Shakespeare on “Spin”

For the lighter side…

I say,
Confusion now hath made his masterpiece!
And many think with brain as dry as the remainder biscuit after a voyage.
Dull and muddy-mettled rascals,
They speak unskilfully: or, if their knowledge be more,
It is much darkened in their malice.

Remember,
Their sin’s not accidental, but a trade.
If you take their advice,
Truly thou art damned, like an ill-roasted egg, all on one side.

People,
Thou hath not so much brain as ear wax.
Hast thou never an eye in thy head?
Did they teach you how you should forget to think?
There’s no more faith in thee than in a stewed prune.
I took thee for thy better.

Spin Doctors,
Out of my sight! Thou dost infect my eyes.
Your means are very slender, and your waste is great.
There’s no room for faith, truth, nor honesty in this bosom of yours. Sense sure you have, else could you not have motion; but sure that sense is apoplex’d.
Thou art pigeon-liver’d and lack gall.
Draw your necks out of your collars. And stop speaking an infinite deal of nothing.

Your bait of falsehoods take this carp of truth:
Thou art so leaky that we must leave thee to thy sinking. No word to save thee. Canst thou believe your living is a life, so stinkingly depending? Go mend, go mend.
Assume a virtue if you have it not.

Peace, ye fat guts!
Peace, good pintpot, peace, good tickle-brain.
I will most humbly take my leave of you.

Spin Meisters

Last weekend GM got a $50 billion US Treasury loan for the development of electric cars and next-gen fuel efficient vehicles.  No one really buys that as we know it is to fend off bankruptcy by GM.  GM credit default swaps (fancy financial instruments that gauge a company’s solvency) were showing a 95% chance of bankruptcy.

 

Automakers Seek $50B In Loans From U.S.

 

(AP) Automakers plan to urge Congress to support funding up to $50 billion in low-interest loans over three years to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.

 
Industry officials said the loans, which are twice the amount authorized in last year’s energy bill, are a top priority when Congress returns next month because of the declining fortunes of Detroit’s automakers and tightening credit markets.  

 

 “The amount of concern and urgency from the Detroit companies has increased in the last month and significantly ratcheted up what they’re communicating what their funding needs are,” said Alan Reuther, legislative director for the United Auto Workers union. More…

CPI 101

Every now and then you might hear someone in the media refer to something called the CPI.  Rather than disregarding it as some strange financial jargon that doesn’t apply to you, pay close attention to it as this little informative factoid affects your life more than you realize.

 

CPI stands for Consumer Price Index and measures the price change of the things purchased by you.  The percent change in CPI is a measure of inflation.  For example, if a gallon of gas cost $3.00 last year and now costs $4.00, the annual rate of inflation for gasoline would be 33%.  CPI is one of the most closely watched national economic statistics.

 

Why should you care about CPI?

1. Your paycheck is tied to CPI as employers use it when determining payroll adjustments.
2. Social Security and other retirement pension payments are tied to CPI.

 

CPI Quick Facts

1. CPI is calculated by the Bureau of Labor Statistics (BLS).  The BLS is a unit of the Department of Labor, which is a cabinet of the government and appointed by the president (this means it is exposed to political pressures).
2. Federal spending is tied to movements in CPI.
3. Interest rates on US government debt are tied to CPI.
4. CPI is used in calculating the country’s “real” GDP (a.k.a. the country’s output).

 

So, it is easy to see that payments made to you and others by the government are tied to CPI.  So just like anybody paying for a car, house, etc… the government’s goal is understandably “how to get the lowest payment?”  It is in their best interest to keep the CPI measure as low as possible.  Unfortunately, if it is in the government’s best interest, it is probably not in yours, because at what cost to you will they go to alter it?  For example, if CPI was calculated to be 10%, the government would have to adjust their payments upward by 10%.  However, if calculation adjustments could be made to lower the CPI to 5%, when in fact the “real” number is still 10%, the government wouldn’t have to pay as much.  Try to stay with this… So, in this case the government expense is reduced to 5% while yours is still at the “real” higher rate of 10%. 

 

Is this happening?  Well, ask yourself, how far do people go to reduce their payments?  Do they embellish their incomes?  Do they try to bend their expenses?  Would the government, filled with politicians, be any different?  You can answer those.

 

Any questions?

 

In our next class we’ll learn about the methods employed to suppress CPI.