Self Editor

Forum: pol
Page 3251
Subject: Ecomomic Stimulus or Spending Bill?

Posted by: Pancho Villa - [51546319] Thu, Jan 29, 2009, 20:19

We've been having discussions of this in various threads, so let's focus this issue here.

I've already made my opinion known. A big part of what this bill promotes is, IMO, completely disconnected with stimulating the economy. At worst, it is social programs run amock, including medicare, food stamps, heat and air conditioning money for the poor and questionable educational programs.

I'm not arguing the pros and cons of these programs; I'm questioning whether they belong in a stimulus package designed to uplift the economy out of this recession, or cease the slide into a full blown depression.

Possibly the most egregious misuse of funds is the suggestion that 4.9 billion be set aside for "neighborhood stabilization activities." There are those who believe that's a synonym for ACORN.

Again, without debating the pros and cons of ACORN, I want to know what "neighborhood stabilization activities" are, and how 4.9 billion dollars is going to be spent in this area.

President Obama has been selling the stimulus package as an emergency measure to save jobs and create jobs - long term jobs through infrastructure projects and a commitment to a new era of alternative energy, including an almost entirely revamped power grid system.

I support that kind of vision. I can not support the stimulus bill in its current form.

jedman on iPhone
ID: 320442118
Thu, Jan 29, 2009, 22:07

I totally agree. The list of inappropriate expenditures is too long
too list here. I feel that our dire economic situation is being used
as an excuse to spend indiscriminately. I am for more tax cuts
aimed at business, such as lower corporate tax rates. Giving
$500 to individuals is not my idea of stimulative, because it does
nothing to give future hope for increased money to spend.
Lowering payroll taxes is better because wage earners will see
more money on a regular basis.

WTC Building 7
ID: 567492817
Thu, Jan 29, 2009, 22:26

Are these expenditures in addition to the ones in the annual federal budget? Amtrak, etc.

They have already broken the record for an annual deficit and the federal fiscal year is only four months old....455 billion or so. and that does not include this stimulus package.

Pancho Villa
ID: 51546319
Thu, Jan 29, 2009, 23:08

Mitch McConnell was on CNBC today saying he thought Obama wasn't pleased with many of the "pork" aspects of the bill, which were being pushed by Pelosi and Reid.

This is somewhat supported by Obama's defiance of Pelosi's wish to retain the condom clause. Further evidence of possible changes in the bill from an interview today with Vice President Biden.

Vice President Joe Biden said on Thursday the economic stimulus package working its way through Congress is good, but will improve and attract Republican votes.

"Could it be better? When you have two branches of government and three separate entities working on something, I'm not sure it could have gotten at this stage much better than it is," Biden told CNBC.

"I think it's good. I think you'll see it get better and I also think you'll see Republicans voting for it," he said.

jedman on iPhone
ID: 320442118
Thu, Jan 29, 2009, 23:32

I really hope that happens. We need something that will really
work, there is too much at stake. The more the public hears
what is really in the bill, the more they will expect changes I
believe. I see Pelosi's attitude as more of the "we won we will do
what we want" than Pres. Obama. I also think this has been
harder than they thought it would be.

Perm Dude
ID: 55072921
Fri, Jan 30, 2009, 00:06

This is a huge spending bill, specifically intended to stimulate the economy. It isn't an either/or.

The GOP has made a large mistake, IMO, by taking themselves out of the picture despite Obama's willingness to speak with them and make the bill weaker in the eyes of his own party by taking into account GOP ideas from his meetings with them. McConnell, in particular, has been ineffective as a leader, saying (for example) that the money in the bill going to cover the budget deficits the states are experiencing as a result of unfunded mandates should be a loan to the states, to be paid back with interest later.

But missing from much of the discussion is that about a third of the package (about $275 billion) is in the form of tax cuts. Since when is the GOP against tax cuts? When they are proposed by Democrats.

biliruben
Leader
ID: 589301110
Fri, Jan 30, 2009, 01:33

What about medicare and food stamps isn't stimulating? This is best of the quick: programs this inject money directly in the economy that wouldn't already be spent. This is the dream stimulus, and I wish there were more.

weykool
Leader
ID: 41750315
Fri, Jan 30, 2009, 02:08

Since when is the GOP against tax cuts?
Answer.....When Put $2 of crap for every $1 of tax cuts.
Can we get just the spending cuts on a seperate bill?

Perm Dude
ID: 55072921
Fri, Jan 30, 2009, 02:17

I think you mean tax cuts (rather than spending cuts)?

There was a GOP "version" which was just tax cuts only and which was soundly defeated. In fact, 9 GOP House members voted against it (which makes you wonder what those 9 members really want, having voted against each of the two versions).

This is a stimulus spending bill. It is all-in-one. It is intended to pump money into the economy and has the broad support of the American public.

No matter what happens, I think this bill will be featured in a lot of political ads in about a year and a half. The GOP House members, however, now have to privately hope that the American economy tanks so that they can swoop in with their plans, whatever that might be. This gives them a little time to get their math right.

Wilmer McLean
ID: 303291
Fri, Jan 30, 2009, 04:23

A REAL stimulus plan should not be about the U.S. goverment splurging, but about the U.S. consumer spending.

The U.S. consumer spending is ~70% of the U.S. GDP (about ~21% of world GDP.)

Give each American his or her well worth amlighty dollar and let the multiplier effect prosper.

Wilmer McLean
ID: 303291
Fri, Jan 30, 2009, 04:32

*almighty

RE: 8

Broad support according to Rasmussen? Only 42% support the President's plan as of the January 29th.

Public Support for Economic Recovery Plan Slips to 42%

Baldwin
ID: 180202819
Fri, Jan 30, 2009, 04:41

What about medicare and food stamps isn't stimulating? This is best of the quick programs - Bili

You could make a humanitarian case for this in a great depression, but what part of the economy does this stimulate? Farmers and hospitals? Yeah, that will restore the system...c'mon.

We are in silly season were absolutely anyone can say their spending boosts the economy and needs to be socialized. We've already seen the porn industry try and claim it.

We are going thru the rainy day money like a drunken sailor. This stuff should be treated like gold not confetti...in fact it is the last of the gold.

Tree
ID: 1311551521
Fri, Jan 30, 2009, 06:37

yep. and 8 years of Republicans spending like 1000 drunken sailors got us here.

Pancho Villa
ID: 51546319
Fri, Jan 30, 2009, 08:04

Food stamps is already one of the most abused programs we have. I personally know someone who gives their food stamp card to their drug dealer every month in return for product. I know because I'm raising her 17 year old son.

As for medicaid, it's great for the poor, but sucks for me. Last week my son cut his forehead horsing around. It was late, and the emergency room was the only option. Twelve stitches later, the bill is $985.60 minus 246.40 for no insurance for a total of $739.20.

Besides, neither food stamps, nor medicaid is an incentive to get people to work. How many of those on these programs have cell phones and cable TV?

How many people make money when a house is built?
Scores. From the excavation of the lot, to the concrete foundation laying, to the framers, drywall, insullation, plumbers. electricians, roofers, painters, flooring, cabinets, countertops, appliances, window coverings, mortgage, real estate and title personnel and possibly new furniture.

When I hear the phrase "neighborhood stabilization activities," I know what activities my neighborhood needs for stabilization, and a healthy, vibrant housing market is at the top of the list.

jedman
ID: 552262217
Fri, Jan 30, 2009, 10:01

Tree, Yes, Bush was crap when it comes to the economy and overspent. Does that mean we want Obama to do the same thing? What does the last 8 years of Bush have to do with a lousy package that is still over spending and won't solve the problem created by Bush?

$600 million for new government cars? How about let Joe Six Pack buy a car and deduct his car payment for awhile. Detroit sells cars and consumers get a tax break.
$400 million to study climate change? If we're flush with cash, maybe, but not now.
$2 billion to the National Park Service, about the same as their annual budget. Why?
It could go on and on. I don't see that as stimulus.

biliruben
Leader
ID: 589301110
Fri, Jan 30, 2009, 10:05

I think you misunderstand our predicament. We have over 5 million empty houses right now - the most in history. We don't need more houses.

We need to keep people being able to buy the stuff they need, like food and health care, and providing jobs to replace the ones that are lost while the provide sector recovers and finds things to build and services provide that people actually need, and the banking industry recovers so that they can lend them the money to do it.

And if you think that healthcare doesn't provide jobs, come to the hospital where I work sometime, and I'll show you jobs. Jobs that are being lost because medicare doesn't pay enough the keep a hospital profitable, btw. Our mix and switched from 60-40 private-medicare, to 40-60 due to people losing their jobs and consequently their insurance, and we are now in the red. So now we are laying-off too, going one more circle down the spiral.

If you can tell me how building houses to stand empty cures that, I'm all ears.

boikin
ID: 532592112
Fri, Jan 30, 2009, 10:14

In fact, 9 GOP House members voted against it (which makes you wonder what those 9 members really want, having voted against each of the two versions).

They probably realize the that both plans are bad for America.

Perm Dude
ID: 55072921
Fri, Jan 30, 2009, 10:15

#10: Even the Republican poll (which implied that their plan was the only one with the tax cuts) indicated support for the stimulus plan.

Every single poll I've seen, including the one you link to, show more Americans in favor than not.

Look, on a spending bill this large, it is very easy to cherry pick individual pieces. But when such a compromise bill is being crafted, members aren't voting in or out those pieces--it is a package deal. The idea is to get the best deal possible to do some good, not to wait for a perfect bill.

Pancho: Sounds like you have a medical insurance problem. This isn't a medicaid or food stamp problem. I know of people who were literally down to one meal a day for the family of four, sending their kids to school with butter sandwiches and watered down milk, until they got on food stamps. (That family was mine). For every abuse case there are lots and lots of quiet successes, in which the program does exactly what it is supposed to, without the headlines that the rare abuse case will generate.

Food stamps will be among the most liquid of the new spending--virtually all the money will be spent in the months in which it is disbursed.

biliruben
Leader
ID: 589301110
Fri, Jan 30, 2009, 10:34

... and we need proof-readers hired by the guv'mint to clean up message board posts. Desperately!

Baldwin
ID: 180202819
Fri, Jan 30, 2009, 10:45

And the excuse for including a handout to the National Endowment For The Arts is...?

'Honey, I know I just lost my job but this charmer from Acorn is asking if I'll hand over our rainy-day fund to the NEA'.

boikin
ID: 532592112
Fri, Jan 30, 2009, 10:48

Every single poll I've seen, including the one you link to, show more Americans in favor than not.

This is not even relevant to the conversation. Politicians are elected to office because they are supposed to be "smarter" than the general public. Just imagine what public policy would look like if it was based solely on what more Americans are in favor of. The question being discussed here is will the plan work, is it actually a stimulus.

In my opinion, the plan will work to some degree, but at what cost. The troublesome part is that if the bill is passed it will set a precedent. So what happens when the next "crisis" hits will we just spend 1.5 trillion, the time after that? How is all this going to be paid for? What is going to happen in 5, 10 years? Theoretically the stimulus could work so well that it could generate enough extra tax revenues to pay for it self in 10 years, but is this likely to happen? Why do I feel like this is all part of huge ponzi scheme being sold to the future?

Perm Dude
ID: 55072921
Fri, Jan 30, 2009, 10:57

Politicians are also elected to represent their constituents.

boikin
ID: 532592112
Fri, Jan 30, 2009, 11:06

Politicians are also elected to represent their constituents. you mean represent their best interests.

weykool
ID: 2842717
Fri, Jan 30, 2009, 11:14

Look, on a spending bill this large, it is very easy to cherry pick individual pieces. But when such a compromise bill is being crafted, members aren't voting in or out those pieces--it is a package deal. The idea is to get the best deal possible to do some good, not to wait for a perfect bill.

And therein lies the reason we are in the mess we are in.
Every bill that congress passes is an all or nothing bill and politicians who dont give a crap about the country attach all of their pet projects to it so they can get re-elected.
If these projects are worthy of being put into place they should be voted on individually.

The time is for new leadership and real change and not business as usual with the same excuses.
People on food stamps need a job so they dont need to be on food stamps.
Will food stamps stimulate the economy?
Once...and then it is done and you have to add more money for more food stamps.
If we put the money into creating new jobs it will give back to the economy many times over AND the money will be paid back in the form of more tax revenue.

Now before you hardened left wingers start accusing me af being against feeding people you can stop already.
I am not against these programs I am against throwning more money into them and calling it a stimulus package.

Pancho Villa
ID: 51546319
Fri, Jan 30, 2009, 11:18

If you can tell me how building houses to stand empty cures that, I'm all ears

The housing market varies from area to area. Currently, a majority of foreclosures and empty new houses are concentrated in 4 states: California, Arizona, Nevada and Florida.

My state, Utah, is predicting the population to double in the next 30 years, but a frozen housing market, due mostly to conditions created outside the state, threatens to dampen the entire cycle.

Obviously, we're more engrossed in the areas we work, Cam at a hospital and me in the (mostly) new housing market, so we tend to be more protective and sensitive to these industries.

Pancho: Sounds like you have a medical insurance problem.

Sort of, but in this case the main problem was time of day. A couple years ago my son biffed on his bike, face met rock, and he had gashes all over his face, needing about 25 stitches. I took him to the Instacare in a strip mall, where the Doc sewed him up practically immediately and the bill was $325. Unfortunately, they close at 10PM, and the nearest hospital emergency room was my only choice.

Still, even the $739.20 is only about a hundred dollars more than I'd have to pay per month for the family to be insured, and there's still a co-pay or deductible I believe.

It is intended to pump money into the economy and has the broad support of the American public.

I think initially the concept did have broad public support(including mine) until the details began to surface.

It's my hope that President Obama is open to constructive criticism and allows Republicans to contribute to whatever the final bill looks like.

Like Baldwin says in a rare moment of clarity,

This stuff should be treated like gold not confetti...in fact it is the last of the gold.

Pancho Villa
ID: 51546319
Fri, Jan 30, 2009, 11:32

There's so many things in this bill, it's hard to keep up.

I just found this article which directly affects my industry.

There's a catch to the first-time-home-buyer tax credit already on the books: Those who receive the credit must pay it back over the years to come. But one provision in the stimulus bill approved by the House of Representatives this week would remove that repayment requirement.
The credit gives buyers who haven't owned a home in the past three years up to a $7,500 credit for buying a home before July. Critics of the current tax credit said the repayment feature made the incentive less appealing, and didn't serve its purpose of luring more buyers back into the market.
The House bill approved this week also would reinstate the 2008 conforming loan limits, setting those higher limits in place for the rest of 2009. The Senate is working on its own version of the stimulus and President Obama has asked for a final bill by Presidents Day.
"This is critical to stimulating home sales and shrinking the housing inventory, which will in turn help stabilize home values," said National Association of Realtors president Charles McMillan. "However, our work is far from finished and much more needs to be done in the coming days and weeks."
NAR wants to extend the credit to all home buyers -- not only first-time buyers -- and wants the credit extended until the end of the year. The group also is still seeking a mortgage interest-rate buydown and improved foreclosure mitigation programs.
link

biliruben
Leader
ID: 589301110
Fri, Jan 30, 2009, 12:09

The only thing that is making the housing market "frozen" is that houses are too dang expensive for normal folks to afford and can qualify for a loan to buy.

Drop the prices and watch the thaw.

There is cram-down legislation in the works to force lenders to drop the principal amount owed. That should move things in the right direction.

I don't know specifically about Utah, but if Salt Lake is anything like Boise, prices and over-building got a bit crazy there as well.

biliruben
Leader
ID: 589301110
Fri, Jan 30, 2009, 12:11

And every state and region has absurd projections of population growth. Seattle too. California has been predicting massive population growth for a while, but they are actually losing people, last I checked.

No reason to build houses that aren't needed in the next 6 months, in my view, because these projections aren't worth the napkin they were scrawled out on.

boikin
ID: 532592112
Fri, Jan 30, 2009, 12:12

The only thing that is making the housing market "frozen" is that houses are too dang expensive for normal folks to afford and can qualify for a loan to buy.

Drop the prices and watch the thaw.

my thoughts exactly, they are trying to create demand for product that no one wants/can afford, Until the prices come down to where they should be there is not going to be any sales.

Pancho Villa
ID: 51546319
Fri, Jan 30, 2009, 13:14

And every state and region has absurd projections of population growth.

True, but only one state is dominated by the LDS religion which has always been very serious about the "replenishing the Earth" mantra.

No other state has the "natural growth" that Utah does, plus immigration remains strong, especially from California.

Boise just doesn't have the economic base SLC does, especially with Micron, the state's largest private employer, tanking.

There's no tourism. Nobody goes to Bogus Basin as a skiing destination. Sun Valley is far away. The hunting, fishing and camping meccas are also far away.
There's Boise State, but U of I and Idaho State are far away.
Heavily LDS Eastern Idaho is closer to Salt Lake than Boise.
Even the Air Force Base in Mountain Home is 50 miles away.

Perm Dude
ID: 55072921
Fri, Jan 30, 2009, 16:06

#27: Exactly. Which is one reason why the tax credit shouldn't be extended to those with their second, third, fourth homes. Much of the housing bubble was driven by speculators trying to flip houses.

We certainly need a housing price adjustment (just as we need to stop living 20% above our means). Hopefully this will happen about the same time that the credit crunch eases a bit.

weykool
ID: 2842717
Fri, Jan 30, 2009, 17:47

The only thing that is making the housing market "frozen" is that houses are too dang expensive for normal folks to afford and can qualify for a loan to buy.

Drop the prices and watch the thaw.

Oy vey.
Lets just pass a law demanding that houses drop another 20%?
Isnt that one of the underlying problems we are facing that led to the banks needing a bailout?
The prices of houses fell and left all the banks with a bunch of assets that were not worth as much as the loan amount and now you want to create more?
The bank makes a 160K loan on a house that sold for 200K at the time and is now worth 150K and you answer is lets just snap our fingers and make the house worth 120K?

There is cram-down legislation in the works to force lenders to drop the principal amount owed. That should move things in the right direction.

If this were to happen you could kiss the housing market goodbye for the next 30 years.
Who in their right mind would put up their money to back a mortgage if they knew the government could force them to lower the principal owed every time there is an economic decline?
The only people who would be able to get a loan would be people who could afford to put up 70-80% in upfront cash.

Our economic problems are very complex and it is going to require more than knee-jerk legislation and bogus stimulus bills to correct it.

boikin
ID: 532592112
Fri, Jan 30, 2009, 17:59

Lets just pass a law demanding that houses drop another 20%?

i am not saying they should pass laws, just that housing market is not going to fix it self till prices balance out with what they are really worth and stop trying to artificially keep prices high.

There is cram-down legislation in the works to force lenders to drop the principal amount owed. That should move things in the right direction.

this is a bad idea.

biliruben
Leader
ID: 589301110
Fri, Jan 30, 2009, 21:04

Well it is a bad idea, but probably for not the reasons you are thinking. It's a bad idea because it only will apply to loans already made, not loans made in the future.

This isn't really new, and it certainly isn't knee-jerk. I've been calling for cramdowns for the last couple years. In bankruptcy, everything is subject to a judge deciding how much the debtor has to pay. Everything, that is, except for a house.

If a lender knew this was a possibility, he would be much more careful about the ability of the borrower to pay back the loan, and it would decrease the moral hazard created by securitization.

We are still well above the point where housing prices make sense compared to rents and incomes, so no, we don't have to pass a law, it's just that the sooner prices make sense, the sooner we can start a recovery. If we artificially continue to prop-up housing prices, it will just delay the point where folks will want to buy a house.

I have been shopping for a house for 9 months now. Sellers are still, by and large, completely delusional. November was the worst month for housing sales in Seattle history. December was worse. January sounds like it's going to be worse yet. Until prices come down, buyers are staying away.

Perm Dude
ID: 55072921
Fri, Jan 30, 2009, 23:42

To be fair, though, housing prices are not set in a vacuum. Many housing prices are based upon the price the seller purchased the house for, plus (at times) investment/upgrade costs. So it isn't altogether delusion holding these prices up.

biliruben
Leader
ID: 589301110
Sat, Jan 31, 2009, 00:11

No doubt, PD. Sellers sometimes can't go lower. That's why cram-downs are a good thing. It drops the amount owed, and sometimes allows the owner to stay in the house with a mortgage payment that he can manage to pay.

There is a reason why sales have been up in Cali and Florida. More than half than half of them are foreclosures.

Building 7
ID: 567492817
Sat, Jan 31, 2009, 01:20

I hope they cram-down my mortgage. I hope cram-down means reduce.

nerveclinic
Leader
ID: 05047110
Sat, Jan 31, 2009, 03:43

We are still well above the point where housing prices make sense compared to rents and incomes, so no, we don't have to pass a law, it's just that the sooner prices make sense, the sooner we can start a recovery. If we artificially continue to prop-up housing prices, it will just delay the point where folks will want to buy a house.

I completely agree with this. If the government does anything to artificially keep housing prices high, we will just be building the next bubble to burst.

biliruben
Leader
ID: 589301110
Sat, Jan 31, 2009, 09:11

Who holds your mortgage, B7? Normally cram-downs would happen in front of a bankruptcy judge, so be careful what you hope for.

If it's indymac or any other lender that was taken over by the FDIC, however, they may start doing running modifications, including decreasing principal outside of bankruptcy, as part of TARP.

biliruben
Leader
ID: 589301110
Sat, Jan 31, 2009, 09:18

To add to 34, Cram-downs would also offer a strong incentive to get a loan-modification done prior to bankruptcy that wouldn't just re-default down the road. If they knew a judge might offer the borrower a much better deal then they are offering, they would work harder to keep the borrower in the home.

Right now loan mods are redefaulting at a >50% rate, and part of the reason is that the mods were disingenuous. The payment was still way too high, because the principal was way too high for the borrower to lower his monthly payment significantly enough that he could afford it. That's even after stretching the loan to 40 years and dropping the interest rate to 4%.

Baldwin
ID: 2003312
Sat, Jan 31, 2009, 13:47

We are detecting a definite uptick in RE sales! Which I attribute here to small town banks loosening credit for some reason.

Perm Dude
ID: 43023112
Sat, Jan 31, 2009, 14:03

Where?

biliruben
Leader
ID: 589301110
Sat, Jan 31, 2009, 16:29

My guess would be foreclosures.

biliruben
Leader
ID: 589301110
Sat, Jan 31, 2009, 16:33

Credit isn't hard to come by, as long as you can afford the mortgage.

You may may a bit of a premium on your rate depending on your credit and down-payment, but given how low interest rates are anyway, that's still a pretty darn low rate.

The problem is houses are still too expensive, except foreclosures and REOs.

FHA loans are only asking 3.5% down, and don't even look at a credit score, with competitive interest rates.

Credit isn't the cause of the housing bust. The price of the house is.

Pancho Villa
ID: 51546319
Sat, Jan 31, 2009, 16:51

The problem is houses are still too expensive,

I don't doubt that's true in the Seattle area, but in my area, at least, the prices are pretty reasonable. The largest builder in the state, Ivory Homes, is a semi-upscale homebuilder that has changed its strategy in the past year or so.

While they used to just build the entire subdivision, now they build a model and wait for an actual purchase before going forward, especially in their high end subdivisions.

They have begun doing townhomes, which are in reach of most serious homebuyers. A 3 bed, 3 bath about 2,000 sq ft can be had for under $200,000, and Ivory always features granite countertops, alder cabinets and other upgrades as standard.

A 3,500 sq ft 5 bed, 3 bath, 2 car garage with a yard is going for around $300,000.

But again, where they used to build em and sell em, now they sell em then build em.

This is true with almost all builders.

Building 7
ID: 70243116
Sat, Jan 31, 2009, 17:34

My mortgage is held by my new bank....it starts with a P. It was held by Franklin Bank, but the FDIC took them over. Then we got a letter saying we should re-finance our mortgage with someone else. Then we got a letter saying they were going to keep our mortgage at the new bank that starts with a P.

I was hoping if they are going to be reducing other people's mortgages, then I wanted some of that action. There's no problem with my mortgage, though.

biliruben
ID: 111542413
Tue, Feb 03, 2009, 13:20

Pancho - While every community likes to think there is something unique that makes them immune to the overall economic woes effecting the country, generally it simply isn't true.

Seattle is the worst for this. People in the RE industry are constantly bring up spurious arguments about "lack of land", "Seattle being the next SF", jobs, rich immigrants, blah blah blah.

To some extent there is a grain of truth to this; just enough to convince people who aren't willing to delve a bit deeper into the numbers.

While Salt Lake City is certainly a desirable enough place to live, if you dig into the numbers, and look at historical rental and housing vacancy rates, affordability and homeownership rates, I just don't see a compelling argument that SLC is going to be, or should be, somehow spared the downturn.

As someone in the housing industry, I recommend you peruse the current and historical vacancy rates and home-ownership rates from the census.

I also recommend you consider some of the affordibility indeces presented at housing tracker. Unfortunately, these data aren't quite up-to-date, but they give you an idea of what sorts of things you should consider, and how to plan appropriately when considering how to gear your company for the future.

I hope for nothing but the best for you, your family and your future. Being well armed with facts that keep you grounded with the proper perspective is always a good thing, and should help you prepare in ways that maybe your competition is not.

walk
ID: 181472714
Tue, Feb 03, 2009, 13:29

Herbert: Need to Repair Infrastructure

What's the prevailing wisdom on this sentiment...that in a recession, we should be investing in our (poor) infrastructure to create jobs and for the future...? I really dunno what the economists have to say about this.

biliruben
ID: 111542413
Tue, Feb 03, 2009, 13:44

Generally recessions are too short for infrastructure investment to do much good. This recession, however, is already historically long and no end is in site. All the projections, even the optimistic ones, estimate elevated unemployment into 2011-12. In this environment, infrastructure investment would do much good, particularly since it's really our only remaining option, as interest rates have already been dropped to 0.

boikin
ID: 532592112
Tue, Feb 03, 2009, 14:00

Even if in the short term it does not help, infrastructure work has long term benefits as long as it is the right work being done.

IMO i thing ares not going to get better to we adapt to the fact that we are not all going to have 72 inch plasma screen TVs and Iphones. And just because we do not have these things does not mean our lives are some how worse than our parents generation.

Perm Dude
ID: 13119223
Tue, Feb 03, 2009, 14:20

Great point, boikin. Bubbles like this are driven by overconsumption. It really pissed me off during the Bush Administration when they continued to press the point that we can simply consumer spend our way out of economic downturns.

Wilmer Mclean
ID: 55151416
Thu, Feb 05, 2009, 02:48

ACLJ Calls on Senate to Remove Discriminatory Provision From Stimulus Package that Targets Religious Activity at Colleges & Universities

February 3, 2009

(Washington, DC) – The American Center for Law and Justice (ACLJ), focusing on constitutional law, today called on the U.S. Senate to remove a discriminatory provision in the economic stimulus package that unfairly targets religious activity at universities and colleges that receive federal stimulus funds. The ACLJ discovered a little-known provision in the stimulus package that prohibits higher education facilities that accept federal stimulus funds from permitting religious groups and organizations from using those facilities.

“This is an unacceptable provision that clearly discriminates against religious organizations that have a legal right to use these facilities,” said Jay Sekulow, Chief Counsel of the ACLJ. “What’s disturbing is an Administration and Congress that moved swiftly to provide federal funds for a host of disturbing initiatives – including the promotion of abortion. And, now, there’s a move to keep religious organizations from utilizing facilities at colleges and universities that take federal stimulus funds. If this discriminatory provision is not removed from the package and is approved and signed into law, we’ll file a lawsuit in federal court challenging this provision.”

The ACLJ became aware that the stimulus package includes a measure that clearly spells out that grants awarded under Section 803 “shall be for the purpose of modernizing, renovating, and repairing institution of higher education facilities that are primarily used for instruction and research . . .”

That provision also includes this disturbing prohibition:

“PROHIBITED USES OF FUNDS. - No funds awarded under this section may be used for - (C) modernization, renovation, or repair of facilities - (i) used for sectarian instruction, religious worship, or a school or department of divinity; or (ii) in which a substantial portion of the functions of the facilities are subsumed in a religious mission.”

Under this provision, student groups would be barred from using facilities for worship or even Bible study if the school accepts the federal stimulus funds.

“There is a priority problem in Washington,” said Sekulow. “We’re seeing a troubling pattern develop regarding the use of federal taxpayer dollars. This provision regarding the use of college and university facilities is just the latest example. This is not what ‘economic stimulus’ is about. We know that the American people don’t want their tax dollars used for discriminatory measures. That’s why this provision must be removed now.”

Led by Chief Counsel Jay Sekulow, the American Center for Law and Justice focuses on constitutional law and is based in Washington, D.C.

Mith
ID: 2894309
Thu, Feb 05, 2009, 10:17

Obama defends the stimulus package in a WaPo Op-Ed.

biliruben
Leader
ID: 589301110
Thu, Feb 05, 2009, 10:27

Nice letter. I wish he went harder at why trickle-down economics doesn't work in either theory or practice, and didn't give the Bush ideas the credibility of discussing them as even a reasonable alternative.

Mith
ID: 2894309
Thu, Feb 05, 2009, 10:30

as even a reasonable alternative

I I don't think he did that, Bili.

In recent days, there have been misguided criticisms of this plan that echo the failed theories that helped lead us into this crisis -- the notion that tax cuts alone will solve all our problems; that we can meet our enormous tests with half-steps and piecemeal measures; that we can ignore fundamental challenges such as energy independence and the high cost of health care and still expect our economy and our country to thrive.

I reject these theories, and so did the American people when they went to the polls in November and voted resoundingly for change. They know that we have tried it those ways for too long. And because we have, our health-care costs still rise faster than inflation. Our dependence on foreign oil still threatens our economy and our security. Our children still study in schools that put them at a disadvantage. We've seen the tragic consequences when our bridges crumble and our levees fail.

jedman
ID: 552262217
Thu, Feb 05, 2009, 10:57

Then he should just go ahead with his plan. The Republicans have said why they think it is not a good bill in its current form, but it appears that major changes are not going to happen, so they will not vote for it, as they shouldn't if they don't believe it is in the best interests of the country.
Those that do, should vote for it, get it going and we'll see what happens. Why is he so worried about what the Republicans think or oppose?

Mith
ID: 2894309
Thu, Feb 05, 2009, 11:06

Actually the Democrats have shown themsleves willing to bend on several issues within the proposal.

Whatever you think of the President, he's clearly committed to the bipartisanship that he campaigned on.

jedman
ID: 552262217
Thu, Feb 05, 2009, 11:16

I think Pres. Obama believes that what he is proposing is going to work.
When the final bill comes out, we will see how much bending there really was.

I have a serious question for many on this board. Do you really believe that all the spending in this bill is what needs to be done? We have discussed many of the questionable items in the bill that seem to be just spending. How much of this bill do you really believe will help the economy? I just have a hard time accepting a lot of those items as necessary and helpful. It seems to me that it could be cut down to just those things that will really help.

Frick
ID: 3410551012
Thu, Feb 05, 2009, 11:21

Has the line-item veto gone away forever?

The amount of pork that gets included in every bill is frustrating. And many of the items that are in the bill do nothing to help stimulate the economy, they were put into to help someone get re-elected or to reward a donor.

Perm Dude
ID: 56122510
Thu, Feb 05, 2009, 11:22

Has the line-item veto gone away forever?

Yes, SCOTUS declared it unconstitutional.

Mith
ID: 2894309
Thu, Feb 05, 2009, 11:26

We have discussed many of the questionable items in the bill that seem to be just spending.

Whenever I have seen opponents of the bill complain about specific provisions within it, the combined items they cite always add up to something like 3% of the whole thing.

Pancho Villa
ID: 51546319
Thu, Feb 05, 2009, 11:40

I read where Republicans were opposed to somewhere in the neighborhood of $600 million for new government cars.

I don't know how necessary that is, but it obviously keeps a large sector of the economy running, not just in Detroit, but all the suppliers involved and the retail benefits from employed citizens as opposed to unemployed.

Possibly the cars being replaced could be donated to the poor through a lottery or something.

Given the precarious situation with the domestic auto industry, I would support that spending as being economically stimulating.

At around 30 grand per car, that's a couple hundred thousand cars, which should keep those assembly lines busy. Probably doesn't help Sarge or lot salesmen though.

biliruben
Leader
ID: 589301110
Thu, Feb 05, 2009, 11:56

Do you really believe that all the spending in this bill is what needs to be done?

I think it is less than needs to be done.

You can complain about how stimulating an individual item is; whether it has a multiplier of 1.3 vs a multiplier of 1.8 for some other item, but the truth is we need much more spending to aggressively decrease job loss and introduce new jobs into this economy.

The estimates I'm seeing are for potentially double digit unemployment starting next year and going into 2013 if we do nothing. We need to spend on things that increase or maintain jobs even far beyond what we are currently spending, if we are going to slow the massive job losses we are seeing and begin to put people back to work.

After that, when the economy starts to recover, we can wean those jobs back into the private sector.

jedman
ID: 552262217
Thu, Feb 05, 2009, 12:09

I just have a hard time believing that once the government gets hold of something that it will ever give it back.

I realize there is no perfect answer. I guess what really ticks me off is our economic problems being used as an excuse to throw in totally unnecessary projects that absolutely will not do anything to help turn things around. I am glad some of these have come out so that everybody knows just exactly what the bill contains.

Seattle Zen
ID: 37142511
Thu, Feb 05, 2009, 13:06

jedman - I guess what really ticks me off is our economic problems being used as an excuse to throw in totally unnecessary projects that absolutely will not do anything to help turn things around. I am glad some of these have come out so that everybody knows just exactly what the bill contains.

When one demonizes all government spending, firmly holds to the belief that a dollar spent by the government is a dollar wasted, of course you think that this bill is filled with unnecessary projects.

Thankfully, economists and the majority of America are smarter than that.

Welcome to Democratic party rule. There is nothing new about it. Think back to 2001, just on the opposite side of the spectrum. I couldn't believe the stupidity of the Republican spending bills, tax cuts and executive orders, but there was nothing I could do about it but hope American would pull its head out of its ass in 2004. Well, had the Democrats nominated someone far better than John Kerry and had the truly evil war mongers not threaten America with "terrorist" fear, Ohio's head would have emerged and we would have been free. Alas, no.

With John Boehner and Mitch McConnell as your spokesmen, the Republicans are in for a dark winter. I expect little will change in 2010. By 2012, the American people will get to decide if they have liked what has happened or if they want the Republicans back. There is really no reason to get "really ticked off" right now or you will be one grumpy grouch for four years.

You know, you could be wrong, as hard as that may seem to you.

C1-NRB
ID: 2911103011
Thu, Feb 05, 2009, 15:46

“PROHIBITED USES OF FUNDS. - No funds awarded under this section may be used for - (C) modernization, renovation, or repair of facilities - (i) used for sectarian instruction, religious worship, or a school or department of divinity; or (ii) in which a substantial portion of the functions of the facilities are subsumed in a religious mission.”

Under this provision, student groups would be barred from using facilities for worship or even Bible study if the school accepts the federal stimulus funds.

This is (poorly) written into the stimulus package to prevent private colleges and universities from using federal funds to modernize, renovate, or repair ornate chapel buildings (think BYU, Notre Dame, TCU, SMU, Baylor, etc.) or improve the "religion" department's facilites, not to prohibit any religious activity from happening on a campus anywhere.

jedman
ID: 552262217
Thu, Feb 05, 2009, 16:18

SZ - Life is too short to be grumpy all the time. I never said I couldn't be wrong, I just might and I am not one who wants to say I told you so. I want things to turn around, I just don't think the way they are doing it will work the way they think, but I claim no economic genius to back it up. From what I am reading, the majority of Americans don't like the bill as it is. To me it is just common sense that things like a dog park in San Diego have no place in an economic stimulus bill.
And if the Dems are wrong on this, I think the country will want change before 2012. This is their big chance, they have the votes to do it.

biliruben
Leader
ID: 589301110
Thu, Feb 05, 2009, 20:28

Of course some people are going to be considering almost everything in this bill "unnecessary". But if it creates jobs and provides some stimulus, nothing is unnecessary, you just disagree that that should be what we spend it on. We need to spend money both quickly and in a way that creates a strong base for long-term growth. Not everyone is going to agree on what projects should be put in for that.

As far as "giving it back", most of the spending will be completed in the next 2 years. There isn't going to be much to "give back" except improved infrastructure to build on future growth.

boikin
ID: 532592112
Fri, Feb 06, 2009, 11:33

But if it creates jobs and provides some stimulus, nothing is unnecessary,

900 billion for some stimulus? Sounds like a great return on investment there...

biliruben
ID: 111542413
Fri, Feb 06, 2009, 12:18

If the return isn't 10-20 years of depression level unemployment and a deflationary trap, I think it's a freakin' bargain. Personally I'd like to see 2 trillion.

You can't look at the I in ROI without looking at the R, boikin.

boikin
ID: 532592112
Fri, Feb 06, 2009, 12:50

If the return isn't 10-20 years of depression level unemployment

Are you serious? Do you really expect this? this is funniest thing i have read in weeks. Let me just say that if we are facing 10-20 years of depression level unemployment then there is no amount of money the government can spend that will stop that, maybe postpone it, but stop it, never.

Mith
ID: 2894309
Fri, Feb 06, 2009, 13:01

in-frə-strək-chər

Mith
ID: 2894309
Fri, Feb 06, 2009, 13:02

damn shwas.

boikin
ID: 532592112
Fri, Feb 06, 2009, 13:09

if it helps you sleep better, go on, laugh....

astade
ID: 191134222
Fri, Feb 06, 2009, 20:08

An interesting article on the lessons learned from Japan

On page 2, note the economic multiplier for various projects.

boikin
ID: 532592112
Fri, Feb 06, 2009, 20:19

I was wondering if someone could post the high lights from the above article, I don't have a subscription and I would like read the part of the economic multipliers, thanks.

biliruben
Leader
ID: 589301110
Fri, Feb 06, 2009, 20:34

You don't need a subscription.

astade
ID: 191134222
Fri, Feb 06, 2009, 20:53

boikin, if you don't want the hassle of creating an account (which might be needed), send me your email address and I can send it to you.

Before I get flamed for linking to a liberal publication, let me clarify to say I found it 'interesting'. Not definitive as Japan is a different country with different factors at play. The article was thought provoking.

biliruben
Leader
ID: 589301110
Sat, Feb 07, 2009, 09:51

Man.

After this experience, Obama's just gotta consider Republican lawmakers the hostile to the good of the people, and treat the as enemies without their midst.

They're acting like children that lit the house on fire, and are trying to shoot the tires out of the firetrucks before they arrive.

Appalling behavior.

That the stimulus was gutted, yet still failed to appease more than a handful is shameful. Now I"m seriously concerned about it's effectiveness; so heavy on useless tax-cuts and light on actual stimulus.

biliruben
Leader
ID: 589301110
Sat, Feb 07, 2009, 09:56

What he should have done is called their bluff, pulled the bill back, and shoved the stimulus bill through in the budget, which wouldn't need the 60 votes.

Turn the Republicans into pariahs.

boikin
ID: 532592112
Sat, Feb 07, 2009, 11:30

I just can not read is my problem.

Perm Dude
ID: 35143622
Sat, Feb 07, 2009, 13:16

#82: The 60 votes is the number needed to cut off a filibuster, which is the same for all spending bills. I say that he should have let the Republicans filibuster (and run ads in which they accused the Democrats of holding up national security when they were in the minority party because they once threatened to filibuster something).

weykool
Leader
ID: 41750315
Sat, Feb 07, 2009, 17:13

Bili:

Your problem is you have everything bass ackwards.
The only real stimulus wiil be the jobs created through tax cuts.
All of this porkbarrel spending is what got us into the mess we find ourselves in the first place.

To use your analogy:
The Democrats are like the firefighters who arrive at the fire and decide to throw more gasoline on the fire.

biliruben
Leader
ID: 589301110
Sat, Feb 07, 2009, 17:24

I'll attempt to keep it simple.

Which number's bigger:

Mattinglyinthehall
ID: 37838313
Sat, Feb 07, 2009, 17:44

All of this porkbarrel spending is what got us into the mess we find ourselves in the first place.

You can't get away with that crap here.

weykool
Leader
ID: 41750315
Sat, Feb 07, 2009, 18:03

MTH:

You dont think the debt of the federal government is contributing to the slowdown in the economy?
You really think we can just spend our way out of this with useless 1 and done projects?
Europe is much further down the socialist path than the US....what is their unemployment rate?

Mose gasoline on the fire.
We may as well be warm as we go down in flames.

Perm Dude
ID: 35143622
Sat, Feb 07, 2009, 18:17

The economy is never slowed down by increased spending. Particularly when the slowdown is caused by tight credit.

weykool
Leader
ID: 41750315
Sat, Feb 07, 2009, 18:34

And what causes tight credit?

Perm Dude
ID: 35143622
Sat, Feb 07, 2009, 19:22

Tight credit can happen for a lot of reasons, but mostly (well, often) because the things for which banks have loaned money do not pan out and defaults rise.

By way of example, Texas banks were giving out oodles of money in the late 70s and early 80s because of the Texas oil and gas boom. With that money came huge numbers of newly employes people (including many who moved to Texas for the jobs), which drove up commercial and residential real estate markets.

In the mid 80s oil prices dropped and suddenly you had commercial vacancies jumping (I don't know the numbers off the top of my head--25 to 30% sounds about right). With banks now owning all this property (including farms, commercial buildings, etc), there was a lot less money to give out in loans.

I think that is happening now at the same time banks are making loans more difficult to get by increasing the credit score and other things a borrower needs. The banks don't have as much money going around and so they naturally will restrict what money is going out.

Mith
Dude
ID: 01629107
Sat, Feb 07, 2009, 20:04

You dont think the debt of the federal government is contributing to the slowdown in the economy?

Sure, it's a factor. But if you think the national debt is the result of simple porkbarrel spending you're sound like you're just latching on to rightist talking points and have never taken a look at where the money goes. How much of the budget do you think is dedicated to pork spending?

And tight credit didn't result from pork spending, either. Look at some of the discussion of diritives in the stock meltdown thread. Both sides of the aisle were complacent in seeing mortgages handed out to people who the brokers knew could never afford them. All the while the president boasted record levels of home-ownership to shout down anyone who suggested the economy was heading in the wrong direction. The process continued and grew as massive debt bundling led banks to behave like they were bulletproof. Then in 2004 The SEC increased the debt to asset ratio allowed for the biggest banks from 12-1 to 40-1.

Think about that last sentence.

Meanwhile since the early 1980s corporate executive pay has soared in real dollars while middle class pay has mostly flatlined and their numbers have vastly shrunk. American middle class households used to get by on one income. Then it required two. Then it required incurring more and more debt as the economy shifted to 70% consumer based.

weykool
Leader
ID: 41750315
Sat, Feb 07, 2009, 21:29

Correct me if I am wrong.....but didnt the Republicans try to offer legislation that would have curtailed the Community Reinvestment Act that was blocked by the Democrat congress by Barney Frank and Chris Dodd and company?

The loans made by Fannie Mae and Freddie Mac were a direct result of the Democrats pushing their socialist ideals.
Houses for everyone even if you cant afford it.
I have to give you guys credit for finding a way to blame Republicans but what do you expect with a leftist MSM?

The cost of credit is nothing more than supply vs demand.
When the Federal government needs to get fed the price of credit is driven up.
As the money supplies see that the risk is becoming too great they demand higher interest rates to make the loans.

Of course the spending of the money will help stimulate the economy.
The problem is what happens if it doesnt work?
Now we just dug our hole even deeper and we will heve even fewer options due to the increaded debt.
Has anyone mentioned the ticking economic time bomb in California?
At one point the California economy was the 5th largest economy in the world.
Right now the state is out of money and is 42 billion in the red.
They are talking about issuing IOU's intead of tax refunds.
The problem here is the state doesnt have the power to print money.

On pork spending I would guess that 50% of the discretionary spending is pork.

Perm Dude
ID: 35143622
Sat, Feb 07, 2009, 21:37

About half of discretionary spending is for the Department of Defense (which doesn't includes Veterans Affairs spending).

I suspect that you haven't thought through some of the things you are passing along as your own opinions.

The problem is what happens if it doesnt work?

A great question, but only half of what we should be asking. The other part is: What happens if we do nothing?

The problem here is the state doesnt have the power to print money.

No, the problem is that the state, by law, has to balance its budget each year (as do many states--they can't issue bonds to cover budget shortfalls like the federal government can). And California's problem is further compounded by a ridiculously easy voter referendum process which ties up budget resources into voter-mandated initiatives.

Mith
ID: 14822920
Sun, Feb 08, 2009, 08:59

legislation that would have curtailed the Community Reinvestment Act that was blocked by the Democrat congress by Barney Frank and Chris Dodd and company

No, not to my knowledge. More rightist hate propaganda designed to cloud up the real issues in favor of demonizing the political opposition.

The loans made by Fannie Mae and Freddie Mac were a direct result of the Democrats pushing their socialist ideals.

This is what happens when you take what Sean Hannity and Glen Beck say as the gospel truth. There was plenty of tacit support from the right as well. As I have already noted, whenever the health of the economy was publicly questioned in the middle of this decade, especially during the 2004 election year, record levels of home-ownership was always the first thing cited by the right to shout them down.

The cost of credit is nothing more than supply vs demand.
When the Federal government needs to get fed the price of credit is driven up.
As the money supplies see that the risk is becoming too great they demand higher interest rates to make the loans.

What are you talking about? Rates have been and are still at historic lows.

me: How much of the budget do you think is dedicated to pork spending?

weykool: On pork spending I would guess that 50% of the discretionary spending is pork.

You know one of the various ways in which John McCain exposed himself as a fraud on economic issues was his promise to bring sanity back to the economy by cutting out porkbarrel earmarks. For all their talk of fairness and balance, if you trusted FOX News Channel for assessments of the candidates' respective proposals I doubt they ever went near that one.

Here's a chart which I'm sure has never been shown on FOX News Channel:

jedman
Dude
ID: 315192219
Sun, Feb 08, 2009, 16:54

Biliruben - I don't think a bill with over $800 billion can be
considered gutted, given there are numerous projects that are
very questionable as to their stimulus value.

Useless tax cuts? Like giving $600 to everybody? Oh wait, that
was Bush. How did that work out?

Don't you wish more congressmen would have stood up to Bush
when he wanted to spend all that money and put us in the huge
deficit we are in? Why are the Republicans expected to just roll
over and accept everything that is put out there? The public
opinion on this stimulus is dropping like crazy. Is it possible the
Senators are actually listening to their constituents?

I think all the opposition is going to make the bill better and a
bill will get passed that has most of what the President wants.
For me, I don't care what percentage of the bill is non
stimulative, if there is $1 in there that is not for stimulus, I want
it out. We are going to be spending enough money on things
that probably will work, we don't need to spend it on those that
don't.

Another question I have. Many people have lost jobs in retail,
finance, sales, legal. How is the stimulus package going to help
them? As I understand it, most of the stimulus is coming from
infrastructure spending. How much of the stimulus do you think
will help small business and create a need for jobs in those
areas?

biliruben
Leader
ID: 589301110
Sun, Feb 08, 2009, 17:03

Don't you wish more congressmen would have stood up to Bush
when he wanted to spend all that money and put us in the huge
deficit we are in?

Yes, yes I do.

You have a basic misunderstanding of accepted Keynesian economics. You know, what's taught in our schools. Either that or you think it's voodoo.

You want to curtail government spending and increase taxes when the economy is running strong. You want to provide a bottom to the moat, to make in shallower and more quickly allow us to reach the other side, when things are crappy.

Bush, like most things, did exactly the wrong thing. Obama is trying to do the right thing, but is being hampered by idiots or disingenuous, self-serving, spiteful, sound-bite-era politicians, and their even worse counterparts in the conservative press.

100

jedman
Dude
ID: 315192219
Sun, Feb 08, 2009, 17:36

From an article on Keynesian economics. I'll try to insert the
link, but it never seems to work for me on this laptop.

The truth about Keynes, as best as I can ascertain it by
canvassing prominent economists, is that DeLong is a lot more
right than Steil. It's undeniable that the "foundations" of
Keynesianism are still very much with us. They remain, in fact,
the key conceptual framework through which we understand the
economy, despite many dents from various Nobel-winning
critics over the years. But it's also true that there's pretty thin
evidence that a Keynesian stimulus of this size and this speed
will work. Assuming the stimulus bill is passed in the coming
hours, we are about to engage in a giant historical experiment.
And we are the guinea pigs.

For a view from the reasonable center, I went to Harvard's
Kenneth Rogoff, the former chief economist for the International
Monetary Fund and an erstwhile adviser to John McCain who has
a reputation for intellectual evenhandedness—and who was
prescient about the current financial crisis. "There is
tremendous skepticism, both based on theory and empirical
evidence, about how much good all this is going to do," said
Rogoff. "But there's also a recognition that the situation is so
dangerous it has to be tried." Rogoff recalled going to a meeting
of the American Economic Association two weeks ago. "You
would find a number of people who were sure that tax cuts were
the best way to have fiscal stimulus. Others say government
spending. And a large number of us were not absolutely sure.
There just isn't consensus about this."

If there is not a consensus about this, shouldn't we start with as
little as possible, and add to it later? I am not saying I am well-
versed in the theory, but there is enough uncertainty that I just
don't think you throw everything at the problem right off the
bat.

target="_blank">link

101

biliruben
Leader
ID: 589301110
Sun, Feb 08, 2009, 22:17

I don't think there will be any second chances. Google "deflationary trap".

102

jedman
Dude
ID: 315192219
Sun, Feb 08, 2009, 22:45

I found this.

It's a Trap! An Economic Myth Stages a Revival: Caroline Baum

May 27 (Bloomberg) -- Just when you thought deflation was the
scariest thing on the horizon, along comes the phony specter of
a new threat: a liquidity trap.

In case you're unfamiliar with this concept, its origin owes to the
dead British economist John Maynard Keynes, who theorized
about the inability of near-zero interest rates to revive the U.S.
economy -- restore it to full employment -- during the Great
Depression.

As explained by economist Paul Krugman in his New York Times
op-ed column on Saturday, when interest rates fall close to
zero, ``additional cash pumped into the economy -- added
liquidity -- sits idle, because there's no point in lending money
out if you don't receive any reward,'' Krugman said. ``And
monetary policy loses its effectiveness.''

Krugman, a frequent critic of the Bush administration, warned
that the risks of falling into a liquidity-trap ``quagmire'' were
high (the Schadenfreude was palpable).

Perhaps Krugman should read the speeches of his former
Princeton colleague, Fed governor Ben Bernanke. While it's true
that nominal interest rates can't fall below zero, the thrust of
monetary policy isn't defined by the level of the overnight rate,
which is the chosen policy instrument for most central banks.
Even when a central bank faces what the Federal Reserve refers
to as the ``zero-bound policy constraint,'' it still has an
unlimited ability to print money.

Not Zero-Bound

OK, you say. The Fed can print money, but the banks, which get
deposits when the central bank buys Treasury securities in the
open market, don't have anyone to lend it to. So there is no
multiplier effect to energize the Fed's monetary stimulus.

Wrong. Even when the private sector has no demand for credit,
which is hardly the situation today, there is one entity with a
voracious appetite: the federal government. With the federal
deficit likely to hit $400 billion this year, there's no lack of
government bonds for the Fed to buy.

Nobel laureate Milton Friedman used to tell his students at the
University of Chicago that as a theoretical argument, the
liquidity trap didn't make much sense since the central bank can
always expand the money stock. When the central bank puts out
more money than the public wants to hold, at the margin
someone will spend it.

As a practical matter -- as an explanation for the Great
Depression -- Keynes's liquidity trap didn't cut it for Friedman
either. The Fed allowed the money supply to contract by about a
third, which for him was the cause of the protracted period of
declining economic growth, wages and profits.

Soggy String

The idea of a liquidity trap is often expressed by the metaphor
of the central bank ``pushing on a string.'' This diagnosis gets
recycled whenever the economy isn't responding to low interest
rates in the prescribed manner.

The liquidity-trap myth made a comeback in the early 1990s
when the U.S., faced with a dysfunctional banking system,
required an extended period of low interest rates first to heal
banks' balance sheets and second to produce a response in the
real economy.

Japan has provided a decade of delight for liquidity-trap
theorists. Interest rates in Japan are near zero, economy-wide
prices are falling (as opposed to some prices in the U.S.) and the
economy is dead in the water.

Unfortunately, the diagnosis is incorrect.

``No country has ever been in a liquidity trap,'' says Allan
Meltzer, professor of economics at Carnegie Mellon University
and visiting scholar at the American Enterprise Institute. ``Japan
is not in one now. Neither is the U.S.''

Misguided Policy

Falling prices and interest rates in Japan say more about
mistaken monetary policy than anything else, Meltzer says. The
Bank of Japan has the ability to buy more assets, which would
increase money growth -- Japan's broad money supply is up a
scant 1.4 percent year over year -- and end the deflation.

If the Japanese government ever got serious about cleaning up
the banking system -- forcing the banks to write off bad loans,
forcing insolvent banks to close -- the BOJ would get some help
in its effort.

As far as the U.S. is concerned, Meltzer, who is the author of a
new 848-page book, ``A History of the Federal Reserve, Vol. 1:
1913-1951,'' points to several periods when interest rates were
at or close to zero, without any liquidity getting trapped.

``In 1954, interest rates were 0.5 percent or below, and we had
no problem recovering,'' he says. ``In 1948 to 1949, we had
zero interest rates. Also in 1937 to 1938. We had no problem
recovering.''

Pink Parrots

Meltzer is equally dismissive of the deflation threat.

``We just reported a GDP deflator of 2.5 percent'' in the first
quarter, Meltzer says. The implicit deflator measures price
changes in the gross domestic product.

The highest reading in almost two years hasn't stopped a flood
of talk and articles on the dreaded deflation ever since the Fed
mentioned the risk of falling prices in the statement following
its May 6 meeting.

``If Alan Greenspan said the grass is pink, Wall Street
economists would see pink grass,'' Meltzer says. ``I like Alan
Greenspan, but they all speak as if he's the Oracle of Delphi.''

The Fed chairman hasn't voiced any concerns about a liquidity
trap just yet. To the contrary, like Bernanke (and unlike
Krugman), he's talked about instituting ``unconventional policy
measures'' -- buying long-term bonds -- should the overnight
rate hit zero.

And if that doesn't work, I'll bet he has a few strings he could
pull (or push).
http://quote.bloomberg.com/apps/news?
pid=10000039&refer=columnist_baum&sid=aAve7WbI7aOs

103

jedman
Dude
ID: 315192219
Sun, Feb 08, 2009, 22:47

My whole point is there are diverging views. I think the Keynes
philosophy is going to win out and we will see if it works. I
understand now why you think it should be bigger.

Thanks for the challenge to look up some things. I'm not saying I
agree, but I see where you are getting your ideas.

104

biliruben
Leader
ID: 589301110
Mon, Feb 09, 2009, 06:47

Glad to get my point across, even if you don't agree, Jedman.

I think the only sure-fire way to get money into the economy in the form of stimulus is for the government to spend it directly. We've dropped a half a trillion or more into the banks already, and they are just sitting on it.

In some respects we are charting new territory here. How quickly we have gone into free-fall has surprised even me, and I've been pretty bearish about our prospects for a while now.

Sometimes a nice graph puts things in perspective:

This is real data, not projections.

105

biliruben
Leader
ID: 589301110
Mon, Feb 09, 2009, 08:33

Couldn't have said it better myself:

"Cutting food-stamp funding to attract Republican support is proof-positive that the Republicans are not trying to come up with an effective stimulus here. If your house is on fire, and you call your fire department, and your fire department tells you to pour gasoline on the flames, they're not actually making a good-faith effort to help you put out the fire. They're not a good fire department.

"If you're working up policy to fix an economic crisis, which is characterized by there being no spending in the economy, and someone in that debate says, 'OK, but cut the spending out of the rescue plan,' they're bad at making policy.

"And you know what? It matters when you're wrong. A whopping proportion of the Republican rhetoric about stimulus is wrong.... It's just wrong. The time is now to take the radical step, as Americans -- as civic-minded Americans concerned about our future -- it's time to take the radical step of privileging correct information over incorrect information....

"If you are wrong, from here on out, you should lose the argument and you should lose your political potency. Form a flat-earthers club or something, where you talk enthusiastically to each other about your made-up economic ideas that aren't based in reality. But get out of the way of the people who are actually trying to save the country."

106

boikin
ID: 532592112
Mon, Feb 09, 2009, 11:24

"If you are wrong, from here on out, you should lose the argument and you should lose your political potency. Form a flat-earthers club or something, where you talk enthusiastically to each other about your made-up economic ideas that aren't based in reality. But get out of the way of the people who are actually trying to save the country."

So by this logic our leaders should lose all arguments.

107

Perm Dude
ID: 2415292
Mon, Feb 09, 2009, 11:47

Heh.

108

Baldwin
ID: 3112216
Mon, Feb 09, 2009, 13:38

But get out of the way of the people who are actually trying to save the country."

Memo to Bili...

There is nothing stopping the dems. Even if you fail the MSM will declare it a victory, no matter how badly you mishandle it and how many years you extend and exacerbate the problem. What are you worrying about?

109

jedman
ID: 552262217
Mon, Feb 09, 2009, 14:43

Maybe some of you saw this, but it really floored me when I heard it and it turns out it is a fact.

From Politifact.com

Stimulus plan comes to more than a million bucks a day since Jesus Christ was born
True

In a CBS Face the Nation interview on Feb. 1, Senate Minority Leader Mitch McConnell , R-Ky, sought to put the proposed economic stimulus bill into some sobering perspective.

"You know, this is huge money," McConnell said. "This is — someone said the other day that, if you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn’t have spent $1 trillion.”

The bill isn't that expensive yet -- the House version is estimated at $819 billion -- but the Senate is expected to add new programs and additional tax cuts that could increase the cost significantly. Both chambers are expected to keep the total pricetag under $1 trillion.

We'll save you from counting zeros on your online calculator and give you our quick and dirty assessment of whether his analogy is right.

First, a starting point. Biblical scholars may quibble about the actual birth date of Jesus Christ, but we're going to go with the fairly commonly accepted theory that it was around 4 B.C. That's right, it would mean Christ was actually born "Before Christ."

Add that to Anno Domini time, and you come to 2012 years since the birth of Christ.

So here goes our math: 2,012 times 365 (yes, we are aware there are leap years..don't be like that) times $1,000,000. A: $734 billion (give or take a few hundred million).

The stimulus package is actually short of $1 trillion too, $819 billion. But that's still more than a million bucks a day since the day Jesus was born. We find McConnell's staggering stat to be True.

Pretty staggering, indeed.

110

Perm Dude
ID: 2415292
Mon, Feb 09, 2009, 14:54

Sounds like a cheap party trick. And the total size of the package is likely to go down, not up. McConnell should put that chicken suit back on.

Even going to $1 trillion (which is a *huge* amount of money), it is less than 6.5% of GDP (nominal).

The War in Iraq is likely to cost between $1 trillion to $2 trillion. When Democrats asked that Iraq pay for some of the cost through future oil revenues, they were slammed by the GOP for trying to stifle a "fledgling democracy."

Glad to see that the GOP is back onto some kind of fiscal responsibility carp, even if they are bad on timing, particulars, and tone.

111

jedman
ID: 552262217
Mon, Feb 09, 2009, 15:11

Two questions I have been wondering about.

If Bush's spending got us in this mess, why is more going to get us out? I understand that much of this bill is infrastructure spending aimed at creating jobs. What about the items that are non-stimulative, how are they any better than Bush's spending?

I own a small business. Assume I get a tax cut that gives me an additional $5,000 to spend each year on personal items, a vacation, down payment on a new car, etc.
The government creates a job that nets the recipient $5,000 per year after paying all his bills. He uses that on the same things I would have used it on.
Is one better than the other? Mine doesn't require the government to spend any money.
What am I missing here?

112

Perm Dude
ID: 2415292
Mon, Feb 09, 2009, 15:17

Bush's spending got us into a huge budget deficit. The current mess is a different one--this is a credit and banking crisit.

You will be getting a tax cut in the stimulus package, BTW.

113

boikin
ID: 532592112
Mon, Feb 09, 2009, 15:35

Bush's spending got us into a huge budget deficit. The current mess is a different one--this is a credit and banking crisit.

so i guess two wrongs make a right? I would characterize this crisis as people spending more than they can afford crisis.

I own a small business. Assume I get a tax cut that gives me an additional $5,000 to spend each year on personal items, a vacation, down payment on a new car, etc.
The government creates a job that nets the recipient $5,000 per year after paying all his bills. He uses that on the same things I would have used it on.

no difference unless said recipient did not have a job before.

114

jedman
ID: 552262217
Mon, Feb 09, 2009, 15:39

I realize I will be getting a tax cut. My question was aimed more at Biliruben's comment about useless tax cuts.

In my example above, I am asking why the spending stimulus is better than the tax cut stimulus? In one, a new job is created, I guess I can see that. So let's say spending on food stamps vs. a tax cut.
Why is one stimulus better than the other, especially if one doesn't require a government outlay?

115

Perm Dude
ID: 2415292
Mon, Feb 09, 2009, 15:41

so i guess two wrongs make a right?

That wasn't the question I answered.

116

boikin
ID: 532592112
Mon, Feb 09, 2009, 15:42

so i guess two wrongs make a right?

That wasn't the question I answered.

I know but that seems to be you implied answer.

117

Perm Dude
ID: 2415292
Mon, Feb 09, 2009, 15:51

Certainly not. I've never implied that the stimulus package is wrong, for one thing. Overall I think it is the right thing to do at the right time to do it.

About a third of the package is tax cuts (something you won't hear on FOX News). Do you think that we should pull that out of the package? I doubt it.

This package is huge, but it is also complicated. Overall it is the right thing to do.

[As an aside, this stimulus package is exactly what Obama's first couple of years will be like: Figuring out how to solve tough problems that blew up in the last few years, often involving doing things we don't like to do but have to because we put it off].

And I agree completely with #105. The GOP has had an opportunity to reluctantly back something to fix the problem, an opportunity they would never have provided if the roles were reversed. They've squandered the opportunity instead.

118

jedman
ID: 552262217
Mon, Feb 09, 2009, 16:04

PD - Boy, I disagree. The Republicans have had a chance to stand up and disagree with something they don't believe in as currently packaged. I don't agree that they should just roll over and accept whatever the new administration throws out. The House bill was written by Democrats with no Republican input, as far as I understand. They threw in numerous things that are very questionable as to their stimulative effect. Now the debate has begun and hopefully by the time it gets through the combined effort, it will be better. We are talking trillions of dollars and we are wanting to just ram it through as fast as possible without debate?

Besides, it is going to pass, without Republican votes, so why are the Democrats so worried about Republican reluctance? They won, tell the Republicans to shove off and pass the bill if it's so good!

119

boikin
ID: 532592112
Mon, Feb 09, 2009, 17:26

Figuring out how to solve tough problems that blew up in the last few years, often involving doing things we don't like to do but have to because we put it off

What is hard about cutting taxes and increasing spending? This does not sound like the kind of things we do not like. It sounds more like they just told a fat person they can loose weight by eating more food. So who is going to have to solve the tough problems next?

120

Building 7
ID: 70243116
Mon, Feb 09, 2009, 19:11

They should just do a new stimulus package every month.

121

Baldwin
ID: 3112216
Mon, Feb 09, 2009, 23:02

If a single republican had defected we'd be hearing in the future about how it had been a bipartisan failure. We saw how much personal responsibility Barney Frank and Chris Dodd took for precipitating the disaster.

122

Baldwin
ID: 3112216
Tue, Feb 10, 2009, 17:14

B7

Try monetizing that debt once China stops buying T-bills. If they haven't already.

123

Building 7
ID: 70243116
Tue, Feb 10, 2009, 22:25

Obviously, I'm kidding. I don't think any stimulus package will work. If it did, they would do it every month. Or, if they think it will work if they give everyone $1000, then it should follow that it would work 10 times better if they give everyone $10,000. My personal plan is to give everyone $250,000. They could pay off their loans, buy a car, TV,etc. I think if someone ran for President on that platform, they could get a lot of votes. Vote for me and I'll put a quarter mill in every pot. Vote for my opponent, and he may give you $1000 or something.

Monetizing debt would be good for my gold holdings. Bush, Jr was great for gold. It has gone up every year since 2001. It looks like Obama is going to be good for gold, also if he keeps running up more debt.

Why do people think the solution to too much debt is.......more debt. Is that a Keynesian concept. It's already unpayable, might as well run it up some more if you can get some sap to loan you the money.

124

Mith
ID: 2894309
Wed, Feb 11, 2009, 09:12

Why do people think the solution to too much debt is.......more debt.

If the problem we're trying to address was singularly "too much debt", you'd have a point. I think you know you're being disingenuous.

Just like B when he blames Frank and Dodd for what Congress failed to do during a Republican majority.

125

boikin
ID: 532592112
Wed, Feb 11, 2009, 10:16

Why do people think the solution to too much debt is.......more debt. Is that a Keynesian concept. It's already unpayable, might as well run it up some more if you can get some sap to loan you the money.

I think this is called the maxing out the credit card theory, or playing the lotto theory.

126

Perm Dude in Chicago
ID: 10134119
Wed, Feb 11, 2009, 10:44

The shamelessness of the Right on the stimulus

Maybe they didn't realize people would be taking notes.

#118: Why, indeed, should the Democrats worry about Republicans when they can simply roll over them? Because (unlike the Republicans), the Obama administration believes in bipartisanship on the tough issues facing the country. It means putting in things the Republicans want (like cutting certain programs, and targetted tax cuts) despite the Republicans turning their back on the thing in the end.

That's what bipartisanship means. Heck, that is what ethical living means: Continuing to walk the walk even when you don't have to.

127

Mith
ID: 2894309
Wed, Feb 11, 2009, 10:51

Excellent.

128

Baldwin
ID: 3112216
Wed, Feb 11, 2009, 13:50

Next show me ACORN workers walking down the middle of the aisle, followed by Bill Ayers spouting Reaganisms. It could happen.

129

Building 7
ID: 471052128
Wed, Feb 11, 2009, 14:02

$12,000,000,000,000 federal debt divided by 300,000,000 people = $40,000 per person. Can you pay back your share?

I think you know you're being disingenuous.

No, I don't know that I'm being disingenuous. That's pathetic.

130

Tree
ID: 1311551521
Wed, Feb 11, 2009, 15:06

Next show me ACORN workers walking down the middle of the aisle, followed by Bill Ayers spouting Reaganisms. It could happen.

why should that matter. we're talking about Congress here. staying on point isn't your strong suit, but at least you could try.

131

Jag
ID: 580233023
Wed, Feb 11, 2009, 22:02

If Obama truly wanted bipartisanship, he wouldn't of had Pelosi write the bill. Any bill where ACORN can apply for 5 billion in funds is trash.

132

Tree
ID: 1311551521
Wed, Feb 11, 2009, 22:08

conservatives are looking for every angle, every excuse, to blame Obama, when he's already accomplished more in terms of reaching out to the other party in three weeks than GW Bush did in 8 years.

133

Perm Dude in Chicago
ID: 10134119
Wed, Feb 11, 2009, 23:32

Pelosi didn't write the bill. And it is even less of a House of Representatives bill now that the two Congressional houses have come up with a compromise bill.

Facts matter, Jag.

134

boikin
ID: 532592112
Thu, Feb 12, 2009, 10:13

when he's already accomplished more in terms of reaching out to the other party in three weeks than GW Bush did in 8 years.

for some reason i remember a pre 9/11 Bush who was much more open to bi-partisanship and how there were stories about how he was always meeting with democrats and giving them nick names. Obama may end up doing more reaching out in year than Bush did in 8 years but i would not count my chickens so early.

135

jedman
ID: 552262217
Thu, Feb 12, 2009, 10:36

Who did actually write the bill? Everything I have read and heard says it was Pelosi, Reid, and another Congressman whose name escapes me. Again, according to what I have read, the Republicans had no input in the initial writing of the bill.

At Conference, it was Senate and House Dems with Collins, Snow, and Specter, the three who voted for it. Were other Republicans in on that?

I do appreciate those of you here who point out the things that aren't exactly factual or have been skewed by one side or the other, so I would like to know if the above information is correct.

The thing is pretty much done, I have stated my concerns with it, but just like after the election, there is nothing more to be said. It is going to do what it is going to do, for better or worse, we just have to see.

136

jedman
Dude
ID: 315192219
Thu, Feb 12, 2009, 20:36

"The text of the Nelson-Collins “compromise” had been roughly
778 pages, but the now “agreed-to” conference report has
DOUBLED to a whopping 1434 pages. With an additional 700
pages in the bill, it is no wonder that Members would like to
review the single largest spending bill in this nation’s history
before casting a vote.
But, in possibly the most bizarre parliamentarian argument ever
made, according to National Journal’s Congress Daily;
“Democratic lawmakers fired back that Republicans didn’t need
to see the bill anyway, since none of them voted for the stimulus
when it moved through the House the first time and would
probably stand in opposition.”

Somebody please tell me this is not correct? If it is, what kind of
transparency has he been talking about?

I wonder how many in Congress have read the entire bill?

Is there anywhere online we can go read the entire bill if we
want? I'm going to start checking.

137

Perm Dude in Chicago
ID: 10134119
Fri, Feb 13, 2009, 09:17

#134: Despite Sen Gregg's gracious backing out as Commerce Sec., Obama has appointed more Republicans into Cabinet positions that Bush ever did (or ever would have).

Bush's talk about being a compassionate conservative went out the window after 9/11, too.

138

gibby88
ID: 14059715
Fri, Feb 13, 2009, 13:37

So, the tax credit for anyone buying a house this year (minus first time buyers) is officially out?

139

Biliruben
ID: 52052916
Fri, Feb 13, 2009, 13:58

As of now...

Which is good for the country though bad for us personally , as
we just got an offer accepted on a house.

140

Pancho Villa
ID: 51546319
Fri, Feb 13, 2009, 15:18

Congrats, bili.

Donde esta su casa nueva?

141

biliruben
ID: 111542413
Fri, Feb 13, 2009, 15:55

If that means "where's your new house" (never took Spanish, if you can believe it), we are in Seattle-proper now, though barely (127th St, and the city ends at 145th). It's a neighborhood called Cedar Park, right on the banks of Lake Washington.

Our house is a bit smaller than we were hoping for (3/2 1300 up, plus a daylight basement), but traded size for a large, flat lot (1/3 of an acre, which is rare in Seattle), and 180 degree unobstructable view of the lake and mountains, right above the main biking route is Seattle, an old rail line that is now the Burke Gilman trail. Perfect.

The house itself is nice but definitely could use some updating (and perhaps an addition), which is exactly what we were looking for. We didn't want to overpay for some flipper's cheap remodel.

As you can guess, we are pretty excited.

142

Seattle Zen
ID: 321261311
Fri, Feb 13, 2009, 16:37

Congrats, bili, right on the Burke-Gilman with views of the lake, that's huge!

Views are worth so much more than square feet. When's the party?

143

nerveclinic
Leader
ID: 05047110
Sat, Feb 14, 2009, 00:56

Congrats Bili

144

biliruben
Leader
ID: 589301110
Sat, Feb 14, 2009, 05:40

Thanks, fellers.

145

walk
ID: 139332920
Sat, Feb 14, 2009, 10:19

bilibaby! Good for you. I wonder if you get some kind of tax rebate with this purchase as part of the stimulation? Do you know? That may have been stripped from the bill.

147

jedman
Dude
ID: 315192219
Sat, Feb 14, 2009, 12:40

I thought I read it was changed to first time home buyers, but I
have been reading so much on the stimulus package that I have
lost track.

How does anybody know for sure if somebody is a first time
home buyer?

Congrats bili, sounds idyllic.

My son and one of my daughters will be buying their first homes
this year, so for them, I am happy that house prices have fallen
in California.

148

biliruben
Leader
ID: 589301110
Sat, Feb 14, 2009, 17:19

Just first time buyer, from everything I've read. We don't qualify, as we sold our home just a year ago, and it needs to have been 3 years since you last owned.

149

rockafellerskank
Dude
ID: 27652109
Mon, Feb 16, 2009, 22:10

Pancho and jedman,

Thanks for your increase posting. I enjoy reading your posts and think you are coming from a place of common sense as opposed to many posters here (you will go unnamed) that seem to be partisan. i can look at a topic and tell you who will post in favor/against most things. It's just like watch politics and typifies what is wrong with DC / USA.

I lean right on fiscal issues and left on human rights issues so consider myself a moderate independent.

Much of what is happening is making me sick (and 99% of what happened the past 8 years). I am aggravated at left/right posters who criticize issues, yet never propose solutions or alternatives.

So... I am going to start posting frequently. I hope my opinions are challenging, exhibit common sense, are constructive, and contribute to beneficial conversation.

150

Building 7
ID: 70243116
Tue, Feb 17, 2009, 00:20

Welcome.

Is it too much to ask for my Congressman to read the legislation before voting on it?

151

rockafellerskank
Dude
ID: 27652109
Tue, Feb 17, 2009, 00:25

I've actually been to Capitol Hill on several occasions to lobby my Congressmen. We were told not to expect the congressman to have a full understanding of our issue, but rather we should speak to his 20-something aide. It's my understanding they rarely read legislation and rely on advisers to "advise" them how to vote. Just more of my distaste for politicians and the process.

787B? Naw, got better things to do.

152

Building 7
ID: 70243116
Tue, Feb 17, 2009, 00:44

Even the aides didn't have time to read it, or analyze it or do any research. Or allow their constituents to read it and respond.

153

rockafellerskank
Dude
ID: 27652109
Tue, Feb 17, 2009, 00:50

You don't have to read legislation as long as you can read the alphabet. (R) or (D).

If i were president of the world, I'd abolish political affiliations and make everyone vote in secret to relive political pressure, but of course, publish the votes afterward. I'd outlaw any name or bill to appear with a (D) or (R) after the name. We don't need a 2-party political system, we need a 100-part political system where it is impossible to build a consensus unless it's on it's merits. I live in a fantasy world.

154

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 00:51

Which is not unusual at all. The GOP chided Democrats when they asked for more time to look over Bush's 2001 tax cut, which was about 50% larger (about $1.35 trillion).

155

rockafellerskank
Dude
ID: 27652109
Tue, Feb 17, 2009, 00:56

PD. Just because that happened in 2001, is not a reason it should continue to happen. R's were wrong then. D's were wrong now.

I'm not picking on you, but I read 100's of posts on this forum where one "side" responds to a statement by giving an example of they way the other "side" responded in a past situation. Big deal. My nephew is in 3rd grade. If he responds with a "but Johnny did it first" comment, he is reprimanded. Surely, these "leaders" can do better than my nephew, yes?

156

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 01:00

I'm not saying it should or should not happen now. I think the GOP should stop acting like it has never happened before, and that they were not the ones to do so.

It is clear that the GOP decided some time ago to all vote against it, so even the whining about not having time to read the legislation is disingenuous.

157

rockafellerskank
Dude
ID: 27652109
Tue, Feb 17, 2009, 01:03

... but just to be clear, putting aside what happened in 2001 (although i could argue that this bill is more important than Bush's 2001 package based on our current situation even though it is about 50% smaller)... do you think it is appropriate for either side to push legislation without proper time for the all stakeholders (D's, R's, voters, business leaders, analysts) to read it?

I don't. I do believe a stimulus package was called for, but i believe the public could ave gotten a better deal without the D's and R's next to their name at every turn. There is no such thing as "bipartisanship"

158

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 01:34

I think your question assumes that the people who wrote the bill haven't read it, which doesn't make a ton of sense (with all due respect--seriously).

I think your question is really: Do the legislators have enough time to doublecheck their work in light of changes made by the merger of the two bills?

A related (but very distinct) question is: Does the public (including lobbyists) have enough time to absorb, reflect, and lobby their legislators on this bill?

I'd say "yes" on the first, and "no, but that doesn't matter too much to me" on the second.

Legislators who do not feel they have enough time should vote "no." If this happens on a large scale the bill doesn't get passed.

The problem really isn't that legislators don't have enough time to read a bill. It is that they are voting for it anyway.

159

jedman
ID: 552262217
Tue, Feb 17, 2009, 09:46

My whole problem with the bill is that it had too much spending that I don't think has anything to do with stimulating the economy. Now that it has passed, I think as this money gets spent and the public actually sees what it is getting spent on, they will contact their congressmen and express their outrage or disappointment, whatever you want to call it.
I want to know when Pres. Obama is going to keep his promise of looking at every department of the government and the budget line by line to eliminate the waste.
I want to know if in the future he is going to keep his promise to have legislation on the internet 48 hours before a vote and wait 5 days before signing a bill so the public can look at it. I hear a lot of talk about transparency, but I have not seen a lot of it in action in this stimulus bill. Perhaps it is one of those rules that has to be flexible, like no lobbyists in the administration.

160

Mith
ID: 2894309
Tue, Feb 17, 2009, 09:52

I don't think has anything to do with stimulating the economy.

You do understand that not all of the items in the bill are designed to stimulate the economy, right? The bill attempts to serve three purposes, only one of which is stimulus.

161

jedman
ID: 552262217
Tue, Feb 17, 2009, 09:55

If we are so far in debt, why are we spending money that doesn't necessarily have to be spent now? Please enlighten me, and I am not trying to be a smart aleck here. I genuinely do want to hear the other side. I do not pretend to think I am absolutely correct on all my thinking. That is why I am trying to listen to all sides of the argument.

162

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 09:58

But that is the point of the stimulus: To pump money into the economy now. I'm not sure why you would think otherwise on a stimulus bill.

163

boikin
ID: 532592112
Tue, Feb 17, 2009, 10:07

I think your question assumes that the people who wrote the bill haven't read it, which doesn't make a ton of sense (with all due respect--seriously).

How much of a bill is actually written by the authors? the bill is 1071 pages long, i know i can not write and comprehend 1071 pages in less than a month. Maybe the authors are geniuses, but i kind of doubt it, odds are that know one completely understands this bill and that aids just give them highlights of the parts they read.

164

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 10:14

You might be right. But the only legislators complaining about it are the ones who have vowed not to vote for a stimulus package anyway. It seems like a manufactured problem to me.

165

Frick
ID: 3410551012
Tue, Feb 17, 2009, 11:10

Re: 163

I don't know on a federal level, but a college friend of mine is a lobbyist at the state level. Some of the recent laws that were passed were his direct writing. Is some of it tweaked? Absolutely.

But I doubt that the representatives wrote any of the actual bill themselves. That's what they have staffers for.

166

weykool
ID: 2842717
Tue, Feb 17, 2009, 12:02

#160 You do understand that not all of the items in the bill are designed to stimulate the economy, right? The bill attempts to serve three purposes, only one of which is stimulus.

Finally a Democrat willing to speak the truth.
The other two purposes?
1. Payback for Democrat supporters who helped get Obama elected.
2. The downpayment on the Obama plan to socialize the government of the United States and limit the freedoms of all Americans.

Not a stimulus package but a SwindleUS package.

168

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 12:05

Heh. 1/3 of the package is in tax cuts. How's that socialization?

FOX News seems to have neglected to mention that the first Obama promise he delivered on is tax cuts.

169

Mith
ID: 2894309
Tue, Feb 17, 2009, 12:10

Weykool

I tjought you backed out of this discussion after you were embarrassed in post 95. Now that you've returned, care to respond to some of the counter-points I made there?

Or did you plan to duck back into the shadows until your next opportunity for a not-so-clever semantic pot-shot ?

170

boikin
ID: 532592112
Tue, Feb 17, 2009, 12:23

Heh. 1/3 of the package is in tax cuts. How's that socialization?

What are taxes going to look like when the bill comes do? It is probably a pretty safe bet that '12 Obama will not be promising tax cuts, then again nobody else will either.

171

gibby88
ID: 14059715
Tue, Feb 17, 2009, 12:41

Does anyone have a link to the total cost of Bush's two stimulus packages? Also, the current cost of the war(s) too? Thanks---

172

boikin
ID: 532592112
Tue, Feb 17, 2009, 13:53

864 billion since 2001 on the war on terror. above the the normal peace time operations. Long term costs assuming they finish out the war in Iraq and Afghanistan and you account for interest could be between 2.5 and 4.5 trillion.

173

boikin
ID: 532592112
Tue, Feb 17, 2009, 14:13

At least we get to watch it getting spent. Or maybe we do, I am interested how this part of plan turns out.

174

weykool
ID: 2842717
Tue, Feb 17, 2009, 15:10

Mith:

You are correct.
I decided it was pointless to respond to you.

The discussion started out talking about porkbarrel spending.
That morphed into "discretionary spending".
Then further morphed into "earmarks"

According to PD "About half of descretionary spending is department of defesne".
The last I saw we were spending 20% of the budget on defense.
This would mean that 40% of the budget would be "discretionary".
When you posted your graph that has no basis in reality I dedided it was pointless to argue with people who just change the subject and throw out bogus information to bolster their argument.

The federal budget is estimated to be 3 trillion.
The swindleUS package has 500 billion in pork.
I dont think that will fit into your bogus little graph.

175

Perm Dude
ID: 111571622
Tue, Feb 17, 2009, 15:26

The last I saw we were spending 20% of the budget on defense.

"Discretionary spending" is what is not mandated by law to be spent (Social Security, Medicare, debt costs, etc are all non-discretionary spending). This is the areas where stuff might be cut from the budget

FY 2008 was about 38% discretionary spending, and about half of that was security spending (which does not include all spending on the military. Much of the spending on The War on Terror is off-budget, and other costs like the VA (including VA hospitals) are not included in standard "security spending" discussions).

Obama is still working up the regular spending bills which will cover 90% or so of the goverment spending (both discretionary and mandatory), but much of those budgets are already covered in the stimulus package, which was intended to frontload government spending.

The swindleUS package has 500 billion in pork.

Where, exactly? It actually only intends to spend about $527 billion. I've no doubt that one can cherry pick all sorts of stuff in the package (Head Start? small business tax incentives? mass transit?). But to outright call 95% of the thing "pork" displays a misunderstanding of what it is that is being discussed.

176

jedman
Dude
ID: 315192219
Tue, Feb 17, 2009, 20:46

#164 - What about our plan is going to make us different than
Japan, who spent years pumping money into their economy, and
yet it did not help?

Are the tax cuts in this bill really going to help? From what I
understand, $116 billion is coming largely from the $13/week
or $8/week
spread over two years and then it stops. I always thought that
permanent tax cuts worked better. It just doesn't seem logical
to me that getting $13/week or $8/week for two years is going
to change the way folks spend, especially since it stops in two
years. Bush tried it twice with stimulus checks and it didn't
work.

177

Baldwin
ID: 9123198
Thu, Feb 19, 2009, 13:33

(2 billion to Acorn)

178

Seattle Zen
ID: 81311911
Thu, Feb 19, 2009, 13:34

Not enough

179

Perm Dude
ID: 5181910
Thu, Feb 19, 2009, 13:59

2 billion to Acorn

A lie.

How would Jesus spin?

180

Tree
ID: 1311551521
Thu, Feb 19, 2009, 14:04

PD - stop letting facts get in the way of propaganda.

181

boikin
ID: 532592112
Thu, Feb 19, 2009, 15:03

Don't let bias get in the way of good reporting. The article is correct ACORN is not getting 2 billion dollars, but instead of just answering the question by saying the stimulus bill makes ACORN eligible for 1 billion dollars and for another 2.2 billion (which they would probably never apply for)and will have to compete for every dollar it gets. It goes on the write about the faulty logic used by the congressman, which is actually incorrect.

182

Perm Dude
ID: 5181910
Thu, Feb 19, 2009, 15:11

The bill does not "make ACORN eligible" in any way. They have to apply and be accepted in order to be eligible for any money for any program.

"ACORN" is simply the GOP's shorthand for "boogieman." They have no credibility, or even anything constructive to offer. Except the tired fear-mongering or waiving the bloody sheet of ACORN around.

"Liberal!"
"Pelosi!"
ACORN!"

On and on. It got them into the minority position they are in today, and continues to paint the GOP as a party without ideas or a firm grasp of facts.

183

boikin
ID: 532592112
Thu, Feb 19, 2009, 15:21

PD what do you think eligible means?

eligible - meeting the stipulated requirements, as to participate, compete, or work; qualified. Do you see the word compete? Did you even read you the link you posted?

ACORN – and any other nonprofit entity – would be eligible to compete for NSP funds (as it already does for CDBG funds), but the key words here are "eligible" and "compete."

184

Perm Dude
ID: 5181910
Thu, Feb 19, 2009, 15:29

Do you read your own posts?

"Eligible to compete" is fundamentally different from "eligible for 1 billion dollars." One gets to the second only by sucessfully completing the first. In the very way, btw, that right wing wackos are saying bill "gives $2 billion to ACORN."

I'm eligible to compete for the Phillies. But I'm not eligible to get paid until I sucessfully make the squad. But if I were using Baldwin's logic, I might as well start a thread saying "Perm Dude" to get $2 million from the Phillies."

185

jedman
ID: 552262217
Thu, Feb 19, 2009, 16:03

It's the same with Pelosi's mouse. Until I actually see proof that her mouse got $30 million, I'm not going to get upset and even then you have to find out the entirety of the expenditure.

I think when we start seeing the money spent, there are going to be surprises on both sides. The right will have to admit they overreacted and the left will have to admit it was spending that didn't work they way they thought it would.

I'm getting so sick of hearing the words crisis and catastrophe a zillion times in each speech from the administration and I'm so sick of the right trashing every single word that comes out of the administration's mouth. I'm starting a new thread in a little bit, what is great about America. For crying out loud, we live in a fabulous country that I love. Let's find some positives for a change!

186

boikin
ID: 532592112
Thu, Feb 19, 2009, 16:09

It's the same with Pelosi's mouse. Until I actually see proof that her mouse got $30 million, I'm not going to get upset and even then you have to find out the entirety of the expenditure.

i must have missed this one, i hope it refers to Disney land, that place could use 30 million in fixing up, actually maybe not fixing up but i sure it would be a 30 million well spent.

187

boikin
ID: 532592112
Thu, Feb 19, 2009, 16:49

I am totally against new mortgage bailout, but i heard one idea today that i thought was pretty good and that was in order to be eligible for mortgage aid you should be willing to community service. They should probably apply this idea to corporations too.

188

jedman
Dude
ID: 315192219
Thu, Feb 19, 2009, 18:23

I have to read up on the Mortgage bailout before I give any
thoughts, I don't know enough about it yet to offer any opinion.
I think it might be worthy of it's own thread, we have pretty much
exhausted this thread I think until the money starts being spent. I
think most of our feelings have been expressed on the bill itself.

189

weykool
ID: 2842717
Thu, Feb 19, 2009, 18:37

I must have missed this one, i hope it refers to Disney land, that place could use 30 million in fixing up, actually maybe not fixing up but i sure it would be a 30 million well spent.

When you have a bill that spends billions of dollars on pork you know there has to be something in it for Disneyland.

Proposed 300mph maglev train from Disneyland to Vegas receives government funding
If we are spending 30 million on a rat surly we can spend 45 million on Mickey Mouse.

190

Perm Dude
ID: 5181910
Thu, Feb 19, 2009, 18:52

That is an article from June 2008. I don't believe the most recently passed stimulus bill has obvious earmarks (the House version had none, I believe).

191

Perm Dude
ID: 5181910
Thu, Feb 19, 2009, 18:55

Just to be clear: the maglev project is a result of an earmark (government spending done on behalf of an individual legislator for a particular project).

But "earmarks" are in the eye of the beholder. Certainly any construction project (like mass transit) would serve the main purpose of creating jobs.

192

jedman
Dude
ID: 315192219
Thu, Feb 19, 2009, 19:20

I have wondered about this some. Wouldn't if follow that the
winning bidders are already in business and have employees? How
many new jobs are really going to be created on some of these
projects? I'm sure there are going to be some who have been laid
off that are re-hired by their companies, but how can the number
of jobs created be quantified at this time? And if we are borrowing
$8 billion to build this, what is the cost per job created?
Of course the other question is, why do we even need this train in
the first place?

193

biliruben
Leader
ID: 589301110
Thu, Feb 19, 2009, 20:04

A job saved is in some respects even better than a job created. I'm not sure I get your point. An obviously if a firm wins for a massive project, they would need to ramp up and hire more staff.

You also have the cascading effects of them spending that salary in the economy. And so on. And so on.

We are losing more than half a million jobs a month. Stopping those job losses is the first job of the stimulus.

194

jedman
Dude
ID: 315192219
Thu, Feb 19, 2009, 20:40

My main question, is how are they quantifying how many jobs
will be created? They don't know what companies will win the
jobs, how many in those companies are already working, how
many they will have to hire on. I'm sure there is some computer
modeling that helps them, but I just think the number of created
jobs is just so hard to quantify, therefore the exact amount of
jobs created by the stimulus is so hard to predict.

I guess I just question the cost of creating those jobs and the
absolute stimulative effect. We're certainly going to find out.

And I still ask, why do we need that train anyway? Wouldn't
there be something else more worthy of $8 billion?

195

Razor
ID: 56038210
Thu, Feb 19, 2009, 20:42

jedman, as far as I know, the stats are always stated as X number of jobs created or saved. It does not matter if they were created or saved, just that there is work for Americans that was not previously there.

196

Perm Dude
ID: 5181910
Thu, Feb 19, 2009, 21:31

Wouldn't if follow that the winning bidders are already in business and have employees?

Absolutely. But they don't necessarily have to be carrying the number of employees on payroll to complete the job being bid upon. If fact, since they are presumably already doing work, the winning bidder would, by definition, be expanding to do the work.

197

boikin
ID: 532592112
Fri, Feb 20, 2009, 10:21

they were created or saved i can see how you can predict created jobs, but i have no feeling for how they can predict saved jobs. I am sure it is is all kind of wave of arms math used.

198

weykool
ID: 2842717
Fri, Feb 20, 2009, 10:45

The only jobs this train is going to be creating are jobs for the lawyers to file the environmental impact studies.
When do you really think they will start laying tracks?
It will be years from now.
The other problem is going to be how many more taxpayer dollars are going to be spent to subsidize the operation of the train?
The drive from OC to Vegas is 4 hours.
You can fly to Vegas for $99 round trip.

I also would like to thank the state of California for spending my portion of the tax cuts from the swindleUS package.
The state sales tax was raised 1%(8.75% in OC now), auto registrations were doubled, and income taxes were raised 25%.
Estimates are it will cost the average family 2K per year over the next 5 years.
I would like to see the job loss projections from this latest state budget.
Being the 5th largest economy in the world California has the potential to drag the rest of the country into that depression we were trying to avoid.

199

jedman
ID: 552262217
Fri, Feb 20, 2009, 11:54

I have 6 trucks for my business, and two personal vehicles. The doubling of the license fees is going to hurt. At least they got rid of the .12 per gallon gas tax I think.

And they wonder why businesses are leaving California. Everything our legislature does is to hurt small business, it is just amazing how much stupidity there is in Sacramento. I have been there half a dozen times lobbying on behalf of our industry and every time I leave I want to just go home and take a shower.

200

weykool
ID: 2842717
Fri, Feb 20, 2009, 12:40

Actually I think the .12 per gallon is in there too.

201

nerveclinic
Leader
ID: 05047110
Fri, Feb 20, 2009, 12:52

As I've mentioned in the stock thread, I listen to all the Bloomberg economic podcasts every day. We are usually talking about 8-10 economists or other in the financial field everyday. Some interviews are 5 minutes some 30. I generally listen to all of them.

Before the plan was passed, I'd say the vast majority of the economists interviewed were for a stimulus package. The numbers were running 80-90% in favor.

Since the bill was detailed and passed, I don't think I've heard a single one who like it. They don't think it's been put together properly. Not enough immediate stimulus, too much pork, too unfocused and spread around to make a difference.

That's the general criticisms I am hearing, some quite harsh.

Again, not politicians with an ax to grind. The economists on the podcasts generally keep partisan politics out of it. They all were wishing Obama well before. They all generally praised the selections he's made in terms of Geitner and Summer etc.

For what it's worth.

202

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 13:13

#198: Airplanes are much, much more subsidized than trains. Trains, however, have the benefit of being a lot more fuel efficient and with much less environmental impact (if you're into that sort of thing).

203

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 13:14

Good blog post by Andrew Sullivan about the stimulus and how we approach problems

204

Boxman
ID: 337352111
Fri, Feb 20, 2009, 13:27

Does anyone here really think the stimulus package is a good idea as presented? Obama talks about how it isn't "perfect". I guess 800 billion dollars doesn't buy us perfection.

Why is it when Bush/Cheney talked up terror attacks it is fear mongering but when Obama talks up the probability of economic calamity the Fear Monger Police are nowhere to be found?

Markets are forward looking. The DOW and S&P have plummeted since the signing of the plan including a near 300 point doozy on Tuesday when Obama literally signed it.

That speaks volumes. If it was thought the plan would work the market would shoot up. The consensus is that it is poorly designed will be ineffective and ultimately fail. These aren't Republicans or Democrats with a beef against Obama or Congress. These are the people who, most likely above all, want to see a plan that works. I know I do.

I want a government plan to be successful. If for no other reason than I'd like to actually see a government plan succeed and my tax dollars used wisely.

What I don't get in any of this is that the transparency claim is a myth. Go to Recovery.gov to see what I'm talking about. He lump in science spending with infrastructure. What is so intertwined about those two concepts that they cannot be broken out on a simple bubble graph? Why does the tax relief portion have about five qualifiers at the footnote of the webpage? Why can't the tax relief part just be called tax cuts? What is exactly meant by "protecting the vulnerable"? We're all vulnerable. Superman is not a real person and even he is vulnerable to kryptonite.

So why mince words? Why not be transparent in the language used to show transparency? The answer is because the books are cooked and people don't like the smell coming out of the government kitchen.

205

Razor
ID: 32138722
Fri, Feb 20, 2009, 13:44

I really cannot believe that you are trotting out this same lame "Obama does X, and the market dose this" garbage again. Didn't you learn your lesson after attempting to tie gas prices to the likelihood of an Obama presidency?

If the markets hated the stimulus, they'd have plummeted when it was first proposed, then again when it seemed likely to pass. It would not just tank the day it was signed. The government is pouring money into the economy; the market does not care how efficiently it is spent, just that it is happening since more money in the economy is better than less money in the economy.

206

Boxman
ID: 337352111
Fri, Feb 20, 2009, 13:46

If the markets hated the stimulus, they'd have plummeted when it was first proposed, then again when it seemed likely to pass. It would not just tank the day it was signed.

If you pull the dates that happened I'll pull the info on the DOW and S&P and we can see what the markets have done since then.

207

Mith
ID: 2894309
Fri, Feb 20, 2009, 13:54

It was proposed on 1/16.

I think the DJIA went up 60 points and the S&P about 6.5 points that day.

208

boikin
ID: 532592112
Fri, Feb 20, 2009, 13:54

The government is pouring money into the economy; the market does not care how efficiently it is spent, just that it is happening since more money in the economy is better than less money in the economy.

what do you mean the market does not care? Explain?

209

Boxman
ID: 337352111
Fri, Feb 20, 2009, 14:14

I think the DJIA went up 60 points and the S&P about 6.5 points that day.

And since? Nobody sells all of their position or buys all of their position in one day.

210

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 14:14

The DOW and S&P have plummeted since the signing of the plan including a near 300 point doozy on Tuesday when Obama literally signed it

This doesn't represent a causal relationship. The tanking of the stock market represents the problem that the stimulus package is intended to help fix. And no, nothing is perfect is economics, but this shouldn't prevent us from doing the right thing (or, at least debating what the best (not perfect) course of action is).

One thing that will help the discourse is to eject from our minds the belief that daily changes in the stock market index is a barometer of how "good" or "bad" some action by the government is.

211

Boxman
ID: 337352111
Fri, Feb 20, 2009, 14:19

One thing that will help the discourse is to eject from our minds the belief that daily changes in the stock market index is a barometer of how "good" or "bad" some action by the government is.

Why? Economists come on CNBC and Bloomberg all the time and rail against the stimulus package. Their opinions are derived from real dollars by the movements in the stock market. I've heard the same things Nerve alluded to. They don't care about Republican or Democrat and I honestly don't in this case. I look at it like I would a war. I want America to win.

To add to the discussion I think it would be great if folks tuned in to CNBC either during the day or at night beginning with Kudlow at 6pm CST. You get a very good sampling of economists, professional traders, hedge fund managers, and politicians from both sides of the aisle.

212

Boxman
ID: 337352111
Fri, Feb 20, 2009, 14:22

Mith: I did some digging and here are more details on the DOW and S&P movements on or about that date.

DOW

Note that 1/16 occurred on a Friday so people had time to digest the approx. 1,000 page document before the next trading day.

1/16 Close: 8,281.22
1/20 Close: 7,949.09

S&P 500:

1/16 Close: 850.12
1/20 Close: 805.22

213

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 14:29

Why? Economists come on CNBC and Bloomberg all the time and rail against the stimulus package.

Yes, but they don't base their opinion on how the stock market did the day after the signing (or the weeks before or after).

There are good reasons to be against the stimulus package, but having the daily change in the index do the thinking for you is folly.

I haven't read or listened to anyone credible who is 100% against the package--most are looking at different aspects of the package and whether this will hurt or help (there's nothing wrong with that, IMO). Others believe the package is either too small or too large. They are a bunch of plumbers who put in the wrong pipes, then try to assure you that they can fix your plumbing problem.

But, like bili, I'm loathe to put a lot of faith in the same bunch of "experts" who urged some of the same policies which got us into this mess.

214

Boxman
ID: 337352111
Fri, Feb 20, 2009, 14:36

This doesn't represent a causal relationship.

Can you site anyone who says this? Where did you get your data from to assert that?

215

Biliruben
ID: 52052916
Fri, Feb 20, 2009, 14:44

Who cares whether it's causal or not?! Are you really
suggesting we set economic policy by direction of the Dow?

This from the guy suggesting we buy financial stock less than
year ago. Sheesh.

216

Boxman
ID: 337352111
Fri, Feb 20, 2009, 14:47

Does being wrong on financials a year ago make me unqualified to comment on the stimulus package? How so?

217

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 14:51

Comment, sure. Just don't present yourself as an expert if that's your job and you have a record of being exactly wrong on it.

218

Boxman
ID: 337352111
Fri, Feb 20, 2009, 14:54

I'm an expert? Thanks.

I was wrong on financials so now I'm wrong on everything? How does being wrong on financial stocks, one sector of the market, equate to being wrong on everything?

219

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 14:55

No no no! I'm not saying you (Boxman). I'm talking about the experts on cable.

Sorry that wasn't clear.

220

Boxman
ID: 337352111
Fri, Feb 20, 2009, 15:04

Perm Dude: Those experts on cable or satellite radio are some of the best minds we have to fix this. As a group they represent economists, politicians, hedge fund managers, mutual fund managers, stock traders, bankers and the list goes on and on. I rarely if ever detect a personal or partisan attack from these guys. They don't have a personal beef with Obama. I don't have a personal beef with Obama. What we do want is for the economy to get rolling because that's how more people make money.

NASA has made mistakes. Should we farm out space exploration to GE or that guy from Virgin? No. They're still brilliant they were just wrong.

They are not infallible. No one is, not Bush, no Obama, or you or me.

221

boikin
ID: 532592112
Fri, Feb 20, 2009, 15:19

PD, i think you are missing Boxmans point, or maybe i am, but i think all he is trying to show is that stock market moves are reactionary to what people think the future will look like. If investors believed in the stimulus package working you would not see the stock market continually falling because investors would have nothing to worry about. the one caveat to his theory is that he has no measure of what the reaction would be for better or worse plans. Maybe market would only be doing slightly better with perfect plan.

222

Biliruben
ID: 52052916
Fri, Feb 20, 2009, 15:27

I don't disagree with that. We all certainly make mistakes, and I
certainly want to hear your input.

Personnally I don't put much stock, so to speak, in what anyone
from wallstreet has to say. They ain't just morally bankrupt, if
you know what I mean, and they have a strong agenda which is
often at odds with the good of America.

223

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 15:32

#221: But where the idea is wrong is that the market is only reacting to what is going on in Washington.

When the whole point of the stimulus package is that things are in the tank, to say that the stock market went down the day after the stimulus was passed because of the package really misses the mark. Sometimes a cigar is just a cigar. Sometimes the market goes down because the companies in the index are, in fact, losing value. Nothing more and nothing less.

224

boikin
ID: 532592112
Fri, Feb 20, 2009, 15:42

PD are you implying that you think the stock market drops are not reflective at all of the stimulus packages passing?

225

Biliruben
ID: 52052916
Fri, Feb 20, 2009, 15:54

Well if he isn't, and I think he is, I am. I am not implying
anything, I'm stating it directly. I think an equally plausable
arguement could be made that the market would have dropped
twice as far without the stimulus. Who cares.

Anyone who uses that a guage of good or bad fiscal policy
should take a look at the farm I have for sale in the Mississippi
flood plain. In the summer.

226

boikin
ID: 532592112
Fri, Feb 20, 2009, 16:07

It is not a measure of good fiscal policy, it would be a measure of what people think is good fiscal policy. And yes it is equally plausible that might have not have dropped at all if there was not stimulus but acting like passing of the bill had no effect on stock market, is ignorant. like i stated earlier the question is not does the stock market reacts to government decisions it is was that reaction extreme or not.

Oh and the best farm land is usually in the flood plain so if was starting a farm i might be interested.

227

Perm Dude
ID: 33122209
Fri, Feb 20, 2009, 16:24

The bill does, indeed, have an effect on the stock market. If the bill works, the spikes in unemployment will halt, credit will ease just a bit, and confidence in the marketplace will creep back into the picture. And that will all be measured by an increase in the stock market indicies. Eventually.

The stock market measures a lot of things. But it isn't a flash opinion poll on the economic worth of a just-passed bill.

No one is saying it doesn't have an effect. But expecting the next day's changes to have any meaning is folly.

228

Boxman
ID: 571114225
Fri, Feb 20, 2009, 17:30

But it isn't a flash opinion poll on the economic worth of a just-passed bill.

Honestly yes it is. Just so you don't think I'm picking on Obama, because I'm not, I'll bore you with a little on my background.

I've been doing stocks since about a year or so before the dot com bubble burst. I can tell you without any reservation or doubt that when a politician speaks, announces legislation or signs legislation it can get hazardous. The market is terrified of government intervention as a general concept. It does work both ways. If the FOMC announces a rate cut, and it's the number the market is looking for, the market will go up. If the rate cut is less, the market will go down.

Bush in particular was famous for this especially in his second term. He would have a press conference or one of his cabinet members and the market would tank. Another famous example was when Pelosi gave her sermon before the first vote on TARP back in November(?). She opened her trap, the market didn't like what she had to say, and curtains, it went down.

The market really isn't partisan. All it wants is money. Just look at the indeces, especially the NASDAQ, under Clinton. At one point, IIRC, the NASDAQ was higher than the DOW. Think about that for a minute.

229

biliruben
ID: 111542413
Fri, Feb 20, 2009, 18:30

That's all true, but the market tends to be extremely short-sighted. That's why we should pay no attention to it.

230

Boxman
ID: 571114225
Fri, Feb 20, 2009, 18:52

How do you define extremely short sighted?

231

biliruben
ID: 111542413
Fri, Feb 20, 2009, 19:05

Depends on the stock, but I've read 6 mo to be typical. Pretty meaningless for this kind of stimulus package.

232

Razor
ID: 56038210
Fri, Feb 20, 2009, 19:11

The major flaws in your argument are:

a) That the market has not already incorporated the passage of the stimulus into its pricing.

b) That the passage of the bill is the primary cause of market movement.

I work for a publicly traded company. The stimulus will not affect us in any direct way. Our company is fine financial shape, but it's just going to be a down year for the company because of the economic conditions. As such, our stock price has fallen and will continue to fall. This would happen with or without the stimulus. The same could be said for most businesses in America; we are all interdependent and there are not many industries out there that are immune to this downturn.

233

Boxman
ID: 571114225
Fri, Feb 20, 2009, 20:31

Depends on the stock, but I've read 6 mo to be typical. Pretty meaningless for this kind of stimulus package.

Let's assume for a moment that 6 months is correct, and I am not saying it is. The stimulus was originally designed to impact this year and 2010. 6 months is a 25% slice of that timeframe. The market reaction is not exactly encouraging news about the stimulus impact in that timespan.

Razor: That the market has not already incorporated the passage of the stimulus into its pricing.

I never said it wasn't factored in. In fact I stated that it's factoring in is what has contributed to the market going down severely.

As I showed Mith earlier today, the market closed at a much lower price on 1/19 as it did on Friday 1/16 when the plan was announced. What other major events occured that day to the tune of 800 billion would have contributed to a 300 point decline in the DOW and a 50 point decline in the S&P? The market needed time (in this cause less than 1 business day) to digest the 1,000 page document and it reacted.

234

Mith
Dude
ID: 01629107
Fri, Feb 20, 2009, 21:02

How do you explain the rebound on the next day? The DOW went up 280 points and the S&P 35. Wasn't that also a statement? That perhaps the previous day was a kneejerk overreaction?

It seems plain enough to me that some of the negative movement in the market results from sagging confidence in the stimulus bill. But it seems just as obvious that the primary force is the general uncertainty in the economy, which even the most optimistic supporters of the president don't expect to improve in the short term.

235

Boxman
ID: 571114225
Fri, Feb 20, 2009, 23:23

I lack the wherewithal to post Excel charts here, but if you take a minute you could easily duplicate my work to see what I mean.

Graphing the DOW and S&P 500 closing prices tells me this:

Taking 1/16 as our starting date we get the following close prices as our basis:

DOW 8,281.22
S&P 500 850.12

Looking at a graph you could see that these starting points are each challenged three times between 1/16 and 2/9 until the bottom completely falls out. A chartist or analyst would call this a "triple top". It's a classic way of testing a new high in the market. You either bust through that new high after three attempts (sometimes even after only two) or you go down big time.

The closing prices for today are:
DOW 7,365.67
S&P 500 770.05

The DOW is down 11% and the S&P is down 9.4% since that day. You're halfway to the definition of a bear market (20% decline off a high) if you use 1/16 as your start date. That's already on top of the enormous bear market we've been in that Obama inherited.

How do you explain the rebound on the next day? The DOW went up 280 points and the S&P 35. Wasn't that also a statement? That perhaps the previous day was a kneejerk overreaction?

Now, to get to your question.

I will not discount the possibility of some short term correction but the long term trend cannot be denied. If you recall, Obama announced the plan on 1/16 as you stated but then the House/Senate went back and forth on versions and none of the serious ones were ever very popular with the market. Then the bill passed and curtains to the market.

Someone has to buy in order for a sale price to be determined right? My experience and heavy book/newspaper/magazine reading tell me that value investors buy after heavy declines. On a much much much smaller scale, people like me who buy and hold set limit orders that are good until cancelled (i.e. beyond just that trading day) so if a stock gets to a certain target price a buy order is triggered or I get a notification and reallocate on my own.

I attribute the rebound, and you are correct there were three solid attempts to bust through the 1/16 "high", to value investors and perhaps even a short term correction by people who felt the reaction to the events of 1/16 as extreme.

Yet the longer trend is too much proof that the market does not believe one iota the stimulus will work.

236

Boxman
ID: 571114225
Fri, Feb 20, 2009, 23:24

For my data I am using the closing prices of the DOW and S&P 500 as defined by what are on their respective Yahoo! Finance pages.

237

astade
ID: 191134222
Fri, Feb 20, 2009, 23:44

For your data, how about looking at the last year?

I'm sick of people cherry picking data to prove a point without thinking about the analysis. Trends like the DOW are accessible to all of us. The DOW was spiraling out of control way before Obama was in power. Since this is a time series, I suggest you use a control chart before making any conclusion. If you did, you would see this has very little to do with the 'stimulus package' being set into motion.

I put the last part in quotes because I am not convinced it will stimulate the economy. But, I am not so foolish as to draw conclusions based on a small sample set.

I miss the days of Houpt and Sludge posting regularly. You are misinforming visitors of this forum.

238

Boxman
ID: 571114225
Sat, Feb 21, 2009, 00:00

And what do you think the market reaction would be to a stimulus package that even you yourself believe will not work?

239

astade
ID: 191134222
Sat, Feb 21, 2009, 00:04

I stated I am not convinced.

If you use data to try to make an objective set of statements as you did in #235. Make sure it is sound and honest. I ask that for the forum as we like to think that those that post here are sincere.

You did not do that in your post.

240

Boxman
ID: 571114225
Sat, Feb 21, 2009, 00:06

I'll have to do a better job of scamming message boards in my free time then. Thank you for the feedback.

241

astade
ID: 191134222
Sat, Feb 21, 2009, 00:13

I'm not sure about the meaning of your last post. Feel free to email me and we can discuss the merits of your analysis.

242

Boxman
ID: 571114225
Sat, Feb 21, 2009, 00:23

Absolutely not. In fact you take your little accusations of my sincerity and honesty and shove it. How's that for "meaning"?

I went out of my way today to say that I don't have an axe to grind with Obama. I really don't. I don't like his philosophy, but the country is getting pounded economically right now and I want a stimulus plan that will work.

I didn't pick 1/16 tough guy that was somebody else. Go back more than one post when you jump into an ongoing discussion and you would realize that.

You want to run numbers and give us your take of the stock market by all means I'm not stopping that. Just get a fvcking clue about what you're talking about before you accuse someone's sincerity and honesty.

While you're at it mince some more words too. You're not "convinced" the plan would work. Well OK then, let's say the market took YOUR advice and they weren't convinced it would work. What do you think their reaction would be? I suppose a full on bull market right?

243

astade
ID: 191134222
Sat, Feb 21, 2009, 00:32

...and that is what I was trying to avoid; a nasty exchange with you.

I read the entire thread. I lurk more often than not to avoid the partisan talk that is spewed. I called you out because of your analysis. I'm sorry you took it personally. I'm not interested in nastiness being posted on the board (see post #242). I'd rather talk about substance. I will refrain from directly responding to you again.

244

Perm Dude
ID: 33122209
Sat, Feb 21, 2009, 00:45

The market really isn't partisan. All it wants is money.

1. It doesn't make it scientific. The market (which is really an index of stocks) runs on money and emotion. This is why a stock can take a large hit despite setting record profits in a quarter (which happens all the time when it doesn't meet expectations of even more profit).

2. It also doesn't make it perfect as a barometer. Consumers (whether purchasers of products or of stocks) don't operate with perfect knowledge, so if even you believe that the next day is a glimpse into the mind behind the "invisible hand" you'd have to assume perfect knowledge to make that meaningful as an analytical tool. But it isn't.

3. If the market isn't "partisan" (whatever that means) then the first response to any market change should be to look for a market answer for the change. You haven't even done that first step. You've assumed, in your partisan analysis, that the market must be responding to the passage of the stimulus package and that the market's response is that the package should not have been passed.

245

Boxman
ID: 571114225
Sat, Feb 21, 2009, 07:13

You've assumed, in your partisan analysis, that the market must be responding to the passage of the stimulus package and that the market's response is that the package should not have been passed.

You should then be able to cite some articles showing me that the 300 point decline had nothing to do with stimulus package signing then.

246

biliruben
Leader
ID: 589301110
Sat, Feb 21, 2009, 07:30

Nobody with any credibility would attempt such an analysis. Six gagillion variables effect what the market does. You are attempting to use just one of those things in your analysis.

Your methods are unsound.

247

Mith
Dude
ID: 01629107
Sat, Feb 21, 2009, 07:54

Taking 1/16 as our starting date we get the following close prices as our basis:

DOW 8,281.22
S&P 500 850.12

Looking at a graph you could see that these starting points are each challenged three times between 1/16 and 2/9 until the bottom completely falls out. A chartist or analyst would call this a "triple top". It's a classic way of testing a new high in the market. You either bust through that new high after three attempts (sometimes even after only two) or you go down big time.

The closing prices for today are:
DOW 7,365.67
S&P 500 770.05

The DOW is down 11% and the S&P is down 9.4% since that day. You're halfway to the definition of a bear market (20% decline off a high) if you use 1/16 as your start date. That's already on top of the enormous bear market we've been in that Obama inherited.

OK, but the reality is that the markets troubles did not begin on 1/16. On September 30th, the DOW stood at 10,850. From that date to January 16th the DOW dropped 25%. When you look at that greater context, dropping another 9% in the next 5 weeks is clearly a continuation of the same decline that has been occurring for months.

You could point out that a 9% decline in 5 weeks is more significant than a 25% decline over 3 and a half months but 1. I've already agreed that uncertainty about the stimulus bill is a factor in the current market decline (while maintaining that the greater factor is the state of the economy in general) 2. I don't believe you can claim with any certainty that continued and increasingly bad economic news doesn't have a cumulative effect on the market and 3. Five weeks is a terribly small sample in such a volitile time. For example, the DOW dropped from 8,835 on 11/13 to 7,997 on 11/19 - a 9.5% drop in just 4 business days. Of course 4 business days later, it climbed back up to close at 8,829.

I think you know that I don't often challenge you on econ issues but the notion that we can look to the short term (I think 5 weeks qualifies as short term, especially when discussing a market trend that began last summer, right?) for any useful determination of the likely success of the stimulus is just ridiculous to me. The market is tanking because banks are still falling, businesses across multiple sectors are tanking, job losses are mounting, the housing market is still in the dumper consumer confidence shows no signs of improvement and people are scared. All of that was true before January 16th and it's all even more true today.

248

biliruben
Leader
ID: 589301110
Sat, Feb 21, 2009, 08:00

249

Mith
Dude
ID: 01629107
Sat, Feb 21, 2009, 08:08

Boxman

I just realized that I'd been taking your 9% decline S&P figure and applying it in my comparison of DOW trends, when I should have been using the 11% figure. Wasn't intentional and of course doesn't change my argument.

For added context the S&P stood at 1,165 on Sept 30th and dropped to 850 on 1/16. Thats a 27% drop over 3.5 months that preceded your 9.4% drop in the following 5 weeks. That sounds to me like a trend pretty much unaltered by any news about the stimulus package on 1/16.

250

Boxman
ID: 571114225
Sat, Feb 21, 2009, 08:20

5 weeks is all the data we have since the stimulus has been announced. If we had more data since the stimulus announcement I would gladly use it. In fact I think it would be healthy for this contuining discussion if someone every now and then looked at a DOW and S&P chart as we progress through the downturn and into the recovery period.

From an investment psychology point of view, let's say the Pelosi/Obama plan was thought to be a miracle worker and a cure to the problem, which is what I want it to be. Why wouldn't the market at least have an overall flatline trend or perhaps a slight downward one? Instead we have another extreme downward spiral since 1/16 with that closing day being tested three times. The triple top in investing is a significant event.

I failed to officially define the term triple top.

The bounce off the resistance near the third peak is a clear indication that buying interest is becoming exhausted. It is used by traders to predict the reversal of the uptrend.

My analysis has shown a triple top using the 1/16 closing price on both the DOW and S&P since 1/16. Once the third top was tested and failed the bottom fell out. This means the new litmus test for a market high is now the 1/16 (i.e. pre-stimulus, keep in mind it was 1,000 pages and impossible to correctly factor in the day it was announced) closing price. As you pointed out, the event of 1/16 was the announcement of the stimulus. So if the market thought the stimulus was a good thing, why would the 1/16 close be the new high and not a new average or low point? Yes there are other factors at play yet none with the gravitas of an 800 billion government stimulus plan designed to create/save 3.5 million jobs.

If we are going to go with biliruben's belief that markets are 6 months forward looking (I'm willing to go with that for the sake of compromise and discussion without further investigation.), then it isn't far out of whack to presume that the market is now looking to October/November and it doesn't like what it sees. Yet in 6 months the economy ought to be seeing spending from the stimulus plan.

Mith, I would very respectfully (I'm being overly careful to not be perceived as sarcastic or crude so I hope you pick up on that please because I'm not trying to be offensive.) suggest you spend 30 minutes watching CNBC when you get home from work or if you have Sirius they are channel 128(?) I believe. Look at it like an economic 9/11 because you're watching history, for better or for worse, being made.

251

biliruben
Leader
ID: 589301110
Sat, Feb 21, 2009, 08:54

From an investment psychology point of view, let's say the Pelosi/Obama plan was thought to be a miracle worker and a cure to the problem, which is what I want it to be.

You are going to be sorely disappointed. This is a 3-8 year downturn, no matter what the stimulus does to ease the pain.

252

nerveclinic
Leader
ID: 05047110
Sat, Feb 21, 2009, 09:07

Box in fairness, even before the stimulus package came out, I heard lots of chatter on business sites about by the buildup and sell the plan, i.e. the day it's announced.

This was before they even knew what the plan would be.

253

Pancho Villa
ID: 51546319
Sat, Feb 21, 2009, 09:15

I watch a lot of CNBC and listen to Bloomberg Radio on Sirius Channel 130.

That said, market reaction to the stimulus bill is incidental. Wall Street is more concerned with the banking/credit/toxic asset components, which the Obama administration has been slow to address.
Geithner has been elusive in directing a course of action, such as creation of a "bad bank," or some form of nationalization of the banking industry.

There are many unanswered questions as to how the first round of TARP funds were utilized, questions which need to be answered before the next round is approved and distributed.

As long as the financial institutions remain volatile and, in some cases, insolvent, the market will continue to respond negatively.
Citigroup, Bank of America and Wells Fargo, three of the biggest national financial institutions left, are toddling on the brink. Citigroup fell 22% and BOA 12% before a late afternoon rally yesterday as the DOW lost only 1.34% in comparison.

It's an exercise in futility attempting to compare the stimulus/spending bill with market movement while ignoring the impact of the banking/financial institutions crisis.

254

jedman
Dude
ID: 315192219
Sat, Feb 21, 2009, 09:23

I think the majority of the people are not thinking in terms of a
3-8 year downturn, they are looking for immediate relief and
that is what many expected from Pres. Obama. I believe those
that expected that were uninformed, but the expectations on
what he could do were so high, that all reality was thrown out
the window.

I'm trying to liken our problems to my personal life. If I am
living paycheck to paycheck, having a hard time making ends
meet, I would never think about accepting every credit card
offer that comes in the mail and using those cards to make
purchases, thus increasing my debt load and making my
economic situation even more difficult. Eventually, no
companies will loan me more money, I won't even be able to
make the minimum payments on all the cards and I'll go under.
I see this as exactly what we are doing. Other countries are
going to be floating new debt to help their economies and at
some point, nobody is going to want ours, our credit rating will
get worse and we will just have to print more and more money,
thus causing a huge inflationary situation.
If we are taking 3-8 years to get out of this, I think natural
market forces could have done the same thing. Recessions are
not something new to our country, we have had booms and
busts forever. I think this one has just become an excuse to
create spending projects that have been wanted for a lot of
years and that will not do what they think they will do. And I
think the market is looking very forward to that and doesn't like
what it sees.

255

biliruben
Leader
ID: 589301110
Sat, Feb 21, 2009, 09:33

This is already far beyond any of the downturns in the last 80 years, and it's accelerating. I think you underestimate the situation dramatically.

256

Pancho Villa
ID: 51546319
Sat, Feb 21, 2009, 09:42

One thing that Bill Clinton said the other day is very profound.

Former President Bill Clinton gives President Barack Obama an "A" grade for his first month in office, but tells ABC News that Obama needs to put on a more positive face when speaking to the American people about the economy

President Obama hasn't exactly exuded confidence as we move forward dealing with the economy. Instead of focusing on "don't expect too much, too soon," even if it's an honest appraisal, it would better serve the nation if he reverted to his campaign slogan of "hope."

257

jedman
Dude
ID: 315192219
Sat, Feb 21, 2009, 09:50

Trust me, I hope I am. One of the two camps is going to be
correct and I hope all those people smarter than me that are
predicting a disaster with this stimulus package are wrong this
time, because if they are right, it is going to get much uglier.

I think the downturn in the market is a combination of a lot of
things, mostly lack of confidence on any ideas being put forth by
the Obama administration. I think they are seeing that things
have been rushed, not well thought out, and the faces put forth
to sell the packages have not presented them very well.
Fortunately, the service I subscribe to has had me in cash since
last June and I am buying a little bit of gold at this time. I can
hope I am wrong, but I am putting some money where my
mouth is.
I've been reading some interesting things on past economic
downturns. When I get back from golf, I'll try to post some of
them later today. It is very interesting to read about what
happened 50, 75, 150 years ago and how so many of the same
things led to the problems. We are just repeating history in
many ways.

258

Perm Dude
ID: 10117218
Sat, Feb 21, 2009, 10:06

Unlike the Depression, however (which was made worse by Hoover doing nothing), the Obama Administration is working on trying to stem the bleeding a bit.

I'm not so sure that people, on the whole, are looking for immediate relief. And I don't think real people (outside Wall Street, that is) are shying away from the hard work and sacrifice that an extended economic downturn will force upon us all.

We can do without yahoos like Rick Santelli, however:

259

Boxman
ID: 571114225
Sat, Feb 21, 2009, 10:09

Pancho Villa: Former President Bill Clinton gives President Barack Obama an "A" grade for his first month in office, but tells ABC News that Obama needs to put on a more positive face when speaking to the American people about the economy

President Obama hasn't exactly exuded confidence as we move forward dealing with the economy. Instead of focusing on "don't expect too much, too soon," even if it's an honest appraisal, it would better serve the nation if he reverted to his campaign slogan of "hope."

Bill Clinton is 100% correct in this regard. There have been video comparisons of how Reagan spoke of the mess he inherited versus Obama and how Obama could learn from Reagan in how to speak about the economy.

This is another aspect that experts on CNBC and Dick Morris on Fox News have talked about. The market does look to the President and the Fed to get some sort of queue on the economy.

Biliruben: This is a 3-8 year downturn, no matter what the stimulus does to ease the pain.

I don't know about 8 years but I agree with your sentiment. If we believe this started towards the end of 2007 then still have at least 18 months left to go. The massive deleveraging required to truly get out of this is going to take time regardless of what Obama does.

We need to delever but to what level? I heard the personal savings rate is now at 3%. This includes money saved and debt elimination. A high savings rate is actually bad for economic activity because it means people are putting the money under their mattress and not going to the store.

So to spur the speed of deleveraging, could Obama have used the stimulus to wipe out 800 billion of private debt? Say student loans? I don't know and I'm not suggesting that. I would be curious what impact 800 billion would have on credit card or student loan debt.

260

Boxman
ID: 571114225
Sat, Feb 21, 2009, 10:11

We can do without yahoos like Rick Santelli, however:

Why? (If you're referring to his speech on the Chicago trading floor, I heard that live on my way to work on CNBC.)

261

Building 7
ID: 70243116
Sat, Feb 21, 2009, 10:12

Welcome to the gold club. And silver, too. Most of the posters here are anti-gold, pro-paper money. Time will tell which is better.

262

Perm Dude
ID: 10117218
Sat, Feb 21, 2009, 10:17

#260: Because yahoos like Santelli don't have a clue about how a widespread economic downturn hurts him (and his "island conservatives") too. Widespread problems need widespread fixes.

He's worried, oh so worried, that some of his tax money will go to someone who doesn't deserve it. Meanwhile thousands are losing their homes and jobs. "Let them eat cake!" Santelli cries. What a schmuck.

263

Boxman
ID: 571114225
Sat, Feb 21, 2009, 10:30

Building 7: Can you point me in the directions of threads you've posted in or some links you know of that lay out the case for gold vs. paper money? Don't do double work for my sake, but if you could reference a couple things I'd like to read it. I'm pretty ignorant on the concept of gold standard vs. paper money and I'd like to read up.

I've never had gold as a higher percentage of my portfolio as I do right now. That's mostly due to appreciation as opposed to new buying. There's a gold miner stock I have that's 15% of my portfolio. Historically it's usually around 3-5%.

264

Building 7
ID: 70243116
Sat, Feb 21, 2009, 10:33

A high savings rate is actually bad for economic activity because it means people are putting the money under their mattress and not going to the store.

I'll have to disagree with this one. Savings is good for the economy. People put their money in banks and get interest and the money is pooled and loaned to build factories, stores, etc.

......................

If what Santelli said is true, I'll go to Chicago.

265

Razor
ID: 56038210
Sat, Feb 21, 2009, 11:38

the money is pooled and loaned to build factories, stores, etc.

Borrowing goes up when rates are low, not when they are high.

266

Building 7
ID: 70243116
Sat, Feb 21, 2009, 12:07

At mises.org you can find a whole new school of economics called the Austrian School of Economics. It's not taught in American schools. It's different than Keynesian economics. Also, Ron Paul wrote something on returning to the gold standard, but I can't find it. These clowns in Congress will never vote to go to the gold standard until it's too late. They don't want to take away their power to print money in violation of the Const.

321gold has a lot of links to gold-related articles.

What if They Returned to the Gold Standard? This site has a lot of articles on silver.

267

astade
ID: 191134222
Sat, Feb 21, 2009, 15:02

MITH, thanks for posting 247. That was my view on how ludicrous it is to look at a time series that is out of control and then attempt to blame the stimulus package on the last month's performance.

268

Perm Dude
ID: 231262119
Sat, Feb 21, 2009, 20:32

Nate Silver shoots down the stock market as stimulus package barometer canard

269

jedman
Dude
ID: 315192219
Sun, Feb 22, 2009, 00:57

#258 - About Hoover, from the book "Great Myths of the Great
Depression", Lawrence W. Reed:

"Hoover expressly said that the laissez-faire approach to the
economy was a thing of the past. No peacetime president in
American history intervened in the economy to the extent
Hoover did. Among other things, he launched public works
projects, raised taxes, extended emergency loans to failing
firms, hobbled international trade, and lent money to the states
for relief programs. He sought to prop up wages at a time when
consumer prices were falling dramatically, thereby calling on
firms in effect to give raises to their workers at a time of great
business vulnerability. This is why Franklin Roosevelt accused
Hoover, during the 1932 presidential campaign, of having
presided over "the greatest spending administration in
peacetime in all of history," and derided him for believing "that
we ought to center control of everything in Washington as
rapidly as possible." FDR's running mate, John Nance Garner,
declared that Hoover was "leading the country down the path to
socialism."

Now I am sure something can be found to say this author is
wrong in some way.

How can we ever know who is right until after the fact? Who is
Nate Silver that we should believe that he knows it all?

270

jedman
Dude
ID: 315192219
Sun, Feb 22, 2009, 01:08

William Leggett in the 1830's warned that "the alternate
inflations and contractions of the paper currency incident to
such a pernicious system as ours will continue to produce their
inevitable consequence, unwholesome activity of business,
followed by prostration, sudden and disastrous. His analysis of
the problems back then:
"A vast amount of speculation in property of every kind and
name, at fictitious values; and finally, a vast and terrific crash,
when the treacherous and unsustainable basis crumbles
beneath the stupendous fabric of credit...Men, nowadays, go to
bed deeming themselves rich, and wake in the morning to find
themselves stripped of even the little they really had. They
count, deluded creatures! on the continued liberality of the
banks, whose persuasive entreaties seduced them into the
slippery paths of speculation.
During an economic bust, he said the average person "is
bewildered in his attempts to investigate the cause of the
confusion, and is ready to listen to any explanation that fixes the
blame of the disaster on those whom he had previously
regarded with dislike."

The more things change, the more things stay the same.

271

jedman
Dude
ID: 315192219
Sun, Feb 22, 2009, 01:23

Is there a precedent for a depression that turned itself around
with no help from the government?

"The often overlooked depression of 1920-21 is especially
instructive for us today. During and after World War 1, the
Federal Reserve had been inflating the money supply quite
substantially, and when it finally began raising the discount rate,
the economy slowed as it began its readjustment in line with
Austrian business cycle theory. by the middle of 1920 the
downturn in production had become severe, falling by 21
percent over the following twelve months. conditions were
worse than they would be in 1930, after the first year of the
Great Depression. Yet scarcely any American even knows that
such a slowdown occurred. That's probably because, compared
to the Great Depression of the 1930s, it was so short lived.
Unlike those terrible times...the market was allowed to make the
necessary corrections, and in no time the economy was back to
setting production records once again.
Not surprisingly, many modern economists who have studied the
depression of 1920-21 have been unable to explain how the
recovery could have been so swift and sweeping even though
the federal government and the Federal Reserve refrained from
employing any of the macroeconomic tools--public works
spending, government deficits, inflationary monetary policy--
that conventional wisdom recommends as the solutions to
economic slowdowns. The Keynesian economist Robert A.
Gordon admitted that "government policy to moderate the
depression and speed recovery was minimal. The Federal
Reserve authorities were largely passive....Despite the absence
of a stimulative government policy, however, recovery was not
long delayed."

272

jedman
Dude
ID: 315192219
Sun, Feb 22, 2009, 01:29

I am getting all these from a book I am reading called Meltdown,
by Thomas Woods Jr. He is a proponent of the Austrian School
of Economics cited by B7 above. How do I know that he is
correct? I don't and knowing the intellect on this board, I am
sure I will get some other sides of the story, which is the way it
should be.

I think my main point is that we are not in a situation that has
not necessarily happened before. The dollar amounts are
astronomical, but I wonder on an inflationary adjusted basis if
they are that much higher. There is most likely not a clear cut
answer, but a Keynesian approach to the problem may not be
the answer.

Food for thought.

273

Perm Dude
ID: 231262119
Sun, Feb 22, 2009, 09:04

#269: Re Nate Silver: You should feel free to click to link to find out the answer to your own question!

Regarding Hoover: In the end, and long after it did any good, he came around to realizing what could be done. The difference is timing: Hoover fought attempts by goverment to intervene in the economy until it was far too late to do any good. He felt that virtually any legislative approaches to the economy would destroy self-reliance and the ability of people to fix the economic problems themselves. His approach (before he realized that he was wrong) was to encourage volunteerism only, and to increase protectionist measures for inported good (Smoot-Hawley).

Since there was a significant change in Hoover at the very end of his term, many conservative commentators and writers like to take just that portion of his administration and point out how the liberals are plain wrong about what Hoover was like, neglecting to offer the context of why Hoover changed his mind (that is, as a result of the deepening Depression, made worse by a federal government which sat on its hands at the beginning).

274

jedman
Dude
ID: 315192219
Sun, Feb 22, 2009, 09:57

I read the link to Nate Silver. I happen to agree that there are
numerous reasons for the market to be going down, it all comes
back to uncertainty, and basically, nobody is comfortable
committing assets to the market at this time.

I just asked because when somebody on the right has presented
a contrarian view, they have been scolded as just finding one
opinion and we are all supposed to think it is then correct, hence
my question, why is Nate Silver the absolute truth. He has a
valid opinion, and I don't necessarily disagree with it, but he
could be wrong, couldn't he?

We are all finding opinions and quotes to justify our beliefs,
trying to present the case that we think is right. For every quote
on FDR and his saving the country, we can find another one that
says it is a myth, that he really exacerbated it and his programs
didn't really work.

I just heard a guy on the radio the other day touting his book
"Tear down this myth", about Ronald Reagan and that he wasn't
as great a president as many of us believe.

We are supposed to believe as indisputable that the Keynesian
approach to our current economic problems is going to work.
There are those warning us that it won't. Did anybody in the
Obama administration listen seriously to opposite views about
how to fix this, have a "blue ribbon" panel commissioned to
seriously study it out and take the appropriate steps? It doesn't
seem so to me, we had to move quickly or else the end of the
world was going to end.

275

Perm Dude
ID: 231262119
Sun, Feb 22, 2009, 09:59

I think that there is no question that those who are advising Obama on economic matters are from a wider swath of the political spectrum than we've seen in quite some time. But there is the timeliness issue as well.

276

jedman
Dude
ID: 315192219
Sun, Feb 22, 2009, 10:05

Who exactly is advising Obama? What have they said in the past
about previous recessions and depressions?

I hear all the talk about timeliness. I'm not talking about 6
months to address the issue, but surely a little more time could
have been taken, heck, even give enough time for everybody to
read the entire bill.

I just read in another blog Republicans being attacked for not
supporting the bill even after Pres. Obama gave in and agreed to
"massive" tax cuts. Massive? Does anybody really think the bill
contains "massive" tax cuts?

277

Perm Dude
ID: 231262119
Sun, Feb 22, 2009, 13:53

One third of the bill's costs are tax cuts, and those cuts were increased from their original amounts after Obama met with Republicans at the White House for the purpose of getting their input. There were other changes made on the spending side as well.

So, yeah, $288 billion in tax cuts is pretty massive.

278

Boxman
ID: 211139621
Sun, Feb 22, 2009, 14:21

How much extra per week could the typical family or taxpayer have from those tax cuts?

279

Perm Dude
ID: 231262119
Sun, Feb 22, 2009, 14:31

Here are some details. Hard to say what an average taxpayer might get, but there is a laundry list.

My family will be taking a tax credit of $2000 for the geothermal heating system we just installed.

280

Boxman
ID: 211139621
Sun, Feb 22, 2009, 15:14

Let me know how that works out. I'm changing out the furnace this spring and I might as well do the hot water heater while I'm at it and I'm interested in cost effective (profitable) alternative energy systems. I've heard that solar hot water heaters pay back rather quickly.

Here's some information:

Deloitte Estimate

Deloitte Tax crunched some numbers to come up with an initial answer.

To be sure, the data is preliminary. Congress is still hashing out the final terms of President Obama's economic recovery package and a full picture won't emerge until the tax lady sings.

Most of the savings are accounted for by the Make Work Pay Credit, which was a centerpiece of Obama's election campaign. It would be worth up to $500 a year for individuals and up to $1,000 for couples.

The full credit would be available for 2009 and 2010, but is limited to those making $75,000 or less ($150,000 or less for workers filing joint returns).

Since most of it is due to the Make Work Pay Credit let's look under the hood.

The credit, which President Obama championed, would reach close to 95% of workers and be paid primarily through paychecks. It would be worth $500 per worker or $1,000 for couples who file jointly. The full credit will be available to those making $75,000 or less, or $150,000 or less for couples. Even workers in those income groups with no tax liability would get it.

So is $1,000 a year really going to do anything?

If the core problem is consumer debt load and mortgage defaults I don't see how $1,000 per year is going to do anything. A tax cut is better than no tax cut but this just looks like shooting spit balls at a freight train.

The Bammer should be applauded for cutting taxes, even if for only two years, but I'm just curious if this is the best method to use those funds for only $1k each year for two years given the enormity of our problem. I suppose its better than more money for the National Endowment of the Arts.

281

Boxman
ID: 211139621
Sun, Feb 22, 2009, 15:27

Anyone have totals on the "shovel ready" construction projects?

I found something citing the American Public Transportation Assocation stating there are 736 shovel ready projects totaling 12.2 billion. I can't believe it's that low.

The Governator was on This Week today and he commented on how we need 1-2 trillion to modernize our infrastructure. How can only 12.2 billion of that be shovel ready? Why not scrap the tax cut (or even better reallocate other proposed expenditures) to get more of those shovel ready and let's get moving?

Complaints about rush hour aside, Eisenhower's interstate system worked. We have or had a pretty good set of roads that need modernizing but worked in the time they were built.

282

Boxman
ID: 211139621
Sun, Feb 22, 2009, 15:35

Astade: I'm willing to apologize for my response if you are willing to apologize for questioning my sincerity and honesty. "Set aside childish things." - Guess who?

BTW, I've been in the market for ten years, I read everything I can get my hands on including two newspaper subscriptions (WSJ, IBD) numerous magazine subscriptions (Forbes, Smart Money, Kiplingers, Fortune and one about options that I got for free) and books. I also spend my morning/evening commute usually listening to CNBC on sirius radio and then watch Cramer (for comedy) and usually Kudlow at night. It's a hobby and a second source of income for me.

When I hear and read about the numerous qualitative arguments regarding the stimulus and then run index charts since the announcement of it, you don't have to be an actuary to put 2+2 together. I stand behind everything I said about the stimulus. Enjoy your Sunday.

283

Perm Dude
ID: 231262119
Sun, Feb 22, 2009, 15:37

I'm a little leery about "shovel ready" projects myself. Those are projects which went through all the preliminary steps (easements, zoning & land development approval, contractor hirings, etc) but didn't start real work yet. Most of those didn't start the real work because they didn't need to be (when budgets become prioritized, these projects are the ones deemed to be put on hold as being non-essential).

I'd much prefer a longer range plan for construction projects so we're not just putting shovels in the ground.

284

Boxman
ID: 211139621
Sun, Feb 22, 2009, 16:17

I'd much prefer a longer range plan for construction projects so we're not just putting shovels in the ground.

Me too. I wonder just how quick shovels could get in the ground if for no other reason than its February and its cold out there. Immediate projects for the sake of immediate projects concerns me in that the cure could be worse than the disease. Excessive traffic congestion, interference with other planned projects that already have allocated state funds. Then we get to summer and there's a stimulus project five miles away from a preplanned one and congestion goes back for miles.

I do wish though that they'd get more "shovel ready" because it's still only 12 billion out of an estimated 1-2 trillion dollar need. Just by the ability to approximate 2 trillion in need I would've thought there'd be more ready to go. Then that way we could have a better selection of which ones to do in what order.

285

Wilmer McLean
ID: 18135224
Mon, Feb 23, 2009, 04:20

"Mster of Emergency" Herbert Hoover

Good video for ya:

286

Wilmer McLean
ID: 18135224
Mon, Feb 23, 2009, 04:20

* Master

287

Wilmer McLean
ID: 18135224
Mon, Feb 23, 2009, 04:22

Saving more lives than Hitler and Stalin can extinguish means he has our honor!

288

Perm Dude
ID: 19150238
Mon, Feb 23, 2009, 09:55

I don't have time to look at the video right now, but I'll just throw out there two things:

-the way Hoover was treated by the FDR Administration, particularly in the transition, was shameful and petty;

-many of the programs Hoover finally came around to proposing, late in the game, formed the backbone of the New Deal programs. Not as extensive in scope or size, mind you, but philosophically pretty close.

289

Boxman
ID: 337352111
Wed, Feb 25, 2009, 13:48

Just curious if there's anything in the stimulus bill about illegal immigrants.

I'm guessing there are more people out there now willing to do the jobs "that no one else is willing to do". A strong crackdown on illegal immigrant labor would force companies to hire citizens. With unemployment potentially going to 10% it would help.

290

biliruben
ID: 461142511
Wed, Feb 25, 2009, 14:08

That sounds like it should work itself out. If an employer is able to hire a documented worker for the same price as an undocumented one, which will they choose?

Why risk prosecution needlessly.

291

Boxman
ID: 337352111
Wed, Feb 25, 2009, 14:47

If an employer is able to hire a documented worker for the same price as an undocumented one, which will they choose?

That's an assumption that the employer is paying the undocumented worker at or above the legal minimum wage.

292

boikin
ID: 532592112
Wed, Feb 25, 2009, 16:36

That sounds like it should work itself out.

i thought i read that because of the economic down turn a lot illegal workers have gone home and that the number trying to get in has also gone down. So you could say it is working itself out.

293

Tree
ID: 61411921
Wed, Feb 25, 2009, 16:42

I'm guessing there are more people out there now willing to do the jobs "that no one else is willing to do".

probably not true. Unemployment insurance often pays more than minimum wage.

294

Boxman
ID: 337352111
Wed, Feb 25, 2009, 16:58

Tree, what is the typical wage for undocumented workers?

295

Tree
ID: 61411921
Wed, Feb 25, 2009, 19:16

it's undocumented.

but i feel pretty comfortable in saying most undocumented workers make NO MORE than minimum wage.

296

Boxman
ID: 571114225
Wed, Feb 25, 2009, 19:29

Anyone else think Tree is right or is he being lazy?

297

DWetzel
ID: 33337117
Wed, Feb 25, 2009, 20:18

Depends on the field.

Agriculture, restaurants, I'm sure are less than minimum wage (or right at it). Construction is probably well above. Some of the other industries, I haven't the faintest idea.

The problem of course is that the cost of hiring a documented worker is much more than the cost of hiring an undocumented one, given the same wage, due to pesky things like workers comp and payroll taxes. Which is why I'd be in favor of pretty draconian penalties to employers who hire illegals.

298

Perm Dude
ID: 412259
Thu, Feb 26, 2009, 00:01

I think you're about right, DW. And the cost of an illegal would have to be less than a legal worker in order for the employer to assume the risk.

I would guess that illegals probably make about as much as legal workers would be if there were no unions.

299

biliruben
Leader
ID: 589301110
Thu, Feb 26, 2009, 07:46

Here you go, box.

Homeland Security Secretary Janet Napolitano has ordered a review of a raid earlier this week at a Bellingham manufacturing plant that ended with the arrests of 28 illegal immigrants.

Napolitano told lawmakers during a hearing in Washington, D.C., on Wednesday that she did not know about the raid before it happened and was briefed on it early Wednesday morning. She has asked U.S. Immigration and Customs Enforcement, which conducted the raid, for answers.

"I want to get to the bottom of this as well," she said. She said work-site enforcement needs to be focused on the employers.

The raid at the Yamato Engine Specialists was the first work-site action that ICE has taken since President Barack Obama took office, said Sean Smith, a spokesman at Homeland Security.

Obama, who appointed Napolitano, has signaled for a shift in immigration policy that would rely less on work-site enforcement, focusing instead on employers who hire illegal immigrants and overall immigration reform.

ICE spokeswoman Lorie Dankers in Seattle declined to comment.

On Tuesday morning, ICE agents descended on the shop and rounded up 25 men and three women. Most of the people arrested are in custody at the Northwest Detention Center in Tacoma, where they will await deportation proceedings. Three of the 28 were not taken to the detention center on humanitarian grounds.

Of the 28, agents found 25 Mexican nationals and one person each from El Salvador, Honduras and Guatemala.

In a statement Tuesday, ICE officials said many of the people obtained the jobs using fake Social Security numbers and other counterfeit documents.

So Obama sounds like he will be focusing more on employer punishment, rather than deportation. I think this would be much more effective in deterring the hiring of undocumented workers, but you have to have a simple way of verifying the legitimacy of the documentation. I thought we had that, but perhaps not.

300

DWetzel at library
ID: 241562612
Thu, Feb 26, 2009, 14:10

Re: 298--the problem is that employers don't assume a lot of risk, or at least they haven't in the past. I don't recall employers getting hit with big fines (and I mean BIG fines) for hiring illegals in the past--I could be wrong. If I am, someone will Google to the rescue.

If the fines are no greater than the savings to the employer that I mentioned, it's a clear benefit to the employer to hire the illegal every time. Heads they win, tails they come out even.

If the fine was twice the savings, then the employer still comes out ahead if they get cost less than 50% of the time--and we all know that the employer will get caught a LOT less than 50% of the time. You can dramatically step up enforcement to change that equation, of course, but even so it's not a huge risk.

If the fine was say 50 times what the savings would be for the employer, then that employer has to think about it. And if that puts some people out of business when they get caught, so be it. THAT will be a genuine incentive to make employers stop hiring illegally. Fining a business $50k when they've saved $100k in taxes, workers comp, and so forth isn't going to do a damn thing.

301

weykool
ID: 2842717
Thu, Feb 26, 2009, 15:21

PD and DW:

The problem here is you are expecting employers to do the job of the government.
In the story posted at #299 the illegals had fake documents.
And now you want to fine employers with onerous fines which could possibly be due to an honest mistake?
Great solution.....

The government has failed miserably in enforcing our borders.
Having failed at that task it decides it will pass a huge pork bill to create jobs.
If we really expect for this economy to recover we need to find way to help business create jobs.

How about the government does its job of enforcing our immigration laws and we let business owners create the jobs?

I can tell you the problem with the California economy is not that the government hasnt created enough jobs, the problem is the government has created far too many jobs.
Once these jobs are created we cant get rid of them.
Try running a campaign on reducing the number of people sucking the government teet dry and see if you get elected.

302

Mith
ID: 2894309
Thu, Feb 26, 2009, 15:27

We trust vendors of cigarettes and alcohol and other regulated goods to be responsible for ensuring that the government documents they receive are legitimate.

You think the responsibility accepted by a bartender or cashier is too much to ask of their employer?

303

Boxman
ID: 337352111
Thu, Feb 26, 2009, 15:42

You think the responsibility accepted by a bartender or cashier is too much to ask of their employer?

That's an apples to oranges comparison.

First, the bartender or cashier will get fired by his employer or set up as the fall guy to avoid a lawsuit from groups like MADD so of course the guy is going to be determined to check IDs. Then there are there more outside resources at play for addressing potential contributors to the problems bartenders and cashiers face. Things like random pullovers on Memorial Day and now those devices that go into cars that test your breath.

Who is watching the employer? Really nobody consistently or with enough teeth obviously.

304

biliruben
ID: 461142511
Thu, Feb 26, 2009, 15:45

Pass a law to throw the employer in jail, and I'm pretty sure they'll be much more conscientious.

305

Seattle Zen
ID: 221232610
Thu, Feb 26, 2009, 15:46

I could see a two tiered approach. One fine for employers who hire someone(s) who is(are) illegally in the country knowingly and a much smaller fine for those who made good faith efforts to determine that they are legally here. Some people have real SS cards obtained from the Social Security Administration with fake birth certificates. You can't expect employers to get to the bottom of that? Furthermore, if you make it a strict liability crime/fine, you are urging employers to discriminate against all people of Latin American decent. If it turns out that they are illegal no matter how deeply the employer investigates, why even take the chance?

306

biliruben
ID: 461142511
Thu, Feb 26, 2009, 15:47

There should be a database out there you can check the SS# from. This shouldn't be rocket science.

307

Perm Dude
ID: 131252611
Thu, Feb 26, 2009, 15:48

#301: The problem here is you are expecting employers to do the job of the government.

Absolutely. Although I would put it as "we are expecting employers to follow the law." Just as we ask employers to collect taxes, check over new employee documents, and follow employment and other laws as a cost of doing business.

Fake documents aside (which, if good fakes, should mitigate or eliminate any potential liability on the part of the business), expecting some kind of pothole fixing to have any long-term sense is folly. But in the meantime

Try running a campaign on reducing the number of people sucking the government teet dry and see if you get elected.

Worked for Bill Clinton. And (unlike any Republican in over a generation) he actually did it.

308

weykool
ID: 2842717
Thu, Feb 26, 2009, 16:06

Worked for Bill Clinton. And (unlike any Republican in over a generation) he actually did it.

PD please.
You really believe Clinton reduced the number of government employees?
Lemme guess.....you are counting people employed by the military.
Please show me the evidence that Clinton reduced the number of non-military employees.

Silly me for not taking into account my words would be parsed to the 10th degree on this forum.

309

Perm Dude
ID: 131252611
Thu, Feb 26, 2009, 16:25

Hey, words count, right?

Civilian workers who work for the military are paid by the government, and should absolutely be counted. But (like the "smaller government" mantra), focusing on just one thing losing the entire point. A government which is smaller isn't necessarily more efficient (or even better).

During Clinton's two terms the government enjoyed a budget turnaround (including surpluses) and was able to cut its own civilian workforce by more than 426,000. But the story is deeper than that. NRP was tasked with implemeting private-sector management practices throughout the Executive branch, and the link above gives some highlights.

I've heard from conservatives who complain that Clinton should not have cut down the size of the military (despite, of course, Clinton having taken the advice of the military in setting its budget), while at the same time complaining that Clinton was merely enjoying the "peace divident" (hard to respond to that--is the dividend only for conservatives to spend? Or should we spend on the military far above its needs?)

Cherry-pick all you want. Clinton balanced the budget, shrunk government (partially by making it more efficient), and kept spending down (federal spending as a percentage of GDP was lower for Clinton than for Reagan, for instance).

310

Boxman
ID: 337352111
Thu, Feb 26, 2009, 16:49

biliruben: There should be a database out there you can check the SS# from. This shouldn't be rocket science.

The golden honey pot for hackers everywhere.

Seattle Zen:Furthermore, if you make it a strict liability crime/fine, you are urging employers to discriminate against all people of Latin American decent.

I agree with your post except this. Bigots will be bigots will be bigots.

Perm Dude:(federal spending as a percentage of GDP was lower for Clinton than for Reagan, for instance).

More of a statement of no more Cold War than a measure of anything else.

311

DWetzel
ID: 278201415
Thu, Feb 26, 2009, 16:49

Obviously (well, apparently not obviously), nobody wants to throw the book at employers who were legitimately defrauded.

On the other hand, I don't have a lot of sympathy for employers who don't make good faith efforts to make shre that the information an employee provides. And at least in some cases, I am virtually certain that the employers level of diligence was about the same as Jeebs in Men In Black. ("He looked all right to me".)

312

Perm Dude
ID: 131252611
Thu, Feb 26, 2009, 16:50

And there is nothing wrong with that. The Right seems to be trying very hard to paint this as some kind of bad thing because it was done by a Democrat. Really, you've got to let go of it.

313

biliruben
ID: 461142511
Thu, Feb 26, 2009, 18:08

The golden honey pot for hackers everywhere.

Well, the database already exists. I mean, we have a Social Security Administration. It hasn't yet been hacked that I know of.

And actually, it turns out employers have long been able to call and check it, if they have any suspicions. It's just that they don't, as they are not properly incented to do so. Nasty fines with possible jail time would change that.

314

Mith
Dude
ID: 01629107
Thu, Feb 26, 2009, 19:09

That's an apples to oranges comparison.

First, the bartender or cashier will get fired by his employer or set up as the fall guy to avoid a lawsuit from groups like MADD so of course the guy is going to be determined to check IDs.

Actually bartenders and cashiers get arrested and charged for selling alcohol to minors. I tend to think that's a bigger deterrant than getting fired. I'm not sure what you mean by "set up as the fall guy". The business might be liable for a lawsuit in some cases but I believe in most states the person who sells the goods to minors is responsible.

there are there more outside resources at play for addressing potential contributors to the problems bartenders and cashiers face. Things like random pullovers on Memorial Day and now those devices that go into cars that test your breath.

I'd think most cashiers who get in trouble are caught in police stings. Bars with reputations for selling to minors get raided all the time. There's no reason why police and other law enforcement can't check on businesses, at least in industries which are known to hire illegals.

And regarding the honest employer who was duped by a fake ID, shouldn't tracking down illegals hired with fake IDs just be a matter of checking IRS filings agianst SSA and/or INS records (and any other apropriate agencies)?

315

astade
ID: 191134222
Tue, Mar 03, 2009, 19:34

An opinion piece in the WSJ about Obama's role in the economy.

316

Boldwin
ID: 581202816
Fri, Mar 06, 2009, 08:16

"The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.' - Ronald Reagan

"It isn't working...everything the government touches turns to crap" - Kudlow 3/5/2009

The question is...is that because it's an automatic given, or because it's deliberate?

@"sabotage it, then claim a socialist solution is the only way out of the situation" - Karl Marx

317

Boldwin
ID: 581202816
Fri, Mar 06, 2009, 08:53

System Failure

318

Boxman
ID: 3821468
Fri, Mar 06, 2009, 09:22

The question is...is that because it's an automatic given, or because it's deliberate?

Is it in government's best interests for you not to need it or for you to need it?

319

Boxman
ID: 3821468
Fri, Mar 06, 2009, 10:36

An excellent explanation of mark-to-market accounting and why it needs to change.

Obama Repeats Bush's Worst Market Mistakes

320

Perm Dude
ID: 5025767
Fri, Mar 06, 2009, 11:13

Steve Forbes?

The most disastrous Bush policy that Mr. Obama is perpetuating is mark-to-market or "fair value" accounting for banks, insurance companies and other financial institutions

Yes, that's right--banks should continue to artificially inflate their assets. Since we know overinflating of the value of assets didn't cause much of the current economic and housing crises, yes?

Compounding this lunacy was the SEC's inexplicable failure to enforce the rule against "naked" short selling.

This I certainly agree with. And since it occurred, as far as I can tell, entirely during the Bush Administration, it probably doesn't belong in an article talking about what Obama is doing wrong.

I do get a bit of a kick out of Steve Forbes advocating an idea (the uptick rule) first implemented by Joseph Kennedy. As far as I know, the Obama administration (and the Fed) are in favor of re-instating the uptick rule, which (like a lot of banking rules changed by the Bush Administration), were done away in the midst of a bull market and pushed through by hardened partisans unaware of the government's true role in the markets.

321

Boxman
ID: 3821468
Fri, Mar 06, 2009, 12:20

Yes, that's right--banks should continue to artificially inflate their assets.

The point against mark-to-market in the case of non-liquid securities states that even non-threatened assets are marked down in value. I.e. not "artificially" inflated.

Just curious if you read the article or just saw the name "Steve Forbes" and then chose to copy/paste your postings from another forum or the latest DailyKos talking points.

Then you go and blame the Bush Administration for everything without reflecting on where we are now and what Obama is doing.

Make that 104 Obama ass covering posts from PD the PD.

322

Boxman
ID: 3821468
Fri, Mar 06, 2009, 12:26

If Obama is in favor of reinstating the uptick rule, can you provide a link to legislation he has introduced that would do that?

Can you quote where Obama has said bringing back the uptick rule is vital?

Then, assuming he has said these things, why has it not been done yet?

And please don't say it takes time. Obama has spent more money in the last two months than you or I could ever count.

Thanks.

323

DWetzel at work
ID: 49962710
Fri, Mar 06, 2009, 15:39

I'm confused (genuinely) and probably misunderstanding something here. Please to explain. Be gentle.

If the bank is using Asset X (say a house which the bank has a mortgage on) as collateral/capital, and Asset X is now worth half of what it was, but the people in the house are still paying the mortgage, should the bank be allowed to keep Asset X at the original value? It doesn't make sense to me that they would.

Or is the value of the asset the mortgage money coming in? In which case, they wouldn't have to mark anything down, assuming that it was still being paid...would they?

324

Boxman
ID: 3821468
Fri, Mar 06, 2009, 16:45

The following is my understanding of the situation and not the direct interpretation of FASB accounting standards. At first I was skeptical of changing mark-to-market because it seemed like cry baby score keeping tactics. There's actually a precendent for this and a valid explanation.

If the bank is using Asset X (say a house which the bank has a mortgage on) as collateral/capital, and Asset X is now worth half of what it was, but the people in the house are still paying the mortgage, should the bank be allowed to keep Asset X at the original value? It doesn't make sense to me that they would.

Why wouldn't the bank be allowed to keep that house on the books at the original mortgaged value? The market for that specific house is in fact represented by the willingness of someone to pay that price for that house.

Even by virtue of every house having a different address you could ascertain that each house is it's own market. I.e. No two are the same. Location, location, location. Right?

Nevermind the hundreds of different traits houses have that differentiate themselves from each other.

I looked at it like this:

"Grandpa's Stamp Collection". Grandpa has an old 1905 5 cent stamp. What's the value of the stamp? In reality, 5 cents. But what if I put it on Ebay for 1 million dollars. Someone buys it for a million. What's the true value? The amount someone is willing to pay for the stamp. Just like the house. The realtor says it's worth 150k today, but I'm willing to pay (as evident of my current mortgage payment) 200k for the house. So the value of the house is 200k because somebody is willing to pay that much for it.

Then there's also the discussion of the valuation of the mortgage backed security itself, which could be an alphabet soup of good assets and bad assets. Yet instead of identifying the wheat from the chafe the whole security is written down. But why would it? There's no immediate danger of all the mortgages in the United States defaulting. Could you imagine the anarchy that would ensure if 100% of the populace was delinquent on their mortgage. Mark to market, in my opinion, makes this erroneous assumption.

Or is the value of the asset the mortgage money coming in? In which case, they wouldn't have to mark anything down, assuming that it was still being paid...would they?

Ahoy that be the crux of the whole matter. Under current FASB rules, the whole asset (in this case the mortgage backed security) has to be written down to market. But there is no market for mortgage backed securities so no value. This means the bank has to write them down to meet capital requirements that the government requires of bank. However this is done with the underlying premise (apparently) that every mortgage in that mortgage backed security is or could be bad.

325

DWetzel at work
ID: 49962710
Fri, Mar 06, 2009, 17:17

Well, I think fundamentally you and I disagree then as to how the house should be valued. At this point, if the house is worth $150k, the house is worth $150k. What you paid for it (and took a mortgage for) in the past is irrelevant, just as someone buying Grandpa's stamp for 5 cents when it was issued is irrelevant.

What would matter is what the house could in fact currently sell for given the normal assumptions about such sales. Read the "limiting assumptions" section of your typical appraisal, but basically, "arms length" transaction, no particular "fire sale" time pressure, and so forth. What the house is actually worth RIGHT NOW under those conditions is what the bank actually owns, isn't it?

When you get into unique items, like Grandpa's stamp, the Honus Wagner card, or real estate, what someone may have paid in the past has essentially no bearing on what someone might actually pay for it in the present. It's worth whatever the "market" says it's worth. If we could hop in a time machine and sell our assets now at 2006 prices, we'd clearly do that in a lot of cases. But we can't.

Realistically, if you were valuing things "right", you'd have to evaluate the actual house value, and evaluate the likelihood that the current mortgage holder were to default on the mortgage, and take a weighted average of the two, erring a bit on the conservative side so as not to under-capitalize. In practice, except for the VERY hard-hit areas, that would end up putting you fairly close to the mortgage value in practice, since the default rate will be a relatively small percentage. By way of example:

Mortgage is at $500k
House is now worth $300k
Mortgage holder has a (conservative) 10% chance of defaulting.

I'd probably value that asset at $480k. (90% * $500k + 10% $300k). That seems like a sensible compromise.

Of course, that puts a LOT of actuaries to work, I guess, because nobody has exact actual values of the underlying houses for every mortgage in America, and nobody has the default rate for a PARTICULAR piece of property.

326

Boxman
ID: 571114225
Fri, Mar 06, 2009, 18:36

What the house is actually worth RIGHT NOW under those conditions is what the bank actually owns, isn't it?

That's another crux of the argument. A house is not a liquid asset like cash in the bank. If I had to sell my house RIGHT NOW, today, and get a check in hand I'd probably get $10,000. That assumes I run into someone with 10k in the bank in cash ready to give me RIGHT NOW.

Now is my house really worth 10k? Absoltely not. The raw materials alone are much much more than that.

Because a house is not liquid you can't use the RIGHT NOW price in my opinion.

At this point, if the house is worth $150k, the house is worth $150k. What you paid for it (and took a mortgage for) in the past is irrelevant

Then we fundamentally disagree. It happens.

In your case then, how do you explain the fact that somebody is willing to pay 200k for it currently as proven by the mortgage payment. Isn't that setting the market for that house?

Now if the house is in default I completely see your point.

Let's use poor old grandpa's stamp again. Let's say I hate stamps and I think they stink. I'd never pay the 1 million for it. But the guy on Ebay loves stamps and that's his thing so he pays 1 million. The value of that stamp is 1 million. Someone is willing to pay that much for it.

What an appraiser thinks of my house may matter to the village for tax purposes or to a potential buyer, but if I am paying 200k for that house it is proof positive that somebody is willing to pay that much for it.

So if I pay 200k for the house or a buyer pays 200k for the house does it really matter? Somebody is willing to pay that much.

327

DWetzel
ID: 33337117
Fri, Mar 06, 2009, 19:03

Not quite. It's proof that you were willing to enter into a contract for $200,000 when you bought it.

And it proves that you are willing to continue to pay the $200,000 rather than suffer the negative consequences to your credit, finding a new home, etc. There's a real cost associated with that, of course, plus a psychological cost as well.

The fact that you are tied in to that contract with all the negative conseqences of breaking it means that looking at what you are currently paying (unless you just entered into the contract) isn't necessarily a fair measure.

328

Boxman
ID: 571114225
Fri, Mar 06, 2009, 19:14

It's proof that you were willing to enter into a contract for $200,000 when you bought it.

Yet it's a contract I am willing to continue as proven by my mortgage payment so it still has the 200k of value. If it didn't I could prove the lesser value by not paying it. I have recourse. There's BK, selling the house, walking away, etc. If the house isn't worth it to me anymore I can get out of that "contract".

329

DWetzel
ID: 33337117
Fri, Mar 06, 2009, 22:20

Yes, but there are (fairly severe) negative consequences for getting out of it.

Let's put it this way: you would never walk away from it if it was worth $100 less than what you paid. You always would if it was worth $1,000,000,000 less than what you paid.

Somewhere in the middle there is the actual cost of walking away from it. Even if the house is otherwise worth less than what you are paying, if (house + value of keeping credit + cost to move out + value of feeling good about self) is more than what you paid for the house, you'd continue to pay. Note that other than the actual value of the house, none of those things are worth one penny to the bank, except as it relates to keeping you paying.

330

Boxman
ID: 571114225
Sat, Mar 07, 2009, 05:36

I simply don't agree. Where I stand is that the house's value is justified by the proof somebody is willing to pay for it.

331

Perm Dude
ID: 34223612
Sat, Mar 07, 2009, 08:24

Where I stand is that the house's value is justified by the proof somebody is willing to pay for it

In theory, you are exactly right and I agree. And if that is at or near zero a company whose value is itself measured by the values of homes it is holding should reflect that reality as well.

332

Boxman
ID: 571114225
Sat, Mar 07, 2009, 09:46

And if that is at or near zero a company whose value is itself measured by the values of homes it is holding should reflect that reality as well.

Certainly. If no one is paying for the house then it should be subjected to the appraisal value or some value equivalent to market since no one is defining the market by paying for the house.

333

biliruben
Leader
ID: 589301110
Sat, Mar 07, 2009, 15:21

Appraisal value. I gotta laugh.

We are buying our second house in the last 5 years, and both times the appraisal value was magically exactly what our offer was.

Imagine that! Appraisers know on what side the bread is buttered.

334

Boldwin
ID: 581202816
Sat, Mar 07, 2009, 19:47

Funny, my experience with appraisers is that they weren't very helpful getting the deals done, and were protecting the bank's interest pretty well by undervaluing things, in anticipation of the sub-prime fiasco in my estimation. That's just my area of course.

335

DWetzel
ID: 33337117
Sat, Mar 07, 2009, 22:38

I think it depends a LOT on the appraiser, and who's asking for the appraisal to be done. Which shouldn't necessarily be the case in theory, of course--but, well, it's reality.

If you are a buyer getting the appraisal, they're more likely to shade things your way I'd say. Bank, not so much.

I'd still take a random appraiser's word over a lot of other possibilities, though.

336

Boxman
ID: 3821468
Tue, Mar 10, 2009, 14:19

Barney Frank starts hitting on two hot topics: the uptick rule and mark to market. I think he's right on both issues.

Uptick Rule on Shorting Stocks Expected to Be Restored

The so-called uptick rule, which limits short-selling in stocks, could be restored soon, Rep. Barney Frank of the House Financial Services Committee said.

"I've spoken to Chair (Mary) Schapiro of the SEC. I am hopeful the uptick rule will be restored within a month," Frank told reporters.

His comments accelerated a rally in stocks, which were already gaining on Citigroup's comments that it was now profitable.

The uptick rule allows short sales only when the last sale price was higher than the previous price.

The rule was first adopted in 1934, five years after the 1929 stock market crash, to prevent short sellers from adding to the downward pressure on a stock that is already falling sharply.

The rule was repealed in June 2007.

"Mary is moving towards the uptick rule, which some people think is very important, some people think it's not important, nobody thinks it does any harm," said Frank who is Chairman of the House Financial Services Committee. "I think that will go back (into effect)."

The SEC has so far declined any official comment on Frank's statements.

The uptick rule is different from the ban on "naked" short selling that was imposed temporarily last summer to prevent the downward spiral in financial stocks. The ban, which was lifted last fall, required investors to actually borrow shares of a stock they were shorting. This prevented "naked" selling, in which investors could put unlimited selling pressure on a stock.

At her confirmation hearing in January, Schapiro told lawmakers the agency would look at the entire area of short- selling and whether to reinstitute the uptick rule.

Several members of Congress have called for a return of the uptick rule. On January 9th, U.S. Rep. Gary Ackerman (D-NY), a Senior Member of the House Financial Services Committee, reintroduced legislation that would reinstate the rule.

Frank also said Tuesday that mark-to-market accounting rule must be improved and made more flexible.

© 2009 CNBC

337

Perm Dude
ID: 31245917
Tue, Mar 10, 2009, 14:31

Good find.

I've been extremely busy on the local political front (more on that late), plus three baseball drafts, so I have done very little digging on this. Good stuff, though.

338

Baldwin
ID: 10258919
Tue, Mar 10, 2009, 14:50

Shortselling and mark-to-market were fine when an "October Surprise" was useful to Frank tho.

339

Perm Dude
ID: 31245917
Tue, Mar 10, 2009, 15:03

Useful to Bush's backers as well. As were the other changes in the banking laws passed by the GOP after the Great Leader proposed them.

340

Building 7
ID: 471052128
Tue, Mar 10, 2009, 15:16

The uptick rule is different from the ban on "naked" short selling that was imposed temporarily last summer to prevent the downward spiral in financial stocks. The ban, which was lifted last fall, required investors to actually borrow shares of a stock they were shorting. This prevented "naked" selling, in which investors could put unlimited selling pressure on a stock.

My understanding is that naked short selling is always illegal, though nothing is ever done. And the ban last fall was on any short selling of financial stocks. Not just naked short selling. I've read where the change of the uptick rule would cause a market rally, and this seems to be happening today just on a comment from Barney Frank.

341

Perm Dude
ID: 31245917
Tue, Mar 10, 2009, 15:18

The stock market is also rallying on news from Citi as well, I believe.

But we need to keep it in perspective: The stock market is overvalued as a thermometer of the US economy.

342

Boxman
ID: 3821468
Tue, Mar 10, 2009, 15:33

But we need to keep it in perspective: The stock market is overvalued as a thermometer of the US economy.

You'll need to back up that statement before it's believable.

343

biliruben
ID: 461142511
Tue, Mar 10, 2009, 15:37

1) Go graph the GDP on top of the S&P.

2) Giggle at your presumption.

344

Boxman
ID: 3821468
Tue, Mar 10, 2009, 15:59

I looked for a graph and here's what I dug up.

Graph Source

Note that the above graph has logartmic which is the ONLY proper way to show long-term trends but which can make a large percentage change appear quire small. Also notice that the two lines on the chart use two different scales. The scale for the Dow earnings (red line, left scale is 1/10th of the value of the GDP scale (blue line, right scale). This makes sense because the GDP is (very) roughly ten times as large as the Dow Earnings. MMy two scales are consistent in that in each case the top of the scale is 10,000 times larger than the bottom. Many analysts will use a left scale that has a range of say 1 to 50, while the right scale goes from say 10 to 200, rather than 10 to 500. Such inconsistent scales are very mis-leading. I always use scales that are consistent.

This graph shows the steady growth in U.S. GDP (blue line) versus the growth in the earnings of Dow Jones Industrial index which are more volatile but which also rose steadily in the long-run. The slope of the earnings line is slightly lower than that of the GDP line. Thus, stock market earnings growth is driven by growth in GDP, in the long run, but is slightly lower. Dow Jones Industrial Average total returns are in turn, in the long term, of course, driven by the earnings and dividend yield on the Index.

Below I show the exact same data but this time with a linear scale:

This chart with a linear scale is not the proper way to look at the trend of GDP or Dow earnings since 1930. (Log scales are best). However the linear scale confirms how DOW Jones Industrial Average Earnings have trended up with GDP over the years. The linear scale does a better job of showing the big drop in Dow earnings in 2008.

Not seeing the overvaluation.

345

Baldwin
ID: 10258919
Tue, Mar 10, 2009, 17:06

I might as well back up PD the one and only time in recent memory that I can think of where I can.

I know banks that hardly have any involvement in the sub-prime fiasco at all. No crap in their portfolio. Trading ten times lower than before the October Surprise. I guess you could say the threat of a run on the banks is a rational fear of an irrational hysteria. That's just an anecdote on the small scale where the market isn't telling the story.

On the large scale, you really need to track much more than the stock market. I need to research indicators of credit fluidity such as LIBOR, but getting a handle on credit fluidity is more important than the stock market in understanding the current state of affairs. The Baltic Dry Index is another indicator that might be more accurate or have less extraneous information mixed in.

346

biliruben
ID: 461142511
Tue, Mar 10, 2009, 17:11

Market goes up. GDP goes up.

Market goes down. GDP goes up.

Such predictive ability!

To be fair, you need to probably look at this on a finer scale. Looking at the YOY changes would also probably show a more interesting, though more messy, answer.

Baldwin - banks, particularly regional ones, have a massive shoe that's about to drop. Commercial RE loans are about to start defaulting on an epic scale. That, and many other ways of making money are gone with, with the economy the way it is these days.

347

Baldwin
ID: 10258919
Tue, Mar 10, 2009, 17:18

Exactly on topic. The small town banks I know about aren't really exposed so much to commercial RE either afaik. But you wouldn't know it to look at their stock prices. Typically @$3 a share down from $30.

348

Tree
ID: 61411921
Tue, Mar 17, 2009, 23:39

i guess this goes here, and i'm mostly putting it here because i love some of the things said, from Schumer to Grassley to the taxpayer...

Livid Democrats demand AIG return bailout bonuses

Taxpayers vent against AIG bonuses

Whatever the process, lawmakers of all stripes said, the money — generally "retention payments" to keep prized employees — belongs back in the government's hands.

"Recipients of these bonuses will not be able to keep all of their money," declared Senate Majority Leader Harry Reid in an unusually strong threat delivered on the Senate floor.

"If you don't return it on your own, we will do it for you," echoed Chuck Schumer of New York.

One leading Republican, Sen. Chuck Grassley, R-Iowa, even suggested they might honorably kill themselves, then said he didn't really mean it.

AIG executives are "not going to bleed to death because I'm not sure that they've got blood. I think it's ice water that runs through their veins," said Gary Jarvis of Herron, Ill., who lost his job as a forklift driver in a factory closing two years ago. "To me, it's just stunning to think they're not even ashamed of their disgusting greed."

349

Boxman
ID: 571114225
Wed, Mar 18, 2009, 07:35

350

Baldwin
ID: 10258919
Wed, Mar 18, 2009, 08:52

My limited understanding not having researched this, is that the bonuses are part of a legal contract. You would think that shame would move them not to accept the bonuses but breaking contracts is another matter. They should have made executives abrogate their contract bonuses before bailing the company out. But the legal system and any kind of functional economy can't survive making fulfilling legally binding contacts optional.

The fact that cherry jobs gaming the system, for these AIG execs to fall back on, are in short supply should give congress a lotta leverage if played right. AIG isn't out of the woods yet and any future bailouts can sure be contingent on handing those bonus checks back.

The bailout czars knew all about these bonuses when they made the bailouts, so what's up with that?

351

biliruben
Leader
ID: 589301110
Wed, Mar 18, 2009, 08:56

These contracts were written in 2008, when the bailout czars were part of the problem, not part of the solution.

352

biliruben
Leader
ID: 589301110
Wed, Mar 18, 2009, 08:59

CEO's guide to Jetting.

353

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 09:06

#350: I love how conservatives jump into this "locked into a legal contract with their employees" argument. But the moment the auto companies were looking for a bailout, the very first thing conservatives wanted to do? Break the union contracts.

Look: Companies should pay bonuses for two reasons: A reward for work above and beyond. And to keep employees from going to another firm. The first argument we can throw out--a huge amount of the bonus money is going to those very employees who have caused the problem.

The second? Where, exactly, will sucky financial services workers find work?

354

weykool
Leader
ID: 41750315
Wed, Mar 18, 2009, 09:13

If for a moment I wish our country had China's legal system where people like the ones at AIG were executed. Not all of them are scum and I don't blame the ones receiving the bonus; who would turn that down in this economy? The rage should be placed at the ones deciding to give it out.

I dont get it....why are we mad at AIG?
I thought they were still a private company.
Shouldt the blame for this be on the morons who gave them our money without any stipulations?
Didnt Dodd put in the bailout plan that the bonuses would still be paid?
We need to focus our anger on the right people here.
Can any of the liberals here confirm or deny that the two highest AIG political contibutions went to Dodd and Obama?

The real hutzpa here are the Democrats who rammed this bailout through without reading what they passed then point the finger at AIG.....un-b-Fing-lievable.

355

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 09:33

Taxpayers now own about 80% of AIG. Yes--they are a private company that we now own.

I think, however, you need to be more clear about the plan to which you are objecting, weykool. There are a number of them around.

We need to focus our anger on the right people here.

We should get mad at Democrats, who are angry at taxpayer money being paid as needless bonuses? Or AIG, who are hiding behind easily breakable contracts as to why their hands are tied?

356

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 09:34

Just to be clear: AIG first started receiving money during the Bush Administration. Your knee-jerk "Obama is to blame!" response obscures this all.

357

Mith
Dude
ID: 01629107
Wed, Mar 18, 2009, 09:36

rammed this bailout through without reading what they passed then point the finger at AIG

The Daily Show With Jon StewartM - Th 11p / 10c

The Notorious AIG

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Yeah, the bonus thing never came up.

And we know it was Dodd and Obama.

un-b-Fing-lievable

358

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 11:16

Turns out, 11 people receiving "retention bonuses" are no longer with AIG.

WTF??

359

boikin
ID: 532592112
Wed, Mar 18, 2009, 11:52

11 people receiving "retention bonuses" are no longer with AIG.

LOL

I am not sure why anyone is shocked by all this, I mean this is one the reasons I was against all the bailouts. They were just handing money over to those who showed they could not handle it in the first place.

360

walk
ID: 181472714
Wed, Mar 18, 2009, 11:58

I think it's 52 people.

NYT blogging the AIG hearing

361

jedman
ID: 552262217
Wed, Mar 18, 2009, 11:59

One would think that when the terms of the bailout were being negotiated, the pay out of bonuses would have been on the table.
Did I hear correctly that Sen. Dodd slipped something into the stimulus bill or bailout bill that allowed the payment of bonuses? And now he has the audacity to be outraged about it?
Wasn't Geithner the point man on the original AIG bailout plan, not Paulson?
Does anybody there know what the heck they are doing? Obviously Paulson and his gang didn't know and there doesn't seem to be any change.
It scares me that guys like Schumer think they can just all of a sudden come up with some law to tax everything paid in the bonuses. Where will it end?

362

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 12:00

I think the meme that this is Obama's fault really needs to stop. This is AIG's fault, and they are making it worse by insisting upon paying these sham bonuses with taxpayer money.

363

walk
ID: 181472714
Wed, Mar 18, 2009, 12:06

The original bailout plan for AIG was done under Bush. Dodd claims it was the Treasury that put the piece in about AIG's bonuses, not Dodd himself. Lotsa finger-pointing right now...

364

walk
ID: 181472714
Wed, Mar 18, 2009, 12:09

And a lot of AIG's baiout $ went to foreign banks (Deutsche and Societie General).

More AIG

365

Mith
ID: 2894309
Wed, Mar 18, 2009, 12:11

Did I hear correctly that Sen. Dodd slipped something into the stimulus bill or bailout bill that allowed the payment of bonuses?

FOX Business

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called “the Dodd Amendment” by the Obama Administration provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.

Dodd’s original amendment did not include that exemption, and the Connecticut Senator denied inserting the provision.

“I can't point a finger at someone who was responsible for putting those dates in,” Dodd told FOX. “I can tell you this much, when my language left the senate, it did not include it. When it came back, it did.”

“Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made,” Dodd Spokesperson Kate Szostak in a response to FOX Business.

The provision excluding those bonus payments made it into the final version of the bill, and is law.

Separately, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org. Also, one of AIG Financial Products’ largest offices is based in Connecticut.

“Senator Dodd was completely unaware of these AIG bonuses until he learned of them in the past few days,” wrote Szostak. To suggest that the bonuses affecting AIG had any effect on Senator Dodd’s action is categorically false.”

Further

In an interview with the Huffington Post, [Senator Ron Wyden] noted that during the crafting of the stimulus package, he and his Republican colleague from Maine introduced a provision that would have forced bailout recipients to cap their bonuses at $100,000. Any amount paid above that would have been taxed at 35 percent. The language made it through the Senate, but during conference committee with the House, it was inexplicably removed.

"The reality is, had that legislation been passed it would have been a very strong disincentive to anybody paying out bonuses in the future," said Wyden. "Earlier, the President had denounced those bonuses that came at the end of the year. And when Senator Snowe and I said it is not enough for those in elected office to say it was wrong, that they have got to have a plan to have them pay it back, we were able to get legislation through the United States Senate. Not a single United States Senator was willing in broad daylight to stand up and oppose our bipartisan amendment... but it died in conference."

366

walk
ID: 181472714
Wed, Mar 18, 2009, 12:16

MITH clarifies.

367

Mith
ID: 2894309
Wed, Mar 18, 2009, 12:23

I imagine Sean Hannity's telling goes a little differently.

368

jedman
ID: 552262217
Wed, Mar 18, 2009, 12:24

One other reason they should have allowed more time for everybody to read the stimulus bill instead of ramming it through so fast.

369

Tree
ID: 61411921
Wed, Mar 18, 2009, 12:43

I thought they were still a private company.
Shouldt the blame for this be on the morons who gave them our money without any stipulations?
Didnt Dodd put in the bailout plan that the bonuses would still be paid?
We need to focus our anger on the right people here.
Can any of the liberals here confirm or deny that the two highest AIG political contibutions went to Dodd and Obama?

The real hutzpa here are the Democrats who rammed this bailout through without reading what they passed then point the finger at AIG.....un-b-Fing-lievable.

they're not a private company. you, me, most of us posting here own 80 percent of the company.

this isn't really about right/left/liberal/conservative/republican/democrat. this is about a company who received BILLIONS from the federal government because the company FAILED, and is now paying millions to people who don't deserve it, while millions of other americans are losing their jobs, their homes, their futures, and their lives.

and i think very few people are blaming the other political party. the blame is focused squarely on AIG, and anyone who believes otherwise likely isn't paying attention, or has some sort of agenda.

370

weykool
ID: 2842717
Wed, Mar 18, 2009, 13:15

Tree:
You can get mad at the wino for being drunk all you want.
I am mad at the people who took my money against my wishes and gave it to the wino without stipulations and then gets mad because the wino spent the money on booze.

The 80% ownership only belongs to you and me by extension.
The federal government owns those shares.
The shareholders elect the board who carries out the management of the coproration....we dont get to vote for anything when it comes to AIG.

I just think it is outrageous for the people who are bankrupting the country are outraged at the management of AIG for bankrupting the AIG.

371

biliruben
ID: 461142511
Wed, Mar 18, 2009, 13:27

I think a better analogy is the fire department putting out a fire happens to save the arsonist along with the kids and dogs, then lends him a match when he asks for a light.

The country was already bankrupt, when the Dems took control. It just wasn't obvious.

What we have now is a lack of demand for goods and services. Decreasing the demand for goods and services buy cutting back on government spending is not the right response to that problem.

The time for fiscal prudence was 5 years ago.

372

boikin
ID: 532592112
Wed, Mar 18, 2009, 13:45

they're not a private company. you, me, most of us posting here own 80 percent of the company.

what does this mean? I mean does the government actually own 80% of the company? Is there a link for this? If none of the share holders sold there shares of AIG to the government, how exactly does the government own 80% of the company?

373

biliruben
ID: 461142511
Wed, Mar 18, 2009, 13:54

The shareholders should, actually, have already been wiped out. Bush et al. chose not to do this, but my guess is at some point Obama will.

They only way Obama will continue to deflect populist rage away from himself is to start nationalizing these zombie companies.

When a the value of a company is signficant less than the amount you just money you just lent them, you own the company.

374

Tree
ID: 61411921
Wed, Mar 18, 2009, 13:55

I am mad at the people who took my money against my wishes..

so start wagging your finger at Bush. the original plan came under his watch.

375

walk
ID: 181472714
Wed, Mar 18, 2009, 14:22

It's quite interesting to read the live blog on the NYT on the AIG hearing happening now...if you not already doing so. There's no commentary...it's strictly play-by-play.

376

weykool
ID: 2842717
Wed, Mar 18, 2009, 14:33

Tree get real.
The bailout plan and the stimulus plan were crafted by democrats.
Are you saying that if Bush had vetoed the bill that you or any of the other leftists that posted here would have supported the veto?
I dont think so.
Is Bush completely innocent?
No.
He signed the bill and bears some of the blame.

But the people who are the most outraged and shooting off their mouths are the very same people who bear most of the blame.

Correct me if I am wrong but it is my understanding that the stimulus package signed by Obama included additionl monies for AIG.
Obama gets an F here for allowing Pelosi and Dodd to write this bill and not taking any resposibility.

377

boikin
ID: 532592112
Wed, Mar 18, 2009, 14:50

re: 373, i think i am still a bit confused by the whole process. If the stock holders are wiped out and own nothing, what exactly did the government give money too?

378

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 15:19

Somebody forgot to send the memo around at AIG: Stop acting like this is 1995.

One good thing that will come out of this is that "financial experts" will take a serious drubbing in the "trustworthy" department. No longer will we assume people know what they are doing and are experts in their field simply because they make piles of money.

As a follow up to #340, I came across this very interesting post from Bainbridge about naked short selling, and the uptick rule. I'm really going to have to put some more thought into that to get my head around it. But there you go.

379

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 15:26

AIG Chief: How about half?

380

boikin
ID: 532592112
Wed, Mar 18, 2009, 15:39

AIG Chief: How about half? i would keep my bonus at least till congress members who received campaign contributions from AIG donated them.

381

Perm Dude
ID: 192191712
Wed, Mar 18, 2009, 15:41

Why?

382

boikin
ID: 532592112
Wed, Mar 18, 2009, 15:50

greed, i guess, and sense of fair play. I am don't like the idea of being called out by hypocrites, i played by the rules, why should i have suffer when they were happy to take AIG money.

383

Wilmer McLean
ID: 462431712
Thu, Mar 19, 2009, 03:48

Dodd admits

(CNN) -- Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.

Sen. Chris Dodd, D-Connecticut, appears on CNN's "The Situation Room" on Wednesday.

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language.

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.

"The administration had expressed reservations," Dodd said. "They asked for modifications. The alternative was losing the amendment entirely."

On Tuesday, Dodd denied to CNN that he had anything to do with adding the language, which has been used by officials at bailed-out insurance giant AIG to justify paying millions of dollars in bonuses to executives after receiving federal money.

He said Wednesday that the "grandfather clause" language "seemed like innocent modifications" at the time.

"I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."

Dodd said he did not speak to high-ranking administration officials and the change came after his staff spoke with staffers from Treasury.

The White House did not immediately respond to CNN's request for comment.

At a town hall meeting in Costa Mesa, California, about an hour after Dodd spoke, President Barack Obama didn't directly address the language change -- but said he'll take responsibility for the bonuses being awarded.

...

384

Tree
ID: 61411921
Thu, Mar 19, 2009, 08:24

thanks for that link WM. it shows us EXACTLY why things are different now, with Obama as President.

President Barack Obama didn't directly address the language change -- but said he'll take responsibility for the bonuses being awarded.

that's a far cry from the previous administration, which made mistakes that jeopardized the lives and well-being of millions, but rarely, if ever, accepted responsibility.

so, again, thank you for spotlighting one of the main differences, and showing again why Obama was the right man for the job, and is already doing more positive than the Bush regime did.

385

Mith
Dude
ID: 01629107
Thu, Mar 19, 2009, 08:40

Last time Dodd gets my benefit of doubt about anything.

386

weykool
ID: 2842717
Thu, Mar 19, 2009, 11:02

Tree:

What exactly does "take responsibilty mean"?
What actions are going to be taken?
Will Democrats demand the resignation of Dodd?
Or are they just empty words to go along with Obama's empty promises?

387

Perm Dude
ID: 2223197
Thu, Mar 19, 2009, 11:09

Will Democrats demand the resignation of Dodd?

Why in the world would they do this?

388

Mith
ID: 2894309
Thu, Mar 19, 2009, 11:09

Will Democrats demand the resignation of Dodd?
Or are they just empty words

Empty words? Weykool, what is Dodd's infraction with regard to the bonus money which warrants demands for his resignation?

And who has demanded anyone's resignation?

389

weykool
ID: 2842717
Thu, Mar 19, 2009, 11:22

Lets not forget it was Dodd and Barney Frank who got us into this mess with the Fannie and Freddie debacle.

As I suspected it will be circle the wagons from Democrats.

Hey you know what?....blame me...."I take full responsibilty".

390

Perm Dude
ID: 2223197
Thu, Mar 19, 2009, 11:24

Riiiight. Chris Dodd and Barney Frank are responsible for the AIG bonus payments...

391

Mith
ID: 2894309
Thu, Mar 19, 2009, 11:26

Weykool = jag.

392

weykool
ID: 2842717
Thu, Mar 19, 2009, 11:30

MITH you can call names all you want.

But I am still waiting to hear what "taking responsibility" means.

393

Perm Dude
ID: 2223197
Thu, Mar 19, 2009, 11:33

It means using political capital to publicly correct mistakes you admit are or were yours, or on your watch.

394

Mith
ID: 2894309
Thu, Mar 19, 2009, 11:35

Yeah I'm waiting to hear about Dodd's infraction with regard to the bonus money which warrants demands for his resignation, and who demanded his resignation.

And I'm not holding my breath. Because weykool = jag.

395

weykool
ID: 2842717
Thu, Mar 19, 2009, 11:41

PD:
Just to be clear: AIG first started receiving money during the Bush Administration. Your knee-jerk "Obama is to blame!" response obscures this all.

Obama:
he'll take responsibility for the bonuses being awarded.

PD credibilty=Zero

396

weykool
ID: 2842717
Thu, Mar 19, 2009, 11:51

MITH:

#1. Dodd needs to resign because he outright lied about how the excemption got into the plan.
If you saw the interview he went into great details on how it happened...this is not just "misremembering" something.

#2. Dodd has proven he is unfit to lead.
I wouldnt trust him to be in charge of my city's dog catchers.

397

Mith
ID: 2894309
Thu, Mar 19, 2009, 12:11

Dodd needs to resign because he outright lied about how the excemption got into the plan.

If that's your opinion, so be it. But I'd like to pin you down here - you're saying that being caught in a lie is grounds to demand the resignation of a sitting Senator? Because I'm pretty sure that more than a few have been exposed since you started postiong here and I don't recall you demanding any resignations before.

My second question was: who has demanded Dodd's resignation? Your opinion that Dodd has proven himself unfit to lead doesn't respond to that.

The reason I ask is that you characterized a demand for Dodd's resignation as "empty words". In order for them to be empty words, someoen must have said them - and not meant them. I'm trying to get at what the heck you're talking about here.

398

weykool
ID: 2842717
Thu, Mar 19, 2009, 12:43

So I answered your question and you dont like the answer ...fine.

Can I at least get an answer to my question?

399

Tree
ID: 61411921
Thu, Mar 19, 2009, 12:54

Or are they just empty words to go along with Obama's empty promises?

since other people took care of you in regards to the rest of your silly questions, i'll handle this one, compliments of a link provided by one of your fellow conservatives, The Obameter...

I'll let you look at the numbers yourself, regarding promises kept so far vs. promises broken. but his record of excellence speaks for itself.

400

Mith
ID: 2894309
Thu, Mar 19, 2009, 13:12

So I answered your question and you dont like the answer ...fine.

No, the problem is that you settled on an answer that doesn't make any sense. You might as well have answered, "potato".

You referred to a demand for Dodd's resignation and you have characterized that demand as "empty words", or at least as potentially so.

Are you saying by your response to my question about who's empty words, "Dodd has proven he is unfit to lead, that YOU are the one who is demanding Dodd's resignation? But then you would be characterizing your own words as empty. That might be your strongest point yet in this discussion but I don't think it's one you intended.

Perhaps by, "are they just empty words to go along with Obama's empty promises", you meant that the empty words belong to Obama? I don't think Obama ever demanded the resignation of Senators who are caught in lies, did he? So they can't be his empty words.

Does anyone here know what he is talking about?

Weykool, do you even know what you're talking about?

401

weykool
ID: 2842717
Thu, Mar 19, 2009, 14:03

MITH:
If you dont want to answer my question just say so.
It isnt that complicated.
Obama said he took "full responsibilty".
What does that mean?
What will be the consequnces.
If nothing happens....they are empty words.

I am sure I will not get a good answer to this and probably more insults but I figured I would try one last time.

402

Perm Dude
ID: 2223197
Thu, Mar 19, 2009, 14:09

Well, what, exactly did Obama say? It seems to me that you want MITH to put words into the mouth of Obama but it doesn't appear that you've done more than read the headline yourself.

By the way, the Republicans in the Senate who are holding up Treasury Department appointments should be slapped around. Holding Treasury hostage by preventing them from being fully staffed, in this time of financial crisis, borders on recklessness.

403

Tree
ID: 61411921
Thu, Mar 19, 2009, 14:10

what SHOULD it mean weykool?

ya know what it DOES mean? it means The Buck Stops Here.

that's a refreshing change, and if you want to be critical of a man standing up and saying that, there isn't much you'll applaud.

404

Perm Dude
ID: 2223197
Thu, Mar 19, 2009, 14:11

Gallup: Consumer confidence up but not reflected yet in spending

405

Mith
ID: 2894309
Thu, Mar 19, 2009, 14:11

If you dont want to answer my question just say so.

You didn't ask me a question. In post 386, you asked Tree, "What exactly does "take responsibilty mean"?".

So let me get this straight - all day I've had to push you to own up to the nonsensical statements you've made and avoided and your new tactic, rather than just admit you were talking out of your ass, is to accues ME of avoidance for not responding to questions you posed to Tree? About something that Tree said?

What I'm currently asking myself is why I am showing you the respect of responding to you at all. Are you even an adult?

406

weykool
ID: 2842717
Thu, Mar 19, 2009, 14:28

Thank you MITH...I rest my case....no answers...more insults.
[/responding]

Tree:
I applaud actions.
If you want to applaud empty words then that is your business.
"The Buck stops here" means you dont point the finger and that is all we have gotten from Obama since he took office.

How about we make Dodd personally pay back the federal government for the AIG bonuses?
He can take the money out of all of his AIG campaign contributions.

407

Mith
ID: 2894309
Thu, Mar 19, 2009, 14:33

WSJ

"Washington is all in a tizzy and everybody is pointing fingers at each other and saying it's their fault, the Democrats' fault, the Republicans' fault," he said at a town hall meeting Wednesday. "Listen, I'll take responsibility. I'm the President."

Accepting responsibility means that he signed the bill and he is therefore responsible for it. He didn't write the language in the bill but as the president, he deserves the credit for it's successes and the responsibility for its failures.

Just like the gaffe at Fox News Channel earlier in the week, when they misrepresented that Biden quote. It's likely that the transgression didn't occur at the executive level, but the execs at FNC are ultimately responsible for the network's content and so the partisan lie that made it to air that day ultimately reflects on them.

But weykool, there's nothing in there about demanding any resignations. So I'd still love to know how you got to the idea that accepting responsibility is empty rhetoric unless Obama demands Dodd's resignation.

408

Mith
ID: 2894309
Thu, Mar 19, 2009, 14:38

It's mind-boggling how the right supported Bush's and Rumsfeld's refusal to acknowledge that any mistakes were made for several years despite the early failures of the Iraq War which flew in stark contrast to the pre-war and early predictions that were made - and yet when we do elect a president who accepts responsibility for the actions of his office, they lob the empty rhetoric charge at him!

When did refusal to admit one's mistakes become a tenet of conservatism?

409

Perm Dude
ID: 2223197
Thu, Mar 19, 2009, 14:42

When the Right conflated evangelical Christianity and politics, MITH. One doesn't admit to errors when God is in charge.

410

Tree
ID: 61411921
Thu, Mar 19, 2009, 14:58

Tree:
I applaud actions.
If you want to applaud empty words then that is your business.

did you follow the link?

no, i didn't think so.

"The Buck stops here" means you dont point the finger and that is all we have gotten from Obama since he took office.

who's he point fingers at? the phrase means he points those fingers at himself, and that's exactly what he's doing by shouldering responsibility.

411

boikin
ID: 532592112
Thu, Mar 19, 2009, 15:00

who cares who takes responsibility, this argument is pretty silly if you ask me. Just as i dont care if Bush said he made mistakes, I don't care that Obama says he will take responsibility. they are all hollow gestures. It is like when i apologize for fouling someone, it doesn't mean i will not do the same thing next time down the court.

412

Mith
ID: 2894309
Thu, Mar 19, 2009, 15:27

I disagree. The principle is important. You fouled someone because it helped your chances at winning - that's part of the game and I don't know why you would apologize unless you hurt your opponent in the process. And in that case, you aren't sorry that you fouled him, but for the harm you inadvertantly caused. I don't know you but I'd hope that you wouldn't deliberatly try to harm your opponent again.

What about when you foul someone at an inopportune time, and it hurts your team? You own up to the mistake and apologize to your coach and teamates, right? Doing so displays a candor and honesty that is preferable to disingenuously accusing the ref of making a bad call, right?

413

boikin
ID: 532592112
Thu, Mar 19, 2009, 15:41

You fouled someone because it helped your chances at winning - that's part of the game this was the point I was trying to get at. it all just part of game.

414

Mith
ID: 2894309
Thu, Mar 19, 2009, 15:45

this was the point I was trying to get at. it all just part of game.

Right, but bailout money going to AIG executive bonuses, after Obama had stated that this wouldn't happen, was not part of Obama's game.

415

Mith
ID: 2894309
Thu, Mar 19, 2009, 17:27

A few thoughts...

I can't get behind taxing the bunuses to recover them. The Senate version of the bill apparently seeks to tax executive bonuses on all companies that receive bailout money. That sounds a bit more sane at first blush.

It would be interesting to see how many representatives who stonewalled caps on executive pay in the last few months are attack mode today.

How far is Geithner from the hook?

416

boikin
ID: 532592112
Thu, Mar 19, 2009, 17:39

I can't get behind taxing the bunuses to recover them. The Senate version of the bill apparently seeks to tax executive bonuses on all companies that receive bailout money. That sounds a bit more sane at first blush.

I agree with this statement for most part, what is done is done. I do not like the precedent of retroactively punishing people for crimes that were not crimes when the act was committed.

It would be interesting to see how many representatives who stonewalled caps on executive pay in the last few months are attack mode today.

good question, it would appear that most of the republicans stuck to guns and voted against the tax on bonuses, then again they might have just been voting against raising taxes.

417

Perm Dude
ID: 32291914
Thu, Mar 19, 2009, 17:46

One notable exception: Minority whip Eric Cantor

Tom Price on the vote: "The government has no business interfering in the private sector."

418

Mith
ID: 2894309
Thu, Mar 19, 2009, 17:46

it would appear that most of the republicans stuck to guns and voted against the tax on bonuses, then again they might have just been voting against raising taxes.

Actually House Republicans were split on the measure. 85 voted in favor and 87 voted against.

419

Mith
ID: 2894309
Thu, Mar 19, 2009, 18:00

Jon Kyl is another one.

420

Tree
ID: 61411921
Thu, Mar 19, 2009, 18:07

with all this asinine criticism of Obama, it's nice to see this:

Bush says it's 'essential' to help Obama

Former President George W. Bush, making his first public speech since leaving office in January, says he wants Barack Obama to succeed and that it's "essential" to support the new leader.

Bush declined to critique the Obama administration in Tuesday's speech, saying the new president has enough critics and that he "deserves my silence."

Former Vice President Dick Cheney has said that Obama's decisions threatened America's safety. Conservative talk-show host Rush Limbaugh has said he hoped Obama would fail.

"I love my country a lot more than I love politics," Bush said. "I think it is essential that he be helped in office."

Kudos to Bush. For this, he deserves props. he could have been trouble on the way out, but he wasn't. he could have racked up the much while observing from afar, but so far, he really hasn't.

so while the limbaughs and cheneys of the world continue to speak themselves into irrelevance, it's nice to see GW Bush say "hey, we're all in this together," even if it's 6 years too late.

421

Mith
ID: 2894309
Thu, Mar 19, 2009, 18:11

Agreed. Credit GWB for taking the high road.

422

jedman
ID: 552262217
Thu, Mar 19, 2009, 18:41

Are they going to heavily tax the bonuses at Fannie and Freddie? I realize the total amount dwarfs AIG, but isn't the principle the same?

Any banks that took TARP money that didn't really need it will surely start giving it back if they are limited as to how much bonus they can pay to executives, I would think.

Think there is going to be more surprises from the stimulus bill that nobody read?

423

Mith
ID: 2894309
Thu, Mar 19, 2009, 18:48

Did FM/FM execs receive huge bonuses? One of the meddling issues with AIG and the banking industry is that their execs' bonuses aren't so much performance incentives, they are the majority of their guaranteed income.

Don't get me wrong, I absolutely think executives should take a pay cut at every firm that receives bailout money.

426

jedman
Dude
ID: 315192219
Thu, Mar 19, 2009, 20:48

More financial companies that are being propped up with federal
money are facing political heat over bonus payments to
executives.

Fannie Mae is due to pay retention bonuses of between
$470,000 and $611,000 this year to some executives, despite
enormous losses at the government-backed mortgage
company. Fannie's main rival, Freddie Mac, also plans to pay
such bonuses but hasn't yet provided details.

Fannie's bonuses are smaller than ones paid by American
International Group Inc. that have caused a political firestorm
for that company. Seventy-three AIG executives received
retention payments of $1 million or more recently, according to
New York Attorney General Andrew Cuomo.

But the Fannie bonuses are still considerable and come at a time
when Fannie and Freddie are receiving increasing amounts of
funding from the Treasury. For 2008, Fannie and Freddie
reported combined losses of about $108 billion, largely
stemming from a surge in home-mortgage defaults. The
Treasury has agreed to provide as much as $200 billion of
capital apiece to Fannie and Freddie in exchange for preferred
stock. The two companies have said they will need a combined
$60 billion of that money to cover their losses so far.

427

Mith
Dude
ID: 01629107
Fri, Mar 20, 2009, 08:42

I'd have to know more before forming an opinion on the FM/FM bonuses.

One thing that makes me sick is the notion that we need the same execs who bundled and packaged debt and otherwise shuffled money around to remain in place to unwind it all. I have no reason to assume these people are as competant as the notion implies and can't think of a reason to assume there is an ethical bone in any of their bodies.

428

Perm Dude
ID: 32291914
Fri, Mar 20, 2009, 17:26

I completely agree, MITH, and the idea that we need to pay these people to stay in those jobs is just poor thinking.

Meanwhile, liberals are reacting strongly against Congress' reaction to the bonus.

429

walk
ID: 181472714
Wed, Mar 25, 2009, 10:21

AIG Resigntation Letter

I wish the NYT did not entitle this: "Dear AIG, I Quit," cos this resignation letter did not read like that. It's interesting, and a viewpoint about the current eco crises and alleged culprits that we do not typically get to see in the media.

430

Frick
ID: 3410551012
Wed, Mar 25, 2009, 10:47

What percentage of AIG's profits were a result of Credit Swaps and other products that crushed AIG? I'm guessing that part of his bonus was based on AIG's total profit, not just his.

And he far from the first person to have his bonus payment taken away due to actions they had no control over.

431

Boxman
ID: 3821468
Wed, Mar 25, 2009, 11:26

Does AIG really deserve the lions share of the attention and blame here? Sorry but this just seems to be a focal point for the torch wielding mob to shake their pitchforks at who isn't a member of the Republican or Democrat parties.

432

Tree
ID: 61411921
Wed, Mar 25, 2009, 11:35

yea, AIG deserves the attention.

the company failed. it would have gone out of business. the use government provided billions of dollars to help the company not fail.

and then, it rewards the people who made bad decisions by giving them extreme amounts of bonus money - another bad decision.

they may not be the only guilty culprit, but they did get 40 BILLION, more than any other company.

so yea, they deserve every bit of grief and criticism they get, and probably what they are getting isn't really enough.

433

Boxman
ID: 3821468
Wed, Mar 25, 2009, 12:55

You completely misread 431.

434

Perm Dude
ID: 30246257
Wed, Mar 25, 2009, 12:59

Can you clarify it, then?

435

Pancho Villa
ID: 42220236
Wed, Mar 25, 2009, 13:00

they deserve every bit of grief and criticism they get

We, the taxpayers, own a huge stake in AIG. What they deserve is our support in stabilizing the corporation so that the government can then sell the shares on the open market and use the proceeds to help pay off our debt.

I agree with Boxman that this just seems to be a focal point for the torch wielding mob to shake their pitchforks at who isn't a member of the Republican or Democrat parties.

We need to move away from the rhetoric and move towards solutions that will make AIG a profitable private corporation again.

436

Boxman
ID: 3821468
Wed, Mar 25, 2009, 13:16

Can you clarify it, then?

As I stated in 431, does AIG really deserve the lions share of anger from the torch wielding mobs? No they don't.

What about Dodd, Frank, other Democrats and Republicans whose policies enabled this? What about the other dozen companies we've bailed out? What about GM and Chrysler? I suppose if AIG had a huge union voting bloc for the Democrats like the autos they wouldn't be as ostracized.

If we're going to have the torch wielding mob mentality that's fine. I'm pissed too. But let's make sure we lynch them all and not just the folks at AIG.

It all smells of a smoke screen where anger at AIG is justified we need to make sure the other culpits don't sneak out the back door or infiltrate the torch wielding mob so as to avoid attention on them.

Now I've heard that AIG people are getting death threats and protests on their property. Quite frankly they deserve it for what they helped to perpetrate. But don't let people like Dodd, Frank and the other execs at these companies off the hook just because we're so angry at AIG.

I want Nuremburg style trials and hangings for the parties that brought this upon us. Now the consumer isn't blameless either, hardly so, but its hard to punish 300 million people. Kinda like a sports team that sucks wherein the coach is fired even though the problem is the players.

437

WTC Building 7
ID: 471052128
Wed, Mar 25, 2009, 13:57

Excellent article in Rolling Stone magazine explaining the history of the AIG mess. link This guy writes like I would, if I could get away with it. Kind of long though. Excerpt:

"The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses)."

438

walk
ID: 181472714
Wed, Mar 25, 2009, 14:08

So, Box, we should have nuremburg trials for the folks that created CDOs and credit default swaps, but not the buyers who bought homes with no money down, well beyond their incomes, and who continously refinanced to avoid making mortgage payments? What about the gov't dudes who made the rules saying that lenders had to have a quota of loans to low SES families? There's a lot of fault here, and not just with the traders.

439

Mith
ID: 2894309
Wed, Mar 25, 2009, 15:24

How do I get in on the Public Private Partnership Investment Program?

440

Boldwin
ID: 392192513
Wed, Mar 25, 2009, 15:52

What is not outstanding about that B7, is that AIG didn't do that.

What happened is that the banking committee in the House of Representatives blew a hole that big in our economy and AIG just happened to have written the insurance policy to cover such an eventuality.

441

Boldwin
ID: 392192513
Wed, Mar 25, 2009, 16:00

Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society

Yes it did. It had congressmen in the banking committee frantically waving their arms saying Chris Dodd's course was leading to a financial meltdown of the banking system.

The real fault lies in democracy itself. The general electorate keeps sending Chris Dodd and Barney Frank back to do this to us.

442

Frick
ID: 3410551012
Wed, Mar 25, 2009, 16:01

Did the hole in AIG's balance sheet exist for the past 8 years, or did it develop when home prices tanked?

443

boikin
ID: 532592112
Wed, Mar 25, 2009, 16:17

re: 439, i think this link belongs in the Postmodernism For the Masses thread, since it basically says what boldwin is always contending that we moving to a world of capitalism for the Rich and socialism for the rest of us.

444

Biliruben
ID: 52052916
Wed, Mar 25, 2009, 17:15

I would reverse that.

445

boikin
ID: 532592112
Wed, Mar 25, 2009, 17:26

I would reverse that. yeah the article is contending that it should not be that way and that everyone should be able to take part.

446

Razor
ID: 53243617
Wed, Mar 25, 2009, 20:24

What happened is that the banking committee in the House of Representatives blew a hole that big in our economy and AIG just happened to have written the insurance policy to cover such an eventuality.

Your understanding of the financial crisis is inaccurate. There are many other types of debt for which AIG's Financial Products division created insurance-like derivatives. These derivatives turned a manageable problem into a devastating crisis.

447

Boldwin
ID: 392192513
Wed, Mar 25, 2009, 21:54

I did not mean to imply AIG only insured the RE mortgage industry, but you know that. Disingenuous cheap shot.

448

Boldwin
ID: 392192513
Wed, Mar 25, 2009, 21:57

And you also damn sure know that the RE bubble/sub-prime mortgage mess is so at the heart of it. Not just some 'one of many' issue.

449

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 13:00

The Republican budget

Zero chance of passing, but worth looking at for their priorities. Several things worth noting:

-that they actually produced one. Until Obama called them out, they seemed content not to bother putting one together.

-they continue to call the market-based cap-and-trade an "energy tax." The GOP, of course, has never met a policy it disagreed with that it didn't try to call a "tax." Emissions in the United States are a problem, and a market-based solution (which creates a new market for emissions allowances) is probably the best out there. But apparently the GOP would prefer the government to step in and start mandating blanket numbers for the industry...

-the current spending cuts read like a litany of small grudges. They are petty and don't actually make much difference in the budget. Eliminating funding for poetry readings isn't going to help.

-the GOP continues to rail against the stimulus package, but has been silent on the one-third of the package that are, essentially, tax cuts and rebates. Get off the fence, fellas.

-the health care options are worth looking at, but given the massive costs to government in health care, really are missing the larger point of cost containment. Ironically, by trying to put on bandaids in order to save some money on paper, they would actually cost the government billions as the old, wasteful system continues unabated.

Again--worth looking at. But this is a 1995 budget.

450

Boxman
ID: 3821468
Thu, Mar 26, 2009, 13:11

You know how many times you people bitch when I post something from three years ago? Now you want me to look at something from 1995?

451

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 13:16

That's a metaphor, Boxman. The GOP budget priorities are virtually the same as 1995, except without Newt Gingrich to help them to make the hard choices. Some superficial cuts, a fat "no" on health care reform (despite the federal government bleeding money in health care costs), "no" on virtually all non-Israel international aid, etc.

Meanwhile, in a surprise (to me) Nouriel Roubini gives some cautious support for Treasury's toxic asset plan. My own belief is that the biggest problem with the plan is the inability of small investors to get in on the buying. Dan Gross makes the case for hedge funds being the leveraging actor for smaller and individual investors getting in on the plan.

I'd be interesting in anyone else's opinion on the plan. Not perfect, but some good ideas and the best of many bad options out there.

452

boikin
ID: 532592112
Thu, Mar 26, 2009, 13:29

I think i said this months ago when the original bail out was being negotiated, and is probably over simplistic but i just say but it all on ebay and sell it off. If the banks are so desperate to get these assets off their books then they should be willing to do what it takes to break them up and sell them off. And for anyone who knows about ebay but the sum of the parts is always worth more than the whole. The problem is that no one wants to be left holding the bag, everyone wants to keep pushing the losses off to some else.

453

Boxman
ID: 3821468
Thu, Mar 26, 2009, 13:32

First, PD, I don't think you'd have anything nice to say about Republicans even if it was covered in chocolate sauce. Much like a fussy kid and vegetables. Ewwwwww....it's Republican they have cooties!!!

that they actually produced one. Until Obama called them out, they seemed content not to bother putting one together.

Cheap shot. Its Obama's job to make the budget. He's the Prez. You know how many times Democrats have been accused of obstructionism?

they continue to call the market-based cap-and-trade an "energy tax." The GOP, of course, has never met a policy it disagreed with that it didn't try to call a "tax." Emissions in the United States are a problem, and a market-based solution (which creates a new market for emissions allowances) is probably the best out there. But apparently the GOP would prefer the government to step in and start mandating blanket numbers for the industry...

I work in the Sustainability field. People are terrified of government intervention and some industries are proactively seeking out solutions. WalMart being a banner example of proactive approaches.

Cap and trade would cost jobs and hit consumers with a rate hike on their utilities and what amounts to a tax on everything else they buy. Imagine the carbon credits Exxon would have to buy. Do you really think they'll eat that cost? Not in a thousand years.

Sustainability really works when people see the cost savings of proactive measures. Foster that culture and let it grow because there's a genuine desire for it to exist across all facets of the supply chain and in a lot of industries. Don't be punitive.

the current spending cuts read like a litany of small grudges. They are petty and don't actually make much difference in the budget. Eliminating funding for poetry readings isn't going to help.

Start somewhere with the spending cuts. We need it in the trillions of dollars. But no matter what is picked people will bitch. Doesn't mean that it doesn't have to be done though.

the GOP continues to rail against the stimulus package, but has been silent on the one-third of the package that are, essentially, tax cuts and rebates. Get off the fence, fellas.

That's because there's a phisophical difference between Republicans and Democrats on the effectiveness of tax cuts. So yeah they aren't going to complain about those.

the health care options are worth looking at, but given the massive costs to government in health care, really are missing the larger point of cost containment. Ironically, by trying to put on bandaids in order to save some money on paper, they would actually cost the government billions as the old, wasteful system continues unabated.

I have an idea. Let's work on the national debt while introduced a trillion dollar healthcare program. Not gonna work. I would have loved to have seen the stimulus pay for the cost of electronic records for the healthcare industry. There's a ton of cost savings there.

454

Boxman
ID: 3821468
Thu, Mar 26, 2009, 13:39

Meanwhile, in a surprise (to me) Nouriel Roubini gives some cautious support for Treasury's toxic asset plan. My own belief is that the biggest problem with the plan is the inability of small investors to get in on the buying. Dan Gross makes the case for hedge funds being the leveraging actor for smaller and individual investors getting in on the plan.

I'd be interesting in anyone else's opinion on the plan. Not perfect, but some good ideas and the best of many bad options out there.

Small investors are such a small piece of the pie anyway, but yeah I see and agree with your point.

I think investors will flock to this. Because of rules like mark to market its highly possible that these so called toxic assets could be massively undervalued. Couple that with historically low mortgage rates and the number of refi's should help de-toxify these assets.

455

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 14:03

Sounds like the GOP budget proposal is all talking points, no substance

So more details might be coming "in a few days."

456

walk
ID: 181472714
Thu, Mar 26, 2009, 14:31

Oooops, I just posted a similar article in the "direction of the republican party thread." It is kinda lame, the reub budget proposal. At least have specifics...

457

WTC Building 7
ID: 471052128
Thu, Mar 26, 2009, 15:56

-the current spending cuts read like a litany of small grudges. They are petty and don't actually make much difference in the budget. Eliminating funding for poetry readings isn't going to help.

This is the kind of attitude whereby you end up $12 trillion in debt. Oh, we owe so much money, that little cut will not make a difference. This goes for household budgets, too.

458

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 16:05

Actually, it is the kind of attitude where you end up a few million dollars in debt.

This is like cutting out the soda and chips in the household budget but keeping the third car.

It reveals the GOP to be unserious about the very thing that they are staking their party upon. Remember: This isn't an issue for which the American public backs the GOP right now. So while the GOP is welcome to make the argument, they actually have to make the argument. Obama was successful in blunting McCain's arguments about earmarks by pointing out that the budget problem drawfs earmarks. The GOP doesn't appear to realize that merely being against Obama on the budget while offering only small-time scapegoats isn't going to get them political traction.

459

boikin
ID: 532592112
Thu, Mar 26, 2009, 16:11

Actually, it is the kind of attitude where you end up a few million dollars in debt.

This is like cutting out the soda and chips in the household budget but keeping the third car.

I dont like this arguement, it reminds me too much of people cry about global warming then don't bother to recycle, there comes a point where you have to start some where. Maybe you find out that you would in end rather have the chips and soda than a third car.

460

Boxman
ID: 3821468
Thu, Mar 26, 2009, 16:23

This is like cutting out the soda and chips in the household budget but keeping the third car.

So then what is the governmental equivalent to a "third car"?

461

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 16:24

I agree that there has to be somewhere to start. But this is an opportunity for the GOP to make the budgetary argument--that they are not making.

The truncated list they gave are not only small potato(e)s, but are programs which, by and large, have immediate impacts much larger than their budgets.

Maybe best, at this point, to wait for their real proposal. All we have are talking points right now.

462

Boxman
ID: 3821468
Thu, Mar 26, 2009, 16:38

No, you are just making another hate piece against Republicans.

You have to make spending cuts somewhere and start with something; however small.

463

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 16:41

You go to the nuclear option far too quickly. Criticizing the GOP isn't hate, Boxman. So suck it up.

My own experience is that throwing out small things when there is a big problem is a procrastinating device. Like cancelling a newspaper subscription when facing bankruptcy. If not accompanied by larger cuts this reveals an unseriousness about it all.

464

Boxman
ID: 3821468
Thu, Mar 26, 2009, 16:52

My own experience is that throwing out small things when there is a big problem is a procrastinating device.

What items do you cut spending for then?

465

Boxman
ID: 3821468
Thu, Mar 26, 2009, 16:58

PD, the collective work of your posts along with each individual one is grossly anti-Republican without a shred of neutrality. You would have more credibility if you took the Democrats to task.

466

Perm Dude
ID: 54242267
Thu, Mar 26, 2009, 17:17

Absolutely it is anti-Republican. The GOP has made a number of huge mistakes (both in abandoning its core political philosophy and making stupid political mistakes which result in public squables). Do you know anyone pro-Republican these days? There's probably a reason for that.

Note that this doesn't mean that I'm anti-conservative. I just believe the GOP to be a poor delivery system for conservative thought and action these days.

467

Boxman
ID: 3821468
Fri, Mar 27, 2009, 13:46

PD, in one of the threads recently you commented on how red states suckle on the governmental teet more than blue states.

Fine whatever. But what do you make of the top states for unemployment being predominantly blue?

Top Unemployment Rates

The U.S. Labor Department's report on state-by-state unemployment, released Friday, showed the terrible toll the recession, now in its second year, is having on workers and companies alike.

Seven states have unemployment rates that topped 10% last month. That's up from four states in January.

The U.S. unemployment rate, released earlier this month, rose to 8.1% in February, the highest in more than 25 years. Economists predict the national jobless rate will hit 10% by year end even if the recession were to end later this year as some hope.

Michigan's jobless rate climbed to 12 percent, the highest in the country. South Carolina registered the second-highest at 11% and Oregon came in third at 10.8%.

North Carolina came in fourth with an unemployment rate of 10.7 percent, the highest there on records dating back to 1976. California and Rhode Island tied for fifth place at 10.5% each. That was an all-time high for Rhode Island. The seventh state with a jobless rate above 10% was Nevada at 10.1%.

All told, 49 states and the District of Columbia saw their unemployment rates move higher in February from the previous month. Only Nebraska recorded a slight drop. Its jobless rate dipped to 4.2%.

Wyoming once again had the lowest unemployment rate, 3.9%.

Michigan - Blue
South Carolina - Red
Oregon - Blue
North Carolina - Red
California - Blue
Rhode Island - Blue
Nevada - Blue

468

Boxman
ID: 3821468
Fri, Mar 27, 2009, 13:48

467 had a typo. North Carolina was Blue in 2008.

469

Perm Dude
ID: 54242267
Fri, Mar 27, 2009, 13:53

Blue states are, by and large, manufacturing states. No surprise there that they have been hit hard. Virtually every state, as your quote notes, had higher unemployment.

Your link doesn't go to unemployment rates, btw.

470

Perm Dude
ID: 172582810
Sat, Mar 28, 2009, 15:09

A very good piece by Simon Johnson (formerly of the IMF) about the politics of economic crises.

His point is that while there is plenty of blame, the problem boils down to changes in policy, time and time again, which benefited the financial industry.

...[B]ut these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits—such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

471

Perm Dude
ID: 172472916
Mon, Mar 30, 2009, 02:43

Desmond Lachman echoes many of the arguments being made by Johnson, particularly with regard to the way that the US has been handling its debt.

The criticism isn't directed at Democrats or Republicans (which should please no one here on these boards). Nevertheless, the kind of sobering analysis we need to hear.

472

biliruben
Leader
ID: 589301110
Mon, Mar 30, 2009, 09:52

If he doesn't mention that it's all Dodd and Frank's fault, he's obviously not worth reading.

473

Building 7
ID: 471052128
Tue, Apr 14, 2009, 15:01

Gov. Perry Backs Resolution Affirming Texas’ Sovereignty Under 10th Amendment

“I believe that our federal government has become oppressive in its size, its intrusion into the lives of our citizens, and its interference with the affairs of our state,” Gov. Perry said. “That is why I am here today to express my unwavering support for efforts all across our country to reaffirm the states’ rights affirmed by the Tenth Amendment to the U.S. Constitution. I believe that returning to the letter and spirit of the U.S. Constitution and its essential 10th Amendment will free our state from undue regulations, and ultimately strengthen our Union.”

A number of recent federal proposals are not within the scope of the federal government’s constitutionally designated powers and impede the states’ right to govern themselves. HCR 50 affirms that Texas claims sovereignty under the 10th Amendment over all powers not otherwise granted to the federal government.

It also designates that all compulsory federal legislation that requires states to comply under threat of civil or criminal penalties, or that requires states to pass legislation or lose federal funding, be prohibited or repealed.

--------------------------------

I like this. I read the Constitution, I read the 10th amendment. It gets completely ignored by the politicians in Washington. I guess I can understand why, as it would cut into their power. But, that is not what the founders intended.

Amendment IX

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment X

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

474

Tree
ID: 41371322
Tue, Apr 14, 2009, 17:12

even republicans in Texas think Perry is becoming a crack pot.

475

Building 7
ID: 471052128
Tue, Apr 14, 2009, 17:50

Here's a crackpot statement for you:

personally, i think we're on track to do away with the pirate problem. as we continue to ignore environmental concerns, we'll eventually see the oceans dry up, and viola, no more pirates on the seven seas.

476

Baldwin
ID: 132854
Wed, Apr 15, 2009, 01:48

Yeah but he lacks that one necessary ingredient.

He would have needed a pot to crack in the first place.

477

Tree
ID: 41371322
Wed, Apr 15, 2009, 02:02

B7 - i was really hoping people would see that post for the joke it was intended to be. sheesh.

478

Boxman
ID: 571114225
Wed, Apr 15, 2009, 06:24

i was really hoping people would see that post for the joke it was intended to be.

I did, you've been a joke for as long as I can remember.

B7: It is interesting that gov'ts trend is to always get bigger and gain power; never returning it to the people. Then when someone tries to reduce that power they are a "crackpot".

479

Building 7
ID: 471052128
Wed, Apr 15, 2009, 09:25

That link in #473 was a giant headline on the Drudgereport last night. Now it's not on there at all. We can infer that Drudge is reading my posts to see what is important.

When people who attempt to follow the Constitution are the ones called crackpots, it's pretty much over for this country.

480

tree, on the treo
ID: 55220277
Wed, Apr 15, 2009, 09:57

boxman. impress me. try to respond without acting like a 12 year old and insulting me.

B7 - perry is considered a moron by a lot of texans for a lot of reasons, not just this latest folly in his effort to prove he's correct in refusing stimulus money...

481

Building 7
ID: 471052128
Wed, Apr 15, 2009, 10:28

Thanks for that update on Texas politics.

482

Tree
ID: 41371322
Wed, Apr 15, 2009, 11:11

as i've said, i grew up there, i just got back from 10 days there, and spent a lot of my time talking politics with people from all sides of the political spectrum.

483

Building 7
ID: 471052128
Wed, Apr 15, 2009, 11:37

The New York governor is considered a moron by a lot of Texans.

The New York governor is considered a moron by a lot of New Yorkers.

Now what.

484

Frick
ID: 3410551012
Wed, Apr 15, 2009, 11:57

Why is anyone who wants smaller government a crackpot? Actually, I don't think Perry wants smaller government, he wants more state government, which he currently controls.

I'm all for a smaller federal government and smaller state government. Let more power reside in the local governments where citizens have more control of the politicians.

The fact that the two biggest spenders of earmarks are the leaders of the appropriations committee. So it is in the best interest of a local citizen to vote for a senior member of the senate, despite the fact that he might be a terrible person for the job. By electing a new representative, they are reducing the net benefit of their rep. Doesn't that seem wrong?

485

Perm Dude
ID: 18351159
Wed, Apr 15, 2009, 12:52

"Smaller government" is a code phrase, typically.

But keep in mind that small government doesn't mean efficient government. Size doesn't tell you whether government exceeds its boundaries, or whether it meets its needs. It doesn't tell you anything about how well government is doing.

486

Baldwin
ID: 132854
Wed, Apr 15, 2009, 13:06

Because less is more.

487

Perm Dude
ID: 18351159
Wed, Apr 15, 2009, 13:16

Well, according to many Republicans during the Bush Administration, more is less: The idea behind not worrying about deficits and sharply cutting taxes was a deliberate strategy to "starve the beast" by making government unable to get larger through a starvation of revenues.

Hopefully this idea gets tossed onto the trash can where it belongs.

488

Baldwin
ID: 132854
Wed, Apr 15, 2009, 13:29

It's awful hard to starve the guy holding the gun.

489

biliruben
ID: 461142511
Fri, Apr 17, 2009, 13:49

The Daily Show With Jon Stewart

M - Th 11p / 10c

Elizabeth Warren Pt. 1

thedailyshow.com

Daily Show
Full Episodes

Economic Crisis

Political Humor

The Daily Show With Jon Stewart

M - Th 11p / 10c

Elizabeth Warren Pt. 2

thedailyshow.com

Daily Show
Full Episodes

Economic Crisis

Political Humor

I want to have Elizabeth's Warren's love-child.

490

Mith
ID: 2894309
Fri, Apr 17, 2009, 14:04

I caught that interview on TV. Exceptional.

I was charmed too.

491

Tree
ID: 41371322
Fri, Apr 17, 2009, 14:57

that was great. the last 2 1/2 minutes were truly riveting to me, and really, in layman's terms, explained a LOT.

492

Perm Dude
ID: 24321178
Fri, Apr 17, 2009, 15:08

That was nicely done. If I have a criticism of her wrapup, I'd say she should have inserted in there that we will do the regulation "despite the short term and ongoing costs to the financial institutions" so as to acknowledge that regulations do cost money, paid for by the institutions and ultimately by the patrons of those institutions.

A mere recognition of the costs which are being outweighed would have made that a "10" in my mind.

493

Boxman
ID: 29351011
Mon, Apr 20, 2009, 10:42

Why God...Why?

The Obama administration has a plan to continue bailing out America's banks without asking Congress for more money -- by converting its loans to common stock, and in turn taking a large ownership stake in the companies.

Though such a move could stir fears of de facto nationalization, The New York Times reported Monday that President Obama's advisers are floating the idea as way to extend the remainder of the $700 billion bank bailout fund.

Doing so would avoid a fight with Congress over a request for more money, at a time when administration officials say some banks will probably need more rescue funds.

Didn't they realize that nationalization scared the crap out of the market in the first place last month or so ago? Honest to God its like they never learn.

494

Razor
ID: 371502414
Mon, Apr 20, 2009, 11:01

If the banks are so bad off that they need to be nationalized, then worrying about the consequences of a market drop is the least of our worries. But I do agree that you don't talk about nationalizing banks, you just do it. My thinking here is that Obama does not want to nationalize the banks nor does Congress, so talk of doing so may be being floated as a way to scare Congress into forking over more money which is needed to keep the banks afloat.

495

Boxman
ID: 29351011
Mon, Apr 20, 2009, 11:33

It's the fence post sitting on this topic that is driving the market nuts. Either do it or don't.

496

Perm Dude
ID: 4032209
Mon, Apr 20, 2009, 11:49

There is no "it." There are a lot of options to look at, a lot of banks which are in different situations, and a lot of numbers to look at.

Instead of "fence sitting" the Administration is trying to (*gasp*) actually look at the situation on the ground before making a decision.

In the meantime, let's put away the canard that the Administration is seriously thinking about taking over all the banks forever. At best, some banks might be forced into bankruptcy (which, of course, is a form of short-term nationalization but your argument has never been nuanced enough to include that in your "analysis"). Others will be encouraged to sell off parts. And all of it will be done after actually looking at the banks in quesiton.

Now, we might argue as to whether the right decisions were made after looking at the banks. But encouraging bad decisions to be made before the banks are examined is simply a recipe for disaster, no matter how much bad mojo you are feeling from financial markets driven by, at best, emotion.

497

Building 7
ID: 471052128
Mon, Apr 20, 2009, 14:00

Most of those 19 banks are bankrupt. Why are we using the FDIC to insure bank deposits at banks that have a casino division that can have huge losses that cause the entire bank to go bankrupt, thus requiring an FDIC bailout.

498

biliruben
ID: 461142511
Mon, Apr 20, 2009, 15:04

And on top of this, most of these banks haven't even contributed a dollar to FDIC throughout the Bush administration. So the FDIC is bankrupt too.

Just burn 'em down and start over. Hand over the deposits to Mayberry Savings and Loan. A bumpkin would be better than a "sophisticated," "innovative" exec who thought placing the world financial system on 28-Red was a sensible thing to do.

499

Perm Dude
ID: 4032209
Mon, Apr 20, 2009, 15:28

That's exactly why I don't take advice from "the market" or "banking executives" as being altogether helpful.

500

Building 7
ID: 471052128
Mon, Apr 20, 2009, 16:25

They took the FDIC insured deposits and bet on 28-Red and kept losing. Only now are they finding out that 28 is always a black number.

I would not burn them down, however. The new bank, with a clean balance sheet can move in there. They should also be able to get a good deal on some used ATM machines, etc.

The FDIC has enough funds left to bail out one or two of these 19 banks. That's probably why they are talking of converting the loans to equity. The sad thing is that the prudent banks that did not gamble away their customer's deposits, will now have to pay extremely higher FDIC fees to pay for the banks that did.

501

Boxman
ID: 571114225
Tue, Apr 21, 2009, 19:52

Dodd Gets $44,000 In Campaign Contributions From Payday Loan Industry

Critics say these businesses prey on low- and moderate-income workers, often African American or Hispanic, and trap borrowers in a cycle of debt that is impossible to escape. The federal government has already restricted lenders doing business with members of the military.

"The payday lenders are among the most aggressive and abusive lenders in the country," said Travis Plunkett, legislative director of the Consumer Federation of America. "They often victimize the most vulnerable consumers. ... We're talking about working people whose budgets are often stretched very thin, who are enticed to take out short-term loans and then are trapped."

502

Perm Dude
ID: 213592312
Sat, Apr 25, 2009, 00:26

More economic troubles downstream:

Prison Economy Spirals As Price Of Pack Of Cigarettes Exceeds Two Hand Jobs

503

boikin
ID: 532592112
Fri, May 15, 2009, 09:59

new trade wars?

504

Perm Dude
ID: 154552311
Fri, Jun 05, 2009, 20:58

The GOP, weeks after criticizing Obama's budget cuts as "too small," lay out their suggested budget cuts which are a fraction of his.

There's a good dick joke in there that I'm not going to go for.

505

nerveclinic
Leader
ID: 05047110
Tue, Jun 09, 2009, 02:29

There are lots of Republicans feigning shock that unemployment has gone up to 9.4% under Obama, now saying this is his economy now, and siting this as evidence the stimulus isn't working.

Are they really that uninformed? Or is this just typical political grandstanding?

For the last year + I've heard virtually every economist interviewed on Bloomberg state that unemployment is headed over 10%. Literally 90% have used this number or higher with a few in the 11% camp. That was before the election.

Second, only 45 billion of the 800 billion stimulus has even been used yet. If there's any complaint from the crowd that is pro stimulus (And that's the majority of economists) it's that it's being implemented to slow, it's not targeted correctly and it's spread out over too many years.

To imply the 9.4% unemployment is anything more then the natural cycle that is at this point a fore gone conclusion is either disingenuous or uninformed.

What else is new in Washington, and yes both sides of the aisle play the game.

506

Boldwin
ID: 133532810
Tue, Jun 09, 2009, 07:42

Nerve

Why would you borrow [or print] a ton of money to spend years down the road when you are broke and need the money right now?

507

biliruben
Leader
ID: 589301110
Tue, Jun 09, 2009, 10:15

Most of it will be spent in the first 16 months.

That said, the limitation on the amount that could be sent to state and local governments that the Republicans insisted be in the bill and the dems foolishly agreed to, has slowed things down, and blocked off a major and needed avenue where we could be spending money and creating and keeping people in jobs.

We have all heard about California's woes, but here is Washington we are laying off teachers, tossing people off of the state subsidized health care and cutting back on a myriad of services.

All this sends the unemployment rate up, sends families closer to the brink, and forces people in to bankruptcy and foreclosure, continuing the downward spiral.

Stupid.

508

boikin
ID: 532592112
Tue, Jun 09, 2009, 10:21

Who and how are they going to clean up the mess left when the stimulus package bubble breaks? All the stimulus package is doing is pushing the problem off for a few years.

509

biliruben
Leader
ID: 589301110
Tue, Jun 09, 2009, 10:24

That's the whole point of the Stimulus, Boikin. It isn't supposed to be permanent.

You are hoping to soften the blow to the economy and allow the financial system and industries to recover so that they can take over the job of growing the economy.

510

boikin
ID: 532592112
Tue, Jun 09, 2009, 10:37

soften the blow? If the goal of the stimulus was soften the blow then it would better to pay people who lose there jobs, not pave down town side walks with bricks(stimulus dollars at work in my town).

What do you think is going to happen when all the money runs out? Do you think property tax revenues will be same as they were a year ago? Think about it this way if a drug addict comes you and says i am going through withdrawals and i just need a fix to soften the blow. So you give him a fix to soften the blow and what does he do next week he just asks for some more to soften the blow.

511

Building 7
ID: 471052128
Tue, Jun 09, 2009, 10:41

Why don't they just always do the stimulus?

My guess is the stimulus money will be spent to help Obama run in 2012.

I don't know how the republicans can insist anything be in any bill with their numbers.

512

biliruben
ID: 461142511
Tue, Jun 09, 2009, 12:10

You boyz sure have short memories. This was just a few months ago.

Let's jog the ol' memory banks here - remember Obama trying to craft a bipartisan bill, threats of filibuster, bending over backwards to get the few sane republicans to sign on...

Anything?

This is the first time I've seen a free-marketeer suggest that Welfare was preferable to Jobs. Conservatives sure must be dizzy and confused.

513

boikin
ID: 532592112
Tue, Jun 09, 2009, 12:26

This is the first time I've seen a free-marketeer suggest that Welfare was preferable to Jobs.

I was just saying if you goal is soften the blow then soften the blow. I am not saying they should have stimulus or hand outs.

514

biliruben
ID: 461142511
Tue, Jun 09, 2009, 12:30

I don't follow.

If you pay someone to build something, he has a job, he buys stuff, he stays in his house, he doesn't get foreclosed on. Blow softened.

I get the feeling your just arguing for arguing's sake here, boikin. You are smart enough to understand this.

515

Perm Dude
ID: 154552311
Tue, Jun 09, 2009, 12:38

I get the same feeling.

A job is preferable to a handout. Seems rather simple to me.

This is particularly the case with jobs aimed at physical construction.

516

boikin
ID: 532592112
Tue, Jun 09, 2009, 12:52

Bili what happens to said guy when job is done and and the stimulus is gone? you are just pushing it off.

517

Biliruben on iffyone
ID: 52052916
Tue, Jun 09, 2009, 13:01

the idea is to give him work until the private industries have
recovered enough that he can find a job.

My guess is that will be a couple of years before we see
signifacant traction on the non-gov employment front.

518

Pancho Villa
ID: 2552912
Tue, Jun 09, 2009, 13:03

what happens to said guy when job is done and and the stimulus is gone?

The idea is that credit will become available from a revitalized banking sector, so that projects will be the domain of private enterprise once again. At least that's what the optomist in me is saying.

519

Mith
ID: 2894309
Tue, Jun 09, 2009, 13:08

Isn't a good deal of the stimulus money supposed to go to infrastructure investments and upgrades? And won't a major beneficiary of those investments be private businesses?

One of the reasons that China's economy has grown at such leaps an bounds this decade is huge investments they've made in infrastructure. Obama caught a good deal of misplaced heat for making that case during the campaign ("oh he thinks we should be more like China, does he?" was the talking point as I recall it). But I tend to think investing in infrastructure is notably superior and longer-term thinking than "just pushing it off".

520

Pancho Villa
ID: 2552912
Tue, Jun 09, 2009, 13:17

Sorry to basically parrot bili's #517 in #518, but you know what they say about great minds ;)

522

biliruben
ID: 461142511
Tue, Jun 09, 2009, 13:23

Exactly, PV!

I sincerely hope it works out that way. I have a couple laid-off friends right now trying to start their own businesses geared toward public-works contracts.

523

Perm Dude
ID: 154552311
Tue, Jun 09, 2009, 14:08

10 banks to repay $68 billion in TARP money

This is a good thing all around, I think. Even if the banks are doing it to avoid strings.

524

boikin
ID: 532592112
Tue, Jun 09, 2009, 14:58

The idea is that credit will become available from a revitalized banking sector, so that projects will be the domain of private enterprise once again.

that is goal of the TARP not the stimulus.

One of the reasons that China's economy has grown at such leaps an bounds this decade is huge investments they've made in infrastructure.

with the profits from our country. There is nothing wrong with investing infrastructure, but invest in it. don't pave side walks with brick that is a luxury.

Even if the banks are doing it to avoid strings.

what does that have to do with them wanting to pay the money back?

525

Perm Dude
ID: 154552311
Tue, Jun 09, 2009, 15:18

what does that have to do with them wanting to pay the money back?

It is the reason for them wanting to give the money back.

As opposed to, say, the program running its course.

I'm not altogether clear why you would be objecting. To really any of the stuff you are objecting to today.

526

Mith
Dude
ID: 01629107
Tue, Jun 09, 2009, 17:13

with the profits from our country

I don't see the point of that part of your response.

don't pave side walks with brick that is a luxury.

Yes, some of the money is dedicated to actual stimulus. Perhaps you're more comfortable with a more traditional stimulus package that just sends checks out to peoples' homes. The issue with the last such stimulus, if you recall, was that too much of that money didn't get spent, which means it didn't get put back into the economy, which means that businesses didn't benefit. In your town, teh company that laid the cobblestones benefitted, as did their suppliers and employees and teh vendors of goods and services they purchase. And if the new stones upgraded the appearance of a retail or commercial district of your town, then business owners there benefit over the longer term for operating in an area that shoppers might find more pleasant.

And only something like 1/14th of the stimulus money has been spent. Shouldn't you at least look into where most of the money is going before you start complaining about where the money is going?

527

Boldwin
ID: 133532810
Tue, Jun 09, 2009, 17:32

One of the reasons that China's economy has grown at such leaps an bounds this decade is huge investments they've made in infrastructure

Bwahaha...unbelievable.

...as if China's infrastruture was so appealing to manufacturers that the world's businesses just decided to move over there. Honestly sometimes I think you guys are a comedy team. Right out of yer collective wazzoos. Name the slightest evidence that China has an infrastructure advantage. Besides the slave labor.

The ONLY reason China was resussitated was because the power elite, for no deserving reason, allowed China into the WTO.

The power elite seem to have decided that they could get more bang for their buck if slave labor made the world's goods.

If they wanted to move the world in a more Orwellian direction [and I certainly believe they do] moving the wealth and power to an Orwellian corner of the political landscape helps.

528

Biliruben on iffyone
ID: 52052916
Tue, Jun 09, 2009, 18:05

So china would currently be a rural back-water but for the fact
that some bonesmen shoehorned them into the WTO.

In order to somehow fulfill an Orwellian fantasy?

Ok. That is plausable.

529

Mith
Dude
ID: 01629107
Tue, Jun 09, 2009, 18:37

I had just typed out a long post with multiple sources about advancements in chinese manufacturing and transportation infrastructure advances since the early 1990s when IE crashed on me. Now my wife is mad at me for getting angry and cussing at the computer.

I'd think about recreating the post and further irritating my wife but given your well-established knack for standing in stark blue-faced denial of any and all evidence and even flat-out proof that you're wrong, I don't see the point.

This will be the closest you've come to winning an argument with me in over a year. Congratulations.

530

Building 7
ID: 9329258
Tue, Jun 09, 2009, 18:46

This stimulus money will never get paid back. I have yet to see a credible plan to pay back the current debt....$12,000,000,000,000. Here is one plan: Raise the income tax rate to 100% for all of 2009. Assuming people would still work with all of their income going to the federal government; it would still not be enough. And they would have zero money to spend on anything else. What is the plan on paying back this $12 Trillion? It would seem reasonable to want to see a plan before going further into debt.

531

biliruben
ID: 461142511
Tue, Jun 09, 2009, 19:34

You haven't received the bill? ;)

Realistically, it has to be combination of:

1) Economic Growth
2) Taxes
3) Spending cuts
4) Time
5) The will to make long-term sacrifices

This is actually not such a massive amount of debt, as a percent of GDP. There have been several times in the past where we have run higher debt levels.

First, we get our economy growing and people back to work in order to engage #1) above, which is the fastest way to pay down debt.

Then we can get serious about spending cuts.

As for official plans, there is one (PD can probably point you to it), but the big issues, such as employment levels and when the recession will end are unknown, so any plan is pretty much guess-work.

Do you have one that won't cripple our economy even more?

What are your main concerns with carrying this much debt?

Did you have those same concerns when Bush was running up even more debt than Obama, during good times (when we should be paying down debt), by giving the rich tax-cuts and starting silly, unjustified wars?

532

Perm Dude
ID: 154552311
Tue, Jun 09, 2009, 20:51

This isn't necessarily about the stimulus plan, per say, but the banks seem to be doing quite well these days. The more I look the better things look -- a pretty good little piece by Derek Thompson on how it worked despite no real bank plan being implemented (remember the Toxic Asset Plan, for instance)?

Mostly it is a result, as the article points out, of buoyed confidence brought on by clear and unrelenting action by the US Government and the Fed to prop up the banking system.

533

Building 7
ID: 9329258
Tue, Jun 09, 2009, 22:26

So Permdude you want to go on record that all is OK now. And the banks are OK now. I'll disagree with that.

First, we get our economy growing and people back to work in order to engage #1) above, which is the fastest way to pay down debt.

The fastest way to pay down debt does not include a solution where debt is increased.

Then we can get serious about spending cuts.

This should be number one.

Do you have one that won't cripple our economy even more?

Do nothing. Do not increase debt. Let the big banks go under.

What are your main concerns with carrying this much debt?

A larger % of funds go to interest on the debt. I don't like borrowing money in general for some reason.

Did you have those same concerns when Bush was running up even more debt than Obama, during good times (when we should be paying down debt), by giving the rich tax-cuts and starting silly, unjustified wars?

Yes.

534

Razor
ID: 583182923
Tue, Jun 09, 2009, 22:31

Let the big banks go under.

This is a non-argument. Can't happen, won't happen. It's been explained to you before. Letting the economy collapse is not an option. Case closed.

535

Perm Dude
ID: 154552311
Tue, Jun 09, 2009, 22:36

So Permdude you want to go on record that all is OK now

Uh, no.

The rest could have been written by Hoover.

536

Building 7
ID: 9329258
Tue, Jun 09, 2009, 23:09

Let the big banks go under.

This is a non-argument....(Your post is nothing but an argument )Can't happen,(Not with the campaign donations from Big Finance) won't happen.(Not with the campaign donations from Big Finance) It's been explained to you before.(No it hasn't) Letting the economy collapse is not an option.(Letting the big banks go under and letting the economy collapse are not the same thing) Case closed.(Case opened)

537

biliruben
Leader
ID: 589301110
Wed, Jun 10, 2009, 08:51

I'd actually be fine with letting Citi and BofA go into bankruptcy. Slice 'em up and resell 'em, with future upside going to tax-payers, who already own them, or should. This isn't the same as letting the financial system collapse, if it is done properly.

This also isn't the same as letting us plumb the depths of deepest recession in 80 years, with all it's all attendant misery, mainly for the poor and poor-that-used-to-be-middle-class. That's just heartless and stupid, and needlessly destroys lives and livelihoods that could and should be saved. That's what the stimulus is about.

538

boikin
ID: 532592112
Wed, Jun 10, 2009, 09:55

I did not like that idea either.

Let the big banks go under.

This is a non-argument. Can't happen, won't happen. It's been explained to you before. Letting the economy collapse is not an option. Case closed.

The question is would they really go under? If all the banks needed was buoyed confidence brought on by clear and unrelenting action by the US Government and the Fed to prop up the banking system. then why even transfer money to the banks why not just say you did people thing the banks have all the money they need life goes on. The question is there really crisis or the illusion that crisis could happen?

I am going to take some flack for this but the problem with the stimulus is that the non-tax cut side of it is what both sides say they hate it is, basically socialist trickle down economics...you give money to governments ask them to trickle down to the people.

539

Perm Dude
ID: 154552311
Wed, Jun 10, 2009, 10:02

My own opinion is that the banks (at least, the top banks) weren't as bad as they thought they were. This is like thinking you need to take a second mortgage out, but when you get it you see all the strings attached, realize you can just suck it up without it for awhile and offer to give the money back.

540

biliruben
ID: 461142511
Wed, Jun 10, 2009, 13:07

Some of the banks were worse. And the stress tests weren't (we are already beyond the "more adverse" scenario in unemployment). Citi and BofA (as well as Wells, GMAC and a bunch of others) are, for all intents and purposes, bankrupt.

If Goldman Sachs and JP Morgan Chase weren't so quick, smart and connected and allowed by the bushies to loot AIG early on, they would be in a lot more trouble as well.

My guess is we'll see that middle shoe drop some time before the end of the year. It's way too early for back-patting.

541

boikin
ID: 532592112
Wed, Jun 10, 2009, 13:42

middle shoe drop sorry i have not heard that expression does that imply that there will be latter other shoe dropping or is that just another form of the "other shoe to drop". either way are thinking that the banks will go bankrupt anyways before the end of year or something else is going happen before the end?

542

biliruben
ID: 461142511
Wed, Jun 10, 2009, 13:47

It was a joke.

By my count, we have already seen 2 shoes drop. You figure it out.

Not a very good joke if I have to explain it, I guess.

543

biliruben
ID: 461142511
Wed, Jun 10, 2009, 13:50

And no, I just think that the markets and factoring a V-shaped recession and recovery, whereas the continued foreclosures, increasing unemployment, massive regional bank closures and stagnant economy will sink in, resulting in another significant drop in the market, further putting pressure on some of the bigger institutions as well as the government to keep this boat afloat.

They'll do it, but ain't gonna be quick or pretty.

544

boikin
ID: 532592112
Wed, Jun 10, 2009, 14:26

so in other words you see this a W shaped recession? I think i somewhat agree with that.

545

biliruben
ID: 461142511
Wed, Jun 10, 2009, 15:03

I think the market will look like a Sloppy W, but the actual economy will look at like a Lazy L.

Coincidentally, those are the names of the two ranches in foreclosure I'm looking to buy in West Texas. ;)

546

nerveclinic
Leader
ID: 05047110
Wed, Jun 10, 2009, 18:07

I completely agree with Bili's post 540.

The banks (Citi definitely) were insolvent PD. They would have been out of business had they not been bailed out. For all intents and purposes they were "out of business" and only kept solvent by government funds.

The truth is the banks were/are in worse shape then the average American comprehends.

It's very possible there is more serious damage to come.

547

Perm Dude
ID: 154552311
Wed, Jun 10, 2009, 18:14

It's very possible there is more serious damage to come

I certainly don't disagree with that. But please don't put words into my mouth: I never said that Citi or the other insolvent banks were better off. The banking industry is too varied for either "everything is rosy" or "everything is crap" analysis.

I'm only speaking of the ten banks who are paying TARP money back.

548

boikin
ID: 532592112
Thu, Jun 11, 2009, 09:48

The truth is the banks were/are in worse shape then the average American comprehends.

what do you mean and why should i care?

I think we need to rename the term bailing out, when the government ends up owning a majority of the company we need to call it what it is, Nationalization. GM was not bailed out, they were nationalized. I guess i am slow(6 months slow) to realization but they are playing semantics game...

This gives me an idea, If the government is so worried about falling house values and falling 401ks maybe they should start buying stock and houses. In doing so they could both drive up values and increase consumer confidence.

549

Razor
ID: 371502414
Thu, Jun 11, 2009, 10:02

Has the government denied nationalizing GM? I believe Obama said as much and followed it up by saying it was only temporary.

There was once a government plan to buy up mortgages. I don't know if it ever took flight.

550

Perm Dude
ID: 154552311
Thu, Jun 11, 2009, 10:18

Any bankruptcy is "nationalization" (i.e., takeover of an entity by the government). Many people on the right who are criticizing the Administration on GM use the term far too loosely to have any real meaning.

f the government is so worried about falling house values and falling 401ks maybe they should start buying stock and houses.

This was McCain's plan, to buy up mortgages. He was slapped around for it, mostly on the Right, for "rewarding" those who had mortgages and shouldn't, and for not letting the free market make some of these determinations as to worthiness.

In fact, Obama's problem with both GM and the banks is that he is not so much taking over anything as providing a hand-brake to sudden free market changes--letting the air out of the balloon as slowly as possible instead of having the whole thing pop.

551

boikin
ID: 532592112
Thu, Jun 11, 2009, 10:35

Any bankruptcy is "nationalization"

you might want to tell that to all the people who just filed for bankruptcy, they have just been nationalized. I maybe wrong but i thought the purpose of bankruptcy was forgive debts or at least say who is getting what as arbitrated by a judge not you cant pay your bills the government owns you now.

This was McCain's plan, to buy up mortgages. He was slapped around for it, mostly on the Right, for "rewarding" those who had mortgages and shouldn't, and for not letting the free market make some of these determinations as to worthiness.

no i meant actually buying houses not mortgages, they go around biding for houses that are for sale. they could even go into the house flipping business. Not only could they help drive up house values they could but people to work fixing up houses to they could later flip for a profit.

Has the government denied nationalizing GM?

no he hasn't but they say they don't want to be, then why are they? If you dont want to be owners of GM well don't.

In fact, Obama's problem with both GM and the banks is that he is not so much taking over anything as providing a hand-brake to sudden free market changes--letting the air out of the balloon as slowly as possible instead of having the whole thing pop.

this arguably true with the banks, but GM has been failing for years, it is not like this was an overnight occurrence.

552

Perm Dude
ID: 154552311
Thu, Jun 11, 2009, 11:10

you might want to tell that to all the people who just filed for bankruptcy,

I'd rather just tell it to the people who throw the term around irresponsibly.

553

nerveclinic
Leader
ID: 05047110
Thu, Jun 11, 2009, 13:23

what do you mean and why should i care?

Boiken I can only go by the comments I hear from professional econmists who are interviewed on Boloomberg. I listen to every Bloomberg podcast and have for the last year and a half.

The consensus seems to be, that had the bank bailouts not taken place, it would have caused the complete collapse of the US and then world financial system. This would have created a world depression on the level of the 1930's on a international scale.

If you understand this, and your response is "why should I care" then I don't really know how to have a coherent conversation with you. It would mean double or triple the current unemployment numbers.

Perhaps you disagree with the premise?

If so I have to ask myself, should I assume this guy Boiken on the internet is correct, or should I listen to the vast majority of economists on Bloomberg who preach this line?

Now there is a big divergence over how the various bail outs have been handled among even those who support it.

So for example, my unscientific break down would go something like this.

Of the economists I hear interviewed (And I'm talking 20 to 30 pod casts a week)

20% were against the bailouts in any form. They believe in complete free market and the system would be better off purged. Even this group accepts the result would have been cataclysmic, they just don't mind watching Rome burn and seeing what the other side looks like.

Of the 80% left opinions vary.

OK to have bailed out the banks but that's all we should have done.

The stimulus package was necessary but Obama is going about it wrong, he's spread it out over too many areas that don't directly effect the situation and he's waiting too long. There is lots of snipping on how the stimulus is being used as a political tool, even when they agree the premis is correct.

Other's think we never should have let Lehman fail, that, that is what really set things off badly because of collateral damage.

Others want the stimulus but think it's too big.

some wanted the temporary nationalisation of the banks 4 months ago rather then saving the share holder. It would be a temporary nationalisation until repaired and then sold to the highest bidder when healthy.

I keep hearing over and over though that it was the right thing to bail out the banks because the damage to the economy and the suffering to so many would have been too much. That sentiment seems to come from the vast majority of the economists.

I am not an economist, all I can do is listen to people who have studied it their whole life and assume they know more then me and Boiken.

554

Building 7
ID: 471052128
Thu, Jun 11, 2009, 13:39

#553 Are those all Keyensian economists? Are any of them of the Austrian school of economics?

555

biliruben
ID: 461142511
Thu, Jun 11, 2009, 14:06

Are there any Austrian Economists of note still breathing in order that they can present an opinion?

As far as I can tell, Austrian school economists don't go in for all that mathematical modelling gobbly-gook. They like to tell stories. And the story they most often tell has a simple message:

Don't touch!

So I can probably guess what Hayak or Van Mises would say, even if they are long dead:

They would tell a story of renewal from the rubble and ashes of Rome, but they would leave out the sad bits about tremendous pain and anguish this story would cause to hundreds of millions of people if we were to foolishly try to enact it on the world stage.

556

Building 7
ID: 471052128
Thu, Jun 11, 2009, 16:08

You can insult a different method of economics, but they are not the ones that got us in this mess. Your Keynes mathematical modelling gobbly-gook has gotten us $12 trillion in debt , over $60 trillion under normal accounting. Is it going to be hard to get out of the mess. Yes. The sooner it is dealt with, the less painful it will be.

557

biliruben
ID: 461142511
Thu, Jun 11, 2009, 16:10

Actually, ignoring Keynes got us into this mess, and it's going to be painful regardless. It will be much, much more painful if we take the absurdly simplistic approach of "do nothing".

I did not mean to insult. If I misrepresented the Austrian School of thought, please educate me.

558

boikin
ID: 532592112
Thu, Jun 11, 2009, 17:30

As a person who does mathematical modeling it is gobbly-gook....

take the absurdly simplistic approach of "do nothing".

i think it would be more accurate to say wait and see then adapt.

559

biliruben
ID: 461142511
Thu, Jun 11, 2009, 18:05

Wait and see what? The shiznet hit the fan a year ago. Most of our financial sector has imploded, employment is skyrocketing, our GDP is shrinking more than at any time since the great depression with no end in site, and 14 trillion dollars has vanished from our household worth.

How long are you planning on waiting, and what would force you to act? Riots in the streets?

Adapt by hording Ramen and bottled water and heading to the hills with lots of ammo?

I do plenty of modeling myself. Some of it actually tells me something I wouldn't have put in my narrative originally.

560

Perm Dude
ID: 154552311
Thu, Jun 11, 2009, 18:08

i think it would be more accurate to say wait and see then adapt.

I think Obama would agree. Except that we've already waited, and it was time to adapt.

561

boikin
ID: 532592112
Thu, Jun 11, 2009, 18:25

you meant unemployment i assume...

14 trillion dollars has vanished from our household worth.

not if it was never there, it is not like you had gold bars stolen from under your bed. You just found out that what you thought was true was not. Guess what those riots in the streets are an illusion too. Just because they say it is true does not make it, or maybe you would like buy some books i have on creationism.

562

biliruben
ID: 461142511
Thu, Jun 11, 2009, 18:39

There are riots in the streets?

I'm sorry. You lost me there. Maybe I need to tune into Fox News more.

I agree with you that much of the 14 trillion was illusory. That doesn't make it any less painful to all those who were counting on those assets to put their kids through college or for retirement, or counting on pension funds that can no longer meet their obligations.

If we had only managed to privatize Social Security, the future of millions would be securely in the gutter.

563

boikin
ID: 532592112
Fri, Jun 12, 2009, 11:32

If we had only managed to privatize Social Security, the future of millions would be securely in the gutter.

Can't disagree with that statement. SS is a mess though i am not sure the privatization would really be any kind of solution. I have no idea where they should begin on it. It was designed based on some bad assumptions and now it is really too late to go back in time and start a new.

I'm sorry. You lost me there. Maybe I need to tune into Fox News more.

that was in reference to your statement:
How long are you planning on waiting, and what would force you to act? Riots in the streets?

564

nerveclinic
ID: 105222
Fri, Jun 12, 2009, 12:27

B7 the Austrian School is a constant theme on Bloomberg and of
course they fall most often into the 20% figure I eluded to that
prefer to watch Rome burn.

This time though you do hear a lot of economists saying things
like, normally I am against government intervention in the
markets but this had become so cataclysmic something had to
be done.

Of course then they explain all the moving parts that have been
done incorrectly.

As far as the 12 trillion debt, how much of that came under the
two Bushes and Reagan?

565

Perm Dude
ID: 154552311
Fri, Jun 12, 2009, 12:49

Jonathan Chait looks at some numbers--Obama would reduce the budget by $900 billion over ten years, according to what he is looking at (with the usual caveats).

Politico.com, as is usual, looks at this from a purely political standpoint, balancing perceptions rather than reality while taking care not to come out and say whether one perception is "wrong" or not.

Certainly the GOP has decided that the debt is something that they can exploit. But reality keeps biting them in the ass:

566

boikin
ID: 532592112
Fri, Jun 12, 2009, 14:26

That looks about right, though i think they included Bush's current tax cuts the ones Obama continued, under Bush policy and not under continued policy. I wish i could find the link but it has it broken down as about 30% economy, 30% bush, 30% joint, and 10% Obama...which sounds about right to me.

Reading that first link made my head spin i hope they are right about $900 billion number but my guess that could be off by plus or minus a trillion or two.

567

nerveclinic
Leader
ID: 05047110
Fri, Jun 12, 2009, 16:14

PD the biggest complaints I hear about Obama's plans to reduce the deficit is the completely unrealistic numbers for economic recovery he is using.

For example 3.5 GDP next year when the vast majority of economists, even Obama supporters, aren't using that rosy a picture.

2% is the new 3% GDP going forward they are saying due to increased consumer savings.

568

Biliruben on iffyone
ID: 52052916
Fri, Jun 12, 2009, 16:26

He's doing that so that projections look rosier and can pay
lipservice to the deficit hawks.

Who he should currently ignoring completely.

At least I hope it's just lip service...

569

Perm Dude
ID: 154552311
Fri, Jun 12, 2009, 16:41

PD the biggest complaints I hear about Obama's plans to reduce the deficit is the completely unrealistic numbers for economic recovery he is using

The graph I copied in #565 aren't Obama numbers, but is compiled by the NY Times from CBO numbers for 2009-2012.

There is an accompanying article (free reg required), which points out that at least some of the criticism (from Congressional Republicans) don't appear to be all that serious, since their own plans seem to make the deficit actually get bigger.

570

nerveclinic
Leader
ID: 05047110
Sat, Jun 13, 2009, 02:50

PD I'm not talking about Republicans I'm talking about economists in general. The consensus seems to be closer to a 2% GDP.

571

Perm Dude
ID: 154552311
Sat, Jun 13, 2009, 16:24

But that is an argument against Obama's numbers, nerve. That isn't an argument against the graph I posted.

572

nerveclinic
Leader
ID: 05047110
Sat, Jun 13, 2009, 17:48

I didn't even see your graph PD.

573

Perm Dude
ID: 154552311
Sat, Jun 13, 2009, 18:01

You mean you didn't see that big-assed graph in 565 when you wrote 567 in response? Or didn't notice that the first link was about the CBO numbers?

It strikes me as indicative of the whole problem when talking about the deficit that the focus seems to be that one party is using numbers that the other "side" doesn't like, while more solid numbers get unresponded to.

574

Perm Dude
ID: 154552311
Sat, Jun 13, 2009, 18:03

btw I was just looking at the Gurukeepers league. I know it's early but I don't see any way I'd catch you unless you get hit with a big injury bug or a top closer falls into my lap.

575

nerveclinic
Leader
ID: 05047110
Mon, Jun 15, 2009, 01:22

You mean you didn't see that big-assed graph in 565 when you wrote 567 in response? Or didn't notice that the first link was about the CBO numbers?

No because I didn't even click on the link. I was just responding to the sentence...

Obama would reduce the budget by $900 billion over ten years, according to what he is looking at (with the usual caveats).

Which was probably not appropriate.

But that is an argument against Obama's numbers, nerve.

Exactly.

576

Perm Dude
ID: 154552311
Wed, Jun 17, 2009, 13:48

Worth noting: Inflation seems to be in check for now.

One of the worries was that inflation would rise based upon what the government has been doing to combat the recession. At least for now that worry appears to not be playing out.

577

Boldwin
ID: 133532810
Wed, Jun 17, 2009, 13:50

Oh, he's not done printing money. Not by a longshot.

578

Perm Dude
ID: 154552311
Wed, Jun 17, 2009, 13:53

He's not done with a lot of things, Baldwin. But reality needs to be inserted into the discussion at some point, despite your efforts to make it all about about your fears of what Obama might do.

579

Boldwin
ID: 133532810
Wed, Jun 17, 2009, 14:12

That printing money things you can bet the farm on.

580

Perm Dude
ID: 154552311
Wed, Jun 17, 2009, 14:15

You're just not all that credible in the area of Obama projections, Baldwin. You pissed that credibility away.

581

nerveclinic
Leader
ID: 05047110
Wed, Jun 17, 2009, 14:21

One of the worries was that inflation would rise based upon what the government has been doing to combat the recession. At least for now that worry appears to not be playing out.

Most economists, even those in the "inflation concerned" camp, aren't expecting inflation in the immediate future. The economy is too distressed. Even those concerned don't anticipate it for at least a year from now.

So to say look, "there's no inflation now, nothing to worry about" sort of misses the whole point.

The inflation question likely falls on how fast the Fed Reserve turns off the spiket once it becomes clear the economy truly is turning around.

Then there is the camp (including some in the Chinese government), who think that the US Government policy may be to intentionally cause inflation to devalue the worth of US savings bonds (US debt) there by making the deficit lower in real terms because it will be paid back when the dollar is worth less and there fore the debt will be less great. Big concern of the Chinese.

Really though PD the point you are making while correct, isn't at all significant since we are still in the middle of an extreme downturn and inflation is virtually impossible under those circumstances until things improve and job losses stop. I haven't heard anyone say there should be inflation "right now" or even next month.

582

Seattle Zen
ID: 535221713
Wed, Jun 17, 2009, 14:26

When the economy does pick back up, letting inflation rise for a few quarters is not a bad idea. There's the Chinese-held bond payback aspect as well as letting the economy get real nice and hot after this long, cold winter...

583

Perm Dude
ID: 154552311
Wed, Jun 17, 2009, 14:30

So to say look, "there's no inflation now, nothing to worry about" sort of misses the whole point.

I agree with virtually all your post, nerve, but your quote above isn't what I was trying to get across. The lack of inflation right now is a good thing (and the de-inflation in many areas is very good, since lower prices is a part of the natural cycle). I'm not saying that there is nothing to worry about--only that this is one thing some anti-Obama people were worried about that isn't turning out to be true so far.

584

nerveclinic
Leader
ID: 05047110
Fri, Jun 19, 2009, 08:32

But again PD my point is the second alf of your last sentence misses the point.

only that this is one thing some anti-Obama people were worried about that isn't turning out to be true so far.

They don't think it's going to be true for another year so how is it "isn't turning out to be true" a valid point.

You are celebrating something that the detractors are not saying, at least the ones I am hearing.

585

Perm Dude
ID: 154552311
Fri, Jun 19, 2009, 14:14

Well, I guess the best that can be said, then, is that my post wasn't intended to rebut the people you are listening to.

586

Building 7
ID: 471052128
Wed, Jun 24, 2009, 09:20

587

Boldwin
ID: 25282121
Fri, Jun 26, 2009, 10:54

When gasoline is over $5 a gallon not because of scarcity but because of energy taxes in this bill...

When unemployment is at a very european 20% during the double-dip recession/depression and at least 15% permanently...

When special interest groups are tearing this country apart and stealing disproportionate amounts out of the economy...because they were put on steroids with this bill...

When T-bills won't sell to prop up Obama's printing press money any longer...

When the bill comes due for a democrat wish list spending spree at the worst possible time in the business cycle/RE bubble burst...

When you can't afford insurance or Obama's fine for being uninsured...

When it finally dawns on you, that you are responsible for the worst and most regressive public policy ever...

Just remember your little triumphalist dance ya'll been doin. The joke is on you, your economic future is in the crapper for good and the villain is in the mirror.

588

Perm Dude
ID: 154552311
Fri, Jun 26, 2009, 11:24

Rep Bachmann? Is that you?

That post is a keeper.

When special interest groups are tearing this country apart and stealing disproportionate amounts out of the economy...because they were put on steroids with this bill...

This is a hoot! Were you asleep during the Bush Administration? And you have the balls to try to blame Obama supporters? ROFL!

589

boikin
ID: 532592112
Fri, Jun 26, 2009, 13:24

Is that the correct link? It is about americore not special interests?

590

Perm Dude
ID: 154552311
Fri, Jun 26, 2009, 15:35

That was about alarmist rightists, with their doom and gloom predictions, boikin.

Baldwin's prediction about special interests suddenly taking an interest in government was just a bonus pull out section.

591

Mattinglyinthehall
ID: 37838313
Thu, Feb 18, 2010, 18:48

Politifact.com's stimulus report card.

592

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 05:02

This is pretty cool.

You can actually see a map of your area, click on a site where money was awarded and see what the grant, loan or contract was.

If I was an Obama supporter I'd sure be advertising that site as widely as possible.

593

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 05:13

But this one linked to in PD's link, I wouldn't care to see highlighted.

The Congressional Budget Office today released a report asserting that the stimulus succeeded in creating growth and jobs. If this seems completely detached from reality, it’s because CBO did not actually analyze the performance of the economy — including the rapid increase in the unemployment rate since the stimulus was enacted. They simply took their economic model that predicted last January the stimulus would work, re-plugged in the bill’s provisions, and (surprise!) got the same result. CBO is effectively saying the evidence the stimulus worked is that they predicted it would work.

I haven't run across an analysis of the methodology of the other three judgements listed, but PD would hope they were more reality based than the 'non-partisan' CBO which has done the president an amazing number of favors in their methodology I have noticed a number of times.

594

Mith
ID: 58136177
Fri, Feb 19, 2010, 08:02

You found it on the internet and it supports your personal political agenda and that's plenty enough to meet your standard of truth but anyone who bothers to do even just the slightest amount of research that an independent thinker would do (like take a peek at the actual CBO report) might come to the conclusion that the wholly unsupported claims in that blog post you chose not to provide a source for meet their standard for something else.

595

biliruben
ID: 16105237
Fri, Feb 19, 2010, 09:01

That's what you get when you put your faith in amateurs.

Wouldn't you look to economists when looking for analysis of the economy?

Can't trust anyone smart enough to know what they are talking about it seems.

596

Mith
ID: 58136177
Fri, Feb 19, 2010, 09:08

Re 592, I think the president mentions recovery.gov every time he talks about the stimulus.

597

Building 7
ID: 471052128
Fri, Feb 19, 2010, 09:28

In FY 2009, the federal government reported the following:

Revenues:...$2.1 Trillion
Expenditures: ...$3.5 Trillion
Defecit:....$1.4 Trillion

They are projecting similar numbers for the next 10 years. Spending money you don't have (stimulus package) will make these numbers worse. One can read this or that report from an economist; they can listen to what big-spenders here tell them to think; or they can form their own opinion as to whether a stimulus package is a good idea when the federal government is spending 67% more than the revenue collected.

The obvious solution IMO is to quit spending so much. But, they never do. It's always more and more and that is exactly what a stimulus package is. Spending more and more.

598

sarge33rd
ID: 280311620
Fri, Feb 19, 2010, 09:38

When the Fed Govt spends money...where does that money go?

Oh yeah...into the hands of the private sector. Driving production of goods, driving transportation of those same goods, driving employment. Nope....wouldnt want any of THAT happening.

599

Razor
ID: 57854118
Fri, Feb 19, 2010, 09:54

Re: 597 - have you entertained the possibility that revenues would be down sharply for several years without the stimulus? The government needs people in jobs and companies posting profits to itself be profitable.

Regardless, the majority of the budget is tied up in entitlement programs, which are much harder to change than discretionary spending. Luckily, the President is on top of this issue while Congress continues to avoid responsibility for fixing it.

600

Pancho Villa
ID: 29118157
Fri, Feb 19, 2010, 10:38

And yet, B7, when Obama proposes legislation aimed at addressing the deficit, Congress votes it down thanks to Republicans who were initially for it. Then yesterday, Obama signs an executive order creating a bipartisan commission to address the deficit.

While it's easy to play the cynic card and simply say,

"He doesn't mean it,"

that doesn't say much for our national psyche. There is a contingency in this country that will oppose anything this president proposes, even at the expense of our economic future, all for the sake of political expediency.

Quit spending so much? Our defense budget is 5 times larger than the next country. Yet, any attempt to reign in spending there is met with howls of weakness from most of the same people who bitch and moan about spending and taxes. On top of that, we have an expensive Dept. of Homeland Security, but any guy with a beef with the IRS and enough money to own an airplane can fly it into a building if he so desires. Our entitlement programs, SS and Medicare, are unsustainable, yet Warren Buffet and George Soros qualify for both. We want every pregnancy brought to term, then complain when the state has to pick up the tab for medical, food and housing because Mom is broke and Dad is nowhere to be found.
We've become a nation of whiners. The left whines about Fox News, the right whines about the MSM, obstinance is portrayed as courage, and entertainers are portrayed as politically saavy.

And we're still the greatest country on the planet.

601

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 11:08

MITH

I am sure that author [who is an economist and is eminently qualified to comment on the CBO"s faulty methodology] as The Heritage Foundation's lead budget analyst, has read the CBO report and no one has reasonable cause to brush off what he has to say as you have done.

602

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 11:09

And that goes double for the flippant comments from bili.

603

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 11:16

So, bili, MITH, PD...

Why is it responsible for you guys to wave around a Politifacts report, and somehow laughable that I should post a source that Politifacts used as their source?

604

Pancho Villa
ID: 29118157
Fri, Feb 19, 2010, 11:19

Flippant?

Allow me to refer you to #587:

When it finally dawns on you, that you are responsible for the worst and most regressive public policy ever...

Just remember your little triumphalist dance ya'll been doin. The joke is on you, your economic future is in the crapper for good and the villain is in the mirror.

605

boikin
ID: 532592112
Fri, Feb 19, 2010, 11:28

And we're still the greatest country on the planet.

well roman said that too...

"He doesn't mean it,"

well he may not mean it but i think he believes it. Obama maybe a lot of things but an idiot, I think not. He knows the deficit is not good for the country.

606

Pancho Villa
ID: 29118157
Fri, Feb 19, 2010, 11:36

Haven't you heard, boikin? Obama's goal is to destroy the United States.

607

biliruben
ID: 461142511
Fri, Feb 19, 2010, 13:08

Dude has an MA in "public affairs". Wicked rigor that. I'll stick with the guys who actually have cracked on econ text, and you can hang with the squishy poli-sci majors that talk better than they think.

Anti-intellectualism reaching new heights.

608

Tree
ID: 23143812
Fri, Feb 19, 2010, 13:40

now that i have a job again, and an english degree, i am qualified to say that the economy is 10,000 times better than it was a few months ago.

why can i say this? well, i have a job now, and i didn't before. thusly, the economy is better.

i'm qualified to make that statement.

just saying. :oD

610

biliruben
ID: 461142511
Fri, Feb 19, 2010, 14:56

At the risk of incurring the wrath of Palinati (-naughty? -noughti?) by dabbling with the results of that black majik of the "elite" (you know, those know-nothings with degrees in economics.), here are some estimates on the impact of the stimulus by the private sector, because that CBO is so corrupt.

611

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 14:58

I'll stick with the guys who actually have cracked on econ text

The guy has a degree in economics.

612

biliruben
ID: 461142511
Fri, Feb 19, 2010, 15:18

You may be right. I read it as a melange degree in "economics and political science", which sounds like econ without the numbers or chops, or perhaps poli sci with a money bent. I suppose he could hold two undergrad degrees, however.

As far as I can tell, he hasn't published any real econ research other than commentaries.

If you really want to hold him up as in the same universe as true economists, feel free. I'll find my true econ elsewhere, however.

613

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 15:44

His work doesn't spring from a vacuum. He works in a think tank with many prominent PHD's in Economics, and the Heritage Foundation work is published.

614

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 15:46

Soros is creating a think tank of 'experts' to disparage capitalism. I'll get a kick out of putting your reaction to their work up against this guy's.

615

biliruben
ID: 461142511
Fri, Feb 19, 2010, 15:47

There is this thing called co-authorship. You should let him know about it. He's a talking head, not a economic researcher. He should be treated as such.

616

biliruben
ID: 461142511
Fri, Feb 19, 2010, 15:47

This guy doesn't have any "work". He has soundbites.

617

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 16:02

And you know this how? Anyway, I'll take the Heritage Foundation's work over the President's or any 'fact check' organization funded by Soros, or any CBO that keeps pulling their punches.

The CBO keeps starting from assumptions that are entirely too generous to the point of being in Obama's pocket.

618

biliruben
ID: 461142511
Fri, Feb 19, 2010, 16:04

How about the 3 organizations who's projections I linked to above? Also part of the conspiracy?

I ran through his research links on the heritage site. All commentaries, or at least the 15 or so I clicked through on.

619

Mattinglyinthehall
ID: 37838313
Fri, Feb 19, 2010, 16:12

How about we just look at the CBO report and see that it cites it's work as it goes therefore specifically did not do what Riedl claims, whatever his credentials might happen to be?

620

Boldwin
ID: 2155174
Fri, Feb 19, 2010, 16:16

When you are doing that see if you can break out the amount those sources credit to the tax cuts, from those they credit to the pork.

621

biliruben
ID: 461142511
Fri, Feb 19, 2010, 17:03

Get your Heritage "researcher" on it.

Generally, the multipliers are much smaller for tax cuts over stimulus, but I'm not eager to pour through the CBO report for you.

622

Nuclear Gophers
ID: 7115138
Sat, Mar 27, 2010, 09:58

Look at what all those babies Stupak saved in the health care bill have to look forward to. This was written in the Washington Times Friday March 26, 2010.

By David M. Dickson

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.

In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the next decade.

"An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference," said Brian Riedl, a budget analyst at the conservative Heritage Foundation. "That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying."

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.

That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.

"That level of debt is extremely problematic, particularly given the upward debt path beyond the 10-year budget window," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

For countries with debt-to-GDP ratios "above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more," according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland.

CBO projected the 2011 deficit will be $1.34 trillion, not much different from the administration's estimate of $1.27 trillion. However, CBO's estimate of the 2020 deficit at $1.25 trillion significantly exceeds the administration's $1 trillion estimate.

623

Mith
ID: 58136177
Sat, Mar 27, 2010, 10:24

I imagine the budget extrapolations conducted at the end of WW2 yielded even gloomier forecasts.

How'd the 1950s work out?

624

Perm Dude
ID: 5510572522
Sat, Mar 27, 2010, 11:38

Heh.

When you have to pay for food but you don't have a job, a lecture on credit card debt isn't very useful (or timely) when you have to put groceries on the Visa for awhile.

It says more about those giving the lecture, I think.

625

jedman
Dude
ID: 315192219
Sat, Mar 27, 2010, 14:13

MITH and Perm Dude,

Do those numbers bother you at all or are you so confident in
the policies of this administration and administrations down the
road that you think these huge deficits will work themselves
out?

I just have a hard time believing that we can go on spending like
this without huge ramifications down the road. If the economy
doesn't start growing at a faster than 3% rate, how are those
deficits going to be erased?

There was an article by the AP that basically said the growth rate
of over 5% at the end of last year was bogus because so much of
the manufacturing was done for cash strapped companies that
had let their inventories run down to the point that they finally
had to order.

The Stock Market is saying things will be ok, at least at this
point and for the most part, corporate earnings have been better
than expected. So many questions we can't answer now, but
those deficit projections just worry the heck out of me.

626

Perm Dude
ID: 5510572522
Sat, Mar 27, 2010, 14:33

I think that the numbers will, indeed, work themselves out, provided that several things happen that Democrats have been trying to do:

-a re-introduction of PAYGO rules in Congress

-tax cuts for the wealthiest Americans that Bush pushed through eliminated

-a continued emphasis on small business tax cuts.

I'm convinced that economic recovery will come from the bottom up rather than from the top down, so it will be small-business generated. This Administration has given huge amounts of tax breaks for small businesses to keep them in the mix and, once private credit markets ease up they will really drive things.

I'm not at all concerned about the CBO score ten years out, mostly because budgets are done each and every year. Unlike CBO scores for single programs, for instance, in which effects can more easily be projected, the overall budget changes so much in a few years time that projections out ten years are useless.

627

Mith
ID: 58136177
Sat, Mar 27, 2010, 14:51

I just have a hard time believing that we can go on spending like this without huge ramifications down the road.

We can't. But I don't expect the rest of Obama's presidency to look like the first two years.

I'm not certain of anything, but I do know that we are not in uncharted territory as far as our deficits are concerned.

628

Boldwin
ID: 362262121
Sat, Mar 27, 2010, 15:19

Wow.

629

jedman
Dude
ID: 315192219
Sat, Mar 27, 2010, 18:54

I am a small business owner and so far I have not seen anything
different in my taxes or in helping my business. Maybe there are
benefits that are not applicable to the food distribution business.

I agree that helping small business will help the economy, I guess i
am just waiting to see where I am being helped.

630

Building 7
ID: 232122716
Sat, Mar 27, 2010, 19:00

Buttinski Party Stimulus Haul Almost Double Republicans

631

Perm Dude
ID: 5510572522
Sat, Mar 27, 2010, 19:15

Every small business is different, of course, so some areas might not apply to you. For example, the National Weatherization Program (to weatherize a million homes per year) helps small handyman businesses but probably has little effect on your business (or mine for that matter).

Obama has:

-Expandeded the Small Business Administration's loan program (including microloans)

-begun the Social Innovation Fund to help incubate ideas on the local level

-raise the limit on small business investment expenses to $250,000 (for 2009)

-proposed $33 billion in tax credits to encourage hiring by small businesses, which includes a $5000 tax credit for each new employee in 2010

The health care bill was crafted largely with small businesses in mind. Small businesses were bearing the brunt of rising premium costs, as they weren't large enough to negotiate for lower prices but needed to offer health care to attract and retain employees. Besides setting up exchanges where small businesses can pool together to choose from a number of different plans to help them save money, there are all sorts of direct tax breaks strictly for small businesses in the plan.: From 2010-2013, these businesses would be eligible for a credit of up to 35 percent of premiums. Starting in 2014, they could get a credit of up to 50 percent of the cost of buying insurance through a state exchange, as long as they pay at least half the premium.

If you pay for health insurance now, this is a pretty sweet deal. And the tax breaks kick in now.

Most of these are already law. Others are to come. In his SOTU he outlined a whole host of tax breaks for small businesses.

[I won't bore you with the individual tax breaks which help all the dba and virtually all small businesses making under $200K/year]

632

Perm Dude
ID: 5510572522
Wed, May 26, 2010, 13:11

Stimulus bill continues to anger conservatives by working as projected.

Or something like that.

633

biliruben
ID: 358252515
Wed, May 26, 2010, 13:23

They jam another trillion through, and pay for it by a tea party,
er.., 90% estate tax.

This situation clearly calls for a big FU, we are going to help
the unemployed with or without you.

634

boikin
ID: 532592112
Wed, May 26, 2010, 13:46

deja vu i swear this link was posted months ago and i wrote a response about how if you spend 787 billion these are results you would expect, no impact studies required and the real question is not is the program working but is it working better than just giving the money away? I looked for the response i wrote and link posted earlier but could not find it....creepy.

635

biliruben
ID: 358252515
Wed, May 26, 2010, 13:59

Yes. Economists have developed estimates of multipliers for
all sorts of fiscal stimulus, based on historical economic data.

Iirc I linked to a standard set of multipliers when we first
discussed this, but I guess you didn't bother reading
it...disheartening.

636

boikin
ID: 532592112
Wed, May 26, 2010, 14:09

No I did read your links but there was another post almost identical to 632 and I remember doing the calculations. It must have been in another thread.

637

biliruben
ID: 358252515
Wed, May 26, 2010, 14:15

Yeah, we had these sorts of discussions in a number of
threads at the time. I have trouble keeping track.

638

Perm Dude
ID: 5510572522
Tue, Jun 21, 2011, 13:12

Bond King tells Congress: Get back to reality.

Sadly, the last paragraph sums it up well:

Unfortunately for Gross and those who share his concerns, the fight over the debt limit seems driven by Republicans hungry for long-standing ideological victories and Democrats cowed into an anti-stimulus fervor whipped up by the right. To many observers it appears that fixing the currently broken economy isn't really what this is about.

639

Boldwin
ID: 8562116
Tue, Jun 21, 2011, 18:23

To many observers it appears

Code for "this reporter's biased view is...".

640

Perm Dude
ID: 5510572522
Tue, Jun 21, 2011, 18:49

If you can't address the context then address the bias, it seems.

Post 639 is content-free.

641

Boldwin
ID: 8562116
Tue, Jun 21, 2011, 20:58

'Content free'? Oh come'on. That old chestnut, "some people say" is just transparent, cheap and hilarious coming from people making a pretense of objectivity and journ-o-listic superiority. The media is the message. Brush up on yer Marshall McLuhan.

It also means they were too lazy to look up their liberal friend/amateur human press release they've quoted 40 times anonymously for a backup.

642

Perm Dude
ID: 420241913
Tue, Oct 11, 2011, 11:26

Ezra Klein with an amazing column about the stimulus package, the politics surrounding it, and how everyone completely underestimated the strength and durability of the Great Recession.

It is hard to read these kinds of things straight through, and not come away with the difficulty in crafting economic policy which is both timely and effective. But the "what happened" question is important.

I know the far right will pick up some choice sentences as partisan fodder, but the whole thing is worth a read because there is something about reading all of it in context.

643

sarge33rd
ID: 469511111
Tue, Oct 11, 2011, 12:51

outstanding article, referencing a book I was not aware of and have since ordered from Amazon.

if you too are interested in the read

644

Perm Dude
ID: 201027169
Tue, Apr 16, 2013, 21:53

#622: Not so fast. Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems

Report abuse

645

biliruben
ID: 41431323
Wed, Apr 17, 2013, 02:29

Contractionary policies causing contraction. Weird.

And the one study that showed contractionary policies were possibly expansionary - discredited.

Weirder.

Report abuse

646

Boldwin
ID: 153271621
Wed, Apr 17, 2013, 06:16

Reinhart and Rogoff obviously felt the effects of world war swamp the effects of national indebtedness.

Conversely those promoting unsustainable debt levels need a world war boost to resuscitate their hobbyhorse.

Report abuse

Forum: polPage 3251Subject: Ecomomic Stimulus or Spending Bill?

Forum: pol
Page 3251
Subject: Ecomomic Stimulus or Spending Bill?