When it costs more to be poor – Fed and government shifting inflation onto rent, medical care, and food. QE3 to widen the gap between the poor and the wealthy.
Inflation has been picking up since the recession ended in 2009. The problem with the CPI increasing year over year with no rise in household incomes is that the standard of living for most Americans erodes every year that incomes do not keep up. Household incomes are back to levels last seen in the mid-1990s while the cost of necessities has gone up. This brings us to our article today that examines the nuts and bolts of what constitutes the Consumer Price Index (CPI). The CPI attempts to measure the changes in price for consumer goods and services. Overall it did a very poor job of measuring the housing bubble because of the owner’s equivalent of rent metric.
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Today, it is understating inflation because of the excess spending on “wants” that occurred in the 2000s has now shifted to spending on “needs” but is being dragged down by the amount of family spending on needed goods. We will dig deep into this data but suffice it to say that the Fed is creating inflation in items most Americans actually need to live their daily lives and the burden on the poor is actually increasing.
These three things—a biological hurricane, computational social science, and the rediscovery of experimentation—are going to change the social sciences in the 21st century. With that change will come, in my judgment, a variety of discoveries and opportunities that offer tremendous prospect for improving the human condition.
Phi Beta Iota: The social sciences are the moral and intellectual runts of the academic litter, with public administration being the bottom feeders unable to even define a discipline or establish laudable norms. Computers are stupid — governments and corporations have very deliberately avoided the necessary investments in true cost economics, whole systems analytic models, and multinational, multiagency, multidisciplinary, multidomain information-sharing and sense-making (M4IS2). This is a very positive development, but it is highly unlikely that major progress will be made in the absence of an Open Source Agency (OSA) guiding a global “Open Source Everything” renaissance of thinking–of intelligence with integrity.
Be Very Careful, Beloved Spain … Two weeks ago I was interviewed by the Catalan newspaper El Punt Avui. I said it would be unthinkable for the Spanish state to stop Catalan secession by military force. Such action would violate EU Treaties and lead to Spain's suspension from the European Union. You do not do such things in the early 21st Century. “No pots ser membre de la UE si utilitzes la força” was the headline. I may have underestimated the vigour of the Spanish officer corps. First we have the robust comments of Colonel Francisco Alaman comparing the crisis to 1936 and vowing to crush Catalan nationalists, described as “vultures”. “Independence for Catalonia? Over my dead body. Spain is not Yugoslavia or Belgium. Even if the lion is sleeping, don't provoke the lion, because he will show the ferocity proven over centuries,” he said. – UK Telegraph
Dominant Social Theme: The riots have begun again. What a surprise.
Free-Market Analysis:Ambrose Evans-Pritchard reports on Spain and what he provides us with is a look at the underbelly of Spanish despair that you won't read about in other similar mainstream reporting.
What Evans-Pritchard provides us with, in fact, is the bloody sociopathic grin that lurks under the current, escalating social tension. The grin is that of one collectively plastered across the faces of the armed forces. It is the same in Britain and soon will be, no doubt, in France and Germany.
As the “planned” – there is no other word for it except perhaps “directed” – demolition of Europe continues to bulldoze its way across the south of this great continent, the lurking violence of the organized military reveals itself once more.
There is increased talk about the “honor” of armed forces in Western mainstream media and this is probably no accident. Here, from the Associated Press:
Prince Harry, third in line to the British throne, began a four-month combat tour Friday in Afghanistan as a gunner on an Apache attack helicopter …”Prince Harry, like any soldier, considers it a great honor to represent his country in her majesty's armed forces wherever it chooses to deploy him,” St James's Palace said in a statement.
You see? This is a deliberate statement. The Afghan war has been subject to contentious debate in Britain, with former Prime Minister Tony Blair coming under attack as a war criminal by some for his role in involving Britain in that quagmire in the first place. But there is no context here: Harry is merely honored.
We used to read a lot about the “sacred honor of the German Reich,” etc. in the history books and would wonder how people could use such rhetoric. Now we know.
The world is being whipped up by the hard military men waiting in the proverbial wings. Soon they will surge to the fore and the reality of modern capitalism will be revealed for what it really is, a thin veneer. Here's some more from Evans-Pritchard's article:
This report is the result of nine months of research by the International Human Rights and Conflict Resolution Clinic of Stanford Law School (Stanford Clinic) and the Global Justice Clinic at New York University School of Law (NYU Clinic). Professor James Cavallaro and Clinical Lecturer Stephan Sonnenberg led the Stanford Clinic team; Professor Sarah Knuckey led the NYU Clinic team. Adelina Acuña, Mohammad M. Ali, Anjali Deshmukh, Jennifer Gibson, Jennifer Ingram, Dimitri Phillips, Wendy Salkin, and Omar Shakir were the student research team at Stanford; Christopher Holland was the student researcher from NYU. Supervisors Cavallaro, Sonnenberg, and Knuckey, as well as student researchers Acuña, Ali, Deshmukh, Gibson, Salkin, and Shakir participated in the fact-finding investigations to Pakistan.
EXTRACT (One Sentence from Each Summary Paragraph):
First, while civilian casualties are rarely acknowledged by the US government, there is significant evidence that US drone strikes have injured and killed civilians
Second, US drone strike policies cause considerable and under-accounted-for harm to the daily lives of ordinary civilians, beyond death and physical injury.
Third, publicly available evidence that the strikes have made the US safer overall is ambiguous at best.
Fourth, current US targeted killings and drone strike practices undermine respect for the rule of law and international legal protections and may set dangerous precedents.
Central banks could be helping communities instead of enriching predatory, parasitic “too big to fail” banks and financial feudalism.
In a system that depends on lies and the credulity of the citizenry, the greatest lie is that the Federal Reserve's “quantitative easing” bailouts of the banks somehow help our citizens and communities.
To clarify this, ask yourself this question: what else could we have bought with the $29 trillion the Fed loaned or backstopped to the banks?
If you enjoy quibbling about the total sum of Fed support, be my guest; the Levy Institute came up with $29 trillion after poring over all the data, while the Government Accountability Office’s (GAO) tally topped $16 trillion. That's 100% of the nation's GDP and roughly 100% of the $16 trillion national debt.
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While we're asking about opportunity costs, let's ask what else we could have bought with the $10 trillion that the Federal government has borrowed and blown in the past 11.7 years. The national debt was $5.727 trillion when G.W. Bush was sworn into office on January 20, 2001. It had risen to $10.626 trillion when President Obama was sworn into office in January, 2009. It is now $16.016 trillion, an increase of $5 trillion in less than four years in “debt held by the public” (i.e. the Chinese central bank, the Japanese central bank, the Federal Reserve, etc.)
$500 billion is roughly 3% of $16 trillion. That is rather astounding, isn't it? We could have switched to a (largely) solar-powered electrical grid for a mere 3% of what the Fed squandered to save the “too big to fail” banks. Yes, yes, I know we need a massive energy storage system for any solar-powered grid; shall we throw $1.1 trillion at the problem? That would total a mere 10% of what the Fed has provided to “save” crony-capitalist financial feudalism.
According to Cory Doctorow at bOING bOING, physicians often prescribe drugs that are ineffective or harmful because pharmaceutical companies provide misleading data, according to an article by Ben Goldacre in the Guardian, “The drugs don’t work: a modern medical scandal.” Goldacre is the author of the forthcoming book Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients. Summary from the caption on the photo above Goldacre’s article: “Drugs are tested by their manufacturers, in poorly designed trials, on hopelessly small numbers of weird, unrepresentative patients, and analysed using techniques that exaggerate the benefits.”
It’s a tough problem: you depend on your physician’s authority, and the authority of the healthcare establishment, to guide your decisions about health. Even if you trust your physician, can you trust the voices persistently whispering in his ear, especially if those voices are motivated by profit as a priority. Do pharma companies place their profit above your health? Don’t assume an easy answer – it’s complicated, though Goldacre’s book blurb suggests a belief that pharma uses the complexity as a cloak (“All these problems have been protected from public scrutiny because they’re too complex to capture in a sound bite.”)
. Summary from the caption on the photo above Goldacre’s article: “Drugs are tested by their manufacturers, in poorly designed trials, on hopelessly small numbers of weird, unrepresentative patients, and analysed using techniques that exaggerate the benefits.”