitty Launceston we were looking at houses that were $500,000 despite obvious mould and rot.  Fucking insane.

 

So people have to get into massive debt to own a home.  Either that or haemorrhage money in the form of ever increasing rents for unstable periods of time (in Australia rents are often 12 monthly leases unlike some parts of Europe where leases are 5 year of even more.

 

We now have more and more homelessness with camps springing up everywhere.  Literally we're headed back to pre-1940.  

  

 

[AlSymerz]

Quite a lot of it is hard to fathom. When we first got the loan for this farm in 2002 the interest rates were about 6.5%, the bank didn't care what our weekly wages were (we both worked full time jobs at that stage), they only cared how the farm was going to service the loan. The figures we gave them were essentially a business plan but the risk was barely on them because they'd have simply sold the farm if we defaulted.

When we got the loan for the second farm next door in 2011, with the same bank, we had to jump through so many initial hoops it wasn't funny. Proving who we were despite banking with the bank for more than 20 years. Four different evaluations on the property, back before they did it all online with a single service. Copies of council land permits and designations. Proof we'd hired a conveyancer. Insurance quotes with a cover note to be produced before final signatures. Potential rent for the house, which we deliberately didn't tell them we planned to demolish. We even had to get my wife's boss write a letter stating she was employed full time. The interest rates had gone down, and while they did care a little bit more about how much money we made, the focus was still on getting the loan done and making sure they wouldn't be out of pocket if we defaulted quickly.

[Dead1]

When we got our first loan in 2009, my bank (Commonwealth) didn't even want to lend me money because I paid a car loan off 3 years early and because I had no credit card debt.  Meanwhile Westpac was offering near $800k (we only wanted $280).

 

Interest rate of 6.5% (or even 1980s interest rate of 20%) has to be compared against average home loans and average earnings.  And due to house values increasing much more rapidly than wages, it means that even lower interest rates hurt more.

So interest rates of 6%-7% might hurt as much as say 10-12% interest rates in 2000. 

[AlSymerz]

The amount a bank is willing to lend has always been an issue because too many automatically think that the figure the bank offers them is affordable by them. I did notice that between our last loan and our eldest getting her first house loan things seem to have changed a little in that they didn't offer as much (as in totally borrow-able figure compared to wage), but it was still higher than I thought it should be.

About a decade ago my uncle (60 at the time) had the bank give him $100K more than he and the wife needed for their new condo on the GC. They gave him the choice to keep the money, or immediately take it off the total of the loan. The stupid fucker spent the money on furniture and a new car, they didn't really need, just because the bank gave it to them. It's was probably the silliest thing he ever made but I suppose he got the last laugh, he died a few years ago and left his wife with all the debt!

[RelentlessOblivion]

Insurance, we’ve had so much rain it’s coming through the light fixtures.

[Thatguy]

Thatguy is back

That is all...for now.

[navybsn]

Just wondering where you were the other day. Glad you're back. Did you have adventures?

[Thatguy]

7 hours ago, navybsn said:

Just wondering where you were the other day. Glad you're back. Did you have adventures?

Italy from north to south with Mrs Thatguy then finishing in Rome with 10 days in the middle driving in Sicily with the daughter and the son and the son's wife. 

We had a great time of course but totally over fucking churches despite their physical beauty. The Catholic Church is a profoundly strange institution but I should think most of us here knew that.

I listened to music really only on the flights to and from - with waiting around times it was a 36 hour or so process to get to Italy and the same to get back - and on the excellent trains because I wanted to interact with Mrs Thatguy. The daughter made me listen to pop music when I was driving with her, oh dear.

13 hours ago, RelentlessOblivion said:

Insurance, we’ve had so much rain it’s coming through the light fixtures.

I have come back to a luxuriant and totally overgrown garden but it's rainy again so I can't do anything about it yet. Flying in everything was so green around Canberra. Not what we expect at all.