More stores across the U.S. that offer deeply-discounted products are seeing their sales decline after years of growth amid America’s “Great Recession” — and one analyst said on Monday it’s another sign of even deeper downturn.“I think what’s going on in those stores is that we are in a depression for 80 percent of Americans,” top retail analyst Howard Davidowitz told KNX 1070.America’s three largest discount chains — Dollar General Corp., Family Dollar Stores Inc. and Dollar Tree Inc. — all recently missed their quarterly earnings targets.
Read it all at Washington's Blog, Top Retail Analyst: "I Think What’s Going On ... Is That We Are In A Depression For 80 Percent Of Americans"
Get ready for the second leg down.
28 comments:
the 80% referred to in this article are exactly the people the US needs to shed in order to restore competitiveness.
i don't think 'starving them out' gradually (which is what the government is sort of implementing now) is a palatable solution - the US needs a quick fix.
So, what would you suggest? Line them up and shoot them? Is that a quick enough 'fix' for you?
Off topic, but just wanted to point out the imminent publication of David Graeber's Debt: The First 5,000 Years. Which looks like a history of money from an "MMT" (that is to say, scientific, sensible and true) perspective. See e.g. David Graeber studied 5,000 years of debt: real dirty secret is that if the deficit ever completely went away, it would cause a major catastrophe or To Have Is to Owe
One wonders what the 20% left would do or have after the "quick fix". Or what the restored competitiveness would mean. Is there really an endless demand for their greed, violence, arrogance and stupidity?
Graeber is great. Michael Hudson has been talking about the origin of money in debt, and Randy Wray said that "modern money" is debt-based and at least 5000 years old. A. Mitchell Innes wrote a couple of articles on this in the early 20th c. debunking the Austrian concept of commodity money.
The republicans, tea partiers, and libertarians who are deficit terrorizing know how the MMT works and how Hamilton made the system in the USA accept MMT though not nec. aware of it.
These deficit terrorists' debt ceiling showdown is exactly what they did in 1979 ( according to the news today ) before raising interest rates sky high. They did this to corner Carter, and they are trying the same thing again to corner Obama.
Someone needs to get across to Obama something about 1937 Roosevelt and 1979 Carter. Whoever was MIKE NOrman's contact to Obama admin needs to be questioned how they could fall for such a trap while trying to play up as some Reaganesque homage.
I covered this before in this blog about cornering Obama with the Carter Corner.
IN other words the deficit terrorists KNOW how MMT works and they plan to use it for their agenda provided they have the smokescreens in place to dismantle constructs that MMT needs - healthcare, infrastructure, and jobs.
the usual :
1. china buys our debt
2. our grandchildren will bear the debt ( though we are bearing the brunt of Reaganomics today as the grandchildren of the 80's )
3. cutting spending creates jobs.
4. inflation is coming even though deflation is coming faster.
5. if no one buys are debt we are doomed.
6. debt ceiling is not a function of ratio to GDP and we can default on our own debt/currency.
any more falacies that we should ascripe to so we can be deficit terrorists ?
please send me your lists !!!
i will publish nation wide if i could.
what about chemical equations :
cut spending -> reduce and make inelastic monetary supply -> lose more jobs and more assets
increase spending -> increase monetary supply -> "inject heat" into real economy and create jobs & assets
heat is inflation
lack of heat is deflation
googleheim
if your looking for talking points to spread "nation wide". here are my talking points. i do some variations but my goal is to just try and get the word out of an alternative explanation of the facts.
"Well-intended policymakers are only as good as their economic advisers. Economists like the author, who i admire, fail to understand that government debt is simply the currency user’s savings as a matter of accounting. It’s a digital resource - a digital account corresponding to all the savings of currency users’ in banknotes, deposits, and treasuries. Mainstream economists are using the wrong models, drawing the wrong conclusions, and giving the wrong advice because they misunderstand monetary operations. For example,the objective should never be to balance the budget as a currency issuer, it’s to optimize it. Fiscal optimization at any level of public spending of a currency issuer requires balancing tax revenues with spending while running deficits at a rate corresponding to the users saving rate. For those of you interested I’ve outlined a laymen’s explanation here - http//www.DollarMonopoly.com The point is the root of our current economic problems are more operational than ideological - proper monetary management and a properly structured banking system. The only economists on top of these issues are the Kansas City school of folks like James Galbraith, William Black, Randall Wray, and Warren Mosler. The academic community continues to trip over itself because of their misunderstanding of the fundamental nature of our monetary system."
dear mike,
in humor, i would suggest sticking them in alaska (with SP preferably), give them a flag, and run a giant laser over the faultline and consider them 'seceded'.
the US is a country of immigrants anyway. so, develop policies to encourage productive, skilled and/or asset-rich individuals to come to the US while shedding the displaced worker base.
its more palatable than running a welfare state because if 'they' don't go, then the productive ones will vote with their feet.
Ahh, SchittReport, you got me (& Mike) at first. My wife read your post and realized it was parody instantly though.
SR:
Thanks for the humor. Keep up the good work, by the way!
hi CRAIG
I am looking for a set of 10 solid points that start with questions ( like I have here but only 5 or 6 ) such that you could email someone and have them take an economic dementia test ( like those funny emails people send asking to say something over and over and then add two trivial numbers together ).
If I could have a list of 10 or 20, then I would have some fun -
example :
Please take your economic IQ test :
1. Does China buy our debt ? No, blah blah blah
2. What happens if no one buys our debt ? The Fed buys it, blah blah blah
3. Can we default ? Response - the question should be can the Fed Res default - and so since they credit or "print" the money as if a Casino can or cannot have it's own chips, blah blah blah
etc
About 10 to 20 would be great, each one explaining a separate function of monetary workings which debunks deficit terrorism.
I swear if we drafted a final chain email with some embellished links to (easy) MMT, it would help a lot of people.
Even a "got MMT?" T-shirt would be in order.
After listening to NPR discussion on default, I have to worry about the democrat liberals who don't know how it works either.
To me, this is the salient part of Graeber’s article”
“I suspect there's a kind of tacit deal, here, whether explicitly stated or not: the Chinese government periodically pretends to get all worked up over the US debt, even though they don't care, and in exchange, the US only pretends to get worked up over their constant pirating of intellectual property rights and technology transfers, but in fact, lets them get away with it. The result: we get Walmart, and they get nanotechnology, superfast trains, and a space program. So what do they care if we never “pay the debt?””
Yet that problem is being compounded by ill targeted stimulus and then everyone wanting spending cuts. This is about what the national debate should be.
Try this I think I just summed up the heart of MMT into the Austin’s Law of Monetary Optimization (for lack of a better name ;-0 )
Monetary optimization at any level of public spending requires balancing tax revenues with spending while running deficits at a rate corresponding to users saving rate. The US government as a currency issuer should never seek to balance the budget, but rather optimize it for any desired output level.
Have no idea if it’s valid nor not. I haven’t back from anybody.
http://dollarmonopoly.blogspot.com/2011/07/austins-law-of-monetary-optimization.html
quick revision - probably need to put the constraint aspect in there
Monetary optimization at any level of public spending requires balancing tax revenues with spending while running deficits at a rate corresponding to users rate of savings. The US government as a currency issuer should never seek to balance the budget, but rather optimize it for a desired output level within the real constraints, such as production capacity, of the marketplace.
Fiscal optimization at any level of public spending by a sovereign currency issuer requires balancing tax revenues with spending in order to run a fiscal balance at a rate corresponding to users rate of savings. The US government as a sovereign currency issuer should never seek to balance the budget as a goal in itself, but rather to optimize it for a desired output level within the real constraints that prevail in the economy, such as production capacity and availability of real resources.
Yes I was initially referred to it as fiscal optimization but "fiscal" may create a negative emotion policy. MMT studys monetary operations so i figured Monetary Optimization because it does point to the "money" aspect within the dynamic taking place - namely saving. Functionally they are the same but i think fiscal may add confusion?
currency issuer vs sovereign currency issuer?
doesn't introducing the term sovereign just introduces questions from readers? Isn't a non-sovereign issuer just a currency user? if so it doesn't add much does it? i'm really trying to force everything into binary language.
Technically it is best IMHO to keep "monetary" and "fiscal" separate. The monetary authority is the central bank, the fiscal authority is the Treasury. Spending is carried out by the fiscal authority iaw appropriations and tax levies. The money authority has no power to change the amount of non-government NFA, only the composition and term.
The MMT paradigm depends on a sovereign currency issuer. MMP Blog #6 clarifies this.
I think your right it needs to be fiscal optimization because there is no way to replenish dollars without spending....unless, of course, you want to put a pallet of bills on my driveway and let me figure out a way to do it. I called it Monetary Optimization of it because I was thinking of the Monetary Operations aspect of it.
Good MMP blog #6 article. Very helpful. Isn't a non-sovereign issuer just a currency user? if so from a laymen's explanation I'm not thinking it doesn't add much does it? i'm really trying to force everything into binary language.
Your either a currency issuer (soverign) or a currency user in other word...right?
@googleheim
What your trying to do is admirable but i think ultimately futile. I say that because your already beat before you've started because the language your using has already beat you. IMO the only to do what your trying to do is redefine the language. This is exactly what i'm trying to do with my issuer-user paradigm. In fact i wrote about it here at http://dollarmonopoly.blogspot.com/2011/07/change-frame-change-game.html
The trick is to force everything into binary logic which is easy sense it's the inherent nature of money.
Why is my URL link tool not working. Testing again
Change the Frame. Change the Game.
Not all currency issuers are sovereign in their currency. Only those that issue non-convertible floating rate.
of course. a non-sovereign is a currency issuer who is pegged to another currency. your right "sovereign" is a distinction that is required. just slipped my mind.
So is a gold standard. I doubt that many of the gold bugs anxious for a return to the GS are aware that this involves the US relinquishing sovereignty.
@googleheim
here is an "engineering approach" response I am still trying to flush out for a comment I left on to Lynn's article - No Jobs + Shredded Safety Net = Disaster for Women
Ahh… I see your approach now. “If we’re going to have a people-centered, values-driven economics, then we have to speak in language that people can relate to and articulate values that resonate in their belief systems.”
Last time was about grandma this time about women. The people approach is effective but the roadblock is “we can’t afford it” By taking an operational approach I can say without a hesitation of a doubt we can most definitely afford it. The reason we think we can’t afford it is because the economic advisors have completely misunderstood how the system works.
For example, let’s say you own some sort of process plant, well it’s the engineer’s job to tell you how to get the most our of your plant - evaluate your bottlenecks (constraints) and figure out a way optimize your operation (or resources) around them. Well note to plant owners…the existing engineers have been constraining the system unnecessarily. In other words balancing the budget should never…NEVER be a guiding objective. The goal should always be to optimize the budget. Fiscal optimization at any level of public spending requires offsetting spending with tax revenues while running deficits at a rate corresponding to users saving rate.
Economists have obviously overlooked the Theory of Constraints, ironically an engineering mainstay, and how it can be applied to the “dollar” economy. I can’t tell you how big of a cluster f@ck of a mistake these people are making. Our economic advisors are choking our economy because they think our current level of debt is a problem. Economists fail to understand that government debt is simply the currency user’s savings as a matter of accounting. It’s a digital resource - a digital account corresponding to all the savings of currency users’ in banknotes, deposits, and treasuries.
Government debt of a currency issuer is essentially a tool to maximize the economy’s output within a resource constrained marketplace. Constraints must be kept at full capacity to maximize output. Exceeding those real constraints, such as production capacity, causes inflation and price instability.
As my friend says, the whole thing would be laughable if it wasn’t so painful.
I like the approach, Craig. I would state up front with something like, "I am an engineer and recognize this as a standard flow problem. Here is how an engineer would analyze it." I would use engineering-speak as much as possible instead of econo-speak.
@Tom I couldn't agree more. I needs to flush out the verbage.
In the meantime check out the new and improved Issuer-User Paradigm
So I'm thinking I milk 2 economic laws out of this puppy:
Austin's Law of Monetary Equilibrium: any level of public spending
Austin's Law of Fiscal Optimization: maximum level of public spending within a resource constrained marketplace
ie: Constraints must be kept at full capacity to maximize production of goods and services. Exceeding those real constraints, such as production capacity, causes inflation and price instability.
back to a solution to solve the economic depression for americans,
Natural Gas Act being pushed by Boone Pickensa and his army, of which I am a proud supporter. Why should we pay 4.50 a gallon and give it to our enemies, so they can build indoor ski slopes in the dessert, its bad enough we are getting financially raped by the bank lobbyists etc. At least if we pay 5.00 per gallon with Natural gas supplying the trucking industry the money stays here in the US. Please support this act, it cuts across all economic classes of people , poor, middle and wealthy, please help to get it passe so high paying jobs will return to the US,
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