Perplexed By The Deficit Scolds?

zFacts has produced an interesting graph for the perplexed (here). It shows (click graphic above to enlarge) US National Debt as a percentage of National Income by Presidential term. It shows the Supply-Side debt disaster that started in the Reagan years and continues to the present. It also shows a great counterfactual: what would have happened if Reagan and the Bushes had balanced their budgets. In the counterfactual world, debt would currently be below 30% of National Income.

There's another interesting part of the graphic. Debt during World War II reached 120% of National Income and the US economy did not seem to have been damaged by this much debt in the Post-War years. What's more, a lot of that debt went to pay for equipment and armaments that were entirely expended during WWII and never had a productive lifetime. So, is 30%, 60%, 90%, 100% (the current number) or 120% the magic "bad number" for national debt?

Nations (especially a nation that plays the role of hegemonic leader in the world system) are not households. But, many business people (for example, here) seem to argue that the household analogy is appropriate so let's see where it takes us. 

Let's say you make $100,000/year (your Personal Income) and you have a $500,000 mortgage (your only debt). You are a solid citizen with a good job, savings and a bright future. These numbers don't seem unreasonable. But, your debt to income ration would be 500%. Whoa, the deficit scolds would say. You can only have a mortgage of $120,000 to bring your debt in line with your income (that's not much of a house for a person with a six-figure income).

So, if a deficit scold was your banker, how could you have possibly obtained that kind of loan? Of course, it's not only income but also net worth that should be considered (does anyone want to guess at the net worth of the US Federal government?). Another way to look at the graph above is that Presidents from Eisenhower to Carter did not invest as much in the US as they might have and today we have an infrastructure that is crumbling due to lack of investment. And, money is basically free right now. A great time to invest.

Of course, there are good reasons why the household analogy fails. The US government can print its own money and households cannot. The US National Debt could be wiped out tomorrow by printing more money. Since we have no inflation right now, it's not really clear what the effect of such a one-time jump in the money supply might be but deficit scolds would yell "inflation"  -- I'll look at the US money supply and what the Fed is doing in a future post.

So when people circulate videos such as the one below, the purpose is to scare the perplexed with large numbers. The debt is what it is. The debt from WWII was what it was and was probably necessary to end the Great Depression and win the War. The current debt level may be what is necessary to end the Great Recession (the Financial Crisis of 2007-2008), the worst economic downturn since the Great Depression, and win the War on Terror (lest we forget, the right wing is still at war with the Islamic world). Money is cheap right now and US infrastructure needs upgrading after decades of inadequate investment. The US is a safe haven for investment. WWII did not sacrifice the "future of our children" on the altar of debt. It ushered in decades of prosperity until the Neoliberal Right-Wing Supply Siders came to power. The upcoming Fiscal Cliff experiment will show how important government expenditure is during times of crisis.

Fourplay Between The Sheets

My first encounter with the Smooth Jazz group, Fourplay, was in a boutique store across the street from Rowe Pottery Works in Cambridge, WI. The store was playing the song you can hear in the video above from their debut album. It caught my ear and I asked the very attractive young lady behind the counter what was playing. She picked up the CD jewel case, turned bright red and told me it was foreplay between the sheets.

"Fourplay," of course, is a "play" on the "4/4" time signature and "sheets" of music. At this point in the conversation, my mind had become clouded with other musical images and I wasn't able to explain the play on words to the young lady. Hopefully, she has become a Smooth Jazz fan. Lee Ritenour, the original guitarist in Fourplay, has become one of my favorites (their current guitarist is Chuck Loeb, no slouch by any means).

Greg Norman: How To Start The Golf Swing

Yesterday on the Golf Channel Academy, I heard Greg Norman give an interesting explanation of how he starts the golf swing. As I've noted in prior posts (here), the Somax Institute recommends starting the golf swing with the left knee. In the Golf Channel interview, Norman commented that he did not like to start with his left knee but rather by turning his right pocket toward the target. He also mentioned that he had to develop a stand-up move to avoid hitting the ball fat (see the Stack & Tilt standup move here and, of course, that comment caught my attention).

In the video above and the frame I've isolated here, Wayne DeFrancesco discusses these two moves (and other unusual aspects of Norman's swing). He describes the moves as "butt under" (another Stack and Tit idea or problem for the critics) and "head back" (standup?).

I have not been able to hit balls trying Norman's approach to starting the golf swing, but it's worth exploring. Now I have three ways to start the golf swing: left knee (Somax style), left shoulder (Width Swing style) and now the right pocket rotation. I have had success with each of the first two approaches. Potentially, each could be done in a sequence similar to that recommended by the Somax Institute. What seems important here is to find a way to start the golf swing without using your hands!

In the Golf Channel video I also noticed that in Greg Norman's current swing, he stays much more centered over the ball, maybe even with a little left-side anchor than he did in the video above (DeFrancesco comments on Norman's right-anchor at the beginning of the video). Possibly, as we age, there needs to be some swing changes to compensate for changes in athleticism, which Greg Norman had plenty of all through his life!

In any event, I had a very nice Greg Norman wine for dinner tonight that can wash away any pain you might have lingering from bad golf swings.

Overmedicated Santelli gibberish on CNBC

Can anyone tell me what Rick Santelli is trying to say here? For those of my readers who are not familiar with Mr. Santelli, his comments as a CNBC correspondent from the Chicago Mercantile Exchange in 2009 were thought to have started the Tea Party movement.

Now I realize that the Tea Party had its wings clipped by the electorate in the last election and that some had to be medicated so that they were able to continue functioning, but Mr. Santelli talks like someone who has been overmedicated (he reminds me of a person I met who had just taken an overdose of Prosac). If I'm right, someone needs to rush Mr. Santelli to the ER.

Or maybe it's just the constraints of the medium. If Mr. Santelli had a bigger white board, possibly he would be able to more fully develop his ideas.

Or maybe it's Mr. Santelli's genetics. His Wikipedia page (here) says he has four Italian parents. I have one Italian parent and I can understand two, but I don't understand four (Hey, compatriota, check yourself in, OK)!

In any event, what's all this about "trust and honesty," "fibbing going on with statistics" (Is he talking about himself? Or, as Curly of the Three Stooges once said "I resemble that!"), "250 grand isn't a million" (yes, that's an accurate statement), "how long will it be before they get in your pocket" (the British would say "knickers"), etc. "Breaking it down like no one else can" indeed Mr. Santelli.

Here's the transcript, if that will help in any way figure out what's being said here:

...let's get to the group this monday morning, check in with rick santelli and get saelli exchange. good morning, carl. to me, if you're trying to work with individuals to solve the problem, trust and honesty are very big components of that relationship working. and i'll tell you what, my theme of late has b that there's a lot of fibbing going on with statistics. but to the point where we take so many things for granted, we miss so many nontru and i'll you a nontruth. we always talk about the 1993 income tax of president clinton, and the top tax rate was 39.6%. threshold, $250 thud. so flash forward from 1993 to present, okay. well let me tell you something, there is this little thing called inflation. i know this might be nitpicking. but $250,000 today well, started out if you want to be apples to apples would be about $165,000 then. in other words, we are not adjusting even for inflation. so, if we're talking about $250,000 today being the same as then, we're wrong. it would be $165,000. so the point is, is that the difference between these two is $85,000. okay? is a 35% miss when it comes to being honest about it. oh, even worse let's take this. how many times, of course you've heard a million times, taxes on million favors and billionaires, even though, and i know this is adjusted, okay, but let's just keep it $250,000. well, 250 grand isn't a million. so it's off by 750-k over 1 million. okay? so, in essence, what we're doing is we're off on this one by 75%. we're off by 35% and 75%. so why am i doing this? because i'll tell you what, middle-class america, pay attention. because if the misses on income tax are this large when they're talking to you over simple numbers, how long, exactly, do you think it's going to be before they get in your pocket? people making $50,000 to $100,000. if we really want to come up with honesty in negotiating, first of all, if you're going to tax millionaires and and billionaires on it the 250 grand threshold, okay, fine. but make sure their net wealth really is a million or higher. and any tax increases should go direct to deficit reduction. take away the hey, everything goes into the general fund because it certainly seems like when you're fibbing about 35% and 75% truths that really all they're after isn't fixing the economy, it's your bucks. back to you. all right. rick, breaking it down like no one else can. rick santelli with the santelli exchange.

Marco Rubio es un pañuelo rosa

Mr. Burns makes a public service announcement explaining the Fiscal Cliff. Be sure to catch the details: a portrait of Teddy Roosevelt on the mantle, binders of women, Nate Silver Can't Add, Rape Now Bad, Marco Rubio, Immigration, the Romney campaign's misuse of graphics and, of course, class conflict -- a very funny smack down from the Simpsons.

I Shall Win! I Shall Win!

Andrea Bocelli sang Nessun Dorma from Turandot of Giacomo Puccini tonight during pledge night on my local Public TV station. From the crowd response to Bocelli Live in Central Park, this is everyone's favorite aria (the version above is from A Night in Tuscany). Here are the words and translation:

[Tenor]

Nessun dorma! (no one sleep)
Nessun dorma!

Tu pure, o' Principessa (even You, o' Princess)
nella tua fredda stanza (in your cold room),

guardi le stelle (watch the stairs),
che tremano d'Amore (that twinkle for Love)

e di Speranza (and for Hope)

[B]

Ma il mio mistero (But my secret)
e chiuso in Me (is closed within Me),

Il nome mio (My name)
nessun sapra (no one shall know)

No! No!

Sulla tua bocca (On your mouth)
lo diro (I will reveal it)

Quando la luce ... (When the light...)
splendera (shines)!

[C]

Ed il mio bacio (And my kiss)
sciogliera il silenzio (will dissolve the silence)

che Ti fa mia (that makes You mine).

[Chorus]

Il nome suo (His name),
nessun sapra (no one shall know i)

E Noi dovrem, ahime (And We shall have, alas),
morir...morir (to die...to die)!

[Tenor]

Dilegua o' notte (Vanish o' night)!
Tramontate stelle (Set Stars)!

Tramontate stelle (Set Stars)!

all'alba (At dawn)

Vincero (I shall win)!

Vincero (I shall win)!

Vincero (I shall win)!

Here's the version from which the lyrics were taken (can't get enough!):

It Wasn't Made in Uzbekistan

The orignal iPod commercial with Steve Jobs doing the voice over, Propeller Heads "Take California"!

When you took an iPod out of the box it was so beautiful that it seemed to glow, and it made all other music players look as if they had been designed and manufactured in Uzbekistan, Walter Isaacson, Steve Jobs, p. 393.

I like the original commercial a lot, but there were also the set of iconic commercials, for example:



All this ($75 million first year budget) to revolutionize the music industry! Rip. Mix. Burn.

TECH NOTE: The original iPod used a tiny 1.8" Toshiba hard drive that held five gigabytes of storage (about a thousand songs). Toshiba was not sure what to do with their innovation but Jon Rubinstein at Apple did. The hard drive was soon to be replaced by flash memory (the current MacBook Pros with the high-resolution retinal display come only with flash memory, no hard drive--good bye hard drive crashes and over-heating)!