National Retirement Infrastructure – Part 3

By J.D. Alt

1. Why we can afford it—2. Why we need it—3. How we can build it

3. How we can build it.

Cohousing, as briefly explained in Part 1, offers a uniquely supportive context for retired living. Cohousing communities consist of between 10 and 30 privately occupied and maintained dwelling units which share certain common facilities, amenities and, in some cases, social responsibilities and activities. It is this “commons” sharing that can potentially provide a retired person with benefits they otherwise could not afford to have, or have easily. For example, the shared facility might include an apartment for a live-in nurse-assistant/care giver who would provide assistance, in each of the private dwellings, as needed. Or, the “commons” might include a small exercise pool that individual retirees can utilize for a daily work-out. “Traditional” cohousing projects typically include a common cooking and dining facility where at least one meal a week is a shared community event—(individual dwellings have their own small kitchens as well.) In general, the goal is to create a comfortable balance between private autonomy and community activities.

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The Big Lie at the Core of Pete Peterson’s Attack on the Baby Boomers

By William K. Black

For the purposes of writing a column I ended up reading materials written by the financial industry PR specialist Makovsky and found this nugget. A Makovsky executive was interviewed about Millennials and he explained the finance industry’s perspective on that group.  Millennials have been leading victims of financial fraud and the resultant Great Recession so they have no love of financial firms:  “the four major banks in the U.S, were ranked in the 10 least loved brands among Millennials according to Viacom.

The Millennials’ disdain for big finance is terrifying to finance for an excellent reason that Makovsky quantified.

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National Retirement Infrastructure – Part 2

By J.D. Alt

1. Why we can afford it—2. Why we need it—3. How we can build it

2. Why we need it.

What is retirement anyway? For most people it seems to be the end of that middle period of their lives where some business, or institution, or civic entity has paid them Dollars in exchange for their labor or personal services. This “Dollar-earning-in-exchange-for-work” period can end at various points in a life-span, for various reasons planned or unplanned: Some of us become disabled by health catastrophes in our 40s or 50s, some find the particular skill we learned or developed over the years is suddenly no longer in demand (and it’s much too late to start over again). Many people are forced to stop providing their labor or services at a certain age by retirement rules designed to create employment openings for the younger generation coming along behind. While a few are fortunate enough to continue earning Dollars in exchange for their services right up until the very end—entertainers, writers, highly specialized professionals come to mind—the vast majority of U.S. citizens all share the same basic fate: at some point in time, with many years or even decades remaining in our life-span, we will cease earning Dollars in exchange for our labor or services.

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Merkel’s Pyrrhic Victory over Cameron

By William K. Black

The old line that one should be very careful about what one wishes for – for you may receive it applies to Germany’s installation of Jean-Claude Juncker as head of the EU Commission. Germany’s Prime Minister Angela Merkel has just crushed her UK counterpart (David Cameron) by orchestrating a nearly unanimous vote among EU nations to appoint (not, really, “elect”) Juncker as head of the EU Commission (not, really, “Parliament”).

The old days of needing to hide Germany’s control of the EU through the façade of a German-French partnership are long gone.  EU nations know that there will be a high price to pay for attempting to buck Germany – and that the effort will fail.  Cameron’s effort to block Juncker is generally viewed outside of the UK as quixotic and humiliating while Merkel is viewed as reigning supreme and serene.

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National Retirement Infrastructure

By J.D. Alt

1. Why we can afford it—2. Why we need it—3. How we can build it

1. Why we can afford it

We, who face mass retirement at the same moment our life-expectancy has been stretched far beyond the retirement savings we managed to set aside during our working years—and anticipating that future generations will face equal, or even more difficult retirement circumstances—we offer to provide the initiating, planning and management efforts required to build, for our collective use, a permanent “National Retirement Infrastructure.” This infrastructure will provide us with housing and social accommodations over the next several decades and, subsequently, be passed on to the next generations inevitably to follow.

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Corporate Fraud is Up Dramatically: Has anyone told John Cochrane?

By William K. Black

John Cochrane, the U. Chicago apologist-in-chief for elite corporate criminals, might want to read what the industry says about fraud.  Cochrane claims that the reason we have a modest economic recovery has nothing to do with inadequate demand, but is instead caused by government civil suits (not even prosecutions) against the financial industry’s massive frauds.

Cochrane apparently knows that corporate fraud does not exist, which is why he describes the government’s civil fraud suits as a “witch hunt.”  As I’ve described several times, Cochrane refuses to read the relevant criminology literature, but perhaps he’s willing to listen to the industry.

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It’s Long Past Time for Krugman to Name and Shame NYT’s Eurozone Reportage

By William K. Black

Monday, July 7, 2014 provided another example of Paul Krugman explaining why austerity was an insane response to the Great Recession and the New York Times authoring another of its endless articles that assumes that austerity is essential to a eurozone recovery. I have no problem with the NYT reporters providing their rationale for why they concluded that Krugman was wrong and that austerity is the proper response to a recession. My problems are with the NYT reporters ignoring Krugman’s views – views shared by the great bulk of economists – and with their failure to question whether austerity is the proper response to a recession.

Recessions occur when demand becomes seriously inadequate and industries fire workers and decrease production and investment. Austerity further reduces already inadequate demand by reducing public sector demand. Austerity is akin to bleeding the patient (the economy) to make him well. It would, therefore, be exceptionally strange if austerity were to be the optimal response to the Great Recession. We have a great deal of real world experience in dealing with recessions that confirms that austerity is self-destructive in such circumstances.

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Gowex Shows Why Lending is the Best Venue for Accounting Control Fraud

By William K. Black
(Cross posted on Benzinga.com)

A classic accounting control fraud, Gowex, has collapsed in Spain.  Gowex was a wi-fi firm.  It was able to run its scam for at least four years.  It was a crude scam that involved simply making up contracts and borrowing to grow rapidly.

“The US firm Gotham City Research had described Gowex as a ‘charade’ and said that its revenues were ‘at most’ 10% of those reported.”

As soon as Gotham City Research blew the whistle on Gowex it made it impossible for Gowex to borrow additional funds and avoid collapse.

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Obama Consults a “Wide Variety of Economists” – Just Not Those Who Got it Right

By William K. Black

In a PR effort that aptly illustrates his approach to governance, President Obama has revealed that he is meeting with a “wide variety of economists” to try to figure out what economic policies he should follow.  “Obama Seeks Advice From Wide Variety of Economists.”

Obama is already well into the lame duck phase of his presidency, so this is simply a PR exercise.  The message Obama wants to send is the same one he has sounded throughout his presidency.  He is open to economic views from the parts of the political spectrum that range from the hard right to the mild left.

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“Debt-Free Money” and “ZIRP Forever”

By Scott Fullwiler

I wrote a while back about how neoclassical economists don’t realize their view that interest on reserves (IOR) stops “printing money” from being inflationary also means that it’s impossible to create inflation by “printing money.”  See here.

I’m not 100% sure on this one (and please feel free to correct me if you know better than I do) because I admittedly haven’t given the literature a thorough read, but from what I can tell, it appears “debt-free money” advocates may not realize they are similarly overlooking the actual operations of the monetary system.  So, apologies in advance if I’ve misinterpreted.

From what I’ve seen, “debt-free money” (DFM) advocates want a world in which the government spends via cash (i.e., paper money).  They are against government issuing bonds or any interest on the debt, since that would suggest the government’s money isn’t “debt free” (again, please correct me if I’m wrong in this description).

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