Monday, February 14, 2011

Naivety: A Political Definition of the Hoi Polloi

The Teabag movement is like a wave sweeping the country. Ride the wave, count the votes and get elected. I listened to several Tea Party home town meetings and it was summed up by one moderator, “We will stand behind you [the Congressman having the town meeting] in making those cuts in spending.” What these town hall meetings lacked in youth, they more than made up for with participants my age or older. When it comes time to make cuts; out comes a list of things that can’t be cut. That there, gives you an idea of how serious the concept of cuts are. Of course, the cuts I deem reasonable are not the ones my neighbor agrees on, so how do we cut any program? The solution was simple, until we tried to implement it.

Then we have an 8 trillion dollar commitment guarantee to save the Fanny and Freddie GSE’s (prop up property prices). Add to that, about 4 trillion in insurance guarantees to bail out the banks, some of which are “too big to fail.” Actual out of pocket so far, is a vague amount. It is kind of like throwing a party on a budget. When you see the estimated bill, for 10 cases of vodka, two hookers and 1000 condoms, you know the party isn’t going to be as advertised; expectations for the hookers were set a tad too high.

Let’s move to Egypt. The people there think that they have overthrown a dictator. I can’t quite figure that out. The dude Mubarak was 82 years old. All they had to do was pop a paper bag behind his back to induce heart failure. I think all this guy wanted to do, was die in office and get the tribute of a free State funeral. It’s not like he needed to kill a few more people to keep the regime going. The country has been a dictatorship since 1958. The youth of the country think that things have changed and they are now in control, the naivety of their thinking will be tested very shortly. The Egyptian military still runs the country.

So where are we now? Everyone wants change, but the money needed is not there. We can have less, but not more. The Well is dry. Obama proposes a budget of 3.7 trillion dollars with a savings of over 1.1 trillion over 10 years (I guess the savings are all in the 10th year). Tax collections this year are about 2.1 trillion. Here we have a President standing up and announcing a budget that is underfunded by 1.6 trillion dollars claiming a savings of 1.1 trillion over 10 years. The real implied statement here is that the President thinks the general population is dumber than a sack of rocks. I don’t have any problem with that; I think he’s on to something. I get irate for being grouped with the Hoi Polloi (the sack of rocks).

Our political representatives have promised us that lobster and steak dinner and believe it or not, they are going to serve it to you at McDonald's. It looks like three card Monte and selling well know bridges are passé. I’m getting hungry, let’s go to McDuck's for Surf and Turf!


frakrak said...

There shouldn't be any fuss here Jim, Mr Bernanke said he can delete all the "in bits" on the ledger when ever he feels the time is right anyway!!
Barack should phone Ben and get some pointers on how to use his delete key also .....

Dan Mac said...

Jim - nothing profound to add here; just wanted to let you know I still read the blog and appreciate all the posts.

Paper bag comment - very funny.

"I get irate for being grouped with the Hoi Polloi (the sack of rocks)." - Well put.

Anonymous said...

Hey Jim come to Nova Scotia we actually have something called the McLobster here. It can be served up with Big Mac. Surf and Turf for the Hoi Polloi :)


GDI said...

Good blog post, I too wondered why the Egyptians were so happy, all they managed to do was replace one dictator for a committee of dictators.

Anonymous said...

Isn't that what we get to do here every four years or so. We get excited about that too.


Jim in San Marcos said...

Hi Rob

I thought you were pulling my leg with McLobster. I googled it and there it was.

It does tend to fit in with the way our politicians promise the world and deliver--not quite what you had in mind--but it's all there.

Jim in San Marcos said...

Hi Dan Mac

Thanks for dropping by. Every complement is appreciated.

Take care

Jim in San Marcos said...

Hi Frakrak

Bernanke and Geithner are running the show. A lot of the dialog reminds me of the drive-in movies years ago, while in the back seat with my date. "Will you respect me tomorrow? etc---" "Sure Honey!"

She's shopping for "tomorrow" and you are buying for "tonight." In political terms, your getting laid and she's getting screwed.

No amount of Vaseline will get Obama out of this mess. They are going to have their way with him.

Anonymous said...

Lobster is cheap here. I could buy it off wharf for less than 4 bucks a pound last season. One of benefits of bad economy and likely why McDucks is peddling them. Maybe they will go nationwide with this. Funny thing is Lobster is considered a Luxury. People quit buying when times get tough and this has forced price down. If it loses it's caché in the course of this happening it will once again be the food of choice for poor people at least where I live. History repeating itself.

Anyway I enjoy the commentary you provide. The insanity of current deficit spending by our politicians is going to end badly whether they like it or not. The general public is oblivious to what is really going on but I suspect that prices for basic commodities will continue to go up at an unsustainable rate. This is an underlying reason for riots in Egypt but commentators are too busy worried about Muslim Brotherhood to talk about it.


Anonymous said...

great post

Jim in San Marcos said...

Hi Rob

You made my mouth water. I'm going to go buy a lobster or two and stimulate the economy.

And then to help your fishing industry, I'll count lobster instead of sheep, when I go to sleep tonight. Not sure it will do much good----but what the hey!

Take care.

Anonymous said...

What you guys don't realize is that you are the lobster. Get ready to be boiled, smothered in butter and eaten by the power elite.

"BURP! That lobster tasted like savers, retirees and foreclosed home owners. Yum, that was a good dinner. What's for dessert, CD and Treasury bill holders?"

Anonymous said...

Most of people posting here know exactly how this line dance will be called. We are just the Markets who get to swim in the tank a little longer while the Canners get boiled for McDucks. As an aside where I'm from the small Lobsters Canners get boiled at wharf the big ones get to fly on airplane to make dreams come true.

Jim you made me laugh with this one.

She's shopping for "tomorrow" and you are buying for "tonight." In political terms, your getting laid and she's getting screwed.


Anonymous said...

The lucky ones are those who will die off in the next 5 years. They will escape the stress and discomfort of an economic blood bath. (But even they'll be screwed if the Buddhists are right and we come right back to a new life after we die.) What is coming financially and economically is the equivalent of the black plague.
Whether it is a deflationary depression or an inflationary depression, most everyone will get whacked big time and their lives are going to drastically change for the worse. Only the very wealthy who can afford to take big hits and lose most of their assets and net worth will survive well and be able to be comfortable. And the people who one companies that are into the correct sectors for the coming plague (healthcare, food, energy, etc.) will be the other survivors.
Those not taking great thought and pains and plans to prepare for the future (98% of USA) will die from the plague. The meek are not going to inherit the earth. The smart-adaptable-tough-wealthy will.

Jim in San Marcos said...

Hi Anon 2:12

I don't think it's going to be that bad. We end up losing all of our savings, and we start over like they did during the Great Depression. For a lot of people who live paycheck to paycheck, it will be a non event.

I tend to think that the occupations that would be hurt the most are those that are government supported like health care. Dentistry would fall off a cliff.

The wealthy will pay the highest price. The more visible taxable toys you own, the more you will be accessed in taxes when the new financial system takes over. You might own a 5 million dollar home and have no means of support except your savings, which will be gone. How do you come up with the future taxes on your property? You could try to sell it, but with everyone starting out at zero, there won't be the dollars you need to make the sale.

What we are really looking at here is the Kondratieff Wave This is the great equalizer that gets rid of the super rich and returns the economy to more normal conditions.

The world isn't going to end, but you will have to work for your next meal. I tend to agreed with you, that it will suck if you are retired.

The rich lose everything and the poor lose nothing.

The thing we could lose is our Democracy. The Hoi Polloi might just want to shoot those they deem responsible for their plight.

A little preparation could make this transition more comfortable. Diversity is the key.

Anonymous said...

Jim --

How long do you think it will be until what you describe occurs?

Jim in San Marcos said...

Hi Anon 4:32

I'm hoping it won't get that bad here, that was my worst case scenario. But if things keep on the same course as they are now, it's could be less than two years away. Remember that my time line has been a tad off in the past, "The Depression of 2006" is taking it's sweet time.

Jesse said...

You are right on, it's nice that there are a growing number of blogs out there over the past decade the highlight the non-sense that takes place within our Government.

Anonymous said...

Its getting more and more scary and unsettling Jim...

Things are really beginning to implode here in the USA. If the confidence of the people goes towards the dollar we'll have deflation. If it goes towards tangible assets we'll have inflation. Hard to tell at this time. Deflation is usually caused by governments paying off their debt. Probably won't happen with the USA. The US govmt will default on the debt instead via inflation, cutting SS and Medicare benfits, etc. So inflation seems to be inevitable after this period of deleveraging and debt destruction is over. Housing valuations will probably continue to drop over the next decade or more. There are so many foreclosures that are sitting in the pipeline right now that will push prices down further. There are many more that the banks aren't even acting on yet. And there are 8 million more mortgage resets coming by the end of 2012, how many of those mortgage holders are going to default? No one can face the numbers and the facts that indicate that housing will easily go to 65% lower than this bubble peak.) There are not just revolts in Egypt, Libya, Tunisia, etc. There is one in Madison Wisconsin right now! This is just the beginning. Expect a lot of tax, food, pensioner and unionist revolts here in USA.
Never thought it would come to this. Now I'm thinking to myself...

Need to move into the middle of a strong agricultural area with a long growing season (central Calif?) so I have a better chance of access to meat, eggs, vegs and fruits. Better own a little home there free and clear (and off the grid). Better have a garage with 50 gal drums of water and a bunch of canned and dried food. And a free and clear RV in case we have to get out of Dodge in a hurry. This not ever be needed... but then again it could be. I don't think I'll be able to be truly comfortable or have some sense of stability unless I know I have some sort of set up like this. I can't think of anything else that will quell the anxiety that is lingering below the surface of my psyche.

What once was an alarmist is quick becoming a realist.

Strategic Investor said...


you are so right, the big problem is that everyone is for cuts - in things they don't perceive to be good for them.

I'm for cuts to current retires pensions and healthcare, and for cuts to farmers, and to government workers.

I notice, though that most Tea Party people are not for Entitlement Reform, at least, not if that reform involves people over the age of 50.

Jim in San Marcos said...

Hi Strategic Investor

I agree and it sure doesn't leave much room for cuts.

As for the Tea Party, I think it is a little too early to judge them. They are not all birds of the same feather but their mad as hell. I'm not sure they will be able to change much, but it has stirred up some hope.