There has been plenty of ink spilled on Pope Francis and his Apostolic Exhortation Evangelii Guadium presented recently to the world. I will leave the evangelical and other religious elements to others to comment on, but Pope Francis included a sizable treatise on economics as well.
By doing so, however, the Pope displayed either outrageous ignorance or worse, intentional malfeasance aimed directly at the people the Church claims to want to help.
53. Just as the commandment “Thou shalt not kill” sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless.
Utter nonsense. The so-called "laws" of competition are natural laws, exactly as are the other areas that the Pope (and others) have pontificated upon for centuries. Indeed, if one is a believer (in God) then you are by your faith confirming the natural system of survival of the fittest, for you believe that God designed that which we have on this earth -- a system that clearly and provably contains precisely these elements.
Indeed, it is through these elements that progress is made, both in the animal and human realm. An animal that is slightly taller than the others in a time of famine can reach further into the trees, and thus may obtain food where other, shorter members of the species may not. He or she thus may survive and reproduce where the others do not, and over time this selects for the genetic traits that improve outcomes.
We may like to believe that we are somehow better than this, but in point of fact we cannot be if we wish to improve outcomes.
As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.
Human beings are themselves considered consumer goods to be used and then discarded. We have created a “throw away” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the “leftovers”.
Utter nonsense, even among animals -- but most-particularly, among humans.
The "outcast" is free to go upon the earth and find his or her own niche. To organize with others of like mind. To invent, to further oneself, to strive. Many of these attempts will fail, but failure is not a bad thing, it is an essential thing for it provides feedback to the person who has failed that their steps were in vain and foolish and thus should be changed in a further attempt to find success.
Virtually everyone who has been successful in a market economy, imperfect though they are, has first failed. Many have failed several times, myself among them. Success without failure breeds mediocrity or worse, self-delusion and destruction.
Witness all those who have found it "easy" in some way -- the "child prodigy" who is "found" by the entertainment or sports industries, for example. They never experience failure, they never risk sleeping under a bridge in a box. They find "success" early and easy, and a huge percentage of those individuals, not being forged in the crucible of failure, never develop any respect for what they achieved.
What comes from that? Foolish choices and frequently self-destruction.
How many examples would you like -- they're all around you. As an aside this is a useful warning to parents, educators, governments and others: A hand up (or a "helping hand") must within a reasonable amount of time be turned to show the back of said hand, or you wind up with someone who never reaches independence and finds their own way. Whether that back of the hand occurs through circumstance (e.g. someone getting in trouble and realizing that one more bad choice will lead to ruin) or choice the only way good outcomes are manifest in the main is when the price of bad ones becomes evident to the person involved.
54. In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.
Again, utter crap.
"Trickle down" is nothing more than a scam, but calling people crude or naive doesn't resolve anything.
We all wield economic power -- the question is why you, Pope Francis, don't want to talk about where the imbalance in that power comes from.
Perhaps that's because the Church and Vatican are deeply involved in creating and promulgating it.
Meanwhile, the excluded are still waiting. To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalization of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase. In the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.
Purchase with what? Economic surplus or debt?
They spend the same but they're not the same.
56. While the earnings of a minority are growing exponentially, so too is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation. Consequently, they reject the right of states, charged with vigilance for the common good, to exercise any form of control. A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules. Debt and the accumulation of interest also make it difficult for countries to realize the potential of their own economies and keep citizens from enjoying their real purchasing power. To all this we can add widespread corruption and self-serving tax evasion, which have taken on worldwide dimensions. The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which become the only rule.
The facts are that the inequality you complain about is caused by unbacked credit creation in all of its forms. In the most-recent years that form has come from government deficit spending undertaken to cover for private unbacked creation that went bad, an outrageous abuse that amounts to involuntary servitude -- otherwise known as slavery.
Worse, that was the Church's and now your allegedly-demanded response to the previous private unbacked credit creation that blew up in the rich man's face!
At its root this problem came about by trying to shift off ahe apostolic command for people of faith to do good works -- personally and with their own hands -- to the state, transforming a voluntary act taken with a view toward grace to that of one enforced at literal gunpoint.
This is the history of the Catholic Church over the last 50 years. The Church and its Pontiffs have repeatedly, deliberately and with malice aforethought transferred its responsibility for feeding and clothing the poor, as just one example, from itself and the voluntary tithing of the faithful to gun-toting governments that extract via taxation that which is not donated, and when that proves insufficient they then emit unbacked credit to hand out to said persons of their choosing, literally robbing the population at large.
These actions are in fact exactly identical in effect to coming into your home with a rifle and shoving it up your ass until you hand over the demanded sum -- whether that theft takes place via direct taxation or indirectly via destruction of one's purchasing power.
No prelate has the right to pontificate on the extraction of labor via the barrel of a gun, yet this is exactly what is being preached.
Indeed, the Church has participated, supported and demanded the very acts you claim should not be undertaken.
You are a hypocrite Francis.
60. Today’s economic mechanisms promote inordinate consumption, yet it is evident that unbridled consumerism combined with inequality proves doubly damaging to the social fabric. Inequality eventually engenders a violence which recourse to arms cannot and never will be able to resolve.
Then why is it that the government demands recourse to said arms after creating the very inequality that you decry? Where is your demand that nation states stop that crap and most-particularly put a stop to the unbacked emission of credit -- both by private entities and themselves?
See, without that inequality becomes very difficult to sustain. Without the ability to initiate force the laborer can walk off, leaving the job undone and the owner of capital has nothing.
But if the owner of capital can destroy the saved equity that labor has accumulated through the emission of unbacked credit he can compel the performance of labor by threatening to destroy labor's accumulated economic surplus.
This is exactly where the problem lies and on top of refusing to raise hell about the root cause you then want people to lay down the only effective means of resistance ever invented -- force multiplication -- when they finally figure out who's been screwing them and how.
Of course you don't, at the same time, call for the police and government generally to also disarm, or even better, to disarm first, do you?
No, Pope Francis, you simply wish to make sure you and others in various States are the only ones with arms, so that when the people figure out that you've been financially buggering them for a century they are unable to offer effective resistance.
One more point:
66. The family is experiencing a profound cultural crisis, as are all communities and social bonds. In the case of the family, the weakening of these bonds is particularly serious because the family is the fundamental cell of society, where we learn to live with others despite our differences and to belong to one another; it is also the place where parents pass on the faith to their children. Marriage now tends to be viewed as a form of mere emotional satisfaction that can be constructed in any way or modified at will. But the indispensible contribution of marriage to society transcends the feelings and momentary needs of the couple. As the French bishops have taught, it is not born “of loving sentiment, ephemeral by definition, but from the depth of the obligation assumed by the spouses who accept to enter a total communion of life”.
Then why does the Church accept and ratify that which it claims is corrupt -- secular marriage?
There is no legal requirement to do so; the Church could conduct sacramental marriages, refusing to place its seal upon documents issued by nations and states that do not conform to the norms and mores that it pronounces as valid.
But it hasn't and won't -- because once again, the Church refuses to stand for what it preaches, instead pontificating not a message of hope and Gospel, say much less equality and reason, but rather one of subjugation -- not to God or Christ, but to itself.
As a Catholic, Pope Francis, I have a single-word response to that: NO.
I've been sent about a dozen emails in the last couple of days telling me that I should call for a boycott of the NFL because it refused to run an ad from Daniel Defense, a firearms manufacturer.
I think you should watch the ad at the linked article -- it's good, and there are no guns displayed. Anywhere. It simply makes the point that we, the people, have primary responsibility for the defense of our families, and that responsibility is certainly something that we should (and many do) take very seriously.
I also don't doubt for a second that the NFL refused the ad. After all, they're the most-rank of hypocrites, celebrating men bashing each other's brains out on the gridiron (a grand American tradition) while at the same time demanding that women carry transparent purses and otherwise insulting their fans. I haven't set foot at an NFL game for decades for exactly this sort of reason -- not only are the tickets grossly overpriced and the stadiums gross rapes of the taxpayer but I refuse to be insulted by people who then ask me to spend my hard-earned money with them.
That people put up with that crap says everything I need to know about idiocracy among Americans -- there should not be one person in any NFL stadium -- ever.
That our nation is stupid enough to pay really good money (and lots of it) only to be abused by the people taking the funds is an outrage. We do the same thing in airports, by the way, and it's equally stupid there. I fly when I must, but I sure don't do it if I have other rational alternatives -- and I usually do. Indeed, I've put something close to 6,000 miles on my car in the last 45 days precisely because I took three 14-hour each-way trips (and they were round trips) in my vehicle because I refuse to spend my hard-earned money with people that flip me off if I have a rational alternative.
But heh, if you're a ****ing idiot it's not my place to stop you from being stupid beyond words. You're entitled to be stupid, and to reap the rewards.
But it is for this reason that I bring up this alleged commercial.
You see, Daniel Defense is a little company. How little? Not much larger than MCSNet was in its hayday -- best estimates are that it has about $12 million in annual revenue.
So with a 30-second Superbowl commercial costing about $4 million, exactly how was this company going to pay for it?
That's easy -- they weren't because they couldn't. They most-certainly weren't going to put ~30% of their annual revenues into one 30 second commercial.
No way, no how.
But by "submitting" the ad (if they did) and getting it "denied" (if they did) they got for free what they couldn't afford to pay for -- an association with the NFL and professional football.
Well-played Mr. Daniel. If I need firearms or parts that you produce in the future, I will definitely consider your firm's products. I've heard they're very high-quality, you make 'em in the good old USA (in Georgia) and from what I can see your prices are reasonable as well.
But as for boycotting the NFL? For what? Being dumb enough to fall for Mr. Daniel's foil and give him millions worth of advertising for free? That's good for a chuckle, not a boycott.
What I will do is look askance at all the people who took this "story" at face value and called for said boycott -- because they have shown that they lack the basic level of discernment necessary to intelligently process common daily events.
Personal income decreased $10.8 billion, or 0.1 percent, and disposable personal income (DPI) decreased $23.6 billion, or 0.2 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $32.7 billion, or 0.3 percent. In September, personal income increased $64.3 billion, or 0.5 percent, DPI increased $62.1 billion, or 0.5 percent, and PCE increased $23.8 billion, or 0.2 percent, based on revised estimates.
Real disposable personal income decreased 0.2 percent in October, in contrast to an increase of 0.4 percent in September. Real PCE increased 0.3 percent, compared with an increase of 0.1 percent.
This is a large disconnect; a spread of 0.5% between income and spending, with income negative.
In other words people increased spending into decreasing incomes. While the BEA claims they adjusted out the shutdown in the government sector they didn't (and can't) on the private side.
This is a bad report but again, I don't know if I can look at it as a "real" result..... so I'll wait for next month.
The unemployment rate declined from 7.3 percent to 7.0 percent in November, and total nonfarm payroll employment rose by 203,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in transportation and warehousing, health care, and manufacturing.
This is an interesting report; the raw figure is close to estimates but the drop of 0.3% in the unemployment rate is sizable and generally larger than the seasonal change would anticipate.
Let's have a look at the unadjusted survey numbers (if you believe them, which is an entirely different discussion.)
There's a notable uptick in this month's data on an annualized basis. That's unmistakably good.
Unfortunately when it comes to the employment:population ratio the news is less enlightening. While there is a tiny little uptick in that ratio (0.2%) it remains mired in the dirt, and as you know from reading me this is the ratio that matters in the intermediate and longer term because only working people pay taxes. There is no joy to be found here.
The "why" is found here -- when one corrects for population growth on an annualized basis we're still not really in recovery. But that's the problem that nobody will address -- dependence and the 20+ year pattern of increase in that regard. The markets like to ignore this reality and you will never see this chart presented in the mainstream media but it is the only honest presentation of the data you can make since the workforce is, of course, the divisor.
Finally, let's look at what the employment-population ratio says in comparison to the "reported" unemployment rate:
Yeah, ok -- one's a claim, the other (the red line) is a count.
Which one's right?
The “it” is secular stagnation, which seems to be the New New Thing or the new new normal: a way to describe the persistent state of subpar economic growth plaguing developed nations. Think of it as Japan’s lost decade gone global.
The diagnosis? Too much saving and a lack of investment opportunities, according to Harvard University’s Summers. And with the funds rate close to zero, the Federal Reserve can’t deliver the negative real interest rates he says the economy needs unless it creates higher inflation.
So what do Summers and Krugman advocate for the secular malaise? Why, a cyclical solution: government spending on infrastructure. They want the kinds of things Keynesians typically promote to stabilize the economy during a recession to become a permanent part of the fiscal architecture.
What's not being talked about is why we have such a condition.
Why not? It's obvious from this chart, isn't it?
When looked at this way it's obvious what happened: We pulled forward demand via more and more debt, yet the underlying demand level never accelerated to match it despite 30 years of the same thing!
In other words we ate tomorrow's hamburger today, but failed to generate the need for a second hamburger. As debt (and thus interest costs) rose we simply borrowed more, but again, we failed to generate demand for more hamburgers and instead simply executed a continuing forward time shift.
That's a very serious problem but it in fact has been going on for a long time.
That is, the marginal productivity of a new dollar of debt has been going down for decades.
How do we know this? Because the chart is right in front of you and this is the BEA's and The Fed's data on a simple plot!
All this borrowing has failed to lift the red line over the blue line on any sort of sustained basis.
That is the economic nostrum put forward and shoved down your mouth has never worked in modern history.
This is the problem with all of the so-called "prescriptions" from the financial industry, economic "pundits" and politicians. All of them rely on borrowing -- that is, more debt -- to fund whatever their particular tonic might be.
History says that no amount of such ever works to lift output on a durable basis and thus the common man's standard of living. It may somewhat lift nominal GDP but the common man's share of that GDP expressed in his pay always declines each and every time this occurs.
For those who say that I'm "cherry-picking" the last 30 years, can you identify the durable post-war increase in GDP that exceeded debt accumulation when I show you the entire series from 1953 forward?
As you can see there is no post-war period where this strategy -- borrow and spend -- has ever worked on a durable basis to lift living standards.
Not in the 1950s, 60s, 70s, 80s, 90s, 2000s, or 2010s.
Any such claim is a fraud and those who make such claims should be excoriated by presenting them with the numerical proof of their false claims, forcing them to eat the paper it is printed on. Those who continually press knowingly false claims such as this and manage to get them enacted as policy deserve to be prosecuted.
The cause of the problem we have today is excessive leverage, exactly as it was with Tulip mania, 1873, 1929, 2000 and 2008. The only question was exactly where the locus of that leverage (that is, debt) happened to reside for any particular bubble.
Post-war we got out of the Depression for two reasons: We blew to bits the entire developed world's manufacturing capacity -- save our own -- and we killed millions of working-age, healthy young men on a world-wide basis thereby reducing competition (dramatically!) for jobs.
If I destroy all of my competitors' plants by blowing them up I am obviously going to have both increased demand for my products and pricing power. If I kill the surplus workers then unemployment will drop as well, dramatically reducing demand on social services.
When both happen at the same time my economy booms -- for a while.
What we failed to learn from the 1920s and 30s is why the imbalance came about in the first place. In the 1920s we did the same thing with "creative financing" that we've done since -- we permitted unbridled and unbacked private credit creation despite a mandate in the Federal Reserve Act to control same, we refused to throw in jail (or boil in oil) the Federal Reserve members when they failed to discharge that responsibility and instead intentionally participated in doing the exact opposite, and the resulting bubble and bust gave us the Depression.
The irony is that The Federal Reserve was formed precisely because of the "Long Depression" (kicked off in 1873) resulting from exactly the same problem -- a recognized malady The Fed was allegedly supposed to prevent!
Then we learned exactly nothing from the second instance of the same nonsense within 50 years, trying all the things that Summers and Krugman have been advocating for and which did not work -- we spent another decade in misery in the 1930s as a consequence.
But the worst part of it is that 1920/21 showed us that if instead of "pumping liquidity" The Fed did its job and prevented attempted credit expansion even a catastrophic collapse in industrial production and demand would sort itself out within months!
Of course things came to a head politically as we went into the 1940s and we wound up in a war that killed millions and destroyed the manufacturing base of the entire developed world -- except for the United States.
Perhaps some would like to see the same "solution" this time around. I suspect Barry Soetero is among them, as are Ben Bernanke, Krugman and Summers.
But I'm not.
Leaving aside the insanity of starting a World War in the nuclear age, we know factually that there is another path what works. Specifically, we know from 1920-21 that pulling liquidity instead of increasing it clears the market and restores economic health within months.
The actions of these jackasses are no accident -- they're intentional and their expressed and well-documented intent is to destroy you, the common man.
For how long are you going to allow this to continue?
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