What happened to all of the doom and gloom economic threads?

[NeverEndingMe]

Those are the regulations keeping the polution out. While I'm sure you pulled that number from your ass still that is the price. Either it's worth it or you want to be China. Pick and STFU.

sean, you want to walk a line...I get that. however, when we look at government and the solution we need....its not a straight line. we need a preverbal cliche solution that as straight as ice

obama tried, and failed miserable. he has no solutions and runs away on vacation. what has obama done for the eocnomy? a stimulus? wtf. putting more government workers to work, is a fucked up short term solution as we shall experience in 2012

we need a better leader. we need congress to work. we are reaching peek oil production and need to start addressing that now. in our oil loving society we can help reduce our oil consumption with Nuclear power and toy solutions like solar and wind generation.

 

[NeverEndingMe]

I disagree with the bennies of a global currency. if we did that, I bet you America would pay $6 to $9 per gallon of gasoline

socialism is a failed experiment, we now consider socialism a mental illness

It's odd how these cut-and-pastes operate. This from NeverEnding Me, a few posts up, is a blog from February 2011, before Strauss-Kahn was somewhat disgraced by a sexual incident and left the IMF. The blog is by a woman called Julie Borowski on 'Freedom Works'. (http://www.freedomworks.org/blog/jborowski/socialist-imf-head-calls-for-global-currency) She's what Americans call a libertarian.

I think she's alarmist about 'bancor'. Nobody is suggesting it replaces national currencies at all. Some people are floating the idea of its being an international currency, which has its merits. She has a rather unusual way of describing Keynes and the proposal:

<< The international bureaucracy has proposed a global currency to honor the father of Keynesian economics- John Maynard Keynes. As an influential economist of the 21st century, Keynes was the antithesis of free markets and limited government. He believed that massive government intervention in the marketplace would somehow lead to prosperity. In 1940, John Maynard Keynes first developed the idea of a supranational currency, called the bancor, to be the world's key currency. When asked about the long-term effects of his economic policies, Keynes famously replied “in the long run we are all dead.”

A global currency would grant even more power to the international bureaucracy while failing to stabilize the global financial system. >>

This is a terrible distortion by conflation of completely separate Keynesian ideas. His proposal for 'bancor' would have required countries over a certain level of deficit *and* over a certain level of surplus in international trade to pay interest on their bancor holdings. That's how it would have attempted to stabilise international trade, by providing inducements to remain within a certain degree of balance. At the moment there is no concrete proposal to solve the problem of countries like China and Germany running vast export surpluses while, in China's case, deliberately distorting the international value of their currency, and such countries holding large quantities of deficit countries' debts in the form of bonds and other investments.

Far from being 'the antithesis of free markets', Keynes was an active loser and gainer on the stock exchange. He believed in specific government intervention in times of recession, not because that 'would somehow lead to prosperity' but because he believed it would have a multiplier effect on the economy, particularly if spent on infrastructure projects that in turn employed the private sector.

His remark 'In the long run we are all dead' is intended to apply to all economics. The point is, Economics as a discipline, whether Hayek's, or Keynes's, fails to take account of the long run, and so in our economic dealings do we.

Patrick

 

[Sean Renaud]

sean, you want to walk a line...I get that. however, when we look at government and the solution we need....its not a straight line. we need a preverbal cliche solution that as straight as ice

obama tried, and failed miserable. he has no solutions and runs away on vacation. what has obama done for the eocnomy? a stimulus? wtf. putting more government workers to work, is a fucked up short term solution as we shall experience in 2012

we need a better leader. we need congress to work. we are reaching peek oil production and need to start addressing that now. in our oil loving society we can help reduce our oil consumption with Nuclear power and toy solutions like solar and wind generation.

No I want to make inteligent decisions. Which means that every single time we hit a problem we look at all the solutions. You always say government is fucktards and are the 1% and we should fire as many of them as possible.

Obama has been blocked entirely the Republicans, save UHC that after a good mangling he managed to push through. We have no idea what would have happened had he done something.

We could work on solutions but that's gonna take you turning your constant arguments against the right who generally don't even believe in peak oil. Otherwise you're not even interested in meeting us halfway much less working towards a a solution to peak oil.

 

[NeverEndingMe]

No I want to make inteligent decisions. Which means that every single time we hit a problem we look at all the solutions. You always say government is fucktards and are the 1% and we should fire as many of them as possible.

Obama has been blocked entirely the Republicans, save UHC that after a good mangling he managed to push through. We have no idea what would have happened had he done something.

We could work on solutions but that's gonna take you turning your constant arguments against the right who generally don't even believe in peak oil. Otherwise you're not even interested in meeting us halfway much less working towards a a solution to peak oil.

don't defend obama, you are just enabling bad behavior. obama needs to find a way to get things to work, not shrug his shoulders after five seconds and say, "I tried"

obama is a horriable leader. hell, even Steve Jobs made a political comment about how obama is a dip shit when it comes to leadership. the only thing obama has been sucessful at is golfing and vacation. he wasted too much time, energy, and clout on obamacare - which will be another government failure in time

we need someone to stand tall, act tough, and get both sides to work. don't you understand that?

 

[Sean Renaud]

don't defend obama, you are just enabling bad behavior. obama needs to find a way to get things to work, not shrug his shoulders after five seconds and say, "I tried"

obama is a horriable leader. hell, even Steve Jobs made a political comment about how obama is a dip shit when it comes to leadership. the only thing obama has been sucessful at is golfing and vacation. he wasted too much time, energy, and clout on obamacare - which will be another government failure in time

we need someone to stand tall, act tough, and get both sides to work. don't you understand that?

I agree he should do more. You should also submit and shut up.

The only way anybody is going to get through to people like you is to bully them and sadly there are no democrats with that kind of backbone. It'll be interesting to see how long you force this issue and how utterly it fucks you for it. In Obama you have a man who genuinely wants to meat you halfway. OWS doesn't like him because he's a centrist. Just wait until they get someone elected. You'll be looking back at OBama as the last bastion of Conservativism and it would be funny if it won't be so fucking sad.

 

[jeninflorida]

don't defend obama, you are just enabling bad behavior. obama needs to find a way to get things to work, not shrug his shoulders after five seconds and say, "I tried"

obama is a horriable leader. hell, even Steve Jobs made a political comment about how obama is a dip shit when it comes to leadership. the only thing obama has been sucessful at is golfing and vacation. he wasted too much time, energy, and clout on obamacare - which will be another government failure in time

we need someone to stand tall, act tough, and get both sides to work. don't you understand that?

I think people have to defend obama and the only excuse for obama is the classic "Republicans are against him on everything"

why don't we hear people screaming, "we need someone strong to get both sides to work"?

I know, to expect a strong leader is a foreign concept to many

 

[Sean Renaud]

I think people have to defend obama and the only excuse for obama is the classic "Republicans are against him on everything"

why don't we hear people screaming, "we need someone strong to get both sides to work"?

I know, to expect a strong leader is a foreign concept to many

Because anybody who's been paying antention knows Obama is betting the other side to work. There is no other option he has except wait until he has a MEGA majority. That's why.

 

[jeninflorida]

Because anybody who's been paying antention knows Obama is betting the other side to work. There is no other option he has except wait until he has a MEGA majority. That's why.

I find it interesting that Obama is losing support and might have some trouble reaching his goal of one billion dollars for his campaign. I don't think Obama will get the same support from New York as he did the first time around.

now, that is just sick. one billion dollars to buy an election.

 

[Sean Renaud]

I find it interesting that Obama is losing support and might have some trouble reaching his goal of one billion dollars for his campaign. I don't think Obama will get the same support from New York as he did the first time around.

now, that is just sick. one billion dollars to buy an election.

If that's what it takes that's what you do. Though I have little doubt he'll reach his goal and purchasing the electrion is gonna be a cake walk. Really he's overpaying at one billion.

 

[4est_4est_Gump]

Sears, Kmart: Beginning of the end?

As a slide in sales continues, Sears Holdings announces the pending closures of more than 100 stores. And a year from now, the outlook might be just as grim.
http://money.msn.com/ways-to-invest/articles.aspx?post=928527db-24b8-400d-8021-26f5a32b828c

Wait! Things are picking up!

Did anybody think those companies were gonna pick up? Go check Vons, Ralphs and Food 4 Less. I'd be shocked to see any of them increasing substancially either. This is the game plan Koala and it's yours. Give three cheers.

We have an example of two companies not able to meet consumer demand.

Sears used to be the be-all, but I've tried repeatedly to get replacement chains for my saws there, but they never carry the actual size you need, you have to go to the internet. Once you do, you find cheaper suppliers...

Vons, Ralphs and Food 4 Less must suffer from some of the same problems.

In a true free market, the government is not paramount, the consumer is.

 

[4est_4est_Gump]

No I want to make inteligent decisions. Which means that every single time we hit a problem we look at all the solutions. You always say government is fucktards and are the 1% and we should fire as many of them as possible.

Obama has been blocked entirely the Republicans, save UHC that after a good mangling he managed to push through. We have no idea what would have happened had he done something.

We could work on solutions but that's gonna take you turning your constant arguments against the right who generally don't even believe in peak oil. Otherwise you're not even interested in meeting us halfway much less working towards a a solution to peak oil.

Blame the people then.

The Republicans did not use force to take up the barricades. The people gave them a warrant.

Government cannot work on solutions it can only ask for more control. As we have been witnessing, certainly over the course of my 50+ years that the more control we give them, the less Capital is available and with that and an open immigration policy we have seen the real loss of wages as the middle class is denied the tools of productivity and then out-bid on the lower end of the job spectrum.

If you do not want to go back to the right, then you have to get accustomed to this reality.

 

[4est_4est_Gump]

"The more communal enterprise extends, the more attention is drawn to the bad business results of nationalized and municipalized undertakings. It is impossible to miss the cause of the difficulty: a child could see where something was lacking. So that it cannot be said that this problem has not been tackled. But the way in which it has been tackled has been deplorably inadequate. Its organic connection with the essential nature of socialist enterprise has been regarded as merely a question of better selection of persons. It has not been realized that even exceptionally gifted men of high character cannot solve the problems created by socialist control of industry."
Ludwig Heinrich Elder von Mises

"The request of Industry to the Government is as modest as that of Diogenes to Alexander: Stand out of my sunshine."
Frédéric Bastiat

 

[4est_4est_Gump]

For a few measly millions, Wall Street not only bought itself a president, but got the start-up firm of B. H. Obama & Co. LLC to throw a cabinet into the deal, too — on remarkably generous terms. President Obama, for a guy prone to delivering prim and smug little homilies denouncing greed, greed, greed — the only of the seven deadly sins that truly offends Democrats (though Mrs. Obama has done some desultory work on gluttony) — is strangely comfortable among the Gordon Gekkos of this world. Shall we have a partial roll call? Beat the drum slowly and call out the names: With unemployment still topping 9 percent, the catastatic world economy teetering on the brink of another, even larger financial catastrophe, and trillion-dollar U.S. deficits as far as the green-shaded eye can see, let’s hear it for Obama’s first National Economic Council director, Lawrence Summers (of hedge-fund giant D. E. Shaw and venture-capital firm Andreessen Horowitz), who has had some nice paydays courtesy of Lehman Bros., JPMorgan Chase, and Citigroup. Let’s hear it for Citigroup’s Michael Froman, deputy assistant to the president and deputy national-security adviser for international economic affairs, for Hartford Financial’s Neal Wolin, deputy Treasury secretary, for JPMorgan’s William Daley, Obama’s chief of staff, and for his predecessor, Rahm Emanuel of Wasserstein Perella. Let’s hear it for Fannie Mae’s Tom Donilon, national-security adviser. (No, seriously: One of the luminous interstellar geniuses who brought Fannie Mae to its current aphotic state of affairs, upside down to the tune of trillions of dollars, is running national security, and the former director of the White House Military Office, Louis Caldera, was on the board of IndyMac when it finally went toes up — sleep tight, America!) And, lest we forget, let’s have three big, sloppy cheers for economic-transition team leaders Robert Rubin (Goldman Sachs, Citigroup) and folksy tax enthusiast/ghoulish billionaire vulture Warren Buffett.

That’s a pretty fantastic lineup, from Wall Street’s point of view, but the real bonus turned out to be Treasury secretary Tim Geithner, who came up through the ranks as part of the bipartisan Robert Rubin–Hank Paulson–Citigroup–Goldman Sachs cabal. Geithner, a government-and-academe man from way back, never really worked on Wall Street, though he once was offered a gig as CEO of Citigroup, which apparently thought he did an outstanding job as chairman of the New York Fed, where one of his main tasks was regulating Citigroup — until it collapsed into the yawning suckhole of its own cavernous ineptitude, at which point Geithner’s main job became shoveling tens of billions of federal dollars into Citigroup, in an ingeniously structured investment that allowed the government to buy a 27 percent share in the bank, for which it paid more than the entire market value of the bank. If you can’t figure out why you’d pay 100-plus percent of a bank’s value for 27 percent of it, then you just don’t understand high finance or high politics.

But high finance is not the only corporate mystery to be unraveled here: President Obama’s repetitious denunciations of Big Oil have not stopped his man David Axelrod’s firm from setting up Astroturf campaigns on behalf of Exelon subsidiary ComEd, or stopped the president from appointing GE chief executive/tax-minimization engineer/offshoring guru/bailout baby Jeff Immelt to his risible White House jobs commission, or choosing former Kraft and Duke Energy board member Mary Schapiro to run the SEC.

When President Obama opined during his 2011 State of the Union speech that a corporate tax-rate cut might be just the thing for America after a year of record corporate profits, his left-wing base was shocked and dismayed. Heck, some conservatives were caught offguard, too. Perhaps they hadn’t noticed who was running the Obama administration: In large part, the same guys who plan to be running the next Republican administration.

Barack Obama (Nasdaq: bho) has been a pretty good buy for Goldman Sachs et al. Sure, the Frank-Dodd financial-reform bill is going to be a sharp pain in Wall Street’s pinstriped posterior, and it’s going to cost some moneymen some money, but not enough that anybody’s going to be out a champagne saber. Mostly, Big Business has got just what it wanted from the Big Government guys in the Obama administration: Frank-Dodd did not do much of anything to lift the cloud of opacity over the world of structured finance, which is what the investment bankers feared most. President Obama has made some noises about ending the carried-interest treatment that allows the fine fellows who run private-equity funds to pay 15 percent in taxes on their gazillion-dollar take-homes instead of 35 percent, but the private-equity guys know that isn’t going to happen, mostly because they’ve heard this story before, from Senator Schumer, and they recognize it for what it is: an inelegant appeal for campaign donations. Beyond Wall Street proper, your Fortune 500 types are looking at the many-splendored tax credits and subsidies and grants and stimulus dollars lavished upon firms such as the now-defunct Solyndra and the really-should-have-been-defunct General Electric and wondering: How do I get me some of that?

What’s worse is that much of official Washington is looking at Wall Street and asking the same question. The answer: Easy. If Wall Street has done pretty well by investing in Washington, the more despair-inducingly germane fact is that Washington has done pretty well by investing in Wall Street. A catalogue of recent congressional insider-trading, self-dealing, IPO shenanigans, and inexplicably good investment luck would fill an entire volume, and in fact it has: The book has the Tea Party–bait title Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison, by Peter Schweizer of the Hoover Institution. That’s a lot of title for a fairly slim book (176 pages of reportage, plus end notes), but, despite its relatively slender dimensions, it cost me an entire night’s sleep: I spent half the night reading it in a single sitting and the other half having nightmares about it. It’s the most offensive and disturbing thing I’ve read since sampling the oeuvre of the Marquis de Sade as an undergraduate.

Some of the highlights: Nancy Pelosi and her husband were parties to a dozen or so IPOs, many of which were effectively off limits to all but the biggest institutional investors and their favored clients. One of those was a 2008 investment of between $1 million and $5 million in Visa, an opportunity the average investor could not have bought, begged, or borrowed his way into — one that made the Pelosis a 50 percent profit in two days. Visa, of course, had business before Speaker Pelosi, who was helping to shape credit-card-reform legislation at the time. Visa got what it wanted. The Pelosis have also made some very fortunate investments in gas and energy firms that have benefited from Representative Pelosi’s legislative actions.

The Pelosis made a million bucks off a single deal involving OnDisplay, the IPO of which was underwritten by investment banker William Hambrecht, a major Pelosi campaign contributor. Writes Schweizer: “The same Bill Hambrecht went before the House Finance Committee, chaired by Barney Frank, a Pelosi ally, to push for a change in the registration process for stock IPOs, an exemption called Regulation A. Under current law, a company that plans an IPO of less than $5 million in stock gets an exemption from detailed reporting. Hambrecht wanted the exemption raised to $30 million, which would greatly benefit his business, making IPOs easier, quicker, and far less expensive. As the hearings began, Congressman Frank said, ‘I should note also that it was Speaker Pelosi who first called this to our attention earlier in the year. It is something that the speaker has taken a great interest in.’”

Besting Nancy Pelosi, Rep. Gary Ackerman (D., N.Y.) got in on the pre-IPO action, without putting up so much as one rapidly depreciating U.S. dollar of his own assets, when a political supporter — who just happened to be the biggest shareholder of the firm in question — lent him $14,000 to buy shares in the private company, which he then sold for more than a hundred grand after the firm went public. There wasn’t so much as a written loan agreement.

On and on and on it goes: Sen. John Kerry invested aggressively in health-care companies while shaping health-care legislation. Rep. Spencer Bachus (R. Ala.) was a remarkably apt options trader during the days when he had a front-row seat to Congress’s deliberations on the unfolding financial crisis. The Obama administration poured billions of dollars into solar companies, of which the failed Solyndra is the most infamous. But a lot of that money went to other firms, including First Solar, which is owned by billionaire Obama supporter Ted Turner and by Goldman Sachs. Goldman Sachs is omnipresent. And during the financial crisis, a big piece of Goldman Sachs was bought by Warren Buffett, who stacked up a lot of cash when the government poured money into that struggling investment bank with the support of Barack Obama. When the federal government bought into Goldman Sachs, it negotiated for itself a 5 percent dividend. Warren Buffett got 10 percent — on top of the benefit of having Washington inundate his investment with great rippling streams of taxpayers’ money. Republicans are no saints, either, but Democrats were running the congressional show during such crucial episodes as the implementation of the bailouts and the health-care debate — which were big investment opportunities for political insiders with access to market-moving information. Congress has effectively exempted itself from insider-trading rules, not that the SEC would have the guts to go after a Senator Schumer or a Speaker Pelosi for these exploits. And that — not campaign contributions, not lobbying — is the really stinky petri dish of festering corruption at the nexus of Washington and Wall Street. You want a case for limited government? That’s it. And Wall Street is on the wrong side of the argument, which is one reason free-market conservatives should not romanticize the lords of finance.

Say this for them, though: Gordon Gekko at least was an honest social Darwinist. He made a lot of money and declared that “greed is good.” Michelle Obama (2007 household income: $4,238,165) made a whole lot of money and then lectured a bunch of blue-collar women in Zanesville, Ohio (median household income: $28,854) that they had a moral obligation to forgo high-paying jobs in “corporate America” (which, notice, is not exactly HQ’d in Zanesville, Ohio, poverty rate: 26.3 percent) in order to “work for the community.” Like Gordon Gekko, she’s a carnivorous competitor at the top of the socioeconomic food chain, but she’s telling us to eat our veggies, like good little herbivores.

Wall Street can do math, and the math looks like this: Wall Street + Washington = Wild Profitability. Free enterprise? Entrepreneurship? Starting a business making and selling stuff behind some grimy little storefront? You’d have to be a fool. Better to invest in political favors. As Schweizer points out, until fairly recently the Blackstone Group, the world’s largest private-equity manager, had spent only about $250,000 a year on lobbying, which to me sounds like one part-time K-Streeter and a lot of lunches. After a friendly encounter with Senator Schumer, the firm saw the scales fall from its eyes and began to spend millions of dollars a year on lobbying — and hired Senator Schumer’s former staff counsel, along with dozens of other Democratic staffers, to do its lobbying. (Senate Republicans will get their chance, don’t you worry, as soon as they’re back in the majority.) You’d think that the Blackstone Group, along with the rest of Wall Street, would be happy with its investment. But the pinstripes gang is suffering from a collective case of buyers’ remorse: Sure, the insurance guys got the keys handed to them with Obamacare, and the structured-finance guys still are sitting securely behind their fortifications of impenetrable complexity and staggering leverage, and the investment banks got to underwrite a lot of “Build America Bonds” and nonsensical stimulus financing. But they want more — that is their nature. And they’re sizing up a cozy little investment in Mitt Romney, a fact that should give Republicans pause.

Kevin D. Williamson, NRO

When Government gets so powerful that its purchase price is cost effective, even imperative, to business, then business will purchase government indulgences.
A_J, the Stupid

 

[4est_4est_Gump]

Requiescat in Pace

Chanukah presents are supposed to make a fellow happy but this one made me sad. It was tendered tenderly enough by loving family members, but after registering the sentiment of the familial I found myself becoming sentimental over the loss of the familiar. The gift was a gorgeous sweater, bought in the waning moments before Filene's Basement disappears from the American scene. Together with its parent company, Sym's, it will pass in mere days into the realm of the nostalgic.

My sadness is not so much for the loss of Sym's as a purchasing venue, although I have been a customer for about 35 years. I have in fact always enjoyed its atmosphere, its buying eye and its selling style. But that sort of bond is easily transferred to another store or chain. The tragedy is that the reason Sym's and Filene's have been euthanized is the decline of American prosperity.

That's right. Although they are discount outlets, their success was based on the overflow with which God blessed America. When the rich got richer the poor got richer by getting these bargains. The irony here is that our nation slipping from prosperity to austerity is depleting the stock at the bargain table.

The way it works is as follows. When times are plush and wallets are flush, manufacturers churn out lots of stuff. All kinds of stuff. High end, low end and middle middle. These makers figure they are in the field of dreams, and if they build it we will come. Some trendy fashion idea, a new nuance in some item, a kitschy new gadget, a whiz of a gizmo: the big cheeses turn them out in the hope of building a better mousetrap. When in doubt, put it out. "Whatsamatta, you don't want one of these. Okay, take a dozen."

Many products become cheaper to make when made in larger quantities. Some huge machine gets turned on for eight hours; you can either produce a thousand widgets at a cost of 16 cents apiece or two thousand at 11 cents apiece. In The History of the Jews, Paul Johnson says that the Jews invented the volume discount, but volume manufacture was probably invented by some more populous bunch. Certainly a country like China with a billion citizens understands that less is not more; more is more.

When the bounty flows, when there is money around, the risk-takers take risks. They make tons of beautiful suits, scores of magnificent dresses. They do it hoping to sell them to the rich folks for big money but inevitably there is overstocking, Mister Moneybags decides the pants are too baggy, Miss Prim decides the dress is not dressy enough, and now the Sir Plus line turns into surplus.

The reason why Sym's and Filene's have been unable to make money the last few years, despite the fact that there are more people feeling the pinch and looking to save a buck, is that there is no excess inventory anymore. The first company along the line is missing and the assembly is breaking down. The business model of Sym's and Filene's is to sell an upper-middle-class look for a lower-middle-class price. They can do that only when the overachievers are overproducing and selling them the spillover.

http://spectator.org/archives/2011/12/28/top-of-the-bottom-line

 

[4est_4est_Gump]

On page 509, we begin the celebration of the economy turning around and the cheering of a rising stock market.

Let's have a moment of reality √...

Stocks finished near their worst levels Wednesday, with the S&P falling into negative territory for the year, as the euro tumbled and investors remained on the sidelines amid what is expected to be a light news week.

http://www.cnbc.com/id/45804289

 

[JAMESBJOHNSON]

I'm surprised no one's talking about gold deflation. The price of gold is down almost $400 from its high.

 

[unregistered]

 

[4est_4est_Gump]

Git yer wallets out and prepare to fork over some more Obama "stash."

DECEMBER 29, 2011 4:00 A.M.
Resisting Euro-bailouts
GOP legislators are addressing the issue; presidential candidates should, too.

Margaret Thatcher, who is the subject of a new film starring Meryl Streep that will premiere in theaters this Friday, once said that the problem with European socialism was that it would eventually run out of other people’s money. That is a good summation of what has happened with today’s euro crisis. The politicians across the water have run out of other people’s money in their own countries, so now they want other nations to foot the bill.


Topping the list of potential suckers is the United States. Our Treasury secretary, Tim Geithner, has been in constant motion shuttling between the U.S. and Europe in recent weeks trying to contain the euro crisis. A study by the Fitch ratings agency warns that the exposure of the U.S. financial sector to European countries and banks is “sizable.”

The Obama administration realizes that if Europe’s economies get sicker, the U.S. economy will catch cold and see unemployment rise. But one method of staving off that prospect that is being pushed behind the scenes by the Obama administration is increased U.S. funding of the International Monetary Fund, which is already on the hook for previous massive bailouts of European banks and financial institutions.

Many Republicans in Congress want nothing to do with any more taxpayer bailouts. They say that would only avoid the painful decisions Europeans have to make to rein in their profligacy. Over 60 House Republicans have signed on to legislation to pull back on U.S. funding of the IMF.

Because the U.S. provides some 17 percent of the IMF’s funding, Oklahoma senator Tom Coburn estimates the U.S. could be liable for as much as $176 billion if the IMF extends its existing bailouts to Italy and Spain and the euro collapses.

The GOP bill would start unraveling that by snatching back a $108 billion line of credit the U.S. approved in 2009 for a crisis fund at the IMF. So far very little of it has been spent.

Its sponsors would like to keep it that way. Cathy McMorris Rodgers of Washington State, a member of the House Republican leadership and the author of the bill, points out that European countries have yet to provide any guarantees that promised fiscal reforms will be enforced. “We need transparency in our dealings with the IMF, and we aren’t getting it. Congress has to make clear that we don’t believe further bailouts in Europe will work, and the U.S. shouldn’t be a part of them,” she says.

Indeed, Greece has already gotten bailouts from the European Union and the IMF equal to $28,000 per Greek adult. Portugal and Ireland have received sums in the same neighborhood, but the debt-to-total-economy ratio of all three countries continues to grow, a sure sign that they are resisting real structural reforms. “Rather than participating in Europe’s version of TARP, America must focus on solving its own $15 trillion debt problems,” says Sen. Jim DeMint of South Carolina, who is carrying the Senate version of Representative McMorris’ bill.

There is no doubt such views are in accord with U.S. public opinion. If the euro continues to sink, the issue of bailouts to Europe could surface in the Republican primaries.

John Fund, NRO

"Why are you here?"

"To get some money."

"What kind of money?"

"Obama money."

"Where's it coming from?

"Obama."

"And where did Obama get it?"

"I don't know... his stash, I don't know. I don't know where he got it from, but he's givin' it t'us to help us. We love him. That's why we voted for him... Obama! Obama!"

 

[4est_4est_Gump]

I'm surprised no one's talking about gold deflation. The price of gold is down almost $400 from its high.

Still up from when I purchased it.

There's deflation everywhere; that's the point of the article I posted yesterday about surplus stores, note that the Overstock.com commercials are even saying that, and why U_D is not seeing his price inflation even though we've had a money supply inflation.

People are too scared to consume other than commodity buying, which may eventually hit the panic point if the dollar proceeds to erode, and business is scared shitless to Capitalize, therefore, everyone is trying to hold steady and just keep what they have.

We need new leadership, leadership not based upon the ideas of Socialist Economy.

 

[4est_4est_Gump]

America Has the Slows
Victor Davis Hanson
PJ Media

Sometime about mid-2009 America began changing psychologically. True, to the naked eye, America retained the old hustle and bustle, but in an insidious fashion it began to think a bit differently. And that change in mentality explains in part why a year-and-a-half recession that officially ended in summer 2009 seems never to have ended at all.

In short, a sizable fraction of the upper-incomes is hesitant, defensive, unsure — and to such a degree that for a while longer it is not hiring, buying, or investing in the old way. It believes not only that there is no certainty in the tax code, the cost of new entitlements, or our national finance, but that even if there were their own successes would be suspect and earn antipathy rather than praise.

In mirror-image fashion, those of the lower incomes are likewise hesitant to take risks — unsure that the rewards of work in the private sector are all that much better than what government can offer through subsidies. The former group fears government will grow; the latter that it will not. The one suspects that Obama will confiscate more earnings; the other hopes that it will. Either way, there are fewer enterprising employers and fewer self-motivated galvanized workers.

The result of this two-front war is that America has been slowing down.

Or in crudely reductionist terms: the one asks “why hire another worker, when it is not worth it to pay out more in new health care costs and taxes down the road?” while the other answers “why get off unemployment or food stamps when it is more likely that they will be extended than curtailed?”

We now accept the notion of the peasant mentality — that all wealth is finite and more for someone means less for another. In this new them/us atmosphere, Barack Obama took the natural tensions between the classes and exploited them as few other presidents dared. Suddenly, there really were two Americas: the suspect top who made over $200,000 and the more noble majority below who made less. Lost in that cheap division was any notion of the value to others from those who did well, or the reasons why some prospered, or the fragility of their brief good fortune.

If the upper 5% paid nearly 60% of the income taxes, then the problem was more fundamental: how had they been so well compensated in the first place to have the wherewithal to pay such taxes? It did no good to remind Obama that confiscating all the wealth of the 1% would not end the debt, or that steep new income tax on the 5% in and of itself will do little to balance the annual budget. His war was not about finding a remedy to his own profligate borrowing, but in retaining power through revving up anger at the better-off.

In the last three years, we have become so numb to Obama’s monotonous invective that it is now part of the national DNA: spread the wealth, fair share, fat cat, punish enemies, corporate jet owners, Super Bowl and Vegas junketeers, 1%, raise the bar, Grinch, millionaires and billionaires, at some point you’ve made enough money, no time for profit, and on and on. The subtext is always the same: the reason why, say, an orthodontist makes more than a Wal-Mart clerk is due to some sort of race, class, or gender discrimination, unfair advantage, or fatal flaw in the capitalist system, and only a technocratic elite in government retains the wisdom and morality to rectify that resulting inequality. One’s salary, then, is not quite his own, but more the collective’s — given that the professional’s good fortune results from an insidious system of exploitation from the moment he was born to the last bill he sent out for services rendered.

...

Note here, however, that the president’s social sermonizing is predictably selective. On the top end, we hear about the horrors of the anonymous millionaire and billionaire, never of the real Jon Corzine who bankrupted MF Global, gave over $70,000 to the Obama campaign, and cannot remember what he did with over $1 billion of someone else’s money. In the world of Obama, human greed is not endemic, but of a particular conservative and grasping sort; in contrast, liberal conniving is always one of carelessness or can be recompensed by liberal activism.

So what I most resent in Obama’s pop socialism is not just its proven impracticality and moral pretensions, but its utter hypocrisy.

 

[4est_4est_Gump]

And the rub is not just that he sees no contradiction between railing at the 1%, while keeping utterly silent about a George Soros’s past, or a John Kerry’s tax evasion, or a John Edwards’ palatial digs, or Leonardo DiCaprio’s $75 million a year in recompense, or his own preferences for elite getaway spots and golf links. Rather, he seems to think that redistributionist rhetoric provides a sort of penance for the high life, as if we are all to go for a stint in reeducation camp — and in the Buffett manner express remorse over the system that enriched us, or in the Soros fashion to fund organizations devoted to stopping what we had ourselves helped foster and perpetuate, or more mundanely, to vote for an organizer like Obama, a sort of 3-5% tax-increase mordida that is the cost of doing business.

On the lower end, in the them/us war of Barack Obama, the president never stops to contemplate the impulses in flash-mobs that target high-end stores, or why the poorer off still have the capital to buy $190 sneakers, and will fight savagely to get them. Or why shopping days around Thanksgiving and Christmas have turned into bare-knuckles free-for-alls in a nation that apparently is ill-housed and ill-fed. For Obama, the massive importation of cheap consumer goods, the revolution in technology, the vast expansion of federal entitlements, off-the-books cash income, the redistributive help from relatives and friends, all these considerations simply do not factor and therefore cannot nuance his picture of a vast underclass without access to basic necessities, at once victimized by the well off and in need of far more borrowed federal redress.

In the last three years, we have also developed a different idea about collective national wealth. In material terms, America has never had so vast a supply of natural gas and oil, so many minerals, timber, and prime agricultural land. Yet now there is something deemed wrong in carefully tapping such riches, whether in Alaska, offshore, in the Gulf, or throughout the American West. There is no logic to this strange attitude. After all, the Obama creed is to use fossil fuels abundantly. He likes arugula. Hardwood floors and lithium batteries are nice. The administration hardly cares that the exporters of much of our imported oil are politically illiberal and environmentally reckless. Instead, there is a deep sense of pessimism that there is something inherently wrong with profiting from our own oil, gas, trees, minerals in the ground, or soil. Is it the idea that a few will do too well from the exploitation of national wealth that will so enrich the many? Or is the idea that our culture is too affluent, too crass? Will solar, wind, and biofuel energy along with forced reductions in resources alone make Americans live the lifestyle that is more in accord with nature?

For Obama, the great tragedy of a Solyndra was not the corruption of old-style fast-buck artists masking their greed through insider green lobbying with members of his administration, but rather that such scandals (along with Climategate and the implosion of Al Gore) have sidetracked the entire green philosophy that mandated more government unionized employees, government technocrats, and government tax collectors to reorder society itself.

The result of all this is a sort of unending but rarely expressed war. The business man does not know what his taxes are, only that they should go up, given his privilege. He is judged not by the good that he does but by the excessive money he makes. The corporation does not know what the rules of the game are, whether his energy is too polluting, his workers not unionized enough, or his product not regulated enough. None believe Obamacare, as promised, will reduce costs. None believe that government borrowing and massive new entitlements are reducing unemployment and raising GDP. None believe that wealth can be created by record deficits and aggregate debt. None believe that printing ever more money will not lead to inflation

 

[4est_4est_Gump]

Budget Collapse: Too Much Free Money
By Lewis E. Lehrman, The American Spectator
It's past time for Congress to "tear up" the U.S. Treasury's credit cards.

The super-committee of Congress is the latest group to confess abject defeat by the Treasury budget deficit. Who can be surprised by this total failure? During the past generation Congress has made as many as fifteen legislative attempts to control government spending -- aimed ultimately at a balanced budget. The most notable efforts were those sponsored by the all-time budget hawk, Senator Phil Gramm of Texas. But every administrative and legislative effort by the authorities, no matter how well-intentioned, has collapsed. Why is this so?

Nobel economist Milton Friedman believed the solution to the budget deficit problem was to deny Congress tax revenues. So he advised Congressmen and Presidents to oppose all tax increases -- thereby denying bloated government the funds with which to increase spending. But Friedman's advice has failed, too. We know this because marginal tax rates have been reduced from as high as 70% in 1964 to 15-20-39% in 2011 -- depending on the type of income. But congressional spending has nevertheless increased every year -- such that, today, only 60% of the Federal budget is financed by taxes, the remainder by Treasury debt. Total direct Federal debt is now about equal to total U.S. output.

The intractable budget deficit and the inexorable rise of government spending has a simpler explanation. Congress and the Treasury are in possession of several open-ended charge accounts -- "permanent credit card financing" -- with no limits. With its charge cards the Treasury can borrow new credit (money) from the banking system -- much of what it needs every year to finance the ever-rising budget deficit.

A look at the current Federal Reserve Balance Sheet shows that the Fed has created about $1.7 trillion of new credit (money) with which to purchase Treasury debt. Foreign central banks have created about $2.7 trillion of new credit to purchase U.S. Treasury bonds. This global, electronic, money-printing exercise* has financed almost 30% of the total direct debt of the U.S. Treasury. In 2002, Ben Bernanke, now Chairman of the Fed, did not mince words to describe this process:

nder a fiat (that is, paper) money system, a government (in practice, the central bank in cooperation with other agencies) should always be able to generate increased nominal spending and inflation, even when the short-term nominal interest rate is at zero…. [T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.

He might have added that these "no cost" dollars, printed by the Fed, are the enablers of the perennial U.S. budget deficit.

But the Fed is not the only credit card used by the Treasury to finance the budget deficit. Because the dollar is the world's reserve currency, foreign central banks also finance U.S. budget deficits (as the custody account of the Fed balance sheet shows). Domestic and foreign commercial banks, too, supply vast amounts of new credit to the U.S. Treasury because domestic, foreign, and international bank regulators, such as the Basel authorities, define U.S. sovereign bonds as high quality assets for which bank reserves are not necessary. Therefore financial institutions can qualify their overleveraged balance sheets by loading up on Treasury Securities. Indeed, only 10-20% of the total direct debt of the U.S. Treasury is now owned by the non-bank, non-government private market. In a word, given the reserve currency role of the dollar, the Federal Reserve and foreign central banks have been given every institutional incentive to finance the U.S. budget deficit. Beginning with World War I, every monetary discipline has been removed by domestic and international authorities, such that runaway government spending everywhere relies on the ultimate credit card -- newly created money in the banking system.

The simplest solution to the government spending problem in Congress is "to tear up" its credit cards. The way to do this is not with ad hoc and unavailing administrative patchworks, all of which are nullified by world banking system credit made available to the U.S. Treasury. Instead, the effective democratic solution is authorized by the U.S. Constitution -- in Article I, Sections 8 and 10: -- whereby the control of the supply of dollars is entrusted to the hands of the people -- where it stayed for most of American history, especially from 1792 to 1914. This was America's longest period of rapid, non-inflationary, economic growth -- almost 4% annually, with the budget under control except wartime.

Congress need only mobilize its unique, Article I, constitutional power "to coin money and regulate the value thereof." From 1792 to 1971 Congress defined by law the gold value of the currency such that paper dollars and bank demand deposits were convertible to their gold equivalent -- by the people (1792-1914) and/or by governments (1933-1971). Congress should exercise this constitutional power to restore dollar-gold convertibility, because of the proven budgetary and economic growth benefits of a dollar as good as gold.

First, the discipline of convertibility would automatically set the limit on Treasury access to its Federal Reserve credit card. If the Federal Reserve created more money than participants in the market wanted to hold, people would get rid of the inflationary excess by promptly exchanging paper and credit money for the gold equivalent. But under the true gold standard, the Fed and the commercial banks would be required by law to maintain dollar-gold convertibility at the statutory gold-dollar parity -- or suffer insolvency. In order to maintain dollar convertibility to gold, the Fed and the commercial banks must reduce the quantity of money and credit, including credit to the Treasury -- thus controlling government spending increases and inflation.

Second, the empirical evidence of American economic history also shows that convertibility to gold stabilizes the value of the dollar. The same evidence shows that a stable dollar also stabilizes the general price level over the long run. For example, under the gold standard, the price level in 1914 was at almost exactly the same level as it was in 1879 and in 1834. There was no long term inflation, even over an 80 year period! But from 1971 -- Nixon's termination of dollar-gold convertibility -- until 2011, the purchasing power of the dollar (adjusted by the CPI) has fallen 85% in a 40 year period.

Third, gold convertibility of the dollar leads to a vast outpouring of savings from inflation hedges such as commodities, farmland, art, antiques -- almost anything perceived to be a better store of value than depreciating paper currencies. Stable money also creates incentives to save from income. Combined with the global release of trillions of hoarded, inert, unproductive inflation hedges, convertibility triggers new savings which would pour into the productive investment market. The new investment would give rise to a general economic expansion -- through new business, new products, new plant and equipment, creating thereby a renewed demand for labor to work the expanding production facilities....

* inflation that will be realized in prices if business is to begin to feel more secure from the interventions of the Federal Government.

 

[JohnnySavage]

Still up from when I purchased it.

There's deflation everywhere; that's the point of the article I posted yesterday about surplus stores, note that the Overstock.com commercials are even saying that, and why U_D is not seeing his price inflation even though we've had a money supply inflation.

People are too scared to consume other than commodity buying, which may eventually hit the panic point if the dollar proceeds to erode, and business is scared shitless to Capitalize, therefore, everyone is trying to hold steady and just keep what they have.

We need new leadership, leadership not based upon the ideas of Socialist Economy.

* inflation that will be realized in prices if business is to begin to feel more secure from the interventions of the Federal Government.

 

[4est_4est_Gump]

 

[JohnnySavage]

The market will go up. Unless it goes down.