He’s an idiot. I’ll grant he’s not stupid like Bush was. But he’s a bumbler.

And this was a classic gaffe as defined by Michael Kinsley because what he said was probably true. I’ll bet anything London’s going to find themselves unprepared for the shitshow that’s coming up. Most host cities end up overwhelmed, and at least half the time they end up in a huge debt. I’m already reading stories about how poorly secured the sites are, and how the traffic is now a nightmare for Londoners.

But… you DON’T SAY THAT when you’re running for president and visiting London. This was supposed to be a positive PR move meant to give him international visibility and get the media temporarily off his case about his tax returns. Now, the tax return issue looks like it may be the better of two bad options compared to going to England and getting chastised by the Prime Minister (who’s conservative to boot) and bood by an arena of tens of thousands of Brits glowing with national pride. He made himself out to be utterly ridiculous.

And it’s not like he’s a newbie politician. He’s spent the majority of his political life running for president. He really should know better.

The amazing thing, is that the London Olympics melting down would make Romney look like an administrative genius – all he had to do is show up and say absolutely nothing while all this went down. People would have automatically made the comparisons with the relative smoothness of the Salt Lake Olympics. The only way Romney could screw up is if he opens his mouth and brags about how he did it.

Going in, London’s not looking to good. I think the cost and complexity of putting on these games is going to severely limit who is really going to want to take on hosting them. My guess it will be mostly 3rd world nations wanting to make a “we have arrived” statement.

Paris lost these Olympics to London. Surely they are feeling relieved at this point. @stevetv

The curious thing is that the world has become a very different place between the Beijing Olympics and now.

The “Lehman Shock” hit the month after Beijing.

The 1Q09 collapse of global equity — the US stock market has recovered (barely), but the Nikkei is still 50% down from 5 years ago.

The Eurozone is going centrifugal.

Things are not all right — and we’re basically just borrowing money and/or printing it left & right to keep the monopoly game going.

The US is probably going to collapse in political disarray 4Q12 and 1Q13, unless a) Romney wins or b) Obama wins and the Dems cave to the Republican demands of austerity or whatever.

Even Japan has a similar hurdle coming up, having to get a ¥38T bond issue through parliament next month to fund government this FY.

The wheels fell off for Japan in the 1990s (when is hard to say I guess, maybe the 1997 asian currency crisis made it clear that the 1980s good times weren’t coming back). Things here in the US turned down in 2001-2002 and it was only a $7T consumer credit bubble:

http://research.stlouisfed.org/fred2/series/CMDEBT

that pulled us (and thus the rest of the world, because the US is a big consumer for exporters) out of that crash, 2003-2007.

Now we’re kinda living a fiction, borrowing a trillion+ a year from wealthy people instead of taxing them (because we can’t tax the “job creators” or they will lose the desire to create jobs any more)

http://research.stlouisfed.org/fred2/series/FGTCMDODNS

and we have everyone clamoring for the Fed to print more money up so we can pretend things are still OK for a while longer.

I’ll be surprised if things don’t really go off the rails this year or next.

@Troy
Generally speaking, I think that “printing money” is, essentially, a flat tax.

My conception of money is that it is not a store of value, but instead, a partial claim upon the resources of a country.

My conception of stock is the same: a partial claim upon the resources of a corporation.

Indeed, like money I could trade a share of “General-Widget” stock for goods and services.

A corporation in need of funds can and will issue more stock, though it dimishes the value of the shares already held. It’s like printing money.

The big difference is, in most states, a corporation that issues new stock must provide existing shareholders the option to maintain their current % of ownership through the new purchase of some of the newly issued stock. If I own 3 shares of a total of 12 already issued, and General-Widget issues 8 more shares to raise money, I have a right of first refusal, to buy 2 of those shares, so I can maintain 25% ownership of the total stock issued.

Since every body holds and/or has interest in dollars, the printing of new currency diminishes the value of everyone’s currency equally across the board: so, it is a flat tax.

For the filthy rich, no tax is preferred over some tax, but a flat tax is preferred over a progressive one. For progressives, a flat tax constitutes a disaster.

The problem with a market oriented economy is that money, over time, gets concentrated at the top: a person with $100 million, wants 7% return on that money. That gets him $7 million. That’s money taken out of the demand side to his personal corner of the supply side. The next year he has $107 million, and so takes in even more. %7 a year, over ten years, doubles the principle.

I’ve long held here, and else where, that the concentration of wealth is a massive disaster waiting to happen (like standing up in a dugout canoe). It is the intended result of supply side economics. Efficacy for supply-side policies moved into declining marginal returns in the 1999-2001 time span and resulting recession – or in other words: “supply-side saturation point.”

In rational administration, then, the game is to figure out how to keep society from become top heavy. The technique is progressive taxation, estate taxes, unions, and welfare payments to the very bottom.

We are no longer in a rational administrative age.

Bush orchestrated the transfer of, as much as, $15 trillion (with a T) from demand side to the supply side. He covered his tracks with cheap credit. Apres les credits, le deluge. After the credit ran out, demand collapsed.

Let me state, clearly and confidently, this was a known, predictable and pre-planned event. They knew the consequences of what they were doing. I knew it, so they ought to have known it. But what no one knows is the when (and perhaps, the how).

In the summer of 2007, there was the tremor. In January there was clear evidence of recession. Bush and Co quickly rushed a mini-stimulus through congress. It was less than $200 billion. It was clearly intended to push the recession off until after January 20th – no more. They were given out $300 in cash, for crying out loud. It went into effect in the Spring. By end of July they found out it was too little, too late. For once, God got off his thrown and threw a triffle bit of justice at the Bush administration and he got saddled with cause of the Great Depression II.

Clearly the thing to do is to Re-Ike: Bump up taxes to Eisenhower levels, implement a massive infrastructure project. Also, introduce German, Japanese and Korean style corporations – where workers have real power over how corporations are run, and otherwise, plough the ground for more unionization of the work place. Even medium sized business need to give workers more bargaining power if we are ever going to have more demand.

Of course, this won’t happen in our life time, and probably, never will.

I agree with every word you wrote, LOL, except that in a deflationary environment, “printing” won’t harm too many people maybe.

The controlling fact is that the top 5% in the US is collecting 33% of the income.

Completely unsustainable without redistribution somewhere, and AFAICT housing costs are the major upward wealth extraction mechanism here in the US.

Land doesn’t cost anything to create yet it still has immense rental value — so much economic rent is flowing from middle-quintile (or government welfare beneficiaries in the case of “Section 8”) tenants to the top 5% — I think this is around $1T/yr.

Then there’s our bloated healthcare sector. I just did the calculation on what PPACA will do for me, if I hold my income to under ~$42,000 the government will give me a tax credit of $3000 on a $7500/yr bill, and it turns out that $3000 is just about how much our system is overpriced!

If the government just raises my taxes $3000 to give me this stupid subsidy, the PPACA mandate will just be a big rip-off.

But I can’t figure out what’s going to happen to Japan this decade and next.

What I do know is that the population of 20-50 year olds in Japan is going to fall 10% — 5M between now and 2020. This loss is equal to the entire population of Hokkaido!

2020-2030 will see another 8M people age out of the worker-bee category — that will be almost 20% of this demographic disappearing, and 8M people is twice the current population of Shikoku. (The 13M people going away between now and 2030 is a bit more than the current population of Kyushu.)

I just see home prices collapsing in Japan in response to this relentless depopulation, and I am hopeful that this dramatic fall in working-age people will result in more labor wage power. (But that’s complicated since transitioning from a growing society to a declining society is very disruptive to established hiring patterns and industries).

But, alas, countering this is the higher support cost the workerbees of Japan will have to bear to pay for the elderly care and pensions.

For nearly every lost workerbee there is a pension that must be supported by his replacement!

The US has the problem too, and we have a much bigger baby boom and also a growing youth population to support this century.

Both Japan and the US can solve their problems by raising taxation to Scandinavian levels (~45% of GDP), but I suspect that if & when this happens, land values will get kicked in the teeth since the current price level is based on current disposable incomes, and raising taxes by definition reduces disposable income.

100m2 plots in Tokyo can still cost ¥350,000/m2 ($4000+) way out by Luis. That is $16M per acre, a stupendously rich valuation for California, where in my town a *very* nice 1/3 acre lot might go for $250,000.

Significant tax rises will drive these incredible land valuations down, and I think the rising vacancy factor pushing down apartment rents this decade and next will also have their effect on home values.

But Tokyo itself is a bit different — it’s the metropolis where all the jobs are drawn and where everyone wants to live, so maybe it will buck the depopulation trend by continuing to import young people.

Tough to see the future, but I like Japan’s slightly better than the US’s.

We’re just crazy with the unsustainability.