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  • Peabody Energy Corporation CEO Says Coal Is Still On Top, But Is It? [View article]
    My inner cynic argues we'll use up ALL the fossil fuels, at the end of which, as Stephen Emmott (a scientist who runs a research lab for Microsoft in U.K.) wrote in the closing line of his book "Ten Billion" (referring to how many people will be on the planet this century), "I think we're f****d."
    Aug 20 03:23 PM | Likes Like |Link to Comment
  • Peabody Energy Corporation CEO Says Coal Is Still On Top, But Is It? [View article]
    @geodan85: "All your points essentially are political ..."

    Hmmm ...
    Aug 20 03:17 PM | 1 Like Like |Link to Comment
  • S&P Economists And Inequality [View article]
    Everyone else seems to think Fed policy is affecting the pricing of stocks, and screwing up the relationship between companies' fundamentals and the market prices of their stocks. Are they wrong? (I'm hoping for a "yes" or "no" answer here.)
    Aug 20 02:59 PM | Likes Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    Stephen, I'm not angry, I'm only demanding a disciplined approach to commenting in public forums which includes researching the factual background of issues ("doing your homework"), fact-checking your statements (I myself became motivated to do this because I quickly learned that when you post inaccurate comments in public forums other people will jump on you for it), and applying logic and reasoning to solving problems. My "right" to demand this of others comes from demanding it of myself.

    I'm very willing to engage with you if you open your mind a little so I don't get bogged down in "shouting past each other." I don't want to spend my time doing that to others, and I don't want others to waste my time by doing it to me.

    To make clear I'm not trolling for knee-jerk conservatives to pick on, I have the same issues with knee-jerk liberals. I don't want the world run by ideologues of any persuasion; I want important decisions made by pragmatists who work at getting the best available information and use a reasoning process to figure out what works; they won't always be right, and can't perform miracles, but they're our best hope.

    The problem with letting ideology control your thinking is you uncritically adopt shibboleths and talking points that are often untrue, and fall into a habit of substituting sound bites and bumper sticker slogans for actual thinking, which isn't productive either for you or other readers. I'm not criticizing you personally; lots of people do it, including me at times. But I consciously try to avoid these habits in my comments on this blog, as Seeking Alpha's audience includes many serious and thoughtful people who don't deserve to have me waste their time in this manner, and because it doesn't contribute anything to our common goal of making our personal investing more successful.

    Yes, you did come across as combative, but I'm more concerned about what I see as factual inaccuracies and illogical thought. Looking back on my college career (which includes undergraduate, graduate school, and law school), my best professors were the ones who whacked me and my fellow students upside-the-head for this sort of thing, and the very best professor I ever had was the one who threw me out of his class within five minutes on the first day for whispering to another student while he was talking, and made me beg and plead to get back into the class and promise to never do it again. I don't want you to tell me what the talking points are; I know them all. (Which is why I don't read Krugman's newspaper columns, either, although I'm interested in his economic analyses.) What I'm looking for here is someone who knows something I don't and/or can open my eyes to a useful different perspective on things. I spend far more time reading and listening than writing or talking, and I think everyone should do the same.

    When you say, "It was not meant to be a global warming discussion," I respond that you didn't say "weather," you said "climate change." One of the perennial arguments I get into with climate change deniers (when I can't avoid the topic) is that weather isn't climate. From what I understand of the science, global warming can indeed cause snowstorms in New York City. If you want to know why, read up on the Gulf Stream and what happens when it shifts.

    You have a valid point about "stuff we're told." There's a lot of noise in the background. I try to avoid it by not owning a TV and spending only enough time parsing CNBC's website to get specific information I'm looking for (what did oil prices do today?). The financial media are entertainment, whose goal is to get you to listen to advertising messages, and I do not look to it for serious analysis. I come here (among other places) for that.

    "Different policy prescriptions were applied in 1980 and they worked much better."

    Reasonable minds can differ about this, and unreasonable minds love to differ about it. I don't want to get into this issue here. I don't know the answer, anyway, or at least I don't have a superior knowledge of the truth of the matter; even economists can't agree about it.

    One of the best movies I ever saw was "Hoosiers." If you haven't seen it, watch it; if you've seen it, watch it again. Pay attention to how Gene Hackman's character teaches the boys how to play basketball. He doesn't let them practice shooting baskets, he doesn't let them shoot any basketballs, he drills them in fundamentals like dribbling, passing, using the court, playing as a team. This is one of the most important lessons there is in life for all things: The key to success is taking a disciplined approach to the task in front of you. This is true whether it involves playing a sport, investing, managing personal finances, or anything else.

    That's my rant for the day.
    Aug 20 02:31 PM | 1 Like Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    @ Stephen Aniston: "So public employment has fallen, while public expenditure is up. I think that has to do with paying ever increasing pensions to retired government workers."

    Stephen, you're the only person I've seen to assert the 1980s recession was worse than the 2008-2009 recession. From what I can tell, economists universally agree that the Great Recession was the worst U.S. economic downturn since the Great Depression.

    And with the comment above, you've lost me; I must stop reading your diatribes at this point because you are not doing your homework or fact-checking, you do not have your facts straight, you are merely ranting and therefore do not deserve to be read.
    Aug 20 12:54 PM | 2 Likes Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    @ Stephen Aniston: "you do realize that government spending as share of GDP has increased markedly in recent years"

    Yes, that's what happens in a recession, because tax revenues fall with the economy and safety net spending (unemployment insurance, food stamps, etc.) goes up.

    "So over the past 6 years, we have had Keynesian stimulus on steriods."

    I disagree. Keynesian stimulus has been anemic. Obama's stimulus was widely criticized as too small.

    "You can't tell me that a cold winter or the stagnant economy of Europe which has always been stagnant or the fall of one bank - Lehman - is the cause for 1% growth 6 years after that bank went into bankruptcy."

    This statement does not accurately represent the U.S. GDP growth rate, which varies by quarter, but on an annualized basis was -2.9% in 2009, +2.5% in 2010, +1.8% in 2011, +2.8% in 2012, and +1.9% in 2013, according to the World Bank. Not robust, but the economy clearly shifted from contraction to growth in 2009, and is growing faster than 1% -- roughly twice that rate. As I said in my comment above, I believe what's holding back the economy is weak demand; I never suggested weather or the Lehman collapse as reasons.

    "I didn't know we depend on global warming for our economic growth."

    I don't see what this has to do with anything in this article or my comment,but as you brought it up, my response is there's a strong consensus in the scientific community that anthropogenic climate change is occurring. As for what that and other human mismanagement will take us, Stephen Emmott (a scientist who runs a research lab for Microsoft in U.K.) summed it up in the last sentence of his book "Ten Billion" (about a planet with 10 billion humans on it): "I think we're f****d." I'm not sure I want to agree with him, I'd rather be more optimistic, but it's hard to argue with his logic.

    "Keynesian stimulus has always been meant to be a temporary solution to temporary condition. Not a permanent solution to a temporary condition."

    Well, are you for Keynesian stimulus, or not? If you believe it works, then Keynesian stimulus was appropriate in 2009-2010, the period of the Obama stimulus, and you probably also believe that stimulus was too small to fully deal with the severity of the Great Recession. We do not have Keynesian stimulus now, so I'm not sure why you threw in this comment. Like your reference to climate change, it looks like a Pavlovian twitch.

    "we continue to treat the economy as if it is on the verge of collapse"

    What policy are you referring to, and what's your justification for this assertion?
    Aug 20 12:50 PM | 3 Likes Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    "I believe the CFR passed one million regs a few years ago."

    Yes, but not every business has to comply with every one of those one million regs. If you own a dry cleaning business, don't pour toxic chemicals down the sewer drain in the alley; dispose of them in an approved manner. If you're a trucker, don't drive until you fall asleep at the wheel and kill people; take rest breaks at mandatory intervals. How hard is that to comply with? We have a million regs because we have a very complex economy with hundreds of industries and millions of businesses. Given Corporate America's lobbying clout in D.C., you can't very well claim that businesses have no input on regulation. The impression most citizens have is that Business runs the show and citizens' opinions count for little. Not a few regulations are requested by businesses to further some purpose of theirs, such as banking regs allowing banks to impose certain rules on their depositors and customers, or securities regs that steer aggrieved investors away from courts into binding arbitration.
    Aug 20 02:19 AM | 1 Like Like |Link to Comment
  • Supply-Side Versus Keynesian Economics [View article]
    It's somewhat brave to publish an article like this on SA, which has a strong demographic of people who believe to a moral certainty that your brand of economic thinking promotes socialism. What we largely have in this country is a sharply polarized populace whose political orientation determines their economic beliefs; and little useful debate, but a surfeit of partisans shouting past each other, with no one listening to what's being said and not much of what's being said worth listening to. I have consistently found Shareholders United articles to be a beacon of light in this darkness.

    I suppose that brands me a Keynesian, in the eyes of some, although I self-identify as a curious eclectic. I'm not politically or economically agnostic (who is?), but if you ask for my non-economist opinion, I think supply-side concepts have validity in some circumstances, and I also see that economies work much the way Keynes described. Coming from that perspective, I do not find "it's all the government's fault" arguments persuasive or usefully meaningful, and I always find Shareholders United articles a delight to read because they're invariably well reasoned.

    Having said all this, it seems obvious to me that lack of aggregate demand is the U.S. economy's main ailment, and that stagnant wages, falling personal incomes (for most), and the fountain of credit running dry, explain much of the weakness in aggregate demand.

    I don't think we can solve this problem with more capital, because it's not caused by a shortage of capital. We're swimming in capital; trillions of dollars sit idle on corporations' books. There are times when capital is the horse and demand is the cart, that is, investment must precede fulfillment of demand; but at present, demand is the horse and capital is the cart, by which I mean we have capital (the cart) but aren't going anywhere for lack of a horse (demand) to pull us. The solution is not giving corporations more money by cutting their taxes, but giving consumers the means to create demand by hiring more employees and raising wages. This may cut into short-term profits but will lead to long-term prosperity.

    Dogmatism is stasis, and we do not learn in a state of stagnation. When we discuss big issues like macroeconomic theories and economic policies, what we need is less shouting and more thinking, and an honest search for truth through fact-based reasoning. Whether you agree United Shareholders' conclusions, or not, they constructively contribute to that effort.

    Thank you very much for your disciplined and well reasoned articles, and please keep them coming.
    Aug 20 02:12 AM | 5 Likes Like |Link to Comment
  • Consumers Are Not Buying, Where Is Their Money Hiding? [View article]
    After reading the article and comments, there are a few factual statements and omissions I feel an urge to "correct." I do this with humility; I believe my sources (which include other Seeking Alpha articles) are reliable, but I make no pretense of being a final arbiter of truth.

    1. The data I've seen indicate labor participation is growing among boomers and the big drop is in the 25-54 age cohort.

    2. The author mentioned that mortgage debt is declining but attributes this to people paying down their mortgages. No mention was made of foreclosures. I don't think America's debt culture has changed, although credit availability has, which restrains new borrowing. Much of the debt reduction since 2008 is due to foreclosures, bankruptcies, and other writeoffs. I don't see a surge of early payoffs of debts.

    3. Student debt is a little over $1 trillion and has been growing an average of 11% a year for the last 5 years, according to U.S. News and World Report. Between 2004 and 2012, the number of borrowers and average debt both increased 70%, according to the New York Fed. Most of the increase in inflation-adjusted college costs has occurred in 4-year public institutions. This is perfectly logical, as state legislatures have reduced tax support for public colleges and universities, which forces these schools to raise tuition more than they otherwise would. Significant cost shifting from taxpayers to student borrowers is occurring, at a time when young people are being told they can't get good jobs in the economy without higher education, which makes these expenses and debts appear mandatory to those incurring them.

    I agree that wages are stagnant, young people are leaving the nest later, and many boomers have little saved for retirement. The latter explains why workforce participation among 65+ workers is rising, not declining as popular wisdom believes. Another noteworthy feature of the current economy is that the average age of cars on American roads (roughly 11 years) is at an all time high, because people deferred car purchases during the recession and aftermath; that's why we have strong replacement demand for new cars now.

    My profile: Late 60s, retired lawyer, debt-free, net worth nearly $1 million with assets divided approximately 50-50 between equity in home and financial investments (dividend stocks and IRAs; no bonds, mutual funds, ETFs, REITs, MLPs, or rental real estate); also own a (very) small manufacturing ("Made in USA") and exporting business.
    Aug 20 12:39 AM | Likes Like |Link to Comment
  • S&P Economists And Inequality [View article]
    Yes, but for years now all we've heard is "don't fight the Fed." I don't want to walk behind a bull led by a ring through its nose. I want to invest in a market where fundamentals count for something.
    Aug 19 11:12 PM | Likes Like |Link to Comment
  • Why Economic And Market Forecasting Matters To Everyone [View article]
    Is there anyone left in America whose thinking isn't straitjacketed by dogma?
    Aug 18 05:07 AM | Likes Like |Link to Comment
  • Japan's Keynesian Demise: A Cautionary Tale For Our Times [View article]
    Macro, thanks for having the guts to argue with people who believe with moral certainty they're right and you're wrong. In an earlier age they burned people at the stake for saying the earth is a sphere.
    Aug 18 04:52 AM | Likes Like |Link to Comment
  • Japan's Keynesian Demise: A Cautionary Tale For Our Times [View article]
    "We could handle America's problems by freezing government hiring and raises (at all levels). ... We should also get off the producer's collective back. That would be the lowering of: regulations, taxes on labor, useless lawsuits...."

    Ah, yes, take it out on public employees, screw the environment, drown the personal injury lawyers ... do I see a political agenda here? But, then, Mr. Stockman is peddling an agenda, too.
    Aug 18 04:43 AM | Likes Like |Link to Comment
  • Japan's Keynesian Demise: A Cautionary Tale For Our Times [View article]
    "It is worth noting that Clinton's so-called budget surplus' were the result of shifty accrual accounting (aka unified budget accounting)."

    Just as fyi, the unified budget dated back to LBJ and 1969, and was substantially modified in 1990 by moving Social Security tax revenues and postal service operations "off budget" before Clinton came into office.
    Aug 18 04:38 AM | Likes Like |Link to Comment
  • Thoughts On Commodities As An Asset Class [View article]
    "a portfolio should be constructed primarily around instruments that are tied to the underlying production of the economy"

    Amen! Sometimes things that seem complicated turn out to be simple. Investing, like baseball, is simple if you learn to screen out crowd noise and focus on basics. (In baseball, there are only three skills that matter: Hitting the ball, catching the ball, and throwing the ball.) Investors make their money by owning shares of the profits from the production of goods and services. Everything else is crowd noise.
    Aug 18 04:07 AM | Likes Like |Link to Comment
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