July 7, 2010

Hiding in the Treasure Room

Justin Katz

Predictive economic news has been dire, lately. If the dark notes weren't so broadly being sounded, one might suspect a Republican conspiracy to keep a nascent recovery from helping the Democrats. The alternative explanation is that conservatives have been correct in their concerns about the Democrats' method of "stimulating" the economy and that the consequences have begun to appear a few months earlier than government incumbents would prefer.

Of course, such reliable left-wing Democrat voices as New York Times columnist Paul Krugman are doing their best to run that hypothetical conspiracy in reverse, as Stephen Spruiell points out in a recent National Review (subscription required). But the left-right battle is secondary to Spruiell's main topic. Krugman points to the stability of government security interest rates as evidence that people aren't really all that worried about federal debt, to which Spruiell replies:

In some ways, gold is a better indicator of investor concern about the government's finances than are interest rates on government bonds, because at least two forces are keeping those rates irrationally low. First, since the crisis began, the Federal Reserve has injected over $1 trillion of new money into the economy, mostly in the form of loans to the nation's commercial banks at 0 percent interest. Over that same period, these banks have increased their purchases of U.S. government bonds by $500 billion.

David Smick, a financial consultant and author of The World Is Curved, explained the phenomenon in an article for Commentary earlier this year: "The perception now is that Washington has entered a new era of 'political banking.' . . . [Banks] can borrow from the central bank for next to nothing [and] use that borrowed money to buy guaranteed government debt, taking the difference in yields as riskless profit." This is not a bug in the government's strategy for dealing with weakness in the banking system; it is the strategy's central feature. The banking sector's demand for low-risk securities, and the Fed's willingness to finance that demand at 0 percent, have helped banks repair their damaged balance sheets while so far keeping the government's interest rates manageable. With virtually no perceived risk and a Fed eager to finance the purchases, banks don't mind a low return on their investment.

That sounds more than a little like GM's proclamation that it would be paying of government loans ahead of schedule... using other money procured from the federal government. It doesn't take much deep economic thinking to see that one cannot borrow to pay of debts for an extended period of time.

As I've said before, such a strategy only makes sense if the person or entity engaged in the financial activity has reason to expect an increase in income or, in the case of the government, in economic activity. Otherwise, the interest will eat an increasing amount of funds that were already too limited and, in the case of the government, the distortion of market forces will dissuade the sorts of behavior that can create or discover unforeseen economic expansion.

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To The Vacuum behind the rock.

Paul Krugman asks an interesting question, "What is the difference in effect between private and public sector stimulus?

Krugman maintains that since business is not spending capital to expand production, and expanded production is necessary for the society to benefit, it becomes incumbent upon the Federal government to provide the stimulus. He also anticipates the objection that we already have alloted 878 Billion to a stimulus program by informing us that more is needed. He compares the original injection to giving a patient an insufficient dose of antibiotics, then declaring that antibiotics don't work. To extend the metaphor, I add that the current resistance can be likened to blood letting as an alternative "cure".

Another question is, "Why do we have an economy - Is it to benefit private individuals or to promote the common good? It is apparent that cutting spending by reducing programs for the poor puts the onus upon those at the bottom of the society so that those at the top can enjoy tax breaks - the poor benefit by fall out. On the other hand, if we try government stimulus, then the poor benefit directly and the fall out eventually goes to business because there is more money available for purchase of goods and services.

I know where I stand. Where are you and why?


Posted by: OldTimeLefty at July 7, 2010 12:27 PM

FYI, Gold was about $800 an OZ. in the last 1970's and peaked at about 1200 recently.

That's an increase of less than 1.5% a year compounded and doe not even start to compare with the cost of living or inflation increases. As one example, that one OZ of Gold would have bought you health insurance for a year back then, now it buys you about 1/5 of a policy or less. I bought a really nice house in 1979 for about 60 OZ of Gold. The same house is on the market today for 350 OZ of Gold.

BTW, if anyone wants to read a more brutally frank assessment of our unsustainable economy, check this out - it has a lot of accuracy, unfortunately!


Posted by: Stuart at July 7, 2010 12:48 PM

Talk of gold, by Stuart and others, always reminds me of a piece of advice from one of my business professors "Always go against the odd lots" (mutual funds were nascent then).

This has always seemed to be true. I recall an incident in the late 70's when we still had elevator operators. The elevator operator was talking about all the money he had made in gold, shortly thereafter the bottom fell out of gold. In the very early 90's it seemed every housewife was talking about the money she had made in real estate (condos). Shortly thereafter the bottom fell out. I saw the same thing around '05, everyone was "flipping" houses. You know the rest of the story.

By the time "the word" has filtered down, the market has peaked.

Posted by: Warrington Faust at July 7, 2010 12:59 PM

There's an old adage about Joe Kennedy Sr. having made his money by getting out of the stock market before the 1929 crash -- reputedly he said something about his shoe shine boy talking about stocks, and so knew that it was time to get out (if show shine boys were in the market, where else would "new" money come from to keep prices spiraling upwards)?

As for gold, I allocated a portion to that over a decade ago when I realized that Social Security, Medicare and such weren't sustainable, but that the politicians wouldn't do what was necessary to make them sustainable. Being a bit of a history buff, I knew that historically governments with fiat currencies eventually default -- either by outright default / refusing to pay their bondholders / creditors, or by debasing the currency (inflation / hyper-inflation) ... and that for politicians the latter was the preferred course since it was more stealthy and so they could more easily elude blame.

One of our neighbors in RI (it was their second home) was a money manager in NYC that also taught finance at Hofstra (she's since passed away). During a conversation I told her about it, and why, and told her that having some money invested in precious metals was "my way of shorting the U.S. Congress." She laughed ... and didn't tell me that I was wrong.

THE GOOD NEWS is that with the rise of the Tea Party and such, more and more Americans are waking up and getting off of their couches (so too in RI with the various taxpayer groups forming, the RISC Business Network, etc.).

And the scales are coming off peoples' eyes re: Obama. It's not too late. I believe that inevitably we're going to witness some massive inflation due to the already massive spending and debt (though it could be preceded by a bout of deflation), but still could avoid hyperinflation / systemic collapse. We're on the cusp, it could go either way, but there is still hope.

OTOH, Google the phrase "Helicopter Ben" and recognize the orientation of the current czar of our monetary printing presses.

Posted by: Ragin' Rhode Islander at July 7, 2010 1:21 PM

OTL-I have little to no education in economics.I have a pretty good education in biology for a layman.
Take my word for it.
I just don't understand how you draw parallels between the two disciplines.
Your point on over/underuse of antibiotics was valid.
IOW too often prescribed;too soon stopped.
Then,when needed,too often ineffective.
A lot of good things we had growing up are losing their impact.
Is that what you want?
I don't believe it for a minute.

Posted by: Joe bernstein at July 7, 2010 2:06 PM

Ragin, the "free money" policies which are still in force are, of course, a product of the bubble era(s), most notably Greenspan/Bush who told the Fed to keep money cheap because it makes a good drug that way.

Looking back a little further, it may have even started back in the lat 80's with the S&L crisis, again....another good way to give away lots of money and then rip off the people and the taxpayers (look up Silverado Bank for the Bush family part or Keating Five for McCains role).

Some say it goes back to Nixon decoupling Gold from our money.....because of debt from the Vietnam war. Sounds a bit familiar given the war debt these days.....

You may be very surprised that I agree with many of your basic premises.....but where I think you are myopic is the idea that this just happened in the last 2, 3, 4 or so years. Actually, the stage was set - there was nothing we could do after 2005-6, the economy had already failed, we just didn't know it yet.

But mark my words - Let's pretend that interest rates went up to what they SHOULD be. What is that? Well, it's easy - common sense! What would I be willing to lend you money at against a house? For 30 years? What would I be willing to lend you money for against a car? An unsecured consumer purchase?

Those figures are, and have been, in the range of 8-12% (house), 12-15% (car) and 12-22% (unsecured).

Ok, so if rates went up that high, I predict you and your friends will cry,cry, cry! If not you, then everyone else.

Folks like me, of which there are millions, played the game conservatively and saved up money our whole lives. Guess what? It did us almost no good. We cannot get interest on the money because the government decided to give it away free!

Realistically, there is not much hope. I'm sorry, but it has gone on too long. One thing for sure - it is not Obamas fault....he is damned if he does and damned if he does not. The ship is already poked full of holes and sinking. No one...and I mean no one, can fix it.

It's really just a crap shoot. It might crash bad, or it might crash worse or it might even be propped up until after you and I pass away. Either way, it sucks.....

However, if you are going to be anywhere near honest about history, look up
Nixon Shock
Neil Bush
S&L Crisis

You will come to the conclusion that your friends on the right, including many of the financiers of the Tea Party, are much more involved than you imagine.

Posted by: Stuart at July 7, 2010 2:18 PM

Ragin writes:
"Being a bit of a history buff, I knew that historically governments with fiat currencies eventually default -- either by outright default / refusing to pay their bondholders / creditors, or by debasing the currency (inflation / hyper-inflation) ..."

What you are describing is the "Panic of 1873". The U.S. government did not default on itss bonds, but it was very close.

About gold. Aside from temporary manias driving up the price, most "goldbugs" will tell you it is a defense against inflation. It is small, portable and usually in demand. Gold prices rise in periods of inflation, this does not mean that gold increases in "value", it means paper money decreases in "value".

This is not readily understood in this country because the government "controlled" the price of gold at $40.00 an oz for so long. For many, many years, the government would buy all the gold available at $40.00, and would sell it at $40.00. When the controls went off in the 70's, gold temporarily soared. It has since been much lower than it's "high" in the 70's. The ads on the radio for gold so distort history that it is laughable.

For many years it was illegal for Americans to own gold, except in small quatities for jewelry and such. You could own stock in gold mines. This was when we were on the "gold standard" and the government had to control the availability of gold in order to control the value of the dollar. Most Americans probably didn't even know this. Who goes shopping for a 24K "brick"? The reason for this was to protect the currency. If large quantities of gold were in circulation, many people would prefer payment in gold rather than paper "redeemable in gold".

Posted by: Warrington Faust at July 7, 2010 2:21 PM

You like to spout about the little guy, and how government helps the little guy. And, business is the villain, exploiting the little guy and government is there to stop the exploitation. That is a severely shortsighted mindset. Now, that little charade of yours can go on for a while, but it won't last long. Like it or not, the little guy and government desperately needs a thriving, and growing business sector. Did you know that the government produces NOTHING! Government is an expense, not an income stream. The "income" it obtains comes from productive business sectors. Without productive businesses there is no income to government. Without thriving and growing productive sectors, just watch and see how your lovely government gets gutted. That shouldn't be difficult to understand as we look at California, Illinois and RI.
Don't forget, government needs business - business is just fine without government. So, go ahead and paint business as the villain; you're merely killing the golden goose.

Are people like you and Obama too stupid to understand that simple fact?

Posted by: Mike Cappelli at July 7, 2010 4:22 PM

Mike Capelli,
Leaving aside your invective,I agree that we need productive businesses, that's why I prefer strict regulations especially dealing with minimum wages, fringe and medical benefits. Business has failed to adequately deal with these problems. Businesses were entrusted and came up short.

You see, the question is "Productive for whom?" If you mean productive in that the entire society benefits, we may be on the same page. If you mean productive for a few capitalists, we have a major difference. So your comment that we need productive businesses is well taken. I agree with that! The disagreement is in the definition of "productive".

Fisherman Phil is productive, a Wall street drone swapping derivatives contributes nothing and takes much - counter productive in my eyes.

Posted by: OldTimeLefty at July 7, 2010 4:53 PM

Growing up in West Philly, a block removed from Fairmount Park (Eight times the size of NYC's Central Park) I could walk for miles in the park in any direction and find pure spring water. Our sports complex had 5 hardball diamonds and a very welcoming spring by diamond #1. I knew another easy half dozen fresh water springs. A recent visit finds none potable and trash accumulated by what was diamond #1's spring. The Fairmount Park Commission didn't have the money to maintain them. Meanwhile businesses were fleeing to non-union states in the South. Insurance, textiles, bled and fled. I WANT THE SPRINGS BACK!

The Philadelphia Transportation Company (PTC) could pick you up anywhere in the city and drop you off anywhere within city limits. No more than a 2 block walk to and from your destination. I WANT PUBLIC TRANSPORTATION BACK!

I attended public schools and got good enough with the 3 R's to be the first in my family to graduate college. Tuition for the year cost the equivalent of a 3 weeks of a laborer's wages. I WANT A COLLEGE EDUCATION TO BE AVAILABLE TO A LABORER"S CHILD!

I must add, parenthetically, that I think that a College degree should guarantee that the holder can read, write and understand the grammar of his/her native language, have completed two years of study of a foreign language, understand basic algebra and have a good grasp of history.

I also must say that today, too many jobs require a college education when a good trade school would do.

So, yes, I do miss somethings.

Posted by: OldTimeLefty at July 7, 2010 5:30 PM

OTL, stricter regulations drive up unemployment. 12% not enough for you? A lot of businesses are having to convert their work force over to contractors as it is to skirt the existing laws, otherwise they'd have to close up shop or not hire anybody. And believe me as somebody with family in that line of work, those contractors are glad they have the work whether it has all your progressive "protections" or not.

If you want college tuition to return to sane levels then you should be against all of the government grants, scholarships, and loans that have tripled the cost over the past few decades by tripling the cash on hand available to most students. What, you thought those programs actually helped students? 20 years ago I could have paid 60k for my education and been done with it. Now, like everyone else, I paid 60k and I have 60k in government loans on top of that, absolutely necessary. Thanks for the "help," government.

You think a second language should be required in college? For what purpose? 95% of the population has no use for anything except English in their work. Is this some more roundabout "cultural diversity" crap, or do you actually think it will translate into an economic benefit? I know Spanish from grade school. Number of times I have had to use it: 0.

Posted by: Dan at July 7, 2010 6:04 PM

Krugman's hypothesis that you find so compelling, about more stimulus being required, is 100% unscientific because it is not falsifiable. However much stimulus is added, one could always declare that it is insufficient and it would be impossible to distinguish between this scenario and the stimulus having no effect at all. When we move into long time periods, say a half a decade, a decade, or more, natural recovery also becomes indistinguishable from assisted recovery (see also: Great Depression). This is why Krugman can shoot his mouth off and nobody can prove him wrong, because the things he's saying are unscientific and based on thin air.

I get it. Krugman is the brainy liberal Nobel Laureate that you can point to as prima facie evidence that liberalism is superior in the field of economics without actually understanding anything. People forget the even more brilliant Hayek, also a Nobel Laureate and far more honest about imperfect information, who advocated for free markets and would disagree with Krugman on pretty much everything he has said over the past few years.

Posted by: Dan at July 7, 2010 6:14 PM

>>those contractors are glad they have the work whether it has all your progressive "protections" or not

Of course they are when the choice is poverty and starvation!

Here is a test, Dan. Take a dog. Give it three meals a day. Then cut it down to two. Notice how happy the dog still is when you give it the food.

Then cut it down to one. The dog still loves you! He wags his tail and circles round and round in anticipation of dinner.

Then cut it down to 1/2 of a portion once a day. The dog will still be your friend.

And that, my friend, is your grateful contractors. The rest of the meals still exist....except they went somewhere else...usually to the stockholders, investment bankers or CEOs. If not, they went to foreign governments or corporations.

It is a very sad thing. Our nation is on fire and lots of people are throwing gasoline on that blaze and telling us about the benefits of roasting marshmellows.

But some of us won't be fooled. And some are just plain misled and wrong.

Posted by: Stuart at July 7, 2010 6:18 PM

Every time I go against my better judgment and read one of your posts I suffer a small amount of brain damage, Stuart. I'm not ever going to get those neurons back. I should sue you.

Contractors are like a dog being fed? What the holy hell are you babbling about? The two relationships have absolutely nothing in common. Nothing. How did you ever pass the analogies section of the SAT, or did you not take it?

Posted by: Dan at July 7, 2010 7:14 PM

OTL-all the things you mentioned were similar in NYC when I was growing up.I miss them a lot.NYC is an extorniate sewer these days and is run by an evil little plutocrat.
We had great parks,great schools,a university system free to city residents,honest government(relatively),daily garbage pickup,and lots of jobs.
I could wander the city by myself when I was 11 or 12 without too much danger.
I lived in a rundown aarea,but unless you were looking for trouble,it generally didn't find you.If you were,it did.
Our doctor lived down the street above his office and made house calls(!!).
The reasons it went away require a book,but in the case of the city university,they decided EVERYONE had to get a college education.It expanded beyond survivability,so goodbye free college.
It is never coming back.You've probably got 9 or 10 years on me.Our generation
was the last that could expect more success than their parents.
I travelled to Philly on my own when I was 13 and rode the transit system(transit buff)-you forgot to mention the Red Arrow Lines,some of which still run trolleys as part of SEPTA.Remember the Bullet cars to Norristown?

Posted by: joe bernstein at July 7, 2010 8:52 PM


I use to work in the old Philadelphia Naval Shipyard and Mechanicsburg Naval Support Activity. I have fond memories of Gino’s Philly cheese steaks, small hoagies so large they became two meals, Mummers Parade and New Years fireworks off the Ben Franklyn bridge.

Unfortunately during my times in Philly a lot of city blocks were being cleared and torn down. Call it redevelopment. Knocking down the old to build new.

My generation wanted it better for our children and we worked with our hands and brains so the children did not have to work so hard. Our children wanted it better for their children but we gave them so much they didn’t learn to appreciate simpler things in life like we did. Now their children are coming to age not writing letters but texting each other. Long-hand writing is dying with the new generation.

In Honolulu “TheBus” stops are about every two blocks and sometimes depending on the traffic the bus driver will make a special stop for the rider. Now the busses are being fitted with GPS so the small screen at the bus stops informs you of updated real time bus arrival time. It’s a little like a modern version of the old Philadelphia Transportation Company (PTC). Females and seniors are not allowed to stand. The bus drivers will make you give up your seat to them on full busses.

Surprisingly OTL college is still as affordable as it was when you and I grew up. It depends on what region of the USA you live in and where you want to attend college. RI just raised tuition at URI, RIC and CCRI. I believe URI is now near $10K per semester for a resident. People in Hawaii were voicing strong opposition because the state raised tuition at UH for residents depending on which of the 10 campuses you attend $2,100.00 to $3,800.00 per semester. Why is URI so high?

The job market here is very active with a 5.2% unemployment rate (and dropping) in Honolulu. Plenty of jobs requiring all skill and education levels. Tourism, Management, Marketing, Banking, Technology, Medical, Alternate Energy, Ship Building, Education and Construction Trades are dominant fields.

There are plenty of private schools, Vocational Schools, Community College, College and University for higher learning plus the public school system offers free after school educational courses year round. So if you need to brush up on algebra II you can do it for free at night. There are also plenty of language classes available due to the fact that over 40 languages are spoken daily in Honolulu plus the state is the only state in the nation to have two official languages (Hawaii and English).

There are states and cities that still operate like good old West Philly but you have to look for them. Milwaukee, WI, Sioux Falls, South Dakota (you can still purchase a 2 bedroom house and land for $12K), Spokane, Washington, Utah, Hawaii.

OTL You can have it like it was but you just have to look for it.

Posted by: Ken at July 7, 2010 9:44 PM

>>How did you ever pass the analogies section of the SAT, or did you not take it?

Ah, so you think the fact that Wal Mart greeters appreciate the job....that means they get paid enough?

People do think, Dan, because they want to survive and often don't have too much choice. I think the Wal-Mart greeter would probably rather be retired at 74 years old and maybe visiting with her grand kids. But, in case you don't get it, that does not mean she does not appreciate her job......compared to something even worse!

In the case of the contractors, it is simply a way of externalizing costs and slowly skinning the workers......also a great way of offloading responsibility. This way, a company can claim, for instance, that they don't hire illegals........you know,, their sub-contractors does it instead.

Many of the subcontract arrangement are actually illegal, but tax cheaters and those who love lower wages and costs know no bounds.

Posted by: Stuart at July 7, 2010 10:09 PM

>>Ragin, the "free money" policies which are still in force are, of course, a product of the bubble era(s), most notably Greenspan/Bush who told the Fed to keep money cheap because it makes a good drug that way.


The "free money" policies have been a bipartisan disaster -- which in large part explains why the Tea Party movement arose, since neither party has been a good steward of the people's money.

But you neglect to give Bill Clinton credit for the dot com bubble that blew up on his watch, and the Greenspan / Fed low interest rates adopted as a result.

And let us not forget that George W tried to rein in Fannie and Freddie, but those two entities were protected by Subprime Barney Frank and Discount Dodd ... and we all know how that turned out.

But the real problem began almost a century ago. No doubt progressives Woodrow Wilson and FDR were aware of the writings / warnings of Alexis de Toqueville and Frederic Bastiat regarding the fate of republics once the people realize that they can vote themselves largesse at others' expense.

Probably seeking this eventual result, Wilson gave us the Fed and the progressive income tax.

FDR followed with the mass expansion of the welfare state via a warped reading of the Commerce Clause (passing legal muster only after he threatened to pack the Supreme Court), and for a while the confiscation of gold from private individuals.

Armed with a progressive income tax it was only a matter of time before folks realized that they could vote themselves other peoples' money, and the Democrats / progressives were happy to serve as their middlemen.

One could credibly argue that the United States' gradual decline, eventually into a hyperinflationary default, was set in stone way back in circa 1917.

Posted by: Ragin' Rhode Islander at July 7, 2010 10:36 PM

Stuart and any other progressives reading - listen to Charles Platt describe his experience applying to and working for Walmart if you want to learn what the company is actually like, as opposed to what the unions say to try to bust their way into a multi-billion dollar market in which they are neither wanted nor needed.


Walmart employees are paid well above average for that job skill level and they are given a lot of perks and autonomy. Stuart considers himself some sort of hero of the poor while simultaneously thinking of them as dumb serfs who can't make their own decisions without being exploited. It never even occurred to him that perhaps not everyone wants to make all the same exact choices that he made in his life. I know people who work at Walmart and they are quite happy with their jobs, Stuart. You are an elitist hypocrite who comes on here everyday and speaks from ignorance, contributing nothing. Give me one good reason why we should listen to anything you have to say. The Walmart employees I know would be extremely insulted if they came on here and read all the crap you posted about how hopeless and pitiful they supposedly are. While I was working at a sub shop in college I worked with and made friends with adults who worked there full time also. Those people weren't so dumb and exploited either, Stuart, they just had little interest in school and didn't mind living that kind of a lifestyle. They didn't want to do... whatever the hell you did. They don't need or want the help of people like you, and again, they would be insulted to read all the crap you post on here about them. And if the state passed "living wage" legislation then they would be out of their job, and could thank economic ignoramuses like you and OTL for that "favor." With friends like you guys, who needs enemies?

Posted by: Dan at July 7, 2010 10:40 PM


“OTL, stricter regulations drive up unemployment.” – An assertion on your part, and you know- What you freely assert, I just as freely deny. You made the statement- you must supply the proof. I simply do not believe that our current high employment rate can be traced to stricter regulations. The economy went into the tank as a result of the Bush policies of tax cuts for the wealthy coupled with deregulation.

As to college tuition - The program that propelled the institution I attended from college to University was the GI bill. Our day school was probably 20% veterans and our night school was more like 50 percent veterans using the GI bill. As I said, tuition at the time was equivalent to 3 weeks pay of an average laborer, so my personal experience puts the lie to your second unfounded assertion, that government grants increase tuition costs. If you look you’ll find dozens of contributing factors. Look and think!

The benefits of studying a foreign language are:
1. Your first language becomes easier. My personal experience bears this out. The more I studied foreign languages, the better my English grades became- a direct connection.

2. Once you learn your second language, each one thereafter becomes easier. I studied Spanish because Italian was not an available choice for me at the time. I put two and two together and voila, the Romance Languages came into focus. I still profit from my study of Attic Greek – expanded English vocabulary and a better than layman’s grasp of etymology and word roots and an introduction to Homer, an author who still brings me pleasure today. I regret that my Greek is not strong enough to enable me to read Homer in his original language, though I can make sense out of some of the scholarly translation arguments. It also helps with bible study.

3. A second language skill has been shown to enhance children’s cognitive development.

Children who learn a foreign language beginning in early childhood demonstrate certain cognitive advantages over children who do not. Research conducted in Canada with young children shows that those who are bilingual develop the concept of object permanence at an earlier age. Bilingual students learn sooner that an object remains the same, even though the object has a different name in another language. For example, a foot remains a foot and performs the function of a foot, whether it is labeled a foot in English or un pied in French. (American Council on the Teaching of Foreign Languages).
I can vouch for this by observing my Guatemalan born grandchildren. My young granddaughter asked her father for a cookie. he said , “no”. She promptly asked for “una galleta”, cookie in Spanish. She knew what the object was and what she wanted to do with it and comfortably switched languages in an attempt to get the galleta/cookie.

4. Students who are learning a foreign language out-score their non-foreign language learning peers in the verbal and, surprisingly to some, the math sections of standardized tests. This relationship between foreign language study and increased mathematical skill development, particularly in the area of problem solving, points once again to the fact that second language learning is more of a cognitive than linguistic activity.
A 2007 study in Harwich, Massachusetts, showed that students who studied a foreign language in an articulated sequence outperformed their non-foreign language learning peers on the Massachusetts Comprehensive Assessment System (MCAS) test after two-three years and significantly outperformed them after seven-eight years on all MCAS subtests. (Again from The American Council on Teaching Foreign Languages)
Your statement, “do you actually think it (Foreign language study)will translate into an economic benefit?” is the one I take most exception to simply because I don’t believe that college should be treated like a trade school. I could say a lot more about this, but I’ll let it rest right here.

Posted by: OldTimeLefty at July 8, 2010 12:45 AM

You're talking me into Hawaii. Please stop. It's not in my plans.

Posted by: o at July 8, 2010 1:12 AM

I notice Ken is an ambassador for Hawaii.If we all started moving there,he'd soon realize it was getting kind of crowded.It's few islands,after all.
Dan-I don't like referencing Limbaugh,because he frequently sounds like a jerk,but years ago he made a remark very apropos to the Stuarts of the world-"we know how to use redwood responsibly"-it sums up the epicurean elitists very well.
A certain "klaus"over on Kmareka once held forth on Europeans "dining" versus Americans "eating".He also waxed euphoric over the amount of leisure Europeans allowed themselves,instead of overworking like Americans.
Stuart has sort of echoed that.
I suspect "klaus"is a househusband from some things he's said,especially extolling the virtues of working from home.
"Working from home"usually means the wife is the breadwinner.
I no longer bother to post on that blog,but sometimess read it to see what moveon.org crowd is thinking about.
OTL-if I assert the sky is blue on a sunny day,you can deny it all you want,but it's still blue.Your signature phrase doesn't work in many cases.
"De-nial"is more than a river in Egypt.
Learning a second language is a good thing to do.
Being forced to learn a second language in one's own country just to mollify immigrants and their mouthpieces isn't.If they want to live here they should learn English.
See how they cater to a non-Spanish speaker in Guatemala or any other country down south.
Or a non-French speaker in Montreal or Wallonia in Belgium.They'd as soon spit in your face.

Posted by: joe bernstein at July 8, 2010 2:09 AM

>>But you neglect to give Bill Clinton credit for the dot com bubble that blew up on his watch

The dot-com bubble was a REAL bubble - that is, based on reality, and there is/was very little that Clinton of the GOP Congress could have done to fix that.

All in all, it still added a vast amount of jobs and infrastructure to the country. It was a relatively mild recession and probably part of a normal boom and bust economy. If you were not a participant in the risky part of the Stock Market. it probably did not affect you at all.

In other words, I don't think that is a valid piece of history to be complaining about, and certainly a tiny fraction of stuff like decoupling from gold, oil shocks, etc.

Big daddy government can't fix everything, my man!

Oh, a century ago! I'd say you are talking about that GOP Progressive.....TED ROOSEVELT. You forgot to mention him.

But the problems actually began when we stood up on 4 legs.

Listen and think about it. Pointing back a century or more is not only foolish, but ridiculous. A recent poll showed that 26% of Americans don't know who we won our independence from! It would be fantastic to assume that Tea Partiers can grasp the ins and outs of the past 100 years.

Posted by: Stuart at July 8, 2010 8:28 AM

>Give me one good reason why we should listen to anything you have to say

I'll give you a couple, my man dan....

1. I do not work for the government, but actually produce goods and services which help people with their lives and independence.

2. I have created products and services from scratch, including patented items.

3. I have worked in my own businesses for 35 years.

4. I have been in the trenches as a dishwasher, a laborer, a carpenter, etc.

5. I did not go to law school.

6. I am an avid reader of history, especially that of the founders, explorers, inventors, etc.
I read the entire world book before I was 10 years old.

7. I was lucky enough to be born with some aptitude.

8. My world view works - in terms of family, occupation, finances and basic sanity.

Now, give me a couple reasons I should listen to you.......

Posted by: Stuart at July 8, 2010 8:35 AM

Stuart-assuming you're not a complete crap artist-only you would know that-there is just one thing you lack-any sense of humility.
Why not tell us groundlings,oh great one, about just one of your patented inventions?
I've always admired people who could do things I couldn't,yet you seem to think
you're more clever by half than anyone.
You always hint at what you've done,yet never come right out with it.Concerned about revealing your identity?Why?This is just an online discussion group.
You'd have more credibility-you spend enough time writing things here-I hardly could call you a troll.A pain in theass,but I actually don't like preaching to the choir.

Posted by: joe bernstein at July 8, 2010 11:25 AM

hey, joe, I'm just a little guy....didn't invent the ipad or anything like that!

Point is, I do have some life experiences of different sorts. I am not some teabagger who decided to get mad at the government (all of a sudden) after the GOP got thrown out. I've been mad at the government (or, more accurately, many of their actions and policies) since I was 16.........

I have nothing to prove to you. Dan asked me a question - I answered that he might want to consider that I have a valid viewpoint....just like you and he does. It is based on my own experiences.

We each have different life experiences and also different tendencies, so our views will differ.

No biggie. I prove myself every day by taking care of my family and helping my neighbors, etc. etc.

Posted by: Stuart at July 8, 2010 12:21 PM

You take care of your family?Good.So do I.Always have,and it hasn't been an easy ride.
I didn't ask you to exactly "prove"yourself-just get a little specific.
I've always been ready to get specific,because I really could sh*t care less what anybody on some blog thinks of me.
That doesn't include being lied about.
you've indicated that you've made substantial business ventures succeed-so maybe you're not GM,but it sounds like you have more income than a "little guy".
My wife and I combined have never hit a six figure income for a year,because I guess we got more out of our work thn money.It wasn't as though we put in short hours.
I'm satisfied.I mean,how much sh*t can you own and keep track of?

Posted by: joe bernstein at July 8, 2010 12:38 PM

I've spent some time in Guatemala. Go to the village of Panajachel on Lake Atitlan and you'll find most of the Mayan population there can handle English as well as Spanish and Quiche, the original Mayan tongue. They cater to non-Spanish, non-Quiche speakers very well. They were traders on a traditional trade route, handled traffic from Cozumel which came to the lake and then sent goods North and South from there. They also picked up Quechua, spoken by people living in the Andes. Traders quickly learn foreign languages. You have no point here.

I never said, implied, or meant to imply that anyone should be forced to learn a foreign language - I was talking about academic requirements. You are the one who mentioned "force" and "mollification", then argued with yourself against it.

As to what the Walloons have to say about foreign languages, I have no concern. I do remember what the Jesuits taught me, that a sin in one species is no excuse to sin in another species. Are you suggesting that we should adopt a crappy attitude because someone else does?

As to assertions, Dan said, “OTL, stricter regulations drive up unemployment.” This was an arguable fact, unlike your blue sky example which could be verified by glancing upwards. Dan presented an arguable proposition as fact. Surely you can see the difference.

Incidentally, I'm still waiting for Dan to respond

Posted by: OldTimeLefty at July 8, 2010 1:56 PM

OTL-I wouldn't know about the Jesuits.
You pick one group of people and extrapolate from that a general willingness for Latin Americans to cater to English speakers-they do, if it suits their purposes,like making money.
What I am saying is that I find it onerous to have to supply translation services in every walk of life nowadays.
Your parents or grandparents,whichever,adapted.Mine did.
No one coddled them.
You think it's "sinful" not to accede to the wishes of new arrivals?They'll do better learning the prevailing language-they won't be enclaved.I dread the idea of an ethnic "mosaic"where every group clusters together and curls up on themselves like a collective version of a pangolin.
The greater the commonality of language,the less distrust,fear,and certainly less potential for hatred.
Yes,I know "freely assert",whatever.
I don't think it's rocket science to understand that sharing a language is good for society.No one is saying ,don't speak your own,but know ours if you plan living here.
And if you're an illegal alien demanding this,f**k off-it's not like ytou were invited here.
Please-not one word about "no visas""Ellis Island"-the whole point is you COULD come here without a visa,but you had to submit to inspection.180 degree diffference from just sneaking in.
Hey Stu-grow up,ok?"Teabaggers" is about as crappy as referring to gays as "faggots"here.Oh,that wouldn't do,now would it.
I just say "homosexual(s)" and leave it at that.
it's not an issue I care about,but you get what I'm saying here.

Posted by: joe bernstein at July 8, 2010 2:28 PM

You don't need to know about the Jesuits, you'll have to concede that the statement makes sense and you don't have to share their beliefs to see it. Let me clarify the use of the word sin here. The reference is to "transgression", an offense against another human being, not to something that puts a bad mark in god's book that he'll remember later. See Justin for that sort of stuff.

I'll remind you that I referred to the study of a language and its academic and cultural benefits. You and Dan then went off about signage. etc. It's an entirely different topic which we can take up elsewhere. The original issues have been clouded enough.

Posted by: OldTimeLefty at July 8, 2010 9:08 PM

OldTimeLefty and Anchor Rising readers,

I am not trying to entice you or any other Anchor Rising commentator to pack up your bags, sell houses and move to Hawaii. Some of you would have a hard time, lose money, finally get here and find out island living just does not fit with your life style and have to return to mainland.

As I said before, I and my wife have been visiting Hawaii since 1970s and decided this is where we wanted to retire after visiting each island to see the good, bad and ugly. When we decided to retire we chose the Big Island of Hawaii but when my wife was diagnosed with cancer we moved to Oahu because of hospitals (something you don’t consider on the mainland along with toilet paper). My wife has since passed not from cancer but effects of chemo treatments to kill the cancer.

For those who say Hawaii is a bunch of islands like they are small, you can fit 6 State of Rhode Island on the Big Island of Hawaii with extra room left over. The Island of Oahu is about 75% land mass of RI and about 80% of the total HI state population (about 1.2 million people) live on the island including about 70,000 added tourists daily but only 30% of the island is developed. There is a lot of open and undeveloped land.

The reason I refer to Hawaii is because I live here now and can look at the 60 plus years I lived in RI and compare the differences. There is not much difference between the two states except HI has a very brutal transparency code for politicians. They sneeze and the newspapers identify how or who wiped their nose! Their children even turn them in for doing the wrong thing!

“Aloha” is written into the State Constitution where every person and politician must show respect to each other and openly listen to the other side to reach consensus. If not you will be publicly ostracized as one city councilperson was for throwing pen across the city chambers or one state senator and one representative for being stopped DUI and being publically force out of office.

Living on the island is one for all and all for one. Everyone just about knows each other and it is a family atmosphere (in HI its back to the 1950s & 60s). You can’t be mad at anyone for too long because your survival may depend on that person. Weekends are family and friends get together. It is a gentle way of life. That is not to say HI is not in the 21st century which it is but away from tourist districts and into the neighborhoods the old ways still survive.

Businesses recognize the so called high cost of living here (if you want to live like a tourist, buy frozen shipped in food products from mainland) on an island and make adjustments for residents offering discounts and additional discounts up to 50% for the seniors. I saved and invested for my retirement in RI at almost break even RI cost but now living in HI I am very comfortably living owning my large condominium and car outright at 50% of monthly retirement income and banking the rest.

All the beaches are free with free parking, bathhouse facilities and trash pickup, there are free very large screen movies on the beach monthly and free drive-in movies once a month, over 30 parades, free block parties, free festivals & fairs besides weekly fireworks shows and free local performances to keep tourist and locals happy our tax dollars at work.

It is a world of difference living here verses RI. Things that Anchor Rising is complaining about have been addressed here. Some work and some don’t work but they go back and fix it. Everyone works together even politically (left, right, liberal, Republican, Democrat you name it they are welcome to the table)! There is a saying for very diehard mainlanders that don’t want to work towards consensus that if you don’t like it I’ll show you the beach and you can start walking back to the mainland.

You know what, after living here close to 5 years it can’t get any better than this as indicated by the enormous number of Federal, state, municipal and military retirees living here. During winter (Nov to Mar) in HI go snow skiing in the morning on 5 mile runs, lunch and golf 18 holes on a tropical green championship course (sunny-78 degrees) with rainbows in the sky watching Humpback whales play and leap out of the water and then go for a swim at the beach in 78-80 degree water before dinner overlooking a spectacular vivid colorful sunset.

OTL you and I are under 10 year’s age difference and of same astrological sign so I think the two of us understand.

Again, I am not trying to get you or other people to move here I am just using HI as a comparison to RI.

There are other states and cities I’ve mentioned and been in many times like Milwaukee, Wisconsin (came very close to moving there), Sioux Falls, South Dakota (you can still purchase a 2 bedroom house and land for $12K in 2010), Spokane, Washington and the happiest state population in the nation Utah that are just as friendly, cheaper living and stable state fiscal budgets with less recession problems and unemployment.

You just have to pick and choose based on your desires for living your life style and how much financials you have.

Posted by: Ken at July 9, 2010 1:29 AM

Ken-the physical size of hI vs.RI is not the issue.It's the psychology of living on islands vs.mainland.
RI is small,but one can just drive to someplace bigger LOL.
RI was much betetr than IL when I moved here in 1984.
Corrupt politicians in cahoots with social(ist)engineers have ruined the place.
The miserable activists who come in here,do damage,and leave after picking everyone's pocket.Some stay,but many of the activists are on a nationwide circuit of destruction.ACORN terrorists.

Posted by: joe bernstein at July 9, 2010 8:09 AM

My comment was made tongue-in-cheek. I really do like RI, and here's where I'll keep my tent pitched.

I usually enjoy reading what you have to say

Posted by: OldTimeLefty at July 10, 2010 1:45 AM

joe bernstein,

On the Big Island of Hawaii it takes 3 ½ hour on the highway to drive straight line coast to coast. Pretty much like driving RI to NY city! On that one island alone there are 11 of the 13 weather systems known to man not accounting for terrain differences (rain forest, desert, winter snow, wooded mountains, live volcano etc). The one thing you have to watch out for is the wild donkeys and loose cows on the roads and highways.

If island fever sets in then it’s less than 45 min flight to another island that is totally different in everything you just experienced on the other island (as permanent residents of Hawaii we show our State of Hawaii ID cards and business provide discounted rates for rental cars, hotel rooms and restaurants if you are not staying with a family friend (locals make friends on other 6 islands and everyone becomes you uncle or auntie).

It takes me 5 hours to circle my Island of Oahu which is 75% size of RI and every time after visiting here since 1970s I discover something new and catch great new photographs. Downtown Honolulu and Waikiki Beach never sleeps with bars and night clubs staying open till 4 AM serving and then there are the 24/7 full service restaurants and daily new tourist I might meet along the way or typical local nightly beach party or private residence party plus some of the military R&R centers allow us locals in with the troops (R&R slow for business we support with our dollars)!

The mainland is 5 ½ hours away but with all the west coast people here you might think you are in CA already! No gambling is allowed in Hawaii (Hawaii and Utah) and there are daily discounted package deals to Las Vegas about $550 for RT airfare, all taxes, airline surcharges, transfers and tips, hotel room and all meals for a week plus welcome hotel package. Cheap Vegas vacation if you don’t gamble! We also have Vegas stage shows in Waikiki Beach!

Joe you forget you are living on an island but like I said, if island living is not your style then don’t try it. Vacation Ok but living no way (RI to HI is 12 hours commercial jet with 1-change of plane and 11 hours 1-change of plane coming back)!

OTL, as I said before I think we both understand and are almost from the same generation. I grew up shoveling coal into the furnace as a kid during RI winters, sitting around the radio on Sundays during family get together.

I remember my first crystal radio and first family B/W TV! We’ve come a long way and where I’m living now the culture and family atmosphere takes me back to those days of a simpler and less complex life unless I want to get crazy and drive into Waikiki Beach for modern day craziness!

If you want a little Philly feeling back, go to http://www.hollyeats.com/ a real Philly restaurant guide.

Posted by: Ken at July 11, 2010 1:50 AM

I'm from Brooklyn-OTL is from Philly.I remember the coal furnace,the huge radio/phonograph with 78's,and our first B&W set,an Ampico.Milk delivery,the "old clothes"man,the icemsn(no kidding-old Mrs.Cohen downstairs still had an icebox)and the iceman came on a horse drawn wagon.
I'm glad you like where you retired to.RI would be just great minus the scumbag politicians,illegal aliens,and moochers.

Posted by: joe bernstein at July 11, 2010 4:56 PM
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