Reviving a European democracy

By John Lloyd
June 3, 2013

The rich are always with us, and we’ll have more of them soon. A report last week from Boston Consulting Group shows that the global millionaire population is some 13.8 million. That is twice the size of Switzerland, which is, incidentally, where many of them have parked much of their wealth. More will accrue, and more individuals will pass the million-dollar mark. Global private wealth will, says Boston Consulting, grow by almost 5 percent per year over the next five years, reaching $171.2 trillion.

This is what we, who like precision in such matters, call “a lot.” The millionaire population in the UK – the fourth-largest in the world – stands at over half a million households. This is so many that when I reminded a wealthy friend of mine, who was complaining about a personal setback, that she was a millionaire, she snapped, “Isn’t everybody?” Tactless as the response seemed, the rich hobnob with the rich. After a while it becomes the prevailing wisdom.

Within rising global wealth, BCG sees a sign that Western economies are edging upward at last. Indeed, the United States seems to be set for appreciably faster growth. But Europe is stuck in recession; If there is growth, it’s anemic and is happening outside the euro zone.

Some 6 million young people are unable to find work in the European Union. This is fewer than the more alarmist figures of a quarter or more of youth unemployment, but it is a vast army nonetheless ‑ one governments hope will not do what armies do, which is stop marching and start fighting.

These doleful figures have plagued Europe for several years. But most of us assume – or are assured – that things will get better, since they have in postwar years, until now. Stephen D. King, the group chief economist of the banking giant HSBC, wrote the recently published When the Money Runs Out: The End of Western Affluence (Yale University Press), in which he says:

Our societies are not geared for a world of very low growth … persistent postwar economic success has left us with little knowledge or understanding of worlds in which rising prosperity is no longer guaranteed.

Before they helped to create a world of rising prosperity, Europeans developed two powerful streams of political thought that ultimately allowed for the peaceful governance of their societies when they came into their own after World War II. One – which could date its beginning to 150 years ago in May 1863, with the founding of the German Workers Association – was social democracy. It was an ideology that in its early years swung between revolution and reform, but which, especially in its British incarnation, the Labour Party, chose the latter route of seeking to tame capitalism and improve the conditions of the poor with the weight of the popular vote.

The other route – Christian democracy – is a little over 120 years old, seeing its foundation in the encyclical Rerum Novarum -  literally, “Of New Things” and in its common meaning, “Of Revolution.” Pope Leo XIII, who wrote the encyclical, was alarmed both by the greed of the capitalists and by the rising discontent of the industrial proletariat. He sought to describe the mutual dependence and differing responsibilities of the worker and proprietor – the first was to work “faithfully,” the second to pay “fairly.” A worker who could not obtain a fair wage was, says the document, “a victim of force and injustice.”

Over time the substantial claims of these two great and antagonistic ideologies came to resemble each other. Social democrats like those in the Catholic Church rarely admire capitalism, but they no longer wish to destroy it. The best-known theorist of modernized social democracy, Anthony Giddens, wrote in Beyond Left and Right that “the only common characteristic of socialist doctrines is their ethical content … ideas brought together by a condemnation of the evils and injustices of capitalism.” It is a claim that rests on the fact that few leftist governments hew to the once-standard policies of nationalization, workers’ control or the high taxation of the rich.

Both social and Christian democracies are weaker today. The Catholic Church is led by the Argentine Pope Francis, who has stressed the need for solidarity, observing tartly that “while the income of a minority is increasing exponentially, that of the majority is crumbling.” Francis’ power to shame the wealthy minority into renouncing their pursuit of riches will be limited, as was the futile gesture of the Socialist Party president of France, Francois Hollande, in making the actor Gerard Depardieu pay the 75 percent wealth tax last year (an action later judged unconstitutional).

In a lament for the passing of a social/Christian democracy that enjoyed widespread support through much of the Western world in the decades after the war, the late scholar and writer Tony Judt argued in one of his last public appearances that the only impetus to revive such a political economy and to escape from what he saw as the dire consequences of a steadily fragmenting and unequal world, was a “social democracy of fear.” The fear, of course, would be of social disturbances that such a fragmented world would bring, as well as of the poverty it would re-impose.

The ethical energy of these two versions of democracy that have been dominant in Europe for the past six decades is diluted today. King is likely right in his view that the more we face aging societies, ascendant new nations and increasingly costly resources, the less likely it is that we will not recover the fine, careless assumption that growth is our birthright. The United States, too, faces higher health and welfare bills over the next two decades – at the end of which the federal debt is forecast to be 90 percent of gross domestic product. The “end of Western affluence” in King’s title may be more than hyperbole.

We will need to find, within fear or in a change of heart (fear seems more likely), a way of identifying which economic arrangements will keep democracy on the road. The way is not easy to glimpse; but it’s a central task for the coming generations of politicians.

PHOTO: Protestors scuffle with French CRS riot police in front of tyre maker Goodyear Dunlop France headquarters during a demonstration against job cuts in Rueil Malmaison, near Paris March 7, 2013. REUTERS/Jacky Naegelen

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To hell with Europe! We’ve got enough of the same wealthy problems in the US.

Apparently, it is not just your friend “who was complaining about a personal setback, (to which you replied) that she was a millionaire, she snapped, “Isn’t everybody?”, but you obviously suffer from the same disease.

“Tactless as (this article really is), the rich hobnob with the rich. After a while it becomes the prevailing wisdom.”

Although the “rich are always with us” that doesn’t mean we can’t take steps to reduce the effects of the disease, even if we can’t cure it completely.

Posted by EconCassandra | Report as abusive

Lovely how EconCassandra always automatically starts ranting about articles like this, with the exact same empty statements about the pure evils of wealth. Yet solutions are always similar and empty

Posted by theAntagonist | Report as abusive

Lovely how EconCassandra always automatically starts ranting about articles like this, with the exact same empty statements about the pure evils of wealth. Yet solutions are always similar, and empty

Posted by theAntagonist | Report as abusive

@ theAntagonist –

The solution, as I have pointed out many times previously, is very simple.

To cure the disease, you must return to when the first sign of serious infection began for this current bout of the illness.

(1) We must reverse what has been done for the past 30+ years in terms of tax laws, free trade and banking “nonregulation” that the wealthy class has managed to implement over that period of time.

(2) Since ALL of their wealth has been obtained by fraud — mainly through manipulation and bribery of government officials — there must be an immediate clawback of their ill-gotten wealth.

The reason for this is straightforward. ONLY the wealthy class has the money to get the global economy back on its feet again, and functioning properly.

(3) Present government officials should be removed and replaced. The laws governing their conduct should be strengthened significantly, including at a minimum, term limits and the elimination of lobbying (i.e. legalized bribery) that has been one of the major reasons why we now have a totally corrupt government.

The Rx must be repeated when necessary to prevent reinfection.

Rather than an empty solution, I see this as quite an effective cure for what ails this economy before the disease progresses to the point where it becomes terminal.

Posted by EconCassandra | Report as abusive

@ theAntagonist –

You state “Lovely how EconCassandra always automatically starts ranting about articles like this, with the exact same empty statements about the pure evils of wealth. Yet solutions are always similar, and empty.”

It is far easier to take cheap shots at someone who expresses an opinion, while at the same time offering none of your own.

I would be interested in hearing your solution to the US/global economic crisis.

Never mind saying there isn’t one, because the data that indicates otherwise is overwhelming.

Put your solution where your mouth is, so to speak.

Posted by EconCassandra | Report as abusive

Mr. Lloyd,

Your article is nothing more than a wealthy class cerebral dissertation that ignores the reality of what you are supposedly disclosing.

Here is the real truth behind your article, and the why we need to do something about the damage done by this latest rise of the wealthy class.

——————-

World faces lost decade of joblessness, ILO warns

International Labour Organisation’s report warns of social unrest and growing inequality as number of unemployed people worldwide continues to grow

Katie Allen
guardian.co.uk, Monday 3 June 2013 06.56 EDT

The world’s advanced economies will suffer a lost decade of jobs growth with more people unemployed for longer and more dropping out of the labour market altogether, a key report has warned.

The International Labour Organisation says the risk of social unrest is rising as inequality worsens and unemployment continues to climb, and it will be “a major global challenge for the years to come”.

It predicts that employment rates in advanced economies will not return to pre-crisis levels until after 2017, more than 10 years on from the start of the global financial meltdown. It forecasts that emerging and developing economies will recover sooner, returning to pre-crisis employment by 2015.

The annual World of Work report warns that at a global level, the number of unemployed people will continue to increase unless policies change. Global unemployment is expected to approach 208 million in 2015, compared with slightly over 200 million now.

It also stresses that key labour market weaknesses that preceded the crisis have “remained acute or worsened”. For example, over the past five years, long-term unemployment has increased in almost two-thirds of advanced and developing countries where data is available.

“In advanced economies, unemployment spells have lengthened and more workers are becoming discouraged and dropping out of the labour market altogether. This not only has adverse consequences on individuals and their families, but also can weaken previously stable societies, as opportunities to advance in a good job and improve one’s standard of living become the exception rather than the rule,” the ILO says.

A combination of jobs destroyed as economic growth faltered and a growing working-age population mean that more than 30m jobs are needed to return employment to the pre-crisis level of 56.6%, the organisation says.

Report author Raymond Torres says countries need to come up with well-designed employment and social policies to consolidate the gains where a labour market recovery is under way and to kickstart job creation in severely crisis-hit countries.

But he sees serious long-term challenges in most countries, noting that a recovery in corporate profitability and stock markets in most countries does not appear to be resulting in strong jobs growth. Instead, unspent cash in the accounts of large enterprises has reached $5tn in advanced economies, exceeding pre-crisis levels, while executive pay is also increasing.

“Economic and social inequalities are on the rise and this may affect long-term recovery prospects,” says Torres.

“Almost everywhere, young people and women find it difficult to obtain jobs that match their skills and aspirations. It is crucial to ensure that the spectacular advancements in educational attainment among youth in recent years are matched by commensurate decent work opportunities. The risk of social unrest is on the rise in most regions. This is a major global challenge for the years to come.”

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http://www.guardian.co.uk/business/2013/ jun/03/world-lost-decade-unemployment-il o#start-of-comments

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What is perhaps the most important paragraph in the above article is this one:

… “he sees serious long-term challenges in most countries, noting that a recovery in corporate profitability and stock markets in most countries does not appear to be resulting in strong jobs growth. Instead, unspent cash in the accounts of large enterprises has reached $5tn in advanced economies, exceeding pre-crisis levels …”

In other words, what the wealthy class is doing is hoarding their profits to amass new fortunes to pass on to their progeny so that they can become the new landed gentry — a return to their good old days, all at our expense.

The ugly truth, is that EVERYTHING the wealthy elite tell you is a lie.

ALL of it designed solely to keep you in your rightful place, which is in servitude to them.

As the article above points out, we have little time to cure the disease they represent and return to the best of times for us, which were during the last half of the 20th century when their powers were at its weakest.

Failure to recognize the existential threat the wealthy elite represent means the present societies in the world as we know it today will soon collapse into chaos.

These people aren’t worth what they are demanding we do for them.

Do you want to give your children the “gift” of servitude to the wealthy elite as it has been throughout most of history, or are you willing to face reality and do something about it NOW?!

Posted by EconCassandra | Report as abusive

Mr. King hits the nail squarely on the head when he states: “Our societies are not geared for a world of very low growth … persistent postwar economic success has left us with little knowledge or understanding of worlds in which rising prosperity is no longer guaranteed.”

It should be obvious that the “new normal” is going to be greater and greater efficiencies in all commercial enterprise. We are seeing more and more production from fewer and fewer people due to the more and more effective use of computer capabilities and coordination as well as greater and greater efficiencies from using fewer people with more automation.

The inevitable result is that more and more of the lesser skilled people cannot find a job and those of skills becoming obsolete are finding it harder and harder to hold onto the one they have. Until and unless present tax incentives are revised these trends can only get worse, and yes, it hits the young and inexperienced as well as the older pre-retirement worker quite disproportionately.

The original “mission statements of the Social Democrats and the Christian Democrats, have gradually merged into the present form of failing Socialism practiced in Europe that is so rapidly “running out of other people’s money.
King correctly perceives in a time of “…aging societies, ascendant new nations and increasingly costly resources…” it is increasingly obvious that the growth which has made possible every previous economic success has become, in and of itself, unsustainable.

Increasing health and welfare bills in the United States are also unsustainable, and yet “our politicians” seem bound and determined to add some twenty million or so useless illegal alien invaders from south of the Rio Grand to obligations to present citizens that cannot be financially met. The short sightedness and utter stupidity of such people is nothing less s than frightening.

I do not see an orderly way forward even were a desirable path clear. Politicians and bureaucrats are ALWAYS “behind the curve”, turning the wheel long after a collision with the iceberg ahead is unavoidable.

The difference today is that there is NO path “ahead” free of icebergs and so economies are slowing down and stopping because there is simply no other rational choice. On the other hand, it is time for those trained in the “dismal science” of economics to begin examining the pieces of our present puzzle and how they can be otherwise assembled. We must use what we have, where we are, now.

We can no longer march to the beat of the old drums of “growth, “recovery”, and “creating jobs”. But march we must. There must be some incentives more seductive than fear to induce those “sitting on cash” to invest in building a workable future for productive societies. “Circling the wagons” to protect assets that inflation and consumption taxes will inevitably reduce in time is not a long term strategy.

Posted by OneOfTheSheep | Report as abusive

For starters, I’d like to see some direct accountability, direct link between Commission and the people. So that citizens can pull the chains at times when ”supranational” entities run amok.

Posted by satori23 | Report as abusive

Let’s see, democracy is a concept whereby individuals have equal say in their government. Or, an oft quoted “substitute”, since a pure democracy is really not feasible in our society for a whole lot of good reasons, we are supposed to be a “representative democracy”. You know, we elect people locally to represent us in our national government, for example, the US Congress.

What we really have in the US is a “plutocracy”, which means:

1. the rule or control of society by the wealthy
2. a state or government characterized by the rule of the wealthy
3. a class that exercises power by virtue of its wealth

Notice the repeated use of the words rule, control and wealthy (or wealth).

If you think the wealthy elite are not affecting your lives negatively on a daily basis, think again.

Here is an article to reinforce my point.

———————-

Price-gouging cable companies are our latter-day robber barons

Monopolistic cable providers make internet access an unaffordable luxury for tens of millions of Americans

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Heidi Moore (updated)
Heidi Moore
guardian.co.uk, Tuesday 4 June 2013 13.47 EDT
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One percent of American households cancels internet service every year – largely because of its artificially high cost. Photograph: Sipa Press/Rex Features

Last year, about 1% of American households cut off their internet service. That’s not as surprising as experts may suggest.

The internet – which promised to connect all Americans with everything from educational opportunities to Facebook status updates – has become, unfortunately, a luxury even for the middle class. Cable companies that have functioned as oligopolies have made it that way.

Naturally, more Americans would cut off internet service considering how absurdly expensive it has become to pay to stay connected. The median income for a household in the United States is just over $50,000, which has to support a family with basics like food, mortgage or rent, a car and gas. Inflation has steadily driven up the price of food and gas, which has meant that American wages have actually dropped since the recession. School costs, healthcare and other costs mean many families depend on credit cards on occasion. That doesn’t leave a lot of room for splashy purchases.

Yet, strangely, internet access – which is a necessity in homes where children get their homework online and parents may telecommute – has become the splashiest purchase of all. In many big cities, internet access can easily become a budgetary sinkhole for families. Think of $100 a month for cable and internet, another $50 a month for a smartphone, $40 a month for an iPad or a similar device; if you travel, add $70 a month for some kind of wireless hotspot like Verizon’s Mi-Fi.

Competition drives down prices, and the world of cable and internet access has largely done away with the threat of competition. At home, if you don’t like Time Warner’s prices, you can’t turn around and get Comcast; you’ll have to spring for satellite service or hope Verizon FiOS serves your area. And once you have those, there’s no guarantee they’ll suit you or that their billing will be any better.

The result is that Americans are being willingly pick-pocketed. Internet service is costly because internet providers refuse to compete with each other, ensuring they can charge high prices. They rationalize it like this: even though the cable companies have a gross profit margin of around 97% – meaning 97 cents of every dollar they make is pure profit – they still have to pay to service cell towers and invest in broadband. They have expensive equipment to maintain, see? That’s not monopoly pricing power. That’s just basic subsistence.

Unfortunately, their arguments fail for two reasons: the first is that those companies are not actually investing in equipment as much as they would like you to think. There is a cable graveyard littered with “overbuilders” that tried to create fast, wide internet access networks to compete with the giant incumbents like Time Warner and Comcast. Those overbuilders failed.

Another problem with the argument is that “recovering fixed costs” is not a problem; the cable companies’ networks are already bought and paid for, many times over. The cable companies have such incredibly high profit margins – “comically high” in the words of one Sanford C Bernstein analyst – that they don’t have any problem covering their costs. The Open Technology Institute noted in a recent report, “cable companies invested over $185bn in capital expenditures between 1996 and 2011. But these networks generated close to $1tn in revenue in the same time period.”

The lack of either existent or upcoming competition taught the larger cable companies that it pays, literally, to get lazy and complacent: not only would they refuse to compete with each other, but there was also nothing to fear from any aggressive startups.

The lack of any pressure to improve means Americans are forced to keep overpaying for internet service or give it up altogether. There are estimates that 100 million people in the US – or roughly a third of the population – do not have internet access at home.

It’s not unusual for middle-class families to spent more than $2,100 a year just to get online; poorer families can’t even bother. The price of internet access has also risen faster than wages ever could; since 2006, the price of telephone and internet access has risen by 21%, according to the Wall Street Journal. This is not something that single mothers and struggling families can afford; kids in urban neighborhoods cluster inside and around the local McDonald’s to do their homework by grabbing a ride on the stores’ free Wi-Fi. Imagine four years of doing that every night just to keep up with your peers, much less scoring the kind of grades that are good enough for college.

Income inequality is also internet inequality.

Americans can make do, of course. The irony of expensive internet service is that cheaper service is everywhere. Wi-Fi is widely available everywhere from most Starbucks to public libraries if you don’t mind giving up your mobility; the prevalence of smartphones like the iPhone and Samsung Galaxy require expensive data plans for internet access. And then, of course, people use the internet at work and can easily rationalize that 8 hours or more a day of access is quite enough. (Though that is no help to kids.)

How did we get to this place?

Susan Crawford, a professor at the Cardozo School of Law in New York, has argued for years that cable companies are a monopoly. One of her favorite statistics is that there’s not much “competition when 94% of new wired high-speed customers bought service from their local cable distributors” at the end of 2012. In other words, cable companies are internet companies and they have locked down what looks like an oligopoly for their services. In an opinion piece in January, she summed up the problem:

“At the heart of the problem lie a few powerful [cable] companies with enormous influence over policy making. Both the wireless and wired markets for high-speed internet access have become heavily concentrated, and neither is subject to substantial competition nor oversight. Companies like Time Warner Cable routinely get their way when they seek to prevent local officials from encouraging competition. At the federal level, Verizon Wireless is keeping the FCC in court arguing over the scope of its regulatory powers – a move that has undermined the agency’s authority. As a result, prices are too high and speeds too slow. A third of Americans opt not to buy high-speed internet access at home, often because they can’t afford it.”

Crawford’s argument is that cable companies are not only monopolistic, but also exercise their considerable power in Washington to squeeze regulators. They walk like a monopoly and talk like a monopoly, trying to block rivals from getting a foothold. Even local governments trying to improve local service feel the lash.

The idea of an oligopoly is a powerful one, which has tended to kick government regulators into gear to defend consumer interests. Naturally, there are those who believe the cable companies are not bad.

“About 89% of US residents have a choice of five or more broadband providers, counting mobile and satellite, and 85% have a choice of two or more wireline broadband providers,” ComputerWorld summarized a recent Information Technology and Innovation Foundation report. Of course, if you’ve ever had internet access in the US any time your life, the one thing you have not found is choice. Satellite service is an expensive and implausible option for many families. If you’re like many Americans, you hit a point of frustration with your cable and internet provider and looked for alternatives – only to find none.

There is, of course, no impetus in Washington to repair this. Market forces have only encouraged cable companies to keep raising prices with impunity. There is a strong argument to be made that cable companies have abused their pricing power and should submit to regulation in pricing – but there is likely no one in Washington ready to hear it.

These are times when a person can yearn for the old moustache-twirling, chortling monopolies of the Gilded Age robber barons – the open maneuvering of a vindictive John D Rockefeller, as detailed by Ron Chernow, or an Andrew Mellon (pdf) thundering with retro-Calvinist disdain for the moral weakness of the poor. It would be great to see monopolistic ambition with such clarity.

Alas, in our day, we are left with the milquetoast version that rules our outrageously expensive cable, internet and phone services. These robber barons in rimless glasses and Rockports pick the pockets of recession-hit families as gleefully as any old Carnegie – but they need never fear government interference.

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http://www.guardian.co.uk/commentisfree/ 2013/jun/04/price-gouging-cable-companie s#start-of-comments

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When are you people going to realize what is really wrong with this nation?

Our government has been bought — lock, stock and barrel — by the wealthy elite, who are busily destroying our lives, just so they can get wealthier.

Maybe you think that is ok, but it tends to make me angry that I am being cheated each and every day by these people, all of which is fully sanctioned by “their” government.

Posted by EconCassandra | Report as abusive

Again, is THIS the kind of society you want your children to inherit?

Posted by EconCassandra | Report as abusive

@EconCassandra/PseudoTurtle,

From your UK article: “It’s not unusual for middle-class families to spent more than $2,100 a year just to get online; poorer families can’t even bother.” That just goes to show that John Kerry was right when he said: “Americans have a right to be stupid.”

I pay approximately $35 a month, or $420/yr. for 3GB of data per month from Verizon. Service is via a MiFi portable device that I can take with me anywhere in the country (no hotel/motel extra fees).

Now, granted, I can’t stay on UTube or Vimeo all day or subscribe to Netflix, etc. like some people’s kids, but this arrangement has proven quite workable for my wife and I for over two years.

“This is not something that single mothers and struggling families can afford…”. Maybe simple economics suggest single mothers live with other single mothers and share expenses?

“Income inequality is also internet inequality.” Equality is an aspiration, not a reality. If you make the same as someone else and you get cancer and they don’t, there’s inequality again. Not going away, ever! Get used to it!

Posted by OneOfTheSheep | Report as abusive

@ OneOftheSheep –

As you say, “Americans have a right to be stupid,” and you exercise that “right” vigorously with every single one of your comments, which are uniformly short-sighted and ignorant beyond belied.

The point of the UK article, which you seem to have missed entirely, is that the government and corporations are now in league together to the detriment of this nation.

Yet, you choose to fasten on one single facet, that of single mothers whom you apparently despise as a group, never mind their individual circumstances, for whatever twisted moralistic slant on reality you happen to have.

Thus, according to you, we should allow corporate American to use monopolistic pricing to steal the American people blind. Apparently, that is just fine by your set of “moral standards”.

You need to understand these “single mother” and the poorer parts of this society have CHILDREN who have a right to education on a par with everyone else. You would condemn these children to a life of poverty and crime for lack of a proper education.

But, hey, as you say, “equality is an aspiration, not a reality”, which is the wealthy class’ interpretation of the US Constitution.

THAT is a very slippery slope that leads ultimately to forced labor camps and debtor’s prisons.

Perhaps, according to you, that is where ALL the undersireables really belong.

Why stop at single mothers, who live off of government welfare checks and pump out babies to get more free money from those “hard-working, decent citizens who deserve the money far more than they do?

There are a lot of others in our society that are not pulling their weight either.

For example, “Joe Sixpack” slackers who won’t work, even though there are plenty of jobs available just for the asking. Because these people are so lazy we have to import illegal aliens to keep our country going.

Or, how about all those people on Social Security, none of whom contribute anything to this society any more and should be cut off to fend for themselves! Besides their Social Security (i.e. “entitlements”) are nothing more than welfare payments that could be spent more profitably elsewhere, instead of wasting it (and health care) on people who have obviously outlived their usefulness to society, but stubbornly refuse to die and get out of the way for others. And speaking of entitlements, how about those on Medicare and Medicaid, who are an even worse drain on this economy.

As you state, “Maybe simple economics suggest single mothers live with other single mothers and share expenses?” Since they refuse to herd togther to share expenses, how about the government rounding them up and forcing them into communal housing?

Are you aware that the UK government is actively attempting to do the same thing with ANYONE who is single and living alone? But, hey, the English have always been known for their great humanitarian beliefs throughout their history.

Think of the height of English society (i.e. the Dickensian Era) when they generously created workhouses to employ the poor, debtors prisons for those who needed encouragement to pay their bills on time, and last but not least a mental health facility that was right on the cutting edge of mental health care for centuries, which we now affectionately know in the popular vocabulary as “belam”.

http://en.wikipedia.org/wiki/Bethlem_Roy al_Hospital

THIS IS WHAT YOU WANT FOR THIS NATION?

AS WE MOVE CLOSER TO THE UK “IDEAL” OF GOVERNMENT — As Mr. Lloyd himself PROUDLY POINTS OUT “The millionaire population in the UK – the fourth-largest in the world (NO DOUBT THIS STATISTIC HAS SLIPPED SOMEWHAT SINCE THEY TOOK A SEVERE HIT AFTER THE ECONOMIC COLLAPSE) – stands at over half a million households — WE WILL NO DOUBT REGRESS TO WHAT THE BRITISH CONSIDER “NORMAL”, WHICH IS A LANDED GENTRY, AND ENTRENCHED WEALTH THAT WEILDS SUPREME POWER IN THAT NATION.

I REPEAT MY QUESTION, IS THIS THE KIND OF NATION WE WANT TO PASS ONTO OUR CHILDREN?

YOU PEOPLE WORRY ABOUT YOUR CHILDRENS’ EDUCATION (WHICH IS SOME OF THE WORST OF ANY OECD COUNTRY) AND ABOUT THEIR “SAFETY” (FROM MASS SCHOOL SHOOTINGS), BUT CONCERN FOR THEIR REAL “SAFETY”, WHICH IS GIVING THEM A NATION TO GROW UP IN WHERE THEY AND THEIR CHILDREN HAVE A CHANCE AT A DECENT LIFE, INSTEAD OF A LIFE OF POVERTY AND ILLNESS, THAT ALLOWING THE WEALTHY ELITE TO RULE WILL GUARANTEE FOR THEM.

WITHOUT A STABLE AND REASONABLY SECURE ECONOMY WITH OPPORTUNITY TO ADVANCE THEMSELVES, YOUR CHILDREN WILL GROW UP IN A SOCIETY THAT RESEMBLES MEXICO, WHICH IS WHERE THE WEALTHY ELITE WANT TO TAKE US.

DO YOU WANT TO LOOK IN YOUR CHILD’S FACE AND TELL THEM THAT, BECAUSE YOU LACKED TO INTELLIGENCE AND MORAL COURAGE TO STOP THE SLIDE OF THIS NATION TO THAT OF A THIRD WORLD ECONOMY, YOU HAVE CONDEMNED THEM (AND THEIR CHILDREN) TO A WORLD OF IGNORANCE, POVERTY AND SERVITUDE TO THE WEALHTY ELITE?

THE CHOICE IS YOURS, BUT ONLY FOR A MOMENT BEFORE THE OPPORTUNITY TO TURN THIS NATION AROUND IS GONE.

Posted by EconCassandra | Report as abusive

@ OneOfTheSheep –

You state ”

It should be obvious that the “new normal” is going to be greater and greater efficiencies in all commercial enterprise. We are seeing more and more production from fewer and fewer people due to the more and more effective use of computer capabilities and coordination as well as greater and greater efficiencies from using fewer people with more automation.

The inevitable result is that more and more of the lesser skilled people cannot find a job and those of skills becoming obsolete are finding it harder and harder to hold onto the one they have. Until and unless present tax incentives are revised these trends can only get worse, and yes, it hits the young and inexperienced as well as the older pre-retirement worker quite disproportionately.”

————————-

Increasing health and welfare bills in the United States are also unsustainable, and yet “our politicians” seem bound and determined to add some twenty million or so useless illegal alien invaders from south of the Rio Grand to obligations to present citizens that cannot be financially met. The short sightedness and utter stupidity of such people is nothing less s than frightening.”

———————

“I do not see an orderly way forward even were a desirable path clear. Politicians and bureaucrats are ALWAYS “behind the curve”, turning the wheel long after a collision with the iceberg ahead is unavoidable.

The difference today is that there is NO path “ahead” free of icebergs and so economies are slowing down and stopping because there is simply no other rational choice. On the other hand, it is time for those trained in the “dismal science” of economics to begin examining the pieces of our present puzzle and how they can be otherwise assembled. We must use what we have, where we are, now.

We can no longer march to the beat of the old drums of “growth, “recovery”, and “creating jobs”. But march we must. There must be some incentives more seductive than fear to induce those “sitting on cash” to invest in building a workable future for productive societies. “Circling the wagons” to protect assets that inflation and consumption taxes will inevitably reduce in time is not a long term strategy.”

================

The “NEW NORMAL” — give me a break! How many times do we need to suffer through another new normal, before we realize this is the same bullshit, wrapped in different packaging.

I AM trained in the “dismal science”, which obviously you are not. Instead you beat your chest with “woe is me, what are we to do” except to accept what the wealthy elite want to allow to “trickle down” to us in the form of “yellow rain”.

What the wealthy elite are doing to this world is not new, but the same old tired scenario of unrestrained greed.

That this is a “normal” phenomenon is no excuse for allowing it to continue. To let it run its course again, means ultimately to allow society to be destroyed by these people, all due to their insatiable greed and belief that they are somehow better than everyone else. Thus, they treat us no better than draft animals and become enraged when we want to assert our rights as a human being, not an animal. History is replete with examples of what they have done — for example, the US economy has crashed into a major recession or depression at least 47 times since the founding of this country. THAT IS A FACT.

————–

http://en.wikipedia.org/wiki/List_of_rec essions_in_the_United_States

————-

Clearly, there is something radically wrong with our economy, no matter what the wealthy class tells you.

And, unless you people can muster the courage to do something about it, they are about to do it again, but this time much worse than at any time in history.

THERE IS A SOLUTION, AS I POINTED OUT ABOVE:

@ theAntagonist –

The solution, as I have pointed out many times previously, is very simple.

To cure the disease, you must return to when the first sign of serious infection began for this current bout of the illness.

(1) We must reverse what has been done for the past 30+ years in terms of tax laws, free trade and banking “nonregulation” that the wealthy class has managed to implement over that period of time.

(2) Since ALL of their wealth has been obtained by fraud — mainly through manipulation and bribery of government officials — there must be an immediate clawback of their ill-gotten wealth.

The reason for this is straightforward. ONLY the wealthy class has the money to get the global economy back on its feet again, and functioning properly.

(3) Present government officials should be removed and replaced. The laws governing their conduct should be strengthened significantly, including at a minimum, term limits and the elimination of lobbying (i.e. legalized bribery) that has been one of the major reasons why we now have a totally corrupt government.

The Rx must be repeated when necessary to prevent reinfection.

Rather than an empty solution, I see this as quite an effective cure for what ails this economy before the disease progresses to the point where it becomes terminal.

———————-

All we need is the intelligence and courage to stand up to the wealthy-controlled government and say “hell no, we won’t go there again”.

One of the major problems I see with the present population is that you grew up during one of the most peaceful and productive times in American history.

During this time, both the nation and the middle class prospered for a whole lot of reasons that NO LONGER EXIST.

All you have seen is the “kinder, gentler face” of our government, mainly because the wealthy power had been severely diminished during the 1930s.

Now, however, things have changed. The wealthy class is back in their full power mode and they see you as a threat to their continued way of life, which is a return to their peak of wealth and power, known as the “Gilded Age” from about the 1870s to the turn of the century.

—————-

http://en.wikipedia.org/wiki/Gilded_Age

—————-

PURE AND SIMPLE, WHAT THEY WANT IS A RETURN TO THEIR “GILDED AGE”, WHICH WAS A TIME WHEN WEALTHY EXCESS AND POWER GREW EXPONENTIALLY, AS DID IMMIGRATION, AND THE STANDARDS OF LIVING FOR THE VAST MAJORITY OF AMERICANS DECREASED SIGNIFICANTLY.

IT WAS ALSO A PERIOD OF PHENOMINAL GROWTH IN TERMS OF PARADIGM SHIFTS IN TECHNOLOGY THAT BEGAN TO TRANSFORM THIS NATION, JUST LIKE NOW.

WE ARE, TODAY, RELIVING EXACTLY THE SAME PERIOD, COMPLETE WITH THE COMPETITION BETWEEN BETWEEN THE DEMOCRATS AND REPUBLICANS, WHO WERE VYING FOR POWER, WITH THE RESULT THAT OUR GOVERNMENT SUFFERED A SEVERE BOUT OF CORRUPTION NEVER SEEN BEFORE. THIS WAS DRIVEN BY THE MASSIVE CAPITAL INVESTMENTS BEING MADE AND “SOLD” TO THE PARTY FAVORITES AS A REWARD FOR THEIR SERVICES.

“Gilded Age politics, called the Third Party System, was characterized by intense competition between the two parties, with minor parties coming and going, especially on issues of concern to prohibitionists, labor unions and farmers. The Democrats and Republicans fought over control of offices, which were the rewards for party activists, as well as major economic issues. Turnout was very high and often exceeded 80% or even 90% in some states as the parties drilled their loyal members much as an army drills its soldiers. Competition was intense and elections were very close. In the southern states, lingering resentment over the Civil War was still present and meant that much of the south would vote Democrat. After the end of Reconstruction in 1877, competition in the south took place mainly inside the Democratic Party. Nationwide, turnout fell sharply after 1900.[21]

The major metropolitan centers underwent rapid population growth and as a result, had many lucrative contracts and jobs to award. To take advantage of the new economic opportunity, both parties built so-called “political machines” to manage elections, reward supporters and pay off potential opponents. Financed by the “spoils system,” the winning party distributed most local, state and national government jobs, and many government contracts, to its loyal supporters. Large cities became dominated by political machines in which constituents supported a candidate in exchange for anticipated patronage. These votes would be repaid with favors back from the government once that candidate was elected; and very often candidates were selected based on their willingness to play along with the spoils system. Perhaps the largest example of a political machine from this time period is Tammany Hall in New York City, led by Boss Tweed.[22]

WE ARE RELIVING THAT SAME PERIOD TODAY, WHICH THE SAME PROBABLY RESULTS OF FINANCIAL TURMOIL AND SOCIETAL CHAOS.

“the work of Charles Darwin became popular. Following Darwin’s idea of natural selection, English philosopher Herbert Spencer proposed the idea of social Darwinism. This new concept justified the stratification of the wealthy and poor and coined the term “survival of the fittest”. Joining Spencer was Yale University professor William Graham Sumner whose book What Social Classes Owe to Each Other (1884) argued that assistance to the poor actually weakens their ability to survive in society. Sumner argued for a laissez-faire and free-market economy. Few people agreed with the social Darwinists, because they ridiculed religion and denounced philanthropy. Henry George proposed a “single tax” in his book Progress and Poverty. The tax would be leveled on the rich and poor alike, with the excess money collected used to equalize wealth and level out society. Norwegian American economist Thorstein Veblen argued in The Theory of the Leisure Class (1899) that the “conspicuous consumption and conspicuous leisure” of the wealthy had become the basis of social status in America.”

IF YOU DON’T UNDERSTAND HISTORY, YOU ARE CONDEMNED TO REPEAT IT, WHICH IS EXACTLY WHAT WE ARE DOING TODAY.

IT WILL END BADLY!!!!!!!!!!!!

Posted by EconCassandra | Report as abusive

@EconCassandra/Pseudo/Turtle,

My comments are offered for people to accept or reject. Many of yours are comically easy to rebut.

I agree with much of what was in this article, so why would I take issue with that content? My “point” was that if any example is suspect in it’s logic, all should perhaps be similarly examined in detail.

Your “position” is that everyone has the “basic right” to high speed internet (and an otherwise perfect life from birth). I disagree.

I can’t afford the monthly cost of high speed internet where I live. Yes, there may be incestuous collusion between the government regulators in my state and high speed internet providers which affect those rates. Do I want “monopolistic pricing”? Of course not.

But the reality is that we have it in utilities, insurance, gasoline, cell phone contracts, satellite and cable TV, education, you name it. Life isn’t fair and most of us have to just “suck it up” and continue living day to day. Like most, I have to pick and choose the battles I fight if those efforts are to have maximum effect.

And so I pay for a slower internet service that I CAN afford. It meets my needs, if not my wants. There is little on the internet that facilitates research or learning that cannot be accomplished with my slower system, and so it would likely satisfy the NEEDS of “the children” you profess to care so much about.

You huff and puff endlessly, railing against things YOU see as “injustice” in the present American way of life. Well, guess what? The American way of life is a “work in progress” and always has been!

When each of us leaves school we aren’t worth much to an employer because we are “all theory, no experience”. As we gain experience that is of commercial worth, we get paid more.

So “in the beginning” we may live with one or more roommates as an economic expedient to live in a better part of town or a nicer place (by pooling rent and utility money). Later on, when personal finances permit, most of us will get “our own place”. To me, this exemplifies quite well the transition from a basic need…shelter, and the “next stage”, a want…private shelter.

Expecting people to act responsibly and make intelligent choices from those available does not mean I despise anyone. I certainly don’t despise myself for choosing a slower, more limited internet service when that is all I can afford.

If America’s poor CHOOSE to have children, those children will have the OPPORTUNITY of a “proper education” in public schools. But living in lower income areas establishes attitudes and challenges that do, all to often, result in lives of crime and poverty. Your blustering changes nothing.

When I say “equality is an aspiration, not a reality”, that’s NOT “the wealthy class’ interpretation of the US Constitution”, it’s REALITY. You live in perpetual denial of what is real and what is not. I can’t even imagine such constant personal misery as you impose on yourself. Life isn’t “all or nothing” as you suggest.

The quality of life in America today is FAR, FAR richer than in the mid-1940s, a time of the highest employment this nation has ever known. People were busy and generally well aware of how much better things were than ten years before. It wasn’t Utopia, but the choice then, as now, is to find satisfaction or live forever unsatisfied. You make it clear with the frustration and anger in your every comment that your choice is the latter.

You and I don’t “CHOOSE” the kind of nation this nation will be in the future. We don’t know what the future holds. All we can do is our best with what we have here, where we are, now. Get used to it!

There will always be crazies “out there” because humans all have insanity in them. Those who massacre innocents in our schools or sociopath “leaders” who incite genocide are the exceptions. Most of us control and suppress the monster inside. Some commit suicide. Life comes with NO guarantees.

The only ones “condemned to a world of ignorance, poverty and servitude” are those who CHOOSE to accept such a life. That’s not YOU. YOU are the Chihuahua annoying one and all with your meaningless, incessant yapping.

Posted by OneOfTheSheep | Report as abusive

Some ”members of the reality-based community” are proud, some irresponsible.

Posted by satori23 | Report as abusive

Attacks on the “wealthy” are a matter of perspective. To a person making $30,000 a year in a $220K home, a person making $60,000 a year in a 320K neighborhood is “wealthy”. It courses through society until the guy in Trump Towers is comparing himself to the guy living in the Hamptons.

So, let’s move the conversation away from “who” is wealthy and look at how government, via political favoritism and manipulation, has been used to favor some over others.

As Larry Kudlow stated, we have an immediate opportunity at hand , starting with the IRS–one of most powerful and politically influenced organizations in government.

If you want reduce the power and influence of the “wealthy” this is a logical place to start. If you fill out your tax return on a post card the political power of deductions alone are eliminated.

Posted by COindependent | Report as abusive

Rich now starts at $7.5 mil, those of us below are merely ‘mass affluent’ or middle-class-millionaires. Most doctors and many lawyers, senior civil servants, licensed professionals like engineers, CPA’s, etc., fall within that category, hopefully, not many journalists. With the slump in 07-08, I traded in the Bentley for a CRV, better mileage, and the insurance was deadly.

But, cassie, take hope: “The poor will be with you always”, so you will always have reason to envy and hate.

Posted by ARJTurgot2 | Report as abusive

@Pseudoturtle

What I was trying to point out is that you have little to add to a fruitful discussion on an actual subject and much rather fall into repetition. It is counter-productive for those who wish to have an actual conversation.

Posted by theAntagonist | Report as abusive

@ theAntagonist –

So, what kind of “actual conversation” that is “productive do you suggest?

Certainly not the one you posted stating:

“The one thing I hate is the constant rambling about the need for increased equality. “turning back everything that changed over the past 30 years”. I don’t believe that would solve anything.

The thing we have been seeing over the last 30 years is globalisation. Borders have faded, the world has become smaller and economies of scale have been build.
These economies of scale have become increasingly more powerful, obtaining lobbying power and becoming huge players on international scenes.

However, turning back everything and disallowing large companies, or any company in particular to operate within the boundaries of a free economie is not going to solve the pain of the middle-class. You see, we constantly forget the enormous benefits that come with size. Things have become increasingly available and affordable for the middle-class that has been suffering so much and our quality of life has increased significantly.

Yes, I understand that some businesses have been becoming too big too fail, businesses have been becoming unproportionally powerfull and some people have become criminally rich.
Leveling economies of scale will only reduce incentive though. What do you think will happen if you disallow the tax construction Apple has? They’ll leave for Ireland, for good. Leaving NO tax income for the US.
I understand you need for change, but change has to be gradually and top-down. Start with transparancy and politics. Inform the middle-class and then see how wealth is gradually redistributed in a free economy.
Posted by theAntagonist”

——————–

THIS, to me, is the ultimate in repetition and futility. It is continuing on a course of action that will ultimately destroy our economy, yet you “ramble on” about the wonders of the global economy, totally oblivious to how little you understand about anything.

You are mistaken that “turning back everything and disallowing large companies, or any company in particular to operate within the boundaries of a free economie is not going to solve the pain of the middle-class. You see, we constantly forget the enormous benefits that come with size.
Things have become increasingly available and affordable for the middle-class that has been suffering so much and our quality of life has increased significantly.”

What “enormous benefits” are you talking about — exactly?

Globalization IS the problem, with its attendant lack of any rules or regulation over international trade.

The “enormous benefits” in the US, from what I can observe, are a declining standard of living for the middle class as jobs are continually being outsourced (it is a fact that US wages have been declining for decades), capital investment is no longer being made due to strict US regulations on corporate activities (e.g. environmental issues) and the lack of the enormous profits that third world countries afford versus the US, PLUS the ability to hide a large percentage of those profits from the US government.

Yes, the American consumer is presumably paying lower prices (though the quality of that merchandise is not comparable to when it was US made), but those lower prices are being subsidized by massive trade imbalances that the consumer is not aware of, which means the true cost is much higher on a national basis that those lower prices would indicate.

The lower prices are also not nearly as low as they should be if the international corporations were taking the same profit levels as when they were operating in the US, subject to US trade and tax laws.

The lower prices also come at the price of lower wages for the American worker, which tends to offset any lower consumer prices.

However, the real crux of the problem with the laissez faire global economy is the ugly truth never admitted about “free trade”, which is that the vast bulk of it is absorbed by investors as profits, and that is why the US stock markets had been increasing so rapidly before they crashed in 2008.

The facts are that the profits from foreign capital investments were generating so much profit for the stockholders that it induced the US banks and brokerage houses to turn to “creative financing” to sell to ever-increasing stockholder demands for more investment.

It also substantially contributed to the 2008 crash, because it addded huge amounts of liquidity to the massive investment bubble that had been growing for the previous 30 years, mainly through “slice and dice” tactics of selling the same asset multiple times to muliple buyers, who simply did not question the validity of what the financial markets were doing.

The globalization of the US economy, from the early 1980s on, was the primary factor in the collapse of the global economy.

THAT is why we must return to a point PRIOR TO when the global economy began its speculative climb to where it is now.

Granted, much/most of the damage can never be reversedf, but to “stay the course” means an even worse economic crash will happen again. Given that the markets are now higher than when they crahsed in 2008 with no reasonable basis for it except the Bernanke QE, it is likely to happen quite soon. The one guarantee is that the longer we wait to curb the excess of global trade as they are now structured the more uncontrolled and severe will be the final result.

You state “I understand you need for change, but change has to be gradually and top-down. Start with transparancy and politics. Inform the middle-class and then see how wealth is gradually redistributed in a free economy.”

Unfortunately, we have run out of time for any gradual change — these last few years of Bernanke-driven QE permanently closed that door for us — and the problems originate at the top. Thus, a top-down approach is not feasible, because the wealthy-driven government will never allow a gradual redistribution of any kind.

Nor is informing the US middle class, who is barely aware there is a problem, never mind how serious it really is.

The reality is that I can only tell you what must be done, not how it can be done.

I think it is counter-productive to repeat like parrots everything they are told.

Try thinking for yourself for a change, or quite repeating what you yourself clearly do not understand, so the rest of us can have an actual conversation.

Posted by EconCassandra | Report as abusive

@ OneOfTheSheep –

Your comments are literally nothing more than a personal attack on whomever you choose to “bait” with your verbal assaults, none of which have any meaningful content whatsover.

For example, when you finally goad me into an angry response, it loses all sense of proportion and integrity, so no one in their right mind would read it.

What you are doing is denying others THEIR right to free speech for reasons you alone seem to understand.

You forced me to change my login in an effort to avoid your incessant attacks, but you pursue me anyhow, now using both my old and new login.

I don’t know why you insist on making personal attacks when you clearly have no other rational motive for doing so, nor do I care.

Your constant heckling in this venue is nothing more or less than shouting fire in a crowded theater, and it needs to stop.

I will grant you what I have never granted anyone before in hopes you will discontinue your personal attacks on me.

I suggest we simply “agree to disagree”, since you seem to place such a high value on that prize.

Please, take your “victory” as my concession to you, and leave me alone.

Can you confirm you have read this and agree?

Otherwise, I will have to keep repeating it until you acknowledge.

Posted by EconCassandra | Report as abusive

@ OneOfTheSheep –

Actually, on second thought, I withdraw the offer.

I refuse to make concessions to a person like you who has no idea what he is talking about, lacks any education or personal experience that would allow him to meaningfully contribute to ANY conversation, and whose only “claim to fame” is a twisted need for recognition at the expense of someone else.

Posted by EconCassandra | Report as abusive

@ theAntagonist –

You know what I find extremely annoying? People like you who not only lack the requisite education to understand what I am saying, choose to challenge me on what I am saying (based solely on their opinions) WITHOUT DOING EVEN THE MINIMUM OF RESEARCH, AND THEN EXPECT ME TO SPOON FEED THEM WHAT THEY ARE UNWILLING TO LEARN IN THE FIRST PLACE.

WHY DON’T YOU KEEP YOUR “OPINIONS” TO YOURSELF AND STOP ANNOYING THE ADULTS WHO ARE TRYING TO HAVE A USEFUL DIALOG?

Posted by EconCassandra | Report as abusive

@EconCassandra/PseudoTurtle,

You don’t have to post and re-post the same words here and on “The Economics of Austerity” threads. I responded there and so shall not do so again here.

http://blogs.reuters.com/lawrencesummers  /2013/06/03/the-economics-of-austerity/ #comment-852

In responding to The Antagonist, you state: “The lower prices are also not nearly as low as they should be if the international corporations were taking the same profit levels as when they were operating in the US, subject to US trade and tax laws.” So you advocate “profit fixing”?

I remember “fair trade” liquor price fixing in several states. They made it impossible to find a reasonably priced bottle of wine, decent or not. Most Americans buy coffee based on taste, and not based on whether or not it is “fair trade” coffee or not.

Only six individuals have contributed to the 22 comments thus far. You, me, The Antagonist, ARJTurgot2, Satori23, and COindependent.

You presume to tell TheAntagonist: “WHY DON’T YOU KEEP YOUR “OPINIONS” TO YOURSELF AND STOP ANNOYING THE ADULTS WHO ARE TRYING TO HAVE A USEFUL DIALOG?”. Juvenile words in the extreme. Would you like them aimed at YOU?

Please. No one cares what YOU “find annoying”.

Posted by OneOfTheSheep | Report as abusive

Turgot actually worships the Celtic neo-pagan fish god, especially when mayflies start hatching. Not so much idols of the temple, as idles of the defined benefit class. He has come to believe in the compulsary consumption of Thorazine by some of the posters here.

Posted by ARJTurgot2 | Report as abusive

@Econcassandra
The arrogance alone, claiming you are more qualified to awnser on the subject than me.
The reason that I object to your statements is my personal disbelief in either price fixing or a government controlled private sector. As I explained before I believe that a reduction in market freedom wil result in a reduction of market incentive. On the short term, this should be somewhat beneficial to the people, i agree.

Yet long-term control on competitiveness, price regulation and profits through the means you describe are restrictive and should not provide sustainable benefits over the long term. These rigorous legislations will further diminish the profitability of doing business within the US which will only damage economic growth on the long term.

P.S. I’ve said before, try not to fall too much into a pot-kettle situation Mr. Econcassandra

Posted by theAntagonist | Report as abusive