An Ethnic Pennsylvanian

I am an ethnic Pennsylvanian.

That may not make much sense to most people, but it does to me. This statement goes to the core of what ethnicity is and the strange fascination we have with it here in North America.
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Bear or Bull?

We’ve spent a lot of time talking about workers – where they have been beaten up for the last 40 years and how the last 15 years have if anything been worse. We outlined a way out of the problem as well by taking on the overhead per employee in an effort to make labor cheaper.

But what about capital? While this has been a good time to be rich there hasn’t been a good place to invest money, leaving much of it parked on the sidelines. Part of the prediction for a big change after 2017 is a big turnaround in investment, which has been low lately. Where will that money come from?

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A Connected Approach

One of the recurring themes of Barataria is that nearly everything in our life can be evaluated based on how it is connected.  This works for analyzing political and economic power, but it also charts the course of ideas and products.  If our political system isn’t working properly, Barataria would argue that it isn’t connected properly to the society it purports to govern or to new ideas that will help it to change.

I’ve expounded on the subject in many different ways, sometimes without using the same words, as a way of thinking this out in public.  Many of you have responded with insightful comments and a few questions on the side – what is that guy going on about?  I’d like to nail this down into a simple, direct statement.  This is an old work, about five years old, but it is something I want to revist to help make sense of our changing world.

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Whither, Oil?

There is little more important to the US economy than the price of oil. In the last year, about $500B of gasoline alone was sold at gas stations across the nation, with another $180B in other fuel oil – about 3.9% of total GDP.

Despite its importance, no one is willing to predict where the price of oil will be in the future. The Economist said “If your correspondent could forecast that, he would be on a yacht reading The Economist rather than at a desk writing for it.” Indeed. It seems like a task for an idiot to even try, as Barataria has several times in the last year. We were so wrong about it that it might make sense to bet heavily in the opposite direction.

Low oil prices appear to be here to stay, at least through the year. The implications are worth talking about, even if we can’t be sure what happens after that.

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Capital Idea

It was 70F in St Paul today, and my mind is on other things.  This repeat from 2013 is still good, but the numbers have changed slightly since it was written.

Borrowing money isn’t bad.  When it’s used to purchase something big that will last for years, like a house or a car, it often makes sense to do it now and pay the finance charge.  Borrowing to buy equipment or a build to be rented is an investment – as is borrowing money to learn a good trade.

When we look at how the Federal government borrows to keep itself going we can and should be able to ask the same questions – was this an investment?  Did we get anything good for the money?  Unfortunately, the accounting practices used by the Feds lump capital and other investment into the same pot as operational expenses, making it impossible to tease everything out.  It’s a procedure the Founding Fathers would recognize, if you wanna get all Tea Party on the practice.  But it’s still a dangerously stupid way to run things – and totally counter to the way any business or state is run.

As we talk about the need for serious reform in Washingtoon, we should add this to the list.

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The Original Source

The internet is a wide, rolling river of information. It can be treacherous and dangerous to wade into if you’re not careful. If you’re looking for a cool drink of truth, the muddy brown of this mighty Mississippi of data often has a harsh stench of bias bubbling along with the waves. What can a reader thirsty for knowledge do?

The answer is to seek the source – the cool, clear stream that feeds into the torment at the headwaters. I call it the “Urquelle”, a German word meaning “original source” favored in the mountains and rolling hills that are the source of so many great rivers in Bavaria and Bohemia. This process of seeking out primary sources is valuable not just for writers, for whom primary sources have long been a staple of good, useful prose. As surely as reading is writing, today’s discerning reader should also seek the Urquelle.
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