Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts

Monday, March 23, 2009

Thoughts on the Recovery Stimulus


GimmeChocolate, one of Crapaud's regular blogger favorites on Lafayette Louisiana's The Daily Advertiser, had this pithy little comment* recently. Crapaud thinks its worth passing along.
*"The bet being made by the United States on the outcome of the stimulus package is a bet on the idea that wealth is not defined simply by the number of dollars, but also by the flow of dollars and the trust of citizens that they can exchange dollars for what they need. Wealth creation is a result of a predictable rate of flow and of trust sustained over time. Wealth destruction results from economic turbulence or loss of trust in money."
Gimme later expanded the dialectic using the gambling metaphor:

So the economy is like a river, and it is also like a game of poker in a casino. To extend the mixed metaphor:

LIKE A RIVER: If the flow undergoes drastic and unpredictable changes, especially if there are interruptions in the circulation of money because some people are hoarding it, then people get scared that they won't be able to dip into the stream (get credit or income). A trickle is not enough, as we have seen in these years since the 1980s.

So a failure of flow kills trust, but it works the other way too. When people are scared to take on debt for fear of losing their jobs, they stop spending on things like new cars. The stream we call the the auto industry dries up, and jobs are lost in a self-perpetuating cycle.

LIKE CASINO POKER: The new administration has to try to play the game decisively to convince all the players it's in control and that they can therefore trust the house's rules. It has to try also to prime the flow. The game could be lost for everyone involved by "the House" priming too little (betting too little), thereby failing to make a sufficiently profound impression on investors and consumers who need to believe there is still something that they can win by playing. Betting too much has its potential problems too. What happens to the game if the House loses too much and can no longer afford to cover bets for all players? We'll deal with that later. We're in too deep to stop the game now and lock in our losses.

The House has a stake in seeing that nobody keeps taking home all the chips (not even the House!), lest all the other players drop out and the game stops, because nobody's willing to place bets. Look at how angry people are that Bernie Made-off with so much of everyone's money! He and the AIG execs are accused of cheating, and that ruins the game.

So everybody wins so long as the game doesn't stop and as long as nobody wins it all.

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Friday, March 20, 2009

REAGONOMICS RUN AMOK is Colossal Understatement


Does America Face the Risk of a Fascist Backlash?

The lessons of the German experience following World War I may be instructive.

Herewith Excerpts from an Alternet Article by Robert Freeman, AlterNet.

The Right's ability to capitalize
on people's sense of grievance must not be underestimated.

In early 1919, Germany put in place a new government to begin rebuilding the country after its crushing defeat in World War I. But the right-wing forces that had led the country into the War and lost the War conspired even before it was over to destroy the new government, the "Weimar Republic." They succeeded.

The U.S. faces a similar "Weimar Moment." The devastating collapse of the economy after eight years of Republican rule has left the leadership, policies, and ideology of the right utterly discredited. But, as was the case with Germany in 1919, Republicans do not intend to allow the new government to succeed. They will do everything they can to undermine it. If they are successful, the U.S. may yet go the way of Weimar Germany.

. . . As a result of the failure of the right, the German people elected a moderately leftist government to lead the nation's rebuilding. It was named the Weimar Republic for the city in which the new post-imperial constitution was written. The new government was led by Friedrich Ebert, head of the German Socialist Party.

. . .It was at this time that the right wing made its crucial decision. Despite its shocking, naked failure over the prior decade, despite the horrific devastation it had wrought on the German people, despite the discrediting of everything they had purported to stand for, they would fight Ebert, his new government, and its plans for recovery. They would do everything they could to make sure that the new government failed.

Their strategy was two-fold: first, stoke the resentment of the population about the calamitous state of its living conditions-no matter that those conditions had been created by the very right-wing oligarchs who now pretended to befriend the little guy. Rage is rage. It is glandular and unseeing. Once catalyzed it is easy to turn on any subject.

. . . It was an easy lie to sell. It entwined an attack on an alien political ideology -- liberalism -- with the latent, pervasive myth of German racial superiority.

The second strategy of the right was to prevent the new government from succeeding. . . .

So the rightists set out to do everything they could to make it impossible for the leftists to govern. They would use parliamentary maneuver, shifting coalitions, domination of the new mass media, legislative obstruction, staged public relations spectacles, relentless pressure by narrow but powerful interests, judicial intimidation and, eventually, outright murder of their political opponents.

Contrition for their abject failure, humility for their destructive hubris, compassion for their crippled country-those had nothing to do with it. All they possessed was a blinding, visceral hatred of the left and a masturbatory lust for the return to power.

Eventually, they succeeded. Every setback in recovery -- and there would inevitably be many -- was met with hysterical demonizing of the left wing government. The lie was repeated relentlessly that the government was run by communists, traitors, and Jews-the same furtive cabal that had purportedly stabbed the country in the back at the end of the War. They steadily chipped away at the efficacy and, thereby, the legitimacy of successive republican governments.

. . .America now faces its own "Weimar moment."

The failure of right wing policy and leadership over the past eight years, especially in matters economic, is comparable to Germany's right-wing failure in World War I. It is catastrophic, undeniable, and complete.

Consider:

According to the World Economic Forum, forty percent of the entire world's wealth has been destroyed in the recent financial collapse. In the U.S. alone, between housing and the stock market, more than $18 trillion in wealth has already been destroyed.

The private mega-banks that anchor the financial systems of the western world are bankrupt. This makes it all but impossible to jump-start the western world's economies which are heavily dependent on bank-system credit to operate.

More than 10,000 homes go into foreclosure every day. More than 20,000 people lose their job every day. And the collapse is accelerating, developing its own self-reinforcing dynamic. Job losses breed foreclosures, reducing demand, leading to more job losses and further degradation of the financial system. None of the stopgaps designed to stanch the bleeding have yet worked. There is no bottom in sight.

Meanwhile, debt has risen to astronomical levels. Reagan and Bush I quadrupled the national debt in only twelve years. Bush II doubled it again in only eight. It is now ten times higher than it was in 1980 when Reagan was elected. Total public and private debt exceeds 300% of GDP, half again higher than it was in 1929.

The government's unfunded liabilities, promises it has made to the American people but for which no payment source can be identified, now exceed $60 trillion, a literally inconceivable sum that can never, will never, be paid. Federal Reserve economist Lawrence Kotlikoff has suggested that the U.S. government is "actuarially bankrupt."

The full measure of the nation's plight is revealed in Hillary Clinton's first trip as Secretary of State. It was to China, to beg them to fund Obama's new fiscal deficits. Without loans from China, the U.S. economy cannot be revived. The significance of this cannot be overstated: the U.S. no longer exercises sovereignty over its own economic affairs. That sovereignty now resides in the hands of China, the U.S.'s greatest long-term rival.

Thanks to Republican policies of massive debt and shipping jobs abroad, the U.S. has technically become a colony of China. It exports raw materials and imports finished goods, together with the capital to make up the difference. Should the Chinese decide not to lend the trillions of dollars the U.S. is begging for, the U.S. economy will implode, plummeting onto itself in a World Trade Center-like collapse that will leave dust clouds circling the planet for decades.

Notwithstanding the destruction inflicted on the economy by Republican policies, the most devastating breakdown is in the intellectual foundation on which right wing economic ideology itself is premised. Free market doctrine, the secular religion of right-wing America, is in utter, irretrievable shambles.

... Free markets clearly cannot, will not, regulate themselves. It is precisely their innate, irrepressible propensity for sociopathic greed and predatory fraud that has brought the whole of the world's economy to the precipice of collapse.

So what is the right wing response?

They have adopted the strategy and tactics of the failed right wing plotters in Weimar Germany. First, stoke the resentment of the population about the increasingly dire state of its living conditions-no matter that those conditions were created by the very right-wing oligarchs who now pretend to befriend the little guy. Rage is rage. It is glandular and unseeing. Once catalyzed it is easy to turn on any subject.

Second, prevent the new government from succeeding in any meaningful endeavor. The Republicans have set all their efforts to doing everything they can to make sure the Obama administration fails. Rush Limbaugh's infamous, "I hope he fails" pronouncement is only the beginning of the fomenting of hatred from the right. As Limbaugh said, "Let's be honest. Every Republican in America is hoping for Obama's failure."

The same malignant hope oozes unadulterated from all the other Dogpatch Demagogues that rent themselves out to the Republican party to foment resentment against anything liberal: Joe the "Plumber," Rick Santelli, Glenn Beck, Michael Savage, Ann Coulter, and virtually every other wing-nut operative whose intellectual stock in trade has been vaporized by the collision of right-wing policies with objective reality.

Equally so for the "respectable" members of the party, the all-but-three Republican members of Congress who refused to sign on to Obama's first stimulus package and continue to grandstand against every effort toward any form of progress. Contrition for their own abject failure, humility for their destructive hubris, compassion for their crippled country-those have nothing to do with it. All they possess is a blinding, visceral hatred of the left and a masturbatory lust for the return to power.

And what else can they do? Bereft of ideas, bankrupt in ideology, architects of collapse, obstruction is all they have. If Obama is successful, it will not only advertise the full extent of their failure, it will provide a model of liberal governance that would render Republicans irrelevant for decades, much as FDR's success left them out in the political cold for an entire generation. Liberal failure is a matter of life and death for Republicans.

And it's not at all clear that the liberals won't fail. No one should underestimate the task at hand. Never before -- not even during the Great Depression -- has the country inherited such a daunting, intractable set of economic problems: a debt burden so crushing; inequality so vast; a loss of financial sovereignty so constricting; an intellectual edifice so bankrupt; a private economy so uncompetitive; or an opposition so callously self interested in its own recovery and so cavalierly disinterested in the nation's.

. . . Simply put, the Republicans hate Democrats more than they love America.

. . .If they succeed in derailing Obama's efforts, the cost will be incalculable.

After World War I, one of the consequences of the liberal government's failure was Adolph Hitler. Hitler had a genius for exploiting the resentment of the German people for their condition. More than 80% of the Nazi party's members were unemployed. It was these legions of idle thugs who made up the ranks of Hitler's brownshirt militia, the SA. The right wing oligarchy that had set out from the beginning to destroy the Weimar Republic recognized the potency of resentment and Hitler's genius at exploiting it. It was they who sponsored Hitler's ascension to Chancellor in 1933.

Resentment and obstruction are all the right wing in America have to peddle. Their policies are utterly discredited. Their ideology -- even by its own standards -- is a sham. They are so bereft of leaders, their de facto leader is a former drug addicted, thrice-divorced radio talk show host. That is literally the best they can muster. But they have built a national franchise inciting the downwardly mobile to blame the government, not the right, for their problems, exactly as Hitler did in the 1920s.

The Republican propensity for fascism must not be underestimated. Witness their phony justifications for the war in Iraq, fanning the flames of nationalistic aggression, just as Hitler did with Austria, the Sudetenland, Czechoslovakia, and Poland in the 1930s. Consider their symbiotic embrace of corporate interests in the oil, weapons, telecommunications, pharmaceutical, finance, and other industries-the same type of corporate interests that sponsored Hitler's ascent to power. Look at their efforts to dismantle civil liberties with the Patriot Act and the Military Commissions Act. Or their relentless, pervasive propaganda laundered through their corporate-owned right-wing media machine.

These are the classic hallmarks of fascism. The strategy is to obstruct recovery, facilitate collapse, and then incite the faux-populism of public resentment to re-install a corporatist oligarchy which has failed, but which will not abide a reduction of its privileges or a diminution of its control. It is a fetid, seditious agenda, awaiting only its own latter day mustachioed messiah for its final fulfillment.


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Monday, March 9, 2009

Special Tip of the Hat to My Friend Joey

My Friend, Joey, says that Milton Friedman, in his view, is still the foremost economist of our times.

I respectfully and vehemently disagree. Keynesian economics are being proven correct everyday, and adapting those principles to the current world-wide meltdown is the only hope we have.

I know for certain nothing good has come of the unbridled greed Milton Friedman and his disciples unleashed on the world. Google Pinochet and The Chicago School of Economics. Read Naomi Klein's The Shock Doctrine, which details the worldwide effects of violent "revolutions" launched by Friedman's minions--with the ardent cheerleading of most every neo conservative voice in America in the past 40 years.

The 20+ year old clip of Friedman appearing on Phil Donahue's show (below) merely underscores the utter folly of following the economic philosophy of the greed-driven egomaniac Friedman. He snidely and condescendingly touts GREED to Donahue as though it is intrinsically good, using only "everybody does it" as a rationale.

Its very possible to be a traditonal fiscal, economic and monetary conservative without channelling Friendman's rapacious greed.

Thanks for sending the clip, Joey. It illustrates well why American hegemony is decried all over the civilized world.

Saturday, March 7, 2009

For Posterity

The President's Weekly Radio Address
February 28, 2009
Lays out Historic Budget Rationale



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Wednesday, March 4, 2009

Obama's Modest Tax Policy


If Obama's tax plan is approved, a family making $500,000 a year would see its annual tax bill rise to nearly $132,000 from about $120,000, a 10 percent increase, said Clint Stretch, managing principal of tax policy at Deloitte Tax.

Over the past three decades, these families have seen their incomes double and triple while the rest of the country stagnated. Now Obama proposes to increase their tax bill by $12,000 — not even enough to get them back to the rates they were paying when Ronald Reagan left office. This is a very, very modest nod toward fiscal fair play, very much in keeping with Obama's modest optics. You'd have to drink several pitchers of Rush Limbaugh's Kool-Aid to think this counts as soaking the rich.

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Tuesday, February 17, 2009

Bailout Blues--Where'd the $$ Go?


$800 Billion BAILOUT
or is it really $2 Trillion??

Meet freshman Congressman Alan Grayson
D Fla





and visit his campaign site for more vids here

Many are calling him "Bulldog."
Crapaud says: Welcome back Harry Truman!

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Sunday, February 8, 2009

Editorial Cartoon from MSNBC


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Wednesday, January 28, 2009

Republicons rebuff BIPARTISANSHIP

David Neiwert's Post At Crooks and Liars

Obama BiPartisan Outreach Shunned by Republicans

Obama-GOP Meet
icon Download | Play icon Download | Play

President Obama has created a lot of talk with his bipartisan outreach, but so far the results have been predictable: nada.

These kinds of huddles are clearly not going to do any good in the short run. The Republican Party has been in the thrall of rigid ideologues -- men who would rather see the nation's economy go down in flames than either admit they were wrong or even let themselves be proven so -- for so long it will take eons to cure them of the habit.

In the long term, though, they will serve the very useful function of giving Obama cover when he finally gives up on his outreach and just pushes a progressive agenda through.

At some point he's going to realize that all the compromises made in the spirit of "bipartisanship" haven't yielded any results at all, particularly not in winning Republican votes. So at that point it won't make sense to keep making any compromises and just proceed without them.

When that happens, he may actually find Republicans finally willing to shed their ideological blinkers. But he shouldn't count on it before then.

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Saturday, January 24, 2009

BAILOUT ACCOUNTABILITY NOW!


Arn Pearson at Common Cause


Sends out this Appeal on January 23, 2009.


"If you got a bonus from work, you would have to report it to the government. But when our nation's banks get a bailout from the federal government, bank CEOs are allowed to spend it as they see fit.

Does that seem fair to you?

Next week, the House Financial Services Committee is planning to hold a hearing to question CEOs from the nation's nine biggest banks about how bailout funds are being used.

Take action now to demand accountability from bank CEOs who receive bailout funds!

These funds were intended to stop the foreclosure crisis, yet so far there is no evidence the banks that helped get us into this mess are doing anything to help struggling Americans weather the storm.

As nine of the biggest beneficiaries of the bailout, these CEOs have an obligation to use taxpayer dollars in an open and transparent manner.

If you've been turned down for a loan by a bailed-out bank or haven't been able to get the financial help you need, this is your chance to get some answers.

But you must act now, there's only a few days left until the hearing!

With your input, Congress will pressure the top bank CEOs to disclose how funds have helped Americans struggling in a tough economy.

Thanks for all you do,

Arn Pearson "

Common Cause is a national nonpartisan organization with chapters in 38 states. Our mailing address is 1133 19th Street NW, 9th Floor, Washington, DC 20036. Our phone number is (202) 833-1200.

Thursday, January 22, 2009

WHY SINGLE PAYER HEALTH BEST

Stark Health Care Reform

A recent exhaustive comparison of various health reform proposals projected that the number of uninsured in the United States will rise to 48.9 million people in 2010 out of a total estimated population of 306.9 million; 15.9 percent of the total population will be uninsured. Among the plans analyzed, the study estimates that up to 48.9 million uninsured could be covered—under a bill proposed by Representative Pete Stark (D–Calif.).

Representative Pete Stark's (D–Calif.) "AmeriCare Health Care Act of 2007" (H.R. 1841) and Senator Edward Kennedy (D–Mass.) and Representative John Dingell's (D–Mich.) "Medicare for All Act" (S. 1218 and H.R. 2034)

Creates a new public health insurance program administered by the federal government to provide everyone with multiple choices for health coverage. Under the Stark bill (H.R. 1841), employers would either offer their employees coverage or pay into a fund to cover their employees through the new public program. Under the Kennedy and Dingell bills (S. 1218 and H.R. 2034), employers and their employees would help finance the expansion through new payroll taxes.

Estimates of Coverage and Costs in 2010 (Rep. Stark's bill)

Number of uninsured covered

48.9 million

Remaining uninsured

0

Total health spending

($58.1 billion) savings

Federal

$188.5 billion

State and local

($83.6 billion) savings

Employers

$61.5 billion

Household

($224.5 billion) savings



The comparison of all the major plans before Congress

shows the STARK approach covers the most people

for the least money.





If this is socialism, GET OVER IT!!


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Saturday, January 10, 2009

On the "Things could always be worse" front:



Crapaud's good fren' Mssr. Le Proffeseur Paul Krugman de la Laureate-Nobel, had this to say in the Jan 5th NY Times relating to the POWER of the opinions of the People to influence public opinion for the good. Thanks to Mon 'tit Bougre for sending this along to Crapaud.

"A bullet dodged

What would have happened if George W. Bush had actually succeeded in his plan to privatize Social Security? Ask the Italians.

Italy did for retirement financing what President George W. Bush couldn’t do in the U.S.: It privatized part of its social security system. The timing couldn’t have been worse.

The global market meltdown has created losses for those who agreed to shift their contributions from a government severance payment plan to private funds meant to yield higher returns.…

Gaetano Turchetta, a Rome office manager, made the irreversible move to a private plan after a union representative boasted of the potential for 20 percent annual returns. The 43- year-old father of three now says he would sign with “two hands and two feet” if he could switch back."

Crapaud say: A bullet dodged is one well-worth gunny-sacking for future battle discussions.

Friday, January 9, 2009

FROM the Primo Blogger, Joe My God joemygod.blogspot.com
I've purloined the following he summarized from Huffington Post today
:

Unemployment Soars

The December unemployment numbers are out and things are worse than feared..
The nation's unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs. The labor market is expected to remain weak as mass layoffs continue. The Labor Department's report, released Friday, underscored the terrible toll the deepening recession is having on workers and companies, and highlights the hard task President-elect Barack Obama faces in resuscitating the flat-lined economy. For all of 2008, the economy lost a net total of 2.6 million jobs. That was the most since 1945, when nearly 2.8 million jobs were lost. Although the number of jobs in the U.S. has more than tripled since then, losses of this magnitude are still being painfully felt. With employers throttling back hiring, the nation's jobless rate averaged 5.8 percent last year. That was up sharply from 4.6 percent in 2007 and was the highest since 2003.
Be good at work today. (Says Joe).

Crapaud says: It'll get much worse before it begins to get better, but it will get better with bold new leadership.