Correlation is not causation, but...

(The blue line is US GDP in billions of barrels of oil, at "current" dollars/prices for the given year. The red line is a four year moving average of the same. Values for 2008 are the current estimate for annual GDP over last week's oil price.)

... check out the nifty inflection points in 1993 and 2001.

Now I want to do per-capita GDP in barrels of oil....

The 19th Century is still here.

The children, from the ethnic Yi minority, came from poor families in Sichuan about 600 miles ( 960 km) away.

The China Daily said 167 children had been rescued from the factory in the industrial city of Dongguan so far, and several arrests had been made.

China announced a nationwide crackdown on slavery and child labour last year.

It emerged that hundreds of poor farmers, children and mentally disabled people had been forced to work in mines and kilns in Shanxi province and neighbouring Henan.

We must not bemoan high gas prices. The positives in this staggering increase will surpass the negatives. We can see for once that corporate greed is proving to be good.

The world's largest automaker by sales said the cuts, to take effect this summer, were brought on by weak demand due to high gasoline prices and an economic downturn. GM said it will make about 88,000 fewer pickups and 50,000 fewer big SUVs [the positive] this calendar year because of the cuts. The layoffs represent just over 4 percent of GM's hourly manufacturing work force of about 80,000 in North America [the negative].

Peep this. The UK Office of Government Commerce, which is all about the money, hired a fancy London branding agency to make them look like a million bucks. And what did the agency come up with? Something that looks like what money surely ain't--classy...
...but in fact tells it like it is:

The man. Always the fucking man.

You might have a little extra scratch next week:

The federal government, eager to boost the flagging economy, will start distributing special stimulus payments Monday - four days earlier than expected.

"Beginning Monday, the effects of the stimulus will begin to reach households," President Bush said Friday. "This money is going to help Americans offset the high prices we're seeing at the gas pump and at the grocery store."

The department announced the early arrival of the payments Thursday after saying last month that it would begin sending out the money on May 2.

As of next week, 800,000 tax filers daily will begin to have their checks directly deposited Monday, Tuesday, and Wednesday. No checks will be distributed Thursday, and 5 million payments will be made Friday.

Those who used direct deposit when they filed their taxes this year will receive their payment first. Paper checks will be sent out May 9. As for how much you'll get...

The program calls for rebates of up to $600 for single filers making less than $75,000. Couples making less than $150,000 would receive rebates of up to $1,200. In addition, parents would receive $300 rebates per child. Filers who do not owe income taxes but have at least $3,000 in income would get a $300 payment.

I think I'll spend mine on a Wii--if I can fucking find one--and then send the rest to the Obama campaign.

A ship contracted by the US Navy has fired warning shots in the direction of two small Iranian boats, according to US military officials.

The incident took place in the Gulf, in international waters dozens of miles from the Iranian coast, the US said.

The vessel - the Westward Venture - was working for the US Military Sealift Command under a 65-day charter, an official told the BBC.

The Iranaian boats withdrew soon after the warning shots were fired.

US officials say the Westward Venture used the correct measures prior to firing the shots: it sounded its horn, and gave the Iranian boats a verbal warning, before firing flares, 50-caliber machine guns and M-16s in the direction of the boats.

Shortly after the incident, a routine inquiry was made of the Westward Venture by Iranian authorities, according to US officials.

The Iranian government has denied that any of its vessels were involved in the incident.

Oil prices rose more than $3 to $119.50 a barrel in response to the incident, just short of the record $119.90 reached earlier this week.

"Lawless [that is, insane] landlords" in San Francisco terrorize tenants to get them out. (Good thing Seattle doesn't have rent control.)

Ford Motor Co. once again surprised Wall Street, posting an unexpected profit and its sixth consecutive quarter of year-over-year improvement despite serious problems in the U.S. automobile market...

Ford reported net income of $100 million, or 5 cents per share, for the first three months of 2008. This compares with a net loss of $282 million, or 15 cents per share, in the first quarter of 2007.

Excluding special items, Ford made $525 million after taxes, or 20 cents per share. That was significantly better than the 16-cents-per-share loss Wall Street was expecting, according to a survey of 13 analysts by the Thomson Financial Network.

My family's history in the United States is deeply intertwined with the rise and fall of middle-class manufacturing in the midwest. My great-grandfather assembled Model Ts at the original Rouge River plant, the original moving assembly line, the birthplace of the manufactured world. He took part in the battle of the overpass, fighting to create the first unions of manufacturing employees, to create a blue collar middle class for the first time in human history. My grandfather spent part of his life on the Packard assembly lines; my father paid his way though school assembling Thunderbirds at the (now shuttered) Ford Wixom assembly plant. Even I--far away from the rest of my family who are still clustered around Detroit--haven't entirely escaped; as a UW graduate student, I dutifully pay dues to the UAW. That's four generations of us with the United Auto Workers. (When I told my dad I was to be a union brother, he exclaimed "can't one of us stop paying these assholes dues?")

Until about the mid-fifties and the start of the long decline, the Detroit economy was the envy of the world--the real start of post-war American-style affluence. It's fashionable now to think of a well compensated working class--of a society where a line worker and an office worker could be next door neighbors, sharing the same lifestyle--as an archaic joke. We should remember that Detroit was the post-war model for countries to rebuild around, with unified blue and white collar workers intertwined into a productive partnership. European and Asian nations alike made it government policy to duplicate the home of the arsenal of freedom, through protectionism, currency manipulations and direct subsidies to industry.

Hence the decline of Detroit. Saddled with poorly negotiated--in some cases intentionally to boost the economies of strategic allies--trade deals, an utterly insane health care system, foreign government subsidized competitors and blatant currency manipulations all leading to gross overcapacity in global manufacturing, Detroit only had one way to go. Terrible business decisions certainly sped this process, but such a decline was inevitable thanks to global policy decisions.

With abundant iron ore, fresh water, water- and land-based transportation networks and an incredibly skilled workforce for starters, one of the world's centers of manufacturing should be Detroit. Keep that in mind the next time you wish to condescend to a (likely former) Midwestern lineworker--assuming they're just too dim witted and parochial to understand the glories of international trade.

So good for Ford--even if they plan to lay off yet more US plant workers.

Boeing's Net Jumps 38% on Strength Of Commercial-Plane Business

Boeing Co. posted a 38% rise in first-quarter net income, driven by strong growth in the company's commercial-airplanes business. The biggest U.S. aerospace company also recorded lower expenses in the quarter.

The weak U.S. economy – even the gloomy business climate for U.S. airlines -- hasn't affected Boeing's business so far, said Jim McNerney, chairman and chief executive, during a conference call with analysts. Only 11% of new aircraft orders are from U.S. customers and Mr. McNerney believes that U.S. airlines still will need to find a way to replace older fleets of jets with new aircraft in the next.

Still, the fuckers left Seattle. I will never get over that.

The Euro hits historic highs, Bush hits historic lows.

As I have said before, capitalism is not really about open and free markets. It's about states managing economies for the benefit of a few. The whole thing about governments being bad for business is absolute nonsense. Where classical Marxism went wrong, an error it inherited from Hegel's Philosophy of Right, a book that breaks up society into three parts (the family, civil society, the state--civil society being the economic sphere: trading, banking, manufacturing, and so on), was it failed to see that capitalism and the state are one and the same thing. It saw it as it is not (in reality) but as it says it is (in ideology): a sphere in which private interests compete and accumulate/circulate/generate wealth for the common good. (At the end of the second chapter of The Communist Manifesto, "Proletarians and Communists," the fifth of ten proposals for the transformation of a capitalist society into a communist one, is this: "Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.") But the state is already the bank and the market, and so the solution to the problem of capitalism is not nationalization, not what it already is. The real condition of an open market negates capitalism. Capitalism is a fixed game. Capitalism is a system of rules for a game that produces and reproduces the same winners and losers. The invisible hand in Smith has always been the end of the long arm of the law, and that law a member of the body of the state. Bailouts are not socialistic but consistent with capitalism.

And now for a living and brilliant economist to back my claims, Ha-Joon Chang.

From Thom Hartmann's review of Ha-Joon Chang's Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism:

There are two glaringly obvious flaws in the so-called "free trade" theories expounded by neoliberal philosophers like Friedrich Von Hayek and Milton Friedman, and promoted relentlessly in the popular press by (very wealthy) hucksters like Thomas Friedman.

First, "infant" economies - countries that are only beginning to get on their feet - cannot "compete" with "mature" economies. They really only have two choices - lose to their more mature competitors and stand on the hungry and cold outside of the world of trade (as we see with much of Africa), or be colonized and exploited by the dominant corporate forces within the mature economies (as we see with Shell Oil and Nigeria, or historically with the "banana republics" of Central and South America and Asia and, literally, the banana corporations).

Second, the way "infant" economies become "mature" economies is not via free trade. It never has been and never will be. Whether it be the mature economies of Britain (which began to seriously grow in the early 1600s), America (late 1700s), Japan (1800s), or Brazil (1900s), in every single case, worldwide, without exception, the economic strength and maturity of a nation came about as a result not of governments "standing aside" or "getting out of the way" but instead of direct government participation in and protection of the "infant" industries and economy.

Without state support, corporate power would be nothing.

Who is paying for the WaMu mess? No need to guess:

The Florida employee said she'd like to leave the industry but "I'm 58, and I've got a house and car payments to make and parents who have Alzheimer's, and I don't know what else to do."

A Seattle-area loan officer who is being laid off after a decade at WaMu said he and others are angry at upper management.

"On April 1, they told the big producers that we're solid, we're good, we want to keep you, and less than a week later, you're gone," he said.

"The loans we do did not cause their problem," he added, saying that people in WaMu's conventional-lending business are paying for missteps the company made with subprime loans, which were given to people with poor credit.

Dave Erickson, president of the Washington Association of Mortgage Brokers, said he is surprised that WaMu will no longer supply loans through mortgage brokers. He predicted borrowers will be affected.

Have you heard Obama's Cooper Union Speech? You should.

The key excerpt:

A free market was never meant to be a free license to take whatever you can get, however you can get it. That's why we've put in place rules of the road: to make competition fair and open, and honest...

I think that all of us here today would acknowledge that we've lost some of that sense of shared prosperity. Now, this loss has not happened by accident. It's because of decisions made in board rooms, on trading floors and in Washington. Under Republican and Democratic administrations, we've failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practice. We let the special interests put their thumbs on the economic scales. The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both. Nor is this trend new. The concentrations of economic power and the failures of our political system to protect the American economy and American consumers from its worst excesses have been a staple of our past: most famously in the 1920s, when such excesses ultimately plunged the country into the Great Depression. That is when government stepped in to create a series of regulatory structures, from FDIC to the Glass-Steagall Act, to serve as a corrective, to protect the American people and American business.

Ironically, it was in reaction to the high taxes and some of the outmoded structures of the New Deal that both individuals and institutions in the '80s and '90s began pushing for changes to this regulatory structure. But instead of sensible reform that rewarded success and freed the creative forces of the market, too often we've excused and even embraced an ethic of greed, corner cutting, insider dealing, things that have always threatened the long-term stability of our economic system...

Partial deregulation of the electricity sector enabled (inaudible). Companies like Enron and WorldCom took advantage of the new regulatory environment to push the envelope, pump up earnings, disguise losses and otherwise engage in accounting fraud to make their profits look better, a practice that led investors to question the balance sheets of all companies and severely damaged public trust in capital markets. This was not the invisible hand at work. Instead, it was the hand of industry lobbyists tilting the playing field in Washington as well as an accounting industry that had developed powerful conflicts of interest and a financial sector that had fueled over-investment. A decade later we have deregulated the financial sector and we face another crisis. A regulatory structure set up for banks in the 1930s needed to change, because the nature of business had changed. But by the time the Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework. And since then we've overseen 21st century innovation, including the aggressive introduction of new and complex financial instruments like hedge funds and non-bank financial companies, with outdated 20th century regulatory tools. New conflicts of interest recalled the worst excesses of the past, like the outrageous news that we learned just yesterday of KPMG allowing a lender to report profits instead of losses so that both parties could make a quick buck. Not surprisingly, the regulatory environment failed to keep pace. When subprime mortgage lending took a reckless and unsustainable turn, a patchwork of regulators were unable or unwilling to protect the American people.

For someone like me, a total wonk, this is enrapturing; it's just so damn Keynesian, so compellingly capturing Minsky. It would be hard to write a clearer, more succinct or compelling dissection of our present financial fiasco.

Any person willing to make the difficult historical connections, to appropriately share the blame for the present crisis's origins, to see and relate the ugliest truths about our present economic crisis--in the midst of a vicious campaign no less--deserves some respect.

Barack Obama says that, if elected, he will "seriously consider eliminating the penny." While we're at it, can we make a real commitment to a dollar coin?

Now that the rich have made their money...

...it's time to make the poor pay.

California is facing the worst budget crisis, with a $16 billion shortfall, and Gov. Arnold Schwarzenegger (R) has proposed a $4.8 billion cut in education services. About 20,000 teachers, counselors, librarians, nurses and other support staff members have received notice of potential layoffs, according to the state's Education Department.

Schwarzenegger has also proposed $650 million in cuts to the Healthy Families Program and Medi-Cal, which together provide health-care services to more than 7 million senior citizens, disabled people and children in the state. Adults under the Medi-Cal program would lose their dental benefits, as well as optometry and psychology services.

Says Gindy: "It's all about privatizing the profits and socializing the losses."

Have no fear...
...capitalism is here.

NEW YORK - ...Wall Street faces the biggest overhaul of its regulatory structure since the Great Depression... [The plan] to be announced by Treasury Secretary Henry Paulson on Monday would help prevent the kind of risky investments that led to the near-collapse of Bear Stearns Cos.

But why are we nervous about this great news? What is it about the rescue that makes us so uneasy? Because we will never find a peace of mind in a plan like this: Wolves offering the sheep a solution to the problem of wolves.

Bear Stearns CEO sells his shares of Bear Stearns for $61.3 million. I love it when a plan comes together.

After the housing crash...
...the furniture crash. After the furniture crash, the human crash. After the human crash, the...

HAVE YOU, IN recent months, found yourself drinking less and exercising more? If you smoke, have you cut back? Have you been spending more time with your kids, or stopping in more frequently on your aging parents or grandparents? Have you lost weight? Does the air seem cleaner, the roads less crowded?


If so, you may be feeling the effects of the recession. A slowing economy, some economists suggest, can actually help you live longer - just one of a few payoffs that might surprise those of us who see recessions as unmitigated disasters.

From those sunny optimists at the Boston Globe.

In other Ayn Rand news, someone donated a million dollars to the University of North Carolina, with the caveat that they had to include Atlas Shrugged as required reading in a course. Some people are not amused. The school now has to construct an Ayn Rand reading room, too, which one angry professor said "Would be exactly like having a Karl Marx room."

(Thanks to Slog tipper Matt.)

The new five-dollar bill is bullshit.