I was right, but I didn't know why

Karl Denninger crunches the numbers: in the last 8 years, US GDP has increased by $14 trillion, but debts by $23 trillion, so effectively accounting for all the GDP growth in that time and still leaving a deficit of $9 trillion...

... we haven't had an expansion in GDP over the last eight years. Congress and its organs of reporting economic "facts" have lied. We have in fact actually seen about a 10% contraction in real GDP from 2000 levels; all of the so-called "expansion" of the Bush Administration has been a lie intended to prevent recognition and working through of the recession that should have happened in 2000.

Now, I sensed this during the last 8 years and felt it coming before then, and have recently said so several times. I'm only grateful that technical whizzes like Karl have managed to spell it out. If only we had taken our lumps after the technology bust of 2000.

What went wrong? A post-match analysis of the Credit Crunch

Jesse quotes Joseph Stiglitz, and summarises five key moments:

1. Reagan's nomination of Alan Greenspan to replace Paul Volcker as Fed Chairman

2. The Repeal of Glass-Steagall and the Cult of Self-Regulation

3. Bush Tax Cuts for Upper Income Individuals, Corporations, and Speculation

4. Failure to Address Rampant Accounting Fraud Driven by Excessive and Flawed Compensation Models

5. Providing Enormous Bailouts to the Banks without Engaging Systemic Reform for the Underlying Causes of the Failure

Rude, funny, true

A near-the knuckle piece from The Onion, illustrating why education is a challenge. The combination of idiot argot and po-faced journalistic style is almost Wodehousian. (htp: Paddington)

Barefoot businesses

Many years ago, China pioneered the idea of "barefoot doctors": cheap physicians with a bagful of the most commonly prescribed medicines, providing a low-cost service to the many. This blog thinks the days of glitzy steel-and chrome offices and hot and cold running secretaries are numbered; the model of the future is the pavement stall and the home garage.

(htp: Jesse)

Heart of Darkness

My news aggregator has picked up news of a startling new discovery, though I fear some details may have been scrambled during transmission:

There is a giant financial black hole at the centre of our finances, a study has confirmed.
Austrian cashtronomers tracked the movement of dozens of banks circling the centres of Western economies.
The black hole in each is the equivalent of four million jobs.
Black holes are obligations whose interest is so great that nothing - including charismatic political leaders - can escape them.
According to experts, the results suggest that thriving economies form around giant debts in the way that a pearl forms around grit.
Treasury ministers on both sides of the Atlantic say that there is no reason to be concerned: provided enough cash is directed into the black holes, they will fill up and the economy will continue to revolve as normal.

Here we go

Jesse interprets the Federal Reserve's request to issue its own debt, as a preparation for selective default on public debt issued by the Treasury.

Now then, cheat China (pop. 1.3 billion, army personnel 2.3 million)- or the UK (pop. 61 million, army personnel 100,000)? Tough call...

Time Management [Guest post by Paddington]

For decades, much was made of the fact that American workers were the most productive of the Western world. Business articles derided the 35-hour work week of the French and Germans.

However, about 10 years ago, there was a study that showed that the French and German workers were much more productive per hour.

This supports my long-held belief that a typical worker averages 6-7 hours of productive work per day. Give them a short-term project and they will work harder and faster, but be less productive afterwards. Tell them that they are going to work overtime, and they will not work as hard in the regular day. Presented with too much work (for them), many will actually do less.

Realizing this is one of the things that has made my job (university teaching) better. I could do my work in less time, so that I had time for myself and my family, rather than twiddling my thumbs at my desk for 8 hours.

In short, people need time to goof off and socialize, and it makes them work better.