The trouble with gold

At OEN, Jimmy Walter leads a short tour through history, part of his discussion about the trouble with gold. Many people have added some gold to their portfolios, and it has often worked out well for many people, though not every person. The thought often recurs to me: What if people stop liking gold? What if they reframe gold as simply a shiny, but otherwise useless metal. As Walter states at the end of his article aimed at gold-lovers everywhere: "Gold is just a shiny stone that mesmerizes the naive natives." What are the odds that this will become the prevailing wisdom? This exposes that the power of gold is not about the metal itself--it is mostly about the value people attribute to it, which is based, for the most part, on the value people assume other people will attribute to gold. Gold is not, in the end, really about gold. It is about predicting what other people will think about gold. It is tempting to say, then, that gold comes close to being a tangible symbol of wealth.

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Corporate Communism

I've sometimes referred to the telecom industry as "communist." After all, if the AT&T and T-Mobile merge is approved, that bigger version of AT&T would have 80% of the wireless market. That means one player would dominate an industry.   If you don't like the phone service you're getting, don't have a phone.   Communism, whether the Soviet or the Capitalist version, stifles innovation and causes customer service to stagnate.  It also forces consumers to pay artificially high bills because there is no competition.  Dylan Ratigan has picked up on this comparison too:

Lately I have been using the phrase “Corporate Communism” on my television show. I think it is an especially fitting term when discussing the current landscape in both our banking and health care systems. As Americans, I believe we reject communism because it historically has allowed a tiny group of people to consolidate complete control over national resources (including people), in the process stifling competition, freedom and choice. It leaves its citizens stagnating under the perpetual broken systems with no natural motivation to innovate, improve services or reduce costs.
Ergo, we need to stamp out communism everywhere we find it, even when it exists in a capitalist system like the United States.

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The reasons that Amazon’s Kindle 2 can’t be manufactured in the U.S.

There are many reasons why the Amazon Kindle 2 can't be manufactured in the United States, and they don't speak well for the future economy of the U.S.   Here are a few of those reasons, from an article at Forbes:

  • The flex circuit connectors are made in China because the US supplier base migrated to Asia.
  • The electrophoretic display is made in Taiwan because the expertise developed from producting flat-panel LCDs migrated to Asia with semiconductor manufacturing.
  • The highly polished injection-molded case is made in China because the US supplier base eroded as the manufacture of toys, consumer electronics and computers migrated to China.

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The so-called free-market miracle of Texas

Daniel Gross pulls out real numbers to show that the economic "miracle" of Texas was made possible by massive growth of state government:

[T]here's less than meets the eye to the Texas miracle. When a state's population grows, it has to add more public employees to provide services — more cops, more teachers, more DMV clerks. This chart posted by Ryan Avent of the Economist shows that Texas's jobs growth in recent years has come mostly from the oil and gas industry, and from things funded by the government: education, healthcare, and federal and state employment. This chart posted by blogger Matt Yglesias shows that Texas's government payroll has been in a huge, long-term uptrend. Jared Bernstein, former economic aide to Vice President Joe Biden, notes that Rick Perry's Texas has been the capital of government job creation. From 2007 through 2010, Texas lost 53,000 jobs on net, not a bad performance in an era when the U.S. economy shed several million. But that's because it lost 178,000 private sector jobs while adding 125,000 public sector ones. Notes Bernstein: "47% of all government jobs added in the US between 2007 and 2010 were added in Texas."
But there's more . . . In 2010, while Rick Perry was railing against government spending his actions betrayed his words:
Perry himself entered Texas into controversial contracts with Washington lobbyists who helped bring billions of dollars in federal money to Perry's home state, some of it via earmarks. Some of those lobbyists would wind up pleading guilty in a separate major bribery scandal.

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