Eleven Economies

Here is something you rarely see in the MSM, pulled from the depths of a CNN story. One of the things a NONpropaganda news source will regularly provide is CONTEXT. In order to have rational, as opposed to emotional meaning, humans require context. One of the keys to propaganda is emotion--"crisis", "meltdown","debacle" etc don't really tell you anything rational, they only tell you how you ought to feel about it.

In the chart above you see that the "Financial Crisis" in the US is FAR from the worst among all those countries. Note Germany, China, Japan -- consider how large their economies are in comparison to ours and it becomes clear that there is more to what is going on than JUST "poor regulation in the US".

Is our MSM interested in understanding that? Not in the least -- they want to make sure to tar and feather Bush and the whole market based US economy before they even consider looking around for some context. They are interested in providing a "simple story", even if that story has no actual relation to facts, and that acting on it may well be horrible case of mistaken identity. Shooting the Golden Goose as a prowler.

When Will They Remove This One?

I imagine that this will get pulled from the web as well as everything else pointing out that the Democrats are the source of the sub-prime debacle has. Guess the age of BO Fascism must already be here, truth has to be removed at every quarter.

How Does One Get Confidence?

A Market Meltdown That Won't Stop: Is This Rational? - TIME

Gee, Time magazine may even be starting to realize that removal of confidence from the public can have a downside rather than just the upside that they believe it will have of electing BO.

But as necessary as those moves may be, the stock market — the most visible gauge of investor sentiment — has not been convincingly reassured. Why doesn't the news of government's quick and sweeping response stop the slide? "The news has got nothing to do with it," says Jeffrey Saut, chief investment strategist at Raymond James. "What it is, is a sequence of events that have brought us into crash mode." Saut traces that sequence of events from the nationalization of Fannie Mae and Freddie Mac, which wiped out the stockholders of those institutions, to the collapse of Lehman Brothers, which did the same to that company's investors, to the run on money-market mutual funds, to the run on Washington Mutual, to the House's unexpected failure to pass the bailout bill the first time around.

"This is a confidence game," says Saut, "and the public has lost confidence not only in financial institutions but also in their elected officials." And confidence, unfortunately, is much easier to lose than to gain.

Nice that Time is starting to figure this out NOW! Would have been a bit better if they had figured it out while they were braying about "recession" in the middle of mutiple quarters of GROWTH!! Once people start to believe in the UNreal, how in the world are they going to get them back to believing in the real?

BO Magic

RealClearPolitics - Articles - Obama's Magic

Read it all, it covers a few of the fallacies very well. I especially liked this paragraph:

Next up, Mr. Obama will re-regulate the economy, with no ill effects
whatsoever! You may have heard that for the past 40 years most
politicians believed deregulation was good for the U.S. economy. You
might have even heard that much of today's financial mess tracks to
loose money policy, or Fannie and Freddie excesses. Our magician will
show the fault was instead with our failure to clamp down on innovation
and risk-taking, and will fix this with new, all-encompassing rules.
Presto!

Where McCain has really let us down is by thinking that the populist rhetoric of "blame Wall Street / CEOs / Business" is acceptable. The reason FDR could never fix the depression is because you can't sit around and blame the folks that have to get you out of the hole you are in for all the known ills. It really matters not at all "who is responsible", what matters is "where do we go from here". Railing against "Wall Street" is just going to have all the productive parts of the society sit on the sidelines until the windbags get through yelling.

"The little guy" can't work until there is some place for him to work. You can scream all day long about how much you hate "Wall Street", but what we need is a TEAM EFFORT. We just succeeded in "benching Wall Street". Congratulations!

I Wish Hugh Hewitt Were Right, Financial Meltdown

Townhall.com::Blog

This is a great little job of writing, and I wish fervently it could be true, even though I believe it is not. The main place I take exception is this paragraph:

The hard left's seven year rage against George Bush has disfigured the politics of the country, but it hasn't infected the large center or demoralized the principled right. Three quarters of the country know the sort of enemy we face around the globe and sense as well the seriousness of the economic risk that faces us and which must be met and managed from maturity and a belief in growth and capitalism's essential genius. The country has never embraced class warfare, and knows that a lurch to the left now would cripple the vast engine of productivity that is the key to a steady recovery of confidence.

I think the seven years of rage HAS disfigured not only the politics, but the emotions of a large majority of Americans. The political parties and the MSM now operate with a horrid scorched earth view in which the destruction of anything is acceptable in the quest for raw political party. The fever pitch of buying votes with earmarks, entitlements, unsustainable mortgages, environmental policies that kill the economy--the list is always growing and we rush headlong to the abyss with both parties promising it all without even a hint of mechanism to deliver.

Somewhere in the 7 year rage -- maybe when everyone's prediction that Iraq had WMD became "Bush lied", maybe when a non-story about Valerie Plame became a "special prosecutor probe", maybe Katrina, or maybe just over the course of the years when less than 2 consecutive quarters of GDP slide became "recessions", an economy growing at 2+% became "bad" and a successful Surge in Iraq dropped from the news like it had never happened.

We lost our national grip on reality. To look at the sub-prime meltdown that started under Carter, accelerated under Clinton as the government pushed their Freddies and Fannies to make riskier and riskier loans, and was fanned by Democrats as late as 2005 as they voted down legislation pushed by McCain.

They now call it a "market failure",  simply deciding to make up a story that suits what the MSM wants, but that is the story that is winning! The market is being blamed for what government created over nearly 40 years!

People are "mad as hell".  It isn't clear that they have any idea what to do to fix their anger, and it appears that we will turn 100% the wrong way causing all sorts of unpredictable harm before more of the population is forced to return to reality based thinking.

Depression Time?

Power Line: The Bailout mess, where is Barack Obama?

Both the far left and the far right seem to be ready to let the house burn and "blame Bush". I guess that is an option, but once it is burned, we just have a burned house, some number of bodies, and then what? Certainly the Democrats managed to make Hoover into a goat and FDR into a saint, but in real historical terms, what did that net us? Rather than a couple years of downturn, FDR managed to give us a decade, and without WWII it is hard to tell how much longer it would have gone.

So let's assume for the moment that our leadership continues to fiddle while Rome burns, BO gets elected, and we have a good rip-snorting deep recession or depression that gets blamed on Bush. Who gets hurt? I'm sure in absolute dollar losses, the rich get hurt the "worst", but that is sort of like in a famine, the big fat guy loses 50% of his body weight and feels better, while the skinny guy loses 30% and dies.

The far left and the far right are both mad as hell, and in general, they have both decided to direct their anger at Bush. It appears that they are angry enough to see their own 401K accounts drop a ton, lose their jobs and who knows what else. I lived through the '70s, and heard enough about the 30's to be sick of it forever, but it looks to me like there are a whole lot of folks that don't understand the risk being taken. I suspect that a lot of the oldsters think that Social Security will carry them through to the grave in fine form, so maybe it is good to let the young folks suffer a bit -- give them some "character". I also think that a lot of folks believe that they "can't be hurt much" or "the rich guys will get hurt more". The media helps them think that, but it is unfortunately wrong. The price of sheephood is often too high.

Long Detail on Bailout With Context

America's bail-out plan | The doctors' bill | The Economist

This is a long article, but worth the read for those that want to get beyond the MSM / political sparring over the "bailout". The chart above is useful because it shows that bailouts aren't new or unusual, and if one puts this one in the context of the size of the US economy, it isn't nearly as large as the MSM would like us to believe.

My contention is that they have decided "crisis is good for BO, so let's make the crisis as big as we can". As I've said before, if you were told that you would have to invest 1/13th of your salary in your company in order to continue to get the full 13/13ths next year, and have an excellent chance of getting the whole 1/13th back in 5 years or so, I doubt it would take long to decide. When the MSM keeps throwing around the figure $700 Billion though, it just sounds "too big to believe" the US Budget is over $3,000 Billion ($3 Trillion) EVERY YEAR!!!

Here are a couple of especially good excerpts from the article:

The consequences will probably not be so far-reaching. The true cost to taxpayers is unlikely to be anywhere near $700 billion, because many of the acquired mortgages will be repaid. The expansion of the Fed’s balance sheet reflects a fear-induced demand for cash, which drove the federal funds rate above the 2% target.

Yet predictions of a sea change towards more invasive government are premature. The Depression witnessed a pervasive expansion of the federal government into numerous walks of life, from trucking and railways to farming, out of a broadly shared belief that capitalism had failed utterly. If Mr Paulson and Mr Bernanke have prevented a Depression-like collapse in economic output with their actions these past two weeks, then they may also have prevented a Depression-like backlash against the free market.

Right vs Privledge

RealClearPolitics - Articles - Bailout Blues

The whole thing is very well worth reading, but the bottom line here, as it is in so many things is that those that EARN IT have the PRIVILEGE of home ownership. When you try to make something that is NOT a "right" into one, you risk your economy learning that nature provides very few rights, and those are the ONLY rights that are guaranteed.

Any reader who has followed me for some time will guess that I am
appalled by the (purported) $700 billion bailout that U.S. President George W. Bush and Treasury Secretary Henry Paulson have organized, yet cannot reasonably oppose it at a moment when the markets are close to a true meltdown. I am further appalled by the spectacle of the Democrats in the U.S. Congress, exploiting the emergency to affix massive quantities of poorly disguised pork to the blunderbuss bill.

And finally, appalled by the media and chattering heads calling the whole mess a "crisis of capitalism" when the plain facts show the opposite. The whole "subprime mortgage" instrument was invented by bankers specifically to assuage heavy-handed Congressional demands to swell the number of minority and low-income homeowners, 20 years ago. Fannie Mae and Freddie Mac were already bloated quasi-government
bureaucracies, dangerously freed from many conventional market disciplines. And among the chief beneficiaries of the current bailout are the most extravagant contributors to the Democrat Party.

As one of my more knowing correspondents put it: "Wall Street loves money but hates free markets, because free markets distribute economic benefits to those who earn them, rather than to those best able to seize them."

The capitalist investment bankers stand accused, rightly, of having invented brilliant kiting schemes -- ultimately to deliver credit to customers who hadn't earned it. Their "greed" is irrelevant -- everyone is trying to make money. The point is that the schemes themselves were basically unsound. The lesson is that when home ownership is considered a "right" instead of a privilege, it is not only the housing market that goes bottom up.

This is a lesson no one wants to learn, so it will take time to sink
in. But any attentive reader of the Wall Street Journal can know today,what his neighbors may never even hear tomorrow: that this marketcrack-up, like every other, came not from observing the basicprinciples of capitalism, but from trying to deny them in the face ofnature.

Way Way Back in 2003, Freddie and Fannie

New Agency Proposed to Oversee Freddie Mac and Fannie Mae - New York Times

Nobody in the MSM needs to look of course, but WAY back in 2003, that bastion of conservative thought, the NYT ran this column pointing out how WRONG Bush was about the need for more Freddie and Fannie regulation, and how RIGHT brilliant Democrats like Barney Frank were in opposition to any more control, because there were NO PROBLEMS!

'These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

See, it is GREAT to be a Democrat. You take a position AGAINST more regulation when the administration and the Republicans propose it, and THEN, when it is clear that you were WRONG, the MSM forgets that and let's you blather about Bush failing to regulate. Note also how it is clear even in 2003 that the Democrats understand that if these agencys are regulated like they should be, it will mean "less bargaining power for poorer families". That is regrettable, but it isn't like taking out high risk loans turns out to be FREE is it!!! If you want to do that, why not try to vote a federal subsidy through in the open rather than sink the credit markets and then blame them for the sinking!!

This is the same kind of brilliance as BO saying "The surge will make things worse"!!! Of course, we have a press that does equal treatment -- the fact that Bush thought there were WMD (along with EVERYONE else) and we never found it is something they ignore just as much as they ignore BO being wrong about the surge.

Killing the Goose?

The government seems to be pretty happy taking $3 Trillion PER YEAR out of a $13 Trillion dollar PER YEAR Economy. Even if getting out of the sub-prime debacle actually cost a Trillion, how many folks would spend 1/13th of their income to make the best effort they could to keep making the other 12/13ths? It doesn't seem to be a hard decision at all when one looks at it that way.

I'm waiting to find an article or politician that explains it as clearly as Paulson did during the Senate Testimony. The GOVERNMENT strongly pushed Freddie and Fannie to take more sub-prime loans in order to keep housing starts moving and lower and lower income people getting homes. Then, after Enron, they passed Sarbannes Oxley that put LEGAL restrictions on the rating of the financial instruments that a business could keep on their balance sheet. Sounded good at the time.

When Bear went down, Moody's and Std and Poors started looking at the "mortgage backed securities" and discovered that sub-prime was everywhere. They downgraded the rating. Once they did that, the Financial Officers and the CEOs HAD to sell the mortgage backed securities--they were ILLEGAL to keep on their balance sheet. Selling them was and is stupid, but they had no choice--the law says sell or GO TO JAIL!! Wham, credit instruments that were 97% secure and had maybe dropped to 95% secure at the worst now had to be DUMPED, and none of the businesses that would normally buy them could make any use of them. Even though on the long term their value is almost certainly secure, they are no longer LIQUID--nobody will buy them TODAY. Meltdown caused by an unintended side-effect of well intentioned government regulation.

BUT, SOX was "Bi-Partisan" BOTH guys like Dodd and McCain voted for it--because they thought it was good. I'm sure there is plenty of blame to go around, Wall Street is certainly not blameless, but Washington is FAR from blameless, and it isn't for the reasons that they seem willing to admit. So they are playing "chicken" with the $13 Trillion US Economy that could take the whole world into a depression. Why?

Well, hey, BOs poll numbers bumped up on the crisis, so crisis must be good! I'm convinced that the MSM and the Democrats could care less if they drive the country to 70% of the population starving and the other 30% killed by terrorists. As long as they can blame Bush and get power it will be more that fine with them!

Unless our elected idiots choose to continue to playing politics rather than fixing an unforseen problem that they had a very large role in creating, there is no way that anything over 10-15% of those mortgages are going to default. The $700-$1Trillion "exposure" is very likely to turn them a PROFIT, just like the Chrysler bailout (that was MUCH less of a good idea) and actually the S&L bailout even eventually turned a profit.

I think the people that make the $13 Trillion a year are perfectly willing to be demonized if that is the price to keep the economy running. Better to have a bunch of prima donas that have never produced anything but hot air in their life going "shame, shame, I told you so" when a big hunk of the problem is actually of their creation than to actually let the credit markets dry up and destroy the business "goose" that keeps turning out that $13 Trillion every year. Do Dodd and BO understand that? I really wonder to sit and listen to them, but I believe they must. They simply don't care about ANYTHING but raw political power, no matter what the level of damage caused!

American Solutions

These guys seem to be mostly common sense.

I don't really like their #10 and the whole "survey says" thing is much less than perfect, but one has to try to hold their nose and support what little positive is out there in the age of BO.

Top 10 Reasons YOU Should Support the Platform

1. English should be the official language of government. (87 to 11)
2. We want our elected leaders in Washington to focus on increasing the energy supplies of the United States and lowering the costs of gasoline and electricity. (71 to 18)
3. The option of a single rate system should give taxpayers the convenience of filing their taxes with just a single sheet of paper. (82 to 15)
4. Every worker should continue to have the right to a federally supervised secret ballot election when deciding whether to organize a union. (79 to 12)
5. Keeping the reference to “One Nation Under God” in the Pledge of Allegiance is very important. (88 to 11)
6. Congress should make it a crime to advocate acts of terrorism, violent conduct, or the killing of innocent people in the United States. (83 to 12)
7. We should dramatically increase our investment in math and science education. (91 to 8)
8. We believe that if research indicates we could build clean coal plants in the United States with no carbon emissions, it would be important to build such plants as rapidly as possible. (71 to 8)
9. Illegal immigrants who commit felonies should be deported. (88 to 10)
10. We support giving a large financial prize to the first company or individual who invents a new, safer way to dispose of nuclear waste products. (79 to 16)

It is an amazing time. I suppose the lefties are just as surprised by the fact that not drilling anywhere or building any refineries means that we have less gas and diesel as they will be by the fact that when you raise a lot of taxes you get a lot less revenue for the government and a lot less productivity for everyone. Oh well, I guess a major part of being a lefty is enjoying your own imagination more than the real world.

The lefties are a wonderful people. Their "assumed rights" to everything from healthcare to "the lifestyle they want to be accustomed to" are a critical thing, but those that need to work to produce all that good stuff ought to just be happy with what they happen to decide we can have and keep our noses to the grindstone.

Feeling Bad About Economy

This is a great little CNN example of "keeping the sheep on the right track". I wonder how many times in American history you COULDN'T go out and find a family that would tell you "things are bad"? They don't list their income, so we have no idea what they mean by "solidly middle class". The article contains a bunch of polls about "how bad things are" and claims it is the worst since the recession of '82 -- but that is only in POLLS, it states NOTHING about actual economic numbers. Not surprising, because those would show it isn't even a recession since the GDP hasn't dropped for even a single quarter yet.

So why would CNN have this as their headline story today? Are we in Iraq? Afghanistan? Was there NO negative news they could find from any of those places? I see that they DO have "Bush's EX press secretary is selling a book in which he says he THINKS he lied for the President". Zowie, nothing much more honorable than ex-employees making a buck selling books making claims that they know will be popular, THAT has never happened before!

Mistreatment of the Military, Memorial Day

Millionaires in the Making Millionaires in the Making: The Shifrins «

When I looked at the link title, I was thinking "Generals". A couple of Captain's, 3rd level of officer up the ranks. O-3. I look at this as GREAT, and not that surprising when one thinks of it. We naturally only hear about the buck private that overspends, loses money gambling and maybe has a drug or alchohol habit to boot, and then "how the country has failed them".

Have to give CNN credit, a little snippet of good news! Wow, the world could be so much more upbeat with just a smidgen more of this. They must be getting revved up for the "good times of BO" that are just around the corner.

Recession ?

The following is a quote from Wikipedia on the 2000-2003 recession:

The U.S. economy shrank in three non-consecutive quarters in the early 2000s (the third quarter of 2000, the first quarter of 2001, and the third quarter of 2001). According to the National Bureau of Economic Research (NBER), which is the private, nonprofit, nonpartisan organization charged with determining economic recessions, the U.S. economy was in recession from March 2001 to November 2001, a period of eight months. However, economic conditions did not satisfy the common shorthand definition of recession, which is "a fall of a country's real gross domestic product in two or more successive quarters," and has led to some confusion about the procedure for determining the starting and ending dates of a recession.

It is important to point out that this group is NON-PARTISAN, because the historical definition of a recession is a 2 Quarter fall in GDP. We HAD that definition in the 4Q of 2000 and the first quarter of 2001, with Bush taking office during 1Q 2001. It must have been important for SOMEONE (non-partisan though I'm sure they were) to change the historic definition, so the "recession" started AFTER Bush took office and lasted during months of growth and REMAINED a "recession" even though there was only a single quarter of retraction in GDP, and that as after 9-11. Funny how non-partisan some folks are.

Anyone that listens to the MSM KNOWS that we are in a recession now, only the complete fool Bush won't admit the obvious. So, how do they report the fact that they are wrong and Bush right?

Like This: "Sluggish Growth Disappoints White House" There is a little baiting of the WH spokesperson to see if they can get Bush to "gloat" over the fact that the economy is not in recession, and thus point out how proud they are of the power of the MSM as everyone would disagree with him. In this case, most people "believe" that we either are in, or are sliding into a recession.

Nobody should be happy about .6% growth, but it is better than nothing and better than actually being in a recession. When it was the close of the Clinton presidency and we were living though the stock market crash of 2K and slipping to what became a REAL recession at the 4Q of the last year of Billy C's term that continued into 1Q of Bush's term, it was hard tell from looking at the MSM that there was anything wrong. Now it is hard to look at the MSM and tell that there is anything right. Oh, I forgot, just like "NBER", the MSM is UNBIASED!

Glenn Beck: The $53 trillion asteroid

Glenn Beck: The $53 trillion asteroid - CNN.com

This article is well worth the read, as are a number of books on the subject - "The Coming Generational Storm", written in 2004 is one that I found to be very solid on the subject. I suspect that few are going to listen, so "what happens will happen" in the future. Some of my thoughts on why this is so:

• It is a bi-partisan problem at this point. FDR put us on the path of the government funded pot of gold at the end of the retirement rainbow. His intent of course was that nearly nobody would ever collect, and he envisioned an ever increasing workforce. Both assumptions are now radically wrong, so we have a radically big problem, but it has been the "third rail" for a long time. Both parties have bought into the madness.
  
• Everyone loves rights and entitlements, nobody likes waiting, working, responsibility. There is an endless supply of people who want someone else to solve their problems, and are willing to vote accordingly. On an individual basis is there is no cost to vote irrationally.
  
• People who have more have more options as well (at least perceived) - more talent, more intelligence, more health, more money, more wisdom, etc. than the people that have less. Christ was right when he said that "to those that have, more will be given, and to those that don't, even that will be taken". It is easy for God to understand how the universe works--if you are certain that you have little, and no options and the only chance you have for success is for things to be given, you will lose what you have (since clearly, you are not even aware you have it). If you are certain that you are blessed with a lot (maybe even more than you deserve), you will see the blessings continue to flow. So the general population is voting to lose what they have. Those that have more will be better off, but the whole will lose a lot.
  
• The idea of "retirement" is generally bad for healthy people. Not surprising that government would be encouraging it and going broke while doing it. Sort of like the free cigarettes given to the soldiers in WWII. Big win for government and tobacco companies. Not so big a win for the soldiers.
  
• Government has been using FICA as a giant extra tax and spending all the money-which is always what was intended. FDR just wanted to increase the government take and buy votes. He did it the old fashined way ... he created the worlds larges ponzi scheme, now the $53 trillion bad debt is coming our way.
  

Glenn Beck, Defconomy

Ran into this out on the Web the other day. The Democrats have been in power for a year now in both houses at the Federal level and and at the state level here in MN. Here in MN they are in the process of raising taxes on gas, cars and sales in the face of an economy that has already started to sour. Are they responsible? I don't know, when Bush took over in 2001 he was considered instantly responsible for the economy that was in a slowdown.

The fact that we have both congress and an executive branch at both the federal and state levels makes it more complicated. Both share some of the blame/success when it is split, but I think it is relatively easy to figure out "who is in charge". In the late '70s, it was really easy - Democrats had it all, and we had predictable disastrous results. In the 80's, Democrats had the house all the way, but Reagan had a lot of sway due to big wins in '80 and '84 and the economy boomed as he got his way.

By '86 he was losing on the interim, got into Iran Contra, and the Democrats mostly took over-the economy cooled. Bush Sr took over in a time of Republican control sinking and his economy sank -- which he helped by giving in to tax increases. Clinton took over with all Dems in '92 and an economy that was already growing and into which the federal reserve dropped interest rates to some of the lowest levels ever (for reasons that I still don't completely follow) -- the country sputtered along and the Republicans took over both houses and held the upper hand with a growing economy and dropping government spending until '98 when their attempt to impeach Clinton failed and he received the complete support of the MSM. (one could argue that '94-'98 or '99 were the best combination times of economic growth and reduced RATE OF GROWTH in government spending that we have seen since prior to '29).

Enter Bush, during the first year he had no capability and inherited a recession. After 9-11 he gained power and so did the economy until '06 when he and the Republicans lost big -- by 2008, it appears the economy is losing as well, we can hope that loss isn't big, but it might be. It seems certain that we are going to have some level of recession and the Democrats will continue to raise taxes on those most capable to get us out of it (giving a re-bate to people who pay less taxes is a form of a tax increase).

Beck thinks that we will get to somewhere between "defconomy" 2-3. I'd like to hope that we don't even sink that low, but the country looks like it really thinks that it is time to teach "the rich" a lesson. Actually, "the rich" are usually those that already understand "the lessons" pretty well which is why they are "rich". Economic slowdowns always hurt the folks at the bottom of the ladder the worst, but on the bright side they DO cut income inequality.

The top of the ladder loses the most percentage and real dollars of wealth as the markets drop, but of course all that really means to them is that they reduce DISCRETIONARY spending until some the nation finally decides that "the lesson is over" and we worry more about making progress at all rather than who makes the most progress. After awhile, the "success" of the rich guy keeping the Lear in the hanger a few weeks out of the year while you stand in an unemployment line and turn down the heat seems a bit hollow. Envy can be fun, but paradoxically, reducing it often isn't.

I'd argue that Obama may be enough of a demagogue to even go beyond FDR though and get us to "Defconomy 0", where we follow the road to the gulag and kill as many of the "wealthy" as possible, or at least "re-educate them", while the borders completely break down, speech becomes controlled well beyond "hate speech" and the destruction of family and religion is carried out. I just finished his book. Only a totalitarian state has any prospect of getting close to the "shared values" that he thinks we all "share".

Maybe we have a slowdown, come to our senses in a couple years and throw the bums out in 2012 -- we really need to, I don't see Al Qaeda as going away, there are a lot of social security bills built up, and most of the baby boomers haven't seen fit to save more than $50K for retirement. If we think the cud chewing masses and central bureaucracy in Washington is going to take the place of innovation and hard work, it will be a long and depressing depression.

DEFCONOMY FIVE

How you'll know we're here: The housing downturn turns into a free fall, making it the worst collapse in our country's history. That not only triggers massive numbers of foreclosures and lost household wealth, but it also sets off another large wave of bank write-downs.

Odds we get here: Roubini told me that it's "extremely likely, even unavoidable" that we hit this stage because "the excess supply of new homes in the market is like we've never seen before." Prices, he believes, "need to fall another 10 to 20 percent before that clears."

• DEFCONOMY FOUR

How you'll know we're here: Americans upside-down on their mortgages and unable to pay their home equity loans begin defaulting on other debt, like credit cards, car loans and student loans. In addition, bond insurance companies lose their perfect credit ratings, forcing already troubled banks to write down another $150 billion.

Odds we get here: High. Roubini says that 8 million households are already upside-down on their mortgages and he thinks we could see that number go to between 16 million and 24 million by the end of 2009. A lot of those people, he believes, will simply walk away from their homes and send their keys back to the bank.

• DEFCONOMY THREE

How you'll know we're here: Some banks begin to crack under the pressure of continuing write-downs and mounting defaults by consumers. A national or large regional bank finally collapses, triggering hedge fund failures and general chaos on Wall Street, potentially leading to a 1987-style market crash.

Odds we get here: Very good. Roubini says that we'll likely socialize the losses, "effectively nationalizing the mortgages or the banks." It would be, he told me, "like Northern Rock (the large bank in England that was recently taken over by the British government) times three." He thinks the stock market will head south throughout the year as fears about a severe recession are confirmed.

• DEFCONOMY TWO

How you'll know we're here: Most forms of credit (both to consumers and businesses) become virtually nonexistent. That results in a "vicious circle" of additional write-downs, stock market losses, and bank collapses, which leads to even less credit being available.

Odds we get here: Good. Roubini says that credit conditions are becoming worse everyday across a variety of markets and won't be getting better anytime soon. Without extra credit available, people might have to actually (gasp!) live within their means.

• DEFCONOMY ONE

How you'll know we're here: Welcome back to 1929. A full economic meltdown results in a complete failure of the underlying financial system. What will be known to future generations as "The Greater Depression" has arrived.

Odds we get here: Not likely. Roubini believes that this will be a "very painful and severe recession" that could last for 18 months or more, but it will be more like 1981 than 1929. Families may be eating soup again, but at least it'll be in their own kitchens.

Now, do I think any of what you just read will happen?

I have no idea, and that's exactly the problem. I'm not an economist or a stockbroker; I'm just a guy trying to make the best decisions I can, and picking the brains of real experts helps me do that.

But I do know one thing for sure: Depressions aren't advertised in advance. Last time around we went from the Roaring '20s to bread lines in a matter of just a few years.

Anyone who says that can't happen again either doesn't know history, doesn't understand how interconnected the world's economies have become, or is lying to you. While that doesn't mean you should panic, it does mean you should prepare -- something my grandfather would've done a long time ago.

Squandered Wealth of Reality

Certainly nothing ever alarmist about Lou Dobbs, good think he gets headline billing every Thursday on CNN. So things were GREAT 25 years ago huh? Maybe for Lou. 1983, the depth of the hang-over recession that was basically "the 70's". The best years of America were behind us, there was no way we could complete, it was OVER. Golly, that was a GREAT time!

During Lou's "squandering of wealth", the inflation adjusted GDP more than doubled, and the stock market returned over 2000%.

I guess that for most of the sheep, "write it and it is so". How can someone that is as out of touch as this guy is have a weekly column in a country where people could actually just remember or look up how wrong he is? How lazy can people be? VERY I guess.

Dobbs: Our leaders have squandered our wealth - CNN.com

By Lou Dobbs
NEW YORK (CNN) -- President Bush's assurances that we'll all be "just fine" if he and Congress can work out an economic stimulus package seem a little hollow this morning.

Much like Federal Reserve Board Chairman Ben Bernanke's assurances last May that the subprime mortgage meltdown would be contained and not affect the broader economy. And it seems Treasury Secretary Henry Paulson has spent most of the past year trying to influence Chinese economic policy rather than setting the direction of U.S. economic policy.

There is no question that Bush, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid will quickly come up with an economic stimulus package simply because they can no longer ignore our economic and financial crisis. That economic stimulus plan will amount to about 1 percent of our nation's gross domestic product, an estimated $150 billion.

But all of us should recognize that the stimulus package will be inadequate to drive sustainable growth in our $13 trillion economy. An emergency Fed rate cut and an economic stimulus plan are short-term responses to our complex economic problems, nothing more than bandages for a hemorrhaging economy.

Bush, Pelosi, Reid and the presidential candidates of both parties have an opportunity now, and I believe an obligation, to adjust the public policy mistakes of the past quarter-century that have led to this crisis. And only through courageous policy decisions will we be able to steer this nation's economy away from the brink of outright disaster.

We all have to acknowledge that our problems were in part brought on by the failure of our government to regulate the institutions and markets that are now in crisis. The irresponsible fiscal policies of the past decade have led to a national debt that amounts to $9 trillion. The irresponsible so-called free trade policies of Democratic and Republican administrations over the past three decades have produced a trade debt that now amounts to more than $6 trillion, and that debt is rising faster than our national debt. All of which is contributing to the plunge in the value of the U.S. dollar.

At precisely the point in our history in which this nation has become ever more dependent on foreign producers for everything from clothing to computers to technology to energy, our weakened dollar is making the price of an ever-increasing number of imported goods even more expensive.

All Americans will soon have to face a bitter and now obvious truth: Our national, political and economic leaders have squandered this nation's wealth, and the price of this profligacy is enormous, and the bill has just come due for all of us.

Bernanke endorsed the concept of a short-term economic stimulus package, but he cautioned that the money must be spent correctly: "You'd hope that [consumers] would spend it on things that are domestically produced so that the spending power doesn't go elsewhere."

Just what would you have us spend it on? The truth is that consumers spend most of their money on foreign imports, and any stimulus package probably would be stimulating foreign economies rather than our own. Imports, for example, account for 92 percent of our non-athletic footwear, 92 percent of audio video equipment, 89 percent of our luggage and 73 percent of power tools. In fact, between 1997 and 2006, only five of the 114 industries examined in a U.S. Business and Industry Council report gained market share against import competition.

And let's be honest and straightforward, as I hope our president and the candidates for president will be: This stimulus will not prevent a recession. It may ease the pain for millions of Americans, but a recession we will have. The question is how deep, how prolonged and how painful will it be. Unfortunately, we're about to find out how committed and capable our national leaders are at mitigating that pain and producing realistic policy decisions for this nation that now stands at the brink.

A Good Year for Bush?

Here is a hard to find view on Bush. Do I think it is 100% accurate? No, not at all, it is "the fringe" of a positive view on '07 for Bush, BUT, in the world of "truth and information" as opposed to "propaganda and lies", one looks for multiple points of view to try to put some bounds on reality.

Something like 80% of the people were totally for the War in Iraq when we went in. I suspect that something close to that number were against the Surge and thought it was "hopeless". It didn't take all that much courage for Bush to go to war with 80% on his side. It took a tad more leadership and courage for him to do the Surge with a very high percentage of the people against him. To date, it has worked. The Democrats will do all they can to snatch defeat from the jaws of victory and they may still make it happen-and of course the MSM will be a willing accomplice through it all. They may well still succeed in making Iraq a disaster, but it looks much less of a sure thing than it did last year at this time.

Pretty much the same for the economy. The Democrats and the MSM have a lot to say about it being bad, but econimics is pretty much about numbers in the real world, and the best real analysis is that the economy is "good to excellent". Inflating fuel prices caused by worldwide demand for fuel hasn't killed it, and the sub-prime real estate bubble has failed to scuttle the economic ship as well.

Seem like there are a lot of prospects for a Happy New Year, but I'm sure that this will be the darkest election year in my lifetime.

Best Economy Ever?

Powerline asserts that the current Bush economy may be the "Best Economy Ever". Is it? I don't have the time to go do research, but I can bet that the MSM won't be giving us any information on it if it was doing well, and they certainly seem to be avoiding that. Lots of job growth over a long period, lots of income growth and the stock market back at record highs.

In August as the sub-prime mortgage meltdown impacted the market and the Fed took actions though, the media had quite a lot to say. I notice that they never went back into the origins of the sub-prime mortgage market-a short perusal of the web looks like it showed up as a major option in the late '90s. I wonder who was President then? No doubt the whole deal was a very good idea, just "poorly executed" by the incompetent Bush.

I love how adding liquidity to the FEDERAL RESERVE system, which is "government banking" (something that one would think that liberals would LOVE) is viewed as "helping the wealthy". Avoiding a recession is pretty helpful to most everyone, and it appears that we have avoided it for at least the moment. No cause for celebration in the MSM though-keeping Clinton in was critical to the late '90s economy, even though it crashed in March of 2000, with him still in the White House. In those days though, the loss of $6 Trillion of internet bubble bursting stock market capitalization and all the econimic indicators sinking like rocks was no news story at all. In those days, only good economic news was worth printing.

I suppose if one is a liberal, it is difficult to figure out what changed.

Listening Left

It is deep summer here in MN, temps in the 90s, no rain, lots of outdoors work and play, so I have been “listening like an average American” to the standard left media and have some thoughts.

If one even just watches the mainline media (closely), a veritable barrage of good news is streaming by, but since it only shows up for a second, and there is never any commentary on it (at least the good news), it is very easy to miss.

· 8 straight quarters of growth above 3%, first time since mid-80s. If there was a Democrat in the WH, this alone would be enough for media happy snoopy dance. As it is, buried on page 4-5 one day, and then the funeral dirge plays on.

· The CBO deficit projection for fiscal year ’04-’05 is down to well under $350 billion and may be under $325 http://www.cnn.com/2005/POLITICS/07/08/budget.deficit.ap/index.html

Contrast this with a Washington Post headline of January
http://www.washingtonpost.com/wp-dyn/articles/A35029-2005Jan25.html that stated it would be $427 Billion. There has been a lot of media and democrat hand wringing about how unrealistic the Bush campaign promise to cut the deficit in half was without the all-purpose media solution on massive tax increases. Expect the story of a lower deficit to see minimal coverage with many caveats about “the numbers being bad”. Next time you see a negative number; see if they tell you about the potential that “the number is bad”. Wonder why that is?

· Unemployment hit 5.0% in June, the lowest since 2001. http://money.cnn.com/2005/07/08/news/economy/jobs_june/

One of the reasons that it truly is sad to have a Republican in the White House is that we never get to enjoy any good news. If we had a Democrat in there, it would be wonderful happy times.

The good news of free market capitalism isn’t just for the USA though. Thomas Freidman had an Op-Ed last week where he pointed out that Ireland, the perennial land of famine and poverty is now the 2^nd highest GDP per capita in Europe. Why? In the early ‘90s they looked at what was working and created a business friendly environment … cut corporate taxes, high individual rates, and reduces socialist kinds of rules that prevented business flexibility, on the “liberal side”, they made even secondary education essentially free to those that were willing to maintain grades. Now Dell, IBM, Motorola, and a host of other business has come to Ireland, while Germany, France, and those in Europe that maintain a socialist bent, slip ever lower. 

As a side effect, it is a lot harder to recruit bombers in a growing economy … people are more interested in living a better life than in blowing it up. The media generally likes to ignore these sorts of facts … the right kinds of decisions might be reached, more people would move up the income ladder and vote Republican … oops, I guess that has already happened. Well, they can try to slow it down at least!

Here in MN the media is intent on blaming Pawlenty for the State shutdown, which was the Democrat strategy from the beginning. One article that you will never read in the local media is that the Governor is part of the EXECUTIVE BRANCH … interestingly, they don’t write legislation, they sign it, and Pawlenty never vetoed a bill during the special session. Which means … drum roll please … that the legislation never got out of the legislature! Let’s see, there are two branches in the legislature, the House (Republican), and the Senate (Democrat). For some odd reason though, this startling fact never made the media, and all we heard about was “Pawlenty’s No New Taxes Pledge”.

There are few things that the media hates more than some limit on taxation, even when a God forsaken Midwestern state with a horrible climate, no mountains, and a bad business climate. However, we do a great job of taxation and always manage to make the top 5. From a liberal POV, high taxes on their own mean a great quality of life … as long as someone else is paying them.

The MN Democrats prevented any bonding bill from passing in ’04, and they were rewarded by picking up 13 seats in the House. Nationally they are obstructing well enough so that a UN Ambassador can’t even be approved. It remains to see if they will be rewarded at the ballot box for their efforts, but if they are one can only guess that even the dense Republicans will learn that obstruction pays and at least give it a ham handed try. Oh how the media will yell at that tactic, but I may be just wishful thinking, look at the Supreme Court.

The Democrats successfully Borked Robert Bork and prevented his confirmation, they carried out their high tech lynching on Clarence Thomas and he squeaked out a confirmation. 

We now hear the opening whine salvos of “Bush didn’t get enough of a majority to appoint anyone conservative”. Clinton NEVER got any majority at all (43% in ’93, 49% in ’96), and yet Ruth Bader Ginsberg sailed through 96-3. What would someone that is as far right as Ginsberg is left believe? I don’t think we can find anyone anywhere in the judicial system that comes close … an equivalent conservative judge would have to believe that Roe should be overturned ASAP, affirmative action / Gay Marriage / restrictions on the Ten Commandments and a host of other things would be constitutional abominations that would need to be fixed immediately. I’m not sure such a candidate exists, but if they did the media and the left would go to filibuster and manufacturing personal charges against the person for certain. 

Yet, the foolish Republicans let Ginsberg sail through AFTER Bork and Thomas. Did they think that the Democrats and the media would give them credit for civility? Of course not, it is the Republicans that have “destroyed the tone” in Washington, and Bush ought to appoint a liberal to “prevent a fight”.

I got a chance to listen to a little of “Fresh Air” with Terry Gross on MPR this evening as I journeyed home from a Church board meeting, and was rewarded with some great humor for my efforts. She was interviewing a Marine reserve Doctor that is head of some University Medical school as well as having served in Iraq. She did her best to try to get him to say something bad about the politics, the efforts, ANYTHING to do with the war, but he remained dedicated to the service, dedicated to the soldiers, and not willing to take any political bait.

She finally got down to a question like “Well, the war in Iraq is a very unpopular war, do you feel that has reflected badly on you as you have returned?”. He had served at the time of (not in) Vietnam, and responded that his experience to the contrary was that they had a lot of support, people sending them letters, treats, helping their families, and telling them how much they appreciated their efforts when they got home. That was the end of the interview, her disappointment was palpable.

It is a great country. He goes to war to fight for the freedom of a tax subsidized woman whose high moments are if someone with Tourettes syndrome comes on and says something inappropriate or she can giggle about gay sex with a guest. If the Muslims that she respects and loves to talk positively about (as opposed to disgusting closed-minded Christians) ever were in charge, they would take her out and cut her head off,  with some unfriendly treatment on the way to getting to see her headless body from a "unique perspective" for her 2-7 seconds of remaining consciousness that science postulates a severed head "enjoys" (providing her head falls in a "lucky" perspective).

How out of touch with reality can a reporter be to think she will get the better of a 30+ year military veteran, Medical Doctor, and head of a University Medical center? She was completely out of her league, but apparently her obliviousness knows no bounds as seems to be the case for most of the mass media.