Pragmatism

You probably have a better idea about how to do something. But will it work? You’ll never know until you try. When you do give it a go, you may find that getting there requires a lot of compromises along the way before your dream is realized. Or, perhaps, you’ll simply give up – blaming your own inability to make it happen or blaming the world for being so darned unfair.

Both experiences are simply part of human nature meeting reality. We’re all idealists at heart, at least in a certain sense. Only a few people have the skills necessary to make those dreams a reality and much of the time they have to keep their eyes on the prize. A dream is one thing, but getting there requires wide-awake attention.

That is why an open, democratic political system can’t live by rigid ideology alone.

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Keystone XL: No Decision, a Good Decision

The Keystone XL Pipeline dispute is one of the hottest political issues for the President Obama. Backers claim that it will provide jobs and detractors claim it’s an disaster waiting to happen. The dispute has torn apart the Democratic Party, with unions calling for the jobs and environmentalists working feverishly to stop the pipeline. Both of these claims are rooted in facts, but both are overblown.

Rather than make a decision on the pipeline, however the administration has delayed the pipeline yet again, probably until after the November 2014 midterm election. This upset nearly everyone. But in terms of what is actually needed, this is probably the best thing to happen. The reason for this lies deep in Canadian oil and politics, quite apart from whatever we have going on in the US.

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The Underground Economy

Given the holiday and a lot of work to do, it’s time for a repeat.  This one goes with along with my musings on Velocity and Inflation like a hand in a glove – why isn’t there more inflation?  We’ve had a small series this week on that topic, and this brings it back home.  Have a Good Friday and a Happy Easter!

It’s good to have a lot of money, assuming that not everyone has a lot.  Inequality is apparently bad when it gets too big, but it also makes the whole economy possible in small doses.  But how much money is really out there, and where is it going?  It turns out that this is more complicated – and hidden – than most thought.

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The Amazing Dollar

Even if most people don’t believe it, the economy is certainly improving for some people. The Federal deficit has declined to $415B, or 3% of Gross Domestic Product (GDP), from a high of over 10% as recently as 2009. This has been fueled by a large increase in tax revenues combined with a drop in spending on unemployment insurance, mortgage assistance, and so on. Our trade deficit with other nations is also dropping rapidly due to lower imports of fuel, and now stands at less than $400B.

That’s good news all around. The only problem is that the US economy is borrowing money or sending it overseas at anywhere near the rate that the world needs it as trade expands. That is putting upward pressure on the US Dollar, meaning that while imports are likely to become cheaper there is little hope that US manufacturing is going to get a break anytime soon – despite remaining one of the big casualties of the depression so far.

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Resurrection

“How good it is for us when the Lord unsettles our lukewarm and superficial lives.”
- Pope Francis, tweeting as @Pontifex, 7 April 2014

Palm Sunday is the start of Holy Week. This is the day Jesus rode into Jerusalem on a humble donkey, a hero to the adoring crowds.  His subsequent challenge to the authorities who were jealous of his popularity got him tortured to death in just five days. It is a day meant for this new People’s Pope, now with a full year under the simple skull cap (or yarmulke) he is usually wears in public in place of the pointy miter of authority. But this Holy Week is a special one, and not just for this pope’s anniversary.

One week after the Easter celebration of resurrection Popes John XXII and John Paul II will be canonized as saints, recognizing their work as reformers of the Church to be the hand of God himself. They make a formidable pair, one more liberal and the other more conservative. Together, along with Francis’ year of tumult, this event will probably mark the start of a major leap for reform and reinvigoration of the Church. This is a good day to question authority and the “superficial lives” that coast along in need of renewal, and Pope Francis appears to have a plan.

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The Case for Optimism

A short time ago, I asked my friends on facebook if they were optimistic about the economy. Scratch that – I insisted that the negative case for this slowly improving economy was bunk and got an eyeful of responses. Needless to say, my friends aren’t in the mood for Mr. Sunshine, as some of the commentators here have called me. Talk about fundamentals improving? Show them the money. Building a strong foundation for the next economy is nothing compared to a strong roof overhead and comfortable home inside.

So it is time to make the case for optimism, which is to say why I feel that things are going to get better in 2014. Either I’m ahead of the curve or I’m just plain wrong – you get to pick. All I ask is that whichever you pick now you file away, with this piece, and evaluate the decision for keeps later. But this is the case for the economy finally picking up this year and developing strong momentum into 2015 and beyond – into 2017 when I still think good times will be had.

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Velocity and Inflation

Since 2008, the Federal Reserve has more or less printed over $3.2 Trillion in three rounds of “Quantitative Easing”, now tapering off to zero. Many have speculated that this has to result in inflation for the simple reason that there are more US Dollars out there than ever before. That’s based on the most fundamental principle of any market, supply and demand –more of these things called “Dollars” around and the value has to drop, meaning it takes more of them to make a reasonable exchange with something real.

It hasn’t worked out that way. Inflation remains less than 2% per year as it has since the financial crisis that started in 2007. How on earth can that be?

The answer is that the number of US Dollars in the world is only one part of the equation. The “velocity of money”, or the number of times they turn over in the economy, is equally important. Data since 2007 shows what every freelancer and job seeker knows – it’s a tough world out there, and people are pretty slow to let go of the dough they have.

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