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McCaskill: Call centers should disclose location

Thursday, September 1, 2011 | 9:14 p.m. CDT

COLUMBIA — For Sen. Claire McCaskill, D-Mo., the issue of outsourced call centers gave enough inspiration to draft new legislation with the hope of spurring job growth.

“We have seen, overall, call center employment in our country fall dramatically in the last few years. A large part of it is outsourcing of call centers to other countries,” McCaskill said Thursday in a conference held at MBS Textbook Exchange, Inc.

McCaskill introduced a plan for legislation that would require companies to tell consumers where their call centers are located. She said she hoped the legislation, which is still being drafted, would encourage companies to keep call centers within the United States.

“I don’t know about you, but I’ve called for help sometimes, and I can’t get them to tell me where they are," McCaskill said.

The legislation would be simple, McCaskill said. When a consumer calls for assistance, he or she would be informed either electronically or by the person answering the phone where the call center is located.

McCaskill said she believed this would give consumer transparency and boost the domestic economy.

McCaskill said she wanted her plan to create jobs to cost as little federal money as possible.

“The only way the federal government can create a lot of jobs is by spending a bunch of money on government related jobs,” McCaskill said. “Long-term, that isn’t good for our economy.”

As for companies that continue to outsource calling centers to foreign countries, there would be no “Draconian” punishment, McCaskill said.

“People who want to move their companies overseas are going to do so," she said. "But we could, in fact, provide rewards and incentives for companies that want to stay in the United States.”

But do consumers care about where their calls are being transferred? McCaskill believes so.

“(Companies) spend an awful lot of time and energy trying to train people in other countries to sound like they come from America, so that when you call there, you think you’re taking to someone in the United States. Why would they do that if they thought it wouldn’t make a difference to the American consumer?”

Jerome Rader, vice president of human resources at MBS Textbook Exchange Inc., said his company's call center is based in Columbia. He said he feels having a local call center helps his business provide the best support to local clients.

McCaskill recently traveled the state in a Missouri Manufacturing Jobs Tour, visiting manufacturing companies in hopes of generating conversation on job creation.

“I think Americans want to give business to companies that are growing jobs in this country,” McCaskill said.

“These are good jobs, and we’re trying to grow jobs. If we can do something that’s not expensive that helps promote job growth in America, I think we need to jump on it," McCaskill said.


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Comments

Mark Foecking September 2, 2011 | 4:23 a.m.

I'm sure that increasing minimum wage employment is a great way to get the country working again.

This is a complete waste of time. Can't our legislators come up with more important things to legislate on?

DK

(Report Comment)
Michael Williams September 2, 2011 | 7:47 a.m.

MarkF: August jobs report just came out this morning.

Zero. Zip. Nada.

That'll help get the country working again, too.

(PS: Shhhhh, don't tell Paul I told you this. He thinks I'm the person most responsible for this economy by posting such nonsense).

(Report Comment)
frank christian September 2, 2011 | 8:24 a.m.

“The only way the federal government can create a lot of jobs is by spending a bunch of money on government related jobs,” McCaskill said."

The only way the federal government can create a lot jobs is to reduce the amount of money it takes from all tax payers (across the board) then get out of the way, said economist, Congressman Richard Armey, as well as Andrew Mellon, John Kennedy, Ronald Reagan, Newt Gingrich, and W. Bush.

The hue and cry will now be "Tax cuts cause deficits!", without a thought that an out of control Congress can and must be made to reduce it's spending.

Those unemployed in this country will multiply until the above occurs and it is now much a certainty that the next chance for it to happen is Nov. 2012.

(Report Comment)
Matthew Schacht September 2, 2011 | 8:41 a.m.
This comment has been removed.
John Schultz September 2, 2011 | 9:18 a.m.

What a bunch of crap legislation. Really Claire? I don't care where the call center I'm contacting is at as long as I can understand the folks on the other end of the line. The help desk at my current company is staffed mainly by people from overseas and sometimes there is a communications issue. I solved that by using instant messenger to communicate with the support guys.

I'm not going to stop patronizing a company just because they disclosed to me that their call center is in Pune, Manila, or Bangalore. It's not the government's right to shame them into bringing Murrican jobs back home. The company owns the jobs and can staff them where they wish.

(Report Comment)
Brian Wallstin September 2, 2011 | 9:27 a.m.

Hey Frank, just because people repeat a myth over and over doesn't make it true. In fact, by your logic, the Bush tax cuts should have gotten unemployment down to 3 or 4 percent. Instead, we've had 10 years of zero net job creation, when no previous decade since 1940s had job growth of less than 20 percent.

Coincidence? Obama's fault? Neither: It's right-wing voodoo economics in action.

(Report Comment)
frank christian September 2, 2011 | 10:17 a.m.

Brian Walstin - http://www.bls.gov/cps/prev_yrs.htm

Year 2000 = 4.0% unemployment. The result of cuts enacted by 94 Congressional Republicans. You would say Bush cuts failed because rate went all the way up to 4.6.

I'd be ashamed to continue your malarkey with the only purpose being to continue the disaster that has been and will be the Obama, Democrat control of our government. I like people, you like government. I'm right, you wrong. Deal with it!

(Report Comment)
Jack Hamm September 2, 2011 | 10:24 a.m.

"The result of cuts enacted by 94 Congressional Republicans"

lmao!!!

I'm sure it had nothing to do with the huge tech boom in the 90s that changed the landscape of the global economy.

(Report Comment)
Brian Wallstin September 2, 2011 | 10:49 a.m.

It's not malarkey, Frank. It's fact. Here are the unemployment numbers under Bush
June '03: 6.5 percent
Aug. 2008: 6.1 percent
Dec. 2008: 7.2 percent
Jan 2009: 7.8 percent

I'm aware, Frank, that unemployment is 1.3 percent higher now. But it's borderline delusional to believe that Bush's tax cuts kept unemployment low. They didn't. So I think you're the one who has to deal with it.

(Report Comment)
Jimmy Bearfield September 2, 2011 | 11:47 a.m.

Brian, you're voluntarily paying higher taxes by refusing to take deductions and using the Clinton-era rates, right? After all, the Bush-era cuts were across all brackets and increased deductions (e.g., child credits), both of which are major reasons why the number of taxpayers with no federal liability increased over the past decade.

(Report Comment)
Mike Bellman September 2, 2011 | 12:45 p.m.

We need manufacturing. We need to take simple, raw materials and ADD VALUE to them. Build, convert or creat NEW goods and products that people in other countries want to buy. Manufacturing FOOD and exporting it.

ADDING VALUE is the easiest way to ADD WEALTH and ADD JOBS. Fixing things, cooking things, serving people are all "REPAIR" jobs, maintaining dying processes. If that's the job of the future, then where are we going for "New things"??

The only way to build wealth in this country is to sell THINGS in exchange for other countries MONEY/WEALTH. WE / US are going nowhere paying each other the same dollars for labor alone.

In some cases - low-tech jobs are quite appropriate.

(Report Comment)
frank christian September 2, 2011 | 1:03 p.m.

B. Wallstin - I said I'd be ashamed to continue your malarkey. It is clear you are not. Bush in office 8 years, you give us the year his cuts were passed, 2003, then skip to the last year of his Administration, in which the Clinton, Frank, Dodd real estate mortgage meltdown began. To top it all, no idea as to where your numbers come from. Second was "that Bush's tax cuts kept unemployment low. They didn't." This astute statement seems to be your argument in a nutshell. Wow!

Hamm, I've covered this with you too many times to pay any attention to you now.

(Report Comment)
Ray Shapiro September 2, 2011 | 1:05 p.m.

"McCaskill: Call centers should disclose location"
The heavy Hinduish accent usually discloses enough for me.
To make certain the service rep understands MY accent, I always tell the worker where I'm calling from, I tell them what kind of weather I'm experiencing and then ask what's the weather like where they are.

Almost always there's no need to ask for a supervisor, once the accent barrier is overcome.
Until the dems stop disincentives for business to outsource overseas, I believe McCaskill's approach to call centers has more racial/hatred of foreigners and hatred of big business overtones then anything else.
No need for more business regulations to announce what country your call is being forwarded to. Just make it profitable to do business in America.
But then again, what can you expect from the woman who might have been Vice President who chided seniors for being concerned about how ObamaCare will effect themselves and future generations and then just outright "Momified" the crowd with her patronizing attitude.

(Report Comment)
Jimmy Bearfield September 2, 2011 | 1:11 p.m.

"We need manufacturing. We need to take simple, raw materials and ADD VALUE to them. Build, convert or creat NEW goods and products that people in other countries want to buy."

And we still do. In fact, we're still the world's largest manufacturer and 40% larger than China: www.msnbc.msn.com/id/41349653/ns/busines...

(Report Comment)
Brian Wallstin September 2, 2011 | 1:38 p.m.

Frank - You brought tax cuts and jobs into the conversation at 8:24 this morning. I'm just pointing out that Bush took office with unemployment at 4 percent, cut taxes and left when unemployment was 7.8 percent. Those tax cuts are still in place, and they're still doing nothing to bolster employment and help the economy.

This astute statement seems to be your argument in a nutshell: "The only way the federal government can create a lot jobs is to reduce the amount of money it takes from all tax payers ... "

Wow.

http://research.stlouisfed.org/fred2/dat...

(Report Comment)
Jack Hamm September 2, 2011 | 1:48 p.m.

Jimmy

I knew that we are still (for the time being) the largest nominal manufacturing economy but other sources put the gap much closer. CNN claims that in 2009 we were at $1.7 trillion out put with China at $1.6 trillion; that is far from msnbc's 40% (http://money.cnn.com/2010/06/21/news/eco...). BLS manufacturing tables agree with CNN.

Either way there is no arguing that our manufacturing sector is losing ground to the Chinese by the day and they most likely have already passed us (remember that all of this data is 2 years old). Both msnbc's and CNN's articles cover 2009 output levels.

Moreover, both Germany and Japan passed us when it came to per capita manufacturing a long time ago.

Last, a large chunk of our manufacturing output is consumed domestically instead of being exported overseas like the Germany, Japanese and Chinese economies.

(Report Comment)
Jack Hamm September 2, 2011 | 1:54 p.m.

Jimmy 2

I just found the UN report that the msnbc article sites. It is actually a projection report from 2009 that was made after Q1. There 2010 report puts China ahead of the US in nominal manufacturing output and projects that India will pass the US in nominal manufacturing output in the next 5-7 years. Reports can be found at United Nations Statistics Division (http://unstats.un.org/unsd/default.htm)

As far as actual numbers the UN is still only working with 2008 data for their Industrial Statistics (http://unstats.un.org/unsd/industry/icsy...).

(Report Comment)
Jimmy Bearfield September 2, 2011 | 2:33 p.m.

@Jack: Yes, there is some debate based on the age of the data and what's being compared. For example, see http://shopfloor.org/2011/03/u-s-manufac.... There's also the wild card of whether China is providing real or plumped-up data.

(Report Comment)
Jimmy Bearfield September 2, 2011 | 2:38 p.m.

"Those tax cuts are still in place, and they're still doing nothing to bolster employment and help the economy."

Are you putting your money where your mouth is by refusing to take Bush-era deductions and rates? Those cuts were across all brackets, so if you work, you personally, directly benefit from them.

(Report Comment)
Jack Hamm September 2, 2011 | 2:53 p.m.

Jimmy

I'm with you on China's data. I assume that it is all BS. Just look at how they perform the dirty float on currency. there is enough manipulation there to keep a statistician busy for a lifetime.

However, I can think of plenty of reasons why they would want to appear to produce and less than they actually do. Just because they are manipulating data does not mean they are manipulating in in our favor.

In the end, we know that we are falling behind no matter who the competitor is. We know that Germany has already passed us in terms of efficiency long ago. We also know that the probability of China and India passing us by a significant margin in nominal output in the next 5-10 years is extremely high.

The global market place has changed significantly over the past 20 years. While other countries are changing strategies and innovating the US and its politicians are still evoking Cold War attitudes and plans; most certainly a losing strategy.

(Report Comment)
Brian Wallstin September 2, 2011 | 2:55 p.m.

Jimmy - That's such a silly argument i think I'll ignore it again.

(Report Comment)
Jimmy Bearfield September 2, 2011 | 3:14 p.m.

"That's such a silly argument i think I'll ignore it again."

Of course. I expected no less from you. Why put your money where your mouth is? You remind me of Warren Buffett.

"Don't tax me. Don't tax thee. Tax that fellow behind the tree!"

(Report Comment)
Brian Wallstin September 2, 2011 | 3:21 p.m.

Jimmy, I could put every cent of the money I make until the day I die where my mouth is and it won't solve the problem, which is why your argument is silly.

(Report Comment)
frank christian September 2, 2011 | 4:08 p.m.

Brian Walstin - Giving us the same numbers month by month changes nothing, or did you know that? "I'm just pointing out that Bush took office with unemployment at 4 percent, cut taxes and left when unemployment was 7.8 percent. Those tax cuts are still in place, and they're still doing nothing to bolster employment and help the economy." Disinformation such as this, in my opinion should be criminal.

The 4% unemployment rate you point to was brought about by the Tax Payers Relief Act and Balanced Budget Act of 1997 (which did indeed lay the ground work for a balanced budget as well as debt reduction four years in a row.) passed by R' controlled Congress and signed by B. Clinton.

Unless you are more ill-informed than I suspected, you certainly know that Bush tax cuts were left in place by Obama and his D's because to coerce more taxes from the people at this time would certainly destroy whatever small gains his trillions of spending had achieved for our economy.

The lengths that those of the liberal ilk go to, to dispute the facts that tax cuts create jobs and bring new money to the government is not only embarrassing but disgusting.

(Report Comment)
Michael Williams September 2, 2011 | 4:10 p.m.

I noticed the feds are going to sue a bunch of banks for the mortgage debacle.

Fair enuf. The banks didn't want to hold the notes (hell, who would?) so they bundled them and sold them with solid ratings. If they were involved in misinformation or fraudulent ratings, go after them.

But...mark my words...what's coming down the pike with this lawsuit is the biggest constraint of capital you have ever experienced. This is a huge jobs killer.

However, some say I'm unable to predict the future, so let's just watch what happens.

PS: Regarding jobs in the Bush era, just once I'd like to hear a liberal's take on what percentage of the jobs lost was due to tax cuts versus the investment trauma of 911. Obama solved the recession until uncontrolled events struck him down; so what about 911? Check this chart and tell me what you see:

http://www.the-privateer.com/chart/dow-l...

(Report Comment)
Michael Williams September 2, 2011 | 4:21 p.m.

This link should help with the unemployment numbers argument. Set the start year at whatever you think best supports your position:

http://www.tradingeconomics.com/united-s...

(Report Comment)
Brian Wallstin September 2, 2011 | 4:31 p.m.

Where's the disinformation, Frank? Did Bush cut taxes when unemployment was 4 percent or not? Did he leave office when unemployment was 7.8 percent or not? Are those taxes still in place or not? And are we still not producing jobs and economic growth or are we?

You can stamp your feet, froth at the mouth and be disgusted with liberals all you want, but Bush and his tax cuts did not produce jobs and increase income to the government. You ignore reality and hard facts to advance this completely irrational and easily disproved theory, and you think I'm the one who should be embarrassed?

(Report Comment)
Derrick Fogle September 2, 2011 | 4:52 p.m.

2 charts worth looking at, one on top of the other:
charts courtesy Left Business Observer http://leftbusinessobserver.com

Rolling 10-year US job creation:
http://www.fogles.net/mostuff/10-year-em...

Real US income, selected percentiles:
http://www.fogles.net/mostuff/real_incom...

(Report Comment)
frank christian September 2, 2011 | 5:27 p.m.

Brian Wallstin - "You ignore reality and hard facts to advance this completely irrational and easily disproved theory," You have produced no facts, only some numbers arranged to improve your fallacious verbal position, while omitting some that do not. "and you think I'm the one who should be embarrassed?" Absolutely! Moreover, I'm still disgusted.

(Report Comment)
Jack Hamm September 2, 2011 | 5:52 p.m.

Mike,

There was a study done about the economic impact of 9/11 called "The Economic Effects of 9/11: A Retrospective Assessment" that was prepared for congress. They concluded that the economic impacts of 9/11 were almost to miniscule to measure outside of direct impacts in NYC. They go in to great depth to show with a wealth of data that much of the negative aspects thought to have stemmed from 9/11 were actually a result of the recession that started earlier. The study is a good read and not to heavy on high level economic and mathematical analysis so that the average person can read it. Simply put, the idea that 9/11 had a severe economic impact (or even a slight economic impact) is a pure myth. Personally I find it disgusting how many politicians from both parties attempt to evoke emotional responses over 9/11 for political gain.

What is the difference between a cow and 9/11?

You can only milk a cow for 10 years.

As far as Obama goes I do not know what uncontrolled events slowed him down. As far as I can tell Obama=Boehner=Reagan=Bush=whatever other neocon you can think of. They are all fooling the American people into thinking there is a difference or a debate going on so that no one notices them lining the pockets of their buddies with your hard earned money.

(Report Comment)
Brian Wallstin September 2, 2011 | 5:53 p.m.

Frank - I produce no facts? I gave you a link that showed official labor bureau statistics from 1948 until Aug. 1 2011. How did I "arrange" those facts to improve my position? And which facts did I leave out?

(Report Comment)
Jack Hamm September 2, 2011 | 6:13 p.m.

Brian

I hope you are aware that Frank is the resident loon. It is pointless arguing with him, he doesn't understand reason, logic or facts. He is more of a "republican good, liberal bad kind of guy".

(Report Comment)
Derrick Fogle September 2, 2011 | 6:13 p.m.

@Brian: Come now, you know you left out the fact that those darned libruls and their socialist gummints are horribuls, and that them GOP are white knights in shinin armor comin to our economic rescue.

How dumb can you be to cite BLS data? We all know it's just made-up gummint numbers to make libruls look good. See, it has the word "Labor" in the name, so we know it's one of them Librul gummint institutions. It's also got the word "Statistics" in it, which proves they are just liars.

Seriously, you can't "see" this?

(Report Comment)
frank christian September 2, 2011 | 6:29 p.m.

Brian W. You must know that I have "been there and done that" with both of the above losing liberals. I am the one that finally induced Fogle to come out of the closet. paraphrase,"if you had to label me, I suppose it would be liberal".

I gave you BLS, you gave me the same divided monthly. This juvenile crap is becoming boring. Did I forget disgusting?

(Report Comment)
Michael Williams September 2, 2011 | 6:43 p.m.

JackH: The President claimed in townhall speech, ""We had reversed the recession, avoided a depression, gotten the economy moving again," Obama told a crowd in Decorah, Iowa. "But over the last six months we've had a run of bad luck." Obama listed three events overseas -- the Arab Spring uprisings, the tsunami in Japan, and the European debt crises -- which set the economy back."

http://washingtonexaminer.com/politics/2...

Do you know if that study included data on consumer, investor, and corporate-expansion sentiment? That chart of the Dow I posted earlier certainly shows a significant hit. However, the markets did recover to over 14K until the mortgage mess hit. The tech meltdown that bubbled during the Clinton years, 9-11, mortgage mess, housing crisis, some awful attempts at fixing things, and absolutely horrible sentiment by the world has taken us to this day.

I'm guessing 4 more years of this, perhaps 5. Truthfully, I think we are looking at a Carter/Reagan economic sequence, but I'm in a fairly good mood from working at the farm today so I won't argue or elaborate on the point. I'll just say I see so many similarities that it's historically weird. Plus, it has been my life's experience that...whatever goes wrong...it takes just as long to get out of it as it did to get into it.

(Report Comment)
Michael Williams September 2, 2011 | 6:49 p.m.

Wow, this thread got as far from the original topic as call centers are from Columbia.

(Report Comment)
Brian Wallstin September 2, 2011 | 6:57 p.m.

Bravo, Michael.

(Report Comment)
frank christian September 2, 2011 | 7:25 p.m.

Michael W. - "Wow, this thread got as far from the original topic as call centers are from Columbia."

I did it. See what happens when one tries to show that people rather than government move our country best? The liberals go nuts.

No comma after people, right? wrong? Can commas cause comas?

(Report Comment)
Michael Williams September 2, 2011 | 7:34 p.m.

Ahhhhhhhh....I can't help myself!

What is the difference between a cow and GWB?

(Geez, 7 more years)

(Report Comment)
Derrick Fogle September 2, 2011 | 7:39 p.m.

The problem with a Carter/Reagan economic sequence is, what Reagan did was deficit spend to juice the economy. $500 Billion a year of deficit spending, in today's dollars. It was unprecedented at the time, but then, we just never stopped. Instead, we kept doubling down. After 30 years of it, people are now saying we're out of bullets.

Will the bullets magically be found as soon as Obama is out of the White House? Will the propaganda machine be able to make everyone forget the evils of debt and deficits again, as quickly as people were made to be so overwhelmingly concerned about it?

I'm not so sure that strategy will actually succeed. Upon trading places with Obama, his successors might find the handcuffs a little harder to remove than they expected.

(Report Comment)
Michael Williams September 2, 2011 | 7:40 p.m.

Can commas cause comas?

I don't know.

But leave an "L" out of "public" and you can sure cause confusion in your posts.

(Report Comment)
Michael Williams September 2, 2011 | 7:52 p.m.

Derrick:

You know that I am a firm believer in this thing called "sentiment". I mainly stress investor and entrepreneurial sentiment rather than consumer sentiment. That is not to say the latter is unimportant because it is. But I think the first two are even more important.

I also believe, since I lived through it as a businessman/entrepreneur, that Reagan lifted sentiment simply on the strength of his own character. And it was that to which I was referring. I saw it from the first day after his inauguration, but it's full effect took a few years.

IMO, sentiment rules. All of my own investing and entrepreneurial decisions have been mainly made based upon "sentiment". The same is true of many others I know that are or have been in similar situations. I've found believing someone else's theory is not as good as believing my own lyin' eyes.

That is why I'm so concerned about these pending lawsuits of banks involved in the mortgage crisis. Deserved? Well, we'll find out. But this will put a crimp in available capital, and decrease sentiment, to levels we have only imagined so far.

Check out the bank stock charts lately?

Here's a couple:

http://stockcharts.com/h-sc/ui?s=BAC

http://stockcharts.com/h-sc/ui?s=GS

http://stockcharts.com/h-sc/ui?s=jpm

Folks can hate banks all they want, but I guarantee to you that this economy will not improve until those charts improve...because sentiment improves.

(Report Comment)
Michael Williams September 2, 2011 | 7:56 p.m.

Oh, and Derrick:

I see NO Reagans out there.

Not a one.

(PS: A little not-so-secret secret. If Democrats want to win the next election, go with Hillary. A walk-off home run. The only person who can get liberals sufficiently motivated to get out and vote. And, before my conservative friends club me, I'm not saying anything Democrat powers-that-be don't already know. The current President is out-of-time and out-of-luck. He's done.)

(Report Comment)
frank christian September 2, 2011 | 8:57 p.m.

D. Fogle - To my knowledge this may be your "first day back" and you immediately give us, "what Reagan did was deficit spend to juice the economy. $500 Billion a year of deficit spending, in today's dollars." Even if you are trolling, this is a disgusting inaccuracy, as well as revision of recorded history. "Deficit spending" was a term unknown LBJ to Reagan. LBJ and D' controlled Congress took their Great Society and Vietnam War monetary needs from the SS accounts belonging to the people. Liberal G. Ford and J.E. Carter with their D' controlled Congress' just allowed printing of their monetary needs and produced WIN (whip inflation now) buttons, then told us inflation was our fault because as Senator E. Hollings put it we Americans was consooomin' too much! Derrick it is clear you and yours are not going to stop the devious demonstrations of deceit that illustrate your ideology so we on the Right side must just be there to set the record straight when you guys deface it.

(Report Comment)
Derrick Fogle September 2, 2011 | 10:41 p.m.

Yep, I've been away for a couple of months (I'm not one of those people who has trouble finding work, I'm turning it away), but I obviously didn't miss anything while I was gone. You haven't changed one bit. You're still spewing irrationally partisan vomit all over the discussion boards.

Now, actually prove my numbers are wrong, instead of going off on some tangent about LBJ. I can wait, I'll go make myself a PBJ.

Historic budget tables are here: http://www.gpoaccess.gov/usbudget/fy11/p...
Constant dollar calculator is here: http://data.bls.gov/cgi-bin/cpicalc.pl

I copied from the PDF and ran the calculations for everyone; 8 years of budget deficits during Reagan Presidency:

1981: $79B = today's dollars $196B
1982: $128B = today's dollars $300B
1983: $208B = today's dollars $471B
1984: $185B = today's dollars $402B
1985: $212B = today's dollars $445B
1986: $221B = today's dollars $455B
1987: $150B = today's dollars $298B
1988: $155B = today's dollars $296B

Total 8-year debt: $1.34T = today's dollars $2.86T
Yearly Avg: $168B/yr = today's dollars $358B/yr

So yeah $500B/yr in todays dollars is a bit of an exaggeration (see, I even did your work for you, lazy bum), but after running the calculations down to the year and nearest $Billion, my original figure was in the ballpark. Don't forget the government's CPI figures may well be understated. Using an independent PPP calculator, instead of a government CPI calculator, would probably yield a higher 'today's dollars' figure.

Considering Reagan's average annual deficits were roughly triple the average of the preceding 20 years, and more than double the highest of any single previous year, Reagan was undoubtedly the original "spending problem" president.

Charismatic, yes, but also the father of our current debt and deficit problems.

(Report Comment)
frank christian September 3, 2011 | 8:47 a.m.

Derrick - All this blather and you did not correct the gross error that I so eloquently wrote about (didn't you love "devious demonstrations of deceit"?

When I wrote of LBJ, R' Ford and Carter misdeeds, I accurately included the other 2/3 of our Government which without which, nothing you have written about could have taken place. These Congresses were without exception controlled by Democrats and none of these horrendous misdeeds could have taken place without their approval. To make your devious demonstration to blame Reagan, who fought the D's daily over the spending you give us, "father of our current debt and deficit problems." "Father" leading the little "children" is atrocious, won't work and worse still, we have discussed this vividly before. Because I noted your absence, please don't entertain the idea that I missed you.

(Report Comment)
Tim Trayle September 3, 2011 | 10:50 a.m.

It's not difficult to complicate efforts that seek to absolve Reagan of his share of responsibility for the deficit spending of the 1980s:
.
1. If Congress had passed Reagan's budgets exactly as his administration *proposed* to Congress, the national debt would have been $29.4 billion *worse.* His congresses approved *less* than he asked for. [The source, so folks can look it up, is listed at bottom*].
.
2. Too many Republicans forget that they controlled the Senate from January 1981 to January 1987. Both the Senate and the House vote twice on each budget--once on the original budget bill, and again after the conference committee has hammered out a compromise. Therefore, the Senate is far from being an unequal player in the budget process. This is part of the balanced, small-r republican nature of our political process.
.
3. Not all of Reagan's budgets were declared DOA by the Democratic-controlled House. The House actually passed his first one, 225 to 193; sixty-two Democrats voted for it. It was a critical one, because it contained his famous, three-year supply-side tax cuts.

.......
Source for point 1 above: House Appropriations Committee, Regular, Annual, Supplemental, and Deficiency Appropriations Bills: Comparison of Administration Budget Requests and Appropriations Enacted, Sep. 30, 1994.

(Report Comment)
Michael Williams September 3, 2011 | 11:36 a.m.

I understand changing the topic to Reagan and his deficits. Reagan's deficits make better arguing points while ignoring the REAL issue.

I brought Reagan's name up for reasons other than deficits, much more important reasons which no one wants to address: Sentiment and confidence.

Reagan, with his single-handed charisma and strength of character, made the citizens of this nation feel better about themselves after Carter's disastrous presidency.

Many folks do not acknowledge the psychology behind creating jobs. To acknowledge such a thing, I expect, is to acknowledge that controlling the actions of entrepreneurs and investors is difficult at the government level. Some folks don't like that.

You can force me to invest, or force me to work, or or force me to spend money, or force me to create jobs only under a threat. With our current system, you can do these things sans threat ONLY if you make me more relaxed about doing such things.

Under our current system, folks invest money and create jobs because they believe there is a good risk for a good return rather than a poor risk for a good return. Currently, this President has done just about everything possible to undermine a favorable entrepreneurial psychology, and this effort continues to this day. I have no idea why this is so unless he is incredibly naive or has another agenda.

Fact is: Anything you can do to lower risk and improve the psychological outlook of entrepreneurs will help you achieve what you wish: More jobs and higher government revenues.

It really is that simple. And there's one helluva wad of cash sitting on the sidelines waiting for that improved psychological outlook. Unfortunately, we are far from any actions or underpinnings that would support such a psychology.

PS: President Carter: Possibly the best human being we've ever had in the White House...but a horrible President.

(Report Comment)
frank christian September 3, 2011 | 2:41 p.m.

The Trayle source shows the problems "inherited" by Reagan from Carter.

"As budget reform encouraged deficit spending, the dramatic increases
of the 1970s inevitably followed. Inflation ran at more than
18 percent by January of 1980, with the prime lending rate climbing
to more than 21 percent that December" The source also shows Reagan's spending to consist almost totally on build up of our defenses. "The United States has always run deficits during wartime and the Cold War, although not usually a shooting war, was expensive. In this view, the deficits accomplished something far more important than adding to the nation's debt, contributing to the end the Cold War and eventually the disappearance of the Soviet Union." This from

http://millercenter.org/president/reagan...
which provides a good description of Reagan Presidency.

Another note from Arthur Laffer who assisted Reagan during, I believe, the whole tenure. '81& '82 continued the deep depression, but the '83 economy took off mightily. Laffer says they erred, tho passing the tax cuts in 1981 they chose to install them two years later, 1983, allowing two more years of a desimated economy.

In my opinion, only extreme partisan hacks would choose to negate Reagan's positive impact on this country and the world.

(Report Comment)
frank christian September 3, 2011 | 10:08 p.m.

Have to add this from Miller. " Reagan also promised to restore public confidence. Solving the nation's problems required "our best effort, and our willingness to believe in ourselves and to believe in our capacity to perform great deeds . . . And, after all, why shouldn't we believe that? We are Americans." We certainly are - aren't we?

(Report Comment)
Mark Foecking September 4, 2011 | 3:30 a.m.

What caused the collapse of the Soviet Union was Saudi Arabia flooding the world with cheap oil, at the behest of the US. Russia's trade balance collapsed in a world of $10/bbl oil, and its government soon after.

This also had a lot to do with the strong economic growth of the 80's. Periods of cheap oil support economic growth, and periods of expensive oil cause recessions. The correlation is much stronger than the correlation with tax rates. Cutting taxes simply increases deficits. Any economic growth following a tax cut is a credit bubble, that pops and leaves us further in debt, as the history of the US shows us since Reagan.

The worse thing, economically, that the US ever did was to abandon the gold standard. Combined with the oil peak in 1970, our money has become increasingly worthless since then. You don't build real worth with IOU's.

DK

(Report Comment)
Tim Trayle September 4, 2011 | 8:21 a.m.

FC: very interesting resource,the Miller Ctr--thanks for posting (sincerely).
.
It supports an earlier point made in this thread, about Republican's shared ownership of 1980s deficit spending, to wit (from the Miller Ctr):
.
"It came as a surprise to Reagan that Republican members of Congress loaded up the budget bill with pet spending projects as readily as Democrats did. The budget would have been out of balance even if the cuts proposed by Reagan had been enacted. As it turned out, the combination of lost tax revenues and higher spending sent the deficit ballooning."
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Obviously, we all know that the economy turned around. (Why, of course, is a matter of debate--as the Miller Ctr notes.)
.
http://millercenter.org/president/reagan...
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Mark is, I think, correct about the larger reasons for the collapse of the USSR. By the early 1980s, GDP in the USSR was running at something like 1.4% per year, in contrast to the 4+% per year of the late 1960s and early 1970s before the OPEC crisis. Gorbachev was not the first reformer--in fact, in the early-to-mid 1960s, there was a running debate in the Politburo over implementing reforms much like perestroika. Prague 1968, however, pulled the ground out from under the liberal wing in the USSR. Gorbachev's reforms cannot be understood outside of domestic USSR history.

(Report Comment)
Corey Parks September 4, 2011 | 10:32 a.m.

Thanks DK,

I think a lot of people forget that Russia was going all in with gas from coal and that for it to work the price of a barrel of oil needed to be in the $40 dollar range at that time. Saudi Arabia took notice and dropped the price to $9 breaking Russia.

(Report Comment)
frank christian September 4, 2011 | 10:58 a.m.

Mark F. - With all the attempts by Democrat Congresses to regulate oil prices, the idea that someone? could call up Saudi A. and get them to flood the world with cheap oil seems a little simplistic. Wikipedia says: "From 1980 to 1986, OPEC decreased oil production several times and nearly in half to *maintain oil's high prices*. However, it failed to hold on to its preeminent position, and by 1981, its production was surpassed by Non-OPEC countries[clarification needed]. OPEC had seen its share of the world market drop to less than a third in 1985, from nearly half during the 1970s."

Democrat controlled Congresses that loved communism so much that they allowed D Rep. Boland to amend spending bills to prohibit expenditure of any money to assist those in Nicaragua trying stop it's spread in central America, could not be accused of trying to destroy the USSR. Isn't the Reagan Administration only ones left? Actually USSR inability to produce enough grain and oil and their imagined need to continue the expense of their military/industrial complex, left them with Borrowing as their sole source of income. When the lenders dried up, so did the USSR.

(Report Comment)
frank christian September 4, 2011 | 11:31 a.m.

DK, Corey, TT - I erred about Saudi break with OPEC, primarily because I had thought USSR breakup came earlier (in 80's).

http://marginalrevolution.com/marginalre... Tells of Saudi increase in production. Another source on same story did not. We can still discuss who was behind "the behest of the US."

TT - In matters concerning our Congress, I blame or congratulate those in control, the majority party. You and yours certainly do so when discussing the 1994 R's. It is no secret that Reagan's first fight after taking office was with fellow R's. Ever heard of "country club Republicans"?

(Report Comment)
Tim Trayle September 4, 2011 | 4:15 p.m.

When we actually trouble ourselves to *learn* a bit about the late Edward Borland, we see that he was a WW2 vet who served in the Pacific theatre, an ardent anti-oommunist, and an early supporter of the war in Vietnam. But he felt that the US overt and covert support for the Contras *undermined* our broader interests in Central America. As Borland said in debates over the measure: "The secret war hasn't brought Central America closer to peace or Nicaragua closer to democracy. What it does is provide the Sandinistas with the perfect excuse to foist unfair elections, a huge army, censorship and the draft on the Nicaraguan people."
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To say that the Borland Amendment was a product of Democratic Party "love" for communism is so far off that mark as to be laughable. In fact, if one's going to reason that way, we have to assume that 2/3s of American citizens also "loved" communism, since opposition to funding the Contras ran at about two-to-one against such funding. Helluva fifth column...

(Report Comment)
Gregg Bush September 4, 2011 | 5:06 p.m.

Boland - Iran-Contra (among many other things) was the NSC violating the Boland Amendments.
I don't know who Borland is.
Somethimes fingerts gert large, too.

(Report Comment)
frank christian September 4, 2011 | 5:16 p.m.

His name is Boland and his and D' House extreme efforts to interfere with U.S foreign policy created the "Iran Contra Affair" and made it far more difficult to unseat the Communist Sandinistas whom had already foisted unfair elections, huge army, etc. on the people. This made Central America a huge score for USSR while financing Castro's Cubans all over Latin-America to instill communism, by whatever means, everywhere. Want to learn something? Find out what Rep Boland felt were "our broader interests in Central America."

For you to use his statement in debate over this unreasonable Amendment as some sort proof that the Sandinistas should be left alone, while knowing of Castro's efforts with USSR, would be laughable if the subject was not so serious.

(Report Comment)
frank christian September 4, 2011 | 6:05 p.m.

TT - Unless you believe Rep Bolands debate statements are all there is to it, look at http://www.jorian.com/san.html

The Contras financed by O. North's illegally gotten gain(due entirely to Mr. Bolands infamous amendments) finally forced new, fair elections for Nicaraguan President. Daniel Ortega and Sandistas lost. Ortega has recently been re-elected minus his communist baggage (we hope).

(Report Comment)
KEN GERINGER September 4, 2011 | 6:26 p.m.

Re: Iran/Contra
Did give us the Reagan Defense.
Nobody told me, and if they did I don't remember.

(Report Comment)
Tim Trayle September 4, 2011 | 7:02 p.m.

Hi FC!:
.
Not sure why you link to a rather basic overview of the FSLN's revolution and period in power. Is there something important in that link that we're supposed to recognize?
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You completely misrepresent my use of Boland's (SORRY, world, for the mispelling!) words. Even a casual reading of my post will show that I was not using Boland's statement as (your words) "proof that the Sandinistas should be left alone." I was just correcting your, frankly (hee hee), absurd claim that Boland and Democrats who supported that amendment were somehow commie-lovers. Again, an absurd notion--cloud cuckoo material.
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I've seen others on this paper's fora correct you on Nicaragua before, for example, when you sought--bizarrely leaping to true tinfoil-hat territory--to represent the country as a genuine threat to the US. So I won't do that; it's been done. But if you want to characterize the US's financing of Chamarro's 1990 election efforts--a campaign effort essentially paid for *by* the US, at a level some 5x greater, proportionally, than what G Bush spent on his *own campaign--as "fair," go for it. It's not a definition of "fair" that looks anything like what has typically passed for fair elections in sovereign states in the past, but heck--this is Frank's World. They do things differently there.

(Report Comment)
frank christian September 4, 2011 | 9:25 p.m.

TT - "Is there something important in that link that we're supposed to recognize?" I suppose not,when one simply disregards information contrary to the sales pitch he is promoting at a given time.

Having to read your writings to you and explain what you wrote is becoming tiresome. If the words of Boland are removed from your attempt to "correct" me, you wrote Nothing that might do that. Neither do your strings of insulting adjectives rather than a URL that might lend some credence to your continued assertions that your views are correct because you say so.

"when you sought--bizarrely leaping to true tinfoil-hat territory--to represent the country as a genuine threat to the US." Only one with an inability to accept truth when it opposes the inaccuracies lodged in his mind would disagree with the premise allowing that USSR until their end, was in Cuba sending their troops wherever any conflict might be swung to communism. That the largest country in Central America could be a threat to the U.S with USSR missiles pointed this way or create open war involving U.S. to stop their installation (narrowly avoided in the Cuban crises).

FAIR had this to say about those elections:

Yet according to the vast majority of independent observers, the 1984 elections were perhaps the freest and fairest in Nicaraguan history. A report by an Irish parliamentary delegation stated: "The electoral process was carried out with total integrity. Nicaragua is now a stable productive country. I think Reagan was right. You don't, because you are a left wing ideologue and choose to reject any information that opposes your progressive liberal ideas.

(Report Comment)
Tim Trayle September 5, 2011 | 9:29 a.m.

FC, FC, FC...
.
The *1984* Nicaraguan election was won by the Sandinistas! I'm glad to see that you recognize the fairness of those elections.
.
It was the *1990* election that the FSLN lost to Chamorro, after the US was newly able to plow gobs of money into her campaign, essentially bankrolling it (while also making sure that no other candidate of the right emerged to split the conservative vote.)
.
The 1990 elections were fair, also, in the strict sense that, observers noted, there was very little naughtiness at the actual polls. That's a different matter from the US's funding of, and interference in, a campaign process preceding the actual vote.
.
One cannot write effectively on these matters without a basic understanding of Nic. history in the 1980s and before.

(Report Comment)
frank christian September 5, 2011 | 1:17 p.m.

TT - How does it go, "SORRY, world, for" writing about the wrong election?

Nothing I read mentions "US's funding of, and interference in, a campaign process" in Nicaragua, however since James Carville physically manipulated Israeli elections to get conservative Netanyahu out of the way for Clinton's "peace plan", I'll accept your simplistic view of what is "different".

Nicaragua has been stable since elections and Miami Herald once reported that it is one of the safest countries in the area. It's homicide rate lower than it's neighbors.

"One cannot write effectively on these matters without a basic understanding of Nic. history in the 1980s and before."
What an arrogant, elitist comment! "Nic." history can be available in minutes. IMO, "it becomes difficult to write effectively on these matters", when the writer's interest lies not with history but only an intent to demean a conservative Republican President.

(Report Comment)
Tim Trayle September 5, 2011 | 6:14 p.m.

FC, FC, FC...all I did was point out that the election you so proudly noted was free and fair was the 1984 election in Nic., held during a physical and economic war against the FSLN gov't., and one which the FSLN won handily. I continue to be glad (and frankly, to marvel) that you accepted FAIR's depiction of that election.
.
The US's interference in Nicaragua's 1990 election is well-known. It wasn't a covert operation.
.
I don't intend to demean Reagan. His own actions towards Nicaragua do that quite well.
.
Nicaragua is the poorest state in the western hemisphere, save Haiti. But they are wonderful people.
.
PS: It's not elitist to point out that people should have basic knowledge about the subjects of their discussions. And no, Google is not a substitute for knowledge.
.
Goodbye.

(Report Comment)
frank christian September 5, 2011 | 8:28 p.m.

TT - "Nicaragua is the poorest state in the western hemisphere, save Haiti. Right, I Google'd that, but they are not communist are they? Jimmy Carter gave us Hugo Chavez by accepting without question the results shown him by the government tho respected pollsters showed Hugo being defeated by a wide margin. The opposition asked for monitors long before elections. I read at least two accounts of election fraud fears in newspaper (didn't have Google) months before election day. Their fatal mistake was in the acceptance of Carter for that job. He of course is high on your "People to Respect" list, right? We now have two communist inspired governments in the Americas. Thanks to Reagan, that is all. Then,from you,"Google is not a substitute for knowledge." Another elitist proclamation. 'Bye

(Report Comment)
Derrick Fogle September 7, 2011 | 12:41 a.m.

Mike's point about Reagan's charisma is well made.

Frank's point that Reagan's deficits were spent solely on the military is important too. In the context of any debate about our current federal debt and deficit, it's critical.

Reagan started deficit spending on the military over 30 years ago. Macroeconomics doesn't care why the money is spent. It was classic Keynesian Economics spending policy, and it (along with DK's point) helped get the US out of the embargo-based recession.

The problem is, we never stopped, and we've never paid for it. We just kept deficit spending more, almost all on the military. The military currently owns about $16T of our $14T deficit. It still owes SS about $2.5T plundered from excess tax recepts that were *supposed* to cover future projected shortfalls, and keep us from wetting our pants over the issue.

Point being, we cannot balance the federal budget without either significant cuts to the military, or, raising taxes. As proof, I cite the "doomday" cuts that will take place if the latest deficit panel fails. Those doomsday cuts are a rare bit of honesty out of Washington: roughly a tax-fo-tax, dollar-for-dollar way to divvy up current receipts and balance the budget. In other words, a perfectly fair way to do it. The military is facing a 50% cut.

That 50% figure is almost exactly how much responsibility military spending has for our current deficit. Even if the military were first in line, and got ALL general revenue after foreign creditors were paid, it would still take a cut. That's how out-of-control it is.

That's why Reagan is the true father of all our debt and deficit problems. It wasn't just the amount he deficit spent, but also where it was spent: All on the military. He set the course, we've been following it ever since.

Now, we find ourselves broke, but still unable to voluntarily cut up and stop using the credit card Reagan issued us. We're going to yank the rug out from under people like Frank, instead.

(Report Comment)
Jimmy Bearfield September 7, 2011 | 7:43 a.m.

Congress has the ultimate authority over taxes and spending. Presidents can propose, cajole, browbeat, whatever, but in the end, it's Congress that determines what hits his desk to sign.

(Report Comment)
frank christian September 9, 2011 | 8:08 a.m.

D. Fogle - I've been gone but am wondering why you can never recall the inflation problem from those days? You seem to know everything else about them.

The Trayle source shows the problems "inherited" by Reagan from Carter.

"As budget reform encouraged deficit spending, the dramatic increases
of the 1970s inevitably followed. Inflation ran at more than
18 percent by January of 1980, with the prime lending rate climbing
to more than 21 percent that December" This information is from the House Appropriations Committee. In regard to the "deficit spending"of the time, most know that Reagan turned off the printing presses creating the deadly inflation. The "we" you like to refer to is in fact the Democrat controlled Congresses that lied to Reagan when they had to and ignored him when they wanted to (Grace Commission). I think folks of today do not understand the damage inflation can do to our economy. We have not had to worry about it because of the Presidency of Ronald Wilson Reagan.

(Report Comment)
frank christian September 9, 2011 | 8:44 a.m.

I wish I had added more to the above, "most know that Reagan turned off the printing presses creating the deadly inflation. - thus leaving "borrowing" as the only alternative to pay for the excess spending that had been the practice since, "budget reform encouraged deficit spending, the dramatic increases
of the 1970s inevitably followed." and hopefully help some of our more shallow thinkers, better understand.

(Report Comment)
Derrick Fogle September 9, 2011 | 12:11 p.m.

So, Reagan traded inflation for crushing debt. Was that really a win?

(Report Comment)
Jack Hamm September 9, 2011 | 12:31 p.m.

At add on to Derrick's post. Inflation is a natural market correction force. By circumventing inflation with public debt Reagan was in fact going against free market principles and utilizing command market controls, ie socialism.

(Report Comment)
Jimmy Bearfield September 9, 2011 | 2:57 p.m.

Again, it's Congress that controls taxes and spending. See http://thenewamerican.com/opinion/walter... for an overview of the roles of a president and Congress. It also has a handy reality check about another widely held belief: that Social Security is guaranteed.

(Report Comment)
Derrick Fogle September 9, 2011 | 5:14 p.m.

The spike in oil prices during the embargo *might* have had something to do with inflation in the 70s, as well.

(Report Comment)
frank christian September 9, 2011 | 6:31 p.m.

D. Fogle - "So, Reagan traded inflation for crushing debt. Was that really a win?"

"The spike in oil prices during the embargo *might* have had something to do with inflation in the 70s, as well."

Sir, those are incredibly ignorant statements and should end the last shred of credibility you ever had. Please, go tweet someone!

(Report Comment)
frank christian September 9, 2011 | 7:07 p.m.

J. Hamm - "At add on to Derrick's post. Inflation is a natural market correction force." - Puts you in Derricks box. Get comfortable. Counterfeiting currency also creates inflation. That is why our Treasury has agents totally dedicated to the arrest and prosecution of those involved in this felony crime. A federal government can do it legally but the result is the same, inflation above and beyond anything the free market might cause. In our country our government has done it in extreme cases, sincere efforts to benefit the people.

You two apparently fall into the group I wrote of above. "I think folks of today do not understand the damage inflation can do to our economy." Had you considered that today's action by BO and the federal reserve are creating the scenario that J.E. Carter foisted upon us? Probably not, you both are too busy, in my opinion, promoting progressive liberalism. Too bad.

(Report Comment)
Tim Trayle September 9, 2011 | 7:38 p.m.

There's nothing ignorant about pointing out the link between OPEC-embargo prices rises for oil, and 1970s inflation. Oil is a major input factor in the economy. It's used in core activities such as fueling all transportation practices, and heating homes.
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If these kinds of base-level input costs rise, we would expect to see the cost of end products rise in response. An example, if the price of oil rises, then it will cost more to make plastic. A plastics company will then pass on some or all of this cost to the consumer, which raises prices and thus inflation. There is absolutely nothing controversial about noting this, let alone "ignorant." That's because it happened.
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The direct relationship between oil and inflation was crystal clear during the 1970s, when the cost of oil rose from a nominal price of a mere $3/barrel before the 1973 oil crisis to around $40/barrel during the 1979 oil crisis. That was an utter shock to *every* nation that used OPEC oil as a significant portion of its energy needs.
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In the U.S., this helped cause the Consumer Price Index, a signal measure of inflation, to more than *double* from $41 in early 1972, to $86.30 by the end of 1980. Some perspective: while it had previously taken 24 years (1947-1971) for the CPI to double, during the 1970s it only took about eight years.
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Denial of the link between inflation and 1970s oil prices--that's where we see true ignorance and loss of credibility.
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Moreover--and here's what's really sad--there is absolutely NOTHING political in pointing out the relationship between oil prices and 1970s inflation! I don't see anyone referring to it as the *sole* cause of that. But labeling someone as "ignorant" because they point out the relationship--that's beyond the Pale.

(Report Comment)
frank christian September 9, 2011 | 8:32 p.m.

Mr. Trayle - You provided the undeniably accurate source that described the situation of the 70's and cited 18% inflation (I had noted 12%, but in those days that is what we were given to believe without Fox News,R. Limbaugh etc. to divulge the truth). Oil recently reached $140. per barrel. Show us the corresponding increase in our rate of inflation.

"But labeling someone as "ignorant" because they point out the relationship--that's beyond the Pale."

Mr. Trayle, when one - anyone whom cites the price of oil as a cause for our inflation, while ignoring the monetization of the Federal spending beyond the tax monies they, the Carter Administration, had collected, is either ignorant, or lying. Take your pick. Either, in my opinion is "beyond the Pale".

(Report Comment)
Mark Foecking September 10, 2011 | 5:37 a.m.

frank christian wrote:

"Oil recently reached $140. per barrel. Show us the corresponding increase in our rate of inflation."

Probably because we leave food and fuel out of the official inflation numbers. If you add those in, we've had a lot higher then 2-3% inflation since 2008.

DK

(Report Comment)
Tim Trayle September 10, 2011 | 8:26 a.m.

FC wrote this: "Mr. Trayle, when one - anyone whom cites the price of oil as a cause for our inflation, while ignoring the monetization of the Federal spending beyond the tax monies they, the Carter Administration, had collected, is either ignorant, or lying. Take your pick. Either, in my opinion is "beyond the Pale""
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Classic logical fallacy: monocausality.
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From FC's response, we learn that anyone who introduces a new factor for consideration when trying to explaim a historical development is labelled as "ignorant." That's because, according to FC, events can only have a single cause.
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No one suggested that the OPEC rise was the *only* factor in the inflation of the late 1970s. But since that's not a *political* factor, it means little to FC, because you can't bash liberal programs through it.

(Report Comment)
Derrick Fogle September 10, 2011 | 9:53 a.m.

There *is* such thing as a dumb question, then. Frank calls my 2 posts "ignorant statements" but can't answer the question posed in the first.

1) The price of oil was a larger factor in our economy in the 70s than it is now.

2) The relative increase in the 70s was more than 1,000%. The increase since 2000 peaked at about 600%, and is currently at about 400%.

The economic shock in the 70s was twice as large as the shock today; it happened almost twice as fast as the shock today, and the shock had a larger effect on the economy because oil was a larger part of our economy. There's actually a pretty good case to be made that the Dems are solely responsible for changing the way the CPI is calculated, effectively masking a much higher true rate of inflation today. But that part of Frank's brain gets closed and locked for this particular conversation.

3) If the printing presses in the 70s were solely responsible for 12-18% inflation, why aren't Bernake's presses, which have printed well over $1.2T in the last 2 years, causing similar inflation? (I will provide one simple math-based theory, after Frank spews more partisan vomit)

At least there's a little humor here... with Frank putting 'Jack in my Box.' LOL! You're welcome to come over any time, Jack.

(Report Comment)
frank christian September 10, 2011 | 10:57 a.m.

tt - Most folks involved in a debate of ideas present their best arguments, then seeing that those are lacking admit (at least mentally) defeat and move along. However, some such as yourself having joined the fray late and asked to prove your point as well as that of your defendant: "Oil recently reached $140. per barrel. Show us the corresponding increase in our rate of inflation.", you ignore the question and proceed to pummel me for even questioning the assertion.

Only the "core" inflation excludes food and energy. The CPI-U consumer price index- all urban consumers contains energy factors and after reaching a high 1990 of 5.4% has been far below that number (particularly during the period involving our highest gas prices) ever since.

For whatever reason you have decided to defend the parting shot of the losing Mr. Fogle, the shot was a blank. Politically motivated or not, neither he nor you have added any information pertinent to the discussion.

You continue to ignore the inflation created by J.E. Carter and the Democrat controlled Congress of the period. You and your cohorts can keep it up, I will not.

(Report Comment)
Derrick Fogle September 10, 2011 | 3:30 p.m.

OK, Frank spewed his partisan vomit. So, why hasn't Bernake's printing of over $1.2T in less than 2 years caused rampant inflation? Because that money never makes it into the real economy, where it *would* create massive inflation.

QE-X is basically handing money to the 6 "Too Big To Fail" banks, whose ex-employees fill almost every single position of the Fed board. Talk about an incestuous and conflict-ridden relationship... It shouldn't be any surprise that the Fed's idea of stimulus is to hand $Trillions of dollars directly to their cronies.

That money is given to those banks, supposedly, so they can lend it out to the "real" economy to spur growth. Why private sector debt is viewed as the answer to our problems to get growth going again, while public sector debt is viewed as the problem that chokes off growth, I don't quite understand. I don't think macroeconomics cares where the money comes from or why, but... I'm sure Frank can explain it to me, in simple partisan terms.

So, QE-X is supposed to spur private lending. But, private sector debt has continued to decline during QE-X. So, that money is obviously not going into the "real" economy. The fact is, much of it is simply kept, or, perhaps used to pay back TARP (D'oh!). That keeps it out of the real economy, and keeps inflation from spiking.

Some of that money does go into the commodities market though; mostly oil speculation, but anywhere there's a quick profit that might be had (certainly not investment in domestic manufacturing), you can find QE-X money there. The inflation we've seen in the last 2 years has been concentrated almost entirely in the commodities market. This is why the market has gone up substantially since the 2008 crash, but the real economy has gone... absolutely nowhere.

I do find it amusing that Frank claims real inflation in the 70's spiked at 18%, not 12%, but then touts the CPI-U as being accurate. The CPI-U figures show the highest annual inflation rate between 1972-1981 was 13.5%. I'm sure Frank has some reason that LBJ forced him to fudge those numbers.

Average annual inflation 1972-1981 was 8.6%.
By comparison, highest 2001-2010 was 3.8%; average was 2.4%.

ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

Inflation was roughly 4 times higher in the 70s than the 00s. Half of that can be accounted for because the spike in oil prices was twice as large, and our economy was much more dependent on oil prices then; the other half can be accounted for because the market was not nearly as sophisticated and able to capture and keep money the Fed printed; far more of it made it into the real economy back then, and inflation much higher as a result.

Now, let's talk about dollar devaluation, shall we? Frank?

(Report Comment)
frank christian September 10, 2011 | 3:38 p.m.

D. Fogle - If "So, Reagan traded inflation for crushing debt. Was that really a win?", was your first question, I can tell you that "crushing debt" was not part of Reagan's plan. He spent on our defense because of the Cold War and "keeping up" caused the implosion of the USSR at least sooner, rather than later. The Democrats then, as now provided "crushing debt" but American were allowed to see it, rather than wonder why everything has gone beyond financial reach to them, while being told the extreme rate of inflation was their fault!

If rising Oil prices (the embargo lasted six months) caused 2 digit inflation why did Volcker try to solve the problem by raising interest rates?

"If the printing presses in the 70s were solely responsible for 12-18% inflation, why aren't Bernake's presses, which have printed well over $1.2T in the last 2 years, causing similar inflation? Hasn't most of Bernake's gifts been received in the last 6 months? Can you name someone, not a Democrat, that is not expecting debilitating inflation when the economy finally picks up?

(Report Comment)
Derrick Fogle September 10, 2011 | 4:02 p.m.

For the record, I totally agree that Democrats shoulder most of the blame for not staunching the flow of red ink after Reagan started it. My only argument has been that Reagan was, most certainly, the one who *started* it. Everyone since has just been running the copy machine.

(Report Comment)
Tim Trayle September 10, 2011 | 5:11 p.m.

Frank "the embargo only lasted six months" Christian somehow forgets the second oil shock of the 1970s, that brought on by the fall of the Shah of Iran in 1979:
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http://www.wtrg.com/oil_graphs/oilprice1...
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"If rising Oil prices (the embargo lasted six months) caused 2 digit inflation why did Volcker try to solve the problem by raising interest rates?"
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Fed does what Fed can do, and it can't do a whole lot about the price of crude. Volcker's restrictions on money supply stopped job growth, and in response to hard times, businesses began cutting prices (and workers their demands for pay rises). Volcker argued this would reduce inflationary pressures in the US economy.
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Red-flag-to-the-bull-time: We should note that Reagan was bit player in the eventual collapse of the USSR. If people who follow the myth of his credit for that collapse (*or* its collapse occurring "sooner rather than later") would read a few researched books on the subject, they'd see that. (Evidence could be offered, but I'd need an assurance that it would actually be read with an open mind. It's tiring to have one's evidence-based arguments--a la Nicaragua--dismissed on purely ideological grounds.)
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Or, heck--we could just try and find, once more, the actual main argument in this thread.
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Or just drop it altogether.
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PS: I too agree that congressional Democrats certainly jumped into the deficit game with both feet.

(Report Comment)
frank christian September 10, 2011 | 6:43 p.m.

fogle, tt - Reading you two in your effort to demean capitalism and it's defenders and make your progressive liberalism and it's Democrats, sound reasonable is like watching Keith Olberman and Rachael Maddow at the same time.

"For the record, I totally agree that Democrats shoulder most of the blame for not staunching the flow of red ink after Reagan started it"

"I too agree that congressional Democrats certainly jumped into the deficit game with both feet."
If you had made these statements a few months, days or earlier this pm much time, thought and angst could have been saved. All, it appears is left, is to remove the smear to Reagan's reputation.

Reagan was most certainly not the one to start our deficit problems. The Democrats that so now appall you covered Johnsons Great Society and Vietnam WAR by "borrowing" from SS. They have since "borrowed" it all. Carter and his Democrats covered his ass with the Fed presses. Reagan did the only honest thing possible, borrowed the money Tip O'Neill and his democrats as you have admitted continued to spend. They outright lied to the President twice to get him to sign loophole closing legislation that those carefully researched leftist publications now scream, Reagan "raised taxes"! Do the leftist publications mention that the day Reagan got on his airplane at Keflavík airport leaving Mikhail Gorbachev wondering where to borrow the money to contend with a "star wars" SDI, defense system, was the effective end of the Soviet Union.?

A lame FC, FC, FC will now be forthcoming.

(Report Comment)
Tim Trayle September 10, 2011 | 8:00 p.m.

FC: "...demean capitalism and it's [sic] defenders."
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Oh c'mon Frank--I shudder to think that you might possibly imagine that *that* is what this argument has been about.
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If you want to make a case that the collapse of the USSR was brought on most powerfully by US defense spending, you'll need to make a better case than a simple (but heartwarming) story about Reagan and a plane ride. Do please make the case. It's an appealing notion in the U.S., for very understandable reasons--*but* it's not sustained by the evidence (domestic USSR evidence and also CIA evidence). But heck, you've made the claim, so make the case if you want it to be taken seriously.
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In any case, there's no need to get all huffy and in a snit. Speaking for myself alone, I have intervened in this thread in order to correct claims when I saw some great gaps in logic (monocausality) and historical errors (omission of key facts relating to Reagan and deficits; Nicaragua as a "serious threat"; Nicaraguan elections issues; denial that the oil shocks of the 1970s were a *major* factor in the inflation of that decade; Reagan and the USSR--none of which you responded to in anything like a persuasive and fact-based manner. Instead, you *continually* resort to overheated and explicitly partisan rhetoric. Why? It doesn't help your arguments, so why?)
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Still, it the end, I am sorry that you feel capitalism is being "demeaned." It must feel poorly. But you know, with good people like you to defend it, I think it'll be around a long, long while!

(Report Comment)
Derrick Fogle September 10, 2011 | 8:13 p.m.

Let's see, deregulation of the financial industry and commodity markets in 1999, and in less than 10 years, a complete collapse in those same markets. The requirement of the infusion of about $2.5 Trillion so far...

I don't think anyone else needs to demean capitalism. I think it's doing fine ruining it's reputation all by itself.

(Report Comment)
Daniel Jordan September 10, 2011 | 9:34 p.m.

" . . .Fox News,R. Limbaugh etc. to divulge the truth [.]" Okay. Got your number now. Dysinfotainment, repeated often enough with sufficiently flashy graphics, becomes the truth. As a wise man once said, controversy is cash.

(Report Comment)
frank christian September 10, 2011 | 9:58 p.m.

I guess I erred in the thought you two had agreed that Democrats have incurred deficit spending during the years you like to question or blame on Presidents(wrong, President Reagan is the One). It must have been only a Washington D.
C. moment. Is that the Krauthammer label, (can't remember and can't find it) when Democrats are caught telling the truth?

Trayle, you once spoke of what the Glasgow Scots would do in a situation. I would suggest that you may have been at risk among we, me, the people to broadcast "If you want to make a case that the collapse of the USSR was brought on most powerfully by US defense spending, you'll need to make a better case than a simple (but heartwarming) story about Reagan and a plane ride." I knew that USSR was on the way out when He walked away from communism and showed them they could not WIN. There were those of your ilk at the time that cried about "negotiation". Too bad that in spite of Reagan's attempts to prolong the history of the greatest, most benevolent Nation ever conceived in the history of our world, we have you and yours writing and undoubtedly promoting and voting for an ideology markedly similar to the one Reagan so opposed. Why, on earth, Why?

(Report Comment)
Derrick Fogle September 10, 2011 | 10:21 p.m.

Why did Volcker raise interest rates? American workers had been experiencing quite a boom in wages and standard of living during the previous decade. The wealthy elite, no so much. Corporate profitability had been falling since 1966. Productivity growth had nearly stagnated. Unions were sticking it to the man. The wealthiest <1% were experiencing a decrease in real income. There was also the crisis of military confidence after Vietnam.

In 1979, at the behest of Rockefeller, the hapless and clueless Carter appointed Volcker to the Fed. Volcker promptly announced that America's standard of living must decline. He then engineered a deep recession to do just that, by severely constricting the money supply and driving interest rates to nearly 20%.

As with any recession, the voters took it out on the majority party in Washington (It doesn't matter which one it is, global political history shows this always happens to whatever party happens to be in power at the time). Reagan was swept into power. By firing the Air Traffic Controllers, he signalled open season on unions. He also slashed taxes on corporations and the wealthy elite, and moved domestic spending from social programs to the military.

From the point of the wealthy elite, this has been incredibly successful. Worked compensation stagnated, but corporate profits soared, and the wealthy elite have seen increased their share of income and wealth by over 250%. The bottom 90% saw an aggregate increase of... nothing.

This has been your class warfare rant of the day. Now please hand 17% of this country's income to the government, to be redistributed to Frank and the Military; and another 25% to the wealthiest <1% so they can hold it out of the economy or drive up commodity prices with it.

And when you think about the 17% the government takes, and the 25% that the wealthy elite take, together, it should put you in the mood to go read some Douglas Adams.

(Report Comment)
frank christian September 10, 2011 | 10:39 p.m.

daniel jordan - A wiseman once said, obtain all the information you can absorb from every source you are able to access.

Now we have you making light of one of those sources. Are you wise, or what?

(Report Comment)
frank christian September 10, 2011 | 10:54 p.m.

DF Its too late. I'll address your comments and science tomorrow, if of course you don't mind.

(Report Comment)
Derrick Fogle September 10, 2011 | 11:00 p.m.

Fox and Rush = "Dysinfotainment." I like it. :-)

This place is the best entertainment value in town, since the Trib boards got shut down by the paywall.

(Report Comment)
Derrick Fogle September 10, 2011 | 11:06 p.m.

I'm waiting with baited breath, Frank. I made that post specifically to push your buttons. Sleep on it, and come out swinging tomorrow! Like I said, the best entertainment value in town.

(Report Comment)
frank christian September 11, 2011 | 9:25 a.m.

D Fogle - Do you dream your stuff late at night, or make it up as you go along? Sorry, I don't have time for this hodge-podge of clap-trap. Try to sell it to a liberal.

(Report Comment)
Tim Trayle September 11, 2011 | 9:46 a.m.

FC: "we have you and yours writing and undoubtedly promoting and voting for an ideology markedly similar to the one Reagan so opposed. Why, on earth, Why?"
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Oh, sticks and stones. But really...oh my...are you *seriously* claiming that I'm some kind of commie? You're too too funny.
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Still, thanks for making things clear: we now learn that there are two groups of people in this old world: those who unequivocally admire Reagan's policies, and...commies (or at least fellow-travelers).
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No room in-between folks! Fall in line.
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I'll see you around the boards, FC. Evidence-based Whack-a-Mole will continue.

(Report Comment)
Jimmy Bearfield September 11, 2011 | 7:57 p.m.

"The bottom 90% saw an aggregate increase of... nothing."

Yeah, there's been so little opportunity the past 30 years that tens of millions of immigrants moved here legally and illegally. Each issue of Entrepreneur magazine is full of success stories. Right now, I'm watching "How I Made My Millions" on CNBC. Plenty of opportunities for those who are willing to go out and stake their claim in life.

(Report Comment)

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