Fundamental transformation

“We are five days away from fundamentally transforming the United States of America.” ~Barack Hussein Obama, Missouri, October 30, 2008

(Now with youtube video!) Fundamentally transforming America? Too bad the complete and total economic ruin of this country will be the result of this effort, but then you can't make an omelet if you don't break a few eggs, right?

Obama ran as a centrist, a moderate, a conservative even; and once again we see that if we don't know how the left has redefined a term we have no idea what they mean. He is decidedly not a centrist and certainly wants to conceal just how radical his agenda really is. We have seen a purposeful strategy of talking conservative and then doing liberal. All to what end?

The current economic free-fall is not unwelcome to the Obama administration, in fact, it may be crucial to their plans. It is the perfect opportunity.

Hillary Clinton:

BRUSSELS (Reuters) - Secretary of State Hillary Clinton told an audience Friday "never waste a good crisis," and highlighted the opportunity of rebuilding economies in a greener, less energy-intensive way. ~in.reuters.com

Rahm Emmanuel:
"You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before." ~allthenewsthatfits.wordpress.com

Obama:
Obama: Crisis is time of 'great opportunity'

WASHINGTON - As the dreadful economic news piles up, President Barack Obama challenged the nation Saturday to not just hang in there but rather to see the hard times as a chance to "discover great opportunity in the midst of great crisis." ~msnbc.msn.com


As Jonah Goldberg so perfectly illustrates:
Imagine a child falls down a well. Now imagine I offer to lend the parents my ladder to save her, but only if they promise to paint my house. Would you applaud me for not letting a crisis go to waste? Or would you think I'm a jerk?

I ask because I'm trying to come to terms with Rule No. 1 of the Obama administration.

"Rule 1: Never allow a crisis to go to waste," ~LA Times


Read the manual

Why is crisis important to a community organizer? Well, for starters, it's in the manual. Chicago radical Saul Alinski is the father of liberal 'community organizers' and Obama and Michelle are students and followers of his in Chicago. They've quoted him in their speeches and they have set about to do exactly as he has advised in order to 'transform America'.

The opening sentence of "Rules for Radicals: A pragmatic Primer for Realistic Radicals," by Saul Alinski:

"What follows is for those who want to change the world from what it is to what they believe it should be. The Prince was written by Machiavelli for the Haves on how to hold power. Rules for Radicals is written for the Have-Nots on how to take it away."

Alinsky describes his ideology as the, "Ideology of Change," and in describing how to bring about that change Alinski says, essentially, that the ends justify the means when "mass salvation" is juxtaposed against "personal salvation."
The practical revolutionary will understand Goethe's "conscience is the virtue of observers and not of agents of action"; in action, one does not always enjoy the luxury of a decision that is consistent both with one's individual conscience and the good of mankind.

...the third rule of the ethics of means and ends is that in war the end justifies almost any means.


Why am I quoting from Rules for Radicals? Because it is highly relevant and I believe that it is the blueprint for Obama's entire political career; indeed his entire campaign for president seems to be lifted from it's pages.

In little over a month Obama has begun the first step of his radical agenda by deepening the economic crisis. Spending a trillion dollars (in addition to and outside the annual budget) in the first month alone. That's twice as much as has been spent on the entire Iraq war over six years!

He has instituted Cap and trade, which is certain to drive energy costs to unimaginable levels. Far eclipsing any theoretical $13 tax cut for 95% of all Americans. Obama himself describes it as bankrupting Coal Power plants.

Facts, aides said, would be the cornerstone of the administration's public relations push. Officials faced a tough haul, even as Mr. Orszag and others said the proposal would raise taxes on wealthy Americans and increase energy costs.

Mr. Emanuel said energy costs are too low anyway. ~washingtontimes.com


He has outlined his economic policy as one of 'fairness', and pitting the rich against the poor, promising businesses and investors tax increases and punishment for profits.

His proposed budget for this year is $3.6 trillion dollars in addition to a trillion dollar stimulus and who knows how many other emergency spending bills.

Every time Obama releases details about his agenda the stock market goes down and he says he doesn't care. Why? Why would a President be completely unconcerned with the stock market plunging daily? It could be because he believes that the money in the stock market is in the wrong hands. And his whole plan is to put that money in the hands of those he thinks are more worthy.

To do that he must first prepare the battlefield. Soften up his targets.

--it is necessary to begin where the world is if we are going to change it to what we think it should be. That means working in the system.

There’s another reason for working inside the system. Dostoevski said that taking a new step is what people fear most. Any revolutionary change must be preceded by a passive, affirmative, non-challenging attitude toward change among the mass of our people. They must feel so frustrated, so defeated, so lost, so futureless in the prevailing system that they are willing to let go of the past and change the future. This acceptance is the reformation essential to any revolution. To bring on this reformation requires that the organizer work inside the system, among not only the middle class but the 40 per cent of American families - more than seventy million people - whose income range from $5,000 to $10,000 a year [in 1971]. They cannot be dismissed by labeling them blue collar or hard hat. They will not continue to be relatively passive and slightly challenging. If we fail to communicate with them, if we don’t encourage them to form alliances with us, they will move to the right. Maybe they will anyway, but let’s not let it happen by default.”


And this is the method of the first five weeks of the Obama administration's madness of presiding over the largest stock market decline in the history of the United States.

For the last seven or eight years the left has constantly harangued the country and accused the Bush administration of using crisis as a pretext for an imagined fascist takeover. Many even outright claimed that Bush caused/planned/executed the 9/11 terrorist attack in order to become a dictator. But what we are witnessing today is nothing less than a revolutionary coup.

I, for one, agree with Rush Limbaugh in hoping, even praying, that Obama fails in this attempt to radically restructure the American political-economic system. The mess we are in has nothing to do with an imagined lack of utopian social justice.

Posted by Eric Simonson at March 11, 2009 1:39 PM
Comments
Comment #277410

Eric writes; “I, for one, agree with Rush Limbaugh in hoping, even praying, that Obama fails in this attempt to radically restructure the American political-economic system. The mess we are in has nothing to do with an imagined lack of utopian social justice.”

Eric, make that two as I agree as well. I don’t believe that many who voted for PO understood his goals. As with Carter, we will see a one-term president whose departure will be applauded and one can hope his coattails will take many liberals (from both parties) down with him. Who will be the President Reagan of our time?

Posted by: Jim M at March 11, 2009 1:57 PM
Comment #277415

Jim M,

Who will be the President Reagan of our time?

I think this is the real problem Jim. I believe that the GOP has betrayed their conservative roots for getting to washington and then merely going into a holding pattern. They allowed spending to increase and never really reformed anything.

It’s now obvious though that having the GOP in power did slow down the Democrat agenda which we now see as runaway taxing and spending. I mean a trillion dollars in five weeks - this has to be a record.

This congress has spent a billion dollars an hour!!! -according to Mitch McConnell.

Posted by: eric simonson at March 11, 2009 2:21 PM
Comment #277421

Eric & Jim M,
What would you have voters do? You accuse the GOP of forgetting its roots while it was in power, and I think that holds true with the runaway spending. However, both of you favored the huge amount of military spending that was squandered on Iraq. There was nothing Reaganesque about invading and occupying Iraq. It became a poster child for the worst kind of nation building, exactly the kind of foreign debacle true conservatives always stood against. Ron Paul has consistently argued for conservative principles, yet he is treated by the GOP like a cook. Both of you have echoed so-called conservatives like Rush Limbaugh and other Bush cheerleaders, and supported the denial of Global Warming. I don’t know about either of you, but other so-called conservatives have opposed the teaching of evolution, as well as nearly every environmental initiative known to man. Conservatism is not anti-science, nor does it have to oppose to green technologies.

I am a liberal, and I come down hard on conservatives again and again. I’m always disappointed that true conservatives cannot articulate anything positive other than support for Bush, an anti-science bias, and an appalling inability to offer positive solutions for issues like health care and social security and a failing financial sector.

My goodness, it was only a few years ago ‘conservatives’ were advocating the privatization of social security insurance. Imagine the magnitude of the failure and suffering if that foolishness had succeeded!

At this point, the vast majority of Americans are ‘radical,’ and that should tell you something. You can sit back and hope the Obama’s policies fail, and the country suffers a horrendous depression. You can oppose all actions put forward by Obama and everyone else, and hope ‘the other guy’ loses his house and life savings so that people will somehow turn to you.

But don’t count on it.

Posted by: phx8 at March 11, 2009 2:56 PM
Comment #277424

Sorry, I can’t give up on him after just 50 days.

Obama is putting liberal ideas back into the political landscape after an 18 year “holding pattern.” If there weren’t a couple of war fronts and an economic crisis going on I think it would be a very healthy debate. As Newt said it’s time now, not 2012, for a generational debate of some very important issues.

But the left is over on their column blaming the Republicans for the sun coming up. And Eric you are over the top with all the radical stuff. Especially since it’s been, what, 50 days?

I’m sure you called Clinton a radical after his first 50 days too, but two years later he became one of the most effective Presidents we’ve ever had. The American political process still works, the sky is not falling, and Obama is not the Antichrist. Have faith in the process.

Posted by: George at March 11, 2009 3:13 PM
Comment #277428

phx8, George,

The absolute best thing that could happen is for Obama to actually be centrist, moderate, and bi-partisan and not attempt to push America into a radical social experiment that I believe will have drastic consequences for all of us.

Clinton did in fact change how he governed once the Republicans took back congress, he had to. Clinton would have never had welfare reform without Newt. I wish Obama had followed this model. But the congress we have now is the pelosi congress. A GOP congress would only be better in the sense that it would slow down the slide but not reverse it. This is the dilemna conservatives find themselves in.

Charlie Rose interviews Timothy Gietner says:

Towards the end [of the interview], the Treasury Secretary said that American capitalism “will be different” and the financial system too. huffingtonpost.com
Posted by: eric simonson at March 11, 2009 4:04 PM
Comment #277432

phx8 writes; “My goodness, it was only a few years ago ‘conservatives’ were advocating the privatization of social security insurance. Imagine the magnitude of the failure and suffering if that foolishness had succeeded!”

As I recall phx8, what was proposed was that those under age 50 could, if they wished, divert a max of 5% of their payroll taxes for SS into a private fund invested in equities. If we measure the loss that may have occurred at 40%, then the loss in the private part of their SS would be 40% of 5% which is 2%. You asked us to “Imagine the magnitude of the failure and suffering if that foolishness had succeeded” and I have done that for you. I hope you understand than none of those under age 50 year old’s would be retiring today…so how would they be affected today?

Measure that minuscule loss against the possibility of SS benefits being reduced in the future to cover losses, of SS eligible age being increased for the same reason and I believe you will find there is risk with every kind of retirement plan. When the market rebounds, which it surely will, the 50 year old who lost 2% today could gain many percentage points with the equity part of their SS by retirement age.

He also writes; “You can sit back and hope the Obama’s policies fail, and the country suffers a horrendous depression.”

You misrepresent my position. I am not sitting back and hoping we suffer “a horrendous depression” but rather, am doing all I can with my elected reps to prevent PO’s policies from being enacted. God help us all if our nation is hanging by a thread being manipulated by PO and the liberal congress.

phx8 also writes; “…the vast majority of Americans are ‘radical,’ and that should tell you something.”

If I believed what you wrote I would sink into great despair. I guess by “radical” you mean “liberal”…or am I mistaken? If you mean being liberal is a radical aberration I would agree.

Posted by: Jim M at March 11, 2009 4:11 PM
Comment #277435

Eric-

Clinton had 57-43 in the Senate and 258-176 during his first 100 days. Again, let the political process play out and have faith that the country’s will, and not the will of a few politicians, will ultimately ring out.

Posted by: George at March 11, 2009 4:22 PM
Comment #277438

Eric, just about the most counter-American spirit and anti-progress article I have read in a very long time.

Americans are noted for turning adversity into opportunity and even victory. And you side with these conservative talking heads denouncing such ambition? WOW!

When the nation is confronted with many pressing issues which will only worsen or become more costly with time, following the simple minded Republican prescription of one thing at a time so they can stay up, is a prescription for failure. And failure is what voters rejected by sending Republicans packing last November.

I am very sorry that those Republican talking heads and so called leaders you appear to cite as references aren’t able to keep up with a multi-tasking agenda, but, that is no reason folks with faster brains and greater abilities should slow down, you know.

Asking Obama to be more like GWB is not what voters intended, according to polls.

Posted by: David R. Remer at March 11, 2009 4:37 PM
Comment #277455

As for Obama, I think things are going along about as one would expect.

He is a bright young man, a bit nieve, articulate, and he is hearing no. Yesterday a top democrat said there were not enough votes to pass his budget!! Imagine such a thing.

Of course it’s predictable. He got the most vote at the ballot box but their are other legal (at least for now) ways to vote. With the top 5% owning the most shares of company stock they are voting right now!!

I think this will all workout fine over time. Once the markets send the message of “moderation in all things,” and Obama hears the message and changes course to a less radical agenda the economy will straighten out.

He is just new and nieve. You Democrats should look at Clinton’s first years when he was new and nieve. Remember Joycelyn Elders?

Posted by: Craig Holmes at March 11, 2009 5:34 PM
Comment #277462

I’m a bit naive about spelling.

Sorry.

Posted by: Craig Holmes at March 11, 2009 6:11 PM
Comment #277468

Craig,
“I think this will all workout fine over time. Once the markets send the message of “moderation…” and Obama hears the message and changes course to a less radical agenda the economy will straighten out.”

I wish that were true, but I really doubt it. Sometimes there are situations that are so bad, problems so serious, that no agenda will make it better. We’re living in such a time now. The financial sector lost trillions-trillions- in mortgage derivatives (aka toxic assets). Nationally and internationally, They may have lost as much as all the equity and real estate markets in the United States combined (about $21 trillion). It’s that bad. AIG alone lost several trillions. Accounting rules have been changed to prevent immediate bankruptcy. By normal standards, 8/24 of the largest banks may be insolvent.

The financial sector assumed real estate would never go down in value, and they rewarded themselves handsomely for making that assumption. Now the results of that bad bet continue cascading through the economy.

Personally, I find it hard to get excited about foreign affairs or a ‘radical’ or ‘liberal’ agenda when, if this keeps up, I might face the loss of my house and my job. A corporation with deep pockets stepped in and bought the company I work for, so I’m safe for now, albeit at a salary 40% less than I’m used to making. Well, I won’t go on about my own problems. In most respects I’m very fortunate. It’s just that I think this might awful economy might go on for years, and that is might be beyond the control of any politician.

Posted by: phx8 at March 11, 2009 7:30 PM
Comment #277469

David,

It is anti-progressive, but anti-american?

The American people didn’t vote for socialism. Weren’t we told during the election that any such charge about Obama was a baseless political attack?

So what is the change that Obama campaigned on? No one knows. Except now we are getting the picture as it rolls out. Capitalism must go.

Partisanship aside David I don’t want to watch this country become a third world nation in the name of progress.

phx8,

We are looking forward to expanding the role of government in the economy by an unprecedented amount. That means less private investment, less private business and more government run and directed investment and business. Does that ever turn out well?

Posted by: eric simonson at March 11, 2009 7:50 PM
Comment #277470

Eric,
Does it ever turn out well? Sometimes. That’s a very broad topic. Large infrastructure projects funded by government, projects too large in scope for private business, can work out well.

The big question involves nationalization of the financial sector- not the smaller banks and credit unions, which have done pretty well, but the largest corporations- anyway, it involves whether nationalizing those would work. Letting them instantaneously fail would be catastrophic. Most solutions involve a kind of ‘temporary’ nationalization. No one wants that, not liberals, not conservatives, I mean, no one wants that. But we’re stuck.

Personally, I would not mind letting GM go down, as long as it could be broken up in a slow and orderly fashion, with assets sold to healthy car makers… Again, instanteously letting a corporation that large dissolve would be bad for everyone.

Sometimes there really just aren’t good choices…

Posted by: phx8 at March 11, 2009 8:07 PM
Comment #277476

phx8,

I’m always disappointed that true conservatives cannot articulate anything positive other than support for Bush, an anti-science bias, and an appalling inability to offer positive solutions for issues like health care and social security and a failing financial sector.
Gee, thanks. Nothing like an ignorantly aimed kick in the face. You ought to read some of Newt Gingrich’s recent work, or maybe some of mine.

Am I a global warming “denier”? I am heartily dismissive of so-called scientific “consensus”, the sort of cretin nonsense that kept geologists from accepting continental drift for nearly three quarters of a century. Consensus it a lazy scientist’s science. Studying mechanisms and knowing when one is whistling past the graveyard to ignore them is another. A lot of mechanisms are at work in the Earth’s ecosystems and we are a long way from even knowing what all of them are.
That said, the mechanisms we do know point strongly to the possibilty of human influences warming global climate.

You will see, even in comments written today, my harsh criticism of the Bush administration. It is not ever a blanket criticism, however, just as you will note that my criticism of Obama policies in my most recent article is also not blanket criticism. You will find this to have been true of numerous conservative commenters nationally as well. Many of them even voted for Obama.

There are numerous proposals for positive change in health care that look far less like comrades instituting a medical dictatorship so they can live high off our medical needs than Democrat proposals do. I personally have favored a central payer system not unlike that in France with protections for physicians against unnecessary tort risks balanced by medical boards made up of both medically aware civilians and physicians capable of ending a doctor’s career for cause. Such a system would be fiercely opposed by Insurers, by lawyer’s groups, and by some employee groups because they know they leach off our medical dollars while not adding anything to the delivery of medical care.

The proposal to invest social security returns was, and is today, a brilliant idea. EVEN IN LIGHT OF THE CURRENT CRISIS this remains true. That’s because all the money that exists in the social security system today is made up of the “full faith and credit” of the United States government. Tere is, in othere words, nothing there by full faith and credit, exactly, EXACTLY what was in Bernie Madoff’s investor’s coffers a year ago. Had the money in Social Security been invested in the stock market twenty years ago it would be worth today twice what it was worth then, even after the recent fall, whereas all of the money supposedly socked away then has been paid to recipients and to cover deficits, etc.

Full faith and credit is a load of crap not made more intelligent by the fawning hypnosis of the masses. Just ask Bernie’s investors.

Failing financial sector?
Quit telling the sector how it must apportion risk to people who lie and can’t pay.
Design regulations to require those who make decisions on risk to have their own money in the game.
Outlaw interlocking corporate boards in which members of a board of one company can scratch their friends backs from their postions on OTHER boards.
Outlaw compenstaion by bonus on profits unless some substantial portion of the money can be taken back because of losses later.
Allow prices to fall to realistic levels in former bubble markets.
Have the decent good sense to recognize people you demonize as “rich” have lost a lot of value in the markets. 45% of the market capitalization of the whole world (an abstraction) has evaporated in the last six months, but the means of production (something real) are still there. People can resume a normal economy as soon as they can accept their value losses. Politics does not play a productive role here because it is consumed with trying to avoid the realignment of values that must happen.

Posted by: Lee Jamison at March 11, 2009 9:20 PM
Comment #277479

Well said, Lee.
I take you far more seriously than I would ever take Newt Gingrich.

Posted by: phx8 at March 11, 2009 9:56 PM
Comment #277485

Lee
I am shocked and delighted to hear you favor the French type ,single payer, medical delivery system. I am with you.It is the best system modal we could adopt. It also offers a high level of quality. Beyond what you mentioned,tort protections and freedom of medical decisions etc, the French also provide free medical school. The academic competition to get in is fierce but the schools are free. This insures quality doctors that do not have an enormous debt load after they graduate. The proof is in the pudding. The level of care ,according to some studies, for the average Frenchman is better that the care for even wealthy Americans. The cost per GDP is far less than we pay. The life expectancy of the French is higher and other indicators of a functioning health care delivery system ,like infant mortality rates are far better under their system. Yes, it is socialist but yes,it works. High time we started pursueing practical solutions as opposed to those that are politically correct from either end of the spectrum.

Posted by: bills at March 11, 2009 10:49 PM
Comment #277486

bills,

The French system is socialist to the extent that payment is socialized and education and many facilities are as well. The same could be said about much of our own system, so what nits do we conservatives pick?

Doctors, though, are for the most part independent contractors. They can have a private practice, something becoming almost impossible in the tort-happy U.S. They can safely serve in small communities, again, very hard here in the U.S. Finally, they don’t have to have a staff of twenty to deal with insurance and legal paperwork for a single Doc.

In France most of the money one spends for medical care pays for medical care. What a concept!

Posted by: Lee Jamison at March 11, 2009 11:14 PM
Comment #277487

Lee
Indeed what a concept!I am having trouble catching my breath. Is this really what the vaunted”common ground” feels like?
I think we need to start moving quickly on improving the afforability of medical trainning. Some improvments are included in the current budgeting but more should be done. Medical school is now more of a financial investment than a calling. We should start soon as it takes years to train doctors and time is wasting.

Posted by: bills at March 11, 2009 11:44 PM
Comment #277488
I, for one, agree with Rush Limbaugh in hoping, even praying, that Obama fails in this attempt to radically restructure the American political-economic system. The mess we are in has nothing to do with an imagined lack of utopian social justice.

Somebody needs to have the balls to restructure this economy. It’s not going anywhere anytime soon by itself. The Republican’s curtailment of enforcement and co-opting and even outright prohibition of regulation (as is the case with derivatives) has created an economy where the market is so God-forsakenly complicated that nobody can make a rational decision about what to do with all the bad investments.

If that doesn’t call for a restructuring of how we run our economy, then we’re not prepared to learn from our mistakes. And as mistakes go, at best this will be the second worse economic catastrophe in US history. Behind that other mistake that the Republicans never truly learned from. You know, the Great Depression.

For the last seven or eight years the left has constantly harangued the country and accused the Bush administration of using crisis as a pretext for an imagined fascist takeover. Many even outright claimed that Bush caused/planned/executed the 9/11 terrorist attack in order to become a dictator. But what we are witnessing today is nothing less than a revolutionary coup.

Those damn liberals. Why I ought to… Wait…

Seriously, though, this is a pretty obtuse argument, and “many” is a very relativistic word to use. I would tell you that most Democrats do not believe that 9/11 Truther BS. Even folks on Daily Kos will shoot that crap down.

But as for fascist behavior? Well, let’s leave labels aside.

If you had talked to me ten years ago and said:

“Stephen, your government will set up equipment to monitor all America’s communications, and spy on US citizens without warrants. Your government will actually try to revoke Habeas Corpus on a citizen. It will become known for torture. Oh, and by the way, people will conspire within the government to hype their way into a war.”

I would have asked what apocalyptic literature or sci-fi novel you got your hands on. I can’t tell you how many times my jaw was dropped by the behavior of the last administration, and their insistence on rationalizing it all.

Whatever you call, the last Administration was taking us away from our country’s roots, it’s foundational ideas. It was too unaccountable, too quick to come with reasons to believe it deserved and needed more power. I think when people like you hype up these economic reforms Obama’s doing as a kickstart on the way to communism, you’re trying to push down the scales on the other side so people believe that Liberals are at least as radical as you folks with power.

Most Americans, though, aren’t buying it.

You say, “And this is the method of the first five weeks of the Obama administration’s madness of presiding over the largest stock market decline in the history of the United States.” But more than eighty percent of Americans believe that Obama inherited this trouble. And give the fact that few of his policies have actually taken effect, there’s little rational reason to blame him. Did you think that the economic catastrophe stopped developing in its implications as Bush left office?

Every time Obama releases details about his agenda the stock market goes down and he says he doesn’t care. Why? Why would a President be completely unconcerned with the stock market plunging daily? It could be because he believes that the money in the stock market is in the wrong hands. And his whole plan is to put that money in the hands of those he thinks are more worthy.

There’s no rational link. At best, for your argument, people in the financial sector are panicking at the thought of regulations that haven’t even come into effect. At worst, there are dozens of confounding elements in the economy going on right now, of which Obama’s statements and announcements are like a stone thrown into a raging sea.

You can speculate on what could be, but you can’t build an argument worth any respect on it. Either way, we’re dealing with counterfactuals here: The notion that markets directly follow the sentiments of our leaders in any lasting, meaningful way, and the notion that what traders think about what happens today is an accurate reflection of the true consequences tomorrow.

It’s not as if those traders on Wall Street are truly so precognitive. These last few months have proven the case otherwise.

I’ll answer more of your post later. See you then.

Posted by: Stephen Daugherty at March 12, 2009 12:00 AM
Comment #277493

Eric Simonson-

He has outlined his economic policy as one of ‘fairness’, and pitting the rich against the poor, promising businesses and investors tax increases and punishment for profits.

The irony is, the budget you blast carries with it hundreds of billions of dollars to payoff the mistakes of the rich. You know, the people who did the exact opposite of profit? I saw a cartoon the other day, where a guy made your argument about punishing success, and his wife says “What success?”

And these are the people we’ve been “rewarding” for their success, with one tax cut and tax break after another. And whose success do we really need, anyways. I didn’t hear much from Republicans about rewarding the middle class’s success! No, we should only reward those who’ve already gotten most of the rewards.

Republicans like to remind all the rest of us ingrates that the Rich are paying most of the taxes. Well, you know, that’s sort of a self-inflicted fate when you’re making most of the money. Should the middle class be paying taxes out of proportion to their earnings so the rich can pay taxes in proportion to their numbers? My lord, you’ve discovered the heart of fairness in this argument, haven’t you?

I guess if the rich are so sick of carrying everybody else on their backs, they should just decide to forgo the benefits of government, so they won’t have to pay the costs. A modest proposal, no?

He has instituted Cap and trade, which is certain to drive energy costs to unimaginable levels. Far eclipsing any theoretical $13 tax cut for 95% of all Americans. Obama himself describes it as bankrupting Coal Power plants.

Oh, so certain! This is the market-based solution to limiting carbon emissions. We gradually raise permit prices, and this eases us onto renewables, wind, solar, and other alternatives, instead of having everything dropped on industry by government regulation. But of course, we can forgo that, and just stick with the status quo… which isn’t going to stay the status quo. Even if Global Warming doesn’t come to pass, our main energy sources are going to diminish, and the market’s going to make them more expensive.

Expensive in a way that make switching over exponentially more difficult. The market defines the consequences for our actions better than it defines the solutions. The solutions people come up with on their own.

But the market is not the only way to define consequences, nor always the best one. The market can sometimes be like the cliques in elementary, middle and high school, where kids do spectacularly stupid things because the others in the group are doing these things and gaining pleasure or reward from it. Well, sometimes, the other kids are jumping off the Brooklyn bridge, and you need a mature adult element to society that just flat inhibits bad behavior. And no, I’m not speaking of them doing this from some paternalistic superiority; this will be America, as a society deciding what it will tolerate and not tolerate. That is the system the founding fathers wanted, not one where a powerful aristocracy, formal or de facto, makes all the important decisions.

Posted by: Stephen Daugherty at March 12, 2009 8:19 AM
Comment #277494
This is the market-based solution to limiting carbon emissions.

Which has failed to work wherever tried and ends up hitting the poor and middle class the hardest.

Posted by: Rhinehold at March 12, 2009 9:06 AM
Comment #277499

Eric, I’m disappointed.

The best you can come up with is a 9-11 type conspiracy theory?

Radical Obama is going to destroy America. Of course, this neglects the fact of who created this economic chaos.

A little more creative thinking and you can throw in more than class warfare, you can follow Mark Sanford’s lead and throw in race warfare as well.

You’ve really got to go to work to get back to your old form.

Posted by: gergle at March 12, 2009 11:53 AM
Comment #277504

bills,

Medical school is now more of a financial investment than a calling.
I have to disagree with you there. No AMERICAN medical student goes into medicine entirely for the money. That would be either an utterly stupid decision or an utterly uninformed one.

I have cousins in San Antonio whose father was a neurosurgeon. Of the five of them none went into, or even considered, medicine and three became lawyers. (Though one of them quit that so he could live with himself…)

What they saw was a good man who worked 90 to 100 hours a week, was always on call when he wasn’t in a foreign country, and was constantly in peril from lawyers who, in spite of his being a technical virtuoso, always saw him as a potential well of money.

When he died well over a thousand people attended his funeral, many, many of them people alive because of him.

A system is badly broken when it dis-inspires people from following in such footsteps.

Posted by: Lee Jamison at March 12, 2009 12:47 PM
Comment #277511

And here I though we were 5 days away from eliminating the last vestige of fundamentalism from the previous administration. :-)

Posted by: David R. Remer at March 12, 2009 1:44 PM
Comment #277512

Lee said: “I have to disagree with you there. No AMERICAN medical student goes into medicine entirely for the money.”

Have you interviewed them all, Lee to verify that statement? I know one Med student who went into med school for the access to drugs and the money of course. I never saw that guy straight. He studied medicine stoned on his ass on pot, and used uppers in the morning to get through the day. He was in his final year before internship. Very, very capable student. I know very few who could have gotten through med school stoned most of the time. I lost track of him before he graduated but, I can assure you, if I ever meet this doctor, he would NEVER see me, or mine, as a patient.

Posted by: David R. Remer at March 12, 2009 1:49 PM
Comment #277513

Eric asked: “It is anti-progressive, but anti-american?”

Eric, I said: “counter-American spirit”, not anti-American. It helps if we respond to what others write, not what we wish they wrote to make responding easy as a knee-jerk.

Care to rephrase the question for accuracy?

Posted by: David R. Remer at March 12, 2009 1:53 PM
Comment #277514

phx8 writes; “The financial sector lost trillions-trillions- in mortgage derivatives (aka toxic assets). Nationally and internationally”

I wonder if someone could help us understand where those “trillions” wound up? Who is holding all this money? Or, was it simply misplaced? Did a bad accident occur with a Brinks Armored Truck carrying all this loot and it was burned up?

I will go back to my question of a few weeks ago. If I loan a dollar to a family member and he/she loans it to another family member and so on thru six family members and the final recipient of that original loaned dollar defaults on the debt how much has the family lost? One dollar or six dollars?

Posted by: Jim M at March 12, 2009 2:13 PM
Comment #277515

Lee Jamison-
I’m not one of those people that thinks that sleep deprivation makes for better healthcare.

Eric Simonson-

In little over a month Obama has begun the first step of his radical agenda by deepening the economic crisis. Spending a trillion dollars (in addition to and outside the annual budget) in the first month alone. That’s twice as much as has been spent on the entire Iraq war over six years!

Whose cost was kept off the books until Obama put them on the books, for the first time. More to the point, he’s doing this to deal with the economic crisis Bush left behind. Is this a deepening of the economic crisis? No. The cost is not immediate, unlike the cost of letting Lehman Brothers fail.

As far as Saul Alinsky goes, a lot of this conjecture of yours is based on a line Michelle Obama used, saying that there is “The World that is” and “The World That Ought to Be”, and that we have to fight for the world that ought to be…

And I’m thinking this sentiment is so damn generalized and vague a connection to radicalism that its not even funny. Hell, even you Republicans could agree with it if you weren’t so busy trying to smear the Obama’s with it. Any politician with half a brain will take the opportunity to push their agenda when the chance presents itself. Why Obama should be expected to carry out your wishes is an unclear question.

The current economic free-fall is not unwelcome to the Obama administration, in fact, it may be crucial to their plans. It is the perfect opportunity.

Opportunity? Yes. Fraught with danger, though. Bush had already provided a much more safer opportunity, through his failures, that Obama could have easily utilized. He didn’t need the added tension of dealing with an economy falling down around his ears.

Obama ran as a centrist, a moderate, a conservative even; and once again we see that if we don’t know how the left has redefined a term we have no idea what they mean. He is decidedly not a centrist and certainly wants to conceal just how radical his agenda really is. We have seen a purposeful strategy of talking conservative and then doing liberal. All to what end?

He ran with a more liberal agenda than any man for a long time. He just made it sound more centrist, more moderate, even more conservative. Look down the list of his promises. He’s fulfilling them. Any decent observer of Obama’s campaign will note his consistency on this count. Maybe you just didn’t expect Obama to do what he promised. That’s not my problem.

“We are five days away from fundamentally transforming the United States of America.” ~Barack Hussein Obama, Missouri, October 30, 2008

(Now with youtube video!) Fundamentally transforming America? Too bad the complete and total economic ruin of this country will be the result of this effort, but then you can’t make an omelet if you don’t break a few eggs, right?

Good thing you went into the future with your time machine to check in on things for us. Otherwise, we’d be restricted to making vague statements about the future based on personal prejudice.

I could just as easily say this, though:

Fundamentally transforming America? Too bad the complete and total economic ruin of this country was the result of this your effort, but then you couldn’t make an omelet if you didn’t break a few eggs, right?

A few eggs. Like worker’s wages, pension, healthcare. Like the domestic automotive industry. Like the banks, as Richard Shelby in the Senate might like. Like the ability of people to invest, even professionals, with some kind of notion of what they’re getting into, instead of trying to second guess an unstable market of poorly managed risk.

Republican Policy and Politics gave Obama this opportunity, by so destroying people’s faith in themselves and demonstrating themselves so harmful to the economy that people are willing to accept even the alternatives you’ve had them rejecting for the last thirty years.

I’d say thanks, but unfortunately, the rest of us have to live with the consequences of your actions; we’re the eggs that got broken. To bad, though, that the yolk’s on you.

Posted by: Stephen Daugherty at March 12, 2009 2:36 PM
Comment #277517

Jim M-
It didn’t go anywhere. It was never anywhere to begin with. It was fake economic productivity, which we now have to replace with real economic productivity.

Put another way, the mortgage securities were based on the idea of selling off the risk, with the buyer gaining the value of all the payments that would come in for those mortgages, which would increase the value as the market increased the value of home prices.

Only thing was, housing prices weren’t justified, so all the appraisals went south. Suddenly what seemed to be worth so much money wasn’t worth as much. That killed a lot of speculators right off the bat, which helped get a nasty ball rolling in the mortgage market.

You see, part of what the mortgage brokers were selling off were these inflated mortgage values. They’d get people to sign, the mortgage would be worth this much, and that worth would be wrapped up with the worth of other mortgages in that neat little bundle.

But if somebody couldn’t pay? Well, before the collapse, that was okay. The idea was you could keep on passing around the mortgage like a hot potato, and let somebody else drop it. Now the lenders have to deal with a bunch of hot potatoes they can neither afford to drop, nor pass to somebody else. That sudden reality check in the mortgage market had a ripple effect on all the businesses and derivatives based on them.

The problem is, this phantom economic growth was allowed to so dominate the financial industry that many of their assets are either crap, or worse so complicated in their structure that it could take a long time to figure out just what their assets are worse.

Short takeaway is, these people were trying to cheat everybody about how productive they really were, and they outsmarted everybody, including themselves. Result? We’re in deep crap and have no solid idea just how contaminated that crap is.

Posted by: Stephen Daugherty at March 12, 2009 2:49 PM
Comment #277528

Stephen,

“Somebody needs to have the balls to restructure this economy.”

Sadly, that’s what’s gotten us into this predicament in the first place. Obama is merely attempting to accelerate the slow process toward this end that we’ve been on for the last fifty years.

The GOP’s failure was not that they succeeded in making the economy a pure free market (ideologically or practically), their failure was in only slowing (part of the time) the slide toward more and more collectivist policies. We have been the proverbial frog boiling slowly in the pot for some time.

The argument that the free market is to blame here is entirely lacking any support, facts, or reason whatsoever. Further, to declare that we must restructure the economy to reflect the opposite of a free market is actually a welcome admission, but it is also the definition of what you refer to as ideological dogma.

Can you tell me what role congress and the quasi-governmental (very much like being half-pregnant) entities of Fannie Mae and Freddie Mac played in the housing crisis? Which is also by necessity then a banking crisis.

If, the problem was caused on the whole through government attempting to skew the market then further efforts in the same vain are likely to produce the same or worse results.

Free markets are not God. They’re not perfect. They merely represent the aggregate decisions, beliefs, and actions of everyone participating including the government. But even governments cannot change the reality of costs through fiat.

When we mask the true costs we will eventually pay the price.

Posted by: eric simonson at March 12, 2009 6:22 PM
Comment #277533

phx8 wrote; “The financial sector lost trillions-trillions- in mortgage derivatives (aka toxic assets). Nationally and internationally”

I asked the forum…where did these trillions of dollars go…who has them now?

Daugherty responded by writing; “Jim M-It didn’t go anywhere. It was never anywhere to begin with. It was fake economic productivity, which we now have to replace with real economic productivity.

We now have two opposing views, trillions lost and unaccounted for and the trillions of lost dollars never existed.

Hmmm, who shall we believe? Should we try to find the missing trillions or should we try to replace the trillions that never existed in the first place.

Posted by: Jim M at March 12, 2009 7:16 PM
Comment #277536

Jim M-
The key thing here is the failure of the participants in the market to properly value their assets, and in certain parts of the market, their inability to determine the value of the assets at all.

Somebody sells you a parcel of land at a certain value, and you find out there’s a toxic waste dump on it, you know the value has just dropped considerably. Other people in the market, once they find this out, know to avoid buying your property, at least at a certain value.

People make decisions about the value of assets every day.

The value of the assets the banks hold is a key concern. Some of these assets consist of what were basically insurance policies held on certain debts. The principle debts at the center of this collapse were Real Estate Mortgages. The value of those mortgages depended on whether there were people paying them off.

It also depended on the future value of the mortgages not yet put into the secondary market. Companies were doing their best to inflate both the value of the mortgages and to hide critical information as to risk of the mortgagee’s default.

They would inflate the value of the property sky-high, or choose naturally expensive properties so as to have the biggest possible note to sell off into the secondary market. When it it went there, it was somebody else’s problem what the property was really worth, and whether they were a credit risk.

Everybody sold to everybody else, so naturally, nobody felt like getting a reality check.

Even so, investors were looking to keep their shirts, so these mortgages were supposed to be divided up according to the homeowner’s risk. That way, if you wanted nice, sedate steady earners that wouldn’t default, you could put your money into that. Or, if you wanted to live dangerously and accept the risk, there was THAT market, which carried higher premiums, to reward the risk takers.

Trouble is, those risk takers were not a big enough customer base to sustain the market the way the folks in the financial business wanted them to. So, they essentially committed financial fraud, laundering the risky stuff with all kinds of things, like the infamous Credit Default Swaps, to where the risky crap got mixed with the steady crap in a way where it was difficult at the very least to separate one from the other.

The difficulty comes in the way the accounting was done. Essentially, the idea was that a mortgage was a valuable thing that once originated, could then be sold to somebody else. You could look at a mortgage arm as a short term engine of profit, instead of a long term investment. Also, the value of their assets, including mortgage securities was dependent on the market’s evaluation of them.

Think of it in terms of stock. It could be worth a lot if you sell high, but if the prices is brought low, your asset suddenly isn’t worth so much.

But there’s something worse than that: Imagine, if you will, that you simply don’t know what it could sell for. Yeah, that’s right. Is there a toxic waste dump on my land or not? Can I sell high, or do I have to sell low, if at all?

And now you have big banks, who has huge exposures to this market, and their ability to lend, or to even avoid bankruptcy and being dissolved, depends on dealing with these assets, which are now obviously worth far less in many cases than their original value.

Oh, you ask, shouldn’t we let them fail?

Well, if they do, who will take the place, and on what timeline? A relatively minor bank collapse, that of Lehman Brothers, was more or less the flashpoint for the economic collapse we’re going through right now. When a bank fails, it too has creditors, folks who were getting paid back by the banks as long as they were solvent. When they go under? So do many of their creditors, and those who don’t still feel the loss.

Is this capitalism and free markets, or institutionalized financial fraud? I believe in free markets, where the government doesn’t engage in heavy duty price controls. But I also believe in a market which is governed, where fraud is discouraged, where people rate risks properly and and make diligent, truthful disclosures, where environmmental sustainability is mandated, and where the market is given the chance to do what it does best: express people’s informed choice about the products and services they offer and they buy.

Posted by: Stephen Daugherty at March 12, 2009 9:54 PM
Comment #277541

Eric Simonson-

The argument that the free market is to blame here is entirely lacking any support, facts, or reason whatsoever. Further, to declare that we must restructure the economy to reflect the opposite of a free market is actually a welcome admission, but it is also the definition of what you refer to as ideological dogma.

Did I say one damn thing about creating THE OPPOSITE of a free market economy? Talk about lacking support. Where’d you pull that conclusion from?

The whole problem here is that you’re confusing a term that once meant an economy that did not have soviet style price controls, with a term that has come to mean, through years of political rhetoric, an economy unregulated or regulated in a friendly way by the government.

This is not an argument between those who embrace the free market, and those who don’t, this is an argument between people who have very different ideas of what constitutes a free market.

I believe that a market must have its own set of laws, like any other part of society. Somethings, people dependably police themselves on. Other things, people get greedy enough about that the law must be in place to add extra disincentive, and to shape the means by which these typically government chartered enterprises operate.

There will always be those who cheat the system and get rewarded. There will always be those who look on and encourage those who cheat the system, to do more of this profitable misbehavior. There will always be those who, faced with competing with these people, cheat as well, just to keep up.

People use evolution for a paradigm, but don’t realize that evolution is natural selection within an environment. Parasites and symbionts alike exist, and if we’re not careful, we make a good environment on Wall Street for parasites.

What do you expect, relaxing accounting rules, keeping derivatives unregulated? Congress and the presidents for the past couple generations did a lot to make it easier for corporate boards and executives to lie to their investors. They made it more difficult for those in charge of enforcement to do their jobs.

We made it easier to make money by pretending to make money and having other people hand you money believing they’ll get a piece of that action. That’s not capitalism, though, that’s a con game, and we’re lucky the economy’s lasted this long with such a system in place.

That, for your information is what I am interested in restructuring against. Not capitalism. I enjoy capitalism, and hope to be very wealthy one day. Not free markets, since I have no desire to see government determine every price. I agree with those who say the market should do most of the determination of those prices.

What I can’t stand by and consent to is a system that institutionalizes financial deception, because the results are always the same, as I explained to Jim M.: the wealth they create just disappears as the truth becomes known.

A good free market economy, a good form of capitalism essentially can survive this one question: “what the hell is this thing I’m holding worth?”

If somebody can’t ask that question about a broad range of assets within the economy without precipitating an Enron collapse, a dot-com collapse, or a collapse like this one, then the market is essentially non-functional, because the whole point of such a market is to determine such values in a valid, truthful way, so that our consumption of such resources can be properly managed.

If you want our economy built on a house of cards that collapse at mere whispers and suspicions, that’s your business. I want something where the system is quite a bit more robust, and more transparent. That’s what I mean by restructuring.

Posted by: Stephen Daugherty at March 12, 2009 10:36 PM
Comment #277550

Stephen,

That’s the real issue though, isn’t it? How do we determine what something is worth? It is worth what someone else is willing to pay for it and someone is willing to sell it for. Fair Market Value. Unfortunately, in a response to Enron, we changed those rules and required Mark to Market accounting, which has caused the extent of this ‘crisis’ to occur. Had we been dealing with FMV accounting principles we would have had a small slowdown as the fallout of the ARM’s resetting made its ripples through the economy and we could have identified issues with the toxic mortgage market and resolved them in a thoughtful process. Instead, Democrats in charge of congress stuck to their guns and wouldn’t change anything (partly because they didn’t believe it was necessary and partly because it helped them win an election for president which they were losing at the time).

Thankfully, they finally get it. I listened to the hearings yesterday and I was happy to hear that the entire banking committee was in agreement that something needed to be done and they wouldn’t let it go on for long. The pressure they put on to get an agreement that changes would be done in 3 weeks or less, rather than the months it was argued it should take, was impressive and I applaud them, even Barney Frank (written with a small grimace), in FINALLY getting on board. In fact, it is a large reason we saw a huge uptick in the market yesterday.

What I find interesting, though, is that you write a column about how things are worse than we think they are and the administration comes out yesterday saying that things are better than we think they are after saying incorrect negative things about the economy for the past year…

It’s obvious that ‘we’ (the citizens of the US) are being played. Knowing that the schools they use to keep the citizens uneducated about finance and civics are working the politicians know that they can herd people to whatever opinion they want them to have, using fear and sounding ‘smart’ while they are flying by the seat of their pants to gain power and string us along about how we NEED them and they are better at running our lives than we are. The entire political system is right now set up to be “How can we get more of someone else’s money without giving up our own”. And that is the real sad state of our economy, much more so than toxic mortgages, and something that I have seen no change with in this administration over the last.

Posted by: Rhinehold at March 13, 2009 6:53 AM
Comment #277551

Rhinehold-
Enron WAS mark to market accounting. It’s been standard for some time now. It was the industries choice, not forced on them by government. They lobbied for this, because it meant they could treat future profits as profits for the near term.

I can only read and listen bewildered as people like you flatly blast the same policies many of your same people fought for, in the name of getting the government out of the way of the economy. Bush hired Harvey Pitt to help clean up Enron’s mess, years after the accounting companies hired him to push mark to market accounting. I don’t doubt Democrats were involved, but it’s not standard populist line, if you understand.

What I find interesting, though, is that you write a column about how things are worse than we think they are and the administration comes out yesterday saying that things are better than we think they are after saying incorrect negative things about the economy for the past year…

I think me and Obama are talking about two different things. Obama was saying that appearances can be deceiving, that things can be worse than they look (the example given is the boom period before the crash) and better than they look. I was saying that Republicans and folks on the Right are in something of denial about just how serious the economic situation actually is. I quoted the author of the entry above basically saying the economy hasn’t collapsed yet, in spite of the stock market losing half it’s value and key economic indicators falling in a way that they haven’t in almost three decades.

My sensibility is that cynicism and naivete both get in the way of a healthy relationship between Americans and their government. Cynicism, as edgy and cool as it might seem, often lets one waste potential allies in getting things done. I don’t expect Washington to always work, but when somebody comes along who can actually get things done, I’ll support them.

Posted by: Stephen Daugherty at March 13, 2009 8:07 AM
Comment #277555
many of your same people fought for

My people? Again, you attribute things and argue against them. If it makes you feel better I suppose…

But I have been against most of what the Bush administration did in the financial area, especially their reactions to Enron and the implementation of SOX. As I stated, I didn’t agree with them on those and this administration seems hell bent on continuing that sort of thing.

Posted by: Rhinehold at March 13, 2009 8:43 AM
Comment #277556

Eric,
I have to wonder how a stock market drop from 14000 to 9000 is less than a stock market drop from 9000 to 6500 for the math just does not add up.

And why I am glad to see that Jim M. and you agree with Rush that President Obama should fail, but explain to me how in doing so you are not surrendering to Bin Laden and Al Qaeda? For why your teaching may have lead you to believe that America cannot build a sustainable world, are you willing to tell your children that they should not have the same Guaranteed Civil and Constitutional Rights as you or their Grandparents. For short of starting the 3rd Generational Discussion asked for by Newt Gingrich on Meet the Press and exposing how stupid Rush statements are I do believe that you need to ask your children and grandchildren what their Generation believes about making Every America Economically Viable and Financially Independen.

For why I will not answer for them if your motivation is money than explain to me how I can make Every Human on Earth a million dollars a year and Rush is stuck in the 60’s when only the Old White Man had money.

Posted by: Henry Schlatman at March 13, 2009 8:45 AM
Comment #277560

RH
I just loved your mention of trading 4 acres of land use in exchange for a beef supply without any government interference. I ran some numbers useing the CIA. Seems that if every American did that we would be short 1,213,529,766.6 acres of arable land.Darn. I guess the rest of us will have to rely on a government overseen market.

Craig Holmes

Ah yes. Clintons first year in office. There are similarities. Clinton in his first year with a Democratic congress passed his economic plan without one Rep vote. Sound fimiliar? That economic plan raised marginal rates on the upper brackets . It also made selected investments but cut the deficit and put the federal government on a track to surpluses that freed up enough capital to lead to the longest running economic expansion in history.

Eric
You need not worry. BHO IS a moderate. Personally I find that annoying,being somewhat radical myself. There are things that need changing,are there not? The economy perhaps? Its the BHO administration that is dragging its feet on bank nationalization with conservative economist like Greenspans calling for it. The BHO stimulus plan includes far to many tax breaks for this radical and is in danger of not being big enough. It looks like his new rules for finance are mostly a return to the old rules, before the Reps weakened the controls. The BHO health proposals are aimmed at moving slowly and taking input from all stakeholders. If it was up to me we would have universal single payer healthcare in about two weeks. Perhaps the reason you are confused is because the debate has shifted so far to the right. For example, the arch conservative president,Nixon, proposed a healthcare plan that was almost identicle to Hillarycare. The war and Watergate prevented much from happening with it but when HC proposed it the response was that it was right out of Trotsky. When JFK lowered taxes on the wealthy it was from %90,under a moderatly conservative Eisenhower, to %70 and was hailed on the right.BHO wants to raise it back to about %40 and close some loopholes.Not particularly radical in the scheme of things.
BHO is a moderate. The change in tone will come when the more intelligent members of the right realize it and the reflexive ranchor disapears. Bad habits take time to change.

Posted by: bills at March 13, 2009 10:36 AM
Comment #277564
I just loved your mention of trading 4 acres of land use in exchange for a beef supply without any government interference. I ran some numbers useing the CIA. Seems that if every American did that we would be short 1,213,529,766.6 acres of arable land.Darn. I guess the rest of us will have to rely on a government overseen market.

This may be the most ridiculous statement I’ve seen on these pages, both in the fact it proves you didn’t read what I wrote and that you fall within the minority of people who believe we need the government in order to succeed in life.

Good Job!

It also made selected investments but cut the deficit and put the federal government on a track to surpluses that freed up enough capital to lead to the longest running economic expansion in history.

If only any of this myth were true. Clinton’s first budget did not cut the deficit. The Deficit (as recorded by the shelving of some of it to unreported areas) did decrease but only after the Republicans took control of the House, where the spending and budgeting of our government is constitutionally controlled from. And there was never, ever EVER a surplus. That is a fairy tale that Democrats tell.

Nixon, arch-conservative? Again, you don’t even understand the words you use. Nixon was about as conservative as Bush II was…

As for the change in tone, wasn’t it Obama himself who was calling those who didn’t support his stimulus package unpatriotic by inferrence? Nice reaching out there…

Posted by: Rhinehold at March 13, 2009 11:24 AM
Comment #277566

>As for the change in tone, wasn’t it Obama himself who was calling those who didn’t support his stimulus package unpatriotic by inferrence? Nice reaching out there…
Posted by: Rhinehold at March 13, 2009 11:24 AM

Huh??? By who’s inference? When? Boy, this one is surely from left (er…right?) field…

Posted by: Marysdude at March 13, 2009 11:51 AM
Comment #277567

Rhinehold wrote; “What I find interesting, though, is that you write a column about how things are worse than we think they are and the administration comes out yesterday saying that things are better than we think they are after saying incorrect negative things about the economy for the past year…”

Yes, confusing isn’t it. The Obama Oracle is certainly a contrarian isn’t he. One could almost use his daily market pronouncements as buy and sell signals. Obama up…market down, Obama down…market up.

Posted by: Jim M at March 13, 2009 12:40 PM
Comment #277568

MD Said ” Huh??? By who’s inference? When? Boy, this one is surely from left (er…right?) field…” If we Had Center-field back we’d get more Coverage,And less effort. :)

Posted by: Rodney Brown at March 13, 2009 12:42 PM
Comment #277571

Daugherty writes; “…a good form of capitalism essentially can survive this one question: “what the hell is this thing I’m holding worth?”

That’s a fair question Daugherty. It seems the Chinese are wondering the same thing.

“Some specialists also say that high inflation could erode the dollar’s value. Finally, some believe that China’s investment in American debt is now so vast that, should it need foreign exchange in some emergency, it would be unable to sell its Treasury securities without flooding the market and driving down their price.”

Link; http://www.nytimes.com/2009/03/14/business/worldbusiness/14china.html?_r=1&th&emc=th

Posted by: Jim M at March 13, 2009 1:17 PM
Comment #277576

Eric writes; “He has instituted Cap and trade, which is certain to drive energy costs to unimaginable levels. Far eclipsing any theoretical $13 tax cut for 95% of all Americans.”

I find the report by CBO cited below to be very interesting. If one takes the estimated annual increase in energy cost to the bottom 20% of households, stated as $680, and divides by 52 weeks the result is….Ta Da…$13 per week. My, my, what a coincidence. Lord Obama giveth, and taketh away.

The Congressional Budget Office estimates that cutting carbon emissions by 15 percent would result in a huge cost to most Americans. According to CBO’s analysis as reported on the Wall Street Journal editorial page March 9, the plan would cost the bottom 20 percent of households 3.3 percent of their entire after-tax incomes every year, or about $680, while those in the next three quintiles would pay between $880 and $1,500 a year in extra energy costs.”

Posted by: Jim M at March 13, 2009 2:05 PM
Comment #277577
Huh??? By who’s inference? When? Boy, this one is surely from left (er…right?) field…

Really? Pay attention much?

The deal, announced on the Senate floor, was a result of two days of tense negotiations and political theater. Mr. Obama dispatched his chief of staff to Capitol Hill to help conclude the talks and reassure senators in his own party, and he called three key Republicans to applaud them for their patriotism. […]

Mr. Obama called Ms. Collins and Mr. Specter, as well as Senator Olympia J. Snowe of Maine, another Republican expected to support the deal, to acknowledge they were acting against pressure from their party and, one official said, to thank them for their patriotism in helping advance the bill at a critical time.

http://www.nytimes.com/2009/02/07/us/politics/07stimulus.html?_r=3&pagewanted=1&hp

Posted by: Rhinehold at March 13, 2009 2:11 PM
Comment #277582

Here’s an interesting report from Judicial Watch concerning one of PO’s royal court jesters, Nancy Pelosi.

“We obtained the documents through the Freedom of Information Act (FOIA). They include internal Pentagon email correspondence detailing attempts by Pentagon staff struggling to accommodate Pelosi’s numerous requests for military escorts and military aircraft as well as the speaker’s 11th hour cancellations and changes.

Here are a few highlights from the documents.

In response to a series of requests for military aircraft, one Defense Department official wrote, “Any chance of politely querying [Pelosi’s team] if they really intend to do all of these or are they just picking every weekend?…[T]here’s no need to block every weekend ‘just in case’…” The email also notes that Pelosi’s office had, “a history of canceling many of their past requests.”
One Pentagon official complained about the “hidden costs” associated with the speaker’s last minute changes and cancellations. “We have…folks prepping the jets and crews driving in (not a short drive for some), cooking meals and preflighting the jets etc.”
The documents include a discussion of House Ethics rules and Defense Department policies as they apply to the speaker’s requests for staff, spouses and extended family to accompany her on military aircraft. In May 2008, for example, Pelosi requested that her husband join her on a Congressional Delegation (CODEL) into Iraq. The Pentagon explained to Pelosi that the agency has a written policy prohibiting spouses from joining CODEL’s into combat zones.
Documents obtained from the U.S. Army include correspondence from Speaker Pelosi’s office requesting an Army escort and three military planes to transport Pelosi and other members of Congress to Cleveland, Ohio, for the funeral services of the late Rep. Stephanie Tubbs Jones. Pelosi noted in her letter of August 22, 2008, that such a request, labeled “Operation Tribute” was an “exception to standard policy.”
The documents also detail correspondence from intermediaries for Speaker Pelosi issuing demands for certain aircraft and expressing outrage when requested military planes were not available. “It is my understanding there are no G5s available for the House during the Memorial Day recess. This is totally unacceptable…The speaker will want to know where the planes are…” wrote Kay King, Director of the House Office of Interparliamentary Affairs. In a separate email, when told a certain type of aircraft would not be available, King writes, “This is not good news, and we will have some very disappointed folks, as well as a very upset [s]peaker.”
During another email exchange Pentagon staff advised Kay King that one Pelosi military aircraft request could not be met because of “crew rest requirements” and offered to help secure commercial travel. Kay King responded: “We appreciate the efforts to help the codel [sic] fly commercially but you know the problem that creates with spouses. If we can find another way to assist with military assets, we would like to do that..

In 2007, the speaker was hammered in the press for requesting a 42-seat Air Force carrier to ferry her and her staff back and forth between San Francisco, CA and Washington, DC. Former House Speaker Dennis Hastert, by comparison, was allowed access to a 12-seat commuter jet for security reasons after the events of 9/11.

Contrary to what some reports in the media suggest, we found that Pelosi used military jets twice as much in two years as Hastert did in three years.”


Posted by: Jim M at March 13, 2009 2:43 PM
Comment #277605

Speaking of Mark to Market…here’s a little tid-bit that may interest y’all:

http://www.huffingtonpost.com/2009/03/13/regulator-before-banks-co_n_174850.html

Posted by: Marysdude at March 13, 2009 8:56 PM
Comment #277606

I’m sorry…for those who get huffy when I refer to something in Huffpost, I’ll provide a snippet from the post there to whet your appetites…

Posted by: Marysdude at March 13, 2009 8:59 PM
Comment #277607

Blame it on old age…here it is:

Robert Herz, head of the FASB, told a panel of lawmakers Thursday that the loudest critics of fair market accounting practices have been the very same banks that have gone belly up when regulators would not let them adjust their accounting.

“There seems to be a clamoring for changing mark-to-market rules that seems to come largely from institutions that may be insolvent,” Rep. Alan Grayson (D-Fla.) said to Herz at a meeting of the Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

Posted by: Marysdude at March 13, 2009 9:00 PM
Comment #277610

Good article Marysdude. Thanks for the link.

Posted by: phx8 at March 13, 2009 9:59 PM
Comment #277617

Jim M asked an important and insightful question: “I wonder if someone could help us understand where those “trillions” wound up? Who is holding all this money?”

The objective answer is complicated and multi-faceted. But, to get the core and bulk of it, an example is in order.

A house built and sold for $100,000 15 years ago is put up for auction. A and B bid up the price of the house and A wins the bid for $400,000, immediately goes to CountryWide and gets a mortgage on that house for zero down to pay the loan shark uncle the $400,000 back used to buy the house. A moves in, and six months later the housing bubble bursts, and A is out of a job, and can’t make the payments.

The house sits on the market vacant for 6 months as A files bankruptcy and foreclosure proceedings take place. Where did the money go, is the question.

Well the loan shark uncle got his. The auctioneer got his. And the seller got theirs. The seller walked away with the most gains from this transaction. A is not out very much except the lawyer fees for filing bankruptcy, and of course their job.

But, CountryWide bundled A’s mortgage and sold the package to an investment bank at a small discount, so that CountryWide could get cash for making more loans, collecting origination fees which it pockets immediately as well as pocketing the interest collected before selling the mortgage, well, that interest less the pro-rata discount lost in selling the bundled mortgages to the investment bank.

OK, with the House A bought now still sitting empty, without buyers willing to pay $400,000 for it, the investment bank holding the mortgage is having an impossible time trying to sell that mortgage to anyone else, and is holding this mortgage asset which now has a market value considerably below the asset value on its balance sheets. It bought insurance to insure against just this sort of thing happening with AIG, but, AIG had so many claims on similar insurance policies that it hasn’t the cash reserves to make good on the claims, even if AIG could establish a market value to subtract from the asset value to determine the exact amount of the insured claim by the investment bank, which of course, it can’t.

So the sellers, made off like bandits. And the investors in AIG and the financial institutions holding these toxic assets, both foreign and domestic, are the big losers. In a nutshell. But, real understanding of where the money went and is still going, can’t be held in a nutshell.

Where did the money go? Some of it was pocketed by AIG which spent it on the high life, shareholder dividends, and employee bonuses and junkets to the Bahama’s for training seminars in how to consume copious quantities of Bahama Mama drinks, instead of being set aside as reserves against the total face value of insurance policies it had issued.

The investment bank, perhaps Lehman Bros. or Bear Stearns or Freddie or Fannie, is left holding the bag for the bulk of the loss as they paid for that mortgage at near market value, pre-bubble burst, and are left holding that mortgage as an asset on their balance sheet even though it is no longer worth its previous pre-bubble value.

Subsequently, their balance sheet of assets suddenly turned into a deep well of liabilities, which it can’t sell, and it making the corporation insolvent as its liabilities in devalued unsellable and even value less assets exceed its projected net revenues for years to come. It’s share price drops out, and its shareholders lose considerably, more so, if they bought at the highest peak price before the bust, less so, if they bought shares 6 years ago at substantially lower prices.

But, though these investment banks, and their insurers, and the mortgagors still holding mortgages as assets, have become insolvent, the money that was made during the bubble expansion was transferred from the business entity to private individual asset accounts to be either spent or, in turn invested. Those who spent it got to live the high life while the living was good. Those who invested their bonuses, dividends, and salaries probably saw as much as 60% of their investments shrink away with the Recession and Bear Market in equities and even bond markets eventually. Which made the sellers just prior to Bear Market the big winners IF they invested their winnings in fixed rate interest bearing instruments. (Some shrewd and wise 401K investors did just that for example).

That accounts for where the money went. But, the money has not all left the scene yet, as the negative balance sheets still must be zeroed out before the credit markets and equity markets can being go back to the business of lending and creating wealth again. That is where the government comes in.

In order to prevent a rising unemployment causing restricted consumption from creating ever higher unemployment, as a vicious cycle, from turning into an all out depression with 20 to even potentially 50% unemployment rate from occurring, the government steps in with borrowed dollars and printed dollars to infuse cash into the insolvent financial institutions and to offset runs on money market funds, to unfreeze the credit markets and prevent a cascade of financial and other corporate and business failures, as well. Which means the money is still leaving the economy, just not this economy, but, a future economy, in the form of interest on national debt, eventual higher taxes, and higher interest rates as a consequence of fighting inflation by constricting money supply.

Over time, beginning with 2008 and extending out for unforeseen decades, those borrowed government dollars will incur interest expense, which tax payers will have to foot, and that accounts for where some of the borrowed money to offset the losses will go, 40% back to American investors in government debt, and 60% to foreign investors in government debt.

Then, more distant into the future, much more distant, tax payer rates will fail to lower due to the addition of these borrowed dollars today being eventually paid back to creditors.

In the less distant future, the printed money to offset financial institution insolvencies, will create inflation, which the Fed Reserve will attempt to contain by reigning in money supply, which will tighten credit and cause interest rates to go up, which the consumers will foot, both American and foreign importers of American products and services.

So, in answer to where did the money go. Some of it went to those who spent it while the spending was good, Execs, shareholder dividend recipients, boards of directors, and employee bonuses of financial institutions bubbling over with cash revenues and profits, prior to that bubble bursting, and to the recipients of capital improvements prior to the burst, investments in buildings and machines of these corporations, and those who built or improved these capital assets.

But, there is still more costs to be born by this bubble bursting, much more. Folks just don’t seem to realize that this bubble / bust cycle is costing us in the bust end than is being created in the bubble end. Which is why Laurence Summers, (White House Economic Counsel Director (If I recall correctly his title) was on TV explaining why there must be an end to these boom bust cycle extremes, a containment policy that allows for peaks and troughs as a balancing mechanism but cuts off the high peaks and valleys through increased oversight, real time regulation as needed, and higher transparency and accountability standards vigorously enforced and applied and leaving no areas of the financial or banking sectors out of reach.

The money that went with the bubble bursting is no longer available to bankrupt and insolvent corporations and businesses dually affected by the bubble bursting and delveraging and the subsequent recession, and that is an enormous hit upon our economy and productivity. But, the costs of either allowing the economy to fail and find its own balance with a devastating cost to the middle class and workers and small businesses for decades, (i.e. a depression of huge magnitude), or, rescuing our economy from that fate through government intervention, borrowing against the future, are the real measure of how devastating the policies were that allowed these crises to occur.

Summers is right. We can’t afford the policies of the past any longer. There must be a fundamental change in the relationship between government oversight and regulation and the private sector. Failure to make this change will result in the eradication of the middle class, which has defined this nation’s strength and power for over a century.


Posted by: David R. Remer at March 13, 2009 11:12 PM
Comment #277622

Stephen,

This is not an argument between those who embrace the free market, and those who don’t, this is an argument between people who have very different ideas of what constitutes a free market.

Almost. It is an argument in which one side has no problem redefining what constitutes a free market.

Posted by: eric simonson at March 14, 2009 12:29 AM
Comment #277626

David,
Excellent example. Now, do you want to try and explain how the House A purchased and lost can regain its value? For short of setting it on fire and collecting the Home Owners Insureance I do believe that most Americans would be amazed to discover how easy it is to make the house worth $400,000 again.

For why Eric and Stephen debate what constitutes a Free Market I wonder how they explain the fact that Jim M. just pointed out that President Obama only gave each American a tax cut to cover the increase in the projected energy costs.

Is there a proper way to explain to the Poor Rich (those Citizens not of the top 2% of Wealth) that in a Trickledown Theory or a Trickle Up Theory that I keep all the Gold and Money in the World? (A lesson that had to be learned by the Top 2% of Society in the 70’s).

Posted by: Henry Schlatman at March 14, 2009 5:24 AM
Comment #277635

David,

Summers is right. We can’t afford the policies of the past any longer. There must be a fundamental change in the relationship between government oversight and regulation and the private sector. Failure to make this change will result in the eradication of the middle class, which has defined this nation’s strength and power for over a century.
You neglected to mention a crucial, actually, the crucial link in the chain of your example, the link without which no company would have been so foolish as to accept the risk implied in the spectacular inflation of the value of your house. Fannie and Freddie took loans such as you described and bundled them into securities sold on the assurance that there was no investment so safe as a mortgage in the United States. Furthermore the securities were touted as being backed by the Treasury of the United States so, knowing they would be protected from loss these securities were traded about, each step in the trading chain creating even more phantom equity.

Government sponsored enterprises, flim flamming the faith and credit of the government, created economic vaporware and the illusion of value. Government intrusions into the marketplace, heavily protected by the congressional sponsors of those enterprises from close scrutiny or regulation themselves, were the Jesus Nut” that made the whole scheme seem to fly. When that nut failed everything else in the chain crashed.

Posted by: Lee Jamison at March 14, 2009 11:57 AM
Comment #277650

Lee said: “Government sponsored enterprises, flim flamming the faith and credit of the government, created economic vaporware and the illusion of value.”

False by half. GSE’s PLUS the private industry mortgage industry, insurers like AIG, and cross bred lines of business mega-institutions, PLUS credit rating agencies, PLUS politicians complete neglect of oversight and regulation of trillions of dollars of financial transactions and instruments, created the vaporware of which you speak.

Blaming one entity in the long chain to the exclusion of the host of others, is false by half or more. And I believe I did include the GSE’s in my commentary, making your claim of oversight, also false.

Posted by: David R. Remer at March 14, 2009 1:33 PM
Comment #277651

Henry, the house in the example rose to $400,000 on the basis of customer demand, willingness and ability to bid the price of that house that high. That house is unlikely to ever be worth $400,000 again in the foreseeable future. Housing is a commodity whose price above actual costs to construct, fluctuates with changes in a host of variables including supply and demand and credit availability.

We will be doing well if that house holds its original new sale price of $100,000. Our economy after all, has contracted to levels predating the house’s construction in a great many cases. This is what is referred to as deflation, when pricing retreats from those levels where the item sold new and for the first time.

Posted by: David R. Remer at March 14, 2009 1:40 PM
Comment #277655

Let’s suppose I take a dollar out of my pocket and buy one share of stock. In time, that share is valued at $2 and I sell it. I have made a profit of $1. The person who purchased my stock paid $2 and in time the price falls to $1. That person has lost $1. Nothing vaporized or disappeared…just changed hands. It is only when someone takes a dollar from their pocket, or puts a dollar in their pocket that wealth accumulates or becomes less in the realm of investing. Paper assets are worthless until they are realized. One can not experience a profit or a loss until a sale is accomplished.

That we, as a nation feel poor or rich when counting our paper assets is an exercise in confidence. When our paper assets make us believe we are rich…we spend and those same paper assets when in decline make us feel poor. We spend more when we feel rich and less when we feel poor. But, it is all relative to our perception of wealth and poverty as no actual wealth or poverty exists within markets until a sale is made at which time true net worth can be ascertained.

Is it not the same with our homes? If I purchase a home for $1 and sell it later for $2 I have realized an actual and real profit of $1. But, if I don’t sell the home for $2 today and wait, in time that home, if sold, may only return my original $1 or less.

As with the share of stock, my home is only worth what I can sell it for at a point in time. It logically follows then, that my perception of the worth of my home is based upon what I believe someone will pay for it. When I believe someone will pay more for my home than I paid for it I have confidence and when that is not the case I do not have confidence.

That housing market prices ballooned merely meant that home owners believed that those prices being paid actually represented true market value, when in fact, high prices merely indicated confidence that prices would continue to increase.

Confidence in markets, whether in equities, bonds, or housing wax and wane as that is their very nature.

An ingredient of confidence in the equity markets is the ability of the companies being bought and sold to make a profit and thereby provide a return on investment to the shareholder. That BOA and Citibank announced profits so far in 2009 is restoring confidence. That housing prices have stabilized in some parts of the country is restoring confidence. That PO is now, finally, speaking of confidence is the correct thing to do.

The only thing that has disappeared or vanished around the world is confidence. All the land, machinery of production, work force, and…even capital that existed two years ago still exists. Every dollar, Euro, peso and every other nations currency that was in existence two years ago is still in existence. It has not been burned, lost, or destroyed by inflation. It has changed hands, but still exists just waiting for confidence to be restored when it will be invested.

I appreciate Mr. Remer’s lengthy explanation and those of others. And the bottom line is that when the confidence of the world returns, so will our economies. Can our world leaders restore this confidence with their manipulations of markets and capital. Only time will tell.

Of one thing I am certain. Those who are now in possession of capital or other assets will not as readily invest in an environment of greater taxation. I cashed in all my equity and bonds in August of 2008. My investable dollars will remain in a safe haven until I have the confidence that government will not penalize me for reinvesting them. I will not risk my capital knowing that my government will take more of the earnings on that capital. Trillions of dollars have fled to safety and to tax exempt or tax deferred investments.

The return of those trillions will be directly influenced by the actions of governments around the world. If we wish to lure that money from their safe of sheltered positions, there must be incentive. The default position for attracting investment has, and always will be, profit.

Posted by: Jim M at March 14, 2009 1:54 PM
Comment #277661

It just occurred to me that I have never thanked all those involved in running Watchblog and all the many contributors. What a wonderful vehicle for those who wish to post their thinking about issues without fear of ridicule or reprisal.

A hearty thank you for all you have done for us.

Posted by: Jim M at March 14, 2009 2:55 PM
Comment #277666
The return of those trillions will be directly influenced by the actions of governments around the world. If we wish to lure that money from their safe of sheltered positions, there must be incentive. The default position for attracting investment has, and always will be, profit.

Jim M, Isn’t that they purpose of the stimulus bill that recently passed? People will be willing to invest because of all the opportunities associated with the new spending.

I’ll give one example, in Massachusetts, the MBTA, Boston’s transit authority, is planning to use spend money to buy new passenger cars for its commuter rail fleet. The lowest bid for the contract came from Hyundai Rotem, who will be building a new factory in Philadelphia to supply our cities with railroad cars in the future.

There will be plenty of profits to be made in the next few years if people are willing to invest their money to help build our new infrastructure(and rebuild the old).

Posted by: Warped Reality at March 14, 2009 3:11 PM
Comment #277668

Warped writes; “There will be plenty of profits to be made in the next few years if people are willing to invest their money to help build our new infrastructure(and rebuild the old).”

Aren’t you talking about government spending in Mass? That no profit will be made on government spending by those who get contracts is not my point. I am talking about attracting private investment money. Attracting private money back into our economy requires both confidence and the belief that their risk-taking will result in profits not then compromised by more taxes.

There is a vast difference between government taking a dollar from my pocket in taxes to invest and me taking a dollar from my pocket to invest.

PO has advocated increased tax on investment. That is hardly a method of restoring confidence.

Posted by: Jim M at March 14, 2009 3:36 PM
Comment #277684

Jim, I believe the locomotive project was originally supposed to be funded by the government of Massachusetts, but it was delayed a few times due to a lack of funds and the need to not run a deficit. I believe the management at the MBTA finally started to commit funds last year, but now that the ARA has passed, there is now money available to fund projects like this.


The thing is that the lack of private investment today is not because of a high tax rate discouraging investors. The private sector is unwilling to invest because there is a lack of demand from consumers. This is the problem with a deflationary recession (opposed to inflationary ones). There is plenty of capital available, its just no one wants to invest on their own, because if no one else invests their money, than that one investor will almost surely lose his or her own money. It’s kind of like the prisoner’s dilemma. Right now everyone is unwilling to resist talking to the police (if we continue the prisoner’s dilemma analogy). We need some entity to stop the confessions no matter what the consequences. The government is not required to to produce a profit in any particular year, so it is able to take risks that only a suicidal company would do.

Posted by: Warped Reality at March 14, 2009 7:06 PM
Comment #277698

Eric Simonson-
It is Republicans who have redefined it. As I outlined in my post, it used to mean the opposite of the Soviet Economy, where all economic authority was enacted top-down, not just a few basic policy decisions.

What you deride as socialist, as an economic abomination, is the same kind of economy that allowed us to defeat the Communists. It wasn’t until the Mid-90’s that your side became so… strict in its definition. But by then, you had the benefit of a fading memory of what real communism, real command economies looked like. But don’t let me stop you from needlessly exaggerating a few similarities in the name of partisan histrionics.

Posted by: Stephen Daugherty at March 14, 2009 11:33 PM
Comment #277706

The ‘elephant’ symbol of the Republican party may soon be replaced…I’d suggest they use the robot from Lost In Space…”Obama is coming, Will Robinson, I will save you!!!”

Posted by: Marysdude at March 15, 2009 8:46 AM
Comment #277712

Warped writes; “The thing is that the lack of private investment today is not because of a high tax rate discouraging investors. The private sector is unwilling to invest because there is a lack of demand from consumers.”

I wrote that the reason that private money has been stashed away in safe havens, tax free, or tax sheltered investments is lack of confidence. I then wrote that few, including me, are willing now to reinvest because we don’t wish to risk our capital and if we do make a profit see government take a bigger share as promised by PO.

When government determines to increase the tax on capital gains investors are disinclined to use their capital in that manner when other avenues are open to them.

When congress is busy finding ways to increase the tax on investment you can be certain that tax attorneys are busy finding loopholes and tax sheltered investments.

When I cashed in my equity and bond holdings in August of 2008 I did so for two reasons. #1 I no longer had confidence that those investments would continue to earn a profit and that my principle was at great risk and, #2 I believed Obama would win the election and he had told us that he was going to increase the tax on capital gains. When congress does pass the tax on capital gains I believe they will make it retroactive to recapture the increased tax from those who have been bailing since his election. I believe investors will be in for very nasty surprises when they file their 2009 tax return.

PO and congress have simply not given me any reason or instilled me with confidence to take my money from where it is parked and place it at risk knowing that my risk taking, if profitable, will be rewarded with government taking a larger part of that profit.

Posted by: Jim M at March 15, 2009 11:46 AM
Comment #277737

Jim M
Well, I think your reason #2 is a very foolish reason to withdraw your funds. Maybe because you are a bit older than I, you might not have been confident that the investments would earn any profits until it was too late to be any use to you, but that falls under reason #1. It’s your money, so you have the right to be foolish with it, but maybe it would help for me to explain why it would be foolish.

Let’s say you purchased some stocks for $1000 10 years ago. Let’s say these stocks return 10% every year. They are now valued at (1000)*(1.1)^10= $2593.74
So you have a theoretical capital gain of $1593.74
If you liquefy the money you invested now to “take advantage” of a 15% capital gains rate that will soon increase to 25%, you pay $239.06 in taxes and keep $2354.68

If you wait two years, you’ll accrue another two years of 10% return: (1000)*(1.1)^12= $3138.43
You liquefy the money and pay a 25% capital gains tax on the $2138.42 capital gain. This means you pay $534.61 in taxes and keep $2603.82

By choosing to wait you have 2603.82-2354.68= $249.14 more in your pocket.
What about interest? Surely 1 dollar in 2009 is worth more than 1 dollar is worth in 2011. In order for the $2603.82 in 2011 to be worth the same as the $2354.68 in 2009 inflation would need to be: ([{1+(249.14/2354.68)}^(1/2)]-1)=0.0516=5.16%

With the amount of deflation that we are experiencing I highly doubt inflation will reach 5% at any point in the next two years.

Therefore, it is foolish to sell you investments unless you think that inflation will exceed 5.16% or that the rate of return over the next few years will be significantly less than it was in the past (reason #1).

As you can see, it is the expectation that reduced consumer demand will result in a reduced rate of return that is mostly responsible for discouraging investors, not the President’s promised tax increase on the nation’s wealthiest people.

Posted by: Warped Reality at March 15, 2009 4:18 PM
Comment #277751

Jim M-
Poor you. Poor them. Let me tell you in stark terms what will happen: other people will invest, other people will make money. They’ll pay the taxes, and if it really bothers them that they’re making less than they want to, they’ll go out, and they’ll do what American do best: work, be creative, and be smart. And they’ll enjoy the fruits of their labor.

I don’t mind people trying to pay a low tax rate if they can, but the obsession over it just strikes me as pathological. Nobody keeps everything they earn. For people like me, I don’t get to keep much of anything these days. So when somebody who has way more money than me expects me to be sympathetic… I guess I figure I’ve got bigger problems than that person does.

You seriously want the rest of us to think that this is such an evil thing. But this is nowhere near real suffering.

You wonder why nobody’s got much sympathy for Wall Street, why everybody’s angry. Don’t you suppose it could be Wall Street’s perpetual emphasis on it’s self-interested gain, even while it inflicts pain on everybody else?

The GOP and the interest groups its served pushed America past the breaking point even before the elections took place, even before the markets crashed. Now, if you can imagine, the tolerance level for this kind of insistence on economic sacrifice from the lower economic classes is even lower. I mean, these people have demonstrated that after all these expert opinions and glowing testimonials to the skill of the market operators, after all the sanctimonious lectures on what we need to accept for the good of the companies, for the good of the economy, These jackasses put America down it’s deepest economic hole in three quarters of a century!

Most people have parked their money because of the market, because the markets gone insane. They may be irrationally fearful, but the Market is being irrational itself these days, not operating like it should, like it has for so many years. You want to blame it on taxes, sure. But many people are going to look at that and say, THAT’s your reason?

The real nasty surprise is that after all this ****, the GOP’s not only not learned its lesson, it’s refusing to learn it, worse, trying to vindicate yet another unsuccessful policy of the past, rewriting history to where only Republican policies can reasonably be expected to save America, when they never did a damn thing to help us in that time.

The Republicans need to realize that Obama would have never been elected unless they had lost the critical political battles before they ever got to election day. What you’re fighting now isn’t the beginning of the move towards liberalism, but it’s consequence, and nothing you can do, even defeating Obama, if you can manage that, is going to change the fact that the GOP has, for the long term, alienated and driven off a critical mass of voters, and all the insane spin and rewriting of history is only serving to convince people that the leaders of your party have lost their minds, that they are the equivalent of those poor souls you see in movies interacting with imaginary people and surroundings, their eyes in a glaze.

The Republicans need to snap out of it. The Republican are free to be conservatives, but they must recognize that the days of America being somewhat naturally sympathetic are over. That goodwill is wasted, dead because of the failures of the past decade.

Maybe it’s just that the Republicans aren’t used to having to make the arguments, and work to persuade people. More to the point, the party hasn’t liked to explain itself, prefering to believe that the truth of its positions should be obvious to people.

Well, after all these years, it’s gotten to the point where the merits of the Republican’s arguments no longer seem as obvious as they once did, to say the least. Unfortunately, there’s a big mental block in the party about departing from the dogmas and the hardline positions that have become emblematic of the party. That, perhaps, is the price for years of strict political discipline. The Republicans will likely have to undefine themselves as a party before they can redefine themselves. It’s not going to be pleasant or painless; as a Democrat I can attest to that. But it’s what they’ll have to do.

Posted by: Stephen Daugherty at March 15, 2009 9:44 PM
Comment #277770

Warped…I appreciate your comments and find no fault with your math. I am 68 years old and am more concerned about preserving my capital than I am about return on capital at this point in my life.

Moving my at risk capital to tax free and tax sheltered positions was a good move for me and millions of others who think as I do. Had I done nothing my portfolio would have lost nearly 32% of its value. I paid the taxes due on what I withdrew and I don’t believe that more taxes will be due on those withdrawals as it is unlikely congress will make any tax increases on capital gains retroactive back to August of 2008.

I agree with American Humorist Will Rogers when he said…”I am not so concerned with the return on my money as the return of my money”.

Why Daugherty went off into a spin and twirl about Republicans I can’t even imagine. When it comes to my personal money only I am responsible for how I invest it.

That many millions of American’s have retirement focused money in the markets thru IRA’s, 401k’s and other investments is factual and most of those millions are just like me…they want to secure their retirement.

For Daugherty to begin his screed with “Poor you, Poor them” is unconscionable and lacking any semblance of empathy. If his attitude reflects that of this administration we are in sad shape indeed.

Posted by: Jim M at March 16, 2009 1:45 PM
Comment #277785

Jim M said:”Let’s suppose I take a dollar out of my pocket and buy one share of stock. In time, that share is valued at $2 and I sell it. I have made a profit of $1. The person who purchased my stock paid $2 and in time the price falls to $1. That person has lost $1. Nothing vaporized or disappeared…just changed hands.”

It is an appropriate analogy, but, one whose scope is too limited for these times. Your analogy fails to take into account the government’s printing money to infuse into the market place. That compensatory act reduces the value of all U.S. dollars, and that is indeed, an evaporation of wealth. Not a transfer from one hand to another.

When the government for example, must infuse printed cash into the markets to compensate for dollars that have left our shores to foreign nations, that constitutes an evaporation of wealth. Fortunately, I see that our trade deficit dropped to 300 billion at last check from 3/4 of a trillion, and that will have a moderating effect on the necessity to create liquidity in the markets via increasing the money supply.

But, there is still that incessant drain on our economy’s money supply via the interest payments on our national debt, nearly half of which now goes to foreign investors, rather than recirculating through our economy with a multiplier effect. And that drain will be with us for at least another two generations. That is cost of Bush and Republicans more than doubling
our national debt in 8 years and averting its eyes to growing unregulated market instruments and institutions as well as the real estate valuation bubble evident and in public statistical view in 2006.

Obama inherits it all, and left with the fundamental choice, increase the debt further in order to stem the collapse of the economy now, rebuild it going forward, and attend shrinking the debt when the economy has found its feet and the government found its revenues again, or allow the economy to collapse, and let as many as 100 million Americans become unemployed in his first term in office, and drop out of the discretionary consumer marketplace creating a Depression that would make the 1930’s appear as a picnic for most. Fortunately, Obama chose correctly by most American’s judgment.

Posted by: David R. Remer at March 16, 2009 4:40 PM
Comment #277786

Jim M-
Go ahead and invest how you like. I think WR has a point as far as return on investment. You say you’re 68, so let me give you a warning based on personal experience with somebody else: you may be alive a lot longer than you think you will be.

But let me tell you what sets me off: I hate things that don’t work but are made to stick around. I especially hate it when people BS something to force it on the system at hand. If it doesn’t work, I don’t want it there.

Tax cuts for the capital class NEVER worked. They went right on laying people off. Their investment in labor never matched the predictions of the GOP. Why should I support what does not work? Why should I then be sympathetic to somebody who’s acting like its a monstrous affront that taxes might be raised at a later date?

That tipped me over into a rant about just about everything else I see about Republican economic policy that simply has not worked, and my anger at the fact that these people still try to push it all down our throats.

It doesn’t help that So many of the Republicans on this site act like a kid writhing on the floor in pain because the doctor gave him a little shot, when raised taxes or stronger regulation is mentioned. I’m like, this couldn’t possibly hurt business half as much as you guys are claiming, because I remember much of these kinds of rules being in place during the 80’s and 90’s!

It astounds me that this is considered a serious response, especially in the wake of this utter financial debacle. So much history seems to have gone down the memory hole, replaced by the dogmas of hardline Republicans who won’t admit to anything else than that. It’s frustrating talking to Republicans these days about economics and the worse thing about that is that we need at least some dialogue with them in shaping a compromise they can live with.

I’m not sympathetic to the plight of those who can afford to invest at this point. I’m sympathetic to those who can barely afford to eat and keep their houses. Things are bad out there, so I think it helps for people to get a perspective on what being truly unfortunate is before they start telling the rest of us what a sad thing it is to be taxed at a higher rate.

Posted by: Stephen Daugherty at March 16, 2009 4:41 PM
Comment #277792

Daugherty writes; “I’m not sympathetic to the plight of those who can afford to invest at this point. I’m sympathetic to those who can barely afford to eat and keep their houses.”

Just as with his; ““Poor you, Poor them” comment, Daugherty still can’t seem to understand that “those who can afford to invest at this point” are his neighbors, relatives, co-workers, and friends. It would seem that Daugherty is telling those who have money in retirement plans that they are somehow worthy of being financially castrated with the long knife of increased government taxes.

This is typical liberal hate speech towards those they believe don’t deserve to keep what they have worked, saved, and sacrificed for…to provide for a secure retirement for themselves. Oh yes, lets punished those folks with higher taxes to reduce their retirement savings.

For Daugherty, life appears to be a zero sum game in which those who have assets must have taken it from those who don’t.

Pension funds should be raided and stolen so some will feel better. We should help some folks keep their homes by robbing others of their retirement security. Such compassion is just amazing. Who else should be impoverished to accomplish this liberal nonsense? Lets tax each word on this blog and send the money to Washington. How about a pet tax? Is there any way we can tax the cash value in life insurance policies? Let’s eliminate all the tax incentives to save for retirement. Let’s have government housing for everyone? Let’s be FAIR…let’s have CHANGE.

Posted by: Jim M at March 16, 2009 5:38 PM
Comment #277798

Jim M-
Just on a stylistic point, don’t you think calling me “Daugherty” all the time just doesn’t read that well? You could occasionally call me Mr. Daugherty, Stephen, or some alternative.

Just as with his; ““Poor you, Poor them” comment, Daugherty still can’t seem to understand that “those who can afford to invest at this point” are his neighbors, relatives, co-workers, and friends. It would seem that Daugherty is telling those who have money in retirement plans that they are somehow worthy of being financially castrated with the long knife of increased government taxes.

It would seem, if you weren’t to ask Mr. Daugherty what he actually thought. Jesus. Castrated with the long Knife of Increased Government Taxes? How about disembowelled with the Battle Axe of Corporate Corruption!

Putting gory metaphors aside,

1) Tax laws deal with retirement accounts, Pensions, and other methods of saving for retirement differently than they do straight capital gains. In fact, the term 401k refers to a provision of the tax code;

and

2) Those who pay Capital Gains Tax on that kind of income are at worst paying 15% now, and 20% under Obama. That sounds less like a castration, and more like the most gentle form of getting it caught in the zipper. That’s still just half of what rich people pay on income tax.

This is typical liberal hate speech towards those they believe don’t deserve to keep what they have worked, saved, and sacrificed for…to provide for a secure retirement for themselves. Oh yes, lets punished those folks with higher taxes to reduce their retirement savings.

Typical Liberal Hate Speech. You do realize I’m talking about people with enough money left over to invest on their own. I’m not talking the guy who deducts money from his paycheck for a retirement account. I’m talking the kind of person whose got the disposable income to go to a broker and put some money in the market.

And what am I calling for? I’m fine with 20%. It’s nothing to blow a gasket over, unless any conceivable tax increases are going to make you mad.

The nonsense here is the constant misrepresentation of our plans, our motives, and our attitudes. It’s not enough for you tell us we’re wrong, or make some reasoned argument, you got to take this scorched earth approach to my reputation here. Although I don’t shave as often as I should, I’m pretty sure that I don’t have a mustache, and that I’m not really inclined to twirling it.

The Republicans are having a fit over every little element of Obama’s plan for change. I’m just getting tired of the hair-pulling and eye-rolling rages of rhetoric.

Posted by: Stephen Daugherty at March 16, 2009 8:04 PM
Comment #277805

“Just as with his; ““Poor you, Poor them” comment, Daugherty still can’t seem to understand that “those who can afford to invest at this point” are his neighbors, relatives, co-workers, and friends. It would seem that Daugherty is telling those who have money in retirement plans that they are somehow worthy of being financially castrated with the long knife of increased government taxes.”

Jim M when you withdraw money from your 401k/IRA, unless you have a Roth IRA, after retirement do you not pay taxes based upon your income rate at that time? Wouldn’t only those that invest outside of the retirement accounts feel the 5% raise in taxes on investment income? When those in the 28% bracket invest money out side of their IRA then they would pay the 20% capital gains tax on the monies made from their investments.
It seems to me the wealthy investors are hiding behind the skirts of the average investors when their income is mostly capital gains and they are paying only 20% income tax. What am I missing here?

Posted by: j2t2 at March 16, 2009 9:32 PM
Comment #277811

David R. Remer,

It is an appropriate analogy, but, one whose scope is too limited for these times. Your analogy fails to take into account the government’s printing money to infuse into the market place. That compensatory act reduces the value of all U.S. dollars, and that is indeed, an evaporation of wealth. Not a transfer from one hand to another.

Maybe I have incorrect conception of inflation, but I thought that inflation due to an excessive increase in currency essentially transfers wealth from those people with assets to the recipients of the new currency? So, in this case no wealth actually evaporates, but is instead redistributed (for better or for worse).

Let’s say that all the world’s wealth consists of 500 pigs and 100 cows. Let’s say 5 pigs trade for 1 cow on the free market. The one world government prints $10,000 of currency at dawn one day in order to ease the exchange of pigs for cows and vice versa. Thus, each pig is worth 10 dollars and each cow is 50 dollars. I own 10 pigs and 2 cows, so my assets are worth $200. My neighbor owns everything else, he has assets worth $9,800 (98 cows and 490 pigs). At noon, the government prints another $10,000 and gives it to me, so I have $10,200. However, massive inflation sets in and these new “afternoon” dollars have only half the purchasing power of “morning” dollars. Thus, I have the equivalent of $5,100 morning dollars. What about my neighbor? His assets are worth only half as much, so he has $4,900 in “morning” dollars. In terms of “morning” dollars, I have gained $4,900 and my neighbor has lost $4,900, so there has been no “evaporation” only a transfer of wealth from the primary asset holder (my neighbor) to the recipient of the new inflated currency.

Jim M,

Warped…I appreciate your comments and find no fault with your math.

Does this mean you will stop your tirades about the modest capital gains tax increase?

Unless we experience enormous inflation, increased government spending seems to be the best way to fix our current economic troubles (provided that the money is spent wisely).

Posted by: Warped Reality at March 16, 2009 10:37 PM
Comment #277824

Warped Reality,
I like your argument of pigs and cows; however, isn’t it also true that if when the government printed the extra $10,000.00 they would assisted you and your nieghbor increasing the number of Pigs and Cows you own to equal the same ratio that Wealth actually increaes for all.

Because couldn’t the same thing be said about one of the tasks facing President Obama and Congress when it comes to the American Consumer and Small Business Owner? Seems to me that the Republicans would be in favor of allowing Big Business to make a Profit instead of watching them lose money due to No Sale as prices of Goods and Services increase.

Posted by: Henry Schlatman at March 17, 2009 9:25 AM
Comment #277828

Mr. Daugherty writes; “Just on a stylistic point, don’t you think calling me “Daugherty” all the time just doesn’t read that well? You could occasionally call me Mr. Daugherty, Stephen, or some alternative.”

You take offense where none is intended. I will however, in the spirit of fellowship, add Mr. when I quote you. You may address me as Mr. Jim if you wish.

Posted by: Jim M at March 17, 2009 12:23 PM
Comment #277831

M, looks like Stephen just pointed out what has been glaringly obvious to me, and am sure has not gone unnoticed by others. Always seemed to further the perception of superior attitude and arrogance that has been commented on as well.

Posted by: jane doe at March 17, 2009 1:40 PM
Comment #277833

Warped asks; “Does this mean you will stop your tirades about the modest capital gains tax increase?”

No. Getting the math correct does not equate to getting the philosophy right.

I wonder who wrote this;

“The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital … the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy.”

— President John F. Kennedy, 1963


Posted by: Jim M at March 17, 2009 1:54 PM
Comment #277842

M Doe writes; “Always seemed to further the perception of superior attitude and arrogance that has been commented on as well.”

Unfortunaely M. Doe, our founding documents only promise equality under the law…not equality of intellect. If you perceive me as arrogant and superior I won’t object in my new found spirit of fellowship. That you mistake my self-confidence for something else doesn’t surprise me.

Posted by: Jim M at March 17, 2009 4:56 PM
Comment #277844

Jim M-
I tend to respond to people in a conversational, direct tone. I try not to objectify people as well, because that is awkward when the person’s in the same room, so to speak.

The addition, though, is appreciated.

On the subject of taxes Kennedy’s tax cuts were arguably much more profound in their economic effect for the heights from which they brought taxes down.

I mean, you complain about Obama’s tax rate, but even his top rate is about 25 points below Kennedy’s historical rate. His corporate rate cut was from 52% to 47%. The top tier rate wasn’t Obama’s 39%, but 91%, and JFK reduced it to 65%. The Capital Gains top rate was 25%, which is five points higher than Obama’s 20%.

In short, we’re not dealing with heavy duty taxation here. That would come later, most likely after LBJ tried to fight the Vietnam War, and push his Great Society programs without raising taxes enough to cover them.

Like a certain somebody we know.

Then taxes rose again across the board as we fought the inflation and economic consequences of this dishonest approach to budgeting.

If you really look at Obama’s tax rates, they’re low by even JFK’s standards. Just because Kennedy would agree with the lowering of taxes from the comparatively high levels of the fifties and early sixties doesn’t mean he would buy into the Republican’s low rates, especially if you read the part where he talks about the taxes having been high to avoid inflation from the Korean War’s spending.

The Republicans are looking at tax policy through a highly distorted lens. Taxes in JFK’s era were amazingly high in comparison to ours now, and the economic effect of that was much more considerable than the difference between Clinton’s rates and Bush’s, much less Bush’s and Obama’s. In 1963, Millionaires could expect to lose virtually all their income to the government. In 2008, they keep two thirds of it. Obama’s only suggesting that go down to three fifths.

I would invite the Republicans, based on these numbers, to get some perspective on their claims about the tax system. Americans have sacrificed much more, and the Rich have shouldered burdens greater than this for much of the time we’ve had income taxes. This much complaint about this little taxation is just overdoing it.

As for equality of intellect? That’s something best, and most decorously determined by those who don’t have a direct stake in the assessment.

Posted by: Stephen Daugherty at March 17, 2009 5:03 PM
Comment #277850

Mr. Daugherty writes; “In short, we’re not dealing with heavy duty taxation here. That would come later, most likely after LBJ tried to fight the Vietnam War, and push his Great Society programs without raising taxes enough to cover them.

Like a certain somebody we know. (No doubt a reference to PB).

That “heavy duty taxation” will come later is a true statement and PO and this congress will ensure that spending and higher taxes will continue resulting in our complete collapse if not stopped.

Posted by: Jim M at March 17, 2009 5:52 PM
Comment #277931

Jim M-
I guess my phrasing didn’t make the point correctly. Our taxation, even under Obama’s plans, is nothing like the taxation of yesteryear. The top rate under Obama will still be less than half of what it was when JFK took office. Capital gains will still be less.

You keep on talking about what Obama will do. Who knows? But statements about the future are by their nature counterfactual. I can present you with Obama’s current proposals for tax policy, and they’re not even as high as JFK, who you’re using as some fiscally conservative Democrat.

So is JFK some socialist monster, or is he a capitalist example for all to emulate? Pick one.

The truth is, the tax rates you and other people are pitching a fit over, and claiming will destroy capitalism and the economy aren’t anything like the tax rates capitalism has already survived.

We might have to raise taxes seriously in order to avoid inflation, but you know something? I think the country’s strong enough for that. It’s been that way before. But I’ll also tell you this: it won’t be pleasant, and I doubt Obama will want to be all that enthusiastic about raising taxes, however he feels in private.

Let me confide something to you, though, while I’m at it: I’m getting pretty annoyed with all these dire predictions of skyrocketing taxes and the destruction of the economy. Do you seriously expect a public that’s just slammed your party down to take this kind of talk seriously? Or will they just look at it as the deeply silly predictions of a party desperate not to have its main talking points invalidated by tax raising that doesn’t destroy the eocnomy?

You folks might start considering how the Republicans seem to other people, if your goal is to bring people back some day. Otherwise, the Republicans are going to shut themselves into their own mutual appreciation society, and they won’t appeal to much of anybody else.

Posted by: Stephen Daugherty at March 18, 2009 5:23 PM
Comment #278028

Confidentially M. Daugherty in response to your question…”Do you seriously expect a public that’s just slammed your party down to take this kind of talk seriously?”

Yes, I do. Support for PO’s and the liberal congress big spending and higher taxing ways is already apparent in recent polls. I fully expect the public to vote against these policies in 2010 and return conservatism (not Demo and Rep liberals) to power.

Posted by: Jim M at March 19, 2009 3:10 PM
Comment #278059

CNN’s latest poll yielded results that show support for Obama and his plan remaining high.

People support Obama’s overall economic plan by nearly two to one. If the economy’s not better within a year, 54% say they’ll blame Bush and his party, compared to 34% for Obama and his party. The Republicans have succeeded in diminishing support for the Stimulus package down to 54%, with 44% against it. and yes, people won’t support another stimulus if this one doesn’t work.

Over fifty percent of people still agree, though, with the following: That those governors who rejected the money acted inappropriately, and that it stands a chance of improving the economy.

The Gallup poll would add that more Americans think government has the solution to this problem than American business. The majority position beats that of those who think business cand do the job by eleven points.

The Democratic Congress, passing all the liberal laws and spending bills still manages to rate much higher than either its gridlocked previous session or the Republican’s Congress.

And the Republicans have to climb out of a whole where people dislike the Republicans by a two to one margin. Democrats have approaching 50% approval in Congress. Obama maintains an average of about 60% approval, even after this withering assault by the Republicans.

You have got to stop thinking that the same policies and politics that won the day in the 70’s and 80’s will do the trick again now. The policy situation is different. We’re not dealing with the after-effects of an inflationary period, but rather the consequences of a deflationary slump. More inflation, at least in a controlled manner, is actually a welcome thing, because it will help absorb some of the debt people are carrying.

Additionally, in that period, the screw-ups of the Democrats were fresh in mind, and were considered the origin of the mess. Now, the Republicans bear that burden. What was once your advantage, is now your disadvantage. Where once Republicans could claim they were the party of fiscal sanity, now the Democrats are the ones people last remember having their house in order. Where big government was the hobgoblin of people’s lives, and ethnic tensions were acute, now big business seems the source of much of the problems.

The question, at this point is who the public sees fighting for them, and who they see just seeking their own benefit. Your people have not come off as the heroes for most, I wouldn’t try spending political capital at this point, because you have none.

Posted by: Stephen Daugherty at March 19, 2009 7:51 PM
Comment #278115

M. Daugherty, I won’t waste my time citing other polls that are contrary to CNN as you would probably place no value on them.

That you do not recognize, yet, that the public is getting weary, after just two months, of this congress and this president is obvious. And, that’s OK, in fact, it’s just fine with me. PO and his liberal congress have passed many footballs into the air. Few will be caught and none will result in a touchdown.

Those “Hail Mary” passes are a mistake and good solid conservative running plays would have been better.

Posted by: Jim M at March 20, 2009 3:51 PM
Comment #278125

Jim M

not to worry the fed is printing another 1.2 trillion in new money. our troubles will be over soon. i already own a dump truck, so i’ll be able to carry the money i’ll need to buy my groceries for the week. maybe the dems can get some good sound financial advice from robert mugabe.

Posted by: dbs at March 20, 2009 5:03 PM
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