Well..looks like the republicans got themselves a genuine
Oreo Cookie  to head up the RNC. It fits.

C

I have been reading for quite some time how bad the economy is.
Job losses, consumer confidence or lack there of, bank bail outs,
foreclosures and on and on. Most of these new items contain only
vague references and few real specifics.  When they do give numeric
data, it's toward ambiguous items or referencing things that most
people do not understand well. We hear of percentage drops in employment
but in relation to what is not always clear. And as far as the financial
sector is concerned, I wonder if even congress or the president knows
exactly and if they do they are not telling.

They use euphemisms like toxic assets, and over leveraged and references
to the depression of the 1930s and the recession of the 1950s.

The point is that without specifics we don't know exactly what is going on
with much of this and we are scaring the living bejesus out of our selves.

The lack of clarity during this who thing is in my opinion having a more
negative effect on people that the reality is. And it's an effect that will
have an even longer lasting consequence that the event itself.

Look what happened after 9/11. The media and government started to
compare it with Pearl Harbor and it wasn't even close. Bad yes.
Catastrophe no. But before long everyone was seeing terrorists
under every rock. Bush gets on the tube and makes a speech
containing generalities about the economic sky falling and everyone
is chicken little.

I'm not saying that I don't think things are bad. But no one says how
bad, bad is. Just really, really bad. The psychological aspects of this
type of news can be just as devastating as the situation, maybe more
so since people over react to it.

Even I have have change my behavior and I have a relatively secure job
at a state university. We are doing relatively well as our enrollment is still
going up. But I have cut back quite a bit though I do not really need to.
And I know there are lots of other people who are doing the same in
similar positions. With out specifics, people will mentally make the
situation worse that it is. As a friend of mine would say. We "awfullize"
it.

If there are banks that are not solvent, Washington needs to say so and
say which ones and then take appropriate action. Give better reference
to the statistics and in a way most people would understand. If there
are companies on the skids, which ones. The people who work for them
know which ones already. What products, specifically are not selling
and which ones are.

Obama keeps talking about openness. How about some clarity too.

C

LOL..I just love Sam Smith's take on this.

I have argued in the past that
Washington is run these days by high
functioning autistics, suffering a sort
of political Asperger's Syndrome, who
can't seem to connect the data in their
minds with the realities of life.

A example: after clipping all the latest
best stories I could find on the fiscal
crisis, I searched for two words: "small
business." They didn't appear because no
one seems to notice the importance of
small business if you want to create
jobs.

But a year ago the Small Business
Administration reported that small
businesses (less than 500 employees)
employed 51% of nation's private
non-farm workforce. From 2003 to 2004
companies with less than 20 employees
created roughly 1.6 million net new
jobs. Companies with 20 to 499 employees
created around 275,000 net new jobs.
Meanwhile, employment at companies with
more than 500 employees shrank by
214,000. The SBA also reported that over
the last 20 years small businesses have
created roughly 3 out of 4 net new
private non-farm US jobs.

Why this indifference? Three possible
reasons are that small business people
are poorly represented in Congress,
they're weak in lobbying and they don't
give enough money to candidates.

But it is also true that as a greater
percentage of power players become
lawyers, MBAs or financial whizzes, a
lesser percentage even pause to think
about small business. And this is not a
partisan issue; both major parties
ignore the smaller firms.

This is just so true. Both parties are totally out of touch
with the common person. No wonder voter turn out is
generally low.
He goes on to mention the way Washington is dealing
or rather not dealing with the bankruptcies.

Thus we found initially little interest
in decentralizing to bankruptcy judges
the decisions on foreclosures as being
proposed by John Conyers. Today's
Washington Post, for example, shoved the
story onto the business page, noting
that "Democrats have backed off efforts
to include the provision in the economic
stimulus package that's making its way
through Congress."

Why the reticence? Something like it
worked for FDR, it's common sense, and
it would even make Obama look good. But
it's not the sort of thing you learn
about in law and business school. And
it's too close to the ground for
comfort. And the banks don't like it.

Heavens..can't upset the banks. you know those bastions
of financial austerity and competence that are currently
sucking the country dry.

There is absolutely no doubt that if
Lyndon Johnson and Adam Clayton Powell
were drafting a bailout it would be
dramatically different from what Obama
has come up with. And politics has
surprisingly little to do with it. It is
far more about what and who you care
about most. As Roosevelt demonstrated,
you can overcome the liabilities of
intelligence or social and financial
success with common sense, good judgment
and a well directed heart, but you have
to work at it.

Right on Sam. I would dearly love to see a Black, female
common sense "Harry Truman" type run for office. But I'm
afraid such a person would be to wise to ever take the job.

C

Economist Michael Hudson has some thoughts on this.

The real question is what the Wall
Street elite will do with the money.
From Chuck Schumer and Barney Frank
through Larry Summers, the Obama
administration hopes that the banks will
lend it out to Americans. Borrowers are
to take on yet more debt - enough to
start re-inflating house prices and
making homes yet more unaffordable,
requiring buyers to take on yet larger
mortgages. Larger mortgages at rising
prices are supposed to help the banks
rebuild their balance sheets - to earn
enough to compensate for their gambling
losses.

But this neglects the fact that today's
looming depression is caused by debt
deflation. Families, businesses and
government having to spend more wage
income, profits and tax revenues on debt
service instead of buying goods and
services. So why is the solution to this
debt overhead held to be yet MORE debt?
Is there not something crazy here?

The government's solution, placed in its
hands by the financial lobbyists, is to
bail out the bankers and Wall Street
while leaving the "real" economy even
more highly indebted. All this talk
about "more credit" being needed, all
this begging of banks to lend more money
and then extract yet more interest and
amortization from the economy, is
leading it even deeper into the debt
hole. It is not helping families repay
their debts. And indeed, homeowners
whose mortgages already exceed the
market price of their property are not
going to be able to borrow more.

And this is one of the problems with this. That there is a
real risk that "priming" the system will simply restart the
mess over again. An economy that is based nearly entirely
on consumerism is simply not sustainable because you
eventually run out of things to consume and ways to pay
for them. America gave up it's manufacturing base decades
ago to pursue a model based on short term profits for profits
sake. The burst housing bubble is simply the latest "Midas
Touch" that has been pawned off on the American people
with the predicable outcome. 

In order to have a viable economy we need to actually produce
something. Bailing out banks so people can just buy more junk
won't do it.

C

According to Mitch McConnel, maybe not.

"We're all concerned about the
fact that the very wealthy and the
very poor, the most and least
educated, and a majority of
minority voters, seem to have more
or less stopped paying attention
to us," McConnell said in a speech
at the Republican National
Committee's winter meeting. "And
we should be concerned that, as a
result of all this, the Republican
Party seems to be slipping into a
position of being more of a
regional party than a national
one."

LOL Gee Mitch, ya think ?? Just because you're out of step and out
of touch with the rest of the country. That your policies and
political philosophies have been proven disastrous.   And that
you're totally clueless as to why no one listens to you much any
more.You think this might have something to do with it.

Sometimes these little things can be funnier than the comic pages.

C

Michael Lind has some interesting observations concerning
the republicans who voted against the stimulus bill.

On Wednesday, January 28, 2009, President
Barack Obama's $819 billion stimulus plan
passed the House of Representatives,
despite the solid opposition of the
Confederates.

By the Confederates I mean the Republican
Party and their allies among Southern
conservative Democrats. The battle in
Washington is not between liberals and
conservatives; it is between the Union and
the South.

The Republican Party that voted
unanimously against the stimulus bill is,
in essence, the party of the former
Confederacy. In the House of
Representatives, there is not a single
Republican representative from New
England. In the U.S. Senate, there is not
a single Republican from the Pacific
Coast.

The Republican congressional delegation is
disproportionately Southern. Half of the
four congressional leaders of the
Republican Party are Southerners: Senate
Minority Leader Mitch McConnell (Kentucky)
and House Minority Whip Eric Cantor
(Virginia). (Senate Minority Whip Jon Kyl
is from Arizona and House Minority Leader
John Boehner is a relic of the dying
Midwestern wing of the GOP). The Chairman
of the Republican National Committee, Mike
Duncan, is from Kentucky. Half of the
candidates for the RNC chairmanship are
Southerners: Duncan himself, Katon Dawson,
chairman of the South Carolina Republican
Party, and Chip Saltsman, former chairman
of the Republican Party of Tennessee. (The
other three are Michael Steele of
Maryland, Ken Blackwell of Ohio and, Saul
Anuzis of Michigan). If you think most GOP
spokesmen on TV seem to speak with a
drawl, you're not imagining things.

In addition, a majority of the 11 House
Democrats who voted against the stimulus
bill are Southerners or from states that
border the South: Bobby Bright and Parker
Griffith, both of Alabama; Gene Taylor, of
Mississippi; Heath Shuler, of North
Carolina; Jim Cooper, of Tennessee; Allen
Boyd, Jr., of Florida; Frank M. Kratovil,
of Maryland; and Brad Ellsworth, of
Indiana. (The other three are Walt Minnick
of Idaho, John Peterson and Paul Kanjorski
of Pennsylvania). Congressman Boyd, a
prominent Blue Dog Democrat, was the only
Democrat to support President Bush's bill
to partly privatize Social Security, which
he co-sponsored. Appropriately, his Second
Congressional District in the Florida
Panhandle near Georgia and Alabama
includes Dixie and Calhoun counties.

The vote about the stimulus package was
not about economics. It was about
nullification. It was the bipartisan
Confederacy sending a message to the rest
of America, stricken by the greatest
crisis since the Depression. That message?
DROP DEAD.

Yep day for certain gonna teach dem Northern city folk and dat
uppity black man a thing or two. By gum.

Just what you would expect from a bunch of Southern racist
trailer trash. Yes sir..the Dixiecrat Party will rise again.

C

Diana Olick explains one reason why here.

Now here's a possibility that is a bit more
disturbing. Rick Sharga of RealtyTrac says
he can't get anyone to confirm it but he
can't get anyone to deny it either:

"The lenders are simply trying to defer the
losses to a later date, because having to
recognize the losses short term might pose
severe risks to the banks in question."

What does that mean? Well, when the
properties are taken back by the bank at
auction, they are often taken back for the
value of the mortgage on the property. The
bank puts in the bid for the value of the
current mortgage and essentially pays
itself back what it lost on the loan, and
of course gets the house for all its
trouble. In good times, the bank could
profit by selling that house for more than
the value of the loan, but not these days.
The trouble now is just the opposite. On so
many of these foreclosed homes, the
property is actually worth far less than
the mortgage on it. So the bank is taking
it back at the mortgage value and not
writing it down.

"Untold numbers of these properties sitting
on banks accounting ledgers where the
imputed value is considerably higher than
the market value," says Sharga. And
unfortunately nobody knows what that market
number is.

What does this mean ? Well as to me it means that this
so called Bad Bank would actually be horrible. It would be
acquiring assets that are as worthless as a 3 dollar bill and
rewarding these cretins in the process. And what would this
entity do with this stuff ? It dare not list it as this would really
put the real estate market into a tail spin. So this government
Bank would have to sit on all this property for god knows how
long. Bad idea.

C
 

Dave Lindorff pretty much nails it.

Over the last 20 years, America has degenerated
into a nation of consumers, with 72 percent of
Gross Domestic Product (sic) now being accounted
for by consumer spending-most of it going for
things that are produced overseas and shipped
here.

That is not an economic model that is
sustainable, and it is a model that has just
suffered what is certainly a mortal blow.

What we are now seeing is the beginning of an
inevitable downward adjustment in American
living standards to conform with our actual
place in the world. As a nation of consumers,
and not producers, with little to offer to the
rest of the world except raw materials, food
crops, military hardware and bad films (none of
which industries employ many people), we are
headed to a recovery that will not feel like a
recovery at all. Eventually, productive capacity
will be restored, as lowered US wages make it
again profitable for some things to be made here
at home again, but like people in the 1930s
looking back at the Roaring 20s of yore, we are
going to look back at the last two decades as
some kind of dream.

It would be better if the new administration
would be honest about this, because with
honesty, we could have a recovery program that
would actually address the real critical issues
facing the country-the decline of our
educational system, the irrationality of
official promotion of home ownership that has
led to the proliferation not just of suburbs but
of exurbs, the over-reliance on the automobile
for transportation, the unprecedented waste of
resources, the pillaging of the environment, not
to mention the decimation of the retirement
system and the creation of a vast
medical-industrial complex that is sucking the
life-blood out of families and businesses alike.
The administration could start by telling us all
this straight up, but most of us probably don't
want to hear it, which explains why we're not
hearing it. It also explains why we're about to
blow another trillion or so dollars on propping
up failing banks, funding pointless highway and
bridge construction, and blowing up illiterate
peasants in remote places like Afghanistan and
Pakistan.

With honesty, we could also confront the other
big obstacle to national recovery-the nation's
obsession with militarism and foreign wars. The
honest truth is that the US is technically
bankrupt and in a state of chronic decline, and
yet the nation persists in spending a trillion
dollars a year on war and preparations for war,
as though America were in mortal danger from
foreign enemies.

The truth is that we are not threatened by
Communism, by drug lords, or by Muslim Jihadists
in any serious way. Rather, we have become our
own worst enemy.

I would like to think David is being pessimistic....however in my
gut I'm afraid he is correct in this.

C

Oh this is just too good to pass up. If some stand up comic
doesn't use this, they're just not paying attention.

We're just listening again to Rep. Flake (R)
who appears to have outdone himself in
militant statements of economic nonsense.
Earlier today we heard Flake claiming that
tax cuts have no stimulus effect if they go
to low-income earners who pay payroll taxes
and not income taxes.

Now he's explaining how capital spending on
AMTRAK is also not stimulus because AMTRAK
doesn't run a profit. Again, total
non-sequitur. I think rail is something we
should be spending a lot more on. But you can
certainly disagree with that on policy terms.
But you can't claim that that capital
spending on rail stock and rail upgrades
doesn't provide jobs. Of course it provides
jobs. And whether Amtrak is profitable or not
is completely beside the point.

Where did they get this guy?

Actually, I forget. He's a chief GOP
spokesman on this whole issue.

Their chief spokesman is a flake ?? They're kidding ....right ?
Sure sounds like one. But then they all do...don't they.

C

Ah republicans...the only people I know who think that the
Constitution is unconstitutional.

C

Krugman gets it as always.

But the obvious cheap shots don't pose
as much danger to the Obama
administration's efforts to get a
plan through as arguments and
assertions that are equally fraudulent
but can seem superficially plausible
to those who don't know their way
around economic concepts and numbers.
So as a public service, let me try to
debunk some of the major antistimulus
arguments that have already surfaced.
Any time you hear someone reciting one
of these arguments, write him or her
off as a dishonest flack.

Didn't McCain admit during the campaign he knew diddly squat
about economics and could care less ?? At any rate Paul is a lot
nicer than I would be. I can think of a lot of other names for these
clowns besides dishonest flack. Like the south end of a mule
heading north.

C

The NYT has some of Pelosi's take on this here. But I disagree
with this.

"Well, whatever you want to call it,"
said Ms. Pelosi, Democrat of California.
"If we are strengthening them, then the
American people should get some of the
upside of that strengthening. Some people
call that nationalization.

"I'm not talking about total ownership,"
she quickly cautioned - stopping herself
by posing a question: "Would we have ever
thought we would see the day when we'd be
using that terminology? 'Nationalization
of the banks?'"

And why the hell not Nancy ? I mean we payed for them.
I my book, that means we already own them. Ain't no free
lunch.  Sure the republicans will blow a gasket. Too bad.
They voted for the TARP bill too so what's their problem.

C

As is evident here , here, here (even on the right ?), here, here
and here the idea of nationalizing the big banks is gaining some
ground. What we need to do is to get some grass roots support for
idea. A petition - on-line and on the ground - going. I'm not good at
such things but if someone is willing to get the ball rolling I'll try
to help out.

The point is, we need to have something to shove under Harry Reid
and Nancy Pelosi's noses to let them know people a serious about
this.

C