Occupation of Independence

Glenwood, NM. What time is it? My cellphone comes on and looks for service without finding it. Thus it won't display the time. Perhaps the first lifestyle adjustment you must make when living in remote towns is turning the clock back to the day when we all wore wristwatches. Imagine how tired waitresses get (in towns like this) when outsiders make weird dietary requests. One city slicker won't eat meat; another eats nothing but meat. None of them is happy with canned goods off-loaded from the Sysco truck or Little Debbie's fine baked goods, which is all there is to rural cuisine. They must wonder if there is anything that isn't against somebody's food ideology. James Howard Kunstler would be amazed with places like Glenwood. He sees America as a dispersed and ugly strip-civilization of fast food joints and big boxes. Our suburban nation is based on cheap oil, but rural areas are even worse. It is staggering to consider how much malinvestment there is in America wh

Recently I got my mountain bike serviced in Phoenix. When picking it up I walked into the wrenching end of the shop and spoke to the young mechanic. He seemed proud of improvising on the bracket, thus relieving me of staying in the Phoenix area for a long time while waiting for a special order to come in. I was happy to stand there and be his appreciative audience. He also installed a new chain. They don't last as long as they used to, in part because they are narrower and thinner and cocked at weird angles to accommodate the 10 (!) gears in the back; with the 3 in the front, it makes for a 30 speed bike. We commiserated about faster wear and tear, and more finicky adjustments.  No sooner did 30-speed bicycles become obligatory for any serious cyclist than a hot new trend arose: single speed bikes with no derailleurs whatsoever. Only really tough, cool guys bought these, and it was for practical reasons, if you were to listen to them. How and why did consumers allow them

It is a Rip van Winkle experience to live a car-free existence for three years and then start traveling again. For one thing it makes you realize how much inflation there has been, despite what the government statisticians tell us. But I was even more shocked to discover that our local Walmart just doesn't sell many of the things it used to. The employees are surly. Apparently the space has been allocated to clothes, cheap household stuff, wider aisles, and other things that I don't care about.

It's interesting to watch my own habits changing, now that I can't walk five minutes to a grocery store. But at the moment I'm more interested in what effect Bernanke's intentional debasement of the dollar is having on people who live in places an hour drive from the nearest real grocery store. Here in Datil NM we are 60 miles from the nearest one. And yet people still talk about how they drove to the big city last weekend, even though it is 150 miles away. So much of the rural lifestyle involves driving long distances in giant pickup trucks. It's true they do more of the maintenance on vehicles themselves; that helps some, but the nearest real auto parts store is still far away. One tire shop told me he made a run into the big city one day per week to load up on tires. So maybe that's how a lot of survival takes place: you renounce the idea that everything must be available every day of the week. Say, maybe I should do that with the internet. I wonder if

Financial turmoil is a serious business, so it's with comic relief that I read about Apple's market capitalization becoming bigger than Exxon's for the first time. 'Who has the biggest market capitalization' is a far cry from being the official 'most important' company; still, it does say something about the financial zeitgeist in a loose and unscientific sort of way.

It is strange that Geitner, Obama, Wall Street liquidity junkies, and the usual cabal of narco-Keynesians would be so upset by Standard and Poor's downgrade of US government debt. Why don't they just nationalize Standard and Poor's, that is, literally make it a branch of the US government? Now, you might think I'm being facetious because that would result in the US government rating itself . To old-fashioned people, that might sound like a conflict of interest. They might even say it makes a farce out of ratings. But ratings are already a farce. Many people have gotten used to the idea that the budget deficit can be "funded" by the Federal Reserve buying US Treasury bonds. So why not take this sort of incestuous arrangement to the next logical step?

One of the difficulties of writing about financial markets these days is that it's hard to tell where politics ends and real markets begin. Many times it seems as though the stock market is just the tail of the Federal Reserve dog. Yesterday's market was down big enough to make mainstream news. Wall Street is desperately hoping that Bernanke's helicopter will come to the rescue, perhaps playing Wagner's Ride of the Valkyries , like in the movie, Apocalypse Now .  This scenario is playing out as I sketched in an earlier post . Obama must be nervous about Bernanke being too quick with QE3. There is a tremendous opportunity for him here if Bernanke doesn't blow it. If Obama wants to get reelected, the bloodletting in the job and stock markets needs a chance to look more desperate.

Credit rating agencies are important, since large institutions (pension funds, insurance companies, etc.) are prohibited from investing in governments or corporations that have low credit ratings. Also, low credit ratings will result in higher interest rates to compensate for the risk; that is the essence of bond market discipline. During the financial bubble of the mid-Aughts, the dominant American credit rating agencies are "credited" with being the enablers of a thoroughly corrupt and reckless financial system. They gave "everybody" AAA ratings.

Admit it. As sick as it sounds, you feel a certain admiration for the Greeks: living for today, with no concern for tomorrow; throwing a big party with borrowed money; lying to the European Union (oh boo-hoo); and being guilt-free about it all. Ahh dear, that is the difference between a Mediterranean and an up-tight Northern European. Strictly speaking, the creditor who lends money to an unfit debtor deserves more condemnation than the debtor, who just wants to have a good time. And the creditors are big banks in up-tight Germany. What's the worst that can happen? If Greece defaults, it will still survive -- ask Argentina. For a few years the big banks of Germany won't lend them any new party-money. But they will, eventually. Then the festival can start all over again.

Markets are croaking right now in anticipation of the Federal Reserve pulling its hypodermic syringe out of the arm of the American economy; that is, the end of QE II. If I were in the Obama administration or the Federal Reserve I would recommend that the Fed not break out its new syringe, QE III, until a solid consensus of support has built up. In fact the more screaming and bleeding there is in the markets this summer, the better, because it will help to form a "coalition of the willing" across the political and economic spectrum: Chamber of Commerce Republicans on Main Street, Wall Street bankers, narco-Keynesian Democrats -- all could be smacking at the vein in their arms, for another needle of fed-fizz (sugar and caffeine). It's the only idea that economists can come up with.

Eric Peters is not my favorite pundit. He actually likes cars. One of the reasons why this blog is anonymous is that I don't see why readers would be that interested in me personally; in contrast, ideas and opinions are -- or at least can be -- more interesting. But in this case a brief autobiographical note might be called for: I grew up in a small town in the industrial Midwest, back in olden times when there actually was industry in America. Small town culture completely revolves around the automobile, right down to the conception of children. It often seemed that the bigger moron a person was, the more they worshiped cars. My parents, on the other hand, were indifferent to the contraptions, and spent as little as possible on them. Peters's editorial today was excellent. It brings some universal aspects of American government and society down to earth, by discussing car loans and the car shopper mentality. It is seditious. That's what we need a lot more of in th

Some in the financial commentariat say that Bernanke must stop printing money and weakening the dollar by 2012, or food and gasoline inflation will put Obama out of work. It does cause me to roll my eyes when I hear (fellow) Obama-bashers use opportunistic arguments like 'Americans need gasoline to get to work.' Well sure, but I wonder what fraction of our passenger-miles in motor vehicles is really about getting to work. I do a lot of bicycling after the morning "rush hour"; how many of those people who pass me are going to work, versus going on an unnecessary shopping trip, or just looking for an excuse to get out of the house? I could be attributing my own slouchy driving habits to other people. For the sake of argument, let's assume that half of driving is just entertainment, thinly disguised as transportation and phony necessity. Isn't there cheaper entertainment available in this modern age? If you walked up to the average gasoline pump, where a d

Recently Obama got a question from an audience about the high price of gasoline. Obama, half-jokingly, suggested that if the questioner was driving a vehicle that got 8 miles per gallon, he should trade it in for something better. This outraged the blogosphere, since it was interpreted as a "let them eat cake" wise-crack. But I thought his response was sensible and candid. At this point the reader's eyes are starting to narrow because he suspects that a foot-and-pedal partisan such as me is rolling in schadenfreude over gasoline approaching $4 per gallon. Very well then, I admit that it is 70% of the reason why I agree with Obama's statement, above. But let's discuss the remaining 30%. I'm old enough to remember when the average American drove an automobile, rather than a monster pickup truck or truck-based SUV. Is the nostalgia of old age playing tricks with my mind? I remember passenger cars doing pretty well; many drivers loved their cars. Only farme

Wow. I needed to find some new blogs. It's funny how, with all this information available on the internet, it's so easy to fall into narrow ruts. I'm really getting to love Smith's blog, OfTwoMinds. He posted part II of his analysis of our consumer economy.

Considering the title and description line of this blog, it doesn't surprise anyone that the blog is implicitly hostile to the borrow-and-spend consumer culture of America. So it never seemed necessary to preach too much about it; people have heard the sermons before. And I never really aspired to go to heaven and sitteth upon the right hand side of Gandhi or Thoreau. But recently an excellent post has appeared on OfTwoMinds blog. There weren't any new ideas in the post, but it is an excellent summary of the idiocy of the American lifestyle. I got a kick out of the commenter who wondered, angrily, why consumers were good enough to buy the semi-useless crap sold by American corporations, but not good enough to be hired by them. 

What was it, the next day after the earthquake and tsunami that Keynesian market commentators began licking their chops over how these disasters would actually help the Japanese economy, because of all the stimulus spending and quantitative easing? That was their knee-jerk reaction, despite Japan's stimulus spending since 1990, which produced two lost decades. It's funny that they didn't use the same argument about the international invasion of Libya and all the ensuing destruction and civil war. After all, if you subscribe to the broken-window-fallacy, what difference does it make whether you throw a rock through somebody's window, or use a ball instead?

Now that ATT and T Mobile are planning on merging, and the American market becomes dominated by two wireless telephone companies, I have to ask why the government ever bothered to break up Ma Bell back in the 1980s. It didn't have a total monopoly back then: there was GTE as well as numerous local carriers. Besides, Ma Bell was regulated as a utility. It seems like we've come full circle.

This blog makes pinatas out of government and the mainstream media (and about ten other things) so often that some readers might be tired of the "cynicism". Very well then, for the sake of being Fair and Balanced, let's take a second to praise and publicize somebody in the mainstream media for writing something sensible. From the AP we have "Why Inflation Hurts More Than it did 30 Years Ago" . I was impressed by this article. Usually the mainstream media just... well, let's not even get into that today.

If anyone knows of a particularly good website that specializes in energy, please let me know. So far, the ones that I've read have too much ideological baggage. You know the drill (ahem): Peak Oil, instead of being based on petroleum engineering or economics, gets used as an apocalyptic prophecy of divine retribution visited upon mankind for living in Sin with SUVs and big pickups. It was astonishing to read that Saudi Arabia's oil reserves might be 40% lower than they have claimed in the past. It took Wikileaks to uncover this? And he is being hounded as a criminal? What the heck was the mainstream corporate media doing the last few decades if they never got around to revealing this (if it's true). I have seen graphs of oil production from Mexico; it is falling so fast that they might not even be oil exporters in seven years. Since oil revenues used to fund a large part of the Mexican government, just imagine the millions of desperate Mexican refugees at the American

Political discussions are best when there is ambivalence in the situation, the writer, or the readers. There is an opportunity to discuss unions on that level, although so far, the discussion of the Wisconsin public unions has been bitterly partisan. You can be against overpaying public unions -- primarily in the form of pensions and benefits -- and still see a constructive purpose for unions in the private sector and in the right industries. The worst part of the discussion so far should offend everyone, regardless of how friendly they are to unions. Democrats are trying to compare public sector unions in Wisconsin to genuine freedom fighters in North Africa and the Middle East. Why? Just because they are having demonstrations? In the Middle East protesters are risking their lives. They are trying to overthrow an oppressive regime and build a new country. In contrast, the public sector unions in Wisconsin are trying to preserve the status quo , in which they are a privileged caste