Rod Dreher

Rod Dreher


How bad is unemployment? Duck!

posted by Rod Dreher

jobschart.jpg
Given those gruesome numers, why are we even arguing about whether or not to extend unemployment benefits?
Via Scott Winship, who said looking at this chart made him “much more sympathetic” to the idea of extending unemployment benefits.



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celticdragonchick

posted July 14, 2010 at 5:51 pm


Given those gruesome numers, why are we even arguing about whether or not to extend unemployment benefits?
Because GOP senator Jim Bunning made it fashionable to give the middle finger to unemployed “hobos” who probably deserve to be poor and kicked in the teeth. After all, we all know that God rewards good people by making them rich.
Also, GOP Lt Gov Andre Bauer of South Carolina sums up the feelings of people like him when he compared poor people to stray animals. If you feed them, they tend to breed…



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Jon

posted July 14, 2010 at 6:26 pm


I read elsewhere that the number of job openings is the tally of publicly adverstized jobs (whether online or in print). Many jobs are not so advertized however, meaning that the absolute numbers are better than the graph shows. But unless someone can show that it’s more common to advertize job openings in bad times than in good (or visa versa), the relative changes are still the same.



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dedanna1029

posted July 14, 2010 at 6:49 pm


The url I’m leaving here is an open letter to the President that I had on my Facebook back when I was working, regarding the unemployment situation. I am now posting it openly at my blog, because I think it’s more than important enough.
If you would, please check Twitter for #Twittermarch, and join in if you feel inclined.
Thanks.



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Japhy Ryder

posted July 14, 2010 at 7:00 pm


Because extending unemployment benefits will only serve to keep the number of people unemployed higher, longer.



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Pat

posted July 14, 2010 at 7:02 pm


We’re arguing about it because politicians know that people will vote for the incumbents if they are doing better economically at the time of the upcoming election, and for the challengers if they are doing worse. Irrespective of whether their plight is actually caused by the incumbents’ party or the challengers’.



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Neil D

posted July 14, 2010 at 7:20 pm


This being a semi-religious blog, I feel compelled to say that this is all just payback for our decades of rampant materialism, consumerism, and selfishness. Suffering is part of life – it’s God’s megaphone and is good for the soul. Through the renunciation of worldly pleasures it is possible to achieve a high spiritual or intellectual state. Blessed are the poor. Let them eat cake. And my personal favorite… What doesn’t kill you makes you stronger.
More suffering, please.
Of course, I am just being a little sarcastic…



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Indy

posted July 14, 2010 at 7:25 pm


Pat, politics is what’s keeping too many people from having useful convos on this stuff (and other issues) in comboxes, too. Politics boxes in too many people these days. It’s become far too central to their sense of personhood and worth. I wish it weren’t so. Deviate from the party line by looking at cause and effect and seeking solutions and heck, one loses the ability to hang with the kool kidz. It’s worse than high school ever was. People go through all sorts of contortions to try to convince themselves they’re independent thinkers but a lot of them just have said “yes, sir, anything you say, sir” to ideologies on the right or the left. Layers of gridlock, all over, while our fellow citizens face problems with everything from jobs to healt care to oil spills.



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JaredK

posted July 14, 2010 at 7:38 pm


What made me more sympathetic to unemployment figures such as these was spending a year and a half as an unemployed person who did not count as unemployed! I finished grad school at one of the worst times in recent history (summer of 2008) and promptly found myself unemployed for the next year and a half. And yet, since I hadn’t been fired from a job, I wasn’t technically unemployed. If I hadn’t gotten married that summer to my beautiful sugar-momma, I would have been a guy with a PhD in Mechanical & Aerospace Engineering…living in his parent’s basement.
In conclusion, I am a firm believer in the difference between the unemployment rate, and the true unemployment rate.



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Turmarion

posted July 14, 2010 at 7:38 pm


Amen, celticdragonchick. On the otherwise, Japhy and Pat exemplify in slightly different ways the exact point you’re making.



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Jerry

posted July 14, 2010 at 7:52 pm


I am one of the long term unemployed brought on by the housing collasp
and being also over the age of 55 the outlook for me and others in the same boat, finding employment anytime soon is nil to none. I can tell that on the few interviews I have that my age is a factor and I will not be considered. What exactly do the weathy expect the people who cannot get a job to do. We have to eat, we need a place to live, and in the State where I live the unemployment check is barely enough to pay utilities. You recieved your riches off the backs of the poor or you who are in Government are drawing paychecks paid for from years of my sweat. God will repay you one day, and come November I will repay you to if you refuse to extend the unemployment benefits.
I do not care what party you are with.



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Jon

posted July 14, 2010 at 7:56 pm


Re: And yet, since I hadn’t been fired from a job, I wasn’t technically unemployed.
Jared,
If you had been contacted by the unemployment household survey and answered No you were not working at all, but Yes you had looked for work in the past four weeks you would be counted by them as unemployed. Your previous status is irrelevant; only those two questions matter.



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celticdragonchick

posted July 14, 2010 at 8:13 pm


@Japhy
Because extending unemployment benefits will only serve to keep the number of people unemployed higher, longer.
Yep. Those poverty level unemployment checks are just the thing for all those unemployed “strapping young bucks” who want T-bone steaks…
But Ronald Reagan told stories about the “strapping young buck” who used food stamps to buy a “T-bone steak.”
http://www.nytimes.com/2010/02/11/us/11foodstamps.html
We all know that Real Americans would never consider taking money from the Gubmint. Real Americans pull themselves up by their bootstraps and go into business with unicorn dust and magic farie wishes while living out of a car with their family! Then they get rich from the Hollywood movie based (very loosely) on their life that re-affirms our Real American exceptionalism where one poor homeless family in a million gets incredibly lucky and beats the odds without gubmint help…
And remember, if you feed the poor, they breed like bunnies! Lt Governor Andre Bauer said his grandma told him that…
By the way…what part of five applicants for every job opening do you fail to understand? Was math a difficult subject for you in school?



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the stupid Chris

posted July 14, 2010 at 8:33 pm


…why are we even arguing about whether or not to extend unemployment benefits?
Apparently you forgot your thread about “winning is everything” when it comes to politics. This is part of that.



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Steve D

posted July 14, 2010 at 9:05 pm


@ Japhy
“Because extending unemployment benefits will only serve to keep the number of people unemployed higher, longer.”
Ummm, not so much. The real problem exists because there are a lack of jobs. If there were jobs and 99 weeks worth of unemployment you cold possibly make that argument. However, since there is a shortage of jobs and not workers the imbalance causes unemployment. It’s simple supply and demand. Doesn’t anyone take Econ101 anymore?



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thehova

posted July 14, 2010 at 10:05 pm


One of the biggest issues is that there are sectors of the economy that won’t really recover. The construction industry will never fully recover.
We need to find some way to get construction workers to become nurses. That’s easier said than done.



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hlvanburen

posted July 14, 2010 at 10:50 pm


So…let me see if I have this straight. According to some folks, we cannot afford to increase the deficit to extend unemployment benefits. Not only is it “bad economic policy” but it encourages laziness.
But, these same folks are telling us that we cannot allow the Bush tax cuts to expire at the end of this year because it will keep businesses from hiring people. Of course, these businesses are not hiring now, and will not make any commitments to hire in the future with or without the continuation of the tax cuts. And continuing the tax cuts will expand the deficit (in spite of what the modern math proponents in the GOP say). So these folks are willing to expand the deficit on the crap shoot that is destined to fail, all to encourage businesses to hire people.
Yep…sounds like voodoo economics to me.



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Pat

posted July 14, 2010 at 10:53 pm


“God will repay you one day, and come November I will repay you to if you refuse to extend the unemployment benefits.
I do not care what party you are with.”
Will you care whether the incumbent in question voted for or against those benefits, or will you just vote against any incumbent?



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Abelard Lindsey

posted July 15, 2010 at 1:11 am


There is considerable disinformation in this blog about why the unemployment benefits bill died in congress.
In reality, the congressional republicans were more than willing to extend the unemployment benefits providing the money came from the $670 billion stimulus fund that has already be set aside for this kind of thing. The democrats refused to accept this provision and killed the extension bill.



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kevin s.

posted July 15, 2010 at 2:50 am


“People go through all sorts of contortions to try to convince themselves they’re independent thinkers…”
Yes, “they” certainly do. How about that?
“In reality, the congressional republicans were more than willing to extend the unemployment benefits providing the money came from the $670 billion stimulus fund that has already be set aside for this kind of thing. The democrats refused to accept this provision and killed the extension bill.”
Pretty much. And they killed it for the precise reason that they very much want to use this as a political bludgeon for the midterms. They have no incentive to pass the extension before November.



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Indy

posted July 15, 2010 at 6:11 am


Hah, as usual, the comments show why problems can’t be resolved. Everybody’s trapped.



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Jon

posted July 15, 2010 at 6:22 am


Re: One of the biggest issues is that there are sectors of the economy that won’t really recover. The construction industry will never fully recover.
Depends by what you mean by “recover”. If you mean return to the boom days of 2006, then no, we won’t (and shouldn’t) see that. But if you mean return to healthy but non-boom state, say, that which obtained in 1994, I see no reason why that will not occur.



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Indy

posted July 15, 2010 at 7:57 am


Look, guys, voters don’t have to hand over their manhood to the Rush Limbaughs and the Keith Olberman’s. How do you think legislation was passed in the old days? Compromise. Whether they’re Republican or Democrats, voters have the freedom to write to their representatives and to urge them to work with each other.
How do you think the scenario that Rep. Bob Inglis (R- SC) recently described came about? Because of voters. (Duh.) Inglis, who lost his primary bid recently, said in an AP interview last week that too many people were letting outside influences (the Becks,. Palins, and other demagogues) set the tone.
“Inglis cited a claim made famous by Palin that the Democratic health care bill would create “death panels” to decide whether elderly or sick people should get care.
“There were no death panels in the bill, … and to encourage that kind of fear is just the lowest form of political leadership. It’s not leadership. It’s demagoguery,” said Inglis, one of three Republican incumbents who have lost their seats in Congress to primary and state party convention challengers this year.”
The AP reported that “Inglis said the rhetoric also distracts from the real problems that politicians should be trying to resolve, such as budget deficits and energy security.
“It’s a real concern because I think what we’re doing is dividing the country into partisan camps that really look a lot like Shia and Sunni,” he said, referring to the two predominant Islamic denominations that have feuded for centuries. “It’s very difficult to come together to find solutions.”
(For more, see http://www.thestate.com/2010/07/10/1371611/inglis-demagoguery-threatens.html)
Voters don’t have to go all Shia and Sunni. They can be Americans. There’s no reason why voters can’t rediscover their manhood and urge legislators to work together, if they want to do what’s best for America.



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Indy

posted July 15, 2010 at 8:38 am


Want solutions? Here’s how to do it. Whether you lean right or left, articulate your principles (fiscal, financial, eoconomic, social) but call out the jerks on your own side who say dumb stuff about the other side. Draw bright lines. Don’t stand with those on either side you are making it hard for people in Washington to work together. If you’re a Dem and you see someone in a combox putting down Republicans as knuckledraggers or End Times believers, call them on it. Tell them they need to differentiate among the many, many different people who vote GOP. Don’t buy into the notion that everyone on the other side votes based on emotion and visceral reactions and only people like you vote for rational reasons. Explain that the other side has some principled people, too. . They simply have a somewhat different ideology and philosophy but they love America just as much as you do and you can work with them.
If you’re a Republican, and you see someone in a combox putting down Democrats as socialists who want to destroy the American way of life, call them on it. Tell them they need to differentiate among the many, many different people who vote Democratic. . Don’t buy into the notion that everyone on the other side votes based on emotion and visceral reactions and only people like you vote for rational reasons. Explain that the other side has some principled people, too. They simply have a somewhat different ideology and philosophy but they love America just as much as you do and you can work with them.
If you see people on your own side making racial comments, call them on it. If you see people on your own side putting down people of faith, call them on it. Man up, be part of the solution, don’t be a wimp, hanging your head and staying silent in the face of demagoguery, just because you think it serves your cause. The best way to serve your cause is to model a behavior based on integrity and decency and good old American values.



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naturalmom

posted July 15, 2010 at 9:12 am


Hear, hear, Indy. (Though I might say “be an adult” instead of “be a man”. Since I’m not a man.) But to your point, the uncivil, juvenile and hyper-partisan talk and behavior going on today make me despair for our country more than any of our other problems, because they directly stand in the way of making any positive progress and fixing the problems that we have. We’ve got to grow up.



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A108

posted July 15, 2010 at 10:11 am


Very well stated, Celticdragonchick.
It occurs to me that the single-issue voter has brought this stand-off to be. I won’t, under any circumstances vote for a Republican because they stand for stripping gays of all their rights.
Nor will most people who share your emotional rejection of gay marriage even consider anybody but a Bible-thumping Republican.
Matters become even worse when abortion or guns enter the picture.
Once-upon-a-time, voters might have been well enough educated to see through such absurd arguments as some have advanced here (Japhy Ryder, have you even one serious economist who agrees with this you can reference?)
Today, most people really seem to believe that cutting taxes will somehow magically lead to employers hiring more workers.
Solutions? I don’t have any. I still won’t vote for a Republican because I place my civil and human rights on a higher plane than anything else.



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JLF

posted July 15, 2010 at 10:54 am


Here’s the conundrum: politics is the problem, and at the same time, it is the only solution. The politics of today is so obviously and odiously toxic that any idea tossed in that stew is tainted by the association. At the same time, in the absence of the eschaton, politics remains the best hope for finding a solution to what ails us as a nation, benevolent dictators being in chronic short supply historically.
Somehow, someway there needs to be an agreed upon reality. The famous boast in the Bush administration about creating its own reality has largely come true, but with consequences far beyond anything imagined. If I won’t believe anything that comes from the mouth of Keith Olbermann and his friends, while at the same time accepting without criticism anything that comes from the mouth of Rush Linbaugh and his friends, there can be no common ground, no reasonable room for compromise, the same being the inescapably necessary ingredient to a representative polity. Recalling Lincoln, a house divided cannot stand.



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Lord Karth

posted July 15, 2010 at 11:23 am


Mr. Dreher, @ 5:19 PM, writes:
“Given those gruesome numers, why are we even arguing about whether or not to extend unemployment benefits?”
Because paying for such requires that the resources—not “money”, but actual resources made or created by Human beings—be taken from an already-weakened productive sector. I’ll grant you that the dollar amount is small, but when we are already burdening producers with murderous taxes, the last thing we should want to do is make the burden worse, either by borrowing or taxes.
Borrowed money has to be paid back, with interest. Taxes have to be paid for now, and they also rob the productive sector through lost “opportunity cost”, or what might have been earned with the resources taken.
Someone needs to tell the Obama Administration, and the central bank, that There Ain’t No Such Thing As A Free Lunch.
The rest of us would do well to remember that, too.
Your servant,
Lord Karth



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celticdragonchick

posted July 15, 2010 at 12:28 pm


@ Lord Karth
Someone needs to tell the Obama Administration, and the central bank, that There Ain’t No Such Thing As A Free Lunch.
The last time we allowed millions of people to starve and live in tents and shanty towns in the Great Depression, there was an army of pensioners that marched on Washington and mobs attacked bank officials and law enforcement officers who tried to serve eviction notices. Parts of the country verged on open armed revolt. Communism was organized and active in this country.
Somebody needs to tell you that starving and homeless people have little to lose and may decide you look like a deserving target when you lecture them about free lunches while you bask in air conditioned comfort.



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JLF

posted July 15, 2010 at 12:31 pm


Karth (and others) worries about the burden of taxation on the productive sector, by which I assume he means those who invest and receive a return on their investment. Taxation (and tax policy) is like three-dimensional chess on steriods. There is the federal level and the state and local levels too. Federal tax policy affects both individual income and corporate income, as do state tax policy. All together, these policies constitue the burden of taxation. It is misleading to suggest any one policy or level of taxation as the sole culprit.
The other side of the coin is spending. Like taxation, spending comes at all levels. Ultimately, though, taxes (present and future) pay for the government we have (and will have.) Unlike others, I would suggest the place to start when discussing tax policy is on the consumption side. What should government do? Then, how much will it cost? Then, how do we pay for it? And, lastly, can we afford to do it? If you want to kick Grandpa to the curb and snatch food out of the mouths of poor babies because in the final analysis we can’t afford it, or if you want to reduce the tax burden on those from whom you hope to receive money for investment by shifting the taxes to those who consume – by definition investors invest with money they don’t spend for consumption – then vote for the politicans who will give you what you want. After all, in a democracy you should get the government you want.
The missing ingredient? Politicans who will tell you the truth about what they will do.



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celticdragonchick

posted July 15, 2010 at 12:41 pm


Here is little taste of the social fun that Karth and his fellow travellers would have us experience again…because unemployed people need to learn about the lack of free lunches.
From Milton Friedmans Monetary History of The United States
The fog of despair lay over the land. One out of every four American workers lacked a job. Factories that had once darkened the skies with smoke stood ghostly and silent, like extinct volcanoes. Families slept in tarpaper shacks and tin-lined caves and scavenged like dogs for food in the city dump. In October the New York City Health Department had reported that over one-fifth of the pupils in public schools were suffering from malnutrition. On the countryside unrest had already flared into violence… Mobs halted mortgage sales, ran the men from the banks and insurance companies out of town….[I]n Nebraska ,,,, the farmers organized a posse, called it the ‘Red Army’, and took [repossessed] trucks back. In West Virginia, mining families, turned out of their homes, lived in tents along the road on pinto beans and black coffee.
[Numerous voices publicly warned of armed revolt:] Edward A. O’Neal, an Alabama planter, head of the Farm Bureau Federation, bluntly warned a Senate committee, “Unless something is done for the American farmer we will have revolution in the countryside within less than twelve months.” …
[The Secretary of War moved troops from places like Texas to staging grounds closer to the large cities of the east and midwest]…



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celticdragonchick

posted July 15, 2010 at 12:51 pm


I misattributed the above paragraph. Apologies. The author was:
– Arthur M. Schlesinger Jr., “The Crisis of the Old Order”
Here is some more fun about learning there are no free lunches.
[By 1930] Across the country the dismal process was beginning, … Now came the slowdown — only three days of work a week, then perhaps two, then the layoff. And then the search for a new job — at first vigorous and hopeful; then sober; then desperate…the unending walk from one plant to the next, the all-night wait to be first for possible work in the morning. And the inexorable news,… “No help wanted here.”
And so the search continued, as clothes began to wear out and shoes to fall to pieces…
In the meantime savings were trickling away. …As savings end, borrowing begins. If there is life insurance, borrowing on that, until it lapses; then loans from relatives and from friends; then the life of credit, from the landlord, from the corner grocer, until the lines of friendship and compassion are snapped. Meat vanishes from the table; lard replaces butter … the children begin to lack shoes, there clothes are ragged…. Wedding rings are pawned, furniture is sold, the family moves into ever cheaper, damper,dirtier rooms.
[Children cried constantly from slow starvation] [Then] the the apple peddlers began to appear on cold street corners, their threadbare clothes brushed and neat…
(Schlesinger, pp. 167-8)
That was 1930. By 1931,
“With no money left for rent, unemployed men and their entire families began to build shack s where they could find unoccupied land.”
“Citizens of Chicago,… could be seen digging into heaps of refuse with sticks and hands as soon the as the garbage trucks pulled out.”
As the depression wore on, private charities received less and less in donations in order to attempt to carry out an ever more staggering caselood.
By 1932,
relief resources, public and private, dwindled toward the vanishing point
. (Schlesinger, pp. 171, 174)



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A108

posted July 15, 2010 at 1:46 pm


celticdragonchick,
I have a quote to match your citations:
“Those who cannot remember the past are condemned to repeat it.” George Santayana
This does not apply to Lord Karth – he knows history, it simply does not move him.
It’s been said here before, but Sayers was right: The first thing a principle does is go out and kill somebody.



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celticdragonchick

posted July 15, 2010 at 2:05 pm


It’s been said here before, but Sayers was right: The first thing a principle does is go out and kill somebody.
That was bloody brilliant. I am going to shamelessly keep that little verbal pearl for future use.



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TWylite

posted July 15, 2010 at 2:13 pm


These stats beg the question about the quality of their data regarding online job advertisements. These have probably eclipsed newspaper ads for years now. Newspapers are dying, and advertisers know it. If the data for online want-ads is not good, it will really skew any comparison to the previous recessions before Al Gore invented the Internet, or when it was still just an internal Defense Department pet project.
My non-economist gut tells me the current receding recession is about on par with the 1980-82 troubles; worse in some ways (much worse trade/manufacturing imbalances), better in others (no double digit inflation so far). The sky is not falling, unless of course the Price Of Tea In China To Freedonia Prime Rate (POTIC/FPR) ratio exceeds 13.7. Then it’s Year Zero, and time to load up on guns, gold, and Ted Nugent albums for the coming apocalypse.



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Lord Karth

posted July 15, 2010 at 2:18 pm


celticdragonchick, @ 12:28 PM, writes:
“The last time we allowed millions of people to starve and live in tents and shanty towns in the Great Depression, there was an army of pensioners that marched on Washington and mobs attacked bank officials and law enforcement officers who tried to serve eviction notices. Parts of the country verged on open armed revolt. Communism was organized and active in this country.
Somebody needs to tell you that starving and homeless people have little to lose and may decide you look like a deserving target when you lecture them about free lunches while you bask in air conditioned comfort.”
You may rest assured, dear lady, that when That Day comes, I will be ready to give said people who try to come and take what little I have (believe me, milady, I am not rich) from MY family a hot-lead welcome, served at high speed and with neither warning nor fanfare.
And in quantities. I’ve been stocking up.
A108, @ 1:46 PM writes:
“This does not apply to Lord Karth – he knows history, it simply does not move him.”
Maybe it doesn’t. Deal with it.
You may also rest assured that should That Day come, I will be very nasty about it. I am not at all a believer in “a fair fight” under such circumstances; I fight to win, and I fight as dirty as I have to.
If that means my putting someone’s head on a pike outside my building, or my house, then so be it. I’ve got plenty of rags and sharp knives for the job.
Anyone who tries to take from my family what is theirs, at such a time, is guaranteed to have a very bad time of it. Also, do note, please, that it is seldom “the rich” that have their stores looted and buildings torched during such incidents. It is generally small businesses/practices like mine that the mobs go after. See, for example, the LA and South Beach riots, of unhappy memory.
How about a compromise: take the money for this subsidy from another one ? Take your “unemployment benefits” funding out of SocSec or Medicare; at least in this case the subsidy would be going towards members of the potentially productive class. From “less moral” to “more moral” is a direction I’d think ANYONE would want to move in, no ?
But if That Day actually shows up—I tend to shoot, and shoot first, under the general principle of “better judged by 12 than carried by 6″.
You do the math.
Your servant,
Lord Karth
captcha poetry: “objective coping”—Now THIS I can approve of !



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Geoff G.

posted July 15, 2010 at 2:19 pm


Not to pile on, but it should be remembered that President Hoover’s Secretary of the Treasury advised him to do exactly what Lord Karth is pushing now: “Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
That advice landed us squarely in the worst economic disaster that this country has ever seen.



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celticdragonchick

posted July 15, 2010 at 2:29 pm


You may rest assured, dear lady, that when That Day comes, I will be ready to give said people who try to come and take what little I have (believe me, milady, I am not rich) from MY family a hot-lead welcome, served at high speed and with neither warning nor fanfare.
And in quantities. I’ve been stocking up.
It is instructive that you are entirely willing to allow a societal collapse and mob violence just to spite unemployed people in furtherance of your personal philosophy of “I gots Mine and ‘eff all of you!”



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Lord Karth

posted July 15, 2010 at 2:45 pm


Geoff G., @ 2:19 PM, writes:

President Hoover’s Secretary of the Treasury advised him to do exactly what Lord Karth is pushing now: “Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
That advice landed us squarely in the worst economic disaster that this country has ever seen.”
Unlikely, since it was never tried. Hoover, during his term in office, was a big spender with the best of them. FDR, in many ways, simply followed Hoover’s lead. (See P. Johnson’s “History of the American People” for details.)
What I think we’re seeing now is a near-reprise of what happened in the 1920s; for the 2001-2009 period, a crony-capitalist President and complicit Congress (controlled by the opposition for his last two years in office, btw) essentially gave the store away to his campaign contributors and favored interest groups. (See the prescription-drug bill, earmarks, etc.) When the crash came, the politicians took action that essentially worsened the situation (1920s: Smoot-Hawley, 2008: TARP) and prevented the liquidation and resource reallocation necessary.
Another similarity: Hoover and FDR wanted to keep wages (labor asset prices) up, Obama and Bush wanted to keep financial-asset (including stock, and especially bank stock) prices up. Incidentally, this effort in the modern case also includes home prices; the mortgage-maintenance program is quite telling on this point.
The problem is that this means asset prices can’t find their correct levels. As in the case of Japan, this simply stretches out the pain.
Housing prices have about another 20 % or so to drop. As for banks and bank stocks—don’t get me started !
Bottom line: central-government intervention, in BOTH cases, made matters worse than they should have been. That’s my belief (principle, if you care to call it such), and I’m sticking with it.
Your servant,
Lord Karth



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Lord Karth

posted July 15, 2010 at 2:49 pm


celticdragonchick @ 2:29 PM writes:
“It is instructive that you are entirely willing to allow a societal collapse and mob violence just to spite unemployed people in furtherance of your personal philosophy of “I gots Mine and ‘eff all of you!”
Direct your rage somewhere else, dear lady. The central government has been overstimulating the economy through excess spending for years. Today’s problem is this: the economy can’t take the hyper-spending any more. Production has to start matching consumption. What was borrowed has to be repaid.
There Ain’t No Such Thing As A Free Lunch.
Your servant,
Lord Karth



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A108

posted July 15, 2010 at 3:20 pm


Lord Karth,
For some reason, Rod permits you and a few other pets a level of nastiness towards other posters which he doesn’t grant to those upon whom he smiles not.
I merely stated (one might say “the obvious”) that you don’t play well with others.
On any other blog here, your “deal with it” would result in a sharp reprimand from the blog owner.
celticdragonchick,
Dorothy Sayers placed many words of wisdom in Lord Peter’s mouth. Not all lords are so arrogant as to believe they know everything there is to know.



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JLF

posted July 15, 2010 at 3:56 pm


Just a couple of notes to clarify the historical record: The Smoot-Hawley Tariff of 1930 was passed by the congress elected with Hoover in 1928. It followed the 19th century Republican Economic Gospel, which favored government support of business and a laissez faire approach to social spending and labor laws. In the 19th century, the protectionism of tariff policy encouraged the investments of the Gilded Age, but by 1929, the United States was already the world leader in business and finance, where protectionist policies constricted business and did not expand it. As happens so frequently, political rhetoric did not keep up with reality, and the Republican Congress, obedient to Republican Economic Gospel, passed the most restrictive protective tariff in history, ensuring the Great Depression to come.
It wasn’t until 1932 that Hoover got behind the Reconstruction Finance Corporation bill, now promoted by a Democratic controlled House. The RFC of 1932 was but a dim forshadowing of the TARP of 2008, but with the same political goal: providing an incumbent president – as it happened, both Republican – with a cover for inaction in an election year where the electorate cared for nothing so much as it cared for change.



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Liam

posted July 15, 2010 at 5:46 pm


The unstated model for the hard-adjustment advocates is the Harding-Mellon model for the post-WW1 depression.
The fundamental problem with that model is that it applied to a demographic context that had only recently (due to WW1) become majority urban; it was still very significantly agricultural. The significant part of the “excess labor” could go back to subsistence farming of some sort to wait out the low economic tide.
That world is long gone with the wind. You can’t wish it back. You can’t even hard-adjust back to it.
And consumers and laborers are also voters. The market is not separate from government; it’s all commingled (and always has been).
The formula for hard-adjustment is the true formula for inviting a much more aggressive form of socialism than Lord Karth et al. fear, pace the cheap bravery talk of hot lead and all that. They just don’t see it. It’s self-delusion posing as seriousness.



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the stupid Chris

posted July 15, 2010 at 5:58 pm


The Producer Price Index for Finished Goods fell 0.5 percent in June, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today.
Deflation.
Given that, here are two options.
1) stimulate the economy at the bottom by giving people who have lost income money that they will immediately spend on housing, clothing and food.
2) stimulate the economy at the top by cutting taxes for investors in the hopes that they’ll invest instead of holding their money until the economy turns around.
Either way the budget deficit goes up, more under #2 than #1.



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Liam

posted July 15, 2010 at 6:44 pm


The problem with the duration of the 2001 tax cuts is that they created a savings glut in the investor class, which meant there was much more money available to invest than there was quality investments, so the excess ending up inflating the price of lower-quality investments. It is possible to have money wasted in investment, when it would have been better spent keeping the deficit lower. We needed those tax cuts for perhaps 3 years at most.



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Tad

posted July 15, 2010 at 7:22 pm


To paraphrase another poster, this is payback for years of extremely low interest rates that created speculation bubbles and the moral hazard that went with them. Now we have to pay the piper and that means unemployment checks to those who truly need them. I just wonder how long our nation can do that before the moral hazard from such unemployment largesse equals the moral hazard created by those years of low interest rates.



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thehova

posted July 15, 2010 at 8:24 pm


Jon, the construction industry boomed from 1980-2008. We likely won’t see levels return to the mid 1990’s for a while.



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Jon

posted July 15, 2010 at 9:16 pm


Huh? The housing bubble didn’t really start until post-2003: it was inflated semi-deliberately to get us out of the 2001-02 recession. Before that we had normal levels of construction (with minor booms and bubbles and busts in specific locales of course). I see no reason we won’t need to start building again by later in the decade. Amid all the hand-wringing over low birth rates in some quarters, America’s population is still growing: we are NOT Japan in that sense. People will want new houses (though not perhaps McMansions) and there will be new commercial structures needed to. Add to that the possibility of redevelopment in older areas and I don’t think the effects of the housing bubble, ugly though they are, will last forever. Also, I will be very surprised if we don’t need to do some major rebuilding after one or more major hurricanes- and (less likely) a major earthquake.



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the stupid Chris

posted July 16, 2010 at 12:04 am


The problem with the duration of the 2001 tax cuts is that they created a savings glut in the investor class, which meant there was much more money available to invest than there was quality investments, so the excess ending up inflating the price of lower-quality investments.
Bingo.
Of course saying so violates the First Commandment of The Conservative Movement™: One must NEVER speak ill about the effects of tax cuts!
And, of course, we have its corollary: One must NEVER speak well about any effects of taxation!
God forbid taxes actually pay for anything useful for the nation, state, county, city or school district. That would undermine The Conservative Movement™’s mythology that taxes are always and in every place and time a great scourge upon self-made free men.



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Indy

posted July 16, 2010 at 6:07 am


Thank you for your kind words, Naturalmom.
To those who commented on Karth and why Rod permits his postings to stay up, I would not worry about Karth. He is an ordinary American, he is not a PR person or strategic thinker in political terms. He is a voter who has the potential to influence the way his representative votes. As such, he is representative of a certain type of conservative thinking which is better revealed than concealed, if one is not hard right and wants to understand the different elements in the GOP. He and all those who react to him affect the image of the GOP. It’s important for right leaning people to know he is out there too so they can decide whether to support him, remain silent, or rebut him.
In fact, it is people who argue as he does who may have contributed to poll numbers, even now, that despite economic woes, Americans have more confidence in the Democrats than in Republicans in handling economic issues. No on in the political world is getting high trust numbers overall these days, but in terms of who is least trusted, right now Congressional Republicans are trusted least, Congressional Democrats a little more, and President Obama a little more. I suspect it’s the radio and tv demagogues and ordinary citizens such as Karth who comment in comboxes who are contributing to the hesitancy of people, even in hard times, to turn enthusiastically to the GOP. Maybe the DNC should pay Karth a bonus since he seems to be helping the Dems.



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Lord Karth

posted July 16, 2010 at 6:19 am


the stupid Chris @ 12:04 AM writes:
“Of course saying so violates the First Commandment of The Conservative Movement™: One must NEVER speak ill about the effects of tax cuts!”
That’s because there are mighty few ill things to be said about them.
Remember what taxes are: money expropriated—that’s SEIZED, for the less economically literate members of Our Studio Audience—under threat of force. (Don’t believe me ? Don’t pay your taxes and see what happens.)
Letting people actually KEEP more of what they earn does not strike me as being a bad thing. We can have an argument over what constitutes “legal” vs. “illegal” income, along with about 52 other things, but that’s just detail. The essential argument is over the answer to this question:
What is appropriate for the government to extort at gunpoint from its subjects ?
That gets us into a discussion of purposes, which, finally, leads us back to the fundamental purposes of government. Since neither of us has time for a several-months-long discussion of those purposes, I will submit that we need to stick pretty closely to the functions of government outlined in the US Constitution, as amended. Which would, under present conditions, mean that some 90 % of what the central government does would be tossed out.
If that means tossing out SocSec, Medicare and the like, then so be it. A government that is powerful enough to do things FOR you is also powerful enough to do things TO you.
“And, of course, we have its corollary: One must NEVER speak well about any effects of taxation!
God forbid taxes actually pay for anything useful for the nation, state, county, city or school district. That would undermine The Conservative Movement™’s mythology that taxes are always and in every place and time a great scourge upon self-made free men.”
Are you going to tell us that there is NOTHING inappropriate or unConstitutional about any aspect of government spending, Chris ? If you want to “dicker over the price”, so to speak, that’s a discussion I’ll gladly have with you, but don’t try to tell us that there is nothing wasted, misspent or contrary to the terms and conditions of the original Constitution in the central-government’s trillions-of-dollars budget.
Your servant,
Lord Karth



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Indy

posted July 16, 2010 at 7:50 am


Karth, the government does not extort at gunpoint any more than any of the laws and regulations you sort through in your profession as a lawyer extort behavioral reactions from people. Just try standing up in court one day and saying you simply reject an existing law because your client doesn’t like its existence and that he should get a pass on his flouting of it because he doesn’t believe in its premise. You wouldn’t be serving your client well because your effectiveness depends on your working within the existing framework. Same is true for your living here in the U.S. You can advocate changes to that.”
Western style democracies rely on laws. Here in the U.S., there are three branches of government involved. Their actions depend on the concept of majority rule. Laws are passed by legislators elected by the people, signed and implemented by executives elected by the people, and judged legal or not by judges who are appointed and confirmed by officials who are elected by citizens.
I do not know why you argue issues based on threats and ability to harm others (as you did in the thread about Bristol Palin). I do not know why you see the government as acting through force and yourself as responding through potential force. I don’t want to know what has shaped to you either in your upbringing or life that view. No, no, no. But I can tell you, your approach comes across as a very weak shield for life’s vicissitudes. Or should I say, brittle and likely to crack more readily than other shields based on more positive elements, such as Christian faith. None of us knows what lies before us. Given the level of your anger, you might well end up the victim of a stroke and (God forbid) your wife would be faced not only with finding a job which replaces your current income but arranging to have you cared for by someone in your helpless state. You could end up like Joe Kennedy, Sr., lingering for years in a situation where you have no control over anything.
Your anger, if uncontrollable, could also lead you to take action one day which results in your being put in prison. Or you might be taken out of the picture some other way. You could develop early onset Alzheimer’s and simply lose your ability to support your family. Or they may decide they don’t want to support you (one cannot compel such things, one earns them.) Your children might become estranged from you. Any number of things could happen that you cannot control.
My point is, the way you argue suggests that you’ve put all your eggs in one basket–your ability to control what happens to you and yours all of which is predicated on your being a provider and defender. I have a very different view of things. To me, your view of strength seems fragile because it does not account for your possible incapacitation, decline, or being taken out of the picture. I believe strength comes from recognizing our lack of control and preparing ourselves and our families, through faith and an understanding of why things happen, to deal with tough challenges and harships, without our ability to stand at the door with a weapon in hand.



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Your Name

posted July 16, 2010 at 9:56 am


Indy, @ 7:50 AM, writes:
“[T]he government does not extort at gunpoint any more than any of the laws and regulations you sort through in your profession as a lawyer extort behavioral reactions from people.
As I said earlier, sir, try not paying your taxes, or even not sending your 1040 in. After a certain time has passed, any of various law enforcement agencies can and will simply go and take your money and/or take you off to jail, no nonsense tolerated. The charge will be “tax evasion” or some variation thereof. Sometimes, the guns will be displayed. On certain rare occasions, they will be used.
A very practical experiment, that would be.
Your servant,
Lord Karth



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Liam

posted July 16, 2010 at 5:57 pm


Extortion is an illegal act. Taxation is a legal act sanctioned by the Constitutions as amended. It’s by definition not extortion. And the Catholic Church, which levied lots of taxes on people in its history and heartily approved when the civil arm did so in ways that favored the Church, has never been one to side with the idea that taxes-are-extortion meme. Rome is not libertarian, pace the Acton Institute and its acolytes.



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Jon

posted July 16, 2010 at 6:55 pm


Lord Karth, you are getting close to the lip of the deep end. Have you considered following the logic of your libertarian rant to its logical end? “A govermment strong enough to imprison rapists is strong enough to imprison anyone.” Well, yes– but rapists still need to be imprisoned and I would expect a man in your profession to understand that there are monsters among us whom we need strong government to restrain. As somneone who seems well read in the Christian tradition perhaps you should apply the tradition: Govermment and its monopoly on violence are necessary (and not just a necessary evil) in a fallen woeld. That may mean that the rest of us also find our wings clipped somewhat too, but so be it, such is the trade-off for being able to sleep at night without fear of brigandage, and being able to watch our childen grow up and beget children of their own. The price in short, for civilization itself. In the fallen world there are prices to pay (perhaps there would be in an unfallen one too), and the state and its sword (or gun) are one of those prices.



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Lord Karth

posted July 16, 2010 at 7:35 pm


Liam @ 5:57 PM writes:
“And the Catholic Church, which levied lots of taxes on people in its history and heartily approved when the civil arm did so in ways that favored the Church, has never been one to side with the idea that taxes-are-extortion meme. Rome is not libertarian, pace the Acton Institute and its acolytes.”
I commend to your attention the words of a certain Augustine; something about the State being a robber band writ large.
Your servant,
Lord Karth



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Liam

posted July 16, 2010 at 7:55 pm


LK
Proof-texting will get you exactly nowhere on that one. There’s lots of Augustine that the Church has never embraced fully (Augustine’s funnier than most Doctors of the Church in that regard) – more to the point, the parts of Augustine it did embrace were rather more enthusiastic about the powers of the state.



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Lord Karth

posted July 16, 2010 at 7:56 pm


Jon @ 6:55 PM writes:
“That may mean that the rest of us also find our wings clipped somewhat too, but so be it, such is the trade-off for being able to sleep at night without fear of brigandage, and being able to watch our childen grow up and beget children of their own. The price in short, for civilization itself. In the fallen world there are prices to pay (perhaps there would be in an unfallen one too), and the state and its sword (or gun) are one of those prices.”
When the brigandage comes from the State apparatus itself, what do you suggest one do ? Apply the old advice given to women about to undergo criminal assault with violence—“relax and enjoy it” ? I would prefer to think that you are not that morally supine.
Have you ever been involved in an IRS audit ? Or known someone who has ? I’ve represented such poor unfortunates, as well as studied cases of others. You’d be surprised how many IRS audits are done simply on a random basis, or as a result of a spite-hit “tipoff” or anonymous call-in. I know this because I have represented IRS employees in various sorts of cases over the years. Do you defend THAT ?
There used to be a program (recently resurrected under another name) called the “Taxpayer Compliance Management Program”. It selected, at random, some 50,000 or so individuals for severe audits. Their tax returns were brought out, and the targets had to justify EACH and EVERY item on the return–beginning with their names. Birth certificates were the only item that would be accepted; some of them had to travel hundreds of miles to get the certified copies that were required. The expense of dealing with them could run into the tens of thousands of dollars. In 1985. Is that defensible ?
Or what about all the political audits ? (For a detailed treatment, see D. Burnham, “A Law Unto Itself: Power, Politics and the IRS”.)
Are those at all right ? Or even defensible ?
Better that the State be reduced in power—“small enough to drown in the bathtub” sounds like a good, suitable size—than to let it be strong enough to drive such of its targets to suicide.
Which has happened. More than once.
I’ll spare you a good deal of future time and trouble, Jon, Indy, etc. You will never, EVER convince me that a state apparatus of the kind we have, that spends trillions on essentially wasteful, immoral and profoundly evil programs like Social Security, Medicare/Medicaid and the like is anything but a generator of monstrosity and incipient tyranny. There may be the occasional beneficial office—but all of those are far, far more than offset by the other offices and programs of monstrous evil that coexist with them. So don’t try.
Let us agree to disagree, and let that be that.
Your servant,
Lord Karth



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Lord Karth

posted July 16, 2010 at 8:04 pm


Liam @ 7:55 PM writes:
“There’s lots of Augustine that the Church has never embraced fully (Augustine’s funnier than most Doctors of the Church in that regard) – more to the point, the parts of Augustine it did embrace were rather more enthusiastic about the powers of the state.”
Fair enough. But do remember, sir, that the size of the State apparatus in those days was perhaps a twentieth the size of today’s states, even the so-called “democracies”; the levels of taxation we live under today would not have been countenanced by the Pharoahs of Egypt.
Your servant,
Lord Karth



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Liam

posted July 16, 2010 at 8:15 pm


But, LK, the “state” apparatus was complemented by a greediness of local patriarchies (very much including the Church in many places) that makes the IRS seem benevolent by comparison. Things actually improved in the couple of centuries that constitute the “darkest” period between Late Antiquity and the Feudal Era, properly speaking, but at the price of much higher risk of piracy, pillage and plunder by both Muslims and Vikings and Asiatic peoples, deep up the river valleys of western Europe and then some. The response in one of the most affected of regions – what we now know as England – was a relatively rapid resort to centralization, well before the Normans, that foretold attractions coming to much of the rest of Europe in succeeding centuries.
In your dyspepsia about the present, you consistently cast a far too golden haze over the realities of times gone by. It’s convenient for you, rhetorically, but it makes your arguments cumulative less credible here, and to more and more people, as best I can tell. Though I suspect that will simply whet your adversarial appetite rather than tempt you to consider more persuasive modes of argument.



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