I believe that the world (the whole universe, actually) lacks all the resources that are desired.  Meaning... every desire cannot be fulfilled.  Some want has to go unfulfilled.

Minnesota is facing severe budget shortfalls.  Our ideologue governor, however, promises not to sign for a single tax increase.  Instead, he's in the habit of pushing costs downward to more local governments which then have to raise their taxes to compensate.  The ideologue wins on a technicality.  *disgruntled sigh*

He's now announced his most recent budget proposal.  There are lots of cutbacks.  Frankly, all of them seem disturbing.  A followup article focuses specifically on the health care cuts.


That last sentence?  That would be me.

The sad thing is that even all the harsh cutbacks still depend on receiving future federal money.  They still depend on pushing true costs out into future state budgets.  Both obvious signs of accounting hack jobs.  (But don't you dare raise taxes, no, because that would destroy the republic.)

I go in next week for my EMG tests.  I go see the neurologist two weeks after that.

It's a race to see if I can leech taxpayer money for my medical diagnosis before the money disappears.

The Telegraph is a conservative newspaper in England.  Go see what they are saying now about the American economy.  They move from one discouraging observation to another to yet another.
"America slides deeper into depression as Wall Street revels"

Oh, and don't miss reading the comments.  They're a hoot.

Sort of related, here is an interest image that shows what resources our expanding industry is exhausting.  (Peak Oil is so yesterday.  We're at Peak Everything already.)  Now you can see why China is securing its mineral access all over the planet.

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For those interested in an amusing detour...

( Read more if you have the time... )

Of course, I'm of the opinion that feeding the exponential economy is always bad, no matter how you do it.  Still... I wanted to pass along this website to everyone, as I think it can still be useful.

http://moveyourmoney.info/

It opened a few days ago.  It's a way to look up your current zip code and find local, small, community-minded, highly-rated banks where you can move your accounts.  As far as I know, every single American bank is FDIC insured, so your accounts are equally protected no matter where your money goes.  This website makes the point, however, that your money can be used by banks in very different ways.

Remember these scenes from "It's A Wonderful Life"?


I'm considering it.  I don't do savings accounts or IRAs or other "money hiding" shell games where profit magically shows up without my having to work for it, but I am considering moving my checking account (/debit card).  Wells Fargo recently jacked up the interest rate on my credit card (just as I paid it to zero), so I might as well move that elsewhere too.

The founders of this movement (which started on the liberal left Huffington Post but seems to appeal to pretty much everyone) are also collecting stories from people about their banking experiences with large banks, small banks, and credit unions.  Some of them have been interesting too.

It's a great reminder that you, "the people", do have powerful authority to dictate the nature of the market.  You're not left solely to the whims of business executives and Washington politicians.  That's always a good reminder, so I'm passing the information along to people who can learn from it.  :)

I don't know, is Business Insider generally reliable for meaningful information? I ask, because today's headlines there are more exciting than my own usual sky-is-falling routine. I found only 1 story that was sort of upbeat. Here are the other notables:

SocGen Tells Clients: Here's How To Bet On Total Global Collapse : The dollar will tank, the US is headed for a lost decade, junk bonds will be crushed, and emerging markets will not be spared.
SocGen Analyst: Our Governments Are Insolvent, Gold To $6,300! (GLD)
The Housing Double Dip Has Arrived
The Most Important Housing Chart Shows Things Are Still Getting Worse
AOL Asks 2,500 Employees To Quit (TWX) : Voluntary layoffs start December 4th. Then comes the firing...
California Has No Idea How Bad Soaring Oil Is Going To Hurt
California: Another Budget Crisis As Soon As This Spring
Bob Toll: FHA Lending Is A "Train Wreck"

But the most interesting read, even though it's 2 days old and not very detailed, is:
Michael Panzner: Commercial Real Estate Is A "Tsunami Unfolding"


Wow. I thought I was being a negative nancy.

There was a time when Newton's and Kepler's laws of motion reigned supreme. The universe was a perfectly explainable place, with every body following particular rules of motion that could be calculated and predicted. The only problem? They were wrong.

As the 19th century dawned, it seemed that Newton’s Theory of Gravitation had won the day. All sorts of motion could be described by the equations that we have looked at (all based on F = ma and F = GM₁M₂/d²). However, it soon became clear that the planet Mercury was not obeying Newton’s Laws. At this point, scientists can do one of two things: either reject the theory and replace it with a better one, or find some subtlety that had been missed in examining the problem the first time.
- http://www.physast.uga.edu/~loris/astr1110h/RelativityI.htm

Astronomers tried to find a small planet inside Mercury's orbit that would explain the deviation. They found none. They faced a significant problem. Their wonder-formula was failing, but they couldn't explain why. It wasn't until the arrival of Einstein and his theories of relativity that an answer finally appeared. Mercury is deep inside our sun's gravity well, and time dilation effects were changing its orbit. Not only does the quantum (small-scale) reality differ from our own, but so does the astronomic (large-scale) reality.

Just as physics requires a frame of reference to make its equations applicable, could it be that economics also requires a frame of reference?

While exploring "Post-Autistic Economics" topics, I have read the call to remove macro- and micro-economics from introductory economics classes. The claim is that these theories have proven to be utterly wrong because of their profound, worldwide, and expensive failure to account for and predict our current economic mess. At first, I agreed wholeheartedly. Now, though, I think the problem might be a matter of scale.

I've been insisting on the end of exponential economics. I've called for an end to fiat money and a return to "money" that is measured by actual physical objects (gold, beer, lima beans, whatever). What if such material valuations are a means of enforcing "local scale" where traditional economic theories can still apply?  In other words, suppose traditional economic theories really do work, but only when material is kept within 1 or 2 steps from producer to consumer? What if our transition to fiat money and stocks and derivatives (and other arcana of money markets) has removed the "reality check" that's needed to keep transactions faithful to their real-world value?

Traditional economics claims that rational self-interest will succeed at regulating a market more effectively than any form of imposed regulation. "Post-Autistic Economics" claims that this old theory is not only wrong but also harmful. The real world has now witnessed the results of traditional thinking; the prediction failed. People are not rational actors within their systems. Or, phrased more generously, people are not rational actors within their systems when viewed within a lengthy timeframe that can account for ecologically sustainable and morally acceptable activity.

Perhaps at very large scales of activity where individual people are far removed from the actual material produced, imposed regulation may be necessary to create sustainable activity. Small-scale endeavors may require altogether different (more traditional) kinds of economic measurements (and laws) than large-scale endeavors. The scale of economic activity might influence the equations that can be used to predict (and laws that influence) its behavior.

Instinct would claim that economic theories should apply at all scales of operation. Instinct, though, would also claim that moving clocks always tick at the same pace as stationary clocks.  In the real universe, though, moving clocks tick more slowly.

The question is, is this crazy world really our world? In other words, do experiments bear out these effects? The answer is yes. All experiments done to date confirm that these effects really work out as the equations of Special Relativity dictate.

What if economics also operates under different rules depending on the "scale" (proximity to material produce) and timeframe?  What if "adjustments" (laws) are necessary to force large-scale operations (and exponential money nonsense) back down to face the appropriate real-world limitations?

As astronomers faced a dilemma when viewing Mercury's orbit, perhaps now economists face the same dilemma when viewing recent economic failures.  Either the entire theory on which it was based is false (which seems unlikely), or it's time to accept that the theories are situational.  It could be the case that barely regulated markets are enormously effective within small scales and timeframes, yet intense regulation is necessary for large scales and timeframes.

I suggested back in February that people endure this economic downturn by buying stuff (durable, useful stuff) because the value of dollars would deteriorate to useless levels. Money is supposed to be useful only as a trade medium. Money doesn't produce anything. Money is not wealth. "Stuff" is wealth. Herds of cattle are wealth. Factory buildings are wealth. Loyal employees are wealth. Farmland is wealth. Education and skill training are wealth. Hammers, axes, and shovels are wealth.

People succumbed to thinking that pieces of paper are wealth. Whether dollars or stocks or bonds, people thought that collecting them and trading them made them wealthy. I think of them all as merely baseball trading cards. They're sexy items to own only because other people think they're sexy. If they lose the luster of... well, lust... then of what use are these pieces of paper?

Today is a day of interesting news. We bomb the moon (I'm still waiting for data). Obama wins the Nobel Peace Prize (I think it's premature but an interesting experiment in encouragement). And the world begins moving away from the US Dollar.  Wait, what?

According to an article at The Independent website, most of the world's energy-relevant nations appear ready to dump the US Dollar as the tool for valuing oil. My favorite take on this whole process is one of the comments at the Oil Drum article:

Like I said, buy stuff. Real stuff is wealth.  Paper has been losing its usefulness for years.

I need to start taking pictures again. Photos of the empty railroad cars that are piling up again at the nearby railyard. Photos of the series of empty storefronts at local malls and shopping centers. One person I know (foeclan) actually begins a new job in a few days. I know of many other people who are have gotten laid off in recent weeks and months. One person (mnteejay )received notice that in January his job will be cut to 8 hours per week. Seriously, just 8 hours.

While the US Dollar does still have value today, "the writing is on the wall" as the saying goes. I don't for one moment believe in the supposed signs of an economic turnaround. There are two problems happening right now. One is the exponential growth of debt that is required for our financial system to operate. The solution is to return to a currency with a fixed real-world value, like a gold standard that the Middle East is creating now. The other problem is energy. Our economy requires vast quantities of energy, and I see no reliable source of such energy available today.

I think this will be the perpetual recession; I believe that it will continue until either the oil finally runs out (and we crash) or we get nuclear fusion to work (which allows us to continue using the boneheaded exponential growth model).  My hope is that we see the creation of actual, sustainable economies and finances.  That would be fun.  But too many people still subscribe to the old thinking, so we'll have to wait for either the oil or the fusion to happen instead.

Leave it to government to make it hard to understand what poverty is.  http://aspe.hhs.gov/poverty/faq.shtml

Poverty seems to be defined at the federal level as $1,127 in gross (pre-tax) wages per month for a single adult.
If I earn 100% or less, then I am eligible for food stamps in my local county.
If I earn 200% or less, then I am eligible in Minnesota for the state health insurance program.

U.S. federal minimum wage increased today to $7.25/hour.  Although poverty guidelines are supposed to be based on consumer price index, it seems conceptually that minimum wage would be the appropriate way to reflect what is the minimum amount of money that a single adult needs to "get by" with food , shelter, and clothing (but not transportation or medicine).  If minimum wage really is linked to this concept, then hopefully that means the increased minimum wage will cause the poverty guideline to also increase after September 30th when it's due for its annual review.  That would be good news for me.

I am barely squeaking by above the poverty level, so I can't get food stamps today.  Officially, I only work 20 hours each week.  I used to be paid more than twice (barely) the minimum wage, so I was earning a little more than a full-time person could at minimum wage.  With today's federal increase in minimum wage, I'm now earning less than an equivalent full-time, minimum-wage job would pay.  Hopefully that means that today I'm now in poverty.  Yay!  :/

Poverty (if the guidelines change after the September 30th review) would mean that I could get food stamps to pay for food, and that would free up the $50/month I'd need to pay for the Minnesota health insurance.  I can't afford over $500/year for state health insurance right now because I still need to get out of debt.  Doing that before the end of 2010 requires that I dump a significant percentage of my monthly income into paying down my debt balance.

All this talk of a national health care plan still leaves me thinking that Washington bureaucrats really have no idea what life is like being poor, which is where 40% of Americans spend some of their time during any given decade.  I already qualify for health insurance that would cost me (on their sliding scale) only $50/month.  I can't afford that much right now.  Unless the national plan will cost me less than $50/month, then it's still beyond my ability to use it.

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UPDATE
p.s. My dollar figure at top is wrong.  The current federal "poverty guideline" is $902.50/month for a single adult.   Eligibility criteria for different programs are then defined as various multiples (125%, 150%, or 185%) of that amount.  That's the case for food stamps.  (902.50 * 1.25 = $1128)  The state of Minnesota happens to double the food stamp requirement in order for a person to become eligible for getting the state-offered health care.

The BBC is taking a special interest in America's financial troubles.  From a video introduction with the new generation of homeless Americans to "The Grapes Of Wrath" revisited.
http://news.bbc.co.uk/2/hi/americas/7997385.stm (video at site)
http://news.bbc.co.uk/2/hi/americas/7992942.stm (The Grapes Of Wrath)

I still think that our troubles are not a matter of mismanagement but rather an error in choosing what is fundamentally a flawed concept for our economic system (growth instead of sustainability).

Growing up in West Texas, I'd see trains with Santa Fe markers on them.  I live just a few blocks from the merged Burlington Northern / Santa Fe company.  So I still sometimes see the old corporate logos at the trainyard near here.  I took this photo, though, a few weeks ago around mid-March.  It's some of the shipping containers that stay piled up around here.  Notice anything interesting about who owns our economy these days?

The tv show Firefly had it right, perhaps.  Although I suppose India will be making a good run at dominance soon too.  I'm still waiting for either an air-powered car or a $2000 car, both currently built by Tata in India.

I mentioned a while ago the concept of the monkeysphere, the number of people (limited by the hardwiring of our brains) that we can intensely care about.  In a related concept, researchers are finding that having friends improves your bank balance.  A Wisconsin Longitudinal Study looked at a 35-year history for about 1,100 males who had answered surveys about high school friendships.


So... it's not what you can do, it's who you know.  This work confirms the suspicions declared more than once over the years in the adult asperger support group that I've attended.  So, what does this study's conclusion have to say about the fact that I earned $13,644 in 2008?  (Other than the fact that I'm sometimes good at estimating.)  *laugh*  It's a crazy mixed-up world, alright.

It's stuff like this, in my opinion, that contributes to the stupidity of our financial and political realities.  The monkeys just encourage each other about how correct they are.  As long as the plundered riches of the earth can support the lie, they'll keep treating money (and political views) like baseball trading cards.  They're valuable because we encourage each other to believe they're valuable.  The more hype we create amongst ourselves, the more valuable they become.

The crash of this unsustainable system can't come soon enough for my tastes.

Why did we never get Ron Paul as president? He has quite the skill in foresight. Seven years ago, he introduced a bill to eliminate the Federal Reserve which would essentially have forced our country into adopting a new financial model for our economy.  Before the crash.

"Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. ... the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy."
- Ron Paul, http://www.house.gov/paul/congrec/congrec2002/cr091002b.htm

I've been saying that our financial system is based on an exponential math equation, and therefore it is designed to fail.

You can make lots of money off of such a system, as long as you stay ahead of the curve. It's like joining a pyramid scheme. It works, it really does, but you have to be at the top of the pyramid for it to benefit you. To keep the pyramid functioning, you have to keep adding resources (people, money) to the base. Moreover, the longer that you keep the pyramid-building operating alive, the more resources it takes to expand the base since each new layer of support has to be even larger than the one that preceded it. Once there are no more resources to feed into the operation, then the scheme finally collapses. That's the point that I call the asymptote/crash. It's an inevitable end, given the growth function used to create the system in the first place.

The chart here looks like the curve that I've been complaining about.  I list below the url for the chart's source article.  The article itself makes a good read too, though it's a little long.  In particular, I recommend skipping to the end and reading the Concluding Remarks.  Basically, he agrees that the problem with our financial model is that it requires that we keep adding money in ever-increasing quantities.  Or, in his words, "The recent actions are the latest in an on-going process whereby collapse is delayed by issuing additional debt. These actions never correct the underlying problem, but merely delay it until a future time."
http://dollardaze.org/blog/?post_id=00578

It looks to me like we're already in the hyperinflationary part of the exponential curve.  There are only two ways to keep the financial model working.  One method is to "roll back the clock" to an earlier place on the curve.  You do this by eliminating vast quantities of money from the system.  Attempts by the government to buy back bad debt is such an example.  They lie when they say they want to get a fair deal for taxpayers.  They don't want fairness.  That money needs to disappear altogether.  If they can spend $10 in order to make $100 in bad debts disappear, then they'll do it.  The other method is to continue creating money at an ever-increasing pace.  We're doing that too.  (Hence, the chart above.)  It's the main method that we've used for a very long time.  That's why the value of the dollar has fallen so far.  There are just too many dollars.  Hyperinflation makes each unit of money worth less, approaching zero.

This dollar chart comes from the same site.  It's part of another long essay, this one explaining the history of paper money in general.  Did you know that the US Dollar is the 3rd oldest paper money still in existence?  I didn't.
http://dollardaze.org/blog/?post_id=00405

I still think that the US financial system is doomed.  Not by mismanagement (which there's a lot of and is getting the press time these days) but by design.  I still claim that it's a fundamental flaw in our finances to use an exponential function as the basis of creating money. 

For the short term, I recommend buying stuff.  Buy only long-lasting essentials, but buy the really good quality stuff.  You might not be getting repairs for a long time, so it should be high quality merchandise. 

For the long term, I recommend moving to a limited money supply.  (Gold would be fine, except that the Middle East is already buying it up presumably to support their new financial system.)  Such a system will not have to feed exponential growth, so it is theoretically sustainable.  As an added benefit, everyone can see plainly how everyone else is jockeying to get more money at someone else's expense.  Ethical review will be a lot more immediate.  Exponential money creation is bad, so it must end.  People will have to get used to the idea that savings accounts do not bear interest, and they have to actually produce work in order to earn money.

Money is supposed to represent work, not privilege.