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Away (from blogging — the writing, not the reading) and the economy, and especially the stock markets, continues in free fall.

Everyone is on edge, if not downright frantic, because if you’re too young to be that concerned about your retirement account and pension, you very well might be looking over your shoulder for economy-related pink slips.

The presidential campaign continues its free fall, from idealism and straight talk to Republican distortions and lies, and increasingly strident (and quite rapid, altogether a nice improvement over the “gentlemanly” Kerry debacle) Democratic responses.

And chanting relentlessly about Bill Ayers to mad-dog mobs (did Sarah Palin bring out every last one of this country’s rednecks?) while 401Ks keep decaying and mortgages keep resetting  is making ordinary, moderate people downright angry.

Fiddling while Rome burns, indeed.

My approach to the meltdown? I just don’t look at my funds.

If you’re not spending it tomorrow, why make yourself crazy? If you live long enough, you’ll see the markets come back. And I’m not retiring until my 90th birthday.

Of course those now living off of their pensions and especially their IRAs and 401Ks have a right to be furious with the criminal class of plutocrats running (yeah, and ruining) this country’s biggest financial institutions. And the Republican politicians who made the world safe for their crimes.

I can imagine some really juicy show trials come January.

Meanwhile, I’m reading lots of good stuff, enough so that this past week I find myself rather tongue-tied as a result.

So, rather than fight to get the words out, here’s a laundry list of worthwhile reading.

Jason Buckley at Washington Interns Gone Bad is one progressive political site I check out frequently, either through the good offices of BlogExplosion.com, or better yet, through our blogroll.

A favorite read (also on our blogroll) is Len at First Door on the Left, who seems to find the good stuff first, and apparently has access to the mother lode of political cartooning.

The 12 Angry Men Blog had the most concise rundown of the contents of the ” $700 Billion Wall Street Bailout” (and I saw a funny [rueful] comment somewhere tonight that for Wall St. billionaires it’s a bailout; proposals that would pay off mortgages of average citizens is socialism); another site I just don’t get to frequently enough.

Just found Scott of The Coyote’s Byte in the last week or so, and I’m glad I did. He picked up (and, more to the point, beat yr (justifiably) humble svt to the punch) on McCain’s extraordinary call during Tuesday night’s debate for Meg Whitman, late of (soon to be late?) Ebay as a potential Treasury Secretary. The same week that Ebay announced 10% in personnel layoffs. Like McCain’s pal, Carly Fiorino, lately of (thankfully robust, despite Fiorino’s “best” efforts) HP, these two famous Silicon Valley women have proven themselves to be all hat, no cattle when it comes to running their businesses. I wouldn’t want them coming near running this economy.

Warren Buffett? Now there’s one septuagenarian I would trust with my money, and my country’s fate. Obama, be very persuasive!

Political Realm is one of the most useful comprehensive political sites. Important news and commentary to read and view there, day in and day out.

Finally, TomPaine.common sense sends me a daily newsletter, proving every day that there’s nothing that’s ever been more needed, but is less common and more difficult to find in today’s perilous world, than common sense.

And everyone’s pace, save yours truly, has picked up, reflecting the relentless countdown to what well might be one of, if not the most important of this generation’s tipping points, November 4, 2008.

So, faithful reader, there’s billions of pages to read, even if I haven’t updated in eight days. But thanks for not giving up on me.

And, thanks for voting.

It’s it for now. Thanks

–MUDGE

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As some observers have noted after the two conventions, there were lots of distractions, lots of words, but not much in the way of substance.

Especially regarding this nation’s number one concern.

Iraq, you ask?

That’s so 2007.

No, it’s the economy — rather, the very dangerous state of the economy.

Our Republican friends, plutocrats, or plutocrat wannabe’s, don’t believe we have a problem. McCain is and has always been insulated from the real world by, first, years as a Naval officer, where the pay might not be royal but subsidized expenses are low; then years as a prisoner of war, where the cost of living takes on an entirely ugly but non-financial meaning; then many more years as a Senator, married to wealth, a combination as isolated from the real world as it gets. He relies on his good buddy and close advisor on topics economic, former colleague Phil Gramm of Texas, who believes we’re all whiners.

The Democrats talked a spectacularly good ball game, but had little substantive to offer us.

Even so, based on their track record, one has to believe that the Democrats are more likely to get it than the Republicans, who have spent the last eight years aiding and abetting the liars and thieves on Wall Street and beyond.

Meanwhile, the news, and its import, is grim and becoming even more so.

The Power of De

Op-Ed Columnist | By PAUL KRUGMAN | Published: September 7, 2008

Save the home lenders, save the world? If only it were that simple.

The just-announced federal takeover of Fannie Mae and Freddie Mac, the giant mortgage lenders, was certainly the right thing to do — and it was done fairly well, too. The plan will sustain institutions that play a crucial role in the economy, while holding down taxpayer costs by more or less cleaning out the stockholders.

But Sunday’s action needs to be seen in a larger context — that of the attempt by the Federal Reserve and the Treasury Department to contain the fallout from the ongoing financial crisis. And that’s a fight the feds seem to be losing.

We’ve come a long way from the days when Alan Greenspan declared a national housing bubble “most unlikely.” There was indeed a bubble, and since it popped two years ago home prices have fallen faster than they did during the Great Depression.

You got that, friends? Home prices have fallen faster in the past two years than they did during the Depression!

Except of course for the plutocrat class, who are apparently insulated from such plebeian concerns.

This great bail out leaves the CEOs of Fannie and Freddy licking their wounds with millions in severance and outlandish pay over the past several years while they directed their organizations into insolvency, and is symptomatic of tough, ugly times ahead.

Op-Ed Columnist – The Power of De – Op-Ed – NYTimes.com

So strategic thinkers, like Paul Krugman, see parallels with Japan, a country that just spent over a decade in an economic funk, that our own current problems threaten to renew for them.

It’s time for some substantive strategic thinking on rescuing the nation from this economic crisis from our presidential candidates.

If I dare to repeat myself, it’s going to take a liberal quantity of BOLD.

Senator McCain’s version of bold is his typically impulsive and reckless choice for vice presidential candidate, a political and religious wingnut. Palin makes Tricky Dick Cheney look like an accomplished statesman. After all his hidden agenda is only oil. And oil money.

Senator Obama, the ball is in your court.

Give your country something to chew on: a real plan to pull this country away from the abyss.

If you make sense, if you give people the substantive means, not just hopeful words, to see light at the end of this gloomy tunnel, then you win.

If you won’t, then I’m very afraid that you will be handing the election to those who vote on superficialities, not issues.

And I’m very afraid that those superficialities will beat you.

It’s ugly, I know, but true.

It’s it for now. Thanks,

–MUDGE

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Seldom are the battle lines as clear as they are in election season 2008.

Establishment conservative versus up from the streets progressive.

Moneyed comfort (via marriage) vs. up from food stamps, self-made comfort.

Explosive, short-fused temper vs. articulate, Ivy League erudition.

Chiseled in stone libertarian capitalism vs. government as proper societal safety net capitalism.

Bomb first, ask questions later approach to foreign affairs vs. talk first, inclusive globalism.

Pandering to the women’s vote with a barely qualified vice presidential choice vs. persuading women that progressive positions trump empty symbols (Sarah Palin is this generation’s Dan Quayle) every time.

The marketplace is the proper solution to the crisis in health care vs. too many families forego medical care because health insurance is out of reach and this must end.

There’s no problem with the economy that ceasing whining won’t cure vs. the last eight years have been economically unpleasant for nearly everyone who has less than $5,000,000 a year in income, and downright catastrophic for far too many working people.

NYTimes economist Paul Krugman put it very well:

Feeling No Pain

Op-Ed Columnist | By PAUL KRUGMAN | Published: August 29, 2008

My first reaction to Bill Clinton’s convention speech was sheer professional jealousy: nobody, but nobody, has his ability to translate economic wonkery into plain, forceful English. In effect, Mr. Clinton provided an executive summary of the new Census report on income, poverty and health insurance — but he did it so eloquently, so seamlessly, that there was no sense that he was giving his audience a lecture.

My second reaction was that in Mr. Clinton’s speech — as in the speeches by Hillary Clinton and Joe Biden (this column was filed before Barack Obama spoke on Thursday night) — one heard the fundamental difference between the two parties. Democrats say and, as far as I can tell, really believe that working Americans are getting a raw deal; Republicans, despite occasional attempts to sound sympathetic, basically believe that people have nothing to complain about.

As it happens, the numbers support the Democrats.

The Republicans who have the ear of John McCain are certain that there’s no such thing as not having health insurance, since people can always use hospital emergency rooms. Anyone who lives in the real world knows how crassly wrong-headed that is, especially because the bankruptcy courts are crowded with those whose emergency room and other medical bills have pushed them over the edge.

Op-Ed Columnist – Feeling No Pain – Op-Ed – NYTimes.com

Barack Obama made it clear, in that extraordinary event in front of 90,000 Democrats in Denver the other night, that he and the Democratic party understand the challenges that working people are facing on a daily basis, and are prepared begin the process of fixing that which eight years of George III’s misrule have utterly broken.

As a parent:

• of an adult son who, unemployed and uninsured, required two days of hospitalization last week that we required our extended family’s assistance to confront;
• of an adult, married, herself presently hospitalized once again as I write this daughter, whose insurance company has been giving her such a hard time about her costly medication that she’s had to file a case with her state’s insurance commission;

I have no difficulty understanding how truly broken is our national health system, where working people’s and their children’s medical well-being is subordinated to insurance companies mandates first, and always, to provide suitable returns to stockholders.

Can the Republicans fix this?

They don’t even see that we have a health care problem.

If the voters elect the Republican’s charming May-December couple, than they’ll have selected four more years of warm support for plutocrats and the Fortune 500, and crass neglect of the 98% of the rest of us.

Will the Democrats fix this?

Only if voters elect Obama-Biden nationally, and send Democratic legislators to represent them in Congress, will this nation regain the opportunity to begin to repair the broken health system, as well as to begin to repair our infrastructure osteoporosis and thereby the economy, and to begin to restore our moral leadership in world affairs.

Seldom are the battle lines as clear as they are in election season 2008.

It’s it for now. Thanks,

–MUDGE

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MUDGE’s Musings

As I begin it’s near the nominal end of a summer Saturday; normally I might have had the opportunity to create some kind of post much earlier, but today was not normal, but that’s acceptable. Today was a beautiful day, and it had very little to do with the weather.

Disposed of the usual Saturday morning errand, grocery shopping, in reasonable fashion although closer to noon, having slept in somewhat later than is common.

Picked up MUDGElet No. 3 at his studio in his grandmother’s basement, took him to lunch at a sandwich shop on the way north to my favorite annual outdoor art fair. Mrs. MUDGE had determined that she was going to pass on the opportunity, due to the 90/90 (degrees Fahrenheit/percent humidity) weather, and the dire state of our discretionary art budget, and I was glad of the company.

We didn’t spend a long time there, but he especially enjoyed our stroll up and down one small section of what usually is a sprawling affair spread across several suburban downtown streets and parking areas.

Distressed economy note: fewer exhibitors, and many fewer members of the visual art loving public today (in previous years this particular event has been wall-to-wall people), but those in attendance appeared to be having a good time.

So we headed back south after about an hour, and I dropped him off back at his studio and returned home, only to be happily surprised to find MUDGElet No. 2, and the lovely MUDGElet No. 2A, and our granddog the terrified (where men in general, and this man in particular are concerned) beagle.

Now, we’ve seen a lot of both of them (they do live nearby, I am grateful to report) this week, as they have been making use of our showers while their one and only bathroom is being rehabbed.

But, this visit was due to a neighborhood power failure, and they came over to see us, and oh, yeah, to cool off (90/90), and yeah, to shower.

But, it was fun seeing them, and they joined us for dinner, together with the J___’s, our friends of the absolute longest standing as a couple, having double dated with the future Mrs. MUDGE and yr (justifiably) humble svt before our respective marriages some 38 years ago — but who’s counting?

And just before the meal we were joined by MUDGElet No. 3, who is living with us these days, and it made for a delightfully crowded table.

So the blogging hours have been impaired.

Today, addiction or not, I didn’t miss them, really.

Family and old friends — doesn’t get much better than that.

Having a granddog who doesn’t scamper away when I raise an eyebrow in her direction: That just might be perfection.

It’s it for now. Thanks,

–MUDGE

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MUDGE’s Musings

We observe the first anniversary of the tragic collapse of the I-35W bridge in Minneapolis (August 1, 2007) with some sadness, and furious anger.

Sadness due to the thirteen lives lost, and 100+ injured.

Anger because the danger embodied in this country’s aging and dilapidated bridges, highways, levees and schools is criminally no closer to alleviation than 366 days ago.

Meanwhile, the economy is faltering: banks are failing, foreclosures are at record highs (three million empty houses!), the ranks of under- and unemployed growing apace.

What is it going to take to repair this country’s infrastructure osteoporosis?

What is it going to take to kick start the economy, to get people working and once again able to meet their mortgage obligations, perhaps even afford that $4.299/gallon gasoline?

It’s going to take a liberal quantity of bold.

I wasn’t there (my parents were young children) but this country faced a disturbingly similar crisis 76 years ago. Banks had failed by the thousands (defenestration became a popular Wall Street exit strategy). Millions of able bodied workers had no work.

The country, whose industrial and military might had tipped the balance and ended the bloody stalemate of the Great War, turned inward, closing off immigration, its historic lifeblood, and barricading trade, sending the entire globe into economic free fall.

The incumbent party (would you be surprised if I revealed that it was the Republican party?) wrung its hands and was the picture of abject futility.

A well-spoken and charismatic graduate of Harvard University stepped forward with some fresh ideas, promising a New Deal for the American people, and declaring that “the only thing to fear is fear itself.”

That New Deal served the country well for nearly 60 years. Hundreds of thousands were put to work to build highways, bridges, schools and dams. Labor and racial justice became the law of the land. Once again, this country’s industrial and military might prevailed in an even larger scale global war, the prelude to an economic and cultural explosion that became the envy of the world.

In many ways, it’s 1932 again. Bankrupted by pointless, and even worse, corruptly mismanaged war; hollowed out by energy policies set in Texas and Saudi Arabia for the benefit of the president’s oilmen sponsors; crumbling because the plutocrats have bamboozled citizens into believing that all taxes are bad, especially the ones that would make the plutocrats pay their fair share.

It’s going to take vision to fix the moral, the physical, the spiritual disrepair.

Hell, it’s going to take vision to recognize the mess in the first place, and vision to reach out for good plans from wherever they come (some of Roosevelt’s first programs, after all, were muscled up continuations of Hoover initiatives).

It’s going to take a liberal quantity of bold.

So, which party has the candidate with vision, who speaks with clarity, and seems to effortlessly engender inspiration and enthusiasm?

And which party has, despite its sober promises, begun swift boating and Rove-ing its way toward November?

So, where should our new president begin on January 20, 2009? That futile war needs to be contained, and ended, but that won’t happen overnight.

Al Gore and Boone Pickens won’t be severing our addiction to Middle Eastern petroleum in an instant, or even soon.

But those deteriorating bridges and roads, schools and levees: that’s an initiative that could begin Day One.

Put people to work, in the spirit of the reNEWed DEAL, rebuilding those highways and bridges.

Put people to work, in the spirit of the reNEWed DEAL, finishing with alacrity what the derelict administration of George III has disgracefully left incomplete, the restoration of New Orleans and its levees.

Put people to work, albeit with some training, in the spirit of the reNEWed DEAL, in those schools with too few teachers and too many underserved students, burying forever the lip service cynicism of “No Child Left Behind” and insisting that our children learn what they need to know, not what they need to pass dumbed down tests.

All this costs. Start by restoring equitable taxation on those of the plutocracy who have had a tax holiday for too many years. Ending that money pit called the Iraq Occupation, and getting smarter about resources and targets in Afghanistan will free up $zillions.

It’s going to take a liberal quantity of bold.

I believe I know from where bold might come from. I absolutely know from where it most definitely won’t.

It’s it for now. Thanks,

–MUDGE

MUDGE’s Musings

Frank Rich of the NYTimes eviscerated John McCain over both his supposed area of expertise, military affairs, as well as Sen. McCain’s admitted area of weakness, matters economic. It wasn’t pretty.

It’s the Economic Stupidity, Stupid

Op-Ed Columnist | By FRANK RICH | Published: July 20, 2008

THE best thing to happen to John McCain was for the three network anchors to leave him in the dust this week while they chase Barack Obama on his global Lollapalooza tour. Were voters forced to actually focus on Mr. McCain’s response to our spiraling economic crisis at home, the prospect of his ascension to the Oval Office could set off a panic that would make the IndyMac Bank bust in Pasadena look as merry as the Rose Bowl.

“In a time of war,” Mr. McCain said last week, “the commander in chief doesn’t get a learning curve.” Fair enough, but he imparted this wisdom in a speech that was almost a year behind Mr. Obama in recognizing Afghanistan as the central front in the war against Al Qaeda. Given that it took the deadliest Taliban suicide bombing in Kabul since 9/11 to get Mr. McCain’s attention, you have to wonder if even General Custer’s learning curve was faster than his.

Mr. McCain still doesn’t understand that we can’t send troops to Afghanistan unless they’re shifted from Iraq. But simple math, to put it charitably, has never been his forte. When it comes to the central front of American anxiety — the economy — his learning curve has flat-lined.

Rich follows similar economic criticism of McCain from Paul Krugman 12 days previously, before Phil Gramm elevated himself from has-been to economic advisor to get thee gone in just a few hours time.

Mr. McCain’s fiscal ineptitude has received so little scrutiny in some press quarters that his chief economic adviser, the former Senator Phil Gramm of Texas, got a free pass until the moment he self-immolated on video by whining about “a nation of whiners.” The McCain-Gramm bond, dating back 15 years, is more scandalous than Mr. Obama’s connection with his pastor, the Rev. Jeremiah Wright. Mr. McCain has been so dependent on Mr. Gramm for economic policy that he sent him to newspaper editorial board meetings, no doubt to correct the candidate’s numbers much as Joe Lieberman cleans up after his confusions of Sunni and Shia.

[By the way, the photo at the top of the column will hereby become Left-Handed Complement's official John McCain portrait.]

Carly Fiorina has picked up the economic cudgel from temporarily banished ex-Sen. Gramm. She comes with a wonderful track record: booted out of Hewlett-Packard after five years of big talk and miserable results.

Then Rich wanders into a long-time hobby-horse of this nanocorner of the ‘Sphere©, Michael Bloomberg, positing him a potential vice president on the McCain ticket.

Mr. McCain reminds us every day how principled he is. That presumably means he’d risk a revolt by his party’s dwindling agents of intolerance and do everything in his power to persuade Mr. Bloomberg to join his ticket in the spirit of patriotic sacrifice. The politics could be advantageous too. A Bloomberg surprise could impress independents and keep the television audience tuned in to a G.O.P. convention that will unfold in the shadow of Mr. Obama’s address to 75,000 screaming fans in Denver.

Op-Ed Columnist – It’s the Economic Stupidity, Stupid – Op-Ed – NYTimes.com

All this vice presidential speculation this year provides the usual column-inch filler during the summertime doldrums for the political junkies out here, but it’s also particularly of interest, in a year of unusually vulnerable presidential candidates. (Hey, if Hillary can point it out, so can I. I’m going to hate myself in the morning, though.)

But, hey, Frank Rich! I want Michael Bloomberg for the good guys.

It’s it for now. Thanks,

–MUDGE

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MUDGE’S Musings

Can anyone still doubt our national (perhaps global?) economic distress? Runs on the banks. A tank of gas edging toward Benjamin territory. Someone you know (or mayhaps many someones you know) out of work and/or looking. Or giving up looking. Starbucks (Starbucks!) closing 600 stores.

Let’s have a show of hands: How many of you (U.S.) readers believe that this Spring’s tax refund “stimulus” could have been an order of magnitude larger (that’s 10 times), and still not been enough?  Two orders (that’s times 100)?

It doesn’t go away, our concern with the dire state of the economy.

Paul Krugman, economics professor and columnist of the NYTimes has been consistent in identifying our present financial dismay, and he has some grim news — it’s not going to get better very quickly.

L-ish Economic Prospects

By PAUL KRUGMAN | Published: July 18, 2008

Home prices are in free fall. Unemployment is rising. Consumer confidence is plumbing depths not seen since 1980. When will it all end?

The answer is, probably not until 2010 or later. Barack Obama, take notice.

It’s true that some prognosticators still expect a “V-shaped” recovery in which the economy springs back rapidly from its slump. On this view, any day now it will be morning in America.

But if the experience of the last 20 years is any guide, the prospect for the economy isn’t V-shaped, it’s L-ish: rather than springing back, we’ll have a prolonged period of flat or at best slowly improving performance.

This is the real deal, folks, upper case ‘R’ Recession. And our next president is going to find it’s why he was elected, and is going to be under the gun to do the many substantive actions (as opposed to the laughably symbolic “stimulus” just handed down by George III — let them eat cake, indeed!) necessary to kick the economy back into gear.

Op-Ed Columnist – L-ish Economic Prospects – Op-Ed – NYTimes.com

American consumers propped up the economy (that was hemorrhaging manufacturing capacity and blue color (and trade union) jobs at a ferocious rate) for most of George III’s benighted presidency by using the ever increasing value of their home equity as an ATM.

Housing prices continue to plummet, and Prof. Krugman believes that they will continue to do so for no less than three more years. The colorful economic term for that ugly state of affairs, where one’s mortgage obligation is larger than the home’s new value, is “upside down.” It feels like that large red arrow plunging into tender flesh.

Many of us have stopped spending on anything more than the basics: food (how high is up?); shelter (oh my God, I owe more than it’s worth!); gasoline for our guzzlers. No wonder Starbucks has suddenly become a luxury to be done without, rather than a daily necessity for so many.

When voters find themselves (in record numbers, if trends can be believed) confronting their presidential and legislative choices in their polling places this November, their economic well being will more than likely drive those decisions, more than any other issue.

Paul Krugman believes that their logical decisions will result in the election of Barack Obama, who represents a change, no matter of what degree, from those failed and the fraudulent custodians of the national economy who need to be swept out of power (my characterization not his!).

One can only hope that he and his brain trust aren’t so focused on the short term (i.e., November 4) that they’re not ready to start immediately to set their new government on a path that leads directly toward economic recovery, stat.

Hiring on expert, articulate, wise men like Paul Krugman would be an excellent beginning.

It’s it for now. Thanks,

–MUDGE

MUDGE’s Musings

We’ve spent the past month or so watching the candidates come off their primary paces, attempting to rejigger their respective approaches to the general election, and taking some hits for the resulting adjustments.

The mishandled wars in Iraq and Afghanistan have been top of mind for many voters since the pointless charade of “Mission Accomplished!”

Paul Krugman reminds us, however, of another paramount issue in this election, the economy, and what its dire condition means to John McCain.

Our current economic distress has been covered in this nanocorner of the ‘Sphere© quite frequently, most recently while highlighting this glass-half-full analysis from two senior Federal Reserve Bank officials. The U.S. economic juggernaut didn’t get to its current poor state by itself. President Bush, and his Republican allies in Congress can take plenty of the credit.

Behind the Bush Bust

Op-Ed Columnist | By PAUL KRUGMAN | Published: July 7, 2008

By huge margins, Americans think the economy is in lousy shape — and they blame President Bush. This fact, more than anything else, makes it hard to see how the Democrats can lose this election.

But is the public right to be so disgusted with Mr. Bush’s economic leadership? Not exactly. We really do have a lousy economy, a fact of which Mr. Bush seems spectacularly unaware. But that’s not the same thing as saying that the bad economy is Mr. Bush’s fault.

On the other hand, there’s a certain rough justice in the public’s attitude. Other politicians besides Mr. Bush share the blame for the mess we’re in — but most of them are Republicans.

For Krugman, our crummy economy has many causes, but three of the most important are the housing/mortgage bubble, the cost of health care and high commodity (fuel and food) prices. And the seeds to the crises in all of these areas were sown, if not on George III’s watch, then under the constipated purview of the six years of Republican Congresses that immediately preceded Bush’s presidency.

Op-Ed Columnist – Behind the Bush Bust – Op-Ed – NYTimes.com

Whatever his strengths might be, the economy has not been McCain’s area of expertise. As a result, he’s fallen back on knee-jerk Republican economic thought (cut taxes for the wealthy, and the rest be damned) that has led us into this all-but recession. We’ll let Paul Krugman have the last word:

And bear in mind that John McCain has gone to great lengths to affirm his support for Republican economic orthodoxy. So he’ll have no reason to complain if, as seems likely, the economy costs him the election.

It’s it for now. Thanks,

–MUDGE

© Ketian Chen | Dreamstime.com

MUDGE’s Musings

We begin this Independence Day celebration in the U.S. with a rather gloomy attitude.

We’re still losing good men and women to the misguided and mishandled Iraq and Afghanistan wars. Fuel and food prices seem to be climbing as we watch. Once my monthly bills from ExxonMobil, my gasoline purveyor of choice (the reason why this is so is worthy of a post of its own — soon!) were under $100. Now, maintaining the same or less driving, as I try to mitigate the costs of commuting with more days working from home, I’m relieved if that bill is under $200.

What we hear of the economy (job losses, inflation rate) and its thermometer (the Dow Jones Industrial Average) is disturbing. Aren’t we officially in recession?

Every one of us knows someone, or more than one, job-seeking.

And the news from the world outside our parochial boundaries is not much better. War news from Iraq, Afghanistan and Pakistan remains grim. The president of Zimbabwe, certain that he’d lose in a fair election, murdered thousands of opposition supporters, and sent his opponent fleeing to the Netherlands embassy for shelter. Israel seems to be seriously considering a preemptory attack on Iran’s nuclear bomb facilities. Gazprom, the Russian petroleum/natural gas giant, has its sights set on becoming the largest corporation in the world before long. How can any of that be good by any measure?

Well, a couple of chieftains at the Federal Reserve Bank have decided to show us a glass half full version of the part of the story they influence, the economy. And, it makes for some attention-grabbing reading.

How Are We Doing?

By W. Michael Cox and Richard Alm From the July/August 2008 Issue

The American economy is in a rough patch. But the long-term trends are good—and there is a price to economic pessimism.

When a presidential election year collides with iffy economic times, the public’s view of the U.S. economy turns gloomy. Perspective shrinks in favor of short-term assessments that focus on such unpleasant realities as falling job counts, sluggish GDP growth, uncertain incomes, rising oil and food prices, subprime mortgage woes, and wobbly financial markets.

Taken together, it’s enough to shake our faith in American progress. The best path to reviving that faith lies in gaining some perspective— getting out of the short-term rut, casting off the blinders that focus us on what will turn out to be mere footnotes in a longer-term march of progress. Once we do that, we see the U.S. economy, a $14 trillion behemoth, is doing quite well, thank you very much.

Cox and Alm go ahead and illustrate their thesis quite compellingly.

As Americans know, today’s rising food and energy prices are crimping household budgets. But there are other ways to understand the relative size of the rise of food and energy costs. For example, in terms of time worked at the average pay rate, the real cost of a 12-item basket of basic foods has hardly budged. And while the work-time price of gasoline doubled in recent years, a gallon of gasoline still goes for less than 11 minutes of work (Fig. 3). At 20 miles per gallon, an hour of work will get you 110 miles down the road; at 30 mpg, you can go 165 miles.

And, if you make the comparisons broad enough, we’ve come a long way in 58 years.

The lament-filled anecdotes about long hours and low pay just don’t stand up to the test of hard data. Real total compensation—wages plus fringe benefits, both adjusted for inflation—has been rising steadily for several generations (Fig. 4). Over time, the fringes have become a larger share of the rewards for work, dampening the statistics on wage increases. At the same time, we’re spending less time at work. An average workweek has fallen from 39.8 hours in 1950 to 36.9 hours in 1973 to 33.8 hours today.

The tables and graphs that accompany the story are worthy of study in their own right. The one showing EBay activity peaking during U.S. working hours is quite telling. Apparently, more than a little of our leisure time is spent while on the job.

The standard of living goes up, and so does safety, both on the job, and off. One number that pops out, though not a subject of the essay, is the comparison of deaths per billion miles between automobiles and airplanes. You are 100 times safer flying than driving. Too bad they never got around to inventing those flying cars the futurists have been promising for 100 years! And then there’s health care, the bugaboo of politicians everywhere.

Medical advances have brought down death rates for many diseases (Fig. 10). Gains have been made against heart disease and cancer in recent decades. Death rates from disease aren’t the only sign that Americans have benefited from rising healthcare spending. Since 1960, life expectancy has risen by seven years for men and six years for women. At a time when so many Americans are vexed by the high cost of healthcare, these gains suggest the country may be getting something for its money (Fig. 11).

The conclusion drawn by these fine gents from the Federal Reserve is that, despite the short term clouds, it’s been mostly sunny for a long time, and there’s no reason why this long-term trend shouldn’t continue.

So many data points add up to steady, continuing progress for average Americans—and there’s no reason not to expect the future will bring further progress. Bad news will pop up from time to time, just as it has in every decade of American history.

And if you read to the end, you get a nice reminder that, even with the Dow stocks taking something of a beating currently, that few investments beat stock investing in the long run. (As I used to respond to the calls from new brokers who cold-called me, I invest in commodities: hamburger meat and buns, lettuce, apples, milk. There’s nothing left for stocks!).

How Are We Doing? — The American, A Magazine of Ideas

Yr (justifiably humble svt takes all of this good news with some measure of skepticism.

I just love being strategic, taking the long view and all, but it really is difficult to reconcile the writers’ long-term positives with the day-to-day reality of $4.199/gallon gasoline, and the $5.23 box of bran flakes on the grocery shelf.

But, we’re all going to parade, or watch the parades (and this election year, those parades will be longer than usual since there will be plenty of smiling and waving photo opportunities for your favorite local and national politicians). We’ll sit on our picnic blankets and listen to the bands and ooh and ah over the fireworks.

For one day, at least, we can celebrate. In that spirit, of parades, band concerts, picnics and fireworks, we should enjoy this contribution to our entertainment by our friends in the Federal Reserve.

Monday, back to the real, glass half empty, world.

Happy Independence Day!

It’s it for now. Thanks,

–MUDGE

Oil prices. A very hot, very sticky, very crude topic. We’ll look at four versions of reality.

MUDGE‘s reality: $4.259/gallon at his neighborhood Shell.

From the mosaic, we can hope that some kind of truth emerges.

No question that we are living in interesting times.

Oil spill no. 1. How high is up?

$200 a barrel petroleum. If you think your world is changing around you, buckle up.

Will Oil Really Hit $200 a Barrel?

By Desmond Lachman | Friday, May 30, 2008

Rudi Dornbusch, the renowned economist, once said that he did not understand how Mexico’s central bank board members could make the same mistakes time after time. Looking at the ongoing frenzy in the global oil market, one appreciates what Dornbusch meant. Once again, many market participants appear to believe that oil prices can only go up. It seems that the painful lessons of the 2001 dot-com bust have been forgotten, as have the lessons of the much more recent U.S. housing crash.

In their state of forgetfulness, many pension funds and insurance companies have built up very large open positions in the oil futures market. These positions are now estimated to total over $200 billion, roughly the equivalent of a full year of Chinese oil demand. They have contributed to the recent spectacular run-up in oil prices.

To be sure, there are many reasons why global crude prices have doubled over the past year from $65 a barrel to an all-time record of $135 a barrel. For starters, it has become increasingly apparent that world oil production is stubbornly stuck at around 85 million barrels a day; new oil production coming on stream is approximately offset by the depletion of the world’s major and aging oil fields. This depletion is occurring at a time when emerging market economies such as China and India are growing rapidly and their citizens are becoming increasingly energy-intensive in their consumption habits.

The writer makes a very useful observation. Skyrocketing oil prices are bound to slow economies in the developed world. In which case, those cheap manufactured goods wending their way across the Pacific in that endless line of giant container ships might not have buyers at the other end.

When that happens, when the orders in China and Vietnam start drying up, how long before their oil consumption begins to falter?

Sky-high oil prices pose a serious threat to global economic growth, and a global slowdown would undermine the very basis of those prices. No, oil prices cannot rise forever, despite what many of today’s market participants seem to think.

[Please click the link below for the complete article -- but then please come on back!]

Will Oil Really Hit $200 a Barrel? — The American, A Magazine of Ideas

I don’t believe that we have sufficient imagination to predict the outcome of such an economic tsunami. But…

Oil spill no. 2. Maybe “up” is now?

Maybe we don’t have to wait until China’s ginormous industrial output grinds to a halt as Wal-Mart’s orders run dry.

Our next correspondent feels that oil prices just might be this year’s “bubble.”

6 Reasons Why Oil Is Ready to Drop

May 28, 2008 03:07 PM ET | James Pethokoukis

I think the “oil is in a bubble” meme is gaining strength. Market strategist Ed Yardeni thinks the hysteria may be ready to wane. His reasons:

1) Russia is scrambling to cut taxes on its oil industry to boost investment in new fields and to reverse a looming decline in production.

2) Brazil continues to find more oil offshore in the Santos Basin, a collection of potential oil fields that could be one contiguous megadeposit of crude oil.

3) In the US, Congress may start considering ending longstanding bans on domestic drilling.

4) Asian countries are starting to reduce their domestic fuel subsidies, which could dampen demand.

5) Americans are driving less. The Transportation Department reported Friday that in March, Americans drove 11 billion fewer miles than in March 2007, a decline of 4.3%.

6) American Airlines said it would reduce flights in the face of soaring fuel costs. Air France warned of a profound restructuring of the world airline industry.

Sounds like economic trends are forming that perfect storm early. In other words, oil prices today are high enough to create pressure to cut the price.

History may prove to be a better guide to future oil prices than we now imagine. This is why I consider oil prices to be a bubble. Oil has reached a level that it will not be able to sustain—at least not without some significant retrenchment.

[Please click the link below for the complete article -- but then please come on back!]

6 Reasons Why Oil Is Ready to Drop – Capital Commerce (usnews.com)

Oil prices already at a peak, bound to retrench? A nice thought, for the short term.

Oil spill no. 3. I am shocked, shocked. Oil prices may have been illegally manipulated!

Intriguing how all the news seems to converge. Here’s a disturbing story about a Federal investigation that might help explain what’s been going on. Maybe more criminomic forces (a new MUDGE coinage, and you’re welcome to it!) than economic ones were at work boosting petroleum prices.

Probe of Crude Oil Trading Disclosed

By Steven Mufson | Washington Post Staff Writer | Friday, May 30, 2008; Page D01

During continued volatility in oil prices, federal regulators said yesterday that they had been investigating crude oil trading, storage and transportation for the past six months with a focus on possible “futures market manipulation.”

The Commodity Futures Trading Commission, which normally keeps investigations confidential, said in a statement that it was “taking the extraordinary step of disclosing this investigation because of today’s unprecedented market conditions.”

Those conditions have sent oil prices to record heights, adding to the U.S. trade deficit, hurting consumers and companies, and weighing heavily on the nation’s economy.

So, the government is getting around to investigating that traders and big time investors, those wonderfully benign and trustworthy types whose banking confreres brought us the subprime mortgage debacle, might have been behind much of the recent rise in petroleum prices. I am just shocked, shocked.

As Claude Rains put it in the immortal Casablanca:

I’m shocked, shocked to find that gambling is going on in here!

Meanwhile, in this rather an omnibus of a story the Post reports that prices have been exceptionally volatile lately; that MasterCard reports gasoline purchases down (“honey, that trip down to Branson to see that Elvis show for our vacation week just isn’t going to work this year”); and a guy from OPEC thinks that prices just might be too high.

[Please click the link below for the complete article -- but then please come on back!]

Probe of Crude Oil Trading Disclosed – washingtonpost.com

All of these converging trends might lead one to believe that gasoline prices might be at a peak now.

Not so fast, kiddo.

Don’t let a retrenchment go to your head. Long term, we need to kick the petroleum as fuel habit.

Oil spill no. 4. Short term relief might be possible. But long term, we must change

Thomas L. Friedman calls the candidates to account.

Truth or Consequences

Op-Ed Columnist | By THOMAS L. FRIEDMAN | Published: May 28, 2008

Imagine for a minute, just a minute, that someone running for president was able to actually tell the truth, the real truth, to the American people about what would be the best — I mean really the best — energy policy for the long-term economic health and security of our country. I realize this is a fantasy, but play along with me for a minute. What would this mythical, totally imaginary, truth-telling candidate say?

For starters, he or she would explain that there is no short-term fix for gasoline prices. Prices are what they are as a result of rising global oil demand from India, China and a rapidly growing Middle East on top of our own increasing consumption, a shortage of “sweet” crude that is used for the diesel fuel that Europe is highly dependent upon and our own neglect of effective energy policy for 30 years.

As noted previously, $4.00/gallon fuel is cheap (truck drivers demonstrated in London the other day against $9.00/gallon diesel fuel!). But cheap relative to the world is still oppressively dear relative to our paystubs.

We need to reset our expectations. Friedman would like to see one of the candidates (and we guess we know which one he means, the one of the three who has not so far pandered to the crowd so superficially where this issue is concerned) step up and tell the electorate what they need to hear, and what most politicians refuse to say.

We must not make that mistake again. Therefore, what our mythical candidate would be proposing, argues the energy economist Philip Verleger Jr., is a “price floor” for gasoline: $4 a gallon for regular unleaded, which is still half the going rate in Europe today. Washington would declare that it would never let the price fall below that level. If it does, it would increase the federal gasoline tax on a monthly basis to make up the difference between the pump price and the market price.

Proud Prius owner Friedman doesn’t have a lot of patience for we who cling to our SUVs (how self-righteous is that?); we changed our profligate habits after the oil shock of the 1970s, let ourselves get lulled by artificially low prices, and now we need to change them once again.

[Please click the link below for the complete article -- but then please come on back!]

Op-Ed Columnist – Truth or Consequences – Op-Ed – NYTimes.com

In the 1970s, carmakers responded desperately with truly horrible small cars (pictured here is one of yr (justifiably) humble svt‘s all time favorite dogs, the American Motors Pacer).

Today at least there are more competent options, some even sold by U.S. auto manufacturers, for those who can afford to, or those who have the fortitude to, replace their Explorers and Trailblazers with vehicles that sip rather than gulp.

The last century was defined by its world-wide wars, and also by its application of petroleum powered individual transportation in developed countries to totally transform what once had been a mainly rural landscape, in the process making suburbanites and indeed exurbanites of so many of us.

This new century (seven years in, is it still new?) will see massive changes in the ways people move around. The era of personal transportation isn’t over by any means (remember there’s a company in India, Tata Motors, about to build a $2,500 car for its domestic market), although in order for it to sustain, the nature of transportation’s motive power inevitably must shift away from petroleum.

As Mr. Friedman might add: or else.

It’s it for now. Thanks,

–MUDGE

Driving earlier this evening to pick up take out for dinner, found myself listening to radio news. Never do that, if I can help it. But this story sprang out at me.

It’s a crime story. Not usually a staple of this nanocorner of the ‘Sphere©. And it’s our next installment in a ever-lengthening series.

“Hold on, Mudge,” I hear faithful reader protesting. “What the devil does crime have to do with our deepening recession.”

Just about everything.

City crime statistics show increased violence

Violent crime is up 6% in first four months of the year compared with 2007, police say

By Angela Rozas | Tribune reporter |

4:52 PM CDT, May 16, 2008

Homicides in Chicago rose by almost 9 percent, while violent crime was up more than 6 percent in the first four months of 2008, compared with the same period last year, Police Supt. Jody Weis said Friday.

Weis blamed the uptick in violence on “unique” sets of multiple homicides, including two triple murders and a quintuple homicide, all in April. In April, there were 47 murders, compared with 34 the year before. A total of 134 homicides were tallied over the first four months of the year, compared with 123 in 2007.

Weis said the department is trying to combat the violence by improving coordination between patrol officers and specialized units and focusing more on the city’s hot spots to quell gang violence. He also said the department plans to conduct joint missions with specialized units and will deploy helicopters to patrol over the hot spots.
Some units have already been taking to the streets on weekends in battle dress, a visual deterrent to crime, Weis said.

First, some context.

The Chicago Police Department has required overhauling and reforming just about every 10 years. I don’t actually have the stomach to do the research for you, but the CPD wants to be a better department, but keeps falling short, in ugly ways. Detectives whose night jobs employed them as mob assassins. Cops whose methods for extracting confessions from suspects would sicken those hardened activists at Amnesty International. Etc.

Every few years, they bring in a new Superintendent of Police to clean house. The latest, who was appointed just over three months ago, has the oddly uncoplike name of Jody Weis, and came to Chicago from leading the Philadelphia office of the FBI.

So violent crimes are up. Yr (justifiably) humble svt is not at all surprised.

[Please click the link below for the complete article -- but then please come on back!]

City crime statistics show increased violence — – chicagotribune.com

In the mid-1990s, big city police departments took credit for a stunning reduction in crimes of all kinds, especially violent crimes. This occurred most emphatically in New York City under Mayor Rudy Giuliani and his hand-picked chief of police, Bernard Kerik. Kerik, a man who may yet go to jail himself, succeeded William Bratton, the man who in NYC and later in Los Angeles provided the clean sweeping broom in those cities, and whom Giuliani replaced when Bratton seemed to be getting more credit than Rudy for the improved crime statistics.

Okay, there’s no question that the NYC department required overhauling; they all seem to every few years. Every bureaucracy becomes set in its ways, resistant to internally driven change. When your bureaucracy carries batons and loaded sidearms, the need for radical change becomes more pressing.

But it’s my contention that the true cause of the incredibly steep decline in violent crimes in NYC and most big cities, including Chicago, was not improved policing, but a greatly improved economy.

Remember the 1990s? The Clinton White House took credit, perhaps deserved, for the boom times that only stumbled during the tech bubble of 2000-2001, and crashed as a result of 9/11, after Clinton’s watch.

But, they were good economic times, when essentially anyone who wanted a job could find one. Even the anyones who grew up in marginal conditions in fatherless households, where the most admirable role model might be the neighborhood’s bling-encrusted drug lord. In bad times, such drug-daddies are the employers of last resort in such environs. Such careers are often violent, extraordinarily dangerous and short.

In good times, there are usually conventional jobs for civilians, with predictable paychecks and regular hours where the dangers are usually limited to slick factory floors, carpal tunnel syndrome, or commuter-clogged highways.

Now faithful reader might recall another explanation for the diminished crime rate of the 1990s, presented by a University of Chicago economist, Steven Levitt, who later became even more famous for the publishing phenomenon of 2005: Freakonomics.

You see where I’m going, right? The headline tipped it off. Can’t avoid noticing that the economy has taken a severe hit, especially in the past several months.

Guys who had decent, if low-paying jobs in factories might have lost them to even lower paid factory workers in Sichuan or Vietnam.

High school dropouts, never anyone’s first choice for hire, are congregating on corners again. Can there be any wonder why crime statistics are climbing?

All of the bureaucratic and procedural overhauls in Bill Bratton’s manual (and Supt. Weis has replaced most of his direct reports in his first 100 days in the position) are not going to prevent the exurban (2-hours commute each way) metal-bending shop making cheap lawn furniture from closing its doors and putting its marginally employable janitors and day laborers back on the mean street corners.

And then back into the crime statistics.

As a lifelong resident of one of Chicago’s near suburbs, I wish Jody Weis well, for all of our sakes.

But history seems to be telling us that the best cure for violent crime isn’t more, better led policing. The best cure for violent crime isn’t to build more prisons (although this is, regrettably, one of the U.S.’s few growth industries).

The absolute best cure for violent crime is to put the people who want to work (and call me the un-MUDGE tonight, but I firmly believe that, give most people a chance and they’ll pick low-paid but honest and safe most of the time) to work.

There’s a country to rebuild, after all. Good, honest work for anyone who wants it. Then, watch the violent crime statistics plummet.

It’s it for now. Thanks,

–MUDGE

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Surprisingly (to me at least) it’s been several weeks since we last looked at the nation’s recession. Maybe we were hoping that we would wake up and find it was all a bad, bad dream.

Basically, the time since Jan. 20, 2001 has been a bad, bad dream; our collective misfortune is that we’ve been experiencing it together. Okay, people, no more sushi from that place down the street!

But, about our recession. Did you catch the news that the unemployment numbers weren’t as desperately bad as predicted? These are the types of statistics examined by gimlet-eyed economists, whom I’m afraid function in much the same way (just different, more electrified tools) as witch doctors and soothsayers.

Consider the employment numbers as so much chicken entrails.

[*His lips are moving.]

Allison Kilkenny, a clever political blogger, gives it to us straight, in The Huffington Post.

The Dummies’ Guide to Stupid Leaders and Misleading Numbers

Allison Kilkenny | The Huffington Post | Posted May 3, 2008 | 08:05 PM (EST)

In case you didn’t know, the loss of 20,000 American jobs in April is actually good news. You see, economists had predicted 73,000 jobs would be lost last month, so thank God we dodged that bullet, right?!

In fact, the unemployment rate fell to 5.0% from 5.1% in March. Therefore, the unemployment rate is going down!! Surely, a .1% drop in the unemployment rate means America’s determined locomotive is chugging toward the dawn of a new economic renaissance…right?

These kinds of figures can mislead citizens, particularly when delivered in sound bites by an ignorantly defiant leader. Let’s first consider the possibility that less people are losing jobs because so many people are already unemployed. People can’t lose jobs they don’t have, and I know very few people that have been laid off the same job twice. These kind of polls also rarely consider the underemployed, who are in as much danger of bankruptcy as unemployed citizens due to medical bills.

Finally, the government doesn’t count everyone who is unemployed. Only people who are actively looking for employment are considered unemployed.

Some time ago, we first quoted Benjamin Disraeli, courtesy of Mark Twain, elucidating the three types of untruths: “lies, damned lies, and statistics.”

It’s bad enough out there, without being lied to.

Let’s let Ms. Kilkenny coin a phrase:

But I know when I’m beat, so if protecting rich people is decisive action, then yes, George W. Bush is the most decisive president in the history of the United States. Call him “the Decisiver.” Tell him it’s a real word. He’ll believe you.

As she points out, “the first step of recovery is recognizing that there’s a problem.”

Do you know that we have a problem, George?

Do you have a clue how to fix it for all your citizens, not just the fortunate .05% who are your oil and banking buddies?

[Please click the link below for the complete article -- but then please come on back!]

Allison Kilkenny: The Dummies’ Guide to Stupid Leaders and Misleading Numbers – Business on The Huffington Post

We need substance, we need a plan, we need the truth. Any chance that the next president can provide those?

It’s it for now. Thanks,

–MUDGE

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Paul Krugman has appeared in this nanocorner of the ‘Sphere© quite frequently; he’s an economist, and an insightful writer, and a lot of news lately has been about our economy, and cries out for insight.

Since so much of the U.S. economy is driven by consumers, and has been, I’m imagining, since the end of World War II, when the bomber factories returned to stamping out annual cosmetic freshenings of shiny Fords, Plymouths and Hudsons to an eager population that couldn’t wait to “See the U.S.A in your Chevrolet,” consumer perceptions are a key indicator of economic health.

It’s no accident, I’m thinking, that the annual survey Krugman quotes, the Consumer Sentiment Index, comes out of the University of Michigan. Its Ann Arbor campus is nigh to the heart of that same automobile industry, and very little drives the economy like the sale of automobiles.

Pity that Detroit has taken so long to remember how to build a good car, but that’s a discussion for another time, or place.

Meanwhile, even Toyota sales are off… I’d say the consumer is downright depressed.

Crisis of Confidence

By PAUL KRUGMAN | Published: April 14, 2008

The Survey Research Center of the University of Michigan has been tracking American economic perceptions since the 1950s. On Friday the center released its latest estimate of the consumer sentiment index — and it was a stunner. Americans are more pessimistic about their situation than they have been for more than a quarter century….

Why are we feeling so down?

Our bleakness partly reflects the fact that most Americans are doing considerably worse than the usual economic measures let on. The official unemployment rate may be relatively low — but the percentage of prime-working-age Americans without jobs, which isn’t the same thing, is historically high. Gross domestic product is up, but the inflation-adjusted income of the median family is probably lower than it was in 2000.

Beyond that, perceptions of the current economy are strongly influenced by the public’s sense of the larger pattern.

Larger pattern. Let’s see: investment bank bail-outs. Foreclosures in a cul-de-sac near you. $zillion dollar payouts to executives who apparently couldn’t manage risk better than the sap plunging $50 his family needs for groceries on this week’s mega lottery. [Need I link to the quote? Not necessary. The lottery is a tax on people who failed to learn math.]

[Please click the link below for the complete article -- but then please come on back!]

Crisis of Confidence – New York Times

Mr. Krugman has been rather unimpressed over this presidential primary season with the candidates’ statements and position papers on the economy, and what they plan to do should the depressed public choose them come November.

The good news: should a Democrat win (and how odd it is to have to place this in the conditional), there could possibly be changes along the lines Krugman suggests: regulation with sincerity (mainly a joke these past 8 years); policies favoring labor (small ‘L’), perhaps ending some of the attractiveness of outsourcing and raising the minimum wage. Such steps could jolt us out of our doldrums, perceived and real.

Meanwhile, 300,000,000 doses of Wellbutrin, stat!

It’s it for now. Thanks,

–MUDGE

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This is not the Navy related story I expected to write. But, as always, real life changed my plans.

More than many, the MUDGE household has been observing this past week’s American Airlines MD-80 debacle with more than passing interest.

There have been myriad news stories, in print and on line, much television (I’m told – I never watch TV news). It’s a topic that anyone who flies can relate to.

As it happens, we’re headed off on a much needed vacation next week to see the grandMUDGElets in L.A., and, as American most frequently protects that route with this disappointingly tiny (in the context of: traversing 2/3 of the continent), not to speak of disappointingly elderly (in the context of: acquired cheaply when American absorbed what was left of the once proud TWA many years ago), sardine can (in the context of: so small, there’s never been audio entertainment available, much less an in-flight movie. Not that this is much of a hardship, but, it is a 4-hour flight). It’s an awful flight, in the best of circumstances, especially for a somewhat larger than life person such as yr (justifiably) humble svt. You guessed it: we’ve got tickets on an MD-80 flight.

Q: What’s worse than flying an American Airlines MD-80 to Los Angeles?

A: NOT flying an American Airlines MD-80 to Los Angeles because the flight’s among 1,000 that they’ve been forced to cancel due to inadequate maintenance procedures finally catching up to them.

Among the plethora of stories, though, one struck me due to its Navy hook (need I remind faithful reader of my lifelong interest, much less my former Navy lieutenant son and daughter-in-law?).

Navy Recruits Face a Hardship Test at the Airport

By JEFF BAILEY and MARINA TRAHAN MARTINEZ | Published: April 11, 2008

DALLAS — On Monday, Karin Peyregne was in Mobile, Ala., kissing her husband and two young sons goodbye, on her way to a base near Chicago for basic training in the Navy.

Unfortunately, she was flying on American Airlines, and connecting through the Dallas-Fort Worth airport. She joined thousands of other travelers here, and in other cities like Chicago, who were stranded as American canceled more than 3,000 flights through Friday because of maintenance inspections ordered by the Federal Aviation Administration.

As of Thursday night, Ms. Peyregne (pronounced PURR-in), 25, and a group of six young male Navy recruits she was traveling with to the Great Lakes Naval Station, were still stuck in and around the airport here.

So a couple of recruits heading to basic training were delayed for an extensive period, as were many, with few resources and little money. This rings true: my kids were directed, on their way to the Naval Academy all those years ago, only to bring the clothes on their back — the Navy would provision them with uniforms and everything else they’d need from underwear to covers (hats, to civilians).

The recruits profiled in this story actually made out better than many of American’s strandees considering the hardships (they received help from the USO and other civilian military assistance organizations), But that isn’t really why I’m asking you to read this story through.

[Please click the link below for the complete article -- but then please come on back!]

Navy Recruits Face a Hardship Test at the Airport – New York Times

What strikes me about this story is the economic hardship that is explicitly portrayed.

Ms. Peyregne is leaving her husband to take care of her one- and three-year-old children because her prospects, as a raw recruit, even as one due for some difficult days as a relatively elderly 25-year-old, are apparently better than his.

The truck driver whose loads are drying up is heading off for what will be a more dependable, if initially minute, paycheck, but hopefully better prospects.

Those at the fringe of economic stability are society’s canaries in the mineshaft. Can anyone doubt that recession is upon us?

We’ve been here many times lately. It’s impossible to ignore.

The U.S. military has always represented a path toward a better life (if survived sufficiently whole, or at all!) for millions of its economically impaired recruits. In service training, and education benefits for afterward, can make the difference between a life serving french fries and one supervising aircraft mechanics.

I’m thinking that for the Navy and Air Force, both mainly out of the line of fire in our deadly entanglements in Afghanistan and Iraq, recruiting will not be a problem.

Should the R-word turn into the D-word, even the Army and Marines should be able to staff up, God help them.

It’s it for now. Thanks,

–MUDGE

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I can’t help it — our turbulent economic news continues to cause concern.

And, as we’ve pointed out, it’s increasingly top of mind most everywhere.

As a topic, it has appeared here with depressing regularity (depressing topic but lively and insightful commentary, of course!):

Pointed here by American.com here’s a useful analysis that lays out the causes of the financial system’s deep crisis, and you might be surprised at the source: St. Alan Greenspan and the Federal Reserve that, directed by Greenspan’s successor, Ben Bernanke, now is portraying itself as our white knight.

The Roots of America’s Financial Crisis

by Jeffrey D. Sachs

CAMBRIDGE – The US Federal Reserve’s desperate attempts to keep America’s economy from sinking are remarkable for at least two reasons. First, until just a few months ago, the conventional wisdom was that the US would avoid recession. Now recession looks certain. Second, the Fed’s actions do not seem to be effective. Although interest rates have been slashed and the Fed has lavished liquidity on cash-strapped banks, the crisis is deepening.

To a large extent, the US crisis was actually made by the Fed, helped by the wishful thinking of the Bush administration. One main culprit was none other than Alan Greenspan, who left the current Fed Chairman, Ben Bernanke, with a terrible situation. But Bernanke was a Fed governor in the Greenspan years, and he, too, failed to diagnose correctly the growing problems with its policies.

Most unusual about the boom that developed when the Fed dropped interest rates after 9/11 is that it was concentrated in one sector of the economy: housing.

A lot of eggs in a very large basket, made even larger by the deregulated greed that led many very smart finance guys to develop increasingly “creative” financial instruments.

Housing lending was so easy to come by, that bankers cheerfully forgot to perform due diligence on the loans they so cheerfully scarfed up.

The result: meltdown as the “get-me-dones,” who had snapped up mortgages from brokers who didn’t require proof of credit worthiness or even income (since they were making their money on the commissions paid to them by the banks and weren’t ever concerned about such minor details as, will the loan ever be paid back?) found themselves unable to meet their obligations. And the cascade of foreclosures finally woke up the banks to the house of cards their assets had become.

[Please click the link below for the complete article -- but then please come on back!]

Project Syndicate

It’s always been about the money. Perhaps next time I’ll take a look at the points in U.S. history where banking excesses and shenanigans tore the entire economy to pieces: 1873, 1907, of course, 1929. These are the events that finally caused the outcry that couldn’t be ignored, and that led to the creation of such institutions as this very same Federal Reserve Bank that purports to know what’s best for us.

See, financiers and investment bankers are wizards highly skilled in the alchemic arts of spinning gold from dross, until they get caught out. And then their failures and greed become a general economic nightmare.

And of course, those financiers who begged the government to deregulate the industry so they could be free to make the profits that let so many of them buy those islands in the Caribbean, were first in line for Fed assistance when the gravy train abruptly derailed.

So while Dr. Bernanke and his Fed continue to throw liquidity at the crisis, the primary outcomes are inflation, record commodity prices, and a murderously devalued dollar.

I am not impressed with Doc Bernanke, Hank Paulson, and the rest. I am, in fact, quite concerned.

Nine months, 17 days until Jan. 20, 2009, and a new broom. Hope we all get there with a roof over our heads.

It’s it for now. Thanks,

–MUDGE

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