In Defense of #Infrastructure Spending

At the federal level, TEApublican types have decried our national deficit, much – if not most – of which came about as a result of placing the price of a decade of warfare on a proverbial credit card. I refer, of course, to the Persian Gulf War, Gulf War II, Operation Desert Shield/Storm and the invasion of Afghanistan, etc., all of which occurred during the previous administration.

Compounding that problem was that corporate and personal income tax rates upon the wealthiest was cut, while simultaneously, the veritable house of cards was crumbling, having been built upon the miry, sinking sands of Wall Street deregulation & greed gone wild.

Nevertheless, as our nation has struggled and clawed its way back to some semblance of fiscal sanity, there have been voices arising whom assert that the federal government’s “bailout” of banks & other large, corporate enterprise has been a gross mistake, and that such a bailout should have never occurred. And, while there will doubtless be volumes written, and debates held about the good and the bad of the ordeal, what’s been done, has been done, and it’s practically all over, but the crying. So the only thing we can do now, is live & learn, and move on.

And yet, respecting one underlying problem which arose corollary to the matter, is the loss of jobs here at home. Again, it was complicated by ‘globalization,’ which – good, bad, or indifferent – is

President Barack Obama to visit Chattanooga, Tuesday, July 30, 2013

Chattanooga is an old, old, old, old city.

It’s older than Civil War old.

Throughout the city there are narrow streets, many (if not most) of which need widening and repaving. Interstate 24, which leads into the city, is in sore need of widening. Because of the twisting, winding route it takes as it leads into, through and around the city and it’s numerous mountains and hills, it can be treacherous. When any slowdown for any reason occurs, traffic can be backed up for 15-20 miles, or more. When wrecks occur on that route, they’re often fatal, and create even longer delays. The only other major route into the city is US Highway 72. There is no bypass. If there are problems on either of those two routes, significant delays can take hours. (See a Google Map of the area.)

It has a university – University of Tennessee, Chattanooga – with other smaller colleges & universities nearby (Lee University, in Cleveland & Southern Adventist University, in Collegedale). One of three hospitals in the area (each which has numerous campuses) Erlanger, is a Level One Trauma Center, and teaching hospital for the College of Medicine at the University of Tennessee, Knoxville. Memorial Hospital, is part of the Catholic Health Initiatives system, and is a teaching hospital, while Parkridge Hospital is operated by TriStar Health.

Because of industrial waste released by area manufacturing, in 1969, Chattanooga had the filthiest air in the nation. The Tennessee River which serves as a boundary for the area was equally polluted. For many years, troubles GALORE plagued the city, including economic inequality, poor race relations, deteriorating economic infrastructure, rapid population decline, and departure of industry.

Recognizing that the city and area residents were suffering a slow suicide, officials and interested citizens embarked upon a plan to revitalize the area, including cleaning up industrial waste, reinvigorating the economy with employment opportunity, and looking forward, rather than backward.

EPB (Electric Power Board), one of the public utilities in the area, came upon an idea to infuse their power grid with Fiber Optic cable to enable better response times, to pinpoint areas of concern, and to re-route electricity during power outages when lines were downed by trees or severe weather. They faced stiff opposition in the form of legal fights by Comcast (principally), yet were successful in overcoming. In turn, they sold High Speed fiber optic Internet Connectivity to area residents at a significantly reduced cost in comparison to the Wall-Street-traded Comcast. They also provide better service.

While the area’s renaissance is by no means complete, it has advanced with enormously significant strides.

—
 

Obama to visit uneven Chattanooga area recovery

published Saturday, July 27th, 2013

Mike Pare, Deputy Business Editor, Chattanooga Times Free Press; MPare@ TimesFreePress.com phone: (423) 757-6318

by Mike Pare
view bio

When President Barack Obama flies into Chattanooga on Tuesday to tout new economic initiatives, he’ll see a city recognized in a national study as a metro area emerging from the recession as an “economic frontrunner.”

Area Development, a national business magazine covering site selection and relocation, ranked metro Chattanooga at No. 86 — in the top quarter — among 380 metro areas examined for the study titled “Leading Locations for 2013.”

While in Chattanooga Obama is expected to unveil new ways to spur the nation’s sluggish economic recovery.

At the Amazon distribution center at Enterprise South industrial park, the president will see a growing, state-of-the-art distribution facility with 1,800 full-time jobs created since 2011. The Chattanooga facility, along with

Federal Reserve’s “Beige Book” shows improving economy

The Federal Reserve regularly publishes a summary of economic activity in the 12 Federal Reserve Districts in the United States.

It is important to note that “This document summarizes comments received from businesses and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials.”

Much, if not most of the news was promising.

Summary highlights from this Beige Book 2013-01-16 are that:

• “Reports from the twelve Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report, with all twelve Districts characterizing the pace of growth as either modest or moderate.”

• “All twelve districts reported some growth in

Federal Reserve: Economy “Strengthening” & “Generally Expanded”

“Most Districts reported strengthening in existing home sales, while prices were described as steady to increasing, with declining inventories noted in the Boston, Atlanta, Minneapolis, Dallas, and San Francisco Districts.

“Automobile sales were flat over the past six weeks but are up year-over-year.

“Demand for consumer credit remained relatively strong,

Chinese Economic Slowdown is in the Making TRANSLATION: America is coming up!

As the Rota Fortuna – the wheel of fortune – goes, one side goes up, while the corresponding side goes down.

America’s turn is next.

We’re comin’ up!

—

Bears at the heart of the dragon

Global Insight
September 12, 2012 3:50 pm, By Jamil Anderlini in Tianjin

Among the corporate titans and global leaders attending the World Economic Forum in the eastern Chinese city of Tianjin this week a fascinating division appears to have formed.

In quiet conversations and background chats with Chinese officials and analysts about the state of things in China, the tone of despondency and cynicism was pervasive while the views of international attendees on China were generally bullish and upbeat.

Rota Fortuna – the Wheel of Fortune – Fortune and Her Wheel: Illustration from Vol. 1 of Boccaccio’s De Casibus Virorum Illustrium (On the Fates of Famous Men) (1467, Glasgow, Glasgow University LIbrary)

At one point, during

Taxpayers’ $182B TARP bailout of AIG Now Fully Recovered

As the president and others – nonpartisan and partisan alike – have noted, BIG BUSINESS should NOT need a bailout. They should be operated in such a manner as to allow the Free Market to decide how, to what extent, and if they prosper. As part of that process, ironclad and strong regulation to prevent fraud and abuse should be vigorously enforced. And chief executives

How to End This Depression

It’s been said that ‘everything should be made as simple as possible, but not simpler.’

The distinguished Dr. Krugman – who accurately foretold in 2001 that the “Bush Tax Cuts” would create significant deficit (and they did) – understands the role of government in providing opportunity for entrepreneurs and private enterprise, and the equally important role that government has in responsibility to protect public health and safety.

The long and short of it is this: Government spending on economic infrastructure (including education) is a good investment because it yields significant immediate and long-term results.

Why?

Because Materials and Manpower ALWAYS come from the private sector.

Regular readers of this blog will be familiar with the aforementioned premise, and the numerous times about which I have written in detail about the same. This entry illustrates with three excellent examples of that principle.

Naysayers and critics miss one very important factor in their analogy, which is that the Federal government has the power and authority to print money. The way that factor relates to the issue at hand is this: While the government could – in theory, and in reality – print enough money to give $10,000 to every man, woman and child in this nation the net effect of so doing would be to devalue the money, which would be resulting from inflation.

How to correct, resolve or work within the guidelines of that factor is to understand that one very important role of government is to provide OPPORTUNITY for entrepreneurs and private enterprise. By providing opportunity, government is also encouraging private enterprise and entrepreneurship. And, for the strict Constitutionalists, courts have continued to uphold and acknowledge that such power is contained within the Preamble’s clause “to promote the general welfare.”

Further, for the “anti-Big Government” naysayers, it is preposterous (contrary to reason or common sense; utterly absurd or ridiculous) to imagine that, in this era, with every technological advance, invention and discovery which has been made since 1776, and with our population (now approaching 312,000,000), that we would have fewer laws, rules and regulations than when we first began.

And, for those who say we should balance our budget, I would agree. However, I hasten to point out, that the last time that was done was under Eisenhower and LBJ. That does not excuse us from an ongoing civil discussion and debate about how to effectively manage our nation’s budget. Perhaps a formula of some type which would take into account GDP, debt (outstanding Treasury notes), trade deficit, population growth, birth rate, and other factors – with an “escape” mechanism for times of civil emergency or war, of course.

For such, we need technocrats – experts in areas of operations – rather than bureaucrats. Perhaps in an advisory role. But then again, we have those.

So… why don’t we work together as we ought?

Politics.

It seems that “Everybody’s got something to hide except for me and my monkey.”

—

May 24, 2012

Paul Krugman

The depression we’re in is essentially gratuitous: we don’t need to be suffering so much pain and destroying so many lives. We could end it both more easily and more quickly than anyone imagines—anyone, that is, except those who have actually studied the economics of depressed economies and the historical evidence on how policies work in such economies.

President Obama on a tour of the Master Lockfactory in Milwaukee with the company’s senior vice-president, Bon Rice, February 2012; Susan Walsh/AP Images

The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending. Never mind all the talk of how we have a long-run problem that can’t have a short-run solution—this may sound sophisticated, but it isn’t. With a boost in spending, we could be back to more or less full employment faster than anyone imagines.

But don’t we have to worry about long-run budget deficits? Keynes wrote that “the boom, not the slump, is the time for austerity.” Now, as I argue in my forthcoming book^*—and show later in the data discussed in this article—is the time for the government to spend more until the private sector is ready to carry the economy forward again. At that point, the US would be in a far better position to deal with deficits, entitlements, and the costs of financing them.

Meanwhile, the strong measures that would all go a long way toward lifting us out of this depression should include, among other policies, increased federal aid to state and local governments, which would restore the jobs of many public employees; a more aggressive approach by the Federal Reserve to quantitative easing (that is, purchasing bonds in an attempt to reduce long-term interest rates); and less timid efforts by the Obama administration to reduce homeowner debt.

But some readers will wonder, isn’t a recovery program along the lines I’ve described just out of the question as a political matter? And isn’t advocating such a program a waste of time? My answers to these two questions are: not necessarily, and definitely not. The chances of a real turn in policy, away from the austerity mania of the last few years and toward a renewed focus on job creation, are much better than conventional wisdom would have you believe. And recent experience also teaches us a crucial political lesson:

More evidence that Government $pending boo$t$ economy

Recollect the brouhaha over Vice President Joe Biden‘s remark Thursday, July 16, 2009 in Alexandria, Virginia?

He was speaking at an AARP-sponsored town hall meeting also attended by AARP CEO A. Barry Rand, Health and Human Services Secretary Kathleen Sebelius and Nancy Ann DeParle, Director of the White House Office of Health Reform.

Vice President Biden said, “Now people, when I say that, look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’ The answer is ‘yes,’ that’s what I’m telling you.”

{ref: http://cnsnews.com/node/51162}

“And folks look, AARP knows – and the people with me here today know, the president knows, and I know – that the status quo is simply not acceptable. Its totally unacceptable. And its completely unsustainable. Even if we wanted to keep it the way we have it now. It can’t do it financially, Were going to go bankrupt as a nation. Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’ The answer is ‘yes,’ I’m telling you.”

Of course, Vice President Biden was speaking in context of the Affordable Care Act – also commonly known as “ObamaCare” – which the Government Accountability Office has shown has already demonstrated significant cost savings and proven to be business-stimulating legislation, and that to eliminate it’s protections would cost the federal government even more in the long-term.

Analogously, it’d be like having a fuel inefficient automobile – one that only got about 5 miles/gallon, or less. If you were to purchase even a used vehicle with twice the fuel economy – 10mpg – you could realize significant overall long-term savings. Simply ceasing driving will not solve any problem, but would rather create more problems.

Similarly, could you imagine having an inefficient Heating/Ventilation & Air Conditioning (HVAC) system? You gotta’ stay cool in the summer and warm in the winter – there’s no way around it. And to lower your average monthly utility bills by even 1/3 would be beneficial.

So, here’s a shocker for armchair philosophers, political pundits, amateur economists, Radical Republicans, TEA Party types and more: Government spending – in part – is a significant driver of our nation’s economy. And, spending on economic infrastructure is ALWAYS a most wise investment.

Why?

Because 1.) Materials and Manpower ALWAYS come from the PRIVATE SECTOR, and;

Q: Where in America can you retire at age 23? A: Bain Capital

“…distributions may be made to a participant who has not separated from service, provided the participant has attained age 23 years old…”

The bigger question is this: Can or will Mitt Romney give all Americans the same opportunity? Can or will his ideas and policy make everyone as rich as Croesus?

Forget “rich.”

Let’s settle for “eliminate poverty.”

I think we know the answer to that one.

—

Bain’s Unusually Young Retirement Rollover Age: 23

April 2, 2012, 2:19 PM ET

By Mark Maremont

Bain Capital, the private-equity firm that Mitt Romney used to run, appears to have an unusual early-retirement age: 23.

That’s the age at which, according to a federal filing (PDF, page 25), Bain employees are allowed to roll over their retirement funds from a Bain profit-sharing plan into their own individual retirement accounts, or simply withdraw the money.

Federal law allows employees in such profit-sharing plans to roll over their funds into an IRA only under certain circumstances, such as when they leave their jobs, when they’ve been in the job a certain number of years, or when they reach a specified age, pension lawyers said. Normally, that age is something close to retirement, such as 50 or 55 years old.

“I’ve never seen or drafted a plan permitting a distribution as early as 23,” said Charles M. Lax, a pension attorney at Maddin Hauser in Southfield, Mich. He said the Bain arrangement

Alabama Commissioner Encourages “Free Trade Agreement”

John McMillan, Commissioner for the Alabama Department of Agriculture and Industries, recently wrote President Obama and encouraged him “to submit to Congress the Free Trade Agreements with Colombia, Panama, and South Korea,” which he asserted “would create thousands of jobs for Alabama workers and farmers and gain new markets access for Alabama products.”

Typically, I don’t “rant and rave” about issues, even if they greatly disturb me. That’s just my “style.” Rather, I endeavor to share understanding with others, and to seek and consider others’ thoughts in the process.

This is one such rare exception.

And yet, that rant is saved for last. Being last, and the fact that it is a rant doesn’t necessarily make it the best part of this entry, however. So bear that in mind as you continue to read.

With all due respect for the issue of “free trade,” I think we Americans have been

Mississippi River Flooding, Diaster Response & Economic Theory

The opening lyric to Hank Williams, Jr.‘s – aka “Bocephus” – 1982 song “A County Boy Can Survive,” is “And the Mississippi River she’s a goin’ dry.”

At this juncture, that certainly doesn’t seem to be the case.

The Mississippi River has flooded to such an extent that the U.S. Army Corps of Engineers has decided to open floodgates and allow excess water from the river to flow toward the Gulf of Mexico through alternate routes.

Weeks of heavy rains and runoff from the melting of an extremely snowy winter have raised Mississippi River levels to historic proportions. Over 3 million acres (1.2 million hectares) of farmland in Mississippi, Tennessee, Arkansas along the river have been flooded, evoking memories of floods in 1927 & ’37.

On Saturday, the Corps opened two of 125 floodgates at the Morganza Spillway, and opened two more today (Sunday, 15 May 2011). The spillway is 45 miles northwest of Louisiana’s capitol, Baton Rouge. The Corps hopes that by opening them, it will

Our National Economy -or- How We Got Into This Fine Mess

The state of our national economic affairs is, to be certain, a complex topic.

And, as complex topics go, there is no one “simple” solution to resolve the greater problem. The greater problem is, of course, the whole state of affairs – especially, and particularly as it relates to every family’s household income.

Again, the complexity of the issue begs to be understood, because

The Impact of the Flat Tax Reform on Inequality

Some assert that everyone should pay the same rate of taxes, claiming that one “flat rate” would solve many problems.

I beg to differ.

The inequality of the so-called “flat tax” is quite simply, self-evident, because given that the cost of living is indexed similarly, the one whom has more income and wealth does not use as much to live, whereas the less fortunate and less wealthy use a greater percentage of their income to make ends meet.

Put another way, if it costs $500 annually to live, and you make $1000, that’s 50% of your income.

If it costs $500 annually to live and you make $10,000 that’s 5% of your income.

Who, then, does a flat tax benefit?

BMW Tapped $3.6 Billion in Federal Reserve Funds During Financial Crisis

BMW Headquarters, Munich, Germany - Image via Wikipedia

By Chris Reiter – Dec 2, 2010

Bayerische Motoren Werke AG, the world’s largest maker of luxury cars, secured funds from the U.S. Federal Reserve during the financial crisis to boost liquidity as other sources dried up.

BMW’s largest transaction under the Fed’s Commercial Paper Funding Facility was for $3.62 billion on Jan. 30, 2009, according to data released yesterday. BMW made “intermittent” use of the Fed program for refinancing at a time when other forms of credit were frozen, Mathias Schmidt, a spokesman for the Munich-based automaker, said today.

“We tapped into this program in 2008 and 2009 during the financial crisis

The economy is so bad that…

I got a pre-declined credit card in the mail.

African television stations are now showing ‘Sponsor an American Child’ commercials!

Wives are having sex with their husbands because

Two Numbers – ONE BIG, one small

$9,100,000,000,000

Nine TRILLION, one hundred BILLION…

Remember another number.

Two.

During the reign of King George W. Bush, just TWO of his failed policies have cost Americans $9,100,000,000,000.

What two failed policies are those?

The Bu$h tax cuts, and the creation of a Rx (prescription drug “benefit” written wholly by Big Pharmaceutical industry cronies.

The U.S. Census Bureau’s most current estimation of the population of the United States places 308,171,505 people in the United States as of December 17, 2009.

Put another way, that’s a cost of $29, 529 per person.

As a result of deregulation of the financial industries – banks, insurance and stock brokerages – thus creating one giant incestuous financial orgy, Americans have directly suffered under the thumbs of bankers and insurance companies, while their Wall Street cohorts, in conjunction with imaginative thieves, have twiddled and fiddled to create “investment derivatives” – essentially a Ponzi schemed fiscal fraud – out of thin air. That house of cards having collapsed, has revealed what was suspected all along. Outside the transparent dressing room of his glass house, the king had no clothes.

Driven by greed and an insatiable lust for more,