TCS Daily

Economic Deja-Vu

By Jerry Bowyer - November 18, 2008 12:00 AM

I just finished a guest appearance on the Mancow radio show. While I was on hold, I heard Mancow interviewing Henry Winkler of Happy Days fame. It seemed oddly appropriate that my segment on the economy followed the Fonz. After all, when you come right down to it, both of our segments were about the same thing--a 1970s rerun.

Ronald Reagan summed up the economic philosophy of the 1970s in one brilliant sentence: "If it moves, tax it; if it keeps moving, regulate it; and if it stops moving, subsidize it." Doesn't that sum up to a T the economic era which we have just entered?

We've taxed American business to the limits of its tolerance, and by so doing driven a vast number of jobs and amount of capital overseas. Downsized corporations have become easy political targets onto which we load highly expensive labor and environmental regulations.

Eventually, large sectors like banking and auto manufacturing will grind to a halt, and then the political class will advise giving them massive grants of taxpayer money. Of course, that money has to come from someone, so new taxes are proposed, and the cycle begins again.

We saw that pattern largely disappear in the 1980s, banished by the Reagan Revolution. Unwilling to learn from our mistakes, Japan adopted the tax-regulate-subsidize model in the 1990s. It still hasn't escaped.

Look at the American auto industry: Big car companies like General Motors and Ford Motor pay among the highest corporate tax rates in the world. Not only are they in the highest bracket, but they are also a capital-intensive industry. These industries are punished because of their inability to take tax deductions for equipment purchases in the year in which they actually spend the money. For the non-accounting-literate supermajority of citizens out there, this is called depreciation.

If GM buys a piece of heavy equipment and pays $10 million for it this year, the government tells it to spread out the accompanying tax deduction over a period of several years. The problem is that a deduction this year is worth more to them than a deduction seven years from now. Furthermore, these depreciation schedules are not adjusted for inflation, so in reality, they never really get to deduct the full amount of the purchase. The worse the inflation, the worse the problem.

But the labyrinth of tax laws is nothing compared to the pit and pendulum of dealing with the union--United Auto Workers (UAW)--in a state like Michigan. Multi-hundred-page master agreements govern every aspect of management. Granting assembly line workers the right to smoke, not on break, but on the assembly line (!) is hardly good for the shareholders or for the rich Corinthian leather upholstery.

The average UAW line worker costs the company $73 an hour, once you count platinum-plated health care and 34 days off per year. We shouldn't wonder why these automakers are going bankrupt; we should wonder how they've stayed alive this long.

So what shall we do? Cut Michigan's onerous tax burden; bring U.S. corporate tax rates in line with the rest of the developed world and send the Big Three off to bankruptcy court, where all these fairy tale labor agreements can be abandoned? No, instead, our glorious leaders propose to give the government's bank PIN to the UAW.

Isn't this exactly what Japan did in the 1990s? High taxes and powerful unions give you stagnation. The central bank tries to revive the economy with a giant printing press. That gives you the inflation. Together, they're stagflation.

Stagflation is in your future. The Bush administration is in the midst of throwing $1.5 trillion at the financial industry. "Fair value" accounting regulations plus affirmative-action mortgage mandates and severe restrictions on private investment have strangled the banks into a coma. Before we kneel down and give them mouth-to-mouth resuscitation, shouldn't we first remove these tentacles from around their throat and see if that works? Of course we should.

But Paulson is sold on a "shock and awe" strategy--to throw men and treasure at the problem until it quits from severe exhaustion. Eventually the market will unclog, and trillions of dollars of new money will suddenly flood into the system. That'll be the inflation.

We already have Japan's monetary policy, near-zero interest rates. The dollar is already starting to act like the yen. We already have higher than normal unemployment, driven more by slow hiring than by fast firing. All we need is a national karaoke craze, and we're there.

You probably want some good news right about now. Here's some: We've seen this before, so we know how to get through it.

Jerry Bowyer is chief economist of Benchmark Financial Network and a CNBC contributor.

Originally appeared on



No...because we'll have Obama's Thugs, it will be more like Mugabe's Zimbabwe than Jimmy Carter's Ca
Remember, he wants to spend zillions on a civilian army the same size as the military with just as much funding and doesn't have to go through that pesky chain of command thing.

We've got our very own Robert Mugabe folks! We just need the hyperinflation and the thugs taking over the farms, er...'green jobs' to complete the picture.

Enjoy your last days of living in collapsing Weimar America. It will be short lived, I am afraid.

Video footage of Obama's Civilian Security Corps wannabes 'patrolling' a Pennsylvania voting station:

Insanity is doing the same thing and expecting different results. From Aristotle to Kling, private property, limited government and free markets have been proven to increase individual prosperity and subsequently, the prosperity of society as a whole.

The only reason I can think of as to why the socialist/liberals completely ignore reality is they can't control their irrational need to have power over others.

I thought this was a great exchange on Star Trek, NG between Picard and a wealthy businessman recovered from cryo-statis.

That's what this is all about...
A lot has changed in three hundred
years. People are no longer
obsessed with the accumulation of
"things". We have eliminated hunger,
want, the need for possessions.
We have grown out of our infancy.

You've got it wrong. It's never
been about "possessions" - it's
about power.

STAR TREK: "The Neutral Zone" - 3/17/88 - ACT THREE 36.


Power to do what?

To control your life, your

That kind of control is an

That kind of power is an illusion. Politicians of all stripes desire such power.

The best economic/political system to date is that described in the US Constitution. Individual liberty, and more importantly, the concept that individuals are sovereign, is contrary to nationalism and the irrational desire to control the lives of others.

The facts are in front of us. The evidence stares us in the face.

We have faced the enemy and the enemy is us.

Obama's thugs
Yup.. guys like Bob Rubin and Paul Volcker are certainly a worse lot than Bernanke and Paulson. The bad times are a-comin'. Too bad the Bush regime installed a period of permanent prosperity, just to see it pissed away (and in advance of their arrival, yet!) by the Obamites. Woe to our great ship of state.

I'll be more than happy to pass the hat if you want to leave now. You never know, the Obamians might confiscate your passport once they attain power. Just tell me where you want to go.

Aristotle said that?
I've pointed out to you before (but you must have forgotten!) how Aristotle asked the question as to whether all property should be held in common, some property held in common or no property held in common. And decidedly, he came down in favor of "some". Without going to the trouble of finding and quoting relevant passages, I would advise that you read his work on Politics (Book 2).

Here's a summary:

"Aristotle thinks that conflict between the wealthy and poor are disastrous for the state. To avoid this division, he believes that controlling poverty is crucial for political stability. His treatment of poverty is innovative and sensible because he realizes that no one can live a decent or happy life without meeting certain needs. To this end, he stresses several things to keep in mind when writing a constitution. First, he believes that property arrangements should be conducive to limiting class conflict. While he absolutely believes in private property, he also holds that some land should be used in common. Aristotle says that generosity demands that those who own land should allow for some common use. Second, he is a strong believer in birth control to limit population growth. Finally, since even the best state will undoubtedly have some poor people, a combination of private and government social services should be designed as a safety net. I argue that Aristotle did have a notion of redistributive justice contrary to Samuel Fleischacker’s claim in his work, A Short History of Redistributive Justice. Aristotle believes that the main aim of charity and government support, however, should be directed toward helping the poor to become self-sufficient. In many ways, Aristotle is thoughtful and innovative in dealing with poverty. He introduces a system of public and private social services to provide a safety net for individuals in society. His proposals are a combination of private charity and government assistance that include job training. His political theory, however, is elitist. It excludes most of the state’s inhabitants, including all women, slaves, farmers, laborers, immigrants, and artisans from citizenship. Certainly, one must consider Aristotle in historical context and thus his views about women, slaves, and laborers are representative of the elite of his day who abhorred the uneducated poor and feared democracy. After all, democracy is essentially the rule of the poor according to Plato and Aristotle. In spite of this, the slaves and other poor members of the free population were indispensable to the city’s economy. Yet they were ineligible for citizenship.

For the moderate, all things are to be taken in moderation. When we swing too far in the direction of either extreme, all property being held in common or none, we invite disharmony, social injustice and economic chaos. Otherwise, if individual liberty is taken to the extreme, the strongest and wiliest individuals invariably come to rule over all the others. And we return to a system of slavery.

Aristotle did not advocate 'forced sharing' of property' unlike Plato
"Aristotle was entirely opposed to Plato's communism of wives, and did not go any great way with him as to property. His arguments against communism are classic.

"Next let us consider what should be our arrangements about property: should the citizens of the perfect state have their posses­sions in common or not? This question may be discussed separately from the enactments about women and children. Even supposing that the women and children belong to individuals, according to the custom which is at present universal, may there not be an advantage in having and using possessions in common? Three cases are pos­sible: (1) The soil may be appropriated, but the produce may be thrown for consumption into the common stock; and this is the practice of some nations. Or (2) the soil may be common, and may be cultivated in common, but the produce divided among individuals for their private use; this is a form of common property which is said to exist among certain barbarians. Or (3) the soil and the produce may be alike common.

"When the husbandmen are not the owners, the case will be dif­ferent and easier to deal with; but when they till the ground them­selves the question of ownership will give a world of trouble. If they do not share equally in enjoyments and toils, those who labour much and get little will necessarily complain of those who labour little and receive or consume much. There is always a difficulty in men living together and having things in common, but especially in their having common property. The partnerships of fellow-travellers are an example to the point; for they generally fall out by the way and quarrel about any trifle which turns up. So with servants: we are most liable to take offence at those with whom we most frequently come into contact in daily life.

"These are only some of the disadvantages which attend the com­munity of property; the present arrangement, if improved, as it might be by good customs and laws, would be far better, and would have the advantages of both systems. Property should be in a cer­tain sense common, but, as a general rule, private; for, when every one has a distinct interest, men will not complain of one another, and they will make more progress, because every one will be attend­ing to his own business; and yet among the good, and respect of use, 'Friends,' as the proverb says, 'will have all things common.' Even now there are traces of such a principle, showing that it is not impracticable, but, in well-ordered states, exists already to a certain extent and may be carried further. For, although every man has his own property, some things he will place at the disposal of his friends, while of others he shares the use with them. "

Again, all depends upon individual right to property, not an individual right to another's property.

When the state protects private property, it is up to the individual to decide how much he will share. From modern surveys and statistics, those are conservative in today's society ARE the most generous in their charity, unlike their 'liberal' counterparts.

It is very simple.
If you respect my property, I will respect yours.

When you as an individual, or as a collective, try to take my property, then we have a problem.

What a fantastic analysis.

It brings to mind an article in the New Yorker recently about the craze of over-parenting. I can't help but feel the two trends - economic and familial - are related.

The leftist illuminati may want to stick flowers in the big guns of the auto industry, but I fear that average joe citizens will be the casualties.

Paradigm shift needed.
When the federal government (society) is determining the 'cost' of a tax cut, they start with the paradigm that ALL the income and wealth in the USA is owned by the government. They then proceed to decide how much various rates and deductions will 'cost' the state.

The challenge for those opposed to socialism need to continue to remind all that government is the servant of the people, not the opposite.

And Roy, the job of that servant is not to rob the rich for the poor but to treat all people equally under the law protecting equal opportunity, not equal outcomes, for all. But don't forget a government is comprised of imperfect individuals and its power must be strictly limited else such power corrupts, which is does so often.

(A state senator and a city councilman in Boston were just arrested for accepting bribes.) Anyone surprised?

The surprise is they were caught. And it was by the Feds, not local authorities.

Sure...they want to tax everyone and let hyperinflation take care of the rest
Let's just hope that there's enough deflationary forces to counter it.

Bill Clinton is the one who first coined the phrase 'Chicago thug' when describing Obama, btw. Not the Right.

social injustice
"Social injustice" is a meaningless phrase. Justice and injustice apply only to individuals. You can only answer "yes" to the question "Was this group treated justly?" if each individual was treated justly, and that can only be achieved by dealing with each individual as an individual.
The position of a moderate is inherently self-contradictory. If moderation is always best, then moderate good must be better than complete good.
The position of a moderate is absurd. How can a moderate number of murders be good? A moderate amount of theft? A moderate amount of amputations of healthy people? When the moderate enters a T intersection, he forsakes the roads to left and right and drives straight ahead into the wall. "Moderation in all things" is an attempt to avoid thinking.
A mixed economy does more than invite disharmony and economic chaos. A mixed economy causes it. Alas, "disharmony" and "economic chaos" are imprecise terms; they can refer to anything from mild disagreement and a boisterous economy to open warfare and economic disaster. A free economy with mechanisms to keep it free will have disagreements and a boisterous economy. An unfree economy (all property held in common) supresses disagreements and destroys the economy. A mixed economy is frequently in turmoil as people without respect for rights attempt to control the property of others by restricting the use of property (as if it were held in common) or by turning private property into common property (theft).

Power vs possessions
That's a great exchange you've found from Star Trek.

However it's only in the upper reaches of society that anyone truly has a hope of obtaining power. I don't mean just the power to tyrannize your subordinates at work, but the actual power to move things around. And for that matter, it's only a certain type of total creep who's even desirous of great power.

The main thing holding the human race back is their acceptance of this kind of person as being entitled to be in charge of things.

For the rest of mankind-- the puny worker ants-- it's possessions that matter. Because they are the one thing we need and don't quite have enough of. And this segment of the population is controlled by the lack of these necessities and petty luxuries, so that they spend their lives working toward the accrual of wealth and power into the hands of those who employ them.

As you know, I'm a wrecker. You're an enforcer. It all depends on the light in which one views our established system.

Aristotle once more
We're wandering astray again. For you, the least contribution you are required to make to preserve our Commons is an imposition of the severest order. It's slavery! It's communism!

You are not worthy to enjoy the advantages of our society if you don't want to help maintain it. I sincerely wish I could vote you off the island, so you could go off to some magical place where you never have to share anything with anyone.

The rest of us prefer a system where the public space is maintained through the concerted will of society. And the best way we've found so far to fund such a project is to tax the public. And we have decided that the richest among us, having gained more from living here, should have the greater burden of support.

That's just the way it is. For the past 27 years we've been trying it your way. And what we have found is that a supposedly "free market" system of wealth allocation not only takes wealth from the majority and awards it to a relatively small number of beneficiaries.. we've found that ultimately, such wealth always destroys itself.

I'm through for one day. Aristotle does not support your desire to keep everything and share nothing.

Each individual has the power and only chooses to be a victim.
You choose what to buy and what not to buy, and by doing so you have the power to force multi-billion dollar corporations to make what you want. McDonald's sells salads because their customers demanded more healthy alternatives. Since McDonald's wanted to stay in business, they invested and adapted to their customer's demands.

Viktor Frankl demonstrated his power over his captors in Nazi concentration camps.

Napolean Hill studied and documented the power of a positive mental attitude and how people can choose such power to be successful.

Those who want to have power over others, like socialists, need victims and must keep people from learning they have the power within themselves to change their lives regardless of circumstance.

For those who might be interested in taking control of their lives here is a like to a web site:

Of course the 17 principles of success are actively opposed by most socialists who advocate the Land of Play:

"After a mile or so, Pinocchio again heard the same faint voice whispering: "Remember, little simpleton! Boys who stop studying and turn their backs upon books and schools and teachers in order to give all their time to nonsense and pleasure, sooner or later come to grief. Oh, how well I know this! How well I can prove it to you! A day will come when you will weep bitterly, even as I am weeping now--but it will be too late!"

Is it a coincidence the naughty boys turned into donkeys?

" For the past 27 years we've been trying it your way."
No we have not.

I don't support oxymoronic 'forced sharing'.

As is well documented, conservatives, who support free markets and individualism, donate the most time and money to charity. Democrats do not. Doesn't sound very selfish to me.

": Yes, especially when it comes to private charitable giving. This, for much of America, is the “surprising truth” in my book’s title. For a lot of folks, this contradicts an entrenched stereotype that conservatives are stingy and venal because they tend to be against a lot of government income redistribution. According to one ham-handed (but amazingly popular) campaign sign in upstate New York before the 2004 presidential election, “Bush Must Go! Human Need, Not Corporate Greed.” When we look at actual private charity, however, we see conservatives do just fine. For example, conservative-headed families in 2000 gave about 30 percent more money per year than liberal-headed families on average, while (in these data, at least), earning 6 percent less income."

"Charitable giving and volunteering are tremendously pleasurable. They also empower givers, making them feel less like victims, and give people a lot of meaning in their lives. I have talked to clinical psychologists who actually prescribe volunteer work to their patients, with amazing results. Studies also show that givers are admired and elevated to positions of influence and authority. It is hardly surprising, given all the evidence, that givers enjoy (on average) higher happiness and prosperity than non-givers do. In fact, my research leads me to the belief that the single best self-help strategy is to serve others."

"According to the popular lexicon, “bleeding hearts” are those who most want to raise taxes and redistribute income from the rich to the poor. Yet the data show that these folks are actually less likely to give away their own money than are those whose hearts apparently don’t bleed quite so much. For example, people who disagree that “the government has a responsibility to reduce income inequality,” privately give away, on average, four times more money than people who agree."

When you don't respect my private property why should I respect yours? Why shouldn't I use the force of state to make you 'share'?

Aristotle did not support 'forced sharing'.

Are you projecting your personality on others? Since you believe you must force others to 'share', does that mean you are really selfish and you know you need to be forced to 'share'?

Paying for the use of the country we live in
Social injustice is certainly a very useful term. If you have a large class of people who work hard, do as they're told and try to live a good life, yet find themselves further and further behind while another class gets wealthier and wealthier.. it's a formula for societal instability and collapse.

A society is healthiest where work is rewarded appropriately. And everyone feels invested in maintaining the status quo. Otherwise you have to hire half of them to guard against the other half.

Likewise a mixed economy offers scope for business to expand and prosper, while at the same time it attends to the necessities of the nonbusiness class. You can't have a balanced economy with all favor being bestowed on only one class of people.

We have had (are having) quite enough of this "boisterous economy". If you've not noticed, all it has done is result in the destruction of trillions of dollars in wealth-- a resource that could have been used far more wisely had it been spread more equally throughout the working economy.

Do you really think, now that several million people are in process of losing their jobs, that everything would be for the best if there were NO safety nets? And those several million families were just allowed to lose their homes as well?

And what is it about those people, who have to bear the burden of poor judgment on the part of the financial sector, that makes you think they are "without respect for the rights of others"?

I don't agree with your interpretation, that when taxes are paid it's a form of theft. What it is, is that you enjoy the right of living in a land we hold in common. We are all protected by its laws and enjoy the use of its infrastructure. And for this privilege we pay dues.

It sounds like you're just saying you just don't want to pay your dues.

Paying our dues
Does everyone have the power to choose whether he keeps or loses his job? I think not. So if he loses his livelihood through no fault of his own, the social system owes him an insurance payment, for his period of unemployment.

And not just for the sake of his family. It's for all our sakes that we don't allow wholesale destitution to arise from the ignorant missteps of the financial class.

If you enjoy so much total personal freedom, I'm sure you can find some way to live in a country that offers us the best of opportunities.. and asks that we pay our dues to keep it up. When your neighbor is not desperate for funds to support his family, you also benefit. Even though I know you'd be more comfortable holding a gun.

Let's ask ourselves a question
What kind of person asks Admiral Mike Mullen and General Petraeus to form the core of his defense team? Is it the kind of guy who's going to hire a cadre of jackbooted thugs to tyrannize good Americans like yourself?

Now let's ask another question. Do you envision Obama waltzing into the White House on January 20 and being able to tell everyone how he wants to initiate an American Reich? And having them execute their orders?

You really have no idea how the job of governing is performed. There's no way any kind of radical can become president and take us beyond the parameters that have been set for chief executives. Obama is from the solid center, and will no doubt prove to be very popular with the typical American.. much the same as Bill Clinton was.

You thought Bush could do that.

Pay dues to a government that caused the job loss?
Talk about insanity.

Large Masses
If you have a large class of people who work hard, do as they're told and try to live a good life, yet find themselves further and further behind while another class gets wealthier and wealthier..

And If you have a large class of people who work hard, do as they're told and try to live a good life, yet find themselves further and further behind while those who do't work or follow the rules are provided a living that would be rich in many other times and places, while people who seek to extract more and more really do well, that large class has paid their dues and then some.

Let us ask Roy to learn some real history, first
"Do you envision Obama waltzing into the White House on January 20 and being able to tell everyone how he wants to initiate an American Reich? And having them execute their orders?"

Hitler didn't do it that way, so why should Obama. As for the rest of his followers 'not in the know', they will go into denial--just like the 'good *****' did.

It won't be declared openly. Instead, there will be civilian 'corps' created and then the little kids will have to learn to sing songs about Obama (already happening with Project Hope)...soon, it will become mandatory. Then the little kids will be taught to inform on their parents if they say anything bad about Global Warming...and those who want to 'solve it', like Obama! Meanwhile, the rest of the 'traditional' government just steams along in its usual self-absorbed way.

"There's no way any kind of radical can become president and take us beyond the parameters that have been set for chief executives"

Sure he can...when the press HID his radicalism from the public.

As for chief executives, I guess you are also unaware that presidential systems of government have a far worse track record of becoming dictatorships than parliamentary ones do? No you aren't? Doesn't surprise me.

"Obama is from the solid center"

Hahahahahah...boy are YOU just delusional today. Obama is a redistributionist Commie who loves to hang with people who killed cops and blew up buildings.

"...will no doubt prove to be very popular with the typical American.. much the same as Bill Clinton was"

Oh yeah..the SAME Bill Clinton that can't be put in front of white suburban voters any more because he's so politically toxic to them? The same Bill Clinton who suborned perjury? That one?

Let us answer the village idiot
You really have no idea how the job of governing is performed.

And you do? What offices have you held?

"Do you envision Obama waltzing into the White House on January 20 and being able to tell everyone how he wants to initiate an American Reich?"

We only know his assistant said he'd be ready to "rule" on day 1. That's creepy. We also know he admires FDR, who, when he couldn't get his way, attempted to pack the SCOTUS.

"There's no way any kind of radical can become president and take us beyond the parameters that have been set for chief executives."

Really? Why not? You guys just spent 8 years complaining about the "religious right", the "neocons" and other phantom menace groups as having "stolen" the election or "taken over" the country. Which is it?

"Obama is from the solid center."

You are absolutely an idiot to make such a statement. None, repeat none of the groups who track these things (from either side) by actually examing voting records arrived at any conclusion other than BHO was among or the most left-wing member of the Senate. For you to make such a statement you have to be either so far to the left as to not recognize the center or just plain stupid.

Never mind, there's a third alternative, one that is better supported by your posts. You are a hard leftist AND cognitively impaired.

Roy, really, get a clue.

Ignorant Missteps
we don't allow wholesale destitution to arise from the ignorant missteps of the financial class.

They had plenty of help from the ignorant missteps of Washington. Yes we have seen seven decades of increasing regulation-these are just 20 of the big signature laws that apply directly or indirectly to Securities and Banking-not the reams of regulations issued by the
SEC, OCC, FDIC, Federal Reserve, Dept of Labor etc…

(I gathered this five minutes, wonder else I’d have thought of in a hour)
1. The Securities Act of 1933
2. The Securities Exchange Act of 1934
3. The Public Utility Holding Company Act of 1935
4. The Trust Indenture Act of 1939
5. The Investment Company Act of 1940
6. The Investment Advisers Act of 1940
7. The Securities Investor Protection Act of 1970
8. Fair Credit Reporting Act (FCRA) 1970
9. Currency and Foreign Transactions Reporting Act 1970
10. Employee Retirement Income Security Act (ERISA) 1974
11. Home Mortgage Disclosure Act (HMDA) of 1975
12. Community Reinvestment Act (CRA) 1977
13. Foreign Corrupt Practices Act of 1977
14. Depository Institutions Deregulation and Monetary Control Act 1980
(despite the name, it increased Federal Control over Banks)
15. Expedited Funds Availability Act (EFA or EFAA) 1987
16. Federal Deposit Insurance Corporation Improvement Act (FDICIA) 1991
17. Truth in Savings Act 1991
18. National Securities Markets Improvement Act 1996
19. Regulation FD 2000
20. The Sarbanes-Oxley Act 2002

You've missed the point
Yes, we've been trying it your way, since 1981. We have elected to deregulate finance.. and as a direct result, have had these recurrent crashes. The S&L debacle. The Asian meltdown. Global Crossing. The telecom boom and bust. Long Term Capital management. And now, the grand daddy of them all. All have come about because no rules were in place to prevent them from happening. And the loss of umpteen trillions IN INVESTED MONEY has been a foolish waste of capital.

Meanwhile the labor force has been undercut, and a race to the bottom created by outsourcing jobs. This structured un- and under-employment has forced wages down. And every time we have a business slump it is characterised by under-consumption.

The fix your guys have proposed? Companies can't sell enough products to make a profit. So instead they borrow more capital to stay in business. Our fortunate ones, with capital to spare, invest in these money-losing turkeys. And from time to time the bill becomes due.

It's the stupidest business model imaginable. And it has been foisted on us by supply-siders and free market True Believers.

Now we have to assess the true value of whatever's left and try something new.

As for the core of your discontent, I actually don't mind your not wanting to share. But you're trying to get a free ride without paying the fare. Why don't you move to Ireland? It's very nice there, the climate's good and the women pretty. And they only want 15% for a subscription to their way of life.

Deflationary forces are now dominant
Tax everyone and let hyperinflation occur? Funny thing.. I just addressed this on our other thread, and you told me I was off topic.

Our greatest fear this week is in fact deflation. I think the coast is clear for an injection of funds, if we can find a spot where they'll do some good.

And I also think such a course would be fiscally prudent if we put the money back as soon as we could afford to do so. But we've been over and over this before. There's something about it that you just can't allow yourself to hear.

Maybe it's your thumbs in your ears.

Once burned, well learned
Starting needless wars in distant lands, sadly, is well within the parameters for both Democratic and Republican presidencies. We have a very long history of those things being both tolerated and, for a time, supported. The public only turns on the warmakers when things start going badly.

As for economic policy, we've had our fling with right wing freedom economics. And we see where that got us. I think it'll be a while before we try that particular medicine again.

A redistributionist Commie
Obama has been going out of his way to select mainstream advisers. None of the people he has named so far are in any way marginal. Nor are they cronies. He's putting together a team any moderate Republican could join in good conscience. Your wild imaginings are very theatrical, but way off the mark.

"Sure he can...when the press HID his radicalism from the public."

Oh, you mean their nonstop reportage on William Ayers? Who turns out just to have been a casual acquaintance? Or how about the endless speculations on his preacher's possible influence?

You know damn well the press beat the drum over every little thing they could find in Obama's past. And there wasn't all that much. Meanwhile I didn't hear a single word about McCain's agreeing to give radio broadcasts for the North Vietnamese when he was captive. Did you?

You come off much better when you try to present yourself as a normal human being. No one but you thinks we're about to see an American Reich.

Governing from the center
No, it's true.. you really do have no way of knowing how Washington actually works. So in your febrile imagination you create monsters.

Before I retired I put in about 28 years in Washington, getting to know and work with several Congressmen, a goodly number of aides and staffers in the House and Senate, a whole passel of Foreign Service people and a number of political appointees.. not to mention members of the civil service. And I never missed the opportunity to discuss events of the day with any of them. So yes, I do have something of an insider's view.

Checks and balances do exist. There is just no opportunity today for a radical leftist to impose his will on the great Ship of State. It's like a supertanker.. deflecting the course where momentum is taking it takes many miles, and much time. Plus, the public is in no mood for radical change of that sort. Even should Obama have wanted to try such a thing, the DNC and DLC would never allow it.

The team Obama is building offers everyone who's been watching the obvious comment: what we're about to get is the old Clinton crowd's third term in office. And that's about as center as you can get.

You miss my point, WHAT deregulation?
There has been NO deregulation.

That's twice youve spouted this crap in one forum
Unlike a club, the government has the right to force you to pay. therefore taxes are not dues. I cannot "choose" to not pay and just have to worry about them ignoring me.

Also, all countries have taxes, you can't move and get away from them. It isn't quite so easy to move to ireland, Germany or South Korea and live and work there; but you can go ahead and give it a try.

No roy, taxes are not the same as dues, they are instead a great EVIL; but one of those necessary ones. I do understand infrastructure and social safety nets and I agree with the need for both. Thus I pay my income taxes, fuel taxes, property taxes, etc. and try not to complain too much.

What I hate are the hidden taxes. Corporate taxes, which raise the price of the goods I purchase, are a true EVIL as they are invisible, unnecessary and "tax" even the poorest among us. The same is true for all business taxes.

If all other government "fees" and taxes were eliminated except income taxes, sales taxes and investment taxes (capital gains) I believe I wouldn't complain at all.

LOL The Liberal Mantra… Clinton was so popular
Bill Clinton managed just 49% of the popular vote in his re-election in 1996. The guy wasn't popular enough to ever cross the 50% threshhold in either election cycle (43% in 1992 and 49% in 1996). compare that to Bush who garnered 48% in 2000 and 51% in 2004. Hmmmm, it would seem that, among everyone but left wingnuts like yourself, Bush was more popular than Clinton; at least in the "put your vote where your mouth is sweepstakes".

LOL go to your grave spouting that mantra abut the ever popular Bill Clinton. I guess you, and the others like you, believe the line that if you say a lie enough it will become the truth.

And Santa and the Easter Bunny really do exist roy; really, they do, really. Just put out your stocking December 24 and the jolly old elf will fill it; if you've been a good little boy!

Clinton was popular - LOL, good joke!

It was off topic
The topic being the stimulus non-stimulus from earlier this year that you claimed would work. You took it off topic (to avoid admitting that it didn't work). When I explained it the umpteenth time, you said my responses were 'circular'. Well...yes. They were...because you kept trying to avoid them, I kept bringing them up.

Inflation is a result of "too much money chasing too few goods/services". And the Fed has just announced it will create some $7 trillion in additional money to inject into the economy. Not credit, like its member banks do, but base money.

Yes, deflation is a problem NOW. But later, when the credit markets get unplugged, all that hot money will still be there. That and the increases in taxes and regulation will cause less productive output means inflation..probably hyperinflation (defined as inflation in at least the double-digits), something that we last had with Jimmy Carter running stagflation policies.

Time will tell. I hope I am wrong. On the other hand, I'd like to pay off some debts in more worthless money.

"Maybe it's your thumbs in your ears."

When it comes to basic economics and actual history shattering your bogus shibboleths, it is 'certain' that your thumbs are in your ears.

"And I also think such a course would be fiscally prudent"

There is NO such thing as fiscally prudent with Democrats in charge of Congress. You rail against the 'Bush Deficits', well...the worse ones in his administration occurred in the last two years with Pelosi and Reid in charge.

Swiss 'dues'
"In a lump-sum taxation arrangement, an annual payment can be negotiated with the government based on your standard of living in Switzerland, rather than on the usual income-and-assets model. This allows for considerable financial privacy if you desire it, because it does not require disclosure of income or assets, and can also mean enormous annual savings, particularly for citizens of certain EU countries. Certain other countries (for example Germany and the United States) levy significant exit taxes on individuals who wish to relocate (whether to Switzerland or elsewhere), but the savings involved in a lump-sum or other Swiss tax ruling can easily make the move worthwhile. "

Nixon had a good team of advisors, too
He didn't listen to them. Carter listened to his but they were terribly wrong. Ford was....Ford.

Point is: We didn't elect 'advisors' to make the call. We elected a President to do so. And they are the ones who do make the call.

Besides, Obama just announced his Grand Plan...nothing but FDR spending platitudes. He also announced his 'grand team of advisors'. So far, I'm not impressed given the 'grand plan' that just involves spending on solar panels and liberal pork like that.

" Who turns out just to have been a casual acquaintance?"

There is NO casual acquaintance...especially since Ayers ghost-wrote Obama's books.

"You know damn well the press beat the drum over every little thing they could find in Obama's past"

On what planet have you been on? They hardly lifted a finger. Not even at Fox News.

No Roy, he intends to Federalize the schools, nationalize industries, all this will be done slowly. This is a taking of Freedoms slowly, all for the myth of security for the poor masses.

Why would he need thugs when so many sheep are off to the slaughter willingly?

So this is how freedom dies, with thunderous applause?

For crying out loud
Greetings, I have returned...

No I do not owe someone insurance Roy. I don't owe them squat.

Funny, in 48 years I have never collected UI. Why? When work was hard to find I moved to the work.

As to the financial class, you mean Barney Frank and Dodd, et al forcing banks along with the corrupt ACORN to make loans to people who could not afford them?

Ge Roy, I have no debt except the mortgage. I bought a house well within my means and I put down 20%.

If I can make responsible decisions why not others? Why is that my problem? I am tired of this notion I owe you something.

The only thing I owe you is to no be a burden on you by forcing you to bail me out every time I make a bad choice or luck is bad.

But you never learn, Roy
"As for economic policy, we've had our fling with right wing freedom economics. And we see where that got us"

Oh yeah...a fling that produced 8 million new jobs and tax revenues through the roof. The rich got soaked by Bush & Republicans (top 10% paying 70% of income tax revenues) far more than they ever got soaked from any Dems in the last 80 years.

But I fear you are correct: It will be a while before we try that particular medicine again. Back to the Carter years (if we are lucky) or FDR's years (if we are not).

So this is how freedom dies, with thunderous applause?
...and with a little help from Jar-Jar Binks (your typical ignoramus of an Obama voter).

Har Har
The press did everything? Really? That is why all the questions were silly softballs except Joe the Plumber who had a anal exam better than Obama ever did? Is it right that Ohio investigated him? Was it right to hear your lord rip him and make fun of this man who dare challenge the lord?

Then again, once I see Franken steal his election in MN the circle is complete. Any nation represented by such a utter foul mouthed slime ball is finished. Franken is the bottom of the barrel and he represents your leftist views.

No American Reich? No, masses of sheep chanting we want pie, we want pie represents a people ready to accept any level of statism as long as they get a free ride.

It is pathetic we are going to squander this nations legacy in the name of some supposed security while the politicians in WA DC spend trillions of money we do not have to maintain power and control over the masses of economically ignorant fools that they have created.

You should love all this Roy. There is nothing like creating a system where the producers are villified and the non-producers rewarded.

I have to bend over now Roy, there is a reason it is called a bottom up society.

Concept of Free Will
Liberals cannot understand these principles. In their mind people are helpless little sheep to be guided and coddled. Make a bad choice? You poor baby. Well bail you out. Hence the saftey net.

ALl people make bad choices, how we deal with them is decided by character. Something that today seems to be lacking.

Character doesn't count for liberals
The top liberal character, Bill Clinton, is praised for getting a BJ in the Oval orifice and sexually harassing women.
Character implies standards and liberals can't have standards or principles except anything goes to achieve power.
Roy believes socialism will succeed if only the 'right people' are in charge. He implies 'right people' are those with character, integrity and standards. He won't find any such people on the socialist side because the end (socialism) justifies the means.

Dealt with.. now, a fresh topic
We have addressed your topic to a fare thee well. The stimulus was insufficient to correct a slowdown in purchasing, as people used it more to pay down debt than they did to buy new stuff. Further, it in no way addressed what turned out to be our real problem: an inability to assign value to a huge mountain of derivatives (many, many times larger than the size of our cash economy).

Having amply dealt with that topic, we should now move to fresh topics. I feel your insistence that my comments are "off topic" masks a reluctance to come to grips with the issues I've been raising.

So here's a topic of your choice: "Inflation is a result of "too much money chasing too few goods/services"."

But the problems we face do not derive from a condition of too few goods/services. We started out with lots of goods and services. But there proved to be too little demand for them, as our economy contracted.

Thus the size of the goods- and services-producing economy has had to be scaled back. The conclusion that must be faced is that this slowdown resembles the one we had in 2002, in that it has been propelled by insufficient demand for the goods and services we are capable of producing. It is, in that definition, a BUSINESS SLOWDOWN leading to recession and increased unemployment. Plenty of goods.. but not enough money in circulation.

To hell with the threat of inflation. For one thing, the value of one dollar does not matter a bit, to all the families that suddenly have no source for more dollars. And for another, the ogre staring us in the face now is not inflation. It's deflation. Stay up with the issue.

The true problems before the American public (setting aside the problems banks and investors are having with their bogus investment decisions) are increasing unemployment, incurred by a business contracture, and homelessness, incurred by a structural increase in foreclosures. Thus a collapsing job market and real estate market.

The preferred fixes for these problems in no way resemble the fixes suitable for an inflationary threat we don't have. I invite your on-topic reply.

Inside Washington with Roy (Inside Roy's Fantasy of Being an Insider)
The question wasn't whether I knew what was going on, but whether you do. Nice try, agent prevaricator.

"Before I retired I put in about 28 years in Washington, getting to know and work with several Congressmen, a goodly number of aides and staffers in the House and Senate, a whole passel of Foreign Service people and a number of political appointees.. not to mention members of the civil service". And I never missed the opportunity to discuss events of the day with any of them. So yes, I do have something of an insider's view.

Put in 28 years at what? Being a star-struck groupie (being what was it-a low income housing "advocate"?)and pandering to the egomania of politicians who smile sweetly while suppressing their internal revulsion at "another one of those idiots" isn't the same thing as being behind closed doors, negotiating, preparing a budget etc. You are the political equivalent of a Star Trek conventioneer

You have had no office, no position and you have already demonstrated your utter inability to grasp the rudiments of economics.

If you were so connected, you wouldn't serve up specious argument after specious argument. Every once in a while though you serve up a flop that lets people know just how pretentious you really are-either some tedious fantasy yopu think is airtight or some simple slip, like other day when you talk about "accruing debt".

You remind me of those idiots that call into a certain octogenarian college football coach's weekly show.. "hey coach, son't you think we should use the tight end more?".

Just once I like to hear, "we" aren't going to do anything.

Disillusionment with free market policies
Job creation during Bush's eight years in office was a pale shadow of job creation during Clinton's eight. Plus, the jobs being created were of a worse quality. Many people lost excellent jobs, only to get replacement jobs in the low-wage service sector. For them, net job gain: zero. Net income loss: significant. The metrics are there for you to find.

But that's not the point I was making. My point was that it was Friedmanite free market principles that led to the deregulation of the financial markets.. and permitted the reckless excesses that took us to this point. Newer, better rules need to be devised. And, assuming the Republicans may one day again become credible to the voting public, better pickproof locks need to be devised.

"Ayers ghost-wrote Obama's books"
This is a now-familiar technique:

It was first fully described by David Brock, who utilized it in his The Real Anita Hill: The Untold Story. And after his repentance and conversion to the light, the secrets involved in this sort of character assassination were fully laid out in his next books, Blinded by the Right and The Republican Noise Machine.

It does make an interesting case study in disinformation, though.

As for media attention, John McCain was always the darling of the media. They downplayed his wife's drug addiction, the dishonorable way he dumped his first wife to switch damaged goods for a fresh one and, again, his less than honorable broadcasts and interviews for Hanoi.

Meanwhile, the nation was inundated in tawdry revelations about the radical past of Bill Ayers. Who, as it happens, was never indicted for any charge of terrorist acts. That he was outspoken is a given.

It's all in the eye of the beholder. But the reason you know so much about Ayers is the intense scrutiny he received on the air and in the press.

Long time no gripe
Welcome back, dbt! I've missed your heart-felt but ill-informed diatribes.

This one, however, has no content. I must have missed the news about Joe the Plumber and his rectal exam. But in any case he was just a media creation that distracted the public from any real assessment of policy differences.

I'm not familiar with any masses of sheep chanting "we want pie". However we are getting a fairly good view of our banking heads and leaders of industry coming to Washington for their very large piece of pie. Maybe you could source this; it's obviously a story I missed.

Maybe your comment would be more clear if you took out all the references to anal activities, and limited yourself to economic commentary. There's a lot of material, pro and con, out there to comment on right now. But the basic choice before us is to (a) do nothing, and watch the whole shooting match go down the tubes, or (b) throw a couple of trillion at the wall and see what sticks.

This second choice is the one being endorsed by both parties in government. I have problems with both options, as I'm sure do you.

The insiders' view
We've been over all this before, Supie, and I've never presented myself as being an insider. I have, however, had long experience talking to insiders from both parties and every area of government (both political and nonpolitical), and have gotten their observations and opinions in depth. Thus I've gotten a pretty good picture of the elephant from all five swamis.. if you'll recall the old tale. And it is this picture, transcending party lines, that underlies my comments here.

How did I come to meet all those people? Most came from a business acquaintance that turned into a social one. Washington is a very gregarious town, and you do tend to meet the same people at parties. And everyone everywhere likes to talk about his job.. as well as talking about politics.

Obama would be very constrained if he ever tried to impose a radical agenda on Washington. There are strong checks in place to prevent just that kind of thing from ever happening. It's a fact.

But we have no evidence that's his intention. By his words as well as his choice of team members, he will be pursuing a moderate, Clinton-like set of policies.

Not to worry, my friend. It will still be business very much as usual, only with a somewhat D spin on the ball this time around.

I am intrigued though by your parting shot.. that I have slipped up grievously in some comment about accruing debt. Pray tell, what was my error?

Free will and choice
The government does in fact have the right to require payment of dues, so long as you use the services being offered. It's like a golf course. If you choose to use it, the clubhouse has the right to charge you for membership.

Your choice is a simple one. Membership in the United States costs X. Membership in other clubs may be offered at a lower rate. And, in an attempt to be helpful, I have suggested Ireland.

You would be comfortable there I'm sure. The facilities are modern and they even speak our language. So don't complain about onerous requirements. You have free will and many choices.

Well put
I admire your independence. It's very admirable.

Just as a suggestion, you could move somewhere they don't have any form of social insurance. That way, since you don't use it anyway, you would not have to chip in to alleviate the misfortunes of others.

As an aside, the last time my job disappeared from under me I elected to become self employed. And so I didn't file for UC. It would have been too time consuming, and I had better things to do. On earlier occasions I did avail myself of that service and appreciated its being there. I had to return to the job market and knew my savings would run out before another job could be secured. So circumstances told the tale. I found it to be a very useful kind of insurance.. and one, moreover, that I had been paying into all those years anyway.

Be glad to
The social fabric is best maintained when it is mutually managed by ownership, management, labor and government. Excessive power in the hands of one over the others leads to excesses that only serve a minority. The principle involved is similar to that of the famous "balance of powers", which alone was responsible for our ability to create a form of government superior to that of other nations.

There are a variety of constituencies to be served. The concept is one of stakeholders, rather than shareholders. Because a corporation (for example) does not merely serve the purposes of a single body of individuals, the co-owners. It also impacts the lives of others:

Its employees, who have to live on what it chooses to award them for their very real efforts in contributing to its success;

Its customers, who have to have access to safe products at an affordable (in the case of necessities) price.

Its neighbors and the environment generally, which has to put up with its noise, its impact and its waste products.

Was there a time when unions enjoyed excessive power? There was.. although their excesses were far lesser in degree than were those of the mill owners of old.

We all have to live with the impact a corporation creates. Let's look at cigarets, for example. Due to a lack of oversight and regulation, a product that harms people's lives was allowed on the market for generations after it fatal effects became fully known. The first conclusive mortality study was published not in our lifetimes, but back in 1938.

For the sake of investor profit, that study was suppressed. Morally right? You tell me.

TCS Daily Archives