CSM-Instead of stimulus, do nothing – seriously

[SkinsHokieFan]

Just another side to the debate

http://www.csmonitor.com/2009/0209/p09s01-coop.html


OAKLAND, CALIF. - As we wait to see how the politicians in Washington will alter the stimulus package the Obama administration is pushing, many questions are being raised about the measure's contents and efficacy. Should it include money for the National Endowment for the Arts, Amtrak, and child care? Is it big enough to get the economy moving again? Does it spend money fast enough? Hardly anyone, however, is asking the most important question: Should the federal government be doing any of this?

In raising this question, one risks immediate dismissal as someone hopelessly out of touch with the modern realities of economics and government. Yet the United States managed to navigate the first century and a half of its past – a time of phenomenal growth – without any substantial federal intervention to moderate economic booms and busts. Indeed, when the government did intervene actively, under Herbert Hoover and Franklin D. Roosevelt, the result was the Great Depression.

Until the 1930s, the Constitution served as a major constraint on federal economic interventionism. The government's powers were understood to be just as the framers intended: few and explicitly enumerated in our founding document and its amendments. Search the Constitution as long as you like, and you will find no specific authority conveyed for the government to spend money on global-warming research, urban mass transit, food stamps, unemployment insurance, Medicaid, or countless other items in the stimulus package and, even without it, in the regular federal budget.

This Constitutional constraint still operated as late as the 1930s, when federal courts issued some 1,600 injunctions to restrain officials from carrying out acts of Congress, and the Supreme Court overturned the New Deal's centerpieces, the National Industrial Recovery Act and the Agricultural Adjustment Act, and other statutes. This judicial action outraged President Roosevelt, who fumed that "we have been relegated to the horse-and-buggy definition of interstate commerce." Early in 1937, he responded with his court-packing plan.

Although Roosevelt lost this battle, he soon won the war. As the older, more conservative justices retired, the president replaced them with ardent New Dealers such as Hugo Black, Stanley Reed, Felix Frankfurter, and William O. Douglas. The newly constituted court proceeded between 1937 and 1941 to overturn its anti-New Deal rulings, abandoning its traditional, narrow view of interstate commerce and giving the federal government carte blanche to spend, tax, and regulate virtually without limit.

After World War II, the government enacted the Employment Act of 1946, codifying the government's declared responsibility for managing the economy "to promote maximum employment, production, and purchasing power," and it has actively intervened ever since, purportedly to attain these declared ends. Its shots have often misfired, however, and we have endured booms and busts, a decade of stagflation, bouts of rapid inflation, and stock-market crashes. The present recession may become the worst since the passage of the Employment Act.

Federal intervention rests on the presumption that officials know how to manage the economy and will use this knowledge effectively. This presumption always had a shaky foundation, and we have recently witnessed even more compelling evidence that the government simply does not know what it's doing. The big bailout bill enacted last October; the Federal Reserve's massive, frantic lending for many different purposes; and now the huge stimulus package all look like wild flailing – doing something mainly for the sake of being seen to be doing something – and, of course, enriching politically connected interests in the process.

Our greatest need at present is for the government to go in the opposite direction, to do much less, rather than much more. As recently as the major recession of 1920-21, the government took a hands-off position, and the downturn, though sharp, quickly reversed itself into full recovery. In contrast, Hoover responded to the downturn of 1929 by raising tariffs, propping up wage rates, bailing out farmers, banks, and other businesses, and financing state relief efforts. Roosevelt moved even more vigorously in the same activist direction, and the outcome was a protracted period of depression (and wartime privation) from which complete recovery did not come until 1946.

The US government has shown repeatedly that as an economic manager it is not to be trusted. What we need most are authorities wise enough to follow the dictum, "First, do no harm." The stimulus package will do enormous harm. The huge debt burden it entails, by itself, ought to condemn the measure. America is already drowning in debt. But the measure will also wreak harm in countless other directions by effectively reallocating resources on a grand scale according to political priorities, rather than according to individual preferences and economic rationality. As our history shows, the economy can recover strongly on its own, if only the politicians will stay out of the way.

[Thiebear]

This is my side... When the IT bubble burst and people with Lucent were jumping out windows.. no 800 billion..

now Madoff people will get money back? really? how far do we go?

[greenspandan]

if this were a normal recession, then yes, i agree. let the correction happen. do nothing.

but this mess makes the .com bubble look like pocket change. unfortunately, this crisis threatens to permanently damage our ability to do business and we could irrevocably lose our central position in the world economy.

[SnyderShrugged]

if this were a normal recession, then yes, i agree. let the correction happen. do nothing.

but this mess makes the .com bubble look like pocket change. unfortunately, this crisis threatens to permanently damage our ability to do business and we could irrevocably lose our central position in the world economy.


The only "permanent" damage comes from our government:2cents:

[Thiebear]

So your saying spending 70 billion on Food Stamps would get us in good standings again?
Or spending 100 billion on schools... 2 million on a golf course...

come on.. theres stuff in there the average citizen can't even fathom as important.
But we being told its an imperfect bill with some junk in it that is needed because we have to do "something".

without telling us what the something is, and that it probably won't help this year, but.
it will make the people think were doing something if nobody reports on it and we'll feel good.

[alexey]

We've been invsting billions in Iraq for years now. Who's gonna do things like repair the infrastructure, upgrade the electric grid, etc?

There is stuff that the government needs to do. There is stuff that it should have been doing, but has been neglecting. That simple fact should be easy to agree on regardless of whether you have beef with Dem pork.

[greenspandan]

So your saying spending 70 billion on Food Stamps would get us in good standings again?
Or spending 100 billion on schools... 2 million on a golf course...


$70 billion on food stamps? i have a hard time believing that more than 10% of the stimulus is going towards food stamps. please cite a source. because according to what i've read, Food Stamps were cut from the stimulus, along with about 40 other things, which all totaled $80 billion.

and for the record, yes, i do think maintaining these programs is a great idea when faced with a crippling depression. it helps those who need it, and more importantly, it provides JOBS at a time when unemployment is skyrocketing.

[81artmonk]

Completely agree with this. Let everything play out and let the economy correct itself.

Everyone in govt is acting as if, we do nothing, than the whole deck of cards will colapse and that just isn't the case.

Sure things will get ugly, but in time it wil right itself.

[JMS]

This is my side... When the IT bubble burst and people with Lucent were jumping out windows.. no 800 billion..

now Madoff people will get money back? really? how far do we go?


Actually nobody is talking about bailing out the Madolf folks. What the Republican Bush administration proposed and passed was bailing out the large banks which if allowed ot fail would have sent caskading waves of business closures through the economy.

What Obama is proposing is we reverse the growing unemployment growth, so/ before unemployment climbs to 15-20%. Which is where economists think its heading...

More importantly we are looking at an L shaped recovery. Which means the hole we are currently in will eventually flatten out and the economy won't rebound. Traditionally we see V shaped recoveries in this country. That's not what the economists are predicting this time around. We need the public works to keep the country from having a systemic double digit unemployment rate.

[JMS]

Just another side to the debate

http://www.csmonitor.com/2009/0209/p09s01-coop.html


You do realize that your entire economic philosophy and that of the Republicans is to defend Hoover and blast the New Deal. ROTS OF RUCK with that one. That type of logic is what will ensure we have a liberal government for generations...

I frankly think the conservatives leaders and ideology are bankrupt when they can't even recognize where we were, much less where we are. It proves that folks like Anne Colter are what pass for unbiased in the GOP. Capable of taking a hard look only at the oposition and never doing their own house cleaning. I really sincerely hope the republicans throw the current leaders and tactics out and start to adopt some compeditive ideas so they can keep the Dems honest. The current philosopy of lieing and FUD just isn't hacking it.

[JMS]

if this were a normal recession, then yes, i agree. let the correction happen. do nothing.

but this mess makes the .com bubble look like pocket change. unfortunately, this crisis threatens to permanently damage our ability to do business and we could irrevocably lose our central position in the world economy.

#1)
Actually we always spend our way out of a Recession.... It's an accepted practice even by the now defunct Friedman followers.. Reagan did it, Bush Sr did it. Bush Jr Did it..

#2)
We aren't going to loose our central place in the worlds economy either. Who is going to take our place? Russia, the EU, China or Japan? They are all significantly worse off than we are. The danger is when the crisis is over the worlds economy is a fraction of what it was only capable of employing 80-90% of the people it formerly did, and not capable of growing at a pace to provide jobs to the new workers. Systemic Stagflation, that's the danger.

[JMS]

We've been invsting billions in Iraq for years now. Who's gonna do things like repair the infrastructure, upgrade the electric grid, etc?

There is stuff that the government needs to do. There is stuff that it should have been doing, but has been neglecting. That simple fact should be easy to agree on regardless of whether you have beef with Dem pork.

Iraq will have cost more than 3 trillion dollars when it's all said and done.

[JMS]

$70 billion on food stamps? i have a hard time believing that more than 10% of the stimulus is going towards food stamps. please cite a source. because according to what i've read, Food Stamps were cut from the stimulus, along with about 40 other things, which all totaled $80 billion.

and for the record, yes, i do think maintaining these programs is a great idea when faced with a crippling depression. it helps those who need it, and more importantly, it provides JOBS at a time when unemployment is skyrocketing.

And Jobs provide people with money, money to pay their bills, and by paying their bills they keep the economy from collapsing.

[GibbsFactor]

Our national debt will be $10 tril by 2010.

[Midnight Judges]

Ronald Reagan prolonged the cold war. If it weren't for his foolish policies, the cold war would have ended in 1983. In fact, the cold war was a result of Reagan's policies.

[JMS]

Everyone in govt is acting as if, we do nothing, than the whole deck of cards will colapse and that just isn't the case.

Sure things will get ugly, but in time it wil right itself.

So it doesn't give you any pause at all that "everybody", conservative economists liberal economists, Bush administration, and Obama administration are all advocating spending...... You prefer to go on you gut? No basis in history, current events, or scholarly study?

They're all fools?

[JMS]

Our national debt will be $10 tril by 2010.

Actually National debt is already 10.7 trillion.... Bush doubled it.. from 5.6 trillion in 2001 when he took over...
http://www.brillig.com/debt_clock/

[JMS]

Ronald Reagan prolonged the cold war. If it weren't for his foolish policies, the cold war would have ended in 1983. In fact, the cold war was a result of Reagan's policies.


I'll forgive you for that because you are probable too young to remeber the Gipper's administration...


The cold war was very much alive under Carter and Reagan. Hate Reagan for his fiscal irresponsibility if you like, but I will always believe he did the country a great service.

[McD5]

So it doesn't give you any pause at all that "everybody", conservative economists liberal economists, Bush administration, and Obama administration are all advocating spending...... You prefer to go on you gut? No basis in history, current events, or scholarly study?

They're all fools?

Everything in history says this is wrong. We are following Japan.

The Repubs wanted to spend because all of the bankers are friends of Paulson. He paid them off very well.

The Dems always love to tax and spend. No surprise there.

Any economist will tell you that this is not the answer.

[PeterMP]

Everything in history says this is wrong. We are following Japan.

The Repubs wanted to spend because all of the bankers are friends of Paulson.

The Dems always love to tax and spend. No surprise there.

Any economist will tell you that this is not the answer.

Look at Japan during the Great Depression and then come back and say that history says he's wrong.

[Midnight Judges]

I'll forgive you for that because you are probable too young to remeber the Gipper's administration...


The cold war was very much alive under Carter and Reagan. Hate Reagan for his fiscal irresponsibility if you like, but I will always believe he did the country a great service.

It was tongue in cheek-sort of like blaming a depression that started in 1929 on a guy who took office in 1933.

And then complaining that the guy who virtually eliminated unemployment didn't do it fast enough.

[McD5]

Look at Japan during the Great Depression and then come back and say that history says he's wrong.

Ever hear of something called "The lost decade" in Japan?

If not, keep your eyes open. You are seeing it right here in the USA.

If the govt is going to cut the dollar in half, they should at least give some to the people. A rebate of the last 3 years income taxes seems to be the most sensible solution.

Or...we can give it to banks who won't lend...pay off environmental groups....and then get ready for the third stimulus plan later this year.

[DjTj]

Ronald Reagan prolonged the cold war. If it weren't for his foolish policies, the cold war would have ended in 1983. In fact, the cold war was a result of Reagan's policies.OLS

If you're going to make the joke, you might as well take it all the way:

Ronald Reagan wasted taxpayer's money fighting the Cold War. If it weren't for his foolish policies, the Soviet Union would have fallen on its own by 1983. The market always self-corrects, and the planned economy of the Soviet Union was destined for failure from the start. In fact, if we had never formed NATO, never spent on the Marshall plan, never went to the Moon, and just stayed out of Korea, Cuba, Vietnam, and Afghanistan, Communism probably would have been defeated decades earlier.

[PeterMP]

Ever hear of something called "The lost decade" in Japan?

If not, keep your eyes open. You are seeing it right here in the USA.

If the govt is going to cut the dollar in half, they should at least give some to the people. A rebate of the last 3 years income taxes seems to be the most sensible solution.

Or...we can give it to banks who won't lend...pay off environmental groups....and then get ready for the third stimulus plan later this year.

Our current situation isn't really that comparable to the lost decade, but I am aware of it.

Are you aware of what Japan did in the beginning of the Great Depression?

[McD5]

Our current situation isn't really that comparable to the lost decade, but I am aware of it.

Are you aware of what Japan did in the beginning of the Great Depression?

The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929–31. However, Japan's Minister of Finance (MoF) Osachi Hamaguchi (http://en.wikipedia.org/wiki/Osachi_Hamaguchi) implemented the first version of Keynesian economic (http://en.wikipedia.org/wiki/Keynesian_economics) policies: first, by increasing deficit spending (http://en.wikipedia.org/wiki/Deficit_spending); and second, by devaluing the currency (http://en.wikipedia.org/wiki/Yen). The MoF believed that the deficit spending could easily be paid for when productivity improved.[citation needed (http://en.wikipedia.org/wiki/Wikipedia:Citation_needed)]
The devaluation of the currency had an immediate effect. Japanese textiles began to displace British textiles in export markets. The deficit spending, however proved to be most profound. The deficit spending went into the purchase of munitions for the armed forces. By 1933, Japan was already out of the depression. By 1934 the MoF realized that the economy was in danger of overheating, and to avoid inflation, moved to reduce the deficit spending that went towards armaments and munitions. This resulted in a strong and swift negative reaction from nationalists, especially those in the Army, culminating in an assassination attempt on the MoF, leading to his eventual demise from poor health some months later. This had a chilling effect (http://en.wikipedia.org/wiki/Chilling_effect_(term)) on all civilian bureaucrats in the Japanese government. From 1934, the military's dominance of the government continued to grow. Instead of reducing deficit spending, the government introduced price controls and rationing schemes that reduced, but did not eliminate inflation, which would remain a problem until the end of World War II (http://en.wikipedia.org/wiki/World_War_II).
The deficit spending had a transformative effect on Japan. Japan's industrial production doubled during the 1930s. Further, in 1929 the list of the largest firms in Japan was dominated by light industries, especially textile companies (many of Japan's automakers, like Toyota (http://en.wikipedia.org/wiki/Toyota), have their roots in the textile industry). By 1940 light industry had been displaced by heavy industry as the largest firms inside the Japanese economy.[35] (http://en.wikipedia.org/wiki/Great_Depression#cite_note-34)

[Henry]

OLS

If you're going to make the joke, you might as well take it all the way:

Ronald Reagan wasted taxpayer's money fighting the Cold War. If it weren't for his foolish policies, the Soviet Union would have fallen on its own by 1983. The market always self-corrects, and the planned economy of the Soviet Union was destined for failure from the start. In fact, if we had never formed NATO, never spent on the Marshall plan, never went to the Moon, and just stayed out of Korea, Cuba, Vietnam, and Afghanistan, Communism probably would have been defeated decades earlier.

That's pretty much what these FDR revisionists do. Very well done.

Yes, the argument could be made that had we simply done nothing, Communism would have collapsed under it's own weight without our help. And that our debt would be much much lower now and our economy would be much healthier. And that of the Presidents who felt compelled to spend us into oblivion fighting this fake war, Reagan was the worst of the bunch.

But beyond the intellectual exercise, does anyone really believe that? Seriously.

[PeterMP]

The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929–31. However, Japan's...

So what does history say about deficit spending working or not working?

[SkinsHokieFan]

Ronald Reagan prolonged the cold war. If it weren't for his foolish policies, the cold war would have ended in 1983. In fact, the cold war was a result of Reagan's policies.

OLS

To be serious though, a fair argument can be made that the Soviet Union would have collapsed anyway and lost in Afghanistan regardless of our actions

Although I think the 2nd part is tough because the tide of the Afghan war didn't turn until we started supplying stingers

[JMS]

Everything in history says this is wrong. We are following Japan.


First off Japan's economy hit the skids as it went from adollecense where it was growing every year at 11-12-14% in the 70's and 80's to when it was shifting to a mature economy like ours growing at 4%....

Their systemic problems were sheilded by their huge growth for decades and only bit them in the buttocks when they didn't have tht huge growth anylonger..

That's not the same boat we are in at all.



The Repubs wanted to spend because all of the bankers are friends of Paulson. He paid them off very well.

The Dems always love to tax and spend. No surprise there.

Any economist will tell you that this is not the answer.

That's my point. If your belief is everybody is a crook, then I think you aren't thinking it through carefully enough. Typically we're pretty good economically... we are the largest most sucessful economy on earth.

[zoony]

Japan's immigration policy has been the only thing holding them back. Stems from the fact that there is no greater xenophobic culture than the Japanese.

If population is finite or declining your economy can only grow so much.

...

[JohnLockesGhost]

So what does history say about deficit spending working or not working?

Hasn't done us much good for the last few years.

[JMS]

The Great Depression did not strongly affect Japan.

Jez.. man are you actually comparing the US economy in 2009 to Japans non industrialized largely agrarian economy of the 1930's?

[JMS]

Hasn't done us much good for the last few years.


Well when you hand out cash to huge corporations like Halaburton without getting a fair return it's hardly can be considered a stimulus. Stimulus is what puts money back into the economy, not wasting trillions on wars, and sweetheart boondogles.

[JMS]

It was tongue in cheek-sort of like blaming a depression that started in 1929 on a guy who took office in 1933.

And then complaining that the guy who virtually eliminated unemployment didn't do it fast enough.

I'm sorry I failed to grasp your analogy/humor.

[zoony]

anyone having board problems today or just me?

[PeterMP]

Hasn't done us much good for the last few years.

1. We don't actually know how much good it has done or not done. W/o deficit spending it is possible our economy would be in even worse shape.

2. I tend to believe there is a point at which deficit spending will quit working, and it is possible we are there so you might be right.

(I WILL have my cake and eat it.)

My point to him was more about the incorrectness of his statement regarding what history shows. He's interpreting history EXACTLY WRONG.

That our current situation (e.g. we have a large deficit already) is different than the historical comparisions that people like to draw (and therefore the solution that worked historically might not work again) is a different argument.

And is in fact one that I would entertain and one that I have been considering starting a thread on.

I think the better comparision to our current situation is Europe post-WWII.

[JohnLockesGhost]

anyone having board problems today or just me?

Not me. Ahmed confessed in just three minutes.

[JMS]

The Great Depression did not strongly affect Japan. The Japanese economy shrank by 8% during 1929–31. However, Japan's Minister of Finance (MoF) Osachi Hamaguchi (http://en.wikipedia.org/wiki/Osachi_Hamaguchi) implemented the first version of Keynesian economic (http://en.wikipedia.org/wiki/Keynesian_economics) policies:


Wow those Darned Japanese.. They implemented Kenssian econmic policy a full six years becore Keynsian actually published it.

The General Theory of Employment, Interest and Money (http://en.wikipedia.org/wiki/The_General_Theory_of_Employment,_Interest_and_Mon ey), was published in 1936 three years into FDR's first term in office.

Also Keynsian is actually credited with influencing FDR, care to guess what our economy GDP did when FDR took office?

[McD5]

It isn't as clear as black or white. And a discussion on all the different aspects of our situation is way too complex for this forum.

I recently gave a seminar on this topic one month ago to some grad students at a local business school here in Orlando. I am nothing special, but am on local television weekly regarding the stock market, and I am occasionally asked to speak at local colleges on financial matters.

The real problem is exactly who is making the decisions on where the money is spent.

The root of that problem is that we have bankers like Paulson, giving bailouts to their friends--the very same people that got us into this situation. The citizens see nothing, and are still unable to get credit in many cases. Paulson's friends make off with fortunes.

Out of the last $750 billion, $18 billion alone was paid out in bonuses to the top executives of the worst-run companies in the country in the month of December.

And on the other side.....now we are going to throw cash at environmental groups, thanks to Pelosi.

Now if we had leaders in charge that put the citizens first, and their banker friends and campaign supporters later, maybe we could get somewhere with spending.

If these "stimulus packages" actually had more stimulus, and less bs, that would also be encouraging.

As it stands right now--that just isn't the case.

[JMS]

That's pretty much what these FDR revisionists do. Very well done.

Yes, the argument could be made that had we simply done nothing, Communism would have collapsed under it's own weight without our help. And that our debt would be much much lower now and our economy would be much healthier. And that of the Presidents who felt compelled to spend us into oblivion fighting this fake war, Reagan was the worst of the bunch.

But beyond the intellectual exercise, does anyone really believe that? Seriously.

You know the best explaination for the cause of the housing bouble and the economic downturn, I've seen has been NPR's "this American Life."
http://www.thislife.org/graphics/icon_full.gif (http://podcast.thisamericanlife.org/promos/355.mp3)30-second Promo (http://podcast.thisamericanlife.org/promos/355.mp3)http://www.thislife.org/graphics/icon_full.gif (javascript:playMe(355);)Full Episode (javascript:playMe(355);)

It's like 20 minutes but it's an excellent piece. Basically it makes the case that it took the human race a few hundred years to create a great pool of money of 36 trillion dollars and six more years after 2000 to double that capital.....

So at a time when global capital had doubled and was desparate for investment, Alan Greenspan cut the T-Bills interest rates to 1% effectively making the largest borrower in the world the US governemnt a less attractive loaner.

So what was the effect. The money flowed everywhere. The US housing market was a prime recipient...

listen to the story..

[JMS]

The real problem is exactly who is making the decisions on where the money is spent.


I would say the real problem we face is the credit crunch is styfuling businesses and chokeing off our jobs and economic growth.

Agarian Japan's problem wasn't similar because their economy and consumers weren't similar.

One can't make broad generalities on econmic solutions or failed remedies by comparing economies which are not alike.

Paulson's biggest problem as I see it is was transparency. We don't know who got the money, and their wasn't much oversite..... It's too early to say if his friends got the money. Hopefully the FBI will be looking into that.

As for Pelosi, I think you are talking about less than a third of 1% of the money being discussed.

[McD5]

I would say the real problem we face is the credit crunch is styfuling businesses and chokeing off our jobs and economic growth.

Agarian Japan's problem wasn't similar because their economy and consumers weren't similar.

One can't make broad generalities on econmic solutions or failed remedies by comparing economies which are not alike.

Paulson's biggest problem as I see it is was transparency. We don't know who got the money, and their wasn't much oversite..... It's too early to say if his friends got the money. Hopefully the FBI will be looking into that.

As for Pelosi, I think you are talking about less than a third of 1% of the money being discussed.

We know exactly where a lot of the money went from good old Hank.

If you want to vomit in your mouth, do a little research on John Thain.

Here it is in a nutshell:


Thain and Paulson are best friends....both colleagues from Goldman Sachs.

When Thain became the ceo of Merrill Lynch, he was given a boatload of stock options--in addition to his regular pay package.

These stock options would not be vested until Thain was at the company for a period of no less than ten years. Ten years is a long time to a thief like Thain that bounces from one company to another.

Unless......wait for it......wait for it.....it's coming......

Unless Merrill Lynch was acquired by another party.

Yep, if MER, one of the oldest, independent financial firms in the country was purchased by another party, Thain could cash in immediately.

So what happened next?


Thain called his good buddy, Paulson on the phone, and convinced Paulson that a portion of your tax money, the tarp funds, should be given to Bank of America to buy out Merrill Lynch, thereby allowing Thain to cash out immediately.

Merrill Lynch was trading at $16 per share. And it was dropping $4 per share, per day. This is when many other banks were dropping to zero.

Bank of America, actually you, the taxpayer, financed the purchase of Merrill Lynch at $30 per share.

This is one day after it was trading at $16 per share. Why the huge premium? Why the rush? Why not just offer $18, or even a buy-under, like at $8?

The combined entities, Bank of America AND Merrill Lynch are now at $6.50 per share. Bank of America itself was at $34 per share the day the deal was announced.


Thain got his money.....redecorated his office, and moved up Merrill Lynch employee bonuses two months ahead of time, to be finalized days prior to the official closing date of the takeover. He, actually you, paid out millions in bonuses to MER employees days before they released the worst earnings in company history to add even more insult to injury.

That is what is really going on in this country. And the public has absolutely no idea about what is really happening.

And people wonder why we haven't seen handcuffs yet on these bankers?

[PeterMP]

I recently gave a seminar on this topic one month ago to some grad students at a local business school here in Orlando. I am nothing special, but am on local television weekly regarding the stock market, and I am occasionally asked to speak at local colleges on financial matters.

Please, tell me you are joking.

Did you tell them about Robert McHugh?

[Chachie]

I know it's not in the immediate best interest of anyone but there's only one way this country will learn from it's greed and debauchery: Full-on CRASH.

No bail-out. Let the chips fall where they may and see who builds a new, better country.

[luckydevil]

Love me some Bob Higgs. I wish he could debate Paul Krugman in a public forum.

And yes some of us are not afraid to argue that our rapid expansion of military spending (from the end off WW2 and on) and general hawkishness did indeed prolong the cold war. Reagan just happen to be at the right place at the right time.

[McD5]

Please, tell me you are joking.

Did you tell them about Robert McHugh?

No, I didn't.

But I should name my first two children after that guy--he has made me a lot of money just over the last four days alone.

He actually has the best stimulus idea I have seen....he presented it to Congress recently. It is up on his site.

https://www.technicalindicatorindex.com/subscribers/guest-articles/McHugh%27s%20Article%20Rebate%20Three%20Years%20In come%20Taxes%202009.pdf

That proposal would be a great thread here.

[sjinhan]

I know it's not in the immediate best interest of anyone but there's only one way this country will learn from it's greed and debauchery: Full-on CRASH.

No bail-out. Let the chips fall where they may and see who builds a new, better country.


well for the people who wants the government to stay put and not do anything... this is what will happen.. you let the chips falls where they may and just deal with the full-on crash... the economy has no chance to recover from its current state if we do not act... The crash might happen regardless of what we do but at least we are trying to get a fighting chance here...

Also in my honest opinion of the whole "size" of this package is this... who cares!? you know why? because when the stimulous package fails or if we do nothign and the crash comes... the US currency will be in shambles along with everything else... only thing of true value will be hard assets like natural resources (oil, gas, food, etc) that countries need to function...

so when people were complaining that oil and gas cost $140.. they shoudl really see it when oil and gas costs $1000 (this number is just to make a points) due to devaluation of the dollar when the crash comes...

[mardi gras skin]

Well when you hand out cash to huge corporations like Halaburton without getting a fair return it's hardly can be considered a stimulus. Stimulus is what puts money back into the economy, not wasting trillions on wars, and sweetheart boondogles.

I don't understand. Several friends have been able to pour money into the economy because of their work in Iraq. Some of them work for government contractors and some of them work for the government. They all got big paychecks that went to buy homes and vehicles other big ticket items.

So, there's no doubt that the war has poured a lot of money into the American economy. What are you trying to say here?

[GibbsFactor]

I'm going to live with it (have no choice, we aren't in charge anymore) and just hope and pray it creates enough jobs to keep people working, and that stimulates the economy. Hopefully by the time these projects are up and running people can start opening up small businesses, investing, etc...

Inflation is the price we pay for our monetary system.

[JMS]

We know exactly where a lot of the money went from good old Hank.


We really don't. Hank spent 350 Billion dollars, we can account for less than a third of that. The oversight board which congress required, was never called into session; and when Paulson went before congress to answer for where all the money went; he amazingly told them it wasn't any of their business. He said publicizing where the money went would actually make the public loose faith and destabilize those institutions. This after he mandated that institutions which didn't want the money take some of the money because againt to do otherwise would reflect badly on the institutions which did partake.


If you want to vomit in your mouth, do a little research on John Thain..
...
That is what is really going on in this country. And the public has absolutely no idea about what is really happening.


Bottom line is Thain didn't cause this crisis, nor is the crisis limited to Meryl. Thain might have cashed in, but he really wasn't starving before he cashed in either.

What is happenning here is larger than Meryl. Larger than Fannie and Freddie; and even Larger than the 750 billion Bush package and the 800-900 billion coming Obama package. Thain walked away with less than .001% of just what Bush and Obama are going to spend.

What happened in a nutshell is global wealth doubled in six years from 2000-2006. In 2000 global investment assets went from 36 Trillion dollars to 70 Trillion Dollars. Finding good investments for all the wealth was getting harder and harder, especially because the US Federal Reserve in 2006 started paying only 1% interest on T-Bills. This caused the investers to seek ever more dangerous investments to keep their earnings high. Problem is they started making bad investments to people who couldn't afford to pay them back. Then when the investors started to loose their money they got hyper conservative, now they don't want to buy anything but American T-bills currently selling at, wait for it.. Zero percent interest...
But they don't want to make loans to consumers, even good loans any more... That's why it makes sense for our government to borrow money and get it into the economy.

[JMS]

I don't understand. Several friends have been able to poor money into the economy here because of their work in Iraq. Some of them work for government contractors and some of them work for the government. They all got big paychecks that went to buy homes and vehicles other big ticket items.

So, there's no doubt that the war has poured a lot of money into the American economy. What are you trying to say here?

War and weapons for war is one of the worst ways to stimulate the economy. Sure you pay a contractor 100$ an hour and that seems like it's coming back to our economy... Problem is the government is paying 200$ for that guy and he get's his check over in Iraq.... It's likely only a quarter or half of hte money ever comes back to our economy. It's also not the case that the 3 trillion dollars spent on the war on terror and Iraq if it ended today had a positive effect on the economy.

[JMS]

Love me some Bob Higgs. I wish he could debate Paul Krugman in a public forum.

And yes some of us are not afraid to argue that our rapid expansion of military spending (from the end off WW2 and on) and general hawkishness did indeed prolong the cold war. Reagan just happen to be at the right place at the right time.


Tell that to the eastern Europeans who lived involuntarily under a communist totalitarianism yoke for five decades...

The communists weren't bad guys because Ronnie called them bad guys. They were actually very bad evil people who preyed upon the weak..

[luckydevil]

Tell that to the eastern Europeans who lived involuntarily under a communist totalitarianism yoke for five decades...

The communists weren't bad guys because Ronnie called them bad guys. They were actually very bad evil people who preyed upon the weak..

Ok, yeah

What does that have to do with my last post.