[Peace-discuss] How to win in November: jobs & income

[David Green]

It looks like to me that a readjustment of the dollar downward and the RMB 
upward is inevitable.
 
In this case, I think "inevitable" means "a good thing."




________________________________
From: E.Wayne Johnson <ewj at pigs.ag>
To: David Green <davegreen84 at yahoo.com>; John W. <jbw292002 at gmail.com>; C. G. 
Estabrook <galliher at illinois.edu>
Cc: peace discuss <Peace-discuss at lists.chambana.net>
Sent: Thu, July 15, 2010 4:27:53 PM
Subject: Re: [Peace-discuss] How to win in November: jobs & income

 
No, probably not.  But I don't think the deficit (or the cumulative national 
debt) is in any way "chimerical"  I think it's very real, and the interest on it 
alone saps something like a third of all the income taxes we Americans pay.  We 
owe real money to real lenders; or else the Fed is simply printing money, which 
devalues the currency and creates inflation.  Either way or both ways, there's 
nothing chimerical about it.
About 2 trillion of US government debt is held by the Chinese, who recently 
downgraded the quality of that paper from AAA to AA.  The Chinese wont willingly 
buy more US debt.
 
The current rate of inflation is about 6%.   It is currently misreported as 
about 2.5% via the trick called geometric adjustment of the CPI.  An accurate 
reporting of inflation will cause mass chaos so they dont dare tell the truth.
 
At an AWARE meeting several months ago I made the statement that the value of 
the US dollar would fall by 50% in the next year.  If one considers the price of 
gold as a measure of the value of the dollar, indeed the dollar has lost about 
50% of its value, howbeit it took longer than I said it was going to.  Part of 
that loss in value has been mediated somewhat by trading in virtual gold (gold 
that doesnt exist).  The Chinese recently also stated that the dollar has lost 
50% of its value, and are no longer buying Treasury bills but are buying 
gold like its going out of style.  They have chosen print Renminbi at the same 
rate that the Fed prints dollars thus maintaining the peg to the dollar.  

 
There was somewhat of a sell off of Treasury bills by the Chinese some time back 
but they seem to have agreed to desist rather than shake the house down.
 
In any event, deficit spending now is needed to put people to work, and 
eventually bring the deficit in line with historical levels. Given the shortage 
of demand, there is no concern about inflation--in fact, deflation is more of a 
concern. Our currency needs to be devalued in relation to the Chinese, but that 
will only make domestic products more competitive. Again, that's a different 
(but related) issue.
The RMB has been historically drastically undervalued relative to the dollar.  
There was a small adjustment some time back from 8.2xxx to 6.8xxx. The black 
market rate used to be 10 while the bank would give 8.23xx.  No one in China 
much wants dollars presently.   Devaluing the dollar will harm Chinese exports 
but cause Americans to pay more for what they buy, and the Chinese will pay less 
for the raw materials and feedstuffs they buy.   US debt is no longer considered 
to be a safe haven.  It looks like to me that a readjustment of the dollar 
downward and the RMB upward is inevitable.
 
 
 
 
> 
> 
> 
>
>DG
>
>
________________________________
From: John W. <jbw292002 at gmail.com>
>To: C. G. Estabrook <galliher at illinois.edu>
>Cc: peace discuss <Peace-discuss at lists.chambana.net>
>Sent: Wed, July 14, 2010 10:18:25 PM
>Subject: Re: [Peace-discuss] How to win in November: jobs & income
>
>
>
>On Wed, Jul 14, 2010 at 9:27 PM, C. G. Estabrook <galliher at illinois.edu> wrote:
>
> 
>"...beyond the scope of this post"?! Come on, John. When did you think anything 
>to be beyond the scope of your posts?
>>

*smile*


You're right that Americans are much more concerned about jobs than about the 
deficit - in spite of all that Republicans and Democrats and the entire MSM can 
do to get them worried about the chimerical deficit - but Americans doubt 
(correctly) that the war is producing many jobs. Our mercenary army, of course, 
and some arms manufacturing jobs - but they'd be there anyway. (Israel e.g. 
needs weapons.)  Americans' first reaction to an announcement that the US is 
withdrawing its troops from the Mideast would not be, "Oh, no, there go our 
jobs!"
>
No, probably not.  But I don't think the deficit (or the cumulative national 
debt) is in any way "chimerical"  I think it's very real, and the interest on it 
alone saps something like a third of all the income taxes we Americans pay.  We 
owe real money to real lenders; or else the Fed is simply printing money, which 
devalues the currency and creates inflation.  Either way or both ways, there's 
nothing chimerical about it.


In fact a withdrawal of US expeditionary forces abroad would produce a clamor 
for "building up our defenses" - and probably scotch any attempt (like the 
Barney Frank-Ron Paul proposal) to reduce the military.
>
Probably.  Because we (collectively) still believe in the "terrorist" bogeyman, 
and have absolutely no concept of how American foreign policy creates and 
sustains what terrorists there are around the world.


How about spending the money going to war actually to hire people (maybe even to 
do useful work, like building mass transit)?  The $33.5 billion "supplemental" 
war budget the House just passed would pay a lot of wages and salaries - more 
than it's doing through the profit-heavy "defense" industries.
>
Well, of course I agree with you here.  But apparently a majority of Americans 
don't....or at least our "leaders" don't.


We need a movement (in any political party) that demands the federal government 
provide a living-wage job to anyone who wants one. 


Though I think your suggestion here is overly simplistic, it would be lovely.



On 7/14/10 9:02 PM, John W. wrote:
>
>
>>On Wed, Jul 14, 2010 at 8:36 PM, C. G. Estabrook <galliher at illinois.edu
>>
>><mailto:galliher at illinois.edu>> wrote:
>>
>>[And no one believes any more that the Democrats will provide that. People
>>are beginning to notice that the war is making us poor. --CGE]
>>
>>I think not, Carl.  The reality is that war generally creates jobs but adds
>>to the deficit.  America's loss of jobs over the past 30 years is due, not to
>>war, but to other factors beyond the scope of this post.  Since according to
>>the poll Americans are much more concerned about jobs than about the deficit,
>>this would support the very opposite of your tortured reasoning.
>>
>>Americans Really Care About Jobs; Deficit, Not so Much By: Jon Walker
>>Wednesday July 14, 2010 8:01 am
>>
>>While collective deficit hysteria fully grips Washington, what the American
>>people really care about is jobs and the economy. According to a new CBS News
>>poll, 38 percent of Americans think the most important problem facing our
>>country is the economy and jobs. Second is the wars in Iraq and Afghanistan
>>at seven percent. Health care comes in third at about six percent, and all
>>the way back in fourth place, with a mere five percent, is the budget deficit
>>and national debt.
>>
>>I have said it before, but since members of Congress are descending into
>>highly destructive deficit insanity, it needs to be said again. The American
>>people don’t really care about the deficit. They consider it to be an issue
>>that should eventually get addressed but is a low priority right now. As
>>common sense would dictate, with almost 10 percent official unemployment and
>>a serious problem of long-term unemployment, what the American people care
>>about is jobs.
>>
>>When the poll specifically asked people for the most important economic
>>problem facing the country, the top response, again at 38 percent, was jobs
>>and unemployment. That number is even slightly higher when you consider that
>>three percent chose the issue of jobs going overseas. The collective topic of
>>budget, national debt and government spending was the top priority for only
>>10 percent of the country.
>>
>>For Washington politicians to obsess about the deficit at the expense of job
>>creation and protection is clearly not what most Americans want their leaders
>>to do. Doing the opposite of what the voters want is an even worse political
>>move, considering that increasing average real disposable income is a
>>significant predictor of how well the incumbent party will do in the next
>>election. So, refusing to extend unemployment insurance, continue COBRA
>>subsidies and provide aid to local governments to prevent massive teacher
>>layoffs right before an election is a bad move for the party in power. It is
>>even worse because the main excuse given for the focus on the deficit, bond
>>vigilantes, is nothing more than a Washington, DC fever dream with no basis
>>in reality. The cost of American borrowing is still much lower than even a
>>few years ago.
>>
>>So, this deficit hysteria is not only misguided policy and morally cruel but
>>also extremely bad politics. The pollsters and political advisers who have
>>convinced Democrats to focus on the issue at the expense of aiding regular
>>Americans are either secretly trying to destroy the party or are incompetent.
>>Either way, they should have been fired yesterday.
>>
>>http://fdlaction.firedoglake.com/2010/07/14/americans-really-care-about-jobs-deficit-not-so-much/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CampaignSilo+%28Jane+Hamsher+Campaign+Silo%29&utm_content=Twitter
>>
>
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