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John Lounsbury  

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  • The Federal Reserve Has Painted Themselves Into A Corner [View article]
    EK1949 - - -
    Mar 29, 2015. 02:27 PM | Likes Like |Link to Comment
  • The Federal Reserve Has Painted Themselves Into A Corner [View article]
    Green Elmo - - -

    Yes, most of what I said is contentious and that is why I said it. Without contention where is a debate?

    What has been going on in this comment stream is a discussion on one level but at the highest level we are debating. Unfortunately there is more debating on Seeking Alpha than in Washington. :-(
    Mar 22, 2015. 02:47 AM | 5 Likes Like |Link to Comment
  • The Federal Reserve Has Painted Themselves Into A Corner [View article]
    Green Elmo - - -

    Your questions are all political and should be resolved politically. The way money is spent is a political decision and I was talking about how much money should be spent as a precondition to determine how it is spent.
    You can clearly start from your questions and work back to how much money.
    Bottom line, we are constrained to live within a political process and I feel that has been failing us.
    What Socialism is acceptable? As much as needed to provide basic safety nets but not so much as to suppress individual initiative, which is the driving force of economic advancement for any society.
    Unfortunately, I believe, the correct amount of Socialism at any time is not the right amount for many other times. So we are unlikely to be able to optimize "Socialism".
    Mar 21, 2015. 04:32 PM | 5 Likes Like |Link to Comment
  • The Federal Reserve Has Painted Themselves Into A Corner [View article]
    Logical Thought - - -

    We clearly have different definitions of money and different understanding of the differences between sovereign debt and non-sovereign debt. Since I expect you are confident in your understanding there is little we can discuss. My understanding is that the U.S. is not insolvent, can never be insolvent and all such discussion is done for political manipulation.

    You do not accept my understanding (based on your statement) so we have no common ground for discussion because I cannot endorse the concept of U.S. government debt as burden on our children. It is only a burden by political choice to subcontract the creation of money to private bankers.

    Private banking should be the business of the private sector and should not be a parasite on the public function. Get the government out of private finance and get private finance out of the government. That would be the end of TBTF and a return to more fundamental capitalism.
    Mar 21, 2015. 04:20 PM | 3 Likes Like |Link to Comment
  • The Federal Reserve Has Painted Themselves Into A Corner [View article]
    EK1949 - - -

    I probably did not express myself as clearly as I would wish. In the paragraph following the one you quoted (the one you said was wrong) I intended to make clear that the rest of the house was fiscal and that political incompetence by dragon fighters (in the age of mechanized weapons) were clueless.

    So I agree with your statement except for: "Good Fed policy with bad fiscal policy isn't a box for the Fed." I would argue that bad fiscal policy limits what the Fed can do effectively. Isn't that a "box"?
    Mar 21, 2015. 04:09 PM | 1 Like Like |Link to Comment
  • Are Debt Levels Too High, Or Are Consumers Simply Not Feeling Rich? [View article]
    We will be discussing your linked article in the "What We Read Today" column at Global Economic Intersection within the next few days.

    Excellent analysis and should provoke some controversy. I will have to review the comments on your article on SA as well.
    Mar 4, 2015. 04:52 PM | Likes Like |Link to Comment
  • Are Debt Levels Too High, Or Are Consumers Simply Not Feeling Rich? [View article]
    MudEngineer - - -

    You have a bargain. I know a "homeowner" who had a home just sold for $240,000 who paid over $11,000 in property taxes, mortgage interest ($140,000 balance, 28 years remaining on 30-year) and homeowners' insurance. That same individual moved to a $400,000 home and now has a $200,000 30-year mortgage with more than $17,000 for the same three categories.

    I know another party with a $450,000 market value home, $150,000 balance remaining on the mortgage with $19,000 annual expenses.

    The people are in a part of the country where I used to live and left more than 10 years ago. Couldn't afford it.
    Feb 28, 2015. 04:13 PM | Likes Like |Link to Comment
  • Connecting The Dots - Oil And Accelerating Growth [View article]
    David - - -

    It's a great poker game.

    Major shale producers are claiming a steep learning curve and production costs coming down to $40 and even lower. The Saudis are claiming their production cost is $20. Both are likely bluffing. And the Saudis can only forego their large margin for a limited period of time - their sovereign wealth funds are not sufficient to carry their population support commitments for more than possibly a year.

    Either someone will fold or we will see all the cards - don't know which.
    Dec 28, 2014. 04:29 AM | 2 Likes Like |Link to Comment
  • Nasty Storm Brewing In Trade [View instapost]
    Wouldn't we have to come up with a rationale for exports being affected more than imports to say work slowdowns impacted the numbers?
    Dec 20, 2014. 06:26 PM | 1 Like Like |Link to Comment
  • Hav Existing Home Sales Volumes Finally Recovered? [View article]
    Peter - - -

    Great discussion of the sad state of financial corruption in the world. The U.S. may have led but the entire world had no problem following down the rabbit hole. We posted at Global Economic Intersection a couple of weeks ago the piece that you linked from FDL using the original manuscript provided to us by Prof. Galbraith. This is a great document describing what was understood over three years ago about the extent of financial fraud. Of course Bill Black is doing a great job of making sure we don't have an opportunity to forget.
    Dec 2, 2014. 02:00 AM | Likes Like |Link to Comment
  • Lack Of Rental Units Can Trigger Inflation [View article]
    Jan - - -

    In general inflation is the friend of the borrower and the enemy of the lender. So if you mean by poor those too low on the financial totem pole to use credit in any form then I can see the possibility that inflation is a burden on the poor. Otherwise the middle 60% of the populace is boosted by inflation and the top 20% (or maybe only the top 10%) are hurt by it.
    Nov 23, 2014. 01:32 PM | Likes Like |Link to Comment
  • November Jobs Report Had Highest Jobs Gain Since 1939 [View instapost]
    fishfryer - - -

    How many of that 4.5 million are already here?
    Nov 13, 2014. 07:27 PM | Likes Like |Link to Comment
  • Is Consumer Income Improving Or Declining? [View article]
    One added note: CPI-MED is 5.825% of the overall CPI formula. Since medical expenditures are about 17% of GDP a crude implication is that at least 11% to 11.175% of costs are still born by employers. But it may be more if the 5.825% includes an estimation that some fraction of households pay all medical expenses. That may be a bad assumption - I don't know. Anyway, some large portion of medical costs seem still to be employer paid so there is a lot of room left for more transfer of costs to employees which could depress the "effective household income" for many years to come.
    Nov 9, 2014. 06:48 PM | Likes Like |Link to Comment
  • Is Consumer Income Improving Or Declining? [View article]
    Alltee - - -

    Great question. But the answer is not straightforward. As median household income has stagnated over the past few of decades, employer paid medical insurance has become more and more expensive and that should be included in the estimation of total compensation. It is not.

    But, especially over the past 20 years employees have increasingly shared in the premium costs of health insurance. And those dollars are included in the median family income (only the employer contribution is excluded).

    But the calculation of how income should be adjusted gets complicated because the numbers are inflation adjusted for comparison over time. And medical cost inflation has been underestimated in the opinion of many in the CPI index (which includes only estimated consumer paid costs) and the PCE deflator (which includes all medical expenditures). That is one complication which I will put aside for the rest of this discussion.

    As healthcare costs have been shifted more to the employee the additional compensation that would be imputed for employer paid premiums has been reduced so a first order estimate is that during the past 10-20 years there would be a negative effect on imputed income progressing over time. At the same time, any costs transferred to the employee could be reducing income available for all things not medical to the extent that CPI or PCE understate the component of medical in household expenses, which some (many?) believe is the case. See for example

    I have not done the tedious analysis to determine the actual profile over time, but my SWAG is that "effective" median household income was increasingly understated as medical costs and employer provided health insurance both increased during the 1960s, 1970s and 1980s. Then in the 1990s employers started shifting some of the costs to the employees and those portions health care costs started coming out of the median household incomes, leaving less for other expenses. This has continued in the 2000s further stretching (diminishing) the "value" of the recorded household incomes.

    The point being that comparing household income from 20-30 years ago to those of today has an apples to oranges aspect. In the earlier time the effective income including imputed value of employer paid health insurance would be larger than the numbers in more recent years when the imputed value would be decreased as employees assumed increasing shares of the costs out of income received.

    Thus, it seems that "effective household income" from years ago would be increased more than it would be today. This would make the income change over time even less positive (or more negative) starting when the employees began sharing premium and increased deductible costs. In other words, if you see that "median household income is the same in 2014 as it was 25 years ago" (1989) - which I believe I have read - these effects are likely to change the statement to "today the "effective" median household income is less than it was in 1989".

    Thus I suspect a more exact analysis including medical insurance parameters would produce a worse trajectory for median household incomes starting 20-30 years ago up to the present day than is "on the record" today.
    Nov 9, 2014. 06:28 PM | 3 Likes Like |Link to Comment
  • No Risk Of Inflation If Velocity Of Money Is Falling? [View article]
    Ordinary - - -

    You need to modify your otherwise excellent discussion. You wrote:

    "We have not had conservatives control the executive, house, & senate all at one time since prior to the FDR era, and going back to Wilson and the launch of the FED, the 16th amendment/income taxes, and the start of WWI."

    The Republicans controlled all three (executive, house, & senate) for 12 years, from 1921-1933, so you should delete "and going back to Wilson".
    Oct 30, 2014. 06:25 PM | Likes Like |Link to Comment