Northern Patrol, American Economic Nightmare, American Mussolini, China Doubts, Mummy's Sleeping, Smart Choice, 9 Lives

If you are 100 miles from the Canadian border, travelling on a bus or train, try real hard not to look un-American.

And make sure you have all necessary and valid id.

On the heels of the Jackson Hole meetings a slew of analysis that the American economy is in deep trouble, the US equity market is in the 10th year of a bear market, the Fed has completely blown its mandate, and conflicting prescriptions. Now we have to start to imagine whether the economic malaise will generate a political response from the right that will be something closer to Mussolini. The pieces are falling into place.

Gwynne Dyer on the problems with the Chinese economy, the chilling news about Japanese sons and daughters keeping mummified parents hidden to collect their old age pensions, the unsurprising news that kindergarten pays off, and the New Scientist on a stressed earth's 9 lives.

The New York Times reports that US border guards are working the Buffalo-Rochester corridor with increasing vigilence.

The Lake Shore Limited runs between Chicago and New York City without crossing the Canadian border. But when it stops at Amtrak stations in western New York State, armed Border Patrol agents routinely board the train, question passengers about their citizenship and take away noncitizens who cannot produce satisfactory immigration papers. http://www.nytimes.com/2010/08/30/nyregion/30border.html?_r=3&ref=todayspaper

Lex on the confusion after this year's Jackson Hole meetings. What is a central bank to do?

The financial crisis, another retrospective. http://www.ft.com/cms/s/3/49800438-b3a1-11df-81aa-00144feabdc0.html

John Mauldin argues that US equities are currently in the fourth bear market since 1900. He argues that the only thing that really matters is the long-term growth rate of the US economy, and the thus danger from rising deficit levels. 90% and bust.

Market analysts (of which I am a minor variety) talk all the time about secular bull and bear cycles. I argued in this column in 2002 (and later in Bull’s Eye Investing) that most market analysts use the wrong metric for analyzing bull and bear cycles. http://www.ritholtz.com/blog/2010/08/the-dark-side-of-deficits/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

 

So the description is that things are bad and the US is on the verge of a second recession in two years. The prescriptions?

The Fed must print more money.

The US recovery is stalling. As a matter of economics the balance of risks strongly favours further fiscal and monetary stimulus. Politics appears to rule out the first, and a divided Federal Reserve is hesitating over the second. America’s leaders are letting the country down. http://www.ft.com/cms/s/0/f04d8600-b397-11df-81aa-00144feabdc0.html?ftcamp=rss&ftcamp=crm/email/2010830/nbe/Comment/product

The Fed must not print more money.

The United States needs to stop printing money and take on austerity measures like the Europeans did, in order for the economy to recover, said billionaire investor Jim Rogers, chairman of Rogers Holdings. http://www.cnbc.com/id/38913263

The federal government must stimulate the economy.

OUR national debate about fiscal policy has become skewed, with far too much focus on the deficit and far too little on unemployment. http://www.nytimes.com/2010/08/29/opinion/29tyson.html?partner=rss&emc=rss

The federal government must not stimulate the economy.

To no one's surprise except perhaps Vice President Joe Biden's, second quarter economic growth was revised down yesterday to 1.6% from the prior estimate of 2.4%, which was down from first quarter growth of 3.7%, which was down from the 2009 fourth quarter's 5%. Economic recoveries are supposed to go in the other direction.   http://online.wsj.com/article/SB10001424052748704147804575455823740024224.html?mod=rss_opinion_main

A lengthy, important and disturbing analysis of how the Fed's myopic focus on monetary policy, belief in rational markets, and infatuation with financial technology instead of the proper role of banks in a modern economy has put the US economy and the currency at tremendous risk.

R. Christopher Whalen, 'I Am Superman: The Federal Reserve Board and the Never Ending Crisis'  http://www.rcwhalen.com/pdf/2010-PB-03_Whalen.pdf

Related.

By now there are few people who do not acknowledge that the major American financial institutions and the markets they dominate turn out to have served the country badly in recent years.  http://www.nybooks.com/articles/archives/2009/may/28/the-failure-of-the-economy-the-economists/

A key word caught my eye in the opening sentence of an article from the Independent about the American political scene, 'comic'.  Nothing could be more dangerous and unfunny than to laugh or underestimate the Nativist shift in thinking in the United States today epitomised by the anti-Hispanic immigration law in Arizona or discussion about changing birthright laws. Mussolini redux.

It is always tempting to home in on the absurdity of the Republican right in America, the almost comic quality of some of their views and the ludicrous nature of the accusations they hurl at President Barack Obama.  http://www.independent.co.uk/opinion/leading-articles/leading-article-the-threat-to-american-conservatism-2065371.html

Charlie Chaplin's globe scene from the Great Dictator  (1940)  http://www.youtube.com/watch?v=IJOuoyoMhj8

Conrad Black weighs in.

As one whose recollections ... http://fullcomment.nationalpost.com/2010/08/28/conrad-black-american-apocalypse/#comments

Related.

Visitors to Washington's National Mall could have been excused for thinking they had stumbled across an open-air church service on Saturday, as thousands turned out to answer Fox News host Glenn Beck’s call to “restore honour” to America.  http://www.ft.com/cms/s/0/62f81d8a-b37c-11df-81aa-00144feabdc0.html

Tony of Victoria sent in this helpful article by Gwynne Dyer about the systemic risks to the Chinese economy.

Will the 21st century belong to China? http://www.straight.com/article-338897/vancouver/gwynne-dyer-chinese-miracle-cautionary-tale

Weird Japan. Mother had been dead for fourteen years. Daughter collected dead mom's social security benefits. Is anyone minding the store?

Police said Sunday they had arrested the 70-year-old daughter of a woman registered as 102 years old but who is most likely dead, for allegedly defrauding the city of Iwaki, Fukushima Prefecture, of ¥300,000 in special benefits her mother would have been owed if she were alive.  http://search.japantimes.co.jp/rss/nn20100830a3.html

The benefits of early childhood education analysed again.

The billions of dollars the Ontario government intends to spend on its new full-day kindergarten model has the potential to deliver twice as much in immediate returns, according to a report to be released Monday.  http://www.theglobeandmail.com/news/national/ontario/full-day-kindergarten-spending-may-deliver-twice-the-returns-report/article1689468/

The New Scientist and the earth's nine lives.

UP TO now, the Earth has been very kind to us. Most of our achievements in the past 10,000 years - farming, culture, cities, industrialisation and the raising of our numbers from a million or so to almost 7 billion - happened during an unusually benign period when Earth's natural regulatory systems kept everything from the climate to the supply of fresh water inside narrow, comfortable boundaries.  http://www.newscientist.com/special/ocean-to-ozone-earths-nine-life-support-systems

 

 

 

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Twin Virtues: Inequality of Outcomes & Equality of Opportunity©

Twin Virtues

Ultimately, the most successful societies find the balance between the twin virtues of inequality of outcomes and equality of opportunity.

The new politics must marry the twin virtues of unequal outcomes and equality of opportunity.

When too few get too much everybody loses.

Feminism is about women living their lives on their own terms, marshalling the resources of the society to make that possible, and men embracing this as vital to a successful society and their own liberation.

Can it be that striving for equality of opportunity however imperfect the process not only benefits the individual but also creates benefits for the society that are unintended but wonderful?

Economics must be a 'moral enterprise' as much as politics claims to be. Economic outcomes need to be framed in terms of right and wrong not just efficiency if only because these often align in surprising ways that are good for society and the economy.

My vision of Canada is that any Canadian child from a family of limited circumstance can expect to have a chance at lifetime of unlimited opportunities.

Free trade is a wonderful thing. Time and time again economists have proven that free trade creates enormous wealth for each country 'on the whole'. Historians have shown that free trade is usually associated with rising political, social and cultural liberty. The perennial problem is that free trade always creates tremendous disruption for thousands even millions of individuals often concentrated in one geography, and where the state is idle, not investing in best in class instruments of social justice, free trade can be a permanent ticket out of the middle class, down, not up.

Tax policy should be founded on the principle of generating steady tax revenues sufficient to maximise environmentally sustainable economic growth in order to fund fair government.

Public policy should be designed to decrease inequality before the law and increase equality of opportunity.

Capitalism is not the problem; the problem is what we do with capitalism.

Content is always more difficult to argue than conspiracy.

Let the state regulate and the market operate (most things).

Welfare strategies are best designed as a hand up, not as a hand out.

Political debate should not be fact free fighting.

Explanation lasts longer than eloquence.

Always favour empowerment over dependency.

The most enduring public figures are embraced for the causes they fought for and not the concept of themselves they hoped others would remember them by.

Find your voice and don't be the echo of somebody else.

It is possible to operate on two different levels: the practical, cautious and conservative; and the realm of ideas, open, free, and radical.