The unacceptable inevitable

What happens when the unstoppable political force meets the inevitable political issue?:

In the poll, Americans across all age groups and ideologies said by large margins that it was “unacceptable” to make significant cuts in entitlement programs in order to reduce the federal deficit. Even tea party supporters, by a nearly 2-to-1 margin, declared significant cuts to Social Security “unacceptable.”

Doesn’t matter. Here’s the numbers. Show me what we’re going to do about it.

Social Security, Medicare, Medicaid, Unemployment and Welfare comprise 56.7% of the federal budget ($2.1 trillion.) Defense comprises another 18.7% (about $700 billion.) And interest, today, is a paltry 4.6% (primarily due to ZIRP). Interest expense will double even if we don’t add one more dollar of debt to the Federal side.

Not might double, will double.

And will do quite a bit more than that when interest rates return to historic norms. Color me skeptical that the Tea Party is going to be any more successful in holding the Republican Party’s feet to the fire when two-thirds of them won’t even look at the elephant in the room. Playing ostrich and declaring the inevitable to be unacceptable just isn’t going to accomplish anything.

The winners write it

The economic history, that is. I’m not a bankster, so it must be the tiger’s blood. Regardless, RGD is the #1 ebook in Economic History.

A patient explanation

Roissy attempts to explain Game, very slowly, to the uninitiated mainstream:

First, everyone needs to stop throwing around the word douchebag so lazily and haphazardly. Douchebags aren’t hopeless with women. Just the opposite. Douchebags are pricks and assholes — usually gauche and lower class — who inexplicably do well with women. (Well, inexplicable to anyone who isn’t a reader of the Chateau. We here know the reason why chicks dig jerks.) Think of, or some of the cast of Jersey Shore.

Most douchebags are naturals with women, probably because they aren’t smart enough to question their unwavering self-confidence. In fact, the best naturals with women mostly occupy the left hand side of the bell curve. The truly dangerous skirt chasers are the naturals with smarts. There aren’t many of them, but they do exist. They are unstoppable forces of nature, owing partly to their concomitant suite of dark triad traits.

I found this part to not only be succinct, but exceedingly amusing, as it happened to come on right on the heels of Spacebunny informing me that I am “a very bad man”. Note, however, that Roissy specifically denies the idea that Game is tool with just one application, which should be completely obvious given this description of its essence.

That women’s behavior can be so analyzed means that women’s actions can be predicted, and subsequently that men with this knowledge can tailor their behavior to get the most out of their interactions with women. Knowledge is a powerful thing, and knowing what’s up does, in fact, shift the balance of sexual power in men’s direction by removing the inscrutability and whimsy that has been the prerogative of women since time immemorial. Game means that it is no longer simply a matter of dumb luck when men get sex and love.

Game is no more limited to use by pick-up artists in night clubs than a screwdriver is limited to use by murderers in stabbing someone to death. Unless you seriously wish to deny that a) female behavior falls into patterns and is predictable to some degree, or b) knowledge of those patterns can be useful to men in a variety of applications, logic dictates that Game will be of use to nearly every man on the planet.

Be prepared

Since it doesn’t do to wing it before discussing economics with someone who has a reasonably sophisticated grasp on the subject, I thought I had better acquaint myself with the latest statistical updates before attempting to talk about them in public. What is interesting to note in all of this recent inflation hysteria is that the rate of increase of the CPI-U measure of price changes and the M2 money supply measure are both presently below their 50-year average.  Below is a chart showing the change in CPI-U and M2 on a monthly basis since January 2008.

The average annual growth over this period is 1.44% for CPI-U and 6.16% for M2.  That sounds like a lot, but to put it in perspective, the average annual growth over the 51 years from January 1960 to January 2011 is 4.13% for CPI-U and 6.86% for M2.  It’s far below the record three-year periods of 1978-1980 in which CPI-U averaged 11.6% growth per year, or when M2 growth averaged 12.2% growth in 1977-1979.  And while it is absolutely correct to doubt the veracity of these government-published figures – anyone who goes through the M2 statistics won’t miss the discrepancy between various H6 reports for the exact same month – but since these statistics are being used to support the inflationary case, the fact that they are not increasing at an unusually rapid rate must be taken into account.

It hasn’t escaped my attention that gold, oil, and commodity prices are all increasing.  Neither have I failed to note that other prices are continuing to fall.  The collapse of housing prices, down 31.4% from their 2006 Case-Schiller peak and falling at an annual average rate of 7.9% over the three years covered in the chart above, are much more indicative of a deflationary environment rather than an inflationary one.  How do we balance these contradictory indications?  I expect that is a question that Mr. Schiff will probably want to discuss.

Now, in the video entitled Four Keynesian Inflations, I explain why attempting to measure inflation in terms of CPI and GDP makes absolutely no sense, despite the fact that this is how the financial media always describes it.  But, even if we accept the idea that inflation is the rate of dollar price changes (CPI) in excess of the rate of economic growth measured in dollars (GDP), it should be obvious from the chart entitled Inflation 1960-2010, which subtracts Real GDP from CPI-U, that inflation is neither at a historically high level nor is it even increasing at the moment.  I think the chart demonstrates even more clearly that the Samuelsonian metrics involved are almost completely worthless as they clearly do not measure what they purport to measure, but since they presently frame the context of the mainstream economic analysis, it is necessary to take them into account.

Since we’re apparently also going to be discussing Federal Reserve Chairman Ben Bernanke, it may be helpful to read his most recent report to the Congress if you want to follow along.