I find it laughable that the Obama administration is trying to blame the nearly-successful "underpants bomber" on the Bush Administration. This is not to say that policies established during the Bush Administration didn't contribute to the failure--they may very well have done.
But the reality is that the Obama administration has been the team at bat for nearly a year now. They've managed to cram through some of the largest pieces of legislation in history over the protestations of their political opponents. Surely, if they saw holes in the homeland security system, they could have passed some legislation to fix it. It would have been a slam-dunk. Even the GOP, who still holds the high ground on national security, would have had a hard time not going along with that one.
But the reality is that tightening homeland security just wasn't that important to this Administration. They didn't make any changes because they believed the current system worked--or they just didn't care. They own this failure, no matter how much they may try to pass the buck.
Nor can they continue to blame the economy on Bush. If the largest spending bill in history couldn't get the job done, then they clearly had no idea what they were doing. It's not Bush's fault. It's Obama's. He had his shot and he blew it. Whether it was picking the wrong people to solve the problem or failing to recognize the depth and extent of the problem, it doesn't matter. He failed to fix it, when he promised he would. It's his problem now.
The fact is that this administration has not accomplished anything of any positive significance in their first year. Not only have they failed to implement the will of the people, they've done many things entirely against the will of the people. I guess it's time to award Obama another prize.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Sunday, January 03, 2010
Friday, June 05, 2009
Congratulations, Class of 2009
I went to my nephew's high school graduation last night. It's been quite awhile since I've been to one--it was probably my own, come to think of it.
The school district superintendent informed us that 75% of the graduating class was either going on to some sort of schooling or into the military. I suppose that could be an impressive figure, but I also have to wonder how much the recession has to do with it. If given the choice between trying to find a job now or being able to wait for a couple of years I know which one I'd pick.
In some ways, this class may be timing things just right. I suspect our economy is going to undergo some changes over the next few years, and they will be well-positioned to adapt mid-way through their post-secondary training if need be. But they will have to stay informed. I doubt they'll be able to rely on the jobs that were hot a few years ago still being hot when they graduate.
Still, I do think that by the time they graduate the economy will be in much better shape. With any luck they'll be emerging from the halls of higher learning just as the employment wave gets firmly headed upward again.
This is an exciting time to be young. It's not without its challenges, of course, but this generation of kids will bring a whole new vibrancy to the world that will make itself felt.
They still need to use sunscreen, though.
The school district superintendent informed us that 75% of the graduating class was either going on to some sort of schooling or into the military. I suppose that could be an impressive figure, but I also have to wonder how much the recession has to do with it. If given the choice between trying to find a job now or being able to wait for a couple of years I know which one I'd pick.
In some ways, this class may be timing things just right. I suspect our economy is going to undergo some changes over the next few years, and they will be well-positioned to adapt mid-way through their post-secondary training if need be. But they will have to stay informed. I doubt they'll be able to rely on the jobs that were hot a few years ago still being hot when they graduate.
Still, I do think that by the time they graduate the economy will be in much better shape. With any luck they'll be emerging from the halls of higher learning just as the employment wave gets firmly headed upward again.
This is an exciting time to be young. It's not without its challenges, of course, but this generation of kids will bring a whole new vibrancy to the world that will make itself felt.
They still need to use sunscreen, though.
Friday, April 17, 2009
Media still doesn't get Tea Party Protests
My local paper did a very good article on the local Tea Party protests, but not all media are getting it. The majority of headlines I've seen--when I even see headlines--have read something like "Tea Party Protestors demonstrate against taxes".
That's both oversimplifying the issue and diverting it at the same time. I think most of the people at the protests were not protesting taxes as a concept. Most of us understand that there must be some means of providing for the national government to operate.
No, the issue is how BIG the national government should be allowed to get, and how far in debt they should be allowed to go. The issue is how both parties seem to have either lost all sense, or lost their sense of responsibility to their constituents. Perhaps both.
It's not just an anti-Obama movement, though contrary to campaign promises, he's certainly exacerbated the problem. And no, we don't forget the role the Bush administration played in this mess. We don't forget the role both parties played in this mess.
Don't think for a moment we're not suspicious of GOP attempts to embrace the Tea Party platform. While we'd love to think they've come to their collective senses we've been burned before. GOP, if you really mean it, stop talking and act. We're tired of talk. Give us action.
We're even more concerned, however, about the Democrats. They're the ones with both hands firmly on the wheel. That they continually dismiss, demean, and denigrate the protest shows that they just don't get it. That they can't stop talking about it shows that they do recognize it as a threat.
The funny thing is that, had this happened during the Bush administration, the Left would be lauding the movement as an amazing bi-partisanship grassroots effort in which every-day Americans exercise their First Amendment rights to speak truth to power. But there's been a changing of the guard, and now such efforts are painted as "despicable", "Shameful", and little more than a Republican front. (This from an Illinois congresswoman whose husband just plead guilty to tax violations and bank fraud.)
No, the Liberals just don't get it. Instead they use misdirection to obfuscate the message:
What is particularly significant and honorable about this moment in history? Oh yes, that Obama-first-black-president thing. I have three words for the Left:
GET OVER IT
It's great we elected a black president. But since when does being black preclude him from criticism? Does he somehow deserve special treatment for being black? Is a black president somehow more sensitive to criticism? Is a black president incapable of doing wrong? That's the most racist implication I've heard in a long time, and it's coming from the LEFT!
No, black, white, or polka-dotted, Obama is the president now. He should be subject to criticism. To imply otherwise is borderline facist.
So what, then, is particularly shameful about Americans of all political persuasions coming together to express concern about the future? THAT is what the moment is all about, no matter how Democrats and media try to paint it otherwise. It's not about taxes this week or this year. It's about the enormous deficits that have been run and are being escalated by someone who pledged to end them.
Perhaps we should have had enough under Bush, but the fact remains, we've had enough. We've lost control of government, but that doesn't mean we shouldn't try to regain control again. That's what the protests are about. It's about a government--both sides--that no longer represents its people.
And, to a degree, it's about a mainstream media who have willfully become the government's propaganda arm. How else can you explain this outburst from CCN's Susan Roesgan at the Chicago Tea Party:
I may be old fashioned, but my high school journalism teacher told us journalists were just supposed to get the facts and report them. They are not to render judgments, and they are not to attempt to persuade the subjects they are covering. They are to report the story, not become the story.
Add to this a government agency that preemptively tried to head off the protest by branding as right wing extremists pretty much anyone who supports certain issues:
To conclude, I'll draw on Michael Graham of the Boston Herald:
That's both oversimplifying the issue and diverting it at the same time. I think most of the people at the protests were not protesting taxes as a concept. Most of us understand that there must be some means of providing for the national government to operate.
No, the issue is how BIG the national government should be allowed to get, and how far in debt they should be allowed to go. The issue is how both parties seem to have either lost all sense, or lost their sense of responsibility to their constituents. Perhaps both.
It's not just an anti-Obama movement, though contrary to campaign promises, he's certainly exacerbated the problem. And no, we don't forget the role the Bush administration played in this mess. We don't forget the role both parties played in this mess.
Don't think for a moment we're not suspicious of GOP attempts to embrace the Tea Party platform. While we'd love to think they've come to their collective senses we've been burned before. GOP, if you really mean it, stop talking and act. We're tired of talk. Give us action.
We're even more concerned, however, about the Democrats. They're the ones with both hands firmly on the wheel. That they continually dismiss, demean, and denigrate the protest shows that they just don't get it. That they can't stop talking about it shows that they do recognize it as a threat.
The funny thing is that, had this happened during the Bush administration, the Left would be lauding the movement as an amazing bi-partisanship grassroots effort in which every-day Americans exercise their First Amendment rights to speak truth to power. But there's been a changing of the guard, and now such efforts are painted as "despicable", "Shameful", and little more than a Republican front. (This from an Illinois congresswoman whose husband just plead guilty to tax violations and bank fraud.)
No, the Liberals just don't get it. Instead they use misdirection to obfuscate the message:
"It's despicable that right-wing Republicans would attempt to cheapen a significant, honorable moment of American history with a shameful political stunt," she added. "Not a single American household or business will be taxed at a higher rate this year. Made to look like a grassroots uprising, this is an Obama bashing party promoted by corporate interests, as well as Republican lobbyists and politicians."
What is particularly significant and honorable about this moment in history? Oh yes, that Obama-first-black-president thing. I have three words for the Left:
GET OVER IT
It's great we elected a black president. But since when does being black preclude him from criticism? Does he somehow deserve special treatment for being black? Is a black president somehow more sensitive to criticism? Is a black president incapable of doing wrong? That's the most racist implication I've heard in a long time, and it's coming from the LEFT!
No, black, white, or polka-dotted, Obama is the president now. He should be subject to criticism. To imply otherwise is borderline facist.
So what, then, is particularly shameful about Americans of all political persuasions coming together to express concern about the future? THAT is what the moment is all about, no matter how Democrats and media try to paint it otherwise. It's not about taxes this week or this year. It's about the enormous deficits that have been run and are being escalated by someone who pledged to end them.
Perhaps we should have had enough under Bush, but the fact remains, we've had enough. We've lost control of government, but that doesn't mean we shouldn't try to regain control again. That's what the protests are about. It's about a government--both sides--that no longer represents its people.
And, to a degree, it's about a mainstream media who have willfully become the government's propaganda arm. How else can you explain this outburst from CCN's Susan Roesgan at the Chicago Tea Party:
CNN’s Susan Roesgen, an alleged “reporter” covering the Chicago Tea Party, lashed out at the participants like an angry MoveOn.org member. “What does this have to do with taxes?” she demanded of one attendee, as he held his 2-year old and spoke of personal liberty. “Don’t you realize you’re eligible for a tax credit,” she shouted at him. “Don’t you know that Illinois is getting stimulus money?”
Unable to get the participants to join her in support of Obama-nomics, Roesgen dismissed the event as “anti-government and anti-CNN, since this is highly promoted by right-wing, conservative network, Fox.”
I may be old fashioned, but my high school journalism teacher told us journalists were just supposed to get the facts and report them. They are not to render judgments, and they are not to attempt to persuade the subjects they are covering. They are to report the story, not become the story.
Add to this a government agency that preemptively tried to head off the protest by branding as right wing extremists pretty much anyone who supports certain issues:
The Department of Homeland Security released a pre-emptive “assessment report” on the dangers of “right-wing extremists” just a week before the tax protest rallies. According to DHS, these potentially include pro-lifers, supporters of border security and that notoriously unstable group - U.S. military veterans.
To conclude, I'll draw on Michael Graham of the Boston Herald:
And I can report that there were, in fact, quite a few vets at our Tea Party at Long Wharf. But other than their crazy notion that spending our kids into an $11 trillion hole is wrong, they didn’t appear to be unhinged.
...
Agree or disagree with the estimated 250,000 people who showed up at Tea Parties across the country, they deserve respect, not abuse. Declared suspect by their own government, targeted for insults from the “unbiased” media, they still showed up. They organized. They spoke out. And they did it without any free-speech bailouts.
It was true democracy in action. And that’s why liberals find it so scary.
Thursday, April 02, 2009
Counterintuitive, or Just Wrong?
Penn Jillete has an editorial on CNN's website, in which he discusses the things he's learned in life that are counterintuitive. Things like turning into a skid or eating fire. He then applies it to Obama's spend-our-way-out-of-debt policies:
It's nice to see a celebrity admit that he simply has misgivings about something and doesn't know for a fact that we're all in deep doo-doo. I could probably learn something from that.
Obama tells us that we can spend our way out of debt. He tells us that even though the government had control over the banks and did nothing to stop the bad that's going on, if we give them more control over more other bank-like things, then they can make sure bad stuff doesn't happen ever again. He says we can get out of all those big wars President Bush caused by sending more troops into Afghanistan. And I don't know. I really don't know.
...
But there are some things that are just intuitive. Did you know, that if you're going 100 mph, directly at a very, very thick, reinforced concrete wall, and you speed up, so you're accelerating right when you hit the wall that the accident you have is going to be much worse than if you'd jammed on the brakes as soon as you saw the wall at the end of the street? Did you know that? It's exactly what everything you know and feel would tell you, and it's exactly true. Most times when you're driving, or playing with fire, or handling money, the thing that makes sense to you is also true.
I way hope we're turning into a skid and not accelerating into a concrete wall.
It's nice to see a celebrity admit that he simply has misgivings about something and doesn't know for a fact that we're all in deep doo-doo. I could probably learn something from that.
Monday, March 23, 2009
It's About Time
The government has announced a plan to buy up toxic assets and to get private investors involved. I may be wrong, but wasn't this idea floated about six months ago by the Bush administration? I'm not sure why they didn't do it at the time, and now that the idea is back on the table Wall Street seems to be quite favorable.
To be sure, the private investment component is new, and I like it. They're also showing a bit of fiscal responsibility at last, in that they're going to launch the program and see if it's successful before asking for more money to expand it to the levels needed.
Two fairly smart actions by the administration in one day. I hope this is the beginning of a trend.
Glenn Reynolds, however, thinks the damage has been done already:
To be sure, the private investment component is new, and I like it. They're also showing a bit of fiscal responsibility at last, in that they're going to launch the program and see if it's successful before asking for more money to expand it to the levels needed.
Two fairly smart actions by the administration in one day. I hope this is the beginning of a trend.
Glenn Reynolds, however, thinks the damage has been done already:
“U.S. Treasury Secretary Timothy Geithner said on Sunday that help from the private sector was critical to get toxic assets off banks’ balance sheets and help resolve a credit crisis.” Even on NPR they were skeptical that private investors would want to get involved, for fear that they’d wind up facing punitive taxes if they made “too much” money.
Some Hope After All
It appears that President Obama is having second thoughts about the bill working through Congress to tax executive bonuses at AIG and other companies nearly out of existance. From MSNBC.com, reporting on a 60-Minutes interview:
Of course he's still baffled about the economy's sharp decline, which isn't good:
I think he needs to take some responsibility for the effect his programs (and various gaffs from his administration) have had on the economy. But he always seems to stop short of that.
President Barack Obama wagered significant political capital Sunday, signaling opposition to a highly popular congressional drive to slap a punitive 90 percent tax on bonuses to big earners at financial institutions already deeply in hock to taxpayers.
Obama defended his stance by saying the tax would be unconstitutional and that he would not "govern out of anger." He declared his determination, nevertheless, to make Wall Street understand it must shed "the old way of doing business."
Of course he's still baffled about the economy's sharp decline, which isn't good:
"I don't think that we anticipated how steep the decline would be," he said in the interview on CBS' "60 Minutes." "That slope is a lot steeper than anything that we've said — we've seen before."
I think he needs to take some responsibility for the effect his programs (and various gaffs from his administration) have had on the economy. But he always seems to stop short of that.
Wednesday, March 18, 2009
The AIG Mess
Outrage is all the rage in Washington this week. The only real question is whose outrage isn't faked. At the heart of the matter is around $450 million that AIG has paid or is contracted to pay to top executives in retention bonuses. $165 million of that went out last week.
According to the Washington Post, these bonuses were known about for months:
These bonuses were announced nearly a year ago:
The article even goes on to speculate that the current government outrage was designed to pressure the execs into giving back their bonuses.
At any rate, it's pretty clear that these bonuses were known about well in advance and were deemed either critical to keeping key people in place, or at least more dangerous to attack than to leave in place. Had this all been explained up front to the American people I doubt we'd be having this big fuss.
But then we hit the big "teeter" (not quite a crash) of 2008. AIG received bailout money, along with quite a few banks. Only a few of those banks actually needed the money--the rest were pressured into taking it to help the needy banks maintain anonymity and prevent runs on those banks.
Then along comes the Stimulus Bill. Knowing about AIG's bonus program, and knowing there were many banks holding government money who didn't need it, lawmakers stepped in to remove an amendment from the bill that would have restricted bonuses to any company receiving bailout funds. It's claimed that Senator Chris Dodd inserted language that limited executive compensation, but exempted bonuses.
Dodd claims to know nothing about this "Dodd Amendment". In fact, no one seems to know how it got into the bill. The only thing we know for sure is that it wasn't the Republicans, as they were specifically kept from helping draft the bill. And we can't blame anyone who voted for the bill, because no one had time to read it.
The usual arguments over what Dodd knew and when he knew it are ensuing. And Dodd himself is trying to combat the provision he supposedly added--and undoubtedly hoping no one remembers the $103,100 campaign donations he received from AIG in 2008. This is the same Dodd who vigorously defended Fannie Mae and Freddie Mac when the Republicans tried to investigate alleged wrong-doings there, and one of the recipients of a sweet mortgage deal from Countrywide Mortgage.
Fannie Mae, by the way, is also giving its top execs retention bonuses of between $470,000 and $61,000 this year. Freddie Mac, not to be outdone, is planning similar bonuses. These companies received $15.2 billion and $13.8 billion in federal funds last year, and Freddie Mac has requested $31 billion more this year.
Meanwhile lawmakers are up in arms, and turning their ire on the Obama administration for being asleep at the wheel. The White House is expressing full confidence in secretary of Treasury Tim Geithner's oversight.
So let me explain...no, it will take too long. Let me sum up. Bonuses we knew were coming are being paid to AIG executives deemed necessary the company's recovery. These bonuses were protected by language placed in the Stimulus bill, though no one knows how it got there. But now that the money is being paid out everyone is suddenly surprised and angry and vowing to undo what they allowed to be done--while at the same time ignoring the exact same thing being done at two government-supported companies with an even more corrupt past. The result:
I'm not sure what to be more concerned about, our tax dollars being spent to save the economy, or our tax dollars being spent to destroy it. At best we can hope the two cancel each other out without doing any lasting damage.
But then what can we expect when we put the party that hates big business and decries capitalism in charge of saving both. It's like asking Gen. Patton to perform life-saving surgery on Hitler. Why should we be surprised when the patient inexplicably dies on the operating table?
Oh, and now it's also coming out that AIG has send out over $100 billion--over half of what's been given them so far--to other institutions and city governments, including some foreign businesses. The Wall Street Journal has suggested the government is using AIG to launder foreign aid funding, and that Washington is making such a fuss over the AIG bonuses to draw attention away from its own inability to supervise AIG and other bailed-out companies.
Jim Rickards, quoted in the Washington Times, suggests there is a "straightforward economic reason" for the rerouting of funds, though it does present a huge political problem for the administration:
I think basically what we have is an administration that is deathly afraid of the public while being simultaneously condescending toward them. They don't think we're smart enough to understand business. I, for one, having read all the above articles feel the real problem is Washington's response, not AIG's activities--at least lately. There's no denying they did some very, very stupid--and perhaps greedy--things and got themselves into serious trouble. But they're not going to be able to get themselves out of trouble without doing some things that are not going to be immediately understood by the public.
Rather than try to explain it to us and risk taking the heat for supporting this, the administration prefers to keep things quiet unless they become public and then howl with rage and feign ignorance. In short, these people are afraid to make the tough call. They want to have their cake and eat it too. They want to make villains of big business while working quietly to try and save them. They claim that some companies are just too big to allow to fail, yet do everything they can to undermine the company's attempts to not fail.
Is $165 million a lot of money? Obviously. Is it money well spent if the people it was supposed to help retain really can salvage the company and stabilize the economy? I think so. If that's what it takes to make the right people willing to stick it out and put up with the crap they're having to wade through right now then it's a small price to pay.
Meanwhile, Congress has voted themselves a pay raise. Just what have they done to save the economy? They seem actively bent on destroying it with their selective amnesia and poll-fueled outrage.
Does anyone have the guts to stand up and say "Hey, we don't have to like it, but this is what it's going to take"? I can think of one senator that might have. In fact I voted for him for preseident. I'm becoming increasingly proud of that vote.
According to the Washington Post, these bonuses were known about for months:
Attorneys working for the Fed had been examining the matter for months and determined that the retention payments couldn't be touched because AIG would face costly lawsuits and be subject to penalties from states and foreign governments. Administration officials said over the weekend that they agreed with that assessment.
These bonuses were announced nearly a year ago:
Beginning in the first quarter of 2008, AIG disclosed the plan to offer retention awards at Financial Products. The unit had already begun to hemorrhage money, a problem that would later grow exponentially. The unit's executives, fearing they might lose valuable employees in the tumultuous months to come, successfully negotiated more than $400 million for their workers, to be paid this month and again next year.
At the Federal Reserve Bank of New York, which has directly overseen AIG since its federal takeover in September, officials have studied the possibility of rescinding or delaying the bonuses. They even brought in outside lawyers for advice. The conclusion: If the bonuses weren't paid, the AIG staffers would be able to sue the company and probably would win, not just what they were owed but also punitive damages that would make the ultimate cost perhaps two to three times as high as the bonuses themselves.
Moreover, Fed officials also hope to keep current employees with the company. The senior executives whose decisions caused the company's collapse are long gone. Most of those left behind are trying to unwind complicated derivative contracts. Completing that process correctly is essential to preserving as much value as possible for taxpayers, officials at both the government and AIG have argued. If it is mishandled, it could expose taxpayers to billions of dollars in additional losses.
The article even goes on to speculate that the current government outrage was designed to pressure the execs into giving back their bonuses.
At any rate, it's pretty clear that these bonuses were known about well in advance and were deemed either critical to keeping key people in place, or at least more dangerous to attack than to leave in place. Had this all been explained up front to the American people I doubt we'd be having this big fuss.
But then we hit the big "teeter" (not quite a crash) of 2008. AIG received bailout money, along with quite a few banks. Only a few of those banks actually needed the money--the rest were pressured into taking it to help the needy banks maintain anonymity and prevent runs on those banks.
Then along comes the Stimulus Bill. Knowing about AIG's bonus program, and knowing there were many banks holding government money who didn't need it, lawmakers stepped in to remove an amendment from the bill that would have restricted bonuses to any company receiving bailout funds. It's claimed that Senator Chris Dodd inserted language that limited executive compensation, but exempted bonuses.
Dodd claims to know nothing about this "Dodd Amendment". In fact, no one seems to know how it got into the bill. The only thing we know for sure is that it wasn't the Republicans, as they were specifically kept from helping draft the bill. And we can't blame anyone who voted for the bill, because no one had time to read it.
The usual arguments over what Dodd knew and when he knew it are ensuing. And Dodd himself is trying to combat the provision he supposedly added--and undoubtedly hoping no one remembers the $103,100 campaign donations he received from AIG in 2008. This is the same Dodd who vigorously defended Fannie Mae and Freddie Mac when the Republicans tried to investigate alleged wrong-doings there, and one of the recipients of a sweet mortgage deal from Countrywide Mortgage.
Fannie Mae, by the way, is also giving its top execs retention bonuses of between $470,000 and $61,000 this year. Freddie Mac, not to be outdone, is planning similar bonuses. These companies received $15.2 billion and $13.8 billion in federal funds last year, and Freddie Mac has requested $31 billion more this year.
Meanwhile lawmakers are up in arms, and turning their ire on the Obama administration for being asleep at the wheel. The White House is expressing full confidence in secretary of Treasury Tim Geithner's oversight.
So let me explain...no, it will take too long. Let me sum up. Bonuses we knew were coming are being paid to AIG executives deemed necessary the company's recovery. These bonuses were protected by language placed in the Stimulus bill, though no one knows how it got there. But now that the money is being paid out everyone is suddenly surprised and angry and vowing to undo what they allowed to be done--while at the same time ignoring the exact same thing being done at two government-supported companies with an even more corrupt past. The result:
Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all.
"It's a mob effect," one senior executive said. "It's putting people's lives in danger."
Politicians and the public spent yesterday demanding that AIG rescind payouts that they said rewarded recklessness and greed at a company being bailed out with $170 billion in taxpayer funds. But company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy.
"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."
I'm not sure what to be more concerned about, our tax dollars being spent to save the economy, or our tax dollars being spent to destroy it. At best we can hope the two cancel each other out without doing any lasting damage.
But then what can we expect when we put the party that hates big business and decries capitalism in charge of saving both. It's like asking Gen. Patton to perform life-saving surgery on Hitler. Why should we be surprised when the patient inexplicably dies on the operating table?
Oh, and now it's also coming out that AIG has send out over $100 billion--over half of what's been given them so far--to other institutions and city governments, including some foreign businesses. The Wall Street Journal has suggested the government is using AIG to launder foreign aid funding, and that Washington is making such a fuss over the AIG bonuses to draw attention away from its own inability to supervise AIG and other bailed-out companies.
Jim Rickards, quoted in the Washington Times, suggests there is a "straightforward economic reason" for the rerouting of funds, though it does present a huge political problem for the administration:
AIG, Rickards said in an e-mail, "had trades with counterparties (Goldman, Deutsche Bank and many others) which, over time, produced paper profits for the counterparties and paper losses for AIG as market prices moved against AIG. In that situation, it is customary (and contractually required) for the losing side (AIG) to pay the winning side (Goldman, others) the amount of the paper profits in cash."
"This protects the counterparty against the possibility that AIG might not be around to perform when the trade is finally closed out at maturity. The name for this is a 'margin call' with margin being the name for AIG's paper losses which have to be made good," Rickards said. "So, when the U.S. gave AIG money, the money went right out the door to meet margin calls."
"AIG was not much more that a conduit for government money which really went to the counterparties. So, in effect, the U.S. was not just bailing out AIG, it was bailing out the counterparties. Many were foreign banks which is part of the outrage," he said.
I think basically what we have is an administration that is deathly afraid of the public while being simultaneously condescending toward them. They don't think we're smart enough to understand business. I, for one, having read all the above articles feel the real problem is Washington's response, not AIG's activities--at least lately. There's no denying they did some very, very stupid--and perhaps greedy--things and got themselves into serious trouble. But they're not going to be able to get themselves out of trouble without doing some things that are not going to be immediately understood by the public.
Rather than try to explain it to us and risk taking the heat for supporting this, the administration prefers to keep things quiet unless they become public and then howl with rage and feign ignorance. In short, these people are afraid to make the tough call. They want to have their cake and eat it too. They want to make villains of big business while working quietly to try and save them. They claim that some companies are just too big to allow to fail, yet do everything they can to undermine the company's attempts to not fail.
Is $165 million a lot of money? Obviously. Is it money well spent if the people it was supposed to help retain really can salvage the company and stabilize the economy? I think so. If that's what it takes to make the right people willing to stick it out and put up with the crap they're having to wade through right now then it's a small price to pay.
Meanwhile, Congress has voted themselves a pay raise. Just what have they done to save the economy? They seem actively bent on destroying it with their selective amnesia and poll-fueled outrage.
Does anyone have the guts to stand up and say "Hey, we don't have to like it, but this is what it's going to take"? I can think of one senator that might have. In fact I voted for him for preseident. I'm becoming increasingly proud of that vote.
Thursday, March 12, 2009
It's Not Just Paranoia Anymore
The idea that Obama and his administration may actually want the economy to stay bad is gaining support:
From the DC Examiner:
Terrestrial Musings, quoting Carl Pham:
From the DC Examiner:
White House chief of staff Rahm Emanuel gave the game away back in November with his observation that:
"You never want a serious crisis to go to waste. What I mean by that is it's an opportunity to do things that you think you could not do before. This is an opportunity…And this crisis provides the opportunity for us, as I would say, the opportunity to do things that you could not do before."
...
Initially, Emanuel’s disturbing words were dismissable as just his own, but the president himself and most recently Secretary of State Hillary Clinton have since repeated variations on the theme. So it is clearly the Obama strategy to use the current economic crisis as justification for his radical agenda.
Call it policy-making by perpetual crisis.
Terrestrial Musings, quoting Carl Pham:
I bet if the entire Obama Administration and Democratic Congressional Leadership were sentenced to hang on December 1, 2009, if the stock market were not above 9000 and unemployment were not below 7%, they would become raging tax-cutting pro-business libertarians overnight.
That is, I don’t believe they are so stupid and deluded as to believe their own hogwash right down to their core. They know very well they’re hanging a millstone around the economy’s neck, costing jobs and punishing capital markets. But they don’t care. They have ambitions — more government power for themselves, better status and pay for their supporters — and they actually don’t care that a bunch of plumbers and HVAC men are going to pay for it with their jobs, 401k’s, life savings invested in the new house. Can’t make an omelet without breaking eggs, y’know.
Tuesday, March 10, 2009
Jim Cramer Asks Some Good Questions
From his editorial on Mainstreet.com:
Basically, neither administration comes off very well. He believes the Bush administration could have avoided the whole mess and didn't. But he also believes that Obama's administration has not done any better:
Yet he still supports Obama's agenda. He just doesn't believe now is the time for it:
Fairly strong stuff. His criticism that neither administration seems to be listening seems valid.
So, why after toiling in the cable wilderness for four years with Mad Money am I the target of the wrath of the Obama clan, and the darling, albeit surely momentary, of the Obama-critics? After all, my criticism of Obama's handling of the economic crisis is a lot less pointed than my withering August 2007 "They Know Nothing" meltdown against the previous regime's handling of the economic crisis. Then, I advocated a swift slashing of interest rates by the Federal Reserve and a concomitant policy for potential widespread banking failures that were sure to come because of the Republican administration's pernicious laissez-faire attitude toward Wall Street.
The answer lies in the way the two administrations handled criticism.
Basically, neither administration comes off very well. He believes the Bush administration could have avoided the whole mess and didn't. But he also believes that Obama's administration has not done any better:
Don't get me wrong, Obama was dealt a terrible hand by the previous croupier. But this administration's handling of the banking crisis, something that has brought Citigroup (Stock Quote: C), Bank of America (Stock Quote: BAC), Wells Fargo (Stock Quote: WFC) and even JPMorgan Chase (Stock Quote: JPM) to their knees, has been devastating. The indecision of Geithner, who has floated to the media every single idea in his head, only to announce none orally, has created a vacuum that has allowed short-sellers to dictate policy.
Yet he still supports Obama's agenda. He just doesn't believe now is the time for it:
After the White House briefing, Rush Limbaugh defended me as a wayward leftist who has seen the light. I am always glad to have any allies and defenders, but I do favor almost all of Obama's agenda, right down to having the rich pay more of their freight in this great country. It's just not the right time. We need to declare a war on unemployment and solve it before we let it get out of hand. We need to stop house-price depreciation. Neither the pork-laden stimulus plan nor the confusing mortgage proposal put forward by Obama will defeat either enemy. When Obama trounces both unemployment and house-price depreciation, he will have the power to enact anything he wants. But all the initiatives he wants to rush, like tax hikes, changes in health care, tinkering with the mortgage deduction -- good grief, right now in the midst of the worst housing downturn ever -- and the tough cap-and-trade rules, will derail any chance we have of turning this economy around. Instead, they put the Second Great Depression smack on the nation's table. The markets thought he could stop it; hence the giant relief rally when he was elected. But in fewer than 50 days of his ascendancy, the markets' hopes were totally dashed and the averages are now forecasting the worst decline since the Great Depression. As someone who listens to what the averages are screaming, I think they are accurately predicting the future.
Fairly strong stuff. His criticism that neither administration seems to be listening seems valid.
WSJ Editorial Defends Obama's Budget
Laura D'Andrea Tyson believes that Obama is showing true leadership in his handling of the economy and his coming budget:
Friday's distressing employment numbers indicate that employers aren't buying the stimulus. Tyson makes the point over and over again in the article that it's only the rich who will be impacted by Obama's plans. She forgets, however, that it's mostly the rich who create the largest number of jobs. The economy won't recover if there aren't more jobs. Cutting taxes on the middle class won't help those who aren't paying taxes because they're unemployed.
Obama campaigned on a "sunny dat scenario" in which he would not be hampered by a poor economy. When pushed during debates he admitted that he wouldn't be able to do everything he wants to do if the economy remains poor. His budget doesn't seem to accept the reality that the economy is poor. Even Tyson gives passing mention to this limitation:
I think it assumes more than the economy entering a recovery. It assumes we've already recovered back to where we were--and then some. That is just not likely at this point, as much as I'd like to think it is.
Tyson continues in an effort to refute criticism but instead gives us more cause to worry:
By her definition I am not in the top 3% of taxpayers--not by a long shot. She, like Obama, seems to ignore the fact that it's not just the rich that own stocks. Raising the capital gains and dividend tax rates will impact me.
Besides, if these rates are actually lower than what they once were (which is largely irrelevant, mind you), then how does she figure that 3% of the taxpayers are going to finance all these vast amounts of spending? That 3% does not include the mega-rich, mind you. It's those who make more than $250,000. I'd like to see the math she uses to determine that these 3% are going to cover the $634 billion just to reform health care, let alone his other pet projects.
How about I do some math, then? Let's assume a generous definition of "taxpayer" as everyone in the US. With a population of about 350 million, that 3% represent about 10.5 million. By my calculations, just to finance health care reform, each of that 3% are going to need to pay out an additional $60,380. If that were the only thing Obama was asking this group to fund it might be possible. But it's not.
Huh? She either leaves out some information here or she just doesn't make sense. The only way a higher bracket family is getting a bigger break is because they are making more. By her logic they shouldn't be taxed more because they're already paying more taxes.
Now granted it shouldn't cost the more affluent family more to raise their children. But then it's this wealthier group that tends to give more to charity. This is not insignificant, yet Tyson blows right past it. By reducing the deduction on charitable giving the government will effectively reduce charitable giving. Who is going to make up the difference? Does the budget cover that shortfall? If so, it's essentially the government saying "Hey, we can give to charity better than you can, so let us be the middle-man". That doesn't make sense. Middle-men always get their cut, so the government would have to take in more taxes just to fund charities at the same level.
In addition, this discouragement of charity will somehow cover half of that $634 billion. Assuming for a moment the numbers add up (I doubt it), where's the other half coming from?
Okay, I'm really baffled here now. Someone please explain this to me. Competitive bidding I understand and can more or less accept (though we've all heard how well the government handles bidding processes, so why expect this will be somehow better). But increasing Medicaid rebates and strengthening performance incentives doesn't sound like a cost decrease to me--quite the opposite. I'm no expert on Medicaid, so I'm willing to learn if someone can teach me how this works.
Tyson dismisses the opposition to all this.
Actually, most of the people protesting these days are middle-class Americans (see the Tea-Party Protests), so she's either out of touch or she's just trying to convince us she's still talking about that horrible 3% who should just pay up and shut up. In any case, she glosses over whose "twin goals" we're talking about. It's not necessarily the American people's goal. It's Obama's. And even if the majority do support these goals, I'll bet her dollars to donuts that there is a wide disparity on how they want these goals met.
Now let's look at Obama's plan for cutting carbon emissions.
"...overwhelming scientific evidence on the risks and costs of climate change..." She's overreaching here. There's overwhelming evidence of climate change, but climate change is not synonymous with Global Warming. Climate changes, with or without man's help. That's why they gently changed the wording from "Global Warming" to "Climate Change". People think it's the same thing, but it's not.
Furthermore, there is very little scientific speculation, let alone evidence, of the cost of climate change. Greenland will tell you the costs are pretty darn good! They're experiencing an agricultural boom. Warmer weather is good for agriculture, so just where are the costs, exactly? Tyson is pulling a common media trick of reducing an entire debate into a single statement of certainty that glosses over reams of complexity and disagreement.
But let's assume for a moment that she's correct. The government wants to set up a market for carbon offsets. And the government wants to be right in the middle of it, getting their cut:
Herein lies the fallacy in this approach. If the government is relying on this revenue to appease the peasants (why gives us rebates? Isn't this money needed to fund programs and avoid deficit spending?) and fund research, then they're not really interested in seeing this revenue stream dry up. In other words, they just want to profit from carbon emissions, not reduce them. Once this source of revenue is in place, what incentive will the government have to eliminate it by moving all companies to carbon-free production?
But let's assume this works. In the very next point Tyson contradicts herself--probably without even realizing it. She moves on to college tuition:
So if creating a shortage of something increases the cost of something (ie. carbon offsets), wouldn't creating a surplus of something else lower the cost of it? If we can double the number of college graduates, that doesn't automatically double the number of jobs for them. On the contrary, if the rate of graduates exceeds the rate of economic expansion we will end up with fewer jobs for more graduates. Salaries will decrease, and companies will be able to increase their highering standards. It's not inconceivable for freight companies requiring college degrees from their truck drivers.
If we increase the number of college graduates without the economy keeping pace we'll just end up creating an even wider divide between the poor and uneducated and the middle class. Meanwhile wages and salary across the board will fall. While this could reduce our interest in offshoring, we're just shifting the problem. We create problems for other countries while decreasing our own productivity. A college graduate glut is not in this country's best interest.
Tyson then moves on into further generalization:
"If the economy recovers..." That's a vague and big "if". How much will the economy recover to make her statements true? And that also assumes that, as the economy grows, the government doesn't grow with it. Does she honestly think that, of Obama gets what he wants now, that he's just going to sit on his hands for the next four to eight years and not do anything else? Is she suggesting that there would be no more to do? She seems like a liberal, so I have a hard time believing she thinks that this is all we need.
Finally she reaches her conclusion--and shoot herself squarely in the foot:
Okay, she gives lip-service to the possibility (which Obama himself seems to believe) that the recovery will be later and weaker. But she suggests that Obama will just adjust his plans to meet that reality. Based on what? He hasn't curtailed his plans to meet reality yet, even though he promised to. He's decided that all we need to do is run up the deficit he once abhorred rather than adopt the fiscal responsibility he once championed for government--and still champions for the general public.
He hasn't even shown he possesses the leadership skills to meet this challenge! He had a perfect opportunity to lead by example, and he blew it. He's essentially saying "America, you be more responsible, because I want get everything I want right now, on credit."
Ah, there's the key. She's got a personal stake in this plan. No wonder she thinks it's wonderful:
She might have mentioned that up front rather than literally burying it in a footnote. But then that would have influenced the reader to weigh her words more carefully, and we can't have that.
If leadership is defined as recognizing a crisis, addressing its challenges, and setting new directions while remaining true to one's values, then Barack Obama is already demonstrating his strengths as a leader. He has inherited an economic crisis worse than any the nation has experienced since the Great Depression. Within fewer than 50 days in office he has signed a historic stimulus package to bolster demand and create 3.5 million jobs. Governors, business leaders and economists from both the left and the right have applauded the stimulus. Friday's distressing employment numbers indicate that much more may be needed.
Friday's distressing employment numbers indicate that employers aren't buying the stimulus. Tyson makes the point over and over again in the article that it's only the rich who will be impacted by Obama's plans. She forgets, however, that it's mostly the rich who create the largest number of jobs. The economy won't recover if there aren't more jobs. Cutting taxes on the middle class won't help those who aren't paying taxes because they're unemployed.
President Obama has also proposed a 10-year budget that is faithful to the progressive vision he articulated during his campaign. His budget includes significant investments in health care, energy, the environment and education, and a tax cut for the middle class. It also calls for higher taxes on the top 3% of income earners to finance his priorities and reduce the deficit. Not surprisingly, a budget plan this ambitious is triggering strong and well-organized opposition on numerous fronts.
Obama campaigned on a "sunny dat scenario" in which he would not be hampered by a poor economy. When pushed during debates he admitted that he wouldn't be able to do everything he wants to do if the economy remains poor. His budget doesn't seem to accept the reality that the economy is poor. Even Tyson gives passing mention to this limitation:
President Bush's tax cuts are scheduled to expire at the end of 2010. At that time, assuming the economy has entered a recovery, President Obama's budget will restore the top two marginal income tax rates to their 1990s levels of 36% and 39.6% for individuals earning more than $200,000 and couples earning more than $250,000. (emphasis added)
I think it assumes more than the economy entering a recovery. It assumes we've already recovered back to where we were--and then some. That is just not likely at this point, as much as I'd like to think it is.
Tyson continues in an effort to refute criticism but instead gives us more cause to worry:
These changes will affect only the top 3% of taxpayers, the group that has enjoyed the largest gains in income and wealth over the last decade. In addition, for these taxpayers the tax rate on capital gains will increase to 20%, the lowest rate in the 1990s and the rate President Bush proposed in 2001, and the tax rate on dividends will increase to 20%, a rate lower than the rate of the 1990s and nearly 40% lower than that proposed by President Bush in 2001.
By her definition I am not in the top 3% of taxpayers--not by a long shot. She, like Obama, seems to ignore the fact that it's not just the rich that own stocks. Raising the capital gains and dividend tax rates will impact me.
Besides, if these rates are actually lower than what they once were (which is largely irrelevant, mind you), then how does she figure that 3% of the taxpayers are going to finance all these vast amounts of spending? That 3% does not include the mega-rich, mind you. It's those who make more than $250,000. I'd like to see the math she uses to determine that these 3% are going to cover the $634 billion just to reform health care, let alone his other pet projects.
How about I do some math, then? Let's assume a generous definition of "taxpayer" as everyone in the US. With a population of about 350 million, that 3% represent about 10.5 million. By my calculations, just to finance health care reform, each of that 3% are going to need to pay out an additional $60,380. If that were the only thing Obama was asking this group to fund it might be possible. But it's not.
In addition, the president proposes to limit the deductions for dependents, charitable contributions and other expenses to 28%, the top rate for such deductions under Ronald Reagan. Some critics claim this is class warfare. But why should a family in a higher tax bracket get a bigger break on expenses than a middle-class family?
Huh? She either leaves out some information here or she just doesn't make sense. The only way a higher bracket family is getting a bigger break is because they are making more. By her logic they shouldn't be taxed more because they're already paying more taxes.
Now granted it shouldn't cost the more affluent family more to raise their children. But then it's this wealthier group that tends to give more to charity. This is not insignificant, yet Tyson blows right past it. By reducing the deduction on charitable giving the government will effectively reduce charitable giving. Who is going to make up the difference? Does the budget cover that shortfall? If so, it's essentially the government saying "Hey, we can give to charity better than you can, so let us be the middle-man". That doesn't make sense. Middle-men always get their cut, so the government would have to take in more taxes just to fund charities at the same level.
In addition, this discouragement of charity will somehow cover half of that $634 billion. Assuming for a moment the numbers add up (I doubt it), where's the other half coming from?
...with the other half coming from savings in health spending. These savings include competitive bidding in order to reduce Medicare payments to private insurance plans, increasing the Medicaid rebate for brand-name drugs, and strengthening Medicare pay-for-performance incentives for hospitals.
Okay, I'm really baffled here now. Someone please explain this to me. Competitive bidding I understand and can more or less accept (though we've all heard how well the government handles bidding processes, so why expect this will be somehow better). But increasing Medicaid rebates and strengthening performance incentives doesn't sound like a cost decrease to me--quite the opposite. I'm no expert on Medicaid, so I'm willing to learn if someone can teach me how this works.
Tyson dismisses the opposition to all this.
Those who stand to lose from these changes are already protesting. But like the 28% limit on deductions, these savings are fair and reasonable ways to finance the twin goals of achieving universal health-care coverage and moderating the growth of health-care spending.
Actually, most of the people protesting these days are middle-class Americans (see the Tea-Party Protests), so she's either out of touch or she's just trying to convince us she's still talking about that horrible 3% who should just pay up and shut up. In any case, she glosses over whose "twin goals" we're talking about. It's not necessarily the American people's goal. It's Obama's. And even if the majority do support these goals, I'll bet her dollars to donuts that there is a wide disparity on how they want these goals met.
Now let's look at Obama's plan for cutting carbon emissions.
Reducing the nation's dependence on foreign oil and cutting carbon emissions are also priorities, supported by overwhelming scientific evidence on the risks and costs of climate change. Economists agree that establishing a price for carbon emissions either through a carbon tax or a cap-and-trade system is essential to achieving these goals. The Obama administration has opted for the latter. The system will impose a limit on the amount of carbon that businesses are allowed to emit each year. Firms will be required to purchase permits from the federal government through an auction and will then be free to buy and sell them.
"...overwhelming scientific evidence on the risks and costs of climate change..." She's overreaching here. There's overwhelming evidence of climate change, but climate change is not synonymous with Global Warming. Climate changes, with or without man's help. That's why they gently changed the wording from "Global Warming" to "Climate Change". People think it's the same thing, but it's not.
Furthermore, there is very little scientific speculation, let alone evidence, of the cost of climate change. Greenland will tell you the costs are pretty darn good! They're experiencing an agricultural boom. Warmer weather is good for agriculture, so just where are the costs, exactly? Tyson is pulling a common media trick of reducing an entire debate into a single statement of certainty that glosses over reams of complexity and disagreement.
But let's assume for a moment that she's correct. The government wants to set up a market for carbon offsets. And the government wants to be right in the middle of it, getting their cut:
The Obama auction plan will also generate substantial government revenues, about 80% of which will be used for financing a refundable tax credit of up to $400 for individuals and up to $800 for families. The result will be tax cuts for 95% of working Americans. The remaining 20% of the auction revenue will be used to finance investments in energy efficiency, clean energy and smart-grid technologies.
Herein lies the fallacy in this approach. If the government is relying on this revenue to appease the peasants (why gives us rebates? Isn't this money needed to fund programs and avoid deficit spending?) and fund research, then they're not really interested in seeing this revenue stream dry up. In other words, they just want to profit from carbon emissions, not reduce them. Once this source of revenue is in place, what incentive will the government have to eliminate it by moving all companies to carbon-free production?
But let's assume this works. In the very next point Tyson contradicts herself--probably without even realizing it. She moves on to college tuition:
Others will oppose expanding the tax credit for college tuition to $2,500 a year and making it permanent and partially refundable; increasing the Pell Grant to $5,500 a year; and eliminating subsidies to banks participating in the student-loan program, cutting $50 billion from the 10-year deficit. But, again, the returns to higher education are substantial for both the individual and the overall economy. Too many American students are forced to forego these returns because they cannot afford a college education, with deleterious effects on the nation's competitiveness.
So if creating a shortage of something increases the cost of something (ie. carbon offsets), wouldn't creating a surplus of something else lower the cost of it? If we can double the number of college graduates, that doesn't automatically double the number of jobs for them. On the contrary, if the rate of graduates exceeds the rate of economic expansion we will end up with fewer jobs for more graduates. Salaries will decrease, and companies will be able to increase their highering standards. It's not inconceivable for freight companies requiring college degrees from their truck drivers.
If we increase the number of college graduates without the economy keeping pace we'll just end up creating an even wider divide between the poor and uneducated and the middle class. Meanwhile wages and salary across the board will fall. While this could reduce our interest in offshoring, we're just shifting the problem. We create problems for other countries while decreasing our own productivity. A college graduate glut is not in this country's best interest.
Tyson then moves on into further generalization:
The president's budget is progressive and ambitious. It will not, however, explode the size of government as some critics warn. If the economy recovers as projected, over the next decade taxes as a share of GDP at around 19% will be lower than they were during the second half of the 1990s, government spending as a share of GDP at around 22.5% will be about where it was under Reagan, and nondefense discretionary spending at around 3.6% of GDP will fall to its lowest level since that data was first collected in 1962.
"If the economy recovers..." That's a vague and big "if". How much will the economy recover to make her statements true? And that also assumes that, as the economy grows, the government doesn't grow with it. Does she honestly think that, of Obama gets what he wants now, that he's just going to sit on his hands for the next four to eight years and not do anything else? Is she suggesting that there would be no more to do? She seems like a liberal, so I have a hard time believing she thinks that this is all we need.
Finally she reaches her conclusion--and shoot herself squarely in the foot:
The real risk lies in the possibility that the economy's recovery starts later and is much weaker than the economic assumptions in the budget. In this case, by no means remote, President Obama will have to adjust his plans while remaining true to his values. In a very few days in office, he has already demonstrated that he has the leadership skills to rise to the challenge.
Okay, she gives lip-service to the possibility (which Obama himself seems to believe) that the recovery will be later and weaker. But she suggests that Obama will just adjust his plans to meet that reality. Based on what? He hasn't curtailed his plans to meet reality yet, even though he promised to. He's decided that all we need to do is run up the deficit he once abhorred rather than adopt the fiscal responsibility he once championed for government--and still champions for the general public.
He hasn't even shown he possesses the leadership skills to meet this challenge! He had a perfect opportunity to lead by example, and he blew it. He's essentially saying "America, you be more responsible, because I want get everything I want right now, on credit."
Ah, there's the key. She's got a personal stake in this plan. No wonder she thinks it's wonderful:
Ms. Tyson is ... a member of President Obama's Economic Recovery Advisory Board.
She might have mentioned that up front rather than literally burying it in a footnote. But then that would have influenced the reader to weigh her words more carefully, and we can't have that.
Monday, March 09, 2009
Newsweek Turning On Obama
Wow, he's starting to lose the Main-Stream Media:
The article also points out that Obama's budget will shrink defense spending considerably over the next eight years, which assumes a safer world than we can necessarily expect--or assumes isolationist strategies that would be less than wise.
It then goes on to discuss his handling of the economy. While they're unwilling to lay blame for all of the market declines in 2009 at his feet, they're certainly not giving him a pass:
The article then ends with a most interesting assessment:
So Newsweek hasn't been carrying the torch for Obama? They seem to completely ignore that they are a part of that "much of the mainstream media". On the other hand, if they're really going to take off the blinders, it's better late than never. If they're willing to start taking a closer look at Obama's policies and actions I'm willing to let them get away with dodging blame. Just a little.
Barack Obama is a great pretender. He constantly says he's doing things that he isn't, and he relies on his powerful rhetoric to obscure the difference. He has made "responsibility" a personal theme, and the budget's cover line is "A New Era of Responsibility." He claims that the budget begins "making the tough choices necessary to restore fiscal discipline." It doesn't.
Let's recognize that, with today's depressed economy, big deficits are unavoidable for some years. Let's also assume that Obama wins reelection. By his last year, 2016, the economy will have presumably long recovered. What, then, does his final budget look like? Well, it runs a $637 billion deficit, equal to 3.2 percent of the economy (gross domestic product), projects Obama's Office of Management and Budget. Just for the record, that would roughly match Ronald Reagan's last deficit, 3.1 percent of GDP in 1988, so fiercely criticized by Democrats.
As a society, we should be willing to pay in taxes what it costs government to provide desired services. If benefits don't seem equal to burdens, then the spending isn't worth having (granting exceptions for deficits in wartime and economic slumps).
If Obama were "responsible," he would be leading a candid conversation about government's size and role. Who deserves support and why? How big can government grow before higher taxes and deficits harm long-term economic growth? Although Obama claims to be doing this, he hasn't confronted entitlement psychology—the belief that government benefits once conferred should never be revoked—and asked whether some significant spending no longer serves any "public interest."
The article also points out that Obama's budget will shrink defense spending considerably over the next eight years, which assumes a safer world than we can necessarily expect--or assumes isolationist strategies that would be less than wise.
It then goes on to discuss his handling of the economy. While they're unwilling to lay blame for all of the market declines in 2009 at his feet, they're certainly not giving him a pass:
Confidence (too little) and uncertainty (too much) are at the core of this crisis. All of Obama's double-talk threatens to reduce the first and raise the second. Investors and traders have surely noticed the discrepancies between Obama's words and actions.
Obama says he's focused singlemindedly on reviving the economy, but he's also using the crisis as a vehicle to advance an ambitious long-term agenda to reengineer the U.S. economy. The two sometimes collide. The $787 billion "stimulus" is weaker than necessary, because almost $200 billion of the impact occurs after 2010. Many of these extended projects (high-speed rail, computerized medical records) can't be accomplished quickly. When Congress debates Obama's sweeping health-care and energy proposals, industries, regions and governmental philosophies will clash. Will this improve confidence? Reduce uncertainty?
A prudent president would have made a "tough choice"— concentrated on the economy, deferred his more contentious agenda. Similarly, Obama claims to seek bipartisanship but, in reality, doesn't. His bipartisanship consists of sprinkling his cabinet with token Republicans and inviting some Republican members of Congress to the White House to watch the Super Bowl. It does not consist of fashioning proposals that would attract bipartisan support on their merits. Instead, he clings to dubious, partisan policies (mortgage cramdown, union checkoff) that arouse fierce opposition.
The article then ends with a most interesting assessment:
It is Obama's conceit—perhaps his cockiness—that he can ignore these blatant inconsistencies. Like many smart people, he believes he can talk his way around any problem. Perhaps he can. In this, he has an ally in much of the mainstream media, which seem so enthralled with him that they can't recognize glaring contradictions. During the campaign, Obama claimed he would change Washington's petty partisanship; he also advocated a highly partisan agenda. Both claims could not be true. The media barely noticed; the same obliviousness persists. But Obama still runs a risk: that his overworked rhetoric loses its power and boomerangs on him. (emphasis added)
So Newsweek hasn't been carrying the torch for Obama? They seem to completely ignore that they are a part of that "much of the mainstream media". On the other hand, if they're really going to take off the blinders, it's better late than never. If they're willing to start taking a closer look at Obama's policies and actions I'm willing to let them get away with dodging blame. Just a little.
Thursday, March 05, 2009
Don't You DARE Call This a "Merit Increase"
Congress has voted themselves a pay increase and a petty-cash increase, and Obama is dining on expensive wine and steak. Meanwhile the economy continues to slide, unemployment rises, and wages are falling. But that, they tell us, is the fault of Bush and Rush.
The only trouble with that theory is that the stock market had started to stabilize in January. We were actually seeing increases. Then Obama took office and every new program or policy or casual remark by government official is met with another market drop. He can't blame THAT on Bush. He can't blame THAT on Rush Limbaugh.
We're hearing nothing but hypocrisy from the Democrat establishment in Washington. Americans, we are told, need to tighten our belts and brace for things to get worse before they get better. We need to be responsible. We need to not buy houses we can't afford.
Washington is not leading by example. They are spending money they don't have, won't have, and may never have. They are attacking the rich as the heart of the problem, and yet are prepared to raise taxes on them as if they're the only solution. They are rewarding their supporters with spending and pork. Our President, who not that long ago was talking tough on earmarks is now refusing to see earmarks anywhere he looks.
Americans are expected to sacrifice for their country, while our Democratic government are determined to feast on the offerings--and demand more.
They can blame the GOP all they want for being the "Party of NO", but the reality is that their "No" is nearly pointless. The Democrats have shut them out of every discussion, and while Obama has at least appeared to want to listen, he didn't use any of the ideas he heard.
Pelosi and Reid have gone a step further by saying that the GOP cannot possible have a good idea worth listening to because every single idea they've ever had in the past eight years are useless and the very cause of the mess we're in. Such a notion is not only insulting, dishonest, and disingenuous, but inherently dangerous. They are essentially saying that every second of the last eight years were a complete and utter failure, including the government's successful response to the economic downturn after the dot-com bust and 9/11 and the steady economic growth we've experienced for at least six of the past eight years. That can't possibly be correct.
What's more, it's not as if the Democrats did nothing at all during that time. Had the GOP enjoyed the level of control the Dems now have it would be much easier to make that case. But in many, many cases the policies and budgets that got implemented were done with Democrat approval. So essentially they're contradicting themselves: "the things we did when we weren't in control were stupid, but now that we're in charge we're suddenly right."
Besides, we know that not everything done during the Bush years were wrong, because Obama has adopted many of the same policies. Remember how "launching missiles into Pakistan won't solve the problem"? How many missiles have been launched into Pakistan since Obama took office? He's C-in-C now. He could stop that if he wanted to. An all we've heard since his original order to close Guantanamo is how difficult that will actually be. It wouldn't be if he really wanted it closed. Irresponsible, yes, but not difficult. And it looks like we'll have a significant number of troops in Iraq for the foreseeable future.
The Democrats seem to think that having won the election translates into "we have a massive mandate to completely undo everything done in the last eight years." That is self-delusion, and a recent poll confirms that while Obama is still popular, his policies are becoming less so. So far he's been able to blame things on Bush or make it appear that it was Congress' work that he was merely okaying. The reality is that he and his team are at best too inexperienced and at worst deliberately trying to weaken the economy further.
Here's a news flash for you, Mr. President. The so-beloved Middle-Class you are out to save have a considerable amount invested in our 401Ks and retirement accounts and are depending on the stock market to turn around. It's not just the Wall Street "fatcats" (most of whom are NOT irresponsible near-crooks) who need the stock market to do well. We all do. What we have seen since January is not the normal gyrations of the market. It's a steady, rapid decline. Call your accountant. He'll tell you what your cabinet of so-called smart people can't seem to figure out.
Suck it in and show some of that fiery resolve you campaigned with. Bring fiscal responsibility to Washington. Put an end to earmarks. Cut back or postpone your programs to meet the economic realities like you said you would. Show us that Washington knows how to manage our money before you lecture us on responsibility.
The economy is continuing to slide because we're not seeing anything new from Washington. It's business as usual. It's revenge as usual. It's scapegoating and blame-deflecting as usual. We need to see leadership and accountability.
It's time you deliver.
The only trouble with that theory is that the stock market had started to stabilize in January. We were actually seeing increases. Then Obama took office and every new program or policy or casual remark by government official is met with another market drop. He can't blame THAT on Bush. He can't blame THAT on Rush Limbaugh.
We're hearing nothing but hypocrisy from the Democrat establishment in Washington. Americans, we are told, need to tighten our belts and brace for things to get worse before they get better. We need to be responsible. We need to not buy houses we can't afford.
Washington is not leading by example. They are spending money they don't have, won't have, and may never have. They are attacking the rich as the heart of the problem, and yet are prepared to raise taxes on them as if they're the only solution. They are rewarding their supporters with spending and pork. Our President, who not that long ago was talking tough on earmarks is now refusing to see earmarks anywhere he looks.
Americans are expected to sacrifice for their country, while our Democratic government are determined to feast on the offerings--and demand more.
They can blame the GOP all they want for being the "Party of NO", but the reality is that their "No" is nearly pointless. The Democrats have shut them out of every discussion, and while Obama has at least appeared to want to listen, he didn't use any of the ideas he heard.
Pelosi and Reid have gone a step further by saying that the GOP cannot possible have a good idea worth listening to because every single idea they've ever had in the past eight years are useless and the very cause of the mess we're in. Such a notion is not only insulting, dishonest, and disingenuous, but inherently dangerous. They are essentially saying that every second of the last eight years were a complete and utter failure, including the government's successful response to the economic downturn after the dot-com bust and 9/11 and the steady economic growth we've experienced for at least six of the past eight years. That can't possibly be correct.
What's more, it's not as if the Democrats did nothing at all during that time. Had the GOP enjoyed the level of control the Dems now have it would be much easier to make that case. But in many, many cases the policies and budgets that got implemented were done with Democrat approval. So essentially they're contradicting themselves: "the things we did when we weren't in control were stupid, but now that we're in charge we're suddenly right."
Besides, we know that not everything done during the Bush years were wrong, because Obama has adopted many of the same policies. Remember how "launching missiles into Pakistan won't solve the problem"? How many missiles have been launched into Pakistan since Obama took office? He's C-in-C now. He could stop that if he wanted to. An all we've heard since his original order to close Guantanamo is how difficult that will actually be. It wouldn't be if he really wanted it closed. Irresponsible, yes, but not difficult. And it looks like we'll have a significant number of troops in Iraq for the foreseeable future.
The Democrats seem to think that having won the election translates into "we have a massive mandate to completely undo everything done in the last eight years." That is self-delusion, and a recent poll confirms that while Obama is still popular, his policies are becoming less so. So far he's been able to blame things on Bush or make it appear that it was Congress' work that he was merely okaying. The reality is that he and his team are at best too inexperienced and at worst deliberately trying to weaken the economy further.
Here's a news flash for you, Mr. President. The so-beloved Middle-Class you are out to save have a considerable amount invested in our 401Ks and retirement accounts and are depending on the stock market to turn around. It's not just the Wall Street "fatcats" (most of whom are NOT irresponsible near-crooks) who need the stock market to do well. We all do. What we have seen since January is not the normal gyrations of the market. It's a steady, rapid decline. Call your accountant. He'll tell you what your cabinet of so-called smart people can't seem to figure out.
Suck it in and show some of that fiery resolve you campaigned with. Bring fiscal responsibility to Washington. Put an end to earmarks. Cut back or postpone your programs to meet the economic realities like you said you would. Show us that Washington knows how to manage our money before you lecture us on responsibility.
The economy is continuing to slide because we're not seeing anything new from Washington. It's business as usual. It's revenge as usual. It's scapegoating and blame-deflecting as usual. We need to see leadership and accountability.
It's time you deliver.
Tuesday, March 03, 2009
The Blame Game
Obama blames Bush for the economy. The Wall Street Journal blames Obama:
The Obama administration has been decrying greed at every opportunity. And yet their policies seem to be counting on it. They seem to think that American business will continue pursuing taxable profits at all cost regardless of how high their taxes are or how difficult the business environment becomes.
All those "smart people" in his cabinet, and not a decent economist in the bunch. Or, if there are, they're simply figureheads to make it look like Obama is getting good advice, even if he's not taking it. More paranoid people suggest that he's purposely trying to destroy the economy and the free market system so that we will all become dependent on the government. I hope they're only paranoid.
Listening to Mr. Obama and his chief of staff, Rahm Emanuel, on the weekend, we couldn't help but wonder if they appreciate any of this. They seem preoccupied with going to the barricades against Republicans who wield little power, or picking a fight with Rush Limbaugh, as if this is the kind of economic leadership Americans want.
Perhaps they're reading the polls and figure they have two or three years before voters stop blaming Republicans and Mr. Bush for the economy. Even if that's right in the long run, in the meantime their assault on business and investors is delaying a recovery and ensuring that the expansion will be weaker than it should be when it finally does arrive.
The Obama administration has been decrying greed at every opportunity. And yet their policies seem to be counting on it. They seem to think that American business will continue pursuing taxable profits at all cost regardless of how high their taxes are or how difficult the business environment becomes.
All those "smart people" in his cabinet, and not a decent economist in the bunch. Or, if there are, they're simply figureheads to make it look like Obama is getting good advice, even if he's not taking it. More paranoid people suggest that he's purposely trying to destroy the economy and the free market system so that we will all become dependent on the government. I hope they're only paranoid.
Wednesday, February 25, 2009
Newsflash: Obama a Good Speaker
I was nearly impressed with Obama's Non-State of the Union Address last night. I almost fell for the rhetoric and believed he can turn things around and introduce real (and positive) change in Washington. But then I remembered that this is the same person who approved funding to save Pelosi's Mouse and yet told us last night that there are "no earmarks" in the stimulus bill.
(Technically, he's correct. Nothing was in the bill that couldn't have been reviewed before the vote. It's just that they purposely made it as difficult they could to review the bill before the vote. It's still dishonest, and it's still pork. Call it whatever else you may.)
He also told us "The U.S. does not torture." Technically true. But he reserves the right to do so if we deem it appropriate.
He told us "...the nation that invented the automobile cannot walk away from it." A lot of critics are pointing out that it was a German who invented the automobile, but that misses the point entirely. When I heard that statement I asked myself "Why not?" That's like saying we have to dump more money into innovations around the light bulb just because we invented it. If someone else can make it better and/or cheaper, then let them do it. Why keep us enslaved to outdated technology?
No, seriously, I say "the nation that invented the automobile should be looking harder for the technologies that will revolutionize the automobile or render it obsolete altogether.
He wants to spend more money while cutting the deficit. He wants to get that money by taxing the rich, while cutting taxes on "the rest of us". Nice idea, but let's see the details.
He wants to go through the budget line by line and remove wasteful spending. Good luck with that one. The president does not have a line-item veto. His budgets are the beginning of the funding process, not the end. Any budget he submits will have to pass through Congress, who will simply put back in everything he wanted to remove. They are the ones who put them in there in the first place.
He wants to reform health coverage in a bi-partisan manner. So? The Democrats have already proven they don't need the other party to do what they want. Even if Obama is serious about coming up with a moderate plan I doubt Pelosi and Reid are. If socialized medicine is what they want, that's what we'll get.
He wants to improve education and increase the number of college graduates. That sounds good on the surface, but he is once again forgetting basic economics. If the number of college graduates increases we run the risk of surplus (especially if those grads are not in the areas needed). When there is a surplus of something competition increases and the cost of it goes down. So unless the demand for college graduates also increases, all he will really be doing is driving down income and devaluating the college degree.
If college graduates get paid less, then that pushes the threshhold of what they will accept down as well. They'll start looking for work in jobs formerly filled by high school graduates or even dropouts. Employers, who look for the best they can get for the least they can pay, will start raising their standards--because they can get what they ask for. Do we really want a college degree to be a requirement to drive a truck or build a house? That just pushes those who formerly held those jobs into lower-level jobs. The entire working population takes a step backward in pay, tax revenues fall, taxes go up higher on the rich, more rich sell their business rather than see more of their money disappear, and more people are out of work looking for lower-paying jobs. It's a nasty cycle.
Education is a good thing, but making it universal just makes it unimportant.
He spoke about expanding benefits for our soldiers, but last I heard he planned to cut the military budget. So that means we'll have well-cared-for soldiers who lack the equipment to fight and the means to deploy. Are we turning isolationist? We'll see what he really submits, but I'm dubious about this one.
The bottom line is this: everything he said sounded good. But he's already shown us time and again that what he says and what he does do not always match up. He claims he wants transparency, and yet he swears all the military leaders to secrecy regarding his budget. And he's also proven that he either agrees with or lacks the guts to oppose Pelosi and Reid.
If he's not willing to cross his own party then it really doesn't matter what president tells us. We may as well put Pelosi on the platform and let her tell us what to expect for the next four years. I'm waiting for him to prove he's not just the official spokesperson of the Democractic Party.
Forgetting to wait for Pelosi to officially introduce him doesn't count.
(Technically, he's correct. Nothing was in the bill that couldn't have been reviewed before the vote. It's just that they purposely made it as difficult they could to review the bill before the vote. It's still dishonest, and it's still pork. Call it whatever else you may.)
He also told us "The U.S. does not torture." Technically true. But he reserves the right to do so if we deem it appropriate.
He told us "...the nation that invented the automobile cannot walk away from it." A lot of critics are pointing out that it was a German who invented the automobile, but that misses the point entirely. When I heard that statement I asked myself "Why not?" That's like saying we have to dump more money into innovations around the light bulb just because we invented it. If someone else can make it better and/or cheaper, then let them do it. Why keep us enslaved to outdated technology?
No, seriously, I say "the nation that invented the automobile should be looking harder for the technologies that will revolutionize the automobile or render it obsolete altogether.
He wants to spend more money while cutting the deficit. He wants to get that money by taxing the rich, while cutting taxes on "the rest of us". Nice idea, but let's see the details.
He wants to go through the budget line by line and remove wasteful spending. Good luck with that one. The president does not have a line-item veto. His budgets are the beginning of the funding process, not the end. Any budget he submits will have to pass through Congress, who will simply put back in everything he wanted to remove. They are the ones who put them in there in the first place.
He wants to reform health coverage in a bi-partisan manner. So? The Democrats have already proven they don't need the other party to do what they want. Even if Obama is serious about coming up with a moderate plan I doubt Pelosi and Reid are. If socialized medicine is what they want, that's what we'll get.
He wants to improve education and increase the number of college graduates. That sounds good on the surface, but he is once again forgetting basic economics. If the number of college graduates increases we run the risk of surplus (especially if those grads are not in the areas needed). When there is a surplus of something competition increases and the cost of it goes down. So unless the demand for college graduates also increases, all he will really be doing is driving down income and devaluating the college degree.
If college graduates get paid less, then that pushes the threshhold of what they will accept down as well. They'll start looking for work in jobs formerly filled by high school graduates or even dropouts. Employers, who look for the best they can get for the least they can pay, will start raising their standards--because they can get what they ask for. Do we really want a college degree to be a requirement to drive a truck or build a house? That just pushes those who formerly held those jobs into lower-level jobs. The entire working population takes a step backward in pay, tax revenues fall, taxes go up higher on the rich, more rich sell their business rather than see more of their money disappear, and more people are out of work looking for lower-paying jobs. It's a nasty cycle.
Education is a good thing, but making it universal just makes it unimportant.
He spoke about expanding benefits for our soldiers, but last I heard he planned to cut the military budget. So that means we'll have well-cared-for soldiers who lack the equipment to fight and the means to deploy. Are we turning isolationist? We'll see what he really submits, but I'm dubious about this one.
The bottom line is this: everything he said sounded good. But he's already shown us time and again that what he says and what he does do not always match up. He claims he wants transparency, and yet he swears all the military leaders to secrecy regarding his budget. And he's also proven that he either agrees with or lacks the guts to oppose Pelosi and Reid.
If he's not willing to cross his own party then it really doesn't matter what president tells us. We may as well put Pelosi on the platform and let her tell us what to expect for the next four years. I'm waiting for him to prove he's not just the official spokesperson of the Democractic Party.
Forgetting to wait for Pelosi to officially introduce him doesn't count.
Tuesday, February 24, 2009
Just Who IS In Charge?
President Obama is scheduled to give his State of the Union address tonight. I will probably watch, but I'm not sure why. He is not in control of the economy. He wants everyone to think he is. He talks like he is. The reality is different.
If Obama were really in control then careless posturing by Sen. Chris Dodd about privitizing banks wouldn't send stocks into a tailspin.
If Obama were in control they wouldn't have passed an enormous spending bill so complex that no one was able to read it before having to vote on it.
If Obama were in control his administration wouldn't feel the need to respond to criticism from Rick Santelli.
If Obama were in control he wouldn't have to hit the road to drum up support for his programs. The press would be doing it for him.
If Obama were in control he wouldn't have been caught off guard by so many of his cabinet picks being sunk by various corruption charges.
If Obama were in control we would not have so many Democratic members of Congress under investigation for various corruption scandals.
But the fact of the matter is either that the Obama who we voted into office in November is NOT the Obama who took office, or he is completely unable to do his job. Neither one is acceptable.
But the fact of the matter is this: there is no one clear voice from Washington calling the shots. There is no clear leadership. Obama is going one way, while Pelosi, Reid, Dodd, and Schumer are going their own ways. Tim Geithner is falling flat.
It's almost as if none of these people have met to come up with any coordinated plan. No one is in control of the message. It's almost as if they are purposely trying to break the economy down further.
I'm not one of those conspiracy theorists who believes that they're doing this on purpose in order to keep us scared enough to accept further hidden social restructuring (even Schumer was surprised by some of the provisions in the stimulus bill and vowed to roll them back). The thought has crossed my mind, but 2010 is not that far away. If they don't want to get thrown out of office they need to show clear progress by then. They would be foolish to dig themselves too deep of a hole.
But if they don't get their act together that is precisely what they will do. And they can ignore or belittle Santelli as much as they like, but they're failing to recognize what he started. Yes, HE may be a former commodities trader--a so-called poster boy for everything that went wrong with the economy--but his frustration is universal. There are a lot of people who are upset with how things are going and what the Administration is doing about it.
I am one of them. I am NOT a commodities trader. I'm a business systems analyst. I bought a house three years ago right before the top of the bubble. I had mortgage brokers encouraging me to buy bigger houses, but I knew what I could afford. I didn't bite. I didn't gamble on an adjustable rate mortgage to get more house. I knew what my budget was, and I knew how much of a house payment I could handle. I paid 20% down.
I save close to 15% of my income each year. I pay my taxes without complaint. I do not carry a balance on my credit cards. I live within my means. In short, I am responsible.
And I've had it with the government propping up all the irresponsible people. Because of all the irresponsible people I'll be losing my job soon. I am not happy about that. I am not happy to see nearly $800 billion dollars--only about 10-20% of which is actual stimulus--added to the public debt in my name, while the bulk of it is actually to appease Democrat supporters and advance socialistic agendas. Frankly, the mortgage rescue is the least of my concerns.
I'm concerned about a government that seems to have lost its mind. I'm concerned about an administration that can't control its message or its people. I'm concerned about a future that not even the people who sold us this stimulus mess will go on record saying will get better soon.
And that's probably why I don't want to listen to Obama tonight. I'm already depressed. I don't need to feel any worse.
If Obama were really in control then careless posturing by Sen. Chris Dodd about privitizing banks wouldn't send stocks into a tailspin.
If Obama were in control they wouldn't have passed an enormous spending bill so complex that no one was able to read it before having to vote on it.
If Obama were in control his administration wouldn't feel the need to respond to criticism from Rick Santelli.
If Obama were in control he wouldn't have to hit the road to drum up support for his programs. The press would be doing it for him.
If Obama were in control he wouldn't have been caught off guard by so many of his cabinet picks being sunk by various corruption charges.
If Obama were in control we would not have so many Democratic members of Congress under investigation for various corruption scandals.
But the fact of the matter is either that the Obama who we voted into office in November is NOT the Obama who took office, or he is completely unable to do his job. Neither one is acceptable.
But the fact of the matter is this: there is no one clear voice from Washington calling the shots. There is no clear leadership. Obama is going one way, while Pelosi, Reid, Dodd, and Schumer are going their own ways. Tim Geithner is falling flat.
It's almost as if none of these people have met to come up with any coordinated plan. No one is in control of the message. It's almost as if they are purposely trying to break the economy down further.
I'm not one of those conspiracy theorists who believes that they're doing this on purpose in order to keep us scared enough to accept further hidden social restructuring (even Schumer was surprised by some of the provisions in the stimulus bill and vowed to roll them back). The thought has crossed my mind, but 2010 is not that far away. If they don't want to get thrown out of office they need to show clear progress by then. They would be foolish to dig themselves too deep of a hole.
But if they don't get their act together that is precisely what they will do. And they can ignore or belittle Santelli as much as they like, but they're failing to recognize what he started. Yes, HE may be a former commodities trader--a so-called poster boy for everything that went wrong with the economy--but his frustration is universal. There are a lot of people who are upset with how things are going and what the Administration is doing about it.
I am one of them. I am NOT a commodities trader. I'm a business systems analyst. I bought a house three years ago right before the top of the bubble. I had mortgage brokers encouraging me to buy bigger houses, but I knew what I could afford. I didn't bite. I didn't gamble on an adjustable rate mortgage to get more house. I knew what my budget was, and I knew how much of a house payment I could handle. I paid 20% down.
I save close to 15% of my income each year. I pay my taxes without complaint. I do not carry a balance on my credit cards. I live within my means. In short, I am responsible.
And I've had it with the government propping up all the irresponsible people. Because of all the irresponsible people I'll be losing my job soon. I am not happy about that. I am not happy to see nearly $800 billion dollars--only about 10-20% of which is actual stimulus--added to the public debt in my name, while the bulk of it is actually to appease Democrat supporters and advance socialistic agendas. Frankly, the mortgage rescue is the least of my concerns.
I'm concerned about a government that seems to have lost its mind. I'm concerned about an administration that can't control its message or its people. I'm concerned about a future that not even the people who sold us this stimulus mess will go on record saying will get better soon.
And that's probably why I don't want to listen to Obama tonight. I'm already depressed. I don't need to feel any worse.
Friday, February 20, 2009
Clinton Thinks Obama Doing Fine But Needs More Optimism in Message
From ABCNews.com:
I'd argue on the "A" personally, but then I'm not Bill Clinton. But Clinton continues...
You're forgetting something, Bill. Add "listen to them and use their ideas" and you'll have a winner. Just inviting them isn't going to do the trick if they still feel it's only for show.
On the other hand, even that is more than the Congress Democrats have been doing.
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 and must keep pressure on Republicans who try to obstruct his plans.
I'd argue on the "A" personally, but then I'm not Bill Clinton. But Clinton continues...
"Look, the American people, I think, know the president has tried to reach out to Republicans," Clinton told ABC News' Chris Cuomo. "And it takes two to tango. I think there are some of them who really believe that just-say-no politics is good politics.
"It was -- briefly, only briefly -- in the '90s. It isn't anymore," he added. "So, sooner or later, I think if he just keeps chugging along, just keeps the door open, invite 'em to every economic conference, invite 'em to every meeting, eventually, he'll start getting some votes" in Congress.
You're forgetting something, Bill. Add "listen to them and use their ideas" and you'll have a winner. Just inviting them isn't going to do the trick if they still feel it's only for show.
On the other hand, even that is more than the Congress Democrats have been doing.
Tuesday, February 10, 2009
Eh? What's That?
A few days ago when the stock market was rallying the headlines indicated it was rallying in anticipation of the Stimulus Bill's passage and the Bailout Plan being revealed.
So how come today, when both actually occur, stocks are tanking? Even the headlines blame it on these events:
Stocks Tumble as Bailout Plan is unveiled (MSNBC).
At any rate, let me get this straight. Congress is looking to spend as much as $839 billion, and this bailout plan will cost $1 trillion? We're not talking about the same money, are we? Where is all this money coming from?! We're talking about a 10-20% increase in the national debt load here, folks!
According to this source, the total value of mortgages in the US is about $3.6 trillion. So we're already half-way to buying back every mortgage in America. In fact, as someone where I work was saying yesterday, why don't we do just that? Instead of all this crap they're proposing, why don't they pay off all the mortgages on primary residences?
Consider that. I'm currently paying about $800 per month on my mortgage. If I suddenly didn't have to pay that I would probably invest much of that and spend the rest on stuff. Both moves would stimulate the economy. Now multiply that by every mortgagee in America. That, folks, would be stimulus. Plus the banks would be able to close out the books on the bulk of their bad mortgages at the same time they'd see a massive influx of cash. That would free up credit.
Americans wouldn't have any mortgage interest to deduct on their taxes. Tax revenues would increase. Many people might just roll their current mortgage payment into buying up some of the depreciated and un-sellable houses currently on the market. That would stimulate demand on housing and raise property values again, further stimulating credit and the economy.
Yes, I'm sure I'm oversimplifying, and there would be other consequences (ie. banks also writing off good loans that would have earned the 100-150% returns over time, and perhaps inflation from the sudden supply of money when production is actually down), but I don't think it's any more lame-brained than what we're currently being force-fed. If we're going to put the country that far into debt, we may as well do something that increases the likelihood of getting back OUT of debt as soon as possible.
I don't see how my plan is any worse than what we're getting.
So how come today, when both actually occur, stocks are tanking? Even the headlines blame it on these events:
Stocks Tumble as Bailout Plan is unveiled (MSNBC).
At any rate, let me get this straight. Congress is looking to spend as much as $839 billion, and this bailout plan will cost $1 trillion? We're not talking about the same money, are we? Where is all this money coming from?! We're talking about a 10-20% increase in the national debt load here, folks!
According to this source, the total value of mortgages in the US is about $3.6 trillion. So we're already half-way to buying back every mortgage in America. In fact, as someone where I work was saying yesterday, why don't we do just that? Instead of all this crap they're proposing, why don't they pay off all the mortgages on primary residences?
Consider that. I'm currently paying about $800 per month on my mortgage. If I suddenly didn't have to pay that I would probably invest much of that and spend the rest on stuff. Both moves would stimulate the economy. Now multiply that by every mortgagee in America. That, folks, would be stimulus. Plus the banks would be able to close out the books on the bulk of their bad mortgages at the same time they'd see a massive influx of cash. That would free up credit.
Americans wouldn't have any mortgage interest to deduct on their taxes. Tax revenues would increase. Many people might just roll their current mortgage payment into buying up some of the depreciated and un-sellable houses currently on the market. That would stimulate demand on housing and raise property values again, further stimulating credit and the economy.
Yes, I'm sure I'm oversimplifying, and there would be other consequences (ie. banks also writing off good loans that would have earned the 100-150% returns over time, and perhaps inflation from the sudden supply of money when production is actually down), but I don't think it's any more lame-brained than what we're currently being force-fed. If we're going to put the country that far into debt, we may as well do something that increases the likelihood of getting back OUT of debt as soon as possible.
I don't see how my plan is any worse than what we're getting.
Friday, February 06, 2009
We Have Nothing To Fear But Fear Itself
Fear sells. We all know that. Salesmen especially. I've had salesman after salesman, selling vitamins to vacuums, use fear to peddle their product. Our environment is poisonous, and our food is losing its nutrition value. We need super-vitamins to survive. There are dustmites everywhere, and they'll kill you! Buy our vacuums. When people don't already have a need for something, create that need. Fear sells.
So what do you do if you're the candidate of hope and you've got a major expenditure to sell? Drop the hope, pump up the fear:
The lead story on MSNBC.com today is jobs: Worst Job Loss Since '74. Meanwhile the Dow is up 174 points. Wall Street has taken a nasty beating, so I don't know why they would be unduly optimistic at this point. But if you look over the last six months you'll see the markets have largely flattened out. We're bouncing around between 8000 and 9000. We've spent about four months in that range now. This would seem to suggest a bottom.
In short, things may be poised to start getting better. So act now, before the Democrats lose this golden opportunity! Pay no attention to the good news coming in. Things are BAD! Trust us on this! We're the politicians that, through our economic ineptitude, brought you this recession in the first place! We KNOW what we're talking about (this time)!
I've said it before. Now could very well be the time for our leaders to boldly stand up and do nothing!
So what do you do if you're the candidate of hope and you've got a major expenditure to sell? Drop the hope, pump up the fear:
"A failure to act, and act now, will turn crisis into a catastrophe."
-- President Obama, Feb. 4.
Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill. (Charles Krauthammer, Washington Post)
The lead story on MSNBC.com today is jobs: Worst Job Loss Since '74. Meanwhile the Dow is up 174 points. Wall Street has taken a nasty beating, so I don't know why they would be unduly optimistic at this point. But if you look over the last six months you'll see the markets have largely flattened out. We're bouncing around between 8000 and 9000. We've spent about four months in that range now. This would seem to suggest a bottom.
In short, things may be poised to start getting better. So act now, before the Democrats lose this golden opportunity! Pay no attention to the good news coming in. Things are BAD! Trust us on this! We're the politicians that, through our economic ineptitude, brought you this recession in the first place! We KNOW what we're talking about (this time)!
I've said it before. Now could very well be the time for our leaders to boldly stand up and do nothing!
I Can't Afford To Take That Job
Here's an angle on the economy I hadn't considered: Because of the housing bubble, people can't afford to move to where the work is.
More than one hundred thousand Americans have just lost their jobs. According to psychologists who study happiness, that is the most miserable experience many people will ever endure. Getting back to work is the best medicine. For thousands of workers and their families, getting back to work means packing up and heading to a new gig in a new town. But many will find it difficult even to consider a move. Because it's tough to sell a house you could never really afford in a town now bleeding jobs.
Tuesday, February 03, 2009
Show-me State
Megan McArdle addresses her commenters who claim it should be up to the opponents of the Stimulus to prove it won't work.
Her response:
Amen, Sister!
As I keep saying, this isn't about Stimulus, it's about "Getting Our Way--Finally!" It's not a recession to these guys. It's Christmas!
The Senate was supposed to inject some sanity into the bill. Instead they're injecting more spending. At this rate our only hope is that they get this thing passed and signed before it gets any bigger.
I applied for a job with a government contractor yesterday. I hope I get it, as the government seems to be the one industry that is NOT cutting back.
Her response:
Let's recall that the evidence for this kind of stimulus working in this kind of situation basically rests on a single instance (World War II)--the other two times it was tried (Japan in the 1990s and America in the 1930s) the economy basically rolled along in the doldrums for the rest of the decade.
Proponents say that that's because there wasn't enough stimulus, which is possibly true, but not really satisfying, because first, how do we know this package is enough, and second, that leaves us with a belief in the virtues of stimulus that is essentially non-falsifiable. We might as well move macroeconomic policy to the Office of Faith-Based Initiatives.
Amen, Sister!
As I keep saying, this isn't about Stimulus, it's about "Getting Our Way--Finally!" It's not a recession to these guys. It's Christmas!
The Senate was supposed to inject some sanity into the bill. Instead they're injecting more spending. At this rate our only hope is that they get this thing passed and signed before it gets any bigger.
I applied for a job with a government contractor yesterday. I hope I get it, as the government seems to be the one industry that is NOT cutting back.
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