The Jefferson Tree - A platform for debate and discussion of current events and politics...

Social Protest Lit: Ebenezer Elliot, “The People’s Anthem”

A poem from Ebenezer Elliot entitled The People’s Anthem from Book IV called “Out of The Depths.” This chapter is focused on man’s pursuit of remedy for social injustice: When wilt thou save the people? O God of mercy! when? Not kings and lords, but nations! Flowers of the heart, O God, are they! Let them not pass, like weeds, away! Their heritage a sunless day! God save the people! Shall bring crime for ever, Strength aiding still the strong? Is it thy will, O Father? That man shall toil for wrong? “No!” ...

Stephen Moore’s Ridiculous Anti-Clean Energy Rant

Hard right-winger Stephen Moore took a break from pushing debunked trickle-down economic policies to take a pathetic shot at clean energy.  Let the stupid begin. …radical Greens, one of the most influential political forces in America today… Seriously?  He goes on to mention the famed Sierra Club as one of these forces.  And where did they rank in 2013 on lobbying: 755.  In fact, if we look at the top 50 interest groups giving to members of Congress this year, no sign ...

Anti-Israel Policies/Actions Is Not Anti-Semitsim

There have been growing protests in Europe against the mass murder of Palestinians in the Gaza Strip by the State of Israel. These actions are in response to the IDF killing 500 Muslims there with the vast majority of them being civilians. But what is troubling about these movements is, according to this article in the NYT, an anti-Semitic tinge has taken place at these protests. The story reads that in France: Several recent pro-Palestinian demonstrations in Paris have boiled over ...

Warren For President?

Today at the the annual Netroots Nation conference in Detroit, the nation’s largest gathering of liberal activists and organizers, Massachusetts Sen. Elizabeth Warren (D) reportedly drew an applause that Hillary could only dream of. According to NYT and Politico reports, Warren was a rock-star while Hillary Clinton, the likely Democratic candidate for President, was absent. Warren’s populist talking points and her history of taking Wall Street to task (remember that Warren was an early advocate for the creation of a new Consumer Financial ...

Social Protest Literatue at Sparking The Left

Here at STL we are starting a new feature. In between our political-insight posts, I will start publishing excerpts or entire pieces of great literature that speak to crucial social and political issues which span the centuries. Though almost all in the Western tradition, the subject matters are transcendental. Now first to name my source, I am taking pieces from Upton Sinclair’s selected and edited collection “The Cry for Justice: An Anthology of the Great Social Protest Literature of All Time.” ...

Pulitzer-Winning Journalist Detained for Being Undocumented

I was first brought aware of Jose Antonio Vargas’ story last week in a piece he penned in Politico. He explained that he was in the Rio Grande Valley, in the city of McAllen, just north of the Mexican border. He was there to see first hand the tens of thousands of undocumented children, most of them from Central America, and observe how they were being treated. The trip was also used for a news conference appearance and vigil organized by United We Dream, ...

GOP Refuses Funding for Border Children Projects

A humanitarian crisis unseen before at our borders is becoming more and more urgent everyday at Rio Grande Valley, TX, and other Southwest locations. And yet the GOP is arguing over numbers. Yesterday President Obama requested an amount of $3.7 billion from Congress to help aid the 57,000 unaccompanied minors who illegally crossed the border from the Mexico side since October. They are mostly from violence-ridden Central American countries, like El Salvador, Guatemala, and Honduras (Honduras has the world’s highest murder ...

Problems galore for the new government headed by Mr. Narendra Modi in New Delhi – Imperative for the first time PM and his council of ministers in governance amidst multiple challenges

The phenomenal victory for Mr. Narendra Modi and his party (the BJP) in May 2014 general elections has not only drawn the adulation of people world over but also silenced all its die hard critics at home and abroad. It was so stupendous and stunning that even the American government and its top leaders across party lines acknowledged Mr. Modi as the emerging democratic leader of the world, setting aside their past antagonism as an error of judgment, not based ...

Selective Outrage

War is hell.  All we have to do is look around the world to see its toll.  That being said, I don't understand the lack of outrage coming from this President and his administration other than that aimed at our one ally - Israel which is doing no more than trying to protect it's people from rocket fire and constant raids from Hamas. The fact that Palestinian civilians are getting killed is a tragic yet unavoidable aspect of this war.  Why ...

Why Are We So Full Of Hate?

What has happened to human kind?  No matter where you look we find ourselves surrounded by a world filled with hate. What puzzles me is how it's combined with political correctness.  Take this country where so many words are now frowned upon and even forbidden because they are hurtful to certain people.  Redskins, squaw, savage plus a whole lot applying to blacks, orientals and hispanics not to mention middle easterners.  Has it dawned on anyone banning the names has done nothing ...

Has Putin Over Reached Once Too Often?

My, oh my.  We've watched this man make mince meat of Obama over the past several years.  Each time you could see the smirk broaden and the swagger get more pronounced. He and his allies - Iran, China, Syria and North Korea were truly enjoying themselves. But as happens with a lot of bullies, they get over confident and suddenly everything around them collapses. I'm wondering if this is the case with the downing of the Malaysian passenger jet. With the death ...

If Only It WERE The Heat!

What a day.  A passenger plane has been shot down over Ukraine uncomfortably close to the Russian border. Hamas reneged on the humanitarian cease fire so Israel launched their ground offensive. Children still pour across the border while Congress dithers. It's now being reported parents are giving them birth control in case they are raped during the journey. Along that line former member of Congress, Todd Aiken, who once talked about legitimate rape and the idea that women's bodies protected them from becoming ...

Hannity's Histrionics

For a person who doesn't have much faith in the intellect of pundits, I wonder why I watch them so often.  I wonder even more why the cable outlets and networks that employ them don't take more care in who they hire. Many of them get on crusades that bear no resemblance to reality.  Sean Hannity is one of the most prominent. The night before last  he was on his Bowe Bergdahl kick demanding to know why he was returned to ...

Do Actions Speak Louder Than Words?

If the President could run away from the border mess any faster I'm sure he would. It's being said it's because being seen in the setting of kids crammed into confined spaces with their scabies and lice would reflect badly on him.  It could even be his Katrina.  Well, maybe.  But who's fault is that? It goes to show his handlers aren't as smart as they think they are.  For one, drinking beer and shooting pool in Colorado, a state where ...

The Kids Always Went Home

Watching the immigration mess going full bore brought to mind a lot of things that have involved children from other nations.  The first thing that comes to mind is the Disney song It's a Small World After All that speaks to all we have in common. Hopes, dreams, all the warm fuzzy stuff. We've had exchange student programs where a student from another country lives with a local family to learn not only academics but what life in American and Americans ...

The Militia Is Coming, The Militia Is Coming!

That's all we need! News has it a call has gone out for militia, both unarmed and armed, to gather along the border to help private land owners protect their property in something called Operation Save Our Borders.  Terrific! Remember how well it went when militia turned out to help to  help Cliven Bundy in his fight over Federal grazing rights in Nevada?  It came within a hair's breadth of turning violent. I really feel for the border towns who are the ...

I consider the foundation of the Constitution as laid on this ground: That 'all powers not delegated to the United States, by the Constitution, nor prohibited by it to the States, are reserved to the States or to the people' (10th Amendment). To take a single step beyond the boundaries thus specifically drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible to any definition. Thomas Jefferson
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Ralph Musgrave - Ralphanomics

Hogwash from the Bank of England on QE.

I’ve just been through a BoE attemptto justify QE. It’s drivel.

After a few hundred words explaining what QE is, their first suggestion as to why QE might actually stimulate economic activity is that, “Direct injections of money into the economy, primarily by buying gilts, can have a number of effects. The sellers of the assets have more money so may go out and spend it.” (p.9).

“Can have”… “sellers of the assets… may spend it”??? What are they on about? The people running the economy ought to have a good idea as to whether “sellers of assets ACTUALLY WILL go out and spend”. Phrases like “May spend” and “can have” just aren’t good enough.

Plus I can think of a very good reason why “sellers of assets” WILL NOT “go out and spend”.

People hold Gilts (directly or indirectly as part of their pension fund) because that is a chunk of their wealth that they regard as their SAVINGS!!!!! Yes: S-A-V-I-N-G-S. If that chunk is converted to cash, the most reasonable assumption is that they will still regard said chunk of their wealth as savings. I.e. the WON’T go out and spend it. Doh!!!

The stock market.

The BoE continues, “Or they may buy other assets instead, such as shares or company bonds. That will push up the prices of those assets, making the people who own them, either directly or through their pension funds, better off. So they may go out and spend more.”

“May go out??” Why not look at the actual evidence here? This study found that in recent years consumer spending rises by one THOUSANDTH of a dollar for every dollar increase in a consumer’s stock market assets. So boosting stock market prices is an absolutely brilliant way of boosting consumer spending, isn’t it?

Moreover, even if boosting stock markets DOES significantly boost consumer spending, where is the justice in largess towards the wealthy, while the less well-off don’t get to increase their consumption of consumer goodies? Oh I forgot: politicians, central bankers and the wealthy are all in cahoots. Silly me.

The BoE continues, “And higher asset prices mean lower yields, which brings down the cost of borrowing for businesses and households. That should provide a further boost to spending.”

We’re suffering from the aftermath of a credit crunch caused by excessive and irresponsible borrowing, and all that central banks can come up with is trying to encourage more borrowing. Central bank staff clearly need psychiatric help.

Presumably central bank’s suggested treatment for someone just involved in a car crash would be to put them into another car and have them drive at 60mph into a concrete wall.

Reserves.

Next comes a real peach. The BoE claims “In addition, banks will find themselves holding more reserves. That might lead them to boost their lending to consumers and businesses.”

First, there goes that word “might” again: i.e. “we haven’t a clue”.

Second, anyone with a grasp of how the banking system works (and that evidently does not include central bank staff) knows that reserves are near irrelevant to commercial banks’ decision to lend. Or as Don Kohn (Former FRB Vice Chair) put it:”I know of no model that shows a transmission from bank reserves to inflation”.

Or as Vitor Constancio (ECB Vice President) put it: “The level of bank reserves hardly figures in banks’ lending decisions; the supply of credit outstanding is determined by banks’ perceptions of risk/reward trade-offs and demand for credit”.

As to the actual evidence, we’ve had an ASTRONOMIC and UNPRECEDENTED increase in bank reserve over the last two years. And the effect? Banks are more reluctant to lend then they were in the good old days when we had Captain Mainwaring type bank managers. What can you do in response to all this, but laugh?

Next, the BoE claims, “More generally, the Bank of England’s purchases of both government and corporate bonds also increase the total demand for those types of assets, pushing up their prices. This is another way in which the Bank’s actions will make it cheaper for companies to raise finance.”

No doubt QE does “make it cheaper for companies to raise finance”. But what in Heaven’s name is the point of boosting an economy purely via one particular form of economic activity, that is lending to companies? You might as well boost an economy just by boosting sales of cars, baked beans, central heating systems and massage parlours.

Central banks staff (and other smartly dressed economic illiterates mingling around the centres of power in the world’s capital cities) need to be reminded that the basic purpose of economic activity is the produce what the CONSUMER WANTS. That’s “what the consumer wants” either as expressed by consumers with their credit cards etc, and as expressed by consumer / voters at election time when they vote for a significant proportion of GDP to be allocated to public spending.

I.e. given a recession, what needs boosting is consumer spending and public spending. And the empirical evidence is that when consumers come by a windfall or their income increases, the do actually spend a significant proportion of the money concerned. See here, here, here or here.

Note that I didn’t use words like “may” or “might” or “can”. I cited EMPIRICAL EVIDENCE as to what consumers ACTUALLY DO.

As to public spending, if this cannot be increased quickly come a recession, then bureaucrats running government departments and local governments need to be given lessons on how to expand or contract their spending and the numbers they employ within a month or two. The actual SIZE of the increased spending does not need to be huge. 5% would do the job.

Ralph Musgrave - Ralphanomics

Author: Ralph Musgrave - Ralphanomics

I wrote a book on unemployment recently with James Galbraith, and others. Galbraith is one of Obama's economic advisers. I love the different cultures that exist in this world. I took an interest in them long before the daft word 'multiculturalism' was widely used. I want to see these cultures preserved. I want to see Tibet staying Tibetan, and Britain staying British.

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