This is a sobering graphic for those who’ve been swayed by the propaganda that America is “just around the corner” from a 100% alternative—non–fossil-fuel—economy.

Energy consumption in the US (1776 – 2015) (EIA)

You can see that coal consumption is way down, but natural-gas consumption is way up. Home-grown natural-gas consumption is declining again (rapidly, despite more propaganda) but imports will likely continue. Along with natural gas, other renewables have also replaced some of the coal, but not nearly as much. Just as much as... [More]

Grooveshark is no more.

Why should we lament this? They were, after all, a company that delivered music without heeding copyrights and without recompensing the artists that wrote the music. Once you read more about their business model, one could only say that they operated in a gray area if one squinted really hard. Once you learned how they delivered what they delivered, you were amazed that they lasted as long as they did.

But let’s take a step back and examine what else they provided and... [More]

As with so many other macroeconomic topics, Dean Baker at CEPR is a good source of information on this one as well. There is a lot of FUD about Greek debt:

• That it will bankrupt Europe (whatever happens to the EU, they’re doing it to themselves),
• That Europe continues to pay out (no payments for over a year now)
• That the Greeks are trying to get out of paying (they’re actually trying to pay interest at a slower rate).

Let’s take a look at some details below.

Interest Rates are too low

... [More]

The very short post ”Holdouts” On Argentine Bonds, Did Not Own the Bonds at Time of Default by Dean Baker (CEPR) corrects the New York Times on their chronic mischaracterization of the Argentine default situation that drags on long after the default actually occurred (in 2001).

The NYT likes to make us think that the battle is between a noble group of American investors which generously invested in Argentina, only to be robbed a country with no work ethic and a casual willingness to declare default rather than pay... [More]

John Oliver’s new show on HBO is what some of us have always wanted the Daily Show to be. Oliver doesn’t self-censor, he doesn’t do pandering interviews and he does really, really in-depth segments. He did one recently on inequality.

Watch the... [More]

When we talk about getting real about the Internet economy, we talk about acknowledging that there is real value there. And when we talk about valuation, we think we are talking about some measure of that—real value. The word “value” is built right into the word, so that must be what it means, right?

But what do we mean when we say “real value”? What kind of value or values? And, more importantly, value to whom? Is there only positive value? Or is there a negative component? Which part is... [More]

The panel from the World Economic Forum on Saturday ended at 16:45 GMT+1. SRF Info was streaming it live in Switzerland in English and I caught the tail end of one of the panels. The discussion included Schäuble from Germany, Christine LaGarde (president of the IMF) and the presidents of the banks of Japan, England (who seems to be American?) and India as well as the president of Blackrock (an investment company) and was moderated by Martin Wolf of the Financial Times.

They discussed the... [More]

The article Spend, don’t Mend by George Monbiot sums up the season as follows,

“Have people become so immune to fellow feeling that they are prepared to spend £46 on a jar for dog treats or £6.50 a bang on personalised crackers, rather than give the money to a better cause?(7) Or is this the Western world’s potlatch, spending ridiculous sums on conspicuously useless gifts to enhance our social status? […]

“To service this peculiar form of mental illness, we must wear down the knap of the Earth, ream the... [More]”

In order to provide a service, a company must generate enough revenue to cover costs. Rent has to be covered, utility bills must be paid and employees must get their salaries. Let’s assume that the main goal of the business is actually not to make the owners rich, but rather to provide the service and also provide employment. This is what we are trained to think of when we think of a small business.

Another goal of our economy in general is growth. When a company grows, it can provide its... [More]

The article Ross Douthat: Conservative Who’s Scared of a Free Market in Health Care by Dean Baker (Beat the Press) states the case with pharmaceutical patents very clearly, succinctly explaining how purported libertarian and small-government conservatives sometimes argue for government regulation. This case is a perfect example of why it’s OK to ignore the opinions of people like Douthat: they have shown time and again that they are either (A) corrupt, in it for themselves and their friends or (B) ignorant and possibly... [More]

This diagram of the branches of economics by Zach Weiner (SMBC) sums it up very nicely.

SMBC 2013-09-19

The Swiss voted overwhelmingly to include a provision in their constitution to, as the campaign stated, “stop the ripoff”. The exact text (in German) can be found at Eidgenössische Volksinitiative gegen die Abzockerei. Rather than try to reformulate the result in a hyperbolic way, I’ll perform the service of just translating the relatively clear amendment to the Swiss constitution.

The letter of the law

See the link above for the full text; I include the original German for the parts I think... [More]

The article Time to Bury Pew Report on Wealth by Age Group by Dean Baker (CEPR) hits the nail on the head. Pew put together a report a few years ago on the wealth of various age groups in the U.S. This report has since been misused by many journalists to show that the wealthy elderly are exacting inter-generational warfare on the young. The report stated that “the median household over the age of 65 had $170,500 in net worth [while] households under age 35 had [a] median net worth [of] just $3,700”.

Though I’m going... [More]

I recently received a request to post an info-graphic (included below) detailing the results of a recent study published by UC Berkeley, called Higher social class predicts increased unethical behavior by Paul K. Piff, Daniel M. Stancatoa, Stéphane Côté, Rodolfo Mendoza-Denton, and Dacher Keltner (Proceedings of the National Academy of Sciences). The original infographic is hosted at a site called Accounting Degree Online, for some strange reason. At any rate, the findings are kind of interesting.

The URL to the graphic includes the text “Rich people are unethical” but it could more accurately be called “Rich people are unethical (so are... [More]

It’s not that Greece’s financial situation is complex. It’s that the common explanation for Greece’s troubles—that the Greeks as a people are lazy—is not only incorrect—per capita, the average Greek works more than the corresponding famously sedulous German—but deliberately racist and unhelpful.

Greece is currently running a larger deficit because of state-incurred debts. These debts are due not to exorbitant expenditure on a hopelessly top-heavy and overgenerous social apparatus—as... [More]

The blog post, Be a Hero, Barry by Robert X. Cringely, proposes an elegant solution to one of the main drags on the economy today: the millions of people (over 80% of mortgage-holders) who continue to make exorbitant payments on their now-nearly-equityless homes. They are moral heroes for continuing to pour money into what amounts to a black hole, an investment that will never pan out. They are also paying a huge amount of interest—especially compared to today’s rates—because they’re trapped and unable to... [More]

What could happen to Greece and why is it Greece that’s in such big trouble? The short article, When Austerity Fails by Paul Krugman (NY Times) sums it up quite well.

Greece, Spain, Portugal and Ireland are in trouble, but Greece is hit the hardest because it was the government that “borrow[ed] at rates only slightly higher than those facing Germany [and] took on far too much debt.” In Ireland and Spain, the government didn’t borrow too much, but both those countries’ banks did and, at least in Ireland’s case, the... [More]

Ah, those lovely U.S. taxes—there’s no way to avoid them, even when living abroad. You can’t even renounce citizenship in order to avoid taxes, as documented in the article, Expatriation Tax. Even if you’re no longer a U.S. citizen, the U.S. reserves the right to require you to pay U.S. taxes if you’re either (A) in non-compliance with filing rules or (B) you’re rich (in which case, you probably won’t be paying anything significant, like other rich Americans). I’m not sure how this is... [More]

After a relatively long dry spell of more toned-down blog entries, Krugman finally sinks his teeth into his opponents again, while at the same time pointing out an interesting concept, the anti–straw-man.

“[T]he construction of anti–straw-men: […] attributing to your intellectual opponents sophisticated, reasonable positions they do not in fact hold, ignoring the nonsense they actually espouse. […] both the OECD and Rajan are calling not just for fiscal austerity but for raising interest... [More]”

Despite the worst economy since the Great Depression and the clear failure of all of the policy tenets of the last three decades, economics and financial reporting has continued largely unchanged. It does not provide context or information that would help people understand why their wages are low, why their houses are underwater (worth less than they still have to pay for them) or why they can’t find jobs. Instead, it continues to generate vast amounts of propaganda designed to continue... [More]

From the article, Roubini on Greece by Felix Salmon (Reuters):

“Sweden’s Bo Lundgren was also on the panel, and he helped explain how the Swedish population has the crucial and decidedly un-Greek ability to unite behind unpopular yet necessary policies once their political leaders have set a certain course. Greece, which is already seeing riots at any hint of fiscal austerity, just isn’t the kind of nation which is likely to decide that five years of wage cuts in a painful and deflationary recession is a price worth... [More]”

From the world of misleading propaganda journalism comes this story: Social Security to start cashing Uncle Sam’s IOUs by Stephen Ohlemacher (Yahoo! News). First off, the author makes sure to use the term IOU right in the title to get people into the right frame of mind. If they get the mistaken impression that the Social Security is issuing IOUs, then that’s a real shame.

Before analyzing any further, a quick recap of how Social Security works is in order. Social Security is individually funded by a special tax (FICA) and, as... [More]

The following six-minute video is of Marcy Kaptur (Ohio) grilling Timothy Geithner about his activities, interests and intentions during and after the bailout.

Kaptur CHEWS Up Tiny Tim GOLDMAN And Spits Him Out (YouTube)

Kaptur is absolutely right to do this and Geithner’s exasperation comes across as extremly dickish. He is an appointed official, she is an elected official; he answers to her. That his every answer must be “Goldman Sachs” when asked about his cohorts is his fault, not hers. It would be nice if not only he, but many others who, as... [More]

Jim Kunstler is never a very uplifting read, but neither do you ever have to worry about him blowing smoke up your ass. There’s one guy who tries not to see rainbows wherever he looks. His latest, Six Months To Live?, is even more downbeat than usual—if that’s even possible—but it’s difficult to argue that he doesn’t have a point. Or that his predictions are complete nonsense. The term “perfect storm” is thrown around entirely too much, but the signs are there:

• Effects of the sub-prime... [More]

The title of the article, The Big Squander by Paul Krugman (NY Times), neatly illustrates the deferential interpretation of the financial robbery it describes.

“About the A.I.G. affair: During the bubble years, many financial companies created the illusion of financial soundness by buying credit-default swaps from A.I.G. — basically, insurance policies in which A.I.G. promised to make up the difference if borrowers defaulted on their debts. It was an illusion because the insurer didn’t have remotely enough money to... [More]”

The economy has been topic numero uno for many months now, including the almost three months of the Obama administration. During that time, the administration, Wall Street and the media have tried on explanations like they were trying on hats, changing stories and justifications as soon as it looked like the American people—despite all efforts—might be grasping just how thoroughly they were being screwed by what amounts to nothing more than a self-elected aristocratic elite. The following... [More]

Hinwil is a smallish town in the canton of Zürich in Swizerland. It can, by no stretch of the imagination, be characterized as either remotely Hawaiian or Australian. Even more so as an especially long winter retains its iron grip on the region. Why is it then that a local discounter (Aldis) has found it to be economically attractive to carry both ukuleles and didgeridoos, as shown in the photos below?

UkulelesDidgeridoos

Is it really so bad to see the back of an economic system that provides us with lunacy... [More]

We are ill-equipped to deal with huge numbers. Many of couldn’t tell the difference between 100,000 people and 1 million people. We are notoriously bad at estimating, conceiving of and comprehending large numbers. This makes it that much easier to pull the wool over our eyes when it comes to budgets and finance. Take, for instance, the $1 trillion figure being bandied about these days. What does one TRILLION dollars look like? (PageTutor) provides a handy visual mnemonic, starting with a single $100 bill... [More]

Man Up! Hedge-Fund Man’s Advice for Wall Street by Michael Lewis (Bloomberg) is a (somewhat) amusing look at the world through the eyes of “typical” trader on Wall Street. This trader is wondering why Wall Street is wasting its time worrying about what the rest of the non-Wall Street-world thinks. Instead, he feels his fellow traders should stick to the plan and stick it to a government that gave them so much money without bothering to force any conditions first.

“Think about this. Some fool comes along and gives you $15... [More]”