ROCKABILLY RULES

ROCKABILLY RULES
The Rockin Johnny B

Monday, February 9, 2015

I'VE SAID IT BEFORE AND SO DOES PAUL.

Nobody Understands Debt

I know most folks won't get this reasoning because most folks really do not understand debt and how it actually helps the national budget.  If everybody saved their money, there would be no debt...true, but there would be no economy either.  Without spending there can be no buying and no buying equals a depression.  Every time I hear the Right blow hard against the national debt and how we have to curb spending, I cringe.  If you want to ruin an economy, stop spending...and that's a fact.

I can prove this in a simple example:

Paul and Enid usually spend $100 per week on groceries, but Paul was fired from his job and he's on unemployment so they only spend $70 on groceries.  What does that do to the economy?  Well, the grocery store is out $30 and they have to cut back on their spending, so they fire a cashier.  The cashier now can't pay the baby sitter, so she has to stop going to the movies and they, the movie house, has to lay off one of their employees because of the lack of incoming cash.
 
Many economists, including Janet Yellen, view global economic troubles since 2008 largely as a story about “deleveraging” — a simultaneous attempt by debtors almost everywhere to reduce their liabilities. Why is deleveraging a problem? Because my spending is your income, and your spending is my income, so if everyone slashes spending at the same time, incomes go down around the world.

Or as Ms. Yellen put it in 2009, “Precautions that may be smart for individuals and firms — and indeed essential to return the economy to a normal state — nevertheless magnify the distress of the economy as a whole.”

So how much progress have we made in returning the economy to that “normal state”? None at all. You see, policy makers have been basing their actions on a false view of what debt is all about, and their attempts to reduce the problem have actually made it worse.

First, the facts: Last week, the McKinsey Global Institute issued a report titled “Debt and (Not Much) Deleveraging,” which found, basically, that no nation has reduced its ratio of total debt to G.D.P. Household debt is down in some countries, especially in the United States. But it’s up in others, and even where there has been significant private deleveraging, government debt has risen by more than private debt has fallen.

You might think our failure to reduce debt ratios shows that we aren’t trying hard enough — that families and governments haven’t been making a serious effort to tighten their belts, and that what the world needs is, yes, more austerity. But we have, in fact, had unprecedented austerity. As the International Monetary Fund has pointed out, real government spending excluding interest has fallen across wealthy nations — there have been deep cuts by the troubled debtors of Southern Europe, but there have also been cuts in countries, like Germany and the United States, that can borrow at some of the lowest interest rates in history.

All this austerity has, however, only made things worse — and predictably so, because demands that everyone tighten their belts were based on a misunderstanding of the role debt plays in the economy.

You can see that misunderstanding at work every time someone rails against deficits with slogans like “Stop stealing from our kids.” It sounds right, if you don’t think about it: Families who run up debts make themselves poorer, so isn’t that true when we look at overall national debt?

No, it isn’t. An indebted family owes money to other people; the world economy as a whole owes money to itself. And while it’s true that countries can borrow from other countries, America has actually been borrowing less from abroad since 2008 than it did before, and Europe is a net lender to the rest of the world.

Because debt is money we owe to ourselves, it does not directly make the economy poorer (and paying it off doesn’t make us richer). True, debt can pose a threat to financial stability — but the situation is not improved if efforts to reduce debt end up pushing the economy into deflation and depression.

Which brings us to current events, for there is a direct connection between the overall failure to deleverage and the emerging political crisis in Europe.

European leaders completely bought into the notion that the economic crisis was brought on by too much spending, by nations living beyond their means. The way forward, Chancellor Angela Merkel of Germany insisted, was a return to frugality. Europe, she declared, should emulate the famously thrifty Swabian housewife.

This was a prescription for slow-motion disaster. European debtors did, in fact, need to tighten their belts — but the austerity they were actually forced to impose was incredibly savage. Meanwhile, Germany and other core economies — which needed to spend more, to offset belt-tightening in the periphery — also tried to spend less. The result was to create an environment in which reducing debt ratios was impossible: Real growth slowed to a crawl, inflation fell to almost nothing and outright deflation has taken hold in the worst-hit nations.

Suffering voters put up with this policy disaster for a remarkably long time, believing in the promises of the elite that they would soon see their sacrifices rewarded. But as the pain went on and on, with no visible progress, radicalization was inevitable. Anyone surprised by the left’s victory in Greece, or the surge of anti-establishment forces in Spain, hasn’t been paying attention.

Nobody knows what happens next, although bookmakers are now giving better than even odds that Greece will exit the euro. Maybe the damage would stop there, but I don’t believe it — a Greek exit is all too likely to threaten the whole currency project. And if the euro does fail, here’s what should be written on its tombstone: “Died of a bad analogy.”

Sunday, February 1, 2015

OH THOSE BIT OL' LIARS

TRUTH TELLING 

OR NOT

  1. FROM PUNDIT FACT
    1. Each of the news networks that we routinely follow -- ABC, CBS, FOX, NBC/MSNBC and CNN -- now has a scorecard that breaks down that network’s performance on the Truth-O-Meter. The scorecard tallies each statement we fact-check on that network and groups the rulings by percentage.
      1. Right now, you can look at the NBC/MSNBC file and see how that network’s pundits and on-air talent stand. For instance, 46 percent of the claims made by NBC and MSNBC pundits and on-air personalities have been rated Mostly False, False or Pants on Fire.
      2. At FOX and Fox News Channel, that same number is 60 percent.
      3. At CNN, it’s 18 percent.
  2. The comparisons are interesting, but be cautious about using them to draw broad conclusions. We use our news judgment to pick the facts we’re going to check, so we certainly don’t fact-check everything. And we don’t fact-check the five network groups evenly. CBS, for instance, doesn’t have a cable network equivalent, so we haven’t fact-checked pundits and CBS personalities as much.
    1. The ABC scorecard, meanwhile, includes fact-checks that were part of a 2010 partnership between PolitiFact and ABC’s Sunday news show This Week.
    2. Our scorecards only include statements made on that network by a pundit or a host or paid staffer. That means they do not include statements made by elected leaders, candidates or party officials. We feel it’s difficult to hold a network accountable for the comments of a politician.
    3. Also, if a Fox News host appears on NBC and makes a claim that we fact-check, that rating would appear on the NBC page. In this case, it’s about the network that aired the content, not the person who said it.
  3. NOW FOR A FEW PERSONALITIES:
    1. RACHAEL MADDOW:
      1. True3 (13%)(3), Mostly True6 (25%)(6), Half True3 (13%)(3), Mostly False6 (25%)(6), False5 (21%)(5), Pants on Fire1 (4%)(1)
    2. RUSH LIMBAUGH:
      1. True0(0), Mostly True2 (7%)(2), Half True3 (11%)(3), Mostly False7 (25%)(7), False9 (32%)(9), Pants on Fire7 (25%)(7)
    3. GLENN BECK:
      1. True2 (7%)(2), Mostly True2 (7%)(2), Half True7 (26%)(7), Mostly False4 (15%)(4), False6 (22%)(6), Pants on Fire6 (22%)(6)
    4. SEAN HANNITY:
      1. True3 (25%)(3) Mostly True2 (17%)(2) Half True3 (25%)(3) Mostly False1 (8%)(1) False3 (25%)(3) Pants on Fire0(0)
    5. BILL O'REILLY:
      1. True2 (12%)(2) Mostly True4 (24%)(4) Half True2 (12%)(2) Mostly False3 (18%)(3) False5 (29%)(5) Pants on Fire1 (6%)(1)
    6. TUCKER CARLSON:
      1. True0(0) Mostly True0(0) Half True1 (50%)(1) Mostly False0(0) False0(0) Pants on Fire1 (50%)(1)
    7. ANN COULTER:
      1. True1 (10%)(1) Mostly True0(0) Half True3 (30%)(3) Mostly False2 (20%)(2) False2(20%)(2) Pants on Fire2 (20%)(2)
    8. LOU DOBBS:
      1. True0(0) Mostly True1 (25%)(1) Half True0(0) Mostly False1 (25%)(1) False2 (50%)2) Pants on Fire0(0)
    9. CHRIS HAYES:
      1. True0(0) Mostly True0(0) Half True1 (100%)(1) Mostly False0(0) False0(0) Pants on Fire0(0)
    10. MIKE HUCKABEE:
      1. True7 (23%)(7) Mostly True2 (6%)(2) Half True7 (23%)(7) Mostly False7 (23%)(7) False4 (13%)(4) Pants on Fire4 (13%)(4)
    11. CHARLES KRAUTHAMMER
      1. True1 (33%)(1) Mostly True0(0) Half True1 (33%)(1) Mostly False1 (33%)(1) False0(0) Pants on Fire0(0)
    12. PAUL KRUGMAN
      1. True7 (44%)(7) Mostly True4 (25%)(4) Half True3 (19%)(3) Mostly False0(0) False2(13%)(2) Pants on Fire0(0)
    13. CHRIS MATTHEWS
      1. True1 (14%)(1) Mostly True1 (14%)(1) Half True2 (29%)(2) Mostly False1 (14%)(1) False2 (29%)(2) Pants on Fire0(0)
    14. ANDREA MITCHELL
      1. True0(0) Mostly True1 (50%)(1) Half True1 (50%)(1) Mostly False0(0) False0(0) Pants on Fire0(0)
    15. LAWRENCE O'DONNELL
      1. True1 (14%)(1) Mostly True3 (43%)(3) Half True0(0) Mostly False2 (29%)(2) False1(14%)(1) Pants on Fire0(0)
    16. SARAH PALIN
      1. True14 (23%)(14) Mostly True6 (10%)(6) Half True8 (13%)(8) Mostly False9 (15%)9) False18 (30%)(18) Pants on Fire6 (10%)(6)
    17. ED SCHULTZ
      1. True0(0) Mostly True1 (10%)(1) Half True3 (30%)(3) Mostly False3 (30%)(3) False1(10%)(1) Pants on Fire2 (20%)(2)
    18. AL SHARPTON
      1. True0(0) Mostly True1 (25%)(1) Half True1 (25%)(1) Mostly False1 (25%)(1) False1(25%)(1) Pants on Fire0(0)
    19. JON STEWART
      1. True2 (33%)(2) Mostly True1 (17%)(1) Half True0(0) Mostly False0(0) False2 (33%)2) Pants on Fire1 (17%)(1)
    20. JOHN STOSSEL
      1. True0(0) Mostly True0(0) Half True0(0) Mostly False0(0) False1 (100%)(1) Pants Fire0(0)
    21. CHUCK TODD
      1. True3 (75%)(3) Mostly True0(0) Half True1 (25%)(1) Mostly False0(0) False0(0) Pants on Fire0(0)
    22. DONALD TRUMP
      1. True0(0) Mostly True2 (15%)(2) Half True2 (15%)(2) Mostly False0(0) False5 (38%)5) Pants on Fire4 (31%)
    23. Greta Van Susteren
      1. True0(0) Mostly True1 (50%)(1) Half True0(0) Mostly False0(0) False1 (50%)(1) Pants on Fire0(0)
    24. CHRIS WALLACE
      1. .True0(0) Mostly True0(0) Half True2 (100%)(2) Mostly False0(0) False0(0) Pants Fire0(0)
    25. FOX NEWS AND OTHER CABLE NEWS OUTLETS
      1. Fox News is between mostly false to pants on fire 75% of the time. Making this news outlet the worst outlet of all the major networks for spewing out misstatements and just plain lies.
      2. Next is MSNBC with 45%
      3. CNN is the best with 18%

        Which makes a person wanna go hmmmm?!?