100%. I compared the pumping of negative partisanship by conservative shit-slingers on AM radio, Fox, and finally the alt-media of the '10's to the low interests rates, debt purchases, and stimulus spending that the gov/central bank have done since the 00's. One created a bubble in the economy, the other created a bubble for democracy. Both are currently bursting as the fed hikes base lending rates while the conspiracism and xenophobia pumped into conservatism turns into anocracy.
Sorry buy your comparison is a desperate effort to have both sides at fault. As far as bubbles, we have had a succession of asset bubbles over the years. Real estate from time to time, stocks at other times.
Travis mentioned this analogy yesterday. I am not sure any correlation can be established. Nor has he attributed his economy bubble to Democrats or the left. The comparison is intriguing but not not desperate.
“Asset bubbles”. Ezra Klein’s podcast had a fascinating guest discussion (Rama Foroohar) titled “The End of ‘The Everything Bubble’”. I’m going to listen to it again. It was engaging and important.
I have listened to this exact episode no less than three times. It is a gold mine of economic information covering the 30's-present cooked down to about 1 hour. Much of what I've posted here is essentially a regurgitation of many of the points she makes in that interview.
I’m so glad I’m not the only one who couldn’t absorb it in one pass!
I used to assume that economics was b-o-r-I-n-g. Now I desperately wish I understood it better. And there are so many sub-economics specialties, like psychology economics (it probably has an actual name). Social-political-energy-international, etc etc. Maybe even the “economics of pet ownership”.
When I was working for an import-export company, I decided to take International Economics at the local university extension because I thought it would help me with my job. However, I soon realized that day-to-day international economics and textbook international economics did not match up very well.
And oil. How many times have we wandered through oil crises? Everyone bought small efficient cars, then went right back to monster SUVs as soon as the most recent crisis fades. This feels different, as our right wing is so hair-trigger angry. This time, we might trade our democratic freedoms for a cheaper tank of gas. A permanent, false “solution” to a predictable recurring problem.
The one "fake price" they never talked about in that podcast was this one. Ezra brought up the fake cost of meat, but the fake cost of oil never came up. Most of the world's oil trades over the ocean on super-tankers. The security for these security tankers not constantly getting robbed by pirates, and oil prices spiking as a result, is because the *US Gov* provides that security on the high seas via the US Navy and US Marine Corps. This essentially amounts to global energy subsidies on oil provided by US taxpayers to the tune of $800B+/year *annually* when you look at what logistics and equipment and personnel it takes to maintain that security for global oil trade--particularly the 40% that travels through the Straits of Hormuz on a daily basis. We pay $800+B/year to secure global oil trade so that inflation is low enough to allow domestic consumers to buy goods cheaply and commute to work so that they can make the asset-holding class's stock portfolio go up a percentage point or two this quarter. That's the rigged price I wish Ezra would have talked about on that podcast.
Does 5th Fleet's budget and resources eclipse that of 6th, 4th, and 3rd? Some parts of the world get more attention than others. Right now, DOD prioritizes the Persian Gulf and 7th Fleet AOR as far as assets and budgets go. There are a lot more threats to global trade in places like the Straits of Hormuz and the Straits of Bab el-Mondeb, and the oil making its way from the Persian Gulf to either Asia, Europe, or the Americas is open to attack among multiple routes toward either of those destinations. DOD protects *all* trade on the ocean--effectively an energy subsidy for globalized trade--not just oil, but it prioritizes the Persian Gulf, the Straits of Bab el-Mondeb, and the East/South China Seas. If the pirates hijack a roll-on roll-off boat anywhere in the world, a USN DDG will be vectored to intercept it generally-speaking--especially if the ship has American hostages on board.
Good point. And the hidden costs, absorbed by the government, explains why our fuel prices have always been higher than the rest of the world. It enabled us to avoid reality, even with regard to the climate crisis.
This is correct. I have spent considerable time in Canada over the last several years (my wife is Canadian and we summer there, usually)... and their energy taxes ARE higher.
There are a LOT of prices in our market that are subsidized (and have been for decades). The most subsidized price is likely the price of oil. A lot of agriculture is also subsidized.
Why do you think so much attention has been paid to the Middle East over the last several decades? Why do you think so many people went into panic mode back in the 80s when OPEC decided to flex their muscles and when the Shah got overthrown. We spend tens/hundreds of billions in tax dollars every year so that people pay a bit less at the pump... because you notice the price of gas more than you notice how much you pay in taxes. It has more direct and immediate impact.
When I was young, it was extremely hard to get credit. Very few people has credit cards or credit accounts. It took some effort to build a record to qualify.
Believe it or not, that was a good thing. It meant that people saved money up to buy things. People paid more attention to prices. People lived more often within their actual means--and they were not in debt.
Easy credit was a bonanza for the financial services industry. It has shifted a lot of wealth out of the lower and middle classes to the upper classes. It is also what makes our consumer culture/economy work despite the loss of a lot of good paying jobs.
Credit helps to mask the essential poverty of many people (until you actually run out of credit, anyway). It turns you into even more of a wage slave--because now you owe money and that paycheck has to keep coming.
Freedom is NOT just a political thing, there is a VERY large economic component to it--and most people are NOT nearly as free as they think they are based upon a reading of the law and the Constitution.
In my opinion, the wealthy and corporations are just as much of a danger, if not more, to freedom and liberty as the government is--we have just be trained NOT to see it that way.
Not really a both sides thing so much as a "conservative leadership *and* national institutions failing the country while trying to protect the wealth of elites" thing.
I think the Fed's job is complicated so sure, they don't want to see a crash. Beyond that, not sure I see your point. And yes the wealthy are protected. But the elites always are.
The fed has kept interest rates near zero from 2009-2022. This allowed corporations making profits off of the federal stimulus and individuals making money off of their stocks going up to take out zero-interest loans and do stock-buybacks and other asset purchases (to include real estate holdings) to inflate the assets they already owned using their assets as leverage and the loans secured as a way of growing even more ridiculous sums of money. There were no provisions for the banks that the zero interest rates should only apply to the renter class and exclude the asset-holding class. As a result, the rich got richer and the poor got in late and got out late, ultimately being left holding the bag just like they were in 2008/2009. If the banks were basically being incentivized to lend out as much money as possible with zero interest *regardless of who those borrowers were*, then of course rich people were going to take advantage with their wealth, maximize their gains in the market during the money dump, and then pull their money out before most of the rest country has any idea what's about to hit them.
At the end of every bust cycle, the rich get richer and the poor get poorer and the middle class splits into either direction depending on total household income, household wealth, and household debt. The top 12% of the country own over 80% of the stocks. That's not an accident, that's an entrenched economic division that's enforced by the GOP through low taxes on the wealthy and deregulation, but it's also enforced through the federal reserve and the banks not applying a more progressive interest rate model that disincentives the rich from tripling their wealth every 5-10 years while making it easier for the renter class to get home loans. What we're left with instead is a boom-bust economy that grows money for the wealthiest Americans and corporations while the renter class and small businesses get cut further and further out of the economic ladder and growth opportunity each cycle. That's my larger point I suppose. The divide between the renter class and the asset-holding class is also partially-driven by marriage trends, whereby the asset-holding class tends to marry their daughters/sons off to other members of the asset-holding class, lest their offspring marry serfs. A significant chunk of the asset-holding class are post-college liberals who decry wealth inequality by pointing to the billionaire class above them while entrenching themselves and their offspring in the middle-to-upper-middle class--while cutting off the renter class, the same way that the billionaires are cutting them off from the whale money while depleting the middle class.
And while interest rates were near zero for an extended time, we failed to take advantage and use that anomaly to finance gigantic, meaningful infrastructure projects. Oops.
I made that very point SO MANY TIMES. I never could understand why the GOP especially did not take advantage of free money to repair and update infrastructure, instead of blowing up the deficit to give tax breaks to the already wealthy. Then just a s the free money window was closing, it was left to the Dems to pass an infrastructure bill, while the GOP suddenly cares about deficit spending. The GOP simply only whines. They have shown themselves incapable of governance whenever they have had the chance.
sure but the Fed has few other tools. we don't even have a fully functional unemployment insurance program. so how do we keep capital markets going? i agree that the GOP can be blamed. I just see the 2007-08 collapse as leaving few options. And by the way, I work in life insurance and low interest rates hurt us. but I still don't see the fed as having a better tool . nor was there will in congress (with the gop filibuster) to help mortgage holders directly - as one example.
The fed doesn't have any other tools, nor did it request any new ones from congress, nor did congress think to address it themselves. Everyone seemed to be *perfectly* happy with corporations and the rich taking advantage of zero interest loans using leveraged assets to triple their income in short periods of time and drastically grow the wealth inequality between the asset-owning class and the rental/mortgage class. Probably because every single member of congress and the senate are card-carrying members of the asset-holding class. Think they want a guy like Fetterman in there with them? LOL
Like, we could have simply made some rule for the banks that says "you can give out zero interest loans to renters and mortgage-seekers, but you can't give them to whales using leveraged assets to obtain zero-interest loans to triple their portfolios on the federal stimulus cash swishing around and growing the very same corporations the whales were investing in. Everyone saw this. Occupy Wall Street and the TARP bailout protests were all about this. The issues got ignored. Now we're here with even more wealth inequality that is increasingly radicalizing the country's politics. When vertical inequality because class-set horizontal inequality, political turmoil and political violence at scale follow in close proximity. From the populism of the Graci Brothers to the populism of Bernie Sanders and Donald Trump. The rich in this country are melting democracy down for better profits just like Marian Reforms did to Rome.
100%. I compared the pumping of negative partisanship by conservative shit-slingers on AM radio, Fox, and finally the alt-media of the '10's to the low interests rates, debt purchases, and stimulus spending that the gov/central bank have done since the 00's. One created a bubble in the economy, the other created a bubble for democracy. Both are currently bursting as the fed hikes base lending rates while the conspiracism and xenophobia pumped into conservatism turns into anocracy.
Sorry buy your comparison is a desperate effort to have both sides at fault. As far as bubbles, we have had a succession of asset bubbles over the years. Real estate from time to time, stocks at other times.
Travis mentioned this analogy yesterday. I am not sure any correlation can be established. Nor has he attributed his economy bubble to Democrats or the left. The comparison is intriguing but not not desperate.
“Asset bubbles”. Ezra Klein’s podcast had a fascinating guest discussion (Rama Foroohar) titled “The End of ‘The Everything Bubble’”. I’m going to listen to it again. It was engaging and important.
I have listened to this exact episode no less than three times. It is a gold mine of economic information covering the 30's-present cooked down to about 1 hour. Much of what I've posted here is essentially a regurgitation of many of the points she makes in that interview.
I’m so glad I’m not the only one who couldn’t absorb it in one pass!
I used to assume that economics was b-o-r-I-n-g. Now I desperately wish I understood it better. And there are so many sub-economics specialties, like psychology economics (it probably has an actual name). Social-political-energy-international, etc etc. Maybe even the “economics of pet ownership”.
When I was working for an import-export company, I decided to take International Economics at the local university extension because I thought it would help me with my job. However, I soon realized that day-to-day international economics and textbook international economics did not match up very well.
Don't get me started on accounting.
will look up
And oil. How many times have we wandered through oil crises? Everyone bought small efficient cars, then went right back to monster SUVs as soon as the most recent crisis fades. This feels different, as our right wing is so hair-trigger angry. This time, we might trade our democratic freedoms for a cheaper tank of gas. A permanent, false “solution” to a predictable recurring problem.
Reminds me of Esau in the book of Genesis, who sold his birthright for a bowl of stew.
The one "fake price" they never talked about in that podcast was this one. Ezra brought up the fake cost of meat, but the fake cost of oil never came up. Most of the world's oil trades over the ocean on super-tankers. The security for these security tankers not constantly getting robbed by pirates, and oil prices spiking as a result, is because the *US Gov* provides that security on the high seas via the US Navy and US Marine Corps. This essentially amounts to global energy subsidies on oil provided by US taxpayers to the tune of $800B+/year *annually* when you look at what logistics and equipment and personnel it takes to maintain that security for global oil trade--particularly the 40% that travels through the Straits of Hormuz on a daily basis. We pay $800+B/year to secure global oil trade so that inflation is low enough to allow domestic consumers to buy goods cheaply and commute to work so that they can make the asset-holding class's stock portfolio go up a percentage point or two this quarter. That's the rigged price I wish Ezra would have talked about on that podcast.
Okay, but how about all the other commodities that moved around the world by ship. Does the Navy and Marine Corp provide their security as well?
Does 5th Fleet's budget and resources eclipse that of 6th, 4th, and 3rd? Some parts of the world get more attention than others. Right now, DOD prioritizes the Persian Gulf and 7th Fleet AOR as far as assets and budgets go. There are a lot more threats to global trade in places like the Straits of Hormuz and the Straits of Bab el-Mondeb, and the oil making its way from the Persian Gulf to either Asia, Europe, or the Americas is open to attack among multiple routes toward either of those destinations. DOD protects *all* trade on the ocean--effectively an energy subsidy for globalized trade--not just oil, but it prioritizes the Persian Gulf, the Straits of Bab el-Mondeb, and the East/South China Seas. If the pirates hijack a roll-on roll-off boat anywhere in the world, a USN DDG will be vectored to intercept it generally-speaking--especially if the ship has American hostages on board.
Good point. And the hidden costs, absorbed by the government, explains why our fuel prices have always been higher than the rest of the world. It enabled us to avoid reality, even with regard to the climate crisis.
Historically, our fuel prices have typically been LOWER than our peer countries. Gas stations around the world sell by the liter, not the gallon.
This is correct. I have spent considerable time in Canada over the last several years (my wife is Canadian and we summer there, usually)... and their energy taxes ARE higher.
There are a LOT of prices in our market that are subsidized (and have been for decades). The most subsidized price is likely the price of oil. A lot of agriculture is also subsidized.
Why do you think so much attention has been paid to the Middle East over the last several decades? Why do you think so many people went into panic mode back in the 80s when OPEC decided to flex their muscles and when the Shah got overthrown. We spend tens/hundreds of billions in tax dollars every year so that people pay a bit less at the pump... because you notice the price of gas more than you notice how much you pay in taxes. It has more direct and immediate impact.
When I was young, it was extremely hard to get credit. Very few people has credit cards or credit accounts. It took some effort to build a record to qualify.
Believe it or not, that was a good thing. It meant that people saved money up to buy things. People paid more attention to prices. People lived more often within their actual means--and they were not in debt.
Easy credit was a bonanza for the financial services industry. It has shifted a lot of wealth out of the lower and middle classes to the upper classes. It is also what makes our consumer culture/economy work despite the loss of a lot of good paying jobs.
Credit helps to mask the essential poverty of many people (until you actually run out of credit, anyway). It turns you into even more of a wage slave--because now you owe money and that paycheck has to keep coming.
Freedom is NOT just a political thing, there is a VERY large economic component to it--and most people are NOT nearly as free as they think they are based upon a reading of the law and the Constitution.
In my opinion, the wealthy and corporations are just as much of a danger, if not more, to freedom and liberty as the government is--we have just be trained NOT to see it that way.
And their gas taxes are higher, if I'm remembering correctly.
Commodities too.
Not really a both sides thing so much as a "conservative leadership *and* national institutions failing the country while trying to protect the wealth of elites" thing.
I think the Fed's job is complicated so sure, they don't want to see a crash. Beyond that, not sure I see your point. And yes the wealthy are protected. But the elites always are.
The fed has kept interest rates near zero from 2009-2022. This allowed corporations making profits off of the federal stimulus and individuals making money off of their stocks going up to take out zero-interest loans and do stock-buybacks and other asset purchases (to include real estate holdings) to inflate the assets they already owned using their assets as leverage and the loans secured as a way of growing even more ridiculous sums of money. There were no provisions for the banks that the zero interest rates should only apply to the renter class and exclude the asset-holding class. As a result, the rich got richer and the poor got in late and got out late, ultimately being left holding the bag just like they were in 2008/2009. If the banks were basically being incentivized to lend out as much money as possible with zero interest *regardless of who those borrowers were*, then of course rich people were going to take advantage with their wealth, maximize their gains in the market during the money dump, and then pull their money out before most of the rest country has any idea what's about to hit them.
At the end of every bust cycle, the rich get richer and the poor get poorer and the middle class splits into either direction depending on total household income, household wealth, and household debt. The top 12% of the country own over 80% of the stocks. That's not an accident, that's an entrenched economic division that's enforced by the GOP through low taxes on the wealthy and deregulation, but it's also enforced through the federal reserve and the banks not applying a more progressive interest rate model that disincentives the rich from tripling their wealth every 5-10 years while making it easier for the renter class to get home loans. What we're left with instead is a boom-bust economy that grows money for the wealthiest Americans and corporations while the renter class and small businesses get cut further and further out of the economic ladder and growth opportunity each cycle. That's my larger point I suppose. The divide between the renter class and the asset-holding class is also partially-driven by marriage trends, whereby the asset-holding class tends to marry their daughters/sons off to other members of the asset-holding class, lest their offspring marry serfs. A significant chunk of the asset-holding class are post-college liberals who decry wealth inequality by pointing to the billionaire class above them while entrenching themselves and their offspring in the middle-to-upper-middle class--while cutting off the renter class, the same way that the billionaires are cutting them off from the whale money while depleting the middle class.
And while interest rates were near zero for an extended time, we failed to take advantage and use that anomaly to finance gigantic, meaningful infrastructure projects. Oops.
I made that very point SO MANY TIMES. I never could understand why the GOP especially did not take advantage of free money to repair and update infrastructure, instead of blowing up the deficit to give tax breaks to the already wealthy. Then just a s the free money window was closing, it was left to the Dems to pass an infrastructure bill, while the GOP suddenly cares about deficit spending. The GOP simply only whines. They have shown themselves incapable of governance whenever they have had the chance.
sure but the Fed has few other tools. we don't even have a fully functional unemployment insurance program. so how do we keep capital markets going? i agree that the GOP can be blamed. I just see the 2007-08 collapse as leaving few options. And by the way, I work in life insurance and low interest rates hurt us. but I still don't see the fed as having a better tool . nor was there will in congress (with the gop filibuster) to help mortgage holders directly - as one example.
The fed doesn't have any other tools, nor did it request any new ones from congress, nor did congress think to address it themselves. Everyone seemed to be *perfectly* happy with corporations and the rich taking advantage of zero interest loans using leveraged assets to triple their income in short periods of time and drastically grow the wealth inequality between the asset-owning class and the rental/mortgage class. Probably because every single member of congress and the senate are card-carrying members of the asset-holding class. Think they want a guy like Fetterman in there with them? LOL
Like, we could have simply made some rule for the banks that says "you can give out zero interest loans to renters and mortgage-seekers, but you can't give them to whales using leveraged assets to obtain zero-interest loans to triple their portfolios on the federal stimulus cash swishing around and growing the very same corporations the whales were investing in. Everyone saw this. Occupy Wall Street and the TARP bailout protests were all about this. The issues got ignored. Now we're here with even more wealth inequality that is increasingly radicalizing the country's politics. When vertical inequality because class-set horizontal inequality, political turmoil and political violence at scale follow in close proximity. From the populism of the Graci Brothers to the populism of Bernie Sanders and Donald Trump. The rich in this country are melting democracy down for better profits just like Marian Reforms did to Rome.