Needs a History lesson - Obama warns of turning a 'crisis into a catastrophe'

[WhiskeyGirl]

Obama warns of turning a 'crisis into a catastrophe'

(CNN) -- President Obama warned Wednesday that failure to act immediately on his economic aid plan "will turn crisis into a catastrophe and guarantee a longer recession."

"Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred," Obama said, as Senate debate continued on amendments to the stimulus package.

read the rest here -

http://www.cnn.com/2009/POLITICS/02/04/stimulus/index.html?iref=werecommend


Now for the history lesson, or "where were these bright minds" -

President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.

...Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having "failed in its duty to follow up on matters brought to its attention."

http://abcnews.go.com/Blotter/story?id=6201900&page=1

NOT a mole hill into a mountain...a "crisis into a catastrophe" - mo

Democrats Were Wrong on Fannie Mae and Freddie Mac

October 06, 2008 05:10 PM ET
Corrected on 10/08/08: An earlier version of this article incorrectly stated the year Barney Frank and Herb Moses broke up. They broke up in 1998.

Seventeen. That's how many times, according to this White House statement (hat tip Gateway Pundit), that the Bush administration has called for tighter regulation of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Congress has cooperated only once. In spring 2007, as House Financial Services Committee Chairman Barney Frank likes to point out, the House did pass a bill in response. The Senate did not act until 2008; Senate Banking Committee Chairman Christopher Dodd spent most of 2007 camped out in Iowa running for president. The legislation passed by Congress in 2008 enabled Treasury Secretary Henry Paulson to put Fannie and Freddie into federal conservatorship this summer when they failed. But it didn't prevent them from spewing a huge amount of toxic waste, in the form of subprime and Alt-A mortgages, into our financial institutions from 2004 to 2007. As Stephen Spruiell points out in The Corner on National Review Online, Fannie and Freddie spewed out $1 trillion worth (face value) of subprime mortgages between 2005 and 2007. That's a whole lot of toxic waste...

Much if not all of that could have been prevented by a bill cosponsored by John McCain and supported by all the Republicans and opposed by all the Democrats in the Senate Banking Committee in 2005. That bill, which the Democrats stopped from passing, would have prohibited the GSEs from speculating on the mortgage-based securities they packaged. The GSEs' mission allegedly justifying their quasi-governmental status was to package or securitize such mortgages, but the lion's share of their profits—which determined top executives' bonuses—came from speculation.

http://www.usnews.com/blogs/barone/2008/10/06/democrats-were-wrong-on-fannie-mae-and-freddie-mac.html

NOT a mole hill into a mountain...a "crisis into a catastrophe" - mo

 

September 25, 2008
VIDEO: Barney Frank (D) Denying Problems With / Blocking Oversight of Fannie-Freddie in 2003

Who's responsible for the mess? It's a truth the Democrats and their surrogates don't want to face. But the record has them dead to rights.

The video clips presented in this report give you a clue. Quote of the decade from Barney Frank (D)- "Fannie Mae and Freddie Mac are not in crisis." Other juicy quotes from Chuck Schumer (D) as well.

Video at link.

Note that McCain and the GOP and Alan Greenspan and Bush were all warning of this in 2001, 2003, 2005 and 2006. Legislation for reform and oversight of Fannie-Freddie was proposed and was blocked every time - on party line votes - by the Democrats. Ignoring it won't change it, O!bots.

DEMOCRATS 08 - PARTY BEFORE COUNTRY.

http://mypetjawa.mu.nu/archives/194210.php


NOT a mole hill into a mountain...a "crisis into a catastrophe" - mo

And these are the people that are part of the solution?  Another example of 'bold leadership'?

my opinions

[WhiskeyGirl]

~ No Confidence - "Obama caps executive pay"

The Obama White House ordered $500,000 pay caps for executives of firms that take federal bailout money, the first in a set of far-reaching and tough standards in the government struggle to stabilize the teetering U.S. banking and financial sector.

After all these months, why continue to bail out FAILED companies?  Even if you limit compensation, I would imagine most of these folks have millions in stock, options, and other financial vehicles that are ALREADY in their posession.  If the stock goes up that IS their golden parachute.  What are they being rewarded for exactly?

Why not funnel future money to banks and investment companies that remained sound.  Well run companies.  Give the little guys a chance to grow and make new customers.  REWARD good behavior.

"We all need to take responsibility. And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses," a stern Obama said in the White House foyer.

Why keep these companies afloat?  How many other management and executives made as much if not more than these folks due to bonuses?  Bonuses for their long term success at raising the stock price?  Didn't anyone, like their audit firms notice that they were taking on a lot of risk?  Speculating?  Wasn't there anyone to blow the whistle?  Maybe the whistle was missing?

Reform?  No confidence.

http://www.iht.com/articles/ap/2009/02/05/america/NA-US-Obama.php

[WhiskeyGirl]

"Insiders are the problem, not solution"

By Joan Vennochi
February 5, 2009

WHETHER or not he paid his taxes, Tom Daschle was never the best person to lead the charge on healthcare reform.

Reform means shaking up the establishment. Daschle is the establishment, just like other Cabinet picks made by President Obama.

Daschle wrote bravely about healthcare reform in a recent book he co-authored. But the former Senate majority leader also moved seamlessly into the private sector, where he quickly cashed in on his political connections. He earned millions from the same healthcare industry that Obama pledges to reform.

Healthcare reform is especially tough. All the stakeholders must get involved and stay involved. But on every front, transforming the status quo takes diplomacy, plus steeliness. And on every front, Obama's chosen agents of change are insiders who are now charged with reforming the system that nurtured them. They are the establishment they have come to change, from George Bush's defense secretary to a treasury secretary who helped to set the monetary policy that is in current meltdown.

It's no coincidence that several Obama picks also had tax problems. Consummate insiders frequently share a sense of entitlement that goes along with their view of themselves as special people who do not have to comply with the same rules as average citizens.

But when that sense of entitlement was put on obnoxious display, Obama not only backed up the entitled, he continued to insist they represent the best, brightest, and only choice for the job...

...Obama embarked on his media mea culpa tour, acknowledging that he "screwed up." He was referring to any impression that he endorsed "two sets of rules. . . one for prominent people and one for ordinary folks who have to pay their taxes."

The country is in sad shape.   

Over time, the bigger screwup may be an overreliance on a squad of insiders and the inevitable baggage they bring to their posts. If they start accommodating the status quo, instead of shaking it up, change becomes an empty promise.

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/02/05/insiders_are_the_problem_not_solution/

jmho

[WhiskeyGirl]

The biggest swindle of all

January 27, 2009 | Issue 689

Turns out that Bernie Madoff was making money the old-fashioned way: fraud.

(snip)

No one blew the whistle on Madoff. Not the authorities, who had no clue that anything was wrong until Madoff's sons ratted him out. Not the investors who competed to become clients. As long as he delivered 15 percent annual returns year after year, none of them asked too many questions.

And now the loot has vanished--as much as $50 billion worth. Which is more, by a good sum, than the U.S. government spent last year on its food stamp program that helps more than 30 million Americans.

Who ratted out Wall Street?  New protection for whistle blowers?  What for?

ALL THE financial commentators are demanding to know how such a thing could have happened. Far fewer ask the more interesting question that New York Times columnist Paul Krugman did: "How different, really, is Mr. Madoff's tale from the story of the investment industry as a whole?"

During the 1990s and 2000s, Wall Street witnessed an explosion of high-stakes gambling on immensely complicated financial markets, far removed from the goods-and-services-producing "real economy."

Why doesn't Wall Street and the problem disappear?  Why isn't the "real economy" taking control again?

...no one asked too many questions because the money was so good.

The biggest banks and firms scrambled to get in on the game. Giant investors had a bottomless appetite for new securities. Government regulators had no clue, nor any power to do anything if they ever got one.

And as long as the money kept rolling in--generated by the bubble in real-estate values and the booming mortgage lending industry--the size of the payoffs and the ensuing bets kept going up, and the biggest players became unimaginably wealthy.

Maybe someone could give the money back?

"So how different is what Wall Street in general did from the Madoff affair?" Krugman wrote. "Well, Mr. Madoff allegedly skipped a few steps, simply stealing his clients' money rather than collecting big fees while exposing investors to risks they didn't understand. And while Mr. Madoff was apparently a self-conscious fraud, many people on Wall Street believed their own hype. Still, the end result was the same (except for the house arrest): the money managers got rich; the investors saw their money disappear."

There are a couple other differences worth noting, too.

In the case of Wall Street's pyramid scheme, no one's going to jail, because it was all perfectly legal. And instead of losing all their money, like Madoff's rich investors, the perpetrators on Wall Street--Citigroup, Goldman Sachs and the rest--are too big to fail without causing a financial Armageddon. So they get a bailout, courtesy of U.S. taxpayers, who are now on the hook for the disaster the bankers caused.

It's impossible to regard the financial world's binge as anything other than robbery--the theft of incomprehensible sums of money that could have been devoted to meeting society's needs the world over.

The financial Armageddon is over.  Why do they keep trying to fill the black hole with taxpayer money?

When a Bernie Madoff is exposed, there's always a hue and cry in the media and from political leaders about the immorality of ill-gotten riches. But this obscures the bigger crime at the heart of the system. Capitalism is built around organized theft--the theft of a portion of the value of what workers produce by the people who employ them.

A just society would root out this robbery and all the social ills that flow from it. Under socialism, no ruling class would have the power to command the labor of others--and every person in it could contribute to the priority of meeting the needs of the whole of society.

I believe that ANY system of government can be overcome by organized theft, not just capitalism.  Big government = big theft.  Doesn't matter if it's communism, socialism, capitalism, or any of the other labels...

http://socialistworker.org/2009/01/27/biggest-swindle-of-all

just my humble opinions

[WhiskeyGirl]

"Now, let me say this," Obama said. "In the past few days, I've heard criticisms of this plan that frankly echo the very same failed theories that helped lead us into this crisis in the first place -- the notion that tax cuts alone will solve all our problems, that we can address this enormous crisis with half steps and piecemeal measures and tinkering around the edges, that we can ignore fundamental challenges, like the high cost of healthcare, and still expect our economy and our country to thrive.

"I reject these theories," he continued. "And, by the way, so did the American people when they went to the polls in November and voted resoundingly for change."

http://www.latimes.com/news/nationworld/nation/la-na-obama-stimulus5-2009feb05,0,4277303.story

One of the problems of failed policies of the past was spending.

The nation is broke and has to borrow unimaginable amounts of money.  Social Security is unfunded and doesn't look like anyone is going to fix it soon.

Wall Street, Freddie/Fannie, AIG and others all were in need of reform for over 10 years and reform was not supported by enough people on Capitol Hill.

Obama is expanding healthcare coverage, a worthy goal, but hasn't reformed the provider network.  When will the government reform healthcare to make it more affordable for everyone?  How many healthcare interests and their employees made contributions to the Obama campaign?

In my state, all ones needs to do to vote is give a name, any name to vote.  No need to provide any kind of ID.  I participated in this process and after watching people register with a utility bill and another person to vouch for their identity, no government issued ID needed, I would conclude the voting process in this nation is a sham, the results a sham.

With people just giving a name to vote and no verification of citizenship or other critera, how would anyone know vote fraud is occuring? 

Where is the support for the Real ID Act of 2005?  Where is the logical cleanup of the voter rolls?  Ensure honest elections in the future?  I see years of sham elections in the future.

The economic crisis was helped along with liar loans, failure of government to understand/make efforts at reforming things like Freddie/Fannie/derivatives when problems sprang up years ago.  The Democratically controlled congress had many reasons to act, but failed to do so. 

Didn't some Democrats see this coming?  Why aren't they concerned with creating a sound currency?  A sound economy?

Is free trade the best way?  Maintain a concentration of economic power in a few, like giant banks on Wall Street and a FEW industrial concentrations in China? 

What happened to creating a vibrant Main Street?  In the past, Main Streets everywhere had business.  Today they do not.  What's the Obama solution?  Green projects with parts made in China or elsewhere.  How long will that green prosperity last?

Healthcare?  Who's paying the bill?  Who's making sure Americans get a fair deal and not another Ponzi or ripoff on drug costs?

When is healthcare reform going to include drug companies and other healthcare providers? 

Take out the non-stimulus things like STD education, get good wage discounts, maybe a training wage to stretch the money farther. 

Meaningful reform is needed, not a continuation of the practices that concentrate the money and opportunity and prosperity among a smaller and smaller pool of nations and individuals.

Is free trade really free?  Or does it reward only a few?  I say let those few move on to new opportunities and start rebuilding this nation for people who live here.

Fair trade is the way to go.

JMHO

[WhiskeyGirl]

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery and a more uncertain future," - Obama

Where was this community activist in 2000?  2005?  Why was he silent?

Obama is fond of saying that prosperity should be shared.  Is everyone contributing to prosperity?  Does prosperity equal spending?  Has Main Street become prosperous by spending using credit?

No one can do everything, everyone can do something.  What about people who choose not to contribute?  There are some who cannot contribute due to limitations, there are many that coose NOT to contribute by choice.  Should they share in prosperity? 

From my earliest school days, I recall that employer/government healthcare benefits became popular during and after WWII.

Prosperity in this country existed long before government programs.  

I saw an educated man on C-Span yesterday.  For every dollar the government spends, there is one dollar less for private industry.  Government outpays private industry, they promise better benefits and don't ensure that there is a way to pay for them. 

Look at what happened to Social Security and Medicare.  Are they financially sound?  Anyone planning on fixing them for future generations?  Anyone in government planning to put the money back in the "Trust Fund"?  This is big government at it's best. 

What one generation builds, another loots, and yet another destroys.  Who thinks it possible to build prosperity based on massive debt and unsustainable programs.  Was Social Security sustainable in the long run?

Will any government benefits be sustainable for generations?

Prosperity was part of the this country long before big government.  Keep the decision making process close to those that are impacted.  Local communities that benefit from good schools and good roads should be responsible for paying for them.  They have more resources, more jobs, greater ability to pay for all the nice things in life. 

Bigger is not always better, the collapse is larger and harder to recover from.  If something is to big to fail, why keep pumping money into it?  Will there ever be enough money to fix Wall Street or Social Security or Medicare or Healthcare for everyone under current circumstances?

Why not reward success?  Programs that work?  Small banks and businesses?  Main Street?  Find new ways to spread and share prosperity.  Not the tired ways of the pat.  Build a better government with better politicians.

Is Obama rewarding health programs that deliver good quality care at an affordable price?  What efforts are made to ensure taxpayers are getting the best possible price?  A price in line and no higher than others pay?

Drugs that work and are reasonable?  Why continue to support unsustainable growth and spending?

Where was the fine print that spells out all that change Obama promised? 

The catastrophe (or depression) is already here.  Promote REAL job growth in the private sector.  There was a time of prosperity in this country when Main Street was filled with good jobs, good companies, and unlimited opportunity.  It was't perfect, but it was a recipe for success, the envy of the world.  What the he$$ happened to that promise?

Have unending credit card debt, high mortgages, rising medical costs made a brighter future for the masses on Main Street?   Will higher debt, a future mortgaged for generations, uncontrolled medical costs make a brighter future for America?

Does the government have a secret weapon or wand that will make everything better?  Or, just bigger entitlements for the political elite?

It seems like fair dealing requires at least fine print.  What was the Obama promise for America?   What is the repayment plan for all of Obama's dreams? 

[WhiskeyGirl]

I think the "war on prayer" is a planned diversion from all the pork spending.

Spending that produces lots of debt.  Why not think of creative ways to educate people about sexually transmitted diseases "STDs"?  Ways that do not include spending that should be creating jobs?

Why not invoke the mighty Obama/Democratic/MoveOn emails lists to spread the word about STDs?  Why not ask the media and internet to provide these important messages for "free" - their their part and make these public services message to reach as many people as possible?

all my posts are just my opinions

[WhiskeyGirl]

When I look at history, I do not see an overwhelming vote for hope and change in November 2008.

I see that some voted for change and intended that change to include financial security, a stable currency, a return to moral and ethical values/fair dealing, and jobs for Americans - a return to prosperity and opportunity for all.

What did we get?  An administration that spends bolder and more than any before.  Any jobs in that bill for Americans?  Any meaningful financial reform?  Any stabilization of the currency?  Economy?  New job opportunities?  A return to financial responsibility for states and communities?  Some voted for integrity.

Fair deal on drug prices for Americans?  Fair deal on healthcare?  Jobs?  

Maybe just continued globalization of the economy to the detriment of America's future?

Obama also made a comment that Americans should be able to retire with dignity and should not have to depend on charity.  How is that possible?  Any trust left in Social Security?  Retirement plans?  401k?  Other 'retirement' vehicles?  Was there a past partnership in government to ensure that the retirement futures of millions of Americans wasn't gambled away legally?  Charity is the only thing left, Capitol Hill can't be trusted to understand the ponzi schemes and/or do the right thing.  There are good people on the hill, but they are outnumbered by special interests. 

The new special interest groups promote snake oil and fountains of youth in the form of pills and potions.   When will building America become the best and foremost interest of Capitol Hill?  Anyone live forever?

Who's looking out for America's best interests?  Or, do some politicians continue to look out for the interests of big business and big government, and new ponzi schemes?

my opinions

[WhiskeyGirl]

President warns that failure to act on package now exceeding $920 billion could plunge the nation into a long-lasting recession that might prove irreversible.

http://www.foxnews.com/politics/first100days/2009/02/05/obama-stresses-urgency-stimulus/

Maybe it will be longer because of the pork spending in this bill?  What's wrong with a "needs" only bill?

WASHINGTON -- President Barack Obama fought back against Republicans on Thursday, charging that critics of his nearly $1 trillion plan to stimulate the collapsing U.S. economy were promoting failed theories and ignoring the depth of the crisis.

In my opinion, the economy was collapsing for years, and this was ignored my many, including Democrats who insisted no reforms were needed.  So, the new plan involves spend the nation out of bankruptcy?  Spending the nation to prosperity?  Seems like that's what America has been doing for years - never worrying about the future payback.  The future arrived.  Where is the change?

Did spending and unending credit work for many Americans that have lost jobs and cannot pay their bills?  Cannot afford any new government spending and the taxation that must come with it?  Maybe hugh tax increases after Obama leaves office?

It seems like common sense for many Americans is a return to frugality and living within the means available.  For some, this won't be enough.

Are there jobs in that package for the many Americans from so many walks of life that are jobless?  Or just a few $300,000 plum jobs for the elite among the working class?

The economy was filled with hot air from Capitol Hill and Wall Street for years.  The bubble continues to deflate.  Kinda late to be shouting a warning...

How many people is that jobs package going to save from foreclosure?

jmho

[WhiskeyGirl]

Nothing in life is sure.  Nothing is forever.

The only thing people can depend on are death and taxes.

There is no fountain of youth, no miracle pills.  There are no miracle investments or Bills from Capitol Hill that will save the nation.

It doesn't matter how much you make (think China $5 a day wage), all that really matters is what you save (think China 1/2 of daily wage to savings & gold/silver, paper is worthless).   In the end, that's all you've got left (think...China HAS money to invest and rideout the depression, they will money for generations on our national debt). 

JMHO

[Edward]

“If you spent a million dollars every day since Jesus was born,
you would have spent three-quarters of a trillion dollars.
A million seconds is about 11.5 days.
A billion seconds is about 32 years.
A trillion seconds is 32,000 years.”
.
- John Allen Paulos, Ph.D., Math Prof., Temple Univ
Do the MATH   We are in trouble any way you add it up. 

[nonesuche]

Whiskey-

Obama was speaking to the democrats last night at a VA event, he stated he INHERITED this issue, that it was gift wrapped waiting for him?

How is that helping? Playing the shell game? He wasn't in the Senate?

Partisanship still rules and now he has to pay back Pelosi, hence the pork fat out the wazoo in the stimulus package.

[WhiskeyGirl]

Whiskey-

Obama was speaking to the democrats last night at a VA event, he stated he INHERITED this issue, that it was gift wrapped waiting for him?

How is that helping? Playing the shell game? He wasn't in the Senate?

Partisanship still rules and now he has to pay back Pelosi, hence the pork fat out the wazoo in the stimulus package.

The 'problems' are perhaps a special gift to the president from a long line of Democrats and others that seem to have an agenda that may include collapsing the government and enslaving the masses for generations.

I imagine the gift was carefully selected, protected, encouraged to grow, gift wrapped, and given with someone special in mind.

Many in number were the attempts to reform or prevent the gift from flowering, but it happened anyway.

The nations debt is a new kind of flesh eating bacteria.  The bacteria just keeps spreading and devouring everything and everyone it its path.  Any way to stop it?

Should a few diseased states be allowed to kill off an entire nation?  If we're all in this together, someone has to step up to the plate and stop enabling poor financial management.

Shore up Social Security, Medicare and the Economy.

Is a stimulus and recovery bill really serious when the only stimulus it seems to provide is for imports?  Borrow money from foreigners, give it back through imports, and pay it back for generations?  How does THAT make sense in any language?  Just "stuck on stupid"?  Change we can believe it?

Many Americans voted for change and they DID NOT vote for Obama.  They voted for someone else.  I voted for change to rebuild this nation, financial security and integrity.  All those continue to be MIA.

jmho

[WhiskeyGirl]

OBAMA: More families will lose their homes.  There is a plan being promoted by a woman with a good track record - Sheila Bair of the FDIC.  She seems to have a good handle on how the problem came about, waved warning flags that were ignored or pooh-pooh'd by some, and has good common sense.   Any chance the Obama plan puts the housing crisis is such good hands?  Or maybe someone with housing problems that have festered for years? 

OBAMA: More Americans will go without health care.  We are a nation that spends more than anyone and doesn't cover everyone.  We are a nation that has private insurers that negotiate drug formularies to bring good coverage at reasonable prices to businesses and consumers everywhere.  Some states negotiate for favorable prices.  For some reason, the Federal Government doesn't do this. 

Why are American taxpayers paying more than insurance companies, other nations, and just about everyone?  When will reform come that lowers the price the Federal programs and people on Medicare pay for drugs?  If Canada can lower drug prices for seniors, why can't the U.S.?  Why should the U.S. taxpayer subsidize the global village? 

Same concerns with hospitals, schools, and infrastructure.

OBAMA:  To create 3 to 4 million jobs and to do it in a way that lays the groundwork for long term growth, by fixing our schools; modernizing health care to lower costs; repairing our roads, bridges, levees, and other vital infrastructure; move us toward energy independence. That is what America needs.

If these are shovel ready projects, why aren't states and local communities taking care of their roads, bridges, and schools?   States and local communities are closer to the problem.  Their elected officials seem to be much more responsible to their voters. 

Why penalize states and communities that are responsible and take care of their roads, bridges, and schools?  Why do some have to keep paying to make up for irresponsible states and local communities? 

"Our XXX" does have its limits.  Are all these states and communities going to start sharing their gambling profits?  Their revenue from job creation?  Their illegal drug proceeds?  Their graft and corruption? 

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/06/AR2009020601829.html

jmho

[WhiskeyGirl]

We're overreacting to economic woes

For several months we have read reports of financial failures on Wall Street, corporate America and Main Street. All the "experts" have concluded the only way out of this "disaster" is a massive stimulus package from the federal government.

How did they come to this conclusion? No one has clearly explained how we got to this point of financial crisis. If we haven't clearly identified the problem, how do we develop a solution? The common link in this financial crisis has been the refusal to face bad economic news.

At every level of our economy, from Wall Street brokers to CEOs to Joe Public, we have refused to accept temporary economic decline. Our response to this bad news has been to take increased risk and acquire more debt. In the short term, this makes things look better, but it only delays and deepens the eventual pain and suffering.

If you are on the verge of bankruptcy, you cannot borrow your way out of it. You must decrease your spending. If we fail to recognize these financial realities, we only dig the hole deeper and wider. Now our government leaders (both parties) have pushed this huge government spending plan as the only solution.

It seems to me that this is the same "solution" that got us into this crisis. If we refuse to accept temporary economic downturns, and instead increase our federal deficit to avoid short-term pain, we will be facing more severe and prolonged economic pain. This means higher unemployment, lower incomes, and higher prices. If we cannot tolerate the rise and falls of a free market economy, then we must accept the gradual transition to a socialist, government-controlled economy.

John MacDonald

Manitowoc

http://www.htrnews.com/article/20090207/MAN06/902070436/1410

Where is the change?  Somehow, I don't see big government, or a dictator doing any better for the economy than the previous generations that made this country great and provided opportunity.

Big government and dictatorship = less opportunity for everyone.

[WhiskeyGirl]

Another view on the crisis -

'Right Now, I Don't See a Crisis'

Economist Bert Rürup is convinced the German economy is in deep trouble. His colleague Stefan Homburg isn't so sure. With SPIEGEL as referee, the two discuss whether stimulus programs are merely a gigantic waste of money.

Homburg: The word crisis is too alarmist, in my view. Unemployment is at roughly three million. That is a long way from the five million unemployed we had four years ago, when there was far less public hysteria than today.

Rürup: I disagree with your assessment completely. Despite the economic stimulus programs, the economy will shrink by more than 2 percent this year. This has never happened before in the history of postwar Germany. I would be pleased to see us reach the bottom in the second half of this year.

Rürup: But unlike earlier downturns, today we cannot expect an economic stimulus from abroad to bring us a recovery. It is not alarmist when I say: We are in a much more precarious situation, compared with past downturns. We cannot compare the current crisis with the 1929 world economic crisis, as some are doing. I agree with you on that. But why is this the case? Because governments around the world have learned from the past and, this time, are doing the right things to prevent the sort of development that happened after 1929.

In the 1929 crisis, I belive the U.S. wasn't already burdened with hugh debt and entitlement programs.  mo

Homburg: I see it completely differently. The economic stimulus program is a waste of public funds and will cause a lot of damage. It is extremely regrettable that the money that has been squeezed out of citizens in recent years through an increased value-added tax and many other programs will now be burned up in one fell swoop.

SPIEGEL: What do you mean by "burned up?"

Homburg: The money will now be passed down the ladder everywhere, all the way down to the small-town mayor. He is supposed to spend it quickly, but he has no plans ready for projects that make sense. As a result, the money will be spent in questionable, poorly considered ways, which will also affect prices. The construction industry is already working almost at capacity today. In this respect, it's a waste of public funds.

I think if the small town mayor had important projects they would have a method to fund them.  Road and bridges to nowhere, schools that should be in good shape and maintained by locals. 

Homburg: But what happens now? No one is buying our BMWs abroad. As a result, BMW is cutting back its workers' hours. And the government reacts by spending money on early childhood education, (welfare) recipients and local construction projects. How does that help BMW workers?

Homburg: …but it doesn't work, and most citizens know this. Citizens suspect that they will be presented with the bill after the parliamentary elections, and they're right. Tax increases are as sure a bet as hearing "amen" at church.

The U.S. needs a truth in spending law for government acts in the public interest.  A sound plan for repayment and honest communication to the public.

Homburg: In my opinion, the financial and economic crises have little in common. The financial crisis is absolutely not the cause of an economic crisis. The savings banks and cooperative banks were not affected at all. The three-month interest rate that banks charge each other for unsecured loans has dropped sharply, which suggests rising confidence. What we are seeing are managers who seek to conceal their individual failures by blaming the financial crisis.

Why does the U.S. government focus on failed businesses?  Why not support those businesses that have made sound financial decisions over the past 10-15 years?  Support and promote the many SMALL and MEDIUM sized banks in the U.S.?  The ones that continue to serve Main Street?

Why aren't the TARP folks writing off all those bad debts?  Wouldn't that get rid of hte problem, quickly?  How many years has this toxic waste been on the books?  Moved off the books (like Enron)?

I can't think of any good reason taxpayers should be saddled with trillions of dollars in toxic assets.  How many of these assets are the result of greed and fraud?  How many exist on paper only?  Why don't the banks take responsibility for these losses?  The ponzi scheme continues.

Homburg: On the contrary. In my opinion, allowing Lehman to fail was the only correct decision. The mistake was saving all the others.

The Lehman failure a boon to taxpayers?  Toxic debt they need not be burdened with?  Any fallout from the failure of Lehman?  Not that I am aware of.

Homburg: Financial crises routinely follow phases with very low interest rates. Low interest rates encourage carelessness. I predict that the banks will behave in even riskier ways in the future than they did in the past, because they have figured out that when things go wrong, the government will bail them out. I already see the next speculative bubble about to take shape.

My choice for the next bubbles are healthcare and insurance industries...

SPIEGEL: Was there a risk of a world economic crisis occurring, like the one in 1929?

Rürup: Yes, if the government had followed the advice of people like Homburg. In fact, the damage could even have been worse than in 1929, because of the domino effect stemming from a globalized economy.

Homburg: No. If you look at how little influence a single bank has in globally diversified markets, you have to conclude: One bankruptcy more or less would not have been a problem.

Rürup: Just a minute! Are you saying that if an institution that carries as much weight within the system as Citibank had gone into bankruptcy, it would not have been a problem?

Homburg: No, that would not be a problem. If one bank fails, others take its place. There are enough examples of this in history.

Rürup: A noticeably isolated opinion.

Homburg: My theory is this: Deutsche Bank CEO (Josef) Ackermann and his ilk deliberately unnerved the government. The bailout program is very advantageous for the banks, as it is for Ackermann, because it also rescues his bank's receivables. This helps his bottom line.

Raise the national debt, keep taxpayers in debt bondage for years...

Rürup: If you mean that the government should simply take the toxic securities off the banks' hands without compensation, I reject this idea. It is imperative that the banks' owners participate in the costs. Depositing all this garbage at the government's door is simply wrong.

Homburg: The German banks called for a "bad bank" back in 2003, using the same arguments. Then they turned around and earned handsome profits. This subsidy would in fact be the height of stupidity.

Rürup: Okay. At least we agree on that.

Maybe the toxic assets in the U.S. are worse than elsewhere in the world?  Why shouldn't banks be responsible for their toxic assets?

Privatize profits, socialize losses...

http://www.spiegel.de/international/business/0,1518,604319,00.html
Why doesn't the U.S. have these kinds of public discussions?

imho

[jjayinthemorning]

780 bailout plus 750 stimulus?
Where is this money coming from?
We are being sold out.

There were verbal conversations that warned Congress that they had better vote for this or else.

[WhiskeyGirl]

780 bailout plus 750 stimulus?
Where is this money coming from?
We are being sold out.

There were verbal conversations that warned Congress that they had better vote for this or else.

I sometimes think the U.S. is being destroyed economically. 

"Our number one goal is to pass this bill,“ Reid told reporters. "They (the Republicans) cannot hold the president of the United States hostage.“

Pork spending that will kill the future for generations of Americans.  mo

"Republicans are no less interested in doing what is right for our country than Democrats are,“ McConnell said. But, he added, "we have very serious differences .“

Republican Senator Susan Collins of Maine and Democratic Senator Ben Nelson of Nebraska were leading the drive by moderates to find a compromise. Nelson said White House officials still hoped for a bipartisan solution, but Obama, taking a tougher tone, warned that "time for talk is over.“

The road to dictatorship, much like Nazi Germany and other places.  People asked, how the Germans or others could let this happen?  Didn't they see what was going on?  Why didn't they stop it?

First they came for...

A charismatic leader, unlimited power, and management of the media.  Yes America, it can happen here.  jmho

http://www.welt.de/english-news/article3156953/Obama-warns-of-an-economic-catastrophe.html

From the comments section -

February 7, 2009 01AM HWHINLA says:

I just want to make sure that everybody reading this article understands what is happening here.

The bill the Democrats are talking about is not a stimulation bill, it is a "spending bill" which contains practically no measures which would actually stimulate the economy - it is a large collection of socialist measures which they could otherwise not get through the legislature, and a whole collection of so called "pork barrel" projects, which represent paybacks to people and companies who supported the Democrats during the last election.

This is called bribery in any other country of the world. This process is a disgrace.

On the other hand, the Obama administration does it very best to dismantle itself with an incredible speed. I don't believe that the United States are ready to accept communism as form of their government. One after another measure introduced by Obama shows exactly that: This person is a dangerous demagogue in sheep skin. Don't be fooled by appearance - Obama is a fool and it shows every step of the way.

God help America - she needs it.

Greetings from Los Angeles

Bribery, pay backs, pay for play...

February 7, 2009 03PM James says:

I regret that politicians have chosen to support the stimulus bill of 2009. Once again, politicians chose to ignore the voice of the american people and vote for their own best interest. Unfortunately, as in past instead of enpowering people they have managed to enable people and expand the government and the budget. Not only, have you mortgaged my future, but the future of the americian people and future generations. Hopefully, they will reconsider and vote against this pork bill and a hugh debt and obviously, susbstancial tax increases.
Respectfully yours,
James J Hoppman

February 7, 2009 11PM MARK S says:

All members of the Senate who vote for this "stimulus" bill are not listening to the American Public. This is not what we want. We've asked for tax relief for those who pay taxes, help for homeowners with problems meeting mortgage payments, and job creation through small business. This bill is outrageous. How much more can we take? Oh how I will work and contribute to see these arrogant, incompetent politicians voted out - every one of them who votes for this give away. Stop selling the future of our children, grandchildren and great grandchildren!

What happened to just stopping the old ways that didn't work?  The formulas to failure?  Ending the old political arguments?  I hear the words, but they are not reflected in the actions.  I think people voted for change - change from either party.  Financial responsibility in Washington, not continued spending on programs that do not work...

jmho

[WhiskeyGirl]

The nation is broke.  The savings and investments of millions are gone.  Social Security trust fund is empty.

A key leader in the House, Rep. Barney Frank, chairman of the House Financial Services Committee, added weight to Summers' comments, chiding Republicans for ignoring the outcome of the November election.

"We had an election last year which had pretty decisive results in the White House, the Senate and the House," the Massachusetts Democrat said. "And it did say that public spending for improved infrastructure, to keep bridges from crumbling, to keep cops and firefighters working is a good thing."

If the election was so decisive, why is the new administration working so hard and complaining so much?  Is it possible that the Congress is actually listening to the little people that elected them to office?  Perhaps people are wondering why no one on Capitol is recovering the money lost in the stock market, lost on Wall Street, and from the bogus/toxic mortgages?  Who's fault is all that?  Who was responsible for oversight?  With the size of the problems, how is it possible that no one on Capital Hill was paying attention?  Or, perhaps they figured out that some were, and were largely ignored by others.

Maybe the change people wanted reflected the poor job some in Congress did over the past 8-10 years as stewards of Freddie/Fannie, Wall Street, and mortgage banking.

Republicans claim that Democrats have failed to learn the lessons of history, arguing that an Obama-style stimulus did not really work in the 1930s, when last tried by former President Franklin D. Roosevelt who took over the White House facing similar economic upheaval.

Summers was blunt in rejecting the criticism.

"Those who presided over the last eight years, eight years that brought us to the point where we inherited trillions of dollars in deficits, an economy that's collapsing more rapidly that in any time in the last 50 years, don't seem to be in a strong position to lecture about the lessons of history," he said. "We need an approach that's very different from the approach that brought us to this point."

I would say - your party helped create the trillions of dollars in deficits, the collapsing economy, and mismanagement at Freddie/Fannie/Wall Street, and other fiascos.  The approach that brought us to this point - what exactly is that?  Ignoring the red flags and warning signs?

If you ignored the approach that brought the nation to it's knees, I would imagine you find people with proven track records to run the government.  People who make sound decisions.  People with good business sense.   NOT the people who were part of the problem...

"We can't afford to make perfect the enemy of the absolutely necessary," Obama said Saturday in his weekly radio and Internet address, sounding a note of pragmatism that liberal followers rarely heard on the campaign trail.

Sometimes, things have to be near perfect, people's lives depend on it.  Bridges collapse, airplanes fall out of the sky, and shuttles explode.  Sometimes, perfection is absolutely necessary.  Sometimes, only the best effort is good enough.  Sometimes, lives are lost when people push perfection and quality to the side of the road.


http://www.cbsnews.com/stories/2009/02/08/politics/100days/economy/main4783689.shtml

I do believe people voted for change.  Isn't it possible they ARE NOT seeing the change they wanted?  Isn't it possible they want sound financial management?  A return to responsible government?

I think government is working the way it's supposed to.  In my simple mind, just because Democrats won a majority, doesn't mean everyone else has to 'rubber stamp' their ideas and spending plans.  What ever happened to discussion?  Self determination? 

Was "I'm listening" just more empty words from Obama?

just my humble opinions

(everyone else, please jump in with your 'know it all' comments, I like everyone's input.)

[WhiskeyGirl]

Much of the following makes sense to me.  It is close to all the economic warnings I've read for the past 20-30 years.  The US is a mature, senior economic nation.  Youth and prosperity has passed us by and moved to China and India.  We are living on our retirement savings.  However, in the US, we are deeply in debt, and there are no savings.  There is no way to spend the US out of this season of life.  It's possible to borrow/steal from future generations and saddle them massive debts.  Is that the right thing to do?  Pay it forward with massive debts that will only get larger if current spending continues?

There is no such thing as free trade.  There is no such thing as an uncensored internet.  Trade for some time seems to have been a one way road - money from the US to other nations.  Very few exports except jobs and factory equipment.

Private Capital needs to prosper in order to survive. Due to the inability of governments to alleviate widespread poverty, the domestic and global environment which created the compelling process of capital accumulation (and profits) following the Second World War had reached a peak, within the context of consumer demand, by the early 1990s. In fact, without the explosion of debt and leverage, asset values would have begun stagnating more than a decade ago. Today, capitalism, from the perspective of a free market, is struggling to survive. State capitalism is destined to shape the world for the better part of this century. What does that mean for share prices?

Does this mean the housing bubble should have burst in the early 90's?  Kept alive by the CRA, liar loans, and other monkey-shines?

Furthermore, the advent of state capitalism in China and Russia, and in varying formats in countries run by despots, dictators and governments elected through heavily flawed electoral mechanisms, has fundamentally and irrevocably shifted the capital accumulation equilibrium for US and western capital. This is not the forum to engage in a detailed analysis of the crisis of capitalism. But, in brief, American corporations can no longer rely on their inherent strength, i.e. the ability to provide capital and expertise, to find new markets and to identify lucrative investment opportunities. In a dynamic which recalls pre-War Germany, Italy and Spain, private capital is no longer able to expand and thrive without entering into sustainable alliances with the “state”. In one respect, political risk insurance rates reflect that dynamic; blanket coverage for the emerging markets is simply unavailable and the insertion of substantive conditions in underlying insurance documentation is now seriously inhibiting capital movements and trade transactions.

There is no such thing as free trade.  Currency manipulation, subsidies, internet firewalls, balance of trades, unfavorable taxation for business and workers, far outweigh any calls of protectionism.  There is no such thing as free trade possible.

Protectionism is at all all-time high, despite the existence of numerous international free-trade protocols. Food, energy and agricultural subsidies are commonplace throughout the developing world. Bureaucratic and legislative hurdles for foreign investments are being consolidated with each passing day. State-dictated interest-rate and currency fixings are wrecking the foundations of the international capital marketplace. And, as German Chancellor Angela Merkel correctly stated last week, “stimulus packages are turning into the ultimate protectionist measures with countries dedicating an increasing amount of public funds to help domestic banks and businesses.”

I think this is an old story.   Maybe the US could focus on trades with their original trading partners?  The 50 states that make up the Union?  Add it Mexico, Canada, Cuba, and a few other regional players?  IIRC, interstate trade barriers used to be the enemy, but it allowed local people to determine their own destiny - bad or good, it was more of a grass roots effort.

The Federal government doesn't seem to be better at steering this nation that the people in all 50 states.  Somes states have better managers than others.  Why should poor management of one state force the entire nation into collapse?

Then, of course, there is Africa where the combination of a formidable regulatory umbrella, poor security levels and deeply-ingrained corruption has left the exploitation of vast segments of the continent’s natural resources to local militias and ethnic warlords. The result: more poverty, and more economic backwardness.

I'm not sure what anyone can do for Africa. 

In this writer’s view the Obama Administration’s stimulus packages and bailouts are incapable of causing any meaningful reversal in a capital accumulation process which is now being directed by states, not by free-market considerations in relation to the movement of goods and machinery. And therein lays the risk to private equity. In certain business segments, like financials and insurance, private equity has no role whatsoever. In certain other corporate segments, asset values need to be rationalized in line with the new reality, e.g. the S&P500 (SPY) below 700. The risk for short traders is grounded in timing. At what point will the real crisis in capitalism overtake optimistic economic forecasts generated daily by stimulus and bailout announcements? Is it best to use forthcoming rallies to short the emerging markets (EEM)? Or is there more money to be made by staying negative on financials (BAC, C, JPM, MS) since the futility of Monday’s financial recovery plan will be proven well before the hard truth pertaining to the global economy unfolds?

Disclosure: The writer is seeking to short both the emerging markets and financials in the event of significant rallies this week and beyond.

The nation is broke.  I read that some don't expect the real estate values in highly overvalued places/highly deflating places (California and the east coast) to return for at least a generation. 

Make every dollar do the work of two or three dollars - make better use of your existing resource before taking on more debt.  Based on campaign speeches, there should be enough 'fat' already in the system for the nation to survive for generations.

http://seekingalpha.com/article/119335-the-real-crisis-collapsing-capital-accumulation-process

just my humble opinions