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Mr. Obama’s Stimulus Plan

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Only a week ago, the Fed cut its bank rate to a historic low, the new range being — can you imagine? — from 0% to 0.25%, while the credit crunch and pressures on the dollar continue unabated. And this rather significant development followed right after the Madoff debacle and so-called “Ponzi scheme,” allegedly defrauding investors worldwide, including banks, hedge funds and financial institutions, to the tune of $50 billion and counting.

Indeed, hardly a day goes by anymore without some news-shattering event or scandal. One could well devote the rest of one's life to blogging away, today on this subject, tomorrow on that, as there certainly isn’t any lack of new material out there and more of the same – it’s a safe bet! – is likely to be forthcoming almost daily.

Unlike other bloggers, however, I find this constant preoccupation with, and focus on, daily events and news-breaking stories a rather futile if not repetitive exercise — both, perhaps, because they all seem to be indicative of one and the same malady. Consequently, I think my time better spent on identifying and addressing systemic weaknesses and causes of our ailments. And of those, time and again I’m brought to deregulation, and its twin brother, privatization, as the main culprits.

Recently, I spoke on the evils of privatization and the evils it generates to compound our already bankrupt capitalist system. It turns the government into an accomplice as it were, only encouraging the system’s most destructive tendencies rather than serving as a kind of stopgap, or as an impediment at least, so as to prevent total breakdown of our culture, cherished ideas, and way of life. From the handling of our prisons to HUD’s scandalous policies – any area, in fact, you can think of where in the name of efficiency privatization has been employed – only corruption had set in its stead and the damage transcends economics for it well nigh affects our perception of government as the perpetrator of fraud. How discouraging! [See “The Case for Fraud” — compliments of Catherine Austin Fitts’ memoirs, Dillon, Read & Co. Inc., and the Aristocracy of Stock Profits.]

Well, only a week ago I’d been alerted to another scheme in the making — Mr. Obama’s so-called stimulus plan involving heavy investment in infrastructure, mass transit in particular. It concerns Mr. Obama’s appointments, especially that of Mr. Lawrence Summers as the Director of the National Economic Council. It’s all on the pages of Democracy Now. The panel included Naomi Klein, Robert Kuttner and Michael Hudson, with Amy Goodman serving as a moderator (see references below) You’d do yourself a favor to read through the entire twelve pages of it. (In fact, make it a point to visit the Democracy Now website on a daily basis; you won’t find more penetrating discussion elsewhere.) What follows is a digest.

The idea of a grand scale public works projects has of course been legitimized as one of the major ways to deal with prolonged economic downturns. It’s been an integral part of FDR’s New Deal, for example – in particular, the National Industrial Recovery Act (NIRA) of 1933, whose express purpose was “to regulate banks, and stimulate the United States economy to recover from the Great Depression.” Sounds familiar? Well, listen to Mr. Obama’s own words as to what needs to be done:

We need a recovery plan for both Wall Street and Main Street, a plan that stabilizes our financial system and gets credit flowing again, while at the same time addressing our growing foreclosure crisis, helping our struggling auto industry and creating and saving 2.5 million jobs, jobs rebuilding our infrastructure, our roads, our bridges, modernizing our schools and creating the clean energy infrastructure of the twenty-first century, because at this moment we need to restore both confidence in the markets and restore the confidence of middle-class families who find themselves working harder, earning less and falling further and further behind.

High-sounding words and on the face of it, at least, sound strategy. Many would say that’s precisely what the doctor ordered. Besides, Mr. Obama has Mr. Keynes on his side, who had argued most vehemently for government spending “as a [major] vehicle for recovery,” the piling up of the national debt and arguments for balanced budgets notwithstanding. Coupled with a great many other goodies that had come part and parcel with the NIRA legislation (such as the Social Security Act, for instance, the National Labor Relations Board Act, Civil Conservation Corp, to name but a few) – all recognized by now, except for the few die-hards, as having created a more equitable, humane kind of society – and there’s no question that Mr. Obama has history and tradition to back him up. So where is the beef?

It’s in the details, man! And the appointment of Mr. Summers doesn’t bide well for what on face value looks like a viable solution.

It should be prefaced, I suppose, that Mr. Summers was the last Treasury Secretary under Bill Clinton. This may seem like a recommendation until we realize that Clinton’s legacy, especially as regards economic policies, has by and large been misunderstood. In reality, it’s been a continuation of the Reagan era, with emphasis on deregulation, except for the fine gloss. George Dubya, of course, had taken the program to a whole new level, exposing it for what it truly is in its “pure” and unadulterated form; but that was only to be expected and represents the true measure of the man. The point really is – and on this the entire panel agreed – that Larry Summers, “along with Alan Greenspan and Robert Rubin, were really the key architects of the deregulation that created the crisis that we are living now.”

And those key policies [Naomi Klein continues] … are the killing of Glass-Steagall [Act] that allowed a series of very large bank mergers that created these institutions that are too big and too intermingled to fail, we’re told again and again. The deliberate decision to keep the derivatives out of the rich of financial regulators – that was also a Summers decision; and also allowing the banks to carry these extraordinary levels of debt, thirty-three to one in the case of Bear Stearns.

To add to Mr. Summers’ already “impressive” credentials, he’s also known to have gone on record as having said, “Spread the truth. The laws of economics are like the laws of engineering. One set of laws works everywhere.” And then he laid out those laws a bit later, the so-called three “actions”: privatization, stabilization, and liberalization.

“So he has been preaching the doctrine,” says Ms Klein. “He is by no means sort of an innocent bystander. He is a dyed-in-the-wool privatizer, free trader.” A true ideologue, I might add.

Ms Klein reminds us of the context:

It was 1992, and it was when he was making World Bank economic policy as it related to Russia in the midst of a financial crisis . . . . Along with Tim Geithner, his deputy, he played [a] key role during very economic crises in other countries . . . , during the Asian financial crisis, during the Mexican peso crisis. And when these countries were suffering a profound economic crisis created by deregulation, they preached more deregulation, more privatization and – the key is – they preached economic austerity to disastrous results. So I think this is really troubling.

One result, Ms. Klein continues, was to create “a kleptocratic class of billionaires who will be ruling Russia for the next hundred years. And they key was to use public expenditure that would increase private wealth.” Again, sounds familiar? And what does it say for Mr. Obama’s campaign promise to level the playing field, to eliminate, to the extent possible, the growing gap between the rich and the poor?

There was another point of consensus: the rebuilding of infrastructure is not going to take the form of refurbishing our freeways and highways. True to the sentiments of the day – relinquishing our dependence of foreign oil, “going green,” et cetera – the emphasis is going to be on mass transit. Fair enough, but there is the catch.

Most infrastructure is built by states and localities. "And I don’t think," says Mr. Hudson, "there will be a privatization of this new infrastructure, because right now the states and localities are broke. Here in New York City, they’ve already announced they’re cutting back the Second Avenue subway, they’re raising transport fares. All over United States, municipalities are broke. The idea of bringing in Summers is to do this from the very beginning with private funds that will be provided largely by the government itself…"

So there is going to be an enormous squeeze on labor, a squeeze on the kind of labor that was employed in states and municipalities, public unions for infrastructure, to essentially privatize it from the beginning with government guarantees, government funds. And it will be a bonanza for the banks. And that’s how they’re going to earn their way out of debt, by lending for the private funds instead of government funds for this.

Whether before or after, it’s a moot point as far as I’m concerned. So there again, there’ll be more graft, more corruption at all levels of government, more bidding and awarding of contracts at sub-market prices. And just as before, it’s going to be done in the name of what on face value at least promises to be a cogent and palatable idea — mass transit in the present case.

There’s a hidden reason, of course, why this is the most likely scenario. And in this connection, once again, Mr. Hudson’s analysis is most illuminating:

Mass transit in almost every country creates an increase in real estate values along the routes that could actually – the rental increase that’s created by this transportation could actually finance the entire transport system. For instance, in London, when they built the Tube extension to their financial district, they created thirteen billion pounds worth of increased real estate values, and the Tube itself cost only eight billion dollars [sic]. But they left this thirteen billion in the hands of the private landlords.

Same thing in Chicago . . . There can be a very heavy investment in mass transportation here. This is going to create enormous real estate value. The tax system will leave these in private hands. And I think all of the tax proposals that Mr. Obama has spoken about have to do with income tax, primarily. The rich people prefer not to earn income, because you have to pay taxes on them. They prefer to make capital gains. So the intention of the economic team that Mr. Obama brought in is really to create a huge capital gains economy and even more disparity of wealth, while leaving in place the one thing that should have been addressed in the last year, and that’s the enormous debt overhead. Nothing is happening at all on that. He’s [only] adding to debt, not reducing it.

One could easily take off from here in a wholly different direction, as to why, for example, the entire tax structure is being left intact. We learn, for instance, that “the kind of returns that Wall Street gets … are not subject to taxation at all … [or that] the giveaways that the Treasury put into the bank bailout law says that because the banks have bought affiliates that have cash loss carryforwards, they’re not going to even be subject to income taxation,” which leaves us with what’s surely common knowledge by now that “only the little people pay taxes.” So nothing had changed! But from our singular perspective, those are peripheral issues. The point of concern is there’s another bubble in the making. And from the vantage point of the architects of the plan, apparently it’s the only thing that matters.

So once again, it looks as though we’re about to embark on the same ol’ pattern of going for quick fixes and easy solutions. Public perception, as always, takes precedence over reality.

In closing, the panel focused on some valid points of comparison as regards the dynamics surrounding the New Deal legislation and those in the present. In FDR’s times at least, there were pressures and counter-pressures from both sides — big business and the elites on one side, and “from the bottom,” as it were, on the other. Oddly enough, this kind of push ‘n’ pull is conspicuously absent in the present instance — in no small measure, no doubt, because of the enormous popularity of our President-elect, I might add — and it’s not a good thing.

Naomi Klein had put it most succinctly in a disheartening conclusion:

Well, you know, the issue is that Obama is coming to these decisions [as regards his appointments, for one] because he is under enormous pressure from above, from Wall Street elite pressure. And the question is, how do you transition from sort of a pro-Obama campaign movement to an independent social movement that puts real counter-pressure on him from below? And those are the conditions under which Roosevelt sold the New Deal as a compromise to the elites. And we don’t have those dynamics right now. What we have are, you know, people who are sort of super fans for Obama, constantly apologizing for every decision that he makes, versus gloves-off elites who are putting real pressure on him from behind the scenes. And we’re seeing the results.

Time will tell, I suppose, whether these predictions will come true. Meanwhile, I suggest that we stay vigilant and wary of even the slightest sign of trouble. Nothing short of collective action – “from below,” as it were, as Ms Klein had put it – may be required in order to offset the interests of Wall Street and let the people have its way.

Haven’t we had enough?

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About Roger Nowosielski

  • http://www.fontcraft.com/rod/ Dave Nalle

    Wow, this is positively surreal. Private enterprise is the problem? Makework programs and massive government spending are going to solve an economic crisis percipitated by out of control government spending? Are you out of your mind?

    I guess I should have guessed something was off when you suggested we might gain something other than amusement by reading the partisan idiotocracy posting at Democratic Underground.

    FDR’s makework programs and massive spending deepened and lengthened the depression. The answer to excessive government spending and destructive interference in the private sector is not yet more spending and nationalization. To believe you can spend your way out of poverty is demented and irrational.

    As for your panel of progressive poohbahs, they’re engaging in one of the classic fallacies of leftist government, trying to reengineer society against its natural inclinations at vast and unnecessary expense to the taxpayers. It’s the bridge to nowhere philosophy taken to a massive scale, dedicated to building what central planners think people should want rather than what they actually need. Central planning does not work, especially when it ends up in the hands of bureaucrats and ideologues. It will be the downfall of the nation.

    Dave

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Here is an interesting video of Fred Thompson explaining his take on all of this. As an added bonus for watching, it’s pretty funny.

    Dan(Miller)

  • http://www.fontcraft.com/rod/ Dave Nalle

    I wonder if there’s a market for “If Only Fred Were Pres” bumper stickers.

    Dave

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Dave,

    There just might be; perhaps you could create an appropriate font.

    Dan(Miller)

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Dave –

    FDR’s makework programs and massive spending deepened and lengthened the depression.

    What a wonderful revision of history.

    Dave, if there’s anything people need, it’s WORK. Can you not see what’s going on right now? “Trickle-down economics” and grand-scale deregulation does not work. Even Alan Greenspan had the intestinal fortitude to finally admit that! The ‘profit motive’ rhetoric sounds good…but in a modern society, in a modern economy it is a path to disaster.

    Yes, the world’s economy is tanking, Dave – and it started HERE. We’ve been sending our manufacturing base overseas and forcing our domestic industries to compete with overseas sweatshops ever since Reagan began the deregulation crusade and infested the conservatives with the idea that ‘government IS the problem’.

    I suppose you’re against the Sherman Anti-Trust Act, too. I thought it was wrong when the government broke up Ma Bell…but even NOT adjusted for inflation I’m paying far less now than back in the early 70’s.

    IF the government is bad, then the government IS the problem…but IF the government is good, then the government is NOT the problem! Is that so difficult to understand?

    Is there a government on earth that you think is better than America’s? I’d really like to hear your answer on that –

    – but I’ll leave you with a concept: the larger the scale or scope of the human activity, the greater the need for regulation thereof. Small-scale human activity – whether it’s political, economic, military, sports, education, whatever – can function well without a great deal of regulation. BUT the larger the scale or scope of the activity, the greater the need for regulation…yet the deregulation crowd would have us believe that this is true with the SOLE exception of economies.

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Glen,

    I seem to recall that dramatically expanding military production and then getting into WWII had something to do with getting out of the Great Depression. Perhaps what we need now is (another) Lovely War. It would have to be a really big war, not like the puny ones we have fought recently. That would reduce unemployment, help industry, and (assuming educational deferments) increase college enrollment. What a deal!

    Dan(Miller)

  • Baronius

    Yeah, but it’s tough to make a bumper sticker that reads, “DON’T BLAME ME – BLAME IOWA AND NEW HAMPSHIRE THAT I DIDN’T GET A CHANCE TO VOTE FOR FRED”.

  • http://drdreadful.blogspot.com Dr Dreadful

    Baronius,

    Don’t knock it – it’s a lot simpler than the Rudy Giuliani bumper sticker would be!

  • Baronius

    DON’T BLAME ME THAT RUDY BET HIS POLITICAL FUTURE ON FLORIDA THUS ISOLATING HIMSELF FROM…eh, forget it.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I hate to barge in – only a short response to Dave Nally. Private enterprise is not the problem, only privatization. In conjunction with government programs, there forms an environment which is the hotbed of graft and fraud. This has nothing to do with competition or free markets, only with which firms are politically connected. As a result, both the government and business are being dragged down into a cesspool of corruption as fraud becomes legitimized.

    May I refer you to Chris Sanders writings (Chris Sanders Associates)referenced in “The Case for Fraud: our ‘prison industry'” as well as the follow-up on HUD, both on my own weblog.

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Dan –

    I hate to refer to the Wikipedia since anyone can edit the entries, but when it comes to non-controversial subjects it’s usually fairly reliable when the references are given.

    If you check the graphs listed there, it becomes pretty clear that the Great Depression bottomed out in 1933, and that by 1937 – just prior to the massive military spending increase prior to WWII – GDP was already above pre-1929 levels.

    To wit: “The turning point in the depression was in 1933, as can be seen in the above Industrial Production graph. Some economists attribute the subsequent recovery to monetary expansion that began after the bank holiday a few days after Roosevelt was inaugurated on March 4, 1933 and devaluation of the U.S. dollar that was then tied to gold.”

    To be sure, the military spending brought the Depression to an end, but it was ending anyway – the military spending only hastened the end of the Depression.

    What’s really interesting are the statements by the ‘Austrian school’ of economics: “…the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. In their view, the Federal Reserve, which was created in 1913, shoulders much of the blame. In opinion, Hayek, writing for the Austrian Institute of Economic Research Report in February 1929[21] predicted the economic downturn, stating that “the boom will collapse within the next few months.” Ludwig von Mises also expected this financial catastrophe, and is quoted as stating “A great crash is coming, and I don’t want my name in any way connected with it,”[22] when he turned down an important job at the Kreditanstalt Bank in early 1929.”

    The article also mentions that American unemployment was still at 15% in 1940…but we must also bear in mind that unlike then, the government calculates unemployment by counting ONLY those who are currently available for unemployment benefits. If I understand it correctly, once one’s unemployment benefits have run out, then one is NOT counted as ‘unemployed’. Therefore we don’t know what the true unemployment rate really is.

    In summary, we do NOT need a ‘really big war’. We DO need enforced regulation and CCC-like massive government employment to (1) put the people to work (and keep the idle hands from getting into trouble) and (2) improve the nation’s infrastructure.

  • http://www.fontcraft.com/rod/ Dave Nalle

    Dave, if there’s anything people need, it’s WORK.

    Meamingless makework is not work, it’s just a drain on the wallets of taxpayers. What you suggest is putting more people out of work through excessive taxation so that you can provide a few people with meaningless work. Do you not see how counterproductive that would be?

    Can you not see what’s going on right now? “Trickle-down economics” and grand-scale deregulation does not work. Even Alan Greenspan had the intestinal fortitude to finally admit that! The ‘profit motive’ rhetoric sounds good…but in a modern society, in a modern economy it is a path to disaster.

    What does this have to do with anything that’s going on now? Deregulation is a peripheral part of the problem and although ‘trickle down’ may or may not work, it has nothing to do with the solutions needed for our current economic situation.

    It doesn’t solve problems to create false dilemmas so that you can solve them with bogus solutions, while ignoring real problems and vilifying sensible solutions.

    It’s very simple and it has nothing to do with the things you’re talking about.

    Taking money out of the economy and devaluing the money which remains is bad for the economy. Putting money back into the economy and making sure that money is worth something is good. Just redistributing money from the productive sector of the economy to the unproductive sector of the economy is just a way to alleviate short-term suffering while driving the economy even deeper into the hole.

    Yes, the world’s economy is tanking, Dave – and it started HERE. We’ve been sending our manufacturing base overseas and forcing our domestic industries to compete with overseas sweatshops ever since Reagan began the deregulation crusade and infested the conservatives with the idea that ‘government IS the problem’.

    No, in this case the false expectations of protectionism is the problem. What is your alternative? To implement tariffs and regulations which will result in price increases, make US products uncompetitive and force our industries to move overseas? Your answer to globalism is massive unemployment and opting out of the world economy. It would be a total disaster.

    I suppose you’re against the Sherman Anti-Trust Act, too. I thought it was wrong when the government broke up Ma Bell…but even NOT adjusted for inflation I’m paying far less now than back in the early 70’s.

    Reasonable regulation of business is just fine with me. Monopolistic and unfair trade practices, fraud and unsafe industrial conditions are all legitimate areas for government regulation.

    IF the government is bad, then the government IS the problem…but IF the government is good, then the government is NOT the problem! Is that so difficult to understand?

    Yes, because once again you’re setting up false dilemmas. Government is neither bad nor good. The good or the bad comes from how government power is used, and the more it is used the more chance there is of it becoming excessive.

    Is there a government on earth that you think is better than America’s? I’d really like to hear your answer on that -

    No. So why do you want to make our government worse, more intrusive and more abusive?

    Dave

  • Kenn Jacobine

    I am so glad that old Fred Thompson has emerged from his coma. If he had been one of the two establishment candidates on the ballot in November I am sure he would not have been spouting the same wisdom from the video on the campaign trail. I am sure he would have rushed back to Washington too to vote for Bush’s Big Bank Bailout Bill.

    Anybody, who thinks we have had deregulation of the economy in the last decade is delusional. Granted some regulations have not been enforced, but our current problems have nothing to do with deregulation. If anything needs regulating it is the Federal Reserve Bank. The following article argues better than I ever could that the government not capitalism is the culprit in the current situation: http://lovesliberty.tripod.com/id8.html

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I believe the reference to “war” was facetious.

    I’d like to (mis)quote a line from “My Man Godfrey”:

    “The only difference between a ‘solid citizen’ (or something to that effect, I believe) and a bum is a job.”

    I do agree it shoudn’t be “meaningless.” But how much of our workforce – still intact and no doubt thinking themselves lucky – can truly say that?

  • http://www.fontcraft.com/rod/ Dave Nalle

    Roger, let’s have a quick reality check on our imperiled workforce. Take a look at the historic data at the BLS.

    Our current 6.7% unemployment only seems high because we just got out of a period of 5 years of remarkably low unemployment. In the historic context it’s kind of average. We have higher unemployment from 1980-1987 and from 1991-1994, and it was hardly the end of the world. Hell in 1983 unemployment hit double digits. If that happens again, then I’ll take your whining seriously.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I think you’re resorting to a bogus argument, Dave, and bogus figures. It’s the same kind of argument that the editors of The Economist use to justify present crisis in view of the prosperity that had been created. They say the gains are unlikely to get wiped out. I’ll provide you with exact references shortly.

    As to the so-called “unemployment figures,” you know that they have always been skewed – to reflect, I suppose, the unflinching faith on the part of the proponents of this economic model or that and general belief that economics is not a dismal science. So your argument, at best, is only a comparative one.

    We know, for example, that once your unemployment benefits run out, you’re no longer counted among the unemployed, and that’s just one example how these statistics do not reflect the true situation. If you take into account all who are on some kind of welfare or who fall in between the cracks as it were, the true figure would be upwards of 30 percent, I’m willing to bet, and growing.

    Doesn’t the fact that 533,000 have lost their jobs in November, and that we’re about to match this figure this month, mean anything to you?

    We are in the Depression, however hard many economics and believers in the market economy would like to deny it. A General Motors stock trading barely over $4.00 per share – like some penny or over-the-counter stock of old? Years ago, that would be unthinkable. Don’t you think that this world is coming to an end?

  • http://blogcritics.org/writer/dan_miller Dan(Miller)

    Glen, I hate to refer to the Wikipedia since anyone can edit the entries, but when it comes to non-controversial subjects it’s usually fairly reliable when the references are given.

    I agree. However, it was an easy link for Oh What a Lovey War, the musical. The link was not intended to support my more controversial assertions.

    Dan(Miller)

  • http://www.indyboomer46.blogspot.com Baritone

    The recent surge in unemployment should wake people like Dave up, but apparently not. There is no reason to believe that it is about to slow down. There is a ripple effect running through the country that is gaining momentum. Some predict unemployment levels will reach and perhaps exceed 10% by late spring or early summer.

    Further, the reduction in tax revenues for all levels of government owing largely to high unemployment and the consequent curtailing of market participation will have the effect of reducing government programs and services, in turn causing further unemployment and on and on.

    Also, it is true that reported government unemployment numbers do NOT reflect those still out of work, but no longer collecting unemployment compensation. There are always a number of people who just give up and no longer actively seek employment.

    What Dave describes as “meaningless makework” proposed by Obama is a mis-characterization. There are literally hundreds of significant and badly needed infrastructure projects virtually everywhere in the country. Many are set to go, but simply don’t have the funding.

    We need significant improvements to our electrical grid. Many cities have disintegrating water and sewage systems. The country could definitely benefit from a rebuilding of our passenger rail system. Hundreds, perhaps thousands of bridges are in dangerously bad repair. Highways and byways are falling apart. The list goes on. These would hardly come under the heading of “meaningless makework” projects.

    None of that will ever be addressed by the private sector.

    B

  • Brunelleschi

    Dave-

    Get a grip! There is more to reality than the GOP web site’s mush.

    Central planning doesn’t work? Tell that to the people that noticed America’s industrial power after WW2. Why? Central planning. Wars are complicated of course, but in WW2, people were motivated, they had the tools, the “we are in this together” thing, and it required central planning, the thing we Americans learn to hate-so we don’t notice when it works or when it happens.

    We can’t even use the term central planning politely without being branded a political atheist. That’s unless you are talking about the private sector, which is made up of centrally-planned entities. Use it that way and you are normal.

    I’m an Army brat. I grew up in centrally planned communities. We didn’t have private landlords, established snooty and and “bad” neighborhoods, and we all went to the same schools-central planning. It worked. We were a little piece of the military system that was really there to fight the USSR because they represent what we hate-central planning.

  • Brunelleschi

    Dave (2)

    BTW-I’m responding to comment #1 :)

    Dave- “Central planning does not work, especially when it ends up in the hands of bureaucrats and ideologues.”

    It does work and has already, so moving to the latter part, you raise the right point.

    But if you expect the worst, you are going to get it. Americans, we can agree, get squeamish even thinking about government centrally planning anything. So, we suck at it! If you are convinced it won’t work, you will figure out a way to prove yourself right.

    Other industrialized nations could teach America some smart lessons, especially in developing things like a rational, national health care system. This knee-jerk “Can’t plan anything” reflex is in the way of progress.

  • Baronius

    Go get’em Dave! (I’m so lazy.)

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Dave –

    Looks like you’re getting beat up about your reply.

    Meamingless makework is not work, it’s just a drain on the wallets of taxpayers. What you suggest is putting more people out of work through excessive taxation so that you can provide a few people with meaningless work. Do you not see how counterproductive that would be?

    Like the others pointed out to you, if the ‘meaningless makework’ is going towards rebuilding our nation’s infrastructure, then it’s not meaningless, is it? Instead, like the hundreds of projects completed by the CCC, the benefits would be around for generations to come.

    What does this have to do with anything that’s going on now? Deregulation is a peripheral part of the problem and although ‘trickle down’ may or may not work, it has nothing to do with the solutions needed for our current economic situation.

    Deregulation and ‘Trickle-down economics’ has everything to do with the solutions to our current economic situation! They got us INTO this situation, so the solution MUST include getting rid of the deregulation/trickle-down mindset. Remember, the SAME guy that popularized ‘trickle-down’ theory and ‘government is bad’ is the SAME guy who (according to Dick Cheney) “proved that deficits don’t matter”!

    Taking money out of the economy and devaluing the money which remains is bad for the economy. Putting money back into the economy and making sure that money is worth something is good. Just redistributing money from the productive sector of the economy to the unproductive sector of the economy is just a way to alleviate short-term suffering while driving the economy even deeper into the hole.

    True, UNLESS that is done in a way that benefits America as a whole, such as by using that money to create jobs that are used to rebuild America’s infrastructure! If the money is used to benefit the entire nation, then everyone – including you – benefits!

    No, in this case the false expectations of protectionism is the problem. What is your alternative? To implement tariffs and regulations which will result in price increases, make US products uncompetitive and force our industries to move overseas? Your answer to globalism is massive unemployment and opting out of the world economy. It would be a total disaster.

    Um, Dave – I don’t know if you’ve noticed, but our products are ALREADY uncompetitive, and it is ONLY ‘deregulation’ that has allowed the flood of companies such as oh-so-patriotic Halliburton to move overseas.

    And HERE’S the proof of the falsity of your argument – which country is the world’s biggest consumer? China? Russia? India? No. You KNOW that America is the world’s biggest consumer…so logic would hold that without protectionism and tariffs that so many other countries STILL have, we’re forcing the little manufacturing capability America has left to compete against sweatshop labor for AMERICAN business. It’s like fighting with one hand tied behind your back!

    Reasonable regulation of business is just fine with me. Monopolistic and unfair trade practices, fraud and unsafe industrial conditions are all legitimate areas for government regulation.

    Oh, good GRIEF! Have you not watched what the Bush administration has done? The instances of refusal to enforce regulations are LEGION! And your boy Bush got rid of whistleblower protection, too. Out of over twelve hundred cases of retaliation by companies against whistleblower, only SEVENTEEN times did the courts rule for the whistleblower. I know from personal experience how this can make a man’s life hell.

    If regulation of monopolistic and unfair trade practices and fraud had been enforced, then we wouldn’t be staring at what the IMF said today could be another Great Depression. I’m sure you remember how I pointed out that the Bush administration had removed ALL regulation by states against the lending industry…and where are we now?

    Yes, because once again you’re setting up false dilemmas. Government is neither bad nor good. The good or the bad comes from how government power is used, and the more it is used the more chance there is of it becoming excessive.

    Hate to tell you this, Dave, but the greater the scale or scope of the human activity – whatever that activity may be – the greater level of regulation and governance it will require in order to ensure success. You will not prove that statement wrong.

    GLENN: Is there a government on earth that you think is better than America’s? I’d really like to hear your answer on that –
    DAVE: No. So why do you want to make our government worse, more intrusive and more abusive?

    Hm, gee, let me see – by having a government that follows the RULE OF LAW,
    – that believes that torture and invasion on false pretenses are crimes against humanity,
    – that believes in a citizen’s protections against (1) search and seizure without a warrant, (2) imprisonment without trial or even access to legal counsel, (3) against restrictions of freedom of speech,
    – that believes the president and vice president CANNOT make up rules as they go along (“the vice-presidency is NOT part of the Executive Branch” – remember that?)
    – that RESPECTS and TRUSTS the Constitution (“Get that G*****ned piece of paper out of my face!” – remember that?)

    At NO time in American history have we had a presidency that was so disdainful of following the rule of law. Even NIXON, as paranoid and insecure as he certainly was, did not dare to ignore the Constitution and the laws of the nation AND international laws and treaties as the Bush administration HAS done.

    Dave, you will NOT understand the degree of your error until you comprehend the degree to which the Bush administration damaged the rule of law and the Constitution.

  • Baronius

    Come on, Dave! They’re saying that the recession was caused by trickle-down economics, and that government “investment” will help everyone! You can destroy these arguments in your sleep!

    As much as I’d love to watch this, I’m headed to New York for a few days, so I wish you all a fine Christmas, even you wacky atheists.

  • Cindy D

    I hate to refer to the Wikipedia since anyone can edit the entries, but when it comes to non-controversial subjects it’s usually fairly reliable when the references are given.

    I LOVE to refer to Wikipedia, since it is like an Anarchist encyclopaedia like open source software. I support it and refer to it every chance I get. Because anyone can change it it usually turns out for the best. Since errors can be corrected and biases disputed. I always go to the sources too. It makes sense no matter what you read to do that.

  • Cindy D

    It will be the downfall of the nation.

    One can only hope Dave.

  • http://www.indyboomer46.blogspot.com Baritone

    Bar,

    Have a good time in NY. Are you going to the big “C?”

    My son just flew into Indy from LaGuardia. The big city is getting him down. Well, not really, but I think he does appreciate seeing grass when he looks out the window – even if its covered with an inch of ice.

    I’m one atheist who will enjoy christmas despite my heretic ways. :-)

    B

  • http://ruvysroost.blogspot.com Ruvy

    There ain’t much to add to what Roger, Brunelleschi, Baritone, Cindy, Glenn, and even Kenn have said here.

    We’re all in trouble worldwide because of the stupid policies of the United States ruling elite, and what you’re whistling past, Dave, could soon be a very bloody graveyard.

    If I were you, I would look away from economics for a while – you obviously have gotten it wrong – and pay real close attention to the movements of the Russian fleet. The slightly burnished “world revolution” of the USSR has been replaced by a far smellier beast, the renewed bear of the Russian Empire. It smells blood and it is coming in for the meat….

  • Cindy D

    Merry Christmas Baronius! Though I missed you by now. You’ll be about an hour away from me.

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Cindy –

    I agree that Wikipedia has some wonderful advantages, but it’s a pain-in-the-butt sometimes, particularly for those of us who belong to religions with whom others strongly disagree. But even then, the good Wiki people usually step in and moderate things to a reasonable degree.

  • http://www.fontcraft.com/rod/ Dave Nalle

    I think you’re resorting to a bogus argument, Dave, and bogus figures. It’s the same kind of argument that the editors of The Economist use to justify present crisis in view of the prosperity that had been created. They say the gains are unlikely to get wiped out. I’ll provide you with exact references shortly.

    I’m using the figures which are generally accepted to represent unemployment and which have been for generations. It would be more bogus to pick different figures which are not standard and accepted because they serve my purposes more.

    But if you don’t like that figure, let’s look at some others.

    We had net gains in employment for 52 months, followed now by 11 months of losses. The 52 months of gains still far outweigh the 11 months of losses. Looking back to the last period, the Clinton recession produced 27 months of losses adding up to far more job loss than we’ve seen in this period. The Carter recession produced 21 months of job loss with a larger total number of jobs lost than the Clinton recession. We’re not in the league of either of those recessions yet in terms of job loss. Were you crying doom and gloom like this in the fall of 2002? At that point we were at the end of a downward trend in employment which had cost 2.7 million jobs.

    Employment like other aspects of the economy goes through up and down cycles. If we panic at every one of them it’s counterproductive, and panicking in the middle of one which is still modest in proportion to others of recent memory is particularly insane.

    And if you don’t like the way unemployment is calculated, we can look at how employment is calculated, by comparing total employment with population on a historic basis.

    Right now employment is at 45.3%. In 2000 it was at 47%. In 1990 it was at 43.7%. In 1980 it was at 39.8%. In 1970 it was at 35%. Now since 1970 the workforce has grown substantially, mainly because of women leaving the home and getting jobs, but it’s quite clear that right now, even if we have less employment than we did 10 years ago we have substantially higher employment than we have had historically. These figures also show that despite your claims that the unemployment figure is innacurate, we have seen only a small decrease in employment, not some dramatic decline.

    Doesn’t the fact that 533,000 have lost their jobs in November, and that we’re about to match this figure this month, mean anything to you?

    Well sure. It means that more people are unemployed than were two months ago. However, 533,000 is less than 1/2 of 1% of the workforce. Unless that kind of job loss goes on for a lot longer than 2 months I’m not going to call it an epic disaster. Irrational panic serves no purpose.

    We are in the Depression, however hard many economics and believers in the market economy would like to deny it.

    You need to read up on what happened in the ACTUAL depression for comparison with the current situation. We do not currently have a 40% bankruptcy rate, 4000 bank failures or a near total shut-down of the economy.

    A General Motors stock trading barely over $4.00 per share – like some penny or over-the-counter stock of old? Years ago, that would be unthinkable.

    Hardly. I wouldn’t have paid $4 a share for it 5 years ago. The company produces a crap product on a terrible business model with incompetent management and has for years. It’s ridiculous that it was ever valued highly. They deserve to go bankrupt, and regardless of the fact that they are one of the ‘big three’, they’re still just another large industrial company and one of many of comparable size in a variety of industries. Building crappy cars doesn’t actually make them that special.

    Don’t you think that this world is coming to an end?

    No.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I’ll need a little time to respond to this, Dave,
    so bear with me for a little while, please!

    RN

  • http://www.fontcraft.com/rod/ Dave Nalle

    The recent surge in unemployment should wake people like Dave up, but apparently not. There is no reason to believe that it is about to slow down. There is a ripple effect running through the country that is gaining momentum. Some predict unemployment levels will reach and perhaps exceed 10% by late spring or early summer.

    Paul Krugman predicts all sorts of crazy shit and is usually wrong. Even if our job loss is as strong and as sustained as the worst periods in recent memory, based on what has happened so far we are unlikely to lose more than another 2 million jobs, resulting in a rise of unemployment to about 8%.

    I hate to break this news to you, but as far as employment goes, this recession looks very much like the standard recessions we’ve had every decade or so, except for the higher level of irrational panic.

    Further, the reduction in tax revenues for all levels of government owing largely to high unemployment and the consequent curtailing of market participation will have the effect of reducing government programs and services, in turn causing further unemployment and on and on.

    If only I could believe that the government would cut services in response to losses in revenues. Prior experience suggests that they will just increase debt to compensate.

    Also, it is true that reported government unemployment numbers do NOT reflect those still out of work, but no longer collecting unemployment compensation. There are always a number of people who just give up and no longer actively seek employment.

    As I pointed out in my previous comment, if you make this argument you then have to explain why our level of actual employment is not down that dramatically, expecially in the longer term historical context.

    What Dave describes as “meaningless makework” proposed by Obama is a mis-characterization. There are literally hundreds of significant and badly needed infrastructure projects virtually everywhere in the country. Many are set to go, but simply don’t have the funding.

    If Obama deals with this by helping to fund those projects and they are then contracted out to private enterprise and dealt with on that basis, then it will be a net positive. But Obama has talked about forced labor conscription and massive makework armies put to work to do some of these jobs, cutting out the private sector, as FDR did. If he takes that route it will be disastrous.

    The country could definitely benefit from a rebuilding of our passenger rail system.

    Here I have to disagree. No one uses it. Why rebuild it?

    But on the whole I agree with the desirability of infrastructure improvement.

    These would hardly come under the heading of “meaningless makework” projects.

    “meaningless makework” is determined by how the projects are undertaken, not by what they are. Remember, FDR put millions to work catching crickets and raking leaves and planting trees and painting murals. If that’s Obama’s approach then we have a problem.

    Dave

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Dave –

    I think you may have exposed your partisanship in your most recent post by using the phrase, “Clinton recession”.

    Searching around, I found several references showing the recession began in 1990 and had its roots in the October 1987 stock market crash, and at least two references (Wikipedia and a Connecticut state government site) indicating that the recession ENDED in late 1992, BEFORE Clinton ever took office.

    But you are calling it the ‘Clinton recession’. Isn’t that sorta like Rush Limbaugh calling the current economic situation the ‘Obama recession’? Just as the Republicans wanted to blame the 1990-92 recession on Clinton even though he wasn’t sworn in until 1993, they are wanting to blame the current recession on Obama even though he won’t be sworn in until next year.

    Do you really think that such blatantly false accusations are honorable conduct? Or do you think that the end (tearing down Democrats for the sake of the Republican party) justifies the means (posting outright falsehoods)? I sincerely hope that you subscribe to neither of the above.

    Please don’t take this as a personal attack – I am pointing out a falsehood that you posted, but I do not know your level of knowledge – you may not realize that you posted a falsehood.

    So please either PROVE that the early-90’s recession was caused in ANY way by Clinton…or post a retraction.

    And remember – being wrong’s one thing. Refusing to own up to it when someone else proves one is wrong…is hubris.

  • Holly Bowse

    Glenn, don’t blame Bushy for not enforcing regulations. Isn’t that the Senate’s job?

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Holly –

    A lesson I learned a long time ago in the military: it all comes from the top.

    (apologies to BC for repeating a sea story)

    When I was on the USS Ranger back in ’84, we couldn’t do anything right. We failed safety and operating inspections right and left, and we were at each others’ throats blaming each other for every little thing.

    Then we got a new captain…and all of a sudden, everything started to happen as they should. We started kicking butt in everything we did. It took me a long time to realize how that happened, because the ONLY thing that changed was the captain!

    The captain – CAPT Tony Davis – had the SAME crew with the SAME complement of officers as his predecessor. So how did he do it?

    He set standards and set the example, and expected his department heads to follow his standards and example. In other words, he was a leader. Under his leadership, the Ranger went from worst-to-first.

    That’s why I believe in Truman’s statement: “The buck stops here!” because it does. With few exceptions, the president by and large receives – and deserves – ALL credit and ALL blame for everything that goes right or wrong on his or her watch.

    So why can’t we blame the Senate? While they do bear the blame and receive credit to be sure, the the REASON the president MUST be the ultimate recipient of the credit and the blame is that he or she is in a position of leadership, and it is therefore incumbent upon him or her to use every tool at his or her disposal to do what must be done.

    Success demands and deserves the accolades of generations to come. Failure receives the disdain, even the contempt of posterity.

    Such is the nature of the beast of leadership.

  • http://www.indyboomer46.blogspot.com Baritone

    There is no indication that Obama intends to have people “paint murals” although for some who may harbor such talents, it couldn’t hurt.

    The major difference between earlier downturns in employment that you have cited since the great depression, is that we did not have the melt down of the housing, banking and investment sectors with which we are now faced. The possible failure of the US auto industry which is one of the last major manufacturing entities in this country, was not a factor in earlier recessions.

    There have been a number of recent warnings that further substantial hits are coming for both residential and commercial real estate. Other retail markets are also falling significantly.

    I don’t believe what is being laid out before us constitutes “panic,” but rather a fair warning that things may well get a lot worse before they get better. The only real panic came from Paulson who wound up duping Congress and the rest of us into handing the banks and securities outfits bundles of taxpayer money with no strings attached and no accountability.

    Then Congress does an about face and refuses to aid the auto industry unless management and especially labor agree to give huge concessions for what amounts to a pittance as compared to that given the bankers.

    While the “big three” clearly have screwed the pooch for several years, it is not wholly their fault. They produced the autos that American’s demanded. American’s generally don’t take to sub-compacts, and generally, with only periodic exceptions, have not given a rat’s ass about fuel economy. Americans want “big” and they want “fast.” Neither of those lend themselves to economy nor efficiency. Anyone who drives a Hummer or monster SUV or other full size, gas guzzling “boat” share in the blame.

    I disagree about the railroads. They are in fact used a great deal, primarily along the east coast. Fast commuter trains making relatively short runs – say between Chicago and St. Louis, or Cincinnati, Louisville and maybe Memphis, etc. could be far more economical and just about as fast if not faster than flying. Post war Europeans were not as stupid as we Americans who trashed the railroads in favor of interstate highways and the airways.

    My younger son used to live in Chicago. A number of times he flew home to Indy and back. Whether he used Midway or O’Hare, the travel time to and from his residence to the airport far and away exceeded the flight time. Add to that the fact that passengers are required to check in at least a half hour before the scheduled departure time of their flights, and owing to having to brave the “security gauntlet,” it is wise to arrive an hour or more before any flight is scheduled to leave. Then, of course, there is the wait for any checked luggage, and then the time to and from the Indy airport of about 30 minutes. We live only about 10 minutes from the downtown railroad terminal.

    The actual flight between Indy and Chicago is around 35 minutes. Add in travel time to and from the airports, early check-in, getting through security and waiting for luggage, you can be talking 3 hours or more. Hell, I have driven from our home in Indy to Evanston in three and a half hours.

    Catching a train in downtown Chicago to downtown Indy could be much quicker than either flying or driving – say around 2 hours, perhaps less, if the trains can run at a good clip. Unfortunately, for years there has been only 1 passenger train between Chicago and Indy and it leaves Chicago at around midnight and arrives in Indy at around 5AM. The return trip is similarly scheduled. Really handy!

    Good passenger rail service serving relatively short runs all across the country could significantly ease the pressure on both our highways and airways. To me, it’s a no brainer. Costly? Yes. But doable? Indeed.

    B

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Right on, Baritone. When Dave says that GM makes a lousy product, or that the GM stock should trade at $4.00 or so, he’s off his rocker. If GM and others go (I don’t believe IBM is any longer “ours,” what’s left? Practically everything these days is made in China – Black & Decker, Stanley, you name it. If that’s not a sign of the economic decline of US, then what is and what else are we waiting for. As far as I’m concerned, all these so-called US companies are so in name only – nothing more than a middle man. What’s left are service industries (i.e., security guards, etc) and hamburger floppers. Robert Reich had talked all about it long time ago, before he served in the Clinton Administration, in “The Work of Nations.” It was prophetic, come to think of it. Perhaps Dave should read it or re-read it as the case may be.

    I’m not certain, however, what’s your position on UAW. As far as I’m concerned, it’s a plague and these people should never be identified with our workforce, real parasites.

    Anyhow, may your voice carry loud and clear.

    RN

  • Cindy D

    Roger,

    Thanks for another brilliant article! I am becoming an avid fan! Merry Christmas.

  • http://drdreadful.blogspot.com Dr Dreadful

    The problem with most passenger rail services in the US at the moment is that they run on tracks owned by the freight rail companies (Union Pacific, BNSF, Norfolk Southern etc) – and the freight trains have priority. This means that passenger services get shoved over onto a siding, stopped short of their destination or even cancelled altogether if a freight train or trains need to use that particular segment of track at that particular time. (Our local San Joaquins service, which uses the BNSF tracks between Bakersfield, Oakland and Sacramento, is habitually up to two hours late by the time it reaches its destination.) I suspect that this is the principal reason why the Chicago-Indianapolis service runs in the middle of the night – there’s less traffic about.

    The advantage of fast, dedicated passenger lines is that they deliver you directly into the heart of a city, not to the outskirts where most airports are. The Eurostar from London to Paris takes about three hours; the flight from Heathrow to Charles de Gaulle about one. However, once you factor in – as B-tone observes – commute times to and from the airports, check-in, security, walking to and from the gate, the boarding process (much longer and more involved than boarding a train), taxiing and baggage claim, the point-to-point journey time on Eurostar is much faster.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Thanks, Cindy. I tried to make it as fluent and cogent as possible; and at least it had generated a spirited debate. I see, however, that’s I’ve got to hit my economics books and do some more research to put Dave away. Although it’s good he’s hanging in there. Everybody needs a foil – just kidding!

    The interesting thing is the extent to which our economic views spring from political ideology(ies) and deeper yet, perhaps, our emotional makeups. Perhaps the best way to destroy these arguments is to show that.

    Roger

  • http://www.fontcraft.com/rod/ Dave Nalle

    Glenn, just so you know, I’m mostly ignoring your comments because they’re such complete nonsense. I may have time to laugh at them later.

    Searching around, I found several references showing the recession began in 1990 and had its roots in the October 1987 stock market crash, and at least two references (Wikipedia and a Connecticut state government site) indicating that the recession ENDED in late 1992, BEFORE Clinton ever took office.

    That’s the Reagan recession. I specifically did not include that one in my brief set of examples. The Clinton recession started right at the end of his term and carried on into the first two years of Bush’s term.

    Do you really think that such blatantly false accusations are honorable conduct? Or do you think that the end (tearing down Democrats for the sake of the Republican party) justifies the means (posting outright falsehoods)? I sincerely hope that you subscribe to neither of the above.

    You need to get over this partisanship bullshit. It’s a waste of time and of no interest to me.

    Please don’t take this as a personal attack

    Except that it makes no sense as anything else.

    - I am pointing out a falsehood that you posted, but I do not know your level of knowledge – you may not realize that you posted a falsehood.

    Because I didn’t post a falsehood. You just made a foolish assumption about what I posted based on your own partisanship and the assumptions it caused you to make about me.

    So please either PROVE that the early-90’s recession was caused in ANY way by Clinton…or post a retraction.

    No need. I never posted anything about that recession.

    And remember – being wrong’s one thing. Refusing to own up to it when someone else proves one is wrong…is hubris.

    And making foolish assumptions just makes you look like a fool.

    For the record, here are the recessions from the last 30 or so years.

    Carter Recession: 1979-1983
    Reagan Crisis: 1985-1987
    Reagan Recession: 1990-1992
    Clinton Recession: 2000-2003
    Bush Recession: 2008-?

    A couple of things to note. I’ve included the Reagan banking/real estate crisis because while it wasn’t a recession it had many of the characteristics of the current situation. And as far as defining recssions I’m using a combination of unemployment and negative economic growth. Each recession is a period where prolonged declines in employment and negative economic growth coincided.

    Dave

  • http://www.fontcraft.com/rod/ Dave Nalle

    Practically everything these days is made in China – Black & Decker, Stanley, you name it. If that’s not a sign of the economic decline of US, then what is and what else are we waiting for.

    This is like saying that when a worker gets promoted from the production floor to management he has failed as a worker. Pure rat-brained craziness.

    There’s nothing inherently desirable or indespensible about low-level manufacturing jobs. If we give those jobs up while growing other more desirable sectors of the economy we’re better off, not worse off.

    Dave

  • http://ex-conservative.blogspot.com Glenn Contrarian

    Hm.

    Time for another serving of crow.

    Please accept my sincere apology, Dave – I assumed that you were referring to the early-90’s recession and I stuck my foot in my mouth up to the kneecap.

    I’ll accept the description of the 2000-2003 recession as the ‘Clinton recession’, for although many rightly see it as a correction of wildly inflated stock prices particularly in the tech sector, it was at least in part enabled by deregulation during the Clinton administration.

    I’m not afraid to be wrong – I’m only afraid of refusing to admit it when someone shows me I’m wrong.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    What sectors on earth are you talking about, Dave? Who gets promoted? Even in Silicon Valley – presumably our greatest strength – all the middle management positions are imported by from India and Asia. Only the CEOs are true-blue Americans. Of course, there’s still the Wall Street elite and the like. But an average worker? Come on! The jobs out there are getting more and more menial except for the specialized cadre. You really ought to re-read Reich’s book.

  • http://www.fontcraft.com/rod/ Dave Nalle

    It’s convenient to stick a president’s name on a recession, but I wouldn’t attach too much blame to their policies in most cases. Recessions usually come from forces which are outside of the president’s ability to control. And I think it’s significant that they’re spaced out so evenly, about every 9 years.

    Oh, and regarding my earlier comment on jobs. I recommend this video from The Onion. Sometimes there’s a lot of truth in their humor.

    Dave

  • handyguy

    Perhaps Dave knows better than all of us — it’s hard to determine whether he actually is a megalomaniac or only plays one on the Internet — but it is not only the Paul Krugmans of the world who see the current financial situation as especially dire and frightening.

    Many economists, right left and center, have been shaken by the freezing of the credit markets. Using unemployment figures in isolation from the banking and credit crisis to label this a run-of-the-mill, average recession is either tunnel vision or propagandistic foolishness.

    The situation has been enough to shake up Republicans like Bernanke and Paulson [and Bush], and Mark Zandi, lead economist for Moody’s and an advisor to the McCain campaign, has urged Obama to err on the side of spending too much rather than too little for an economic stimulus.

    The need for a Keynesian stimulus is in fact almost universally accepted, by everyone except the usual rightist know-nothings.

    We can and should have a discussion about the best ways to spend the money…but spend it we must.

    From Fox News [!!]:

    Among those whose opinions Obama sought were Lawrence B. Lindsey, a top economic adviser to President George W. Bush during his first term, and Harvard professor Martin Feldstein, an informal adviser to John McCain and the chairman of the Council of Economic Advisers under President Ronald Reagan.

    Feldstein recommended a $400 billion investment in one year, Obama aides said, and Lindsey said the package should be in the range of $800 billion to $1 trillion. The aides revealed the discussions on condition of anonymity because no decisions had been reached.

    “I do recommend $400 billion in year one and expect a similar amount in year two,” Feldstein said in an e-mail. “The right amount depends on how it is used.”

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I happen to agree with everything you say, Handyguy. Dave won’t give up until the ground shakes under his feet. I have reservations, however, about people like Lindsay. We certainly don’t need another bubble.

    RN

  • http://www.fontcraft.com/rod/ Dave Nalle

    Believe me, the ground has shaken under my feet, but it’s done it a few times before. Unlike some of you I remember the Ford and Carter years and the Reagan crisis in 85 and the tech bust. Seen in perspective what seems to distinguish the current crisis is the level of irrational panic, not the actual level of genuine crisis.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I’m far from panicking, Dave. And I don’t believe I was ever whining, as you said God knows how many entries ago. As a matter of fact, I kind of welcome – though I don’t want to shock the reading public – the coming of the dawn. This system, unsupervised and unregulated, had had it and yes … pure greed took over and showed the rest of the world what unstable foundations it really rests on. Am I a socialist?

    I don’t think so. I remember JKF years, and Bethlehem Steel, the the first sign of the collapse. But American corporations were still responsible more or less, or at least pretended to be. They all wanted to bear the banner of “good corporate citizens.” Pensions and vacations were a rule, not an exception.

    Do you really want to tell me that the average worker, whether white or blue collar, had been worse off 50 years ago? If you go back that far, you should remember that in the good old days only the head of the family had to work and the women worked only part-time. It wasn’t till the mid 60s that the influx of women into the workforce assumed significant proportions, so much so that it had become necessary for them to work full time from that time on in order to make ends meet: understandably, the employers had access to cheaper labor and the salaries and wages started to take a dive. Another required reading for many – John Kenneth Galbraith, although many may not remember. So I don’t want to hear about the benevolence or hidden advantages of the invisible hand. It’s always been a dog-eat-dog world out there, let’s not have any illusions.

    Of course the Reagan era of deregulation and mergers and acquisitions had put an end to illusion. It was no longer necessary for corporations to pretend. They were free to become global conglomerates and do practically as they pleased. Many had seen the signs of the end even then, and finally it’s coming back to haunt us.

    The problem seems to be – many don’t have a large enough horizon – or of the past, if you will – from the vantage point of which to correctly assess the events of the present.

    Do I really wish for this to happen? Not at all! For all its faults, this system still provides the greatest kind of freedom – especially in creative endeavors, arts, etc. – for it lets you do what you want even if you starve to death (I’ll bring up the relevant passage from “Howards End” by E. M. Forster shortly once I organize my argument better). So no! I hate to see the demise of the West because any replacement is not likely to guarantee the kinds of freedoms we’ve all been brought on and learned to enjoy. But do I see it coming to some definite and irrevocable climax? Definitely!

    To be continued.

  • http://www.indyboomer46.blogspot.com Baritone

    “There’s nothing inherently desirable or indespensible about low-level manufacturing jobs. If we give those jobs up while growing other more desirable sectors of the economy we’re better off, not worse off.”

    This is a nation of around 300 million people. Just what “more desirable sectors of the economy” would you be talking about? Actually, most manufacturing jobs are NOT as menial as many others. About the only other “industry” which offers any real volume of employment opportunities outside of manufacturing is the service sector – low end retail, fast food, convenience stores, etc.

    Manufacturing jobs certainly can be boring and repetitive, but the trade off for many has been better pay and benefit packages often not available from the service sector. Much of the service sector doesn’t even offer full time employment which in many cases allows the employer to avoid offering any benefits at all.

    I only half agree with the case against unions or the UAW in particular. I do believe they have, over the years, overstepped their bounds as it were. However, were it not for unions, we would not have a blue collar middle class. Union workers make better money, buy better housing, purchase higher end consumer goods and pay more taxes than many non-union workers. Workers without any organization behind them are totally at the mercy of their employer and are, consequently, far more vulnerable to job loss and unfair labor practices.

    Dave won’t give it up unless and until they come and start tearing down his castle walls.

    B

  • bliffle

    Roger, #49 is right.

    Conditions have deteriorated over the past 50 years. Job-wise and economics-wise, my kids have a much harder time than me, and my fathers end-life condition was better than mine, and granddads conditions were better than any of us.

    The only descendant of granddad (never more than a carpenter) who made it really big was Uncle E, a huge success in the advertising business, whose wife G committed suicide messily in his Arizona Ranch. And then his beautiful daughter L committed suicide in deep depression.

    Hey, onward and upward every generation in the USA, right?

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I hope no one is mad at me. please! Perhaps I shouldn’t be resurrecting ghosts like Galbraith or speak of conditions so long ago, but it is true in any area of history that the greater the span, the sharper the perception. Ultimately, I believe that all economics-related arguments are at bottom moral arguments (and by “moral” I’m including politics, naturally). Way way back, they used to call is “political economy.”

    I’m checking out for the rest of the day.

    Merry Xmas and/or Happy Holidays everyone!

  • Cindy D

    I think John Galbraith is my favorite economist. Please resurrect him regularly, I do.

  • Arch Conservative

    I wonder if there’s a market for “If Only Fred Were Pres” bumper stickers.

    Probably not as someone once described Fred Thompson during the campaign as “campaigning from a hammock.” Thompson’s lackluster completely effort during the campaign has forfeited his right to be taken seriously on these matter now.

    However in about 3 years time I plan on becoming a millionaire by selling “Don’t blame me I learned my lesson after the first Jimmy Carter,” bumper stickers for a dollar a piece.

  • http://www.fontcraft.com/rod/ Dave Nalle


    Probably not as someone once described Fred Thompson during the campaign as “campaigning from a hammock.” Thompson’s lackluster completely effort during the campaign has forfeited his right to be taken seriously on these matter now.

    Ah, but Plato tells us that the Philosopher who doesn’t really want to be our leader is the one we should draft – even against his will – to run the state. Fred fits that description perfectly.

    Dave

  • Cindy D

    Plato shmato…

  • http://www.fontcraft.com/rod/ Dave Nalle


    This is a nation of around 300 million people. Just what “more desirable sectors of the economy” would you be talking about?

    High tech, healthcare, assembly, packaging, technical management, customer support, shipping, receiving and fulfillment.

    Actually, most manufacturing jobs are NOT as menial as many others. About the only other “industry” which offers any real volume of employment opportunities outside of manufacturing is the service sector – low end retail, fast food, convenience stores, etc.

    Absolutely and fundamentally untrue. Service industry jobs only account for 10% of the workforce. Manufacturing jobs are only about 6% of our total workforce. Our nation has overwhelmingly become a nation of managers and technicians and you seem to have missed it.

    Some data from the BLS can be very revealing about the real nature of our workforce.

    Service Industries: 14.7 million
    Manufacturing/Production: 8.3 million
    Management and Supervisory: 11 million
    Business and Financial: 5 million
    Professional/Science/Legal/Computer: 12 million
    Education: 6.5 million
    Healthcare: 5 million
    Sales: 10.5 million
    Office/Administrative: 15 million
    Construction: 7 million
    Installation/Maintenance/Repair: 4.5 million
    Transportation/Shipping: 7 million

    So by no possible criteria could we be considered a nation of manufacturers.

    Also significant is the rate of growth (or shrinkage) of these occupations in the last 5 years.

    Here are the top growing areas:

    Management and Supervisory +10%
    Education +10%
    Healthcare +10%
    Service +10%

    Manufacturing employment has remained stable or gone down slightly.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I’m not sure whether you’re addressing this comment to me, Dave. I haven’t made any references to Plato (yet).

    I agree that we’re not a nation of manufacturers, nor should we aspire to be. Besides, I thought we’d already put this argument to rest. There was a two-day moratorium on this site and now you guys are resurrecting it.

    So you say we’re rapidly becoming a nation of managers and technicians and that I missed this fact. First off, I haven’t. That’s the cadre that Reich is referring to in “The Work of Nations,” as best 10 percent of the population. Who and where are people getting the kind of education to qualify them for these positions? At Heald’s College or any other vocational school? They’re springing up every day, you know.

    My next piece, coming up any time now, addresses if only marginally the educational crisis in this country. You’re really looking through rose-colored glasses. Even in the best case scenario, the Bell curve argues against any such proposition. We may be equal under the law, but none of that applies to genetic differences, aptitudes, natural abilities, etc. – especially for a nation of $300 million. 90 percent of the population will always be peons in a matter of speaking. This has been true historically and no amount of democratization is going to change that.

    We’ll have to wait until the Kingdom of God comes.

  • http://www.fontcraft.com/rod/ Dave Nalle

    Roger, the first comment was directed at Arch and the second which you responded to was addressed to Baritone who I quoted at the beginning of it.

    And topics get ressurected all the time. It’s the nature of the format.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Thanks for the stats, anyway. They always come handy.

  • Arch Conservative

    “Ah, but Plato tells us that the Philosopher who doesn’t really want to be our leader is the one we should draft – even against his will – to run the state. Fred fits that description perfectly.”

    Yes and history also tells us that when our leaders find things more interesting than us to preoccupy themselves, we pay the price, such as Nero in Rome.

    Fred seems like he’d be much more interested in staying home and groping the fake ta tas he bought his young trophy wife than flying all over the nation/world to help solve our problems. Who can blame him? Stay home and squeeze some melons or send the wek at THE UN being lectured too by a bunch of snooty Europeans….gee that’s a tough one…..

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I know this is addressed to Dave, but I can’t resist butting in, Arch Conservative (no doubt because my would-be article had been placed on hold for what I deem unnecessary corrections so I am on pins and needles).

    You’re right about Plato except that I don’t think that Fred fits the bill. He comes awfully close to a buffoon,in my opinion. But then again, perhaps I’m suffering here from a TV syndrome. It’s all about image.

  • Clavos

    He comes awfully close to a buffoon,in my opinion.

    Being a buffoon is the first and most important qualification for american politics, especially the presidency.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    You may well be right, Clavos. I doubt, however, whether Arch Conservative thinks so.

  • Arch Conservative

    To this day I still can’t figure out what motivated Thompson too run. But I don’t care either.

    We’re stuck with Barry now. Daily I’m told that I’m supposed to abandon my beliefs so that I may support this man who, from everything I’ve seen of him thus far, believes the federal government is the only agent capable of solving our problems and that private enterprise must be vilified at every opportunity.

    I want there to be millions of new jobs for Americans in the next four years just like I’m sure many liberals would like to see. Unlike them however I know this will not be made possible by taxing businesses even more, regulating them more and generally making it harder for them to do business.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I agree with you in essence. I had most serious reservations concerning Barack all along (see my own website, especially at the inception) though now I feel I must embrace him as a matter of good form to say the least. I also agree that Federal Government shouldn’t be the answer. In light of the corruption, however, at all levels of government – merging politics and business into an unholy alliance – we need a major cleanup, but I doubt that Obama will be the one to do it. It’s just too pervasive, the way of the world. (You must check solari.com site referenced in my article!)

    As to regulation, we certainly need it with respect to the Wall Street elites. They had practically taken all of us to the cleaners, you must admit that!

  • Arch Conservative

    Of course we need some regulation and oversight of private industry Roger. My point is that we cannot tie business’ hands behind it’s back, hand over the keys to the federal government and then expect the economy to recover.

    What makes anyone think a Senator or a president is any more altruistic than a CEO?

    What makes one think that because a few CEO’s/businesses are corrupt they all are?

    What makes a person who is already making millions upon millions of dollars a year legitimately decide that they just don’t have enough and engage in illegal and ammoral business practices to even further pad their wallet?

    Although I’m a earn it yourself, pro business kind of guy, my zeal for business as the only solution pales in comparison to those zeal of those on the other side claiming that the federal government has all the answers. In fact I don’t believe at all that unrestrained capitalism is good for this nation.

    The fact is that both the government and the failed egotistical captains of industry that we’re now seeing looking for handouts have failed us. We have also failed ourselves. We have become a society of greedy materialistic consumers. The deadly combination of ubiquitous advertising and easy credit is responsible for this.

    There was a time when a man didn’t know he needed 2 cellphones, 3 ipods, 2 laptops, an 87 inch plasma TV, a fancy car with all the bells and whistles, a different colored Rolex for each day of the week, a DVD player in his refrigerator, 37 pairs of designer Italian shoes and a set of of gold clubs that’s ten times better than the crappy old titanium ones the other guy’s play with because they’re made out of some new kind of alloy that was developed through research done by NASA from their moon landing data, to be happy.
    But thanks to 24-7 advertising that is pretty much everywhere but in our dreams, now he knows that his life would be boring, meaningless and not worth living at all unless he possesses these items.

    And with 30 or so years of easy credit he has been able to obtain those things. He hasn’t always been able to pay for them but he has them nonetheless and that’s all that counts right?

    It’s not just the economy that we should be worried about but our changing social fabric, which is necessarily interwoven into our economic concerns.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Very well said: the entire social fabric had gone array.

    I am, by the way, addressing this issue in my next piece, “To Fellow Bloggers: a memo” (still held up by an overscrupulous editor) though only marginally at first. It concerns the subject of “mass consumption” society – the counterpart and negative (self) image as it were of a system which prides itself on having perfected the concept of mass production. I argue that by and large we have produced a nation of morons and that re-education of the American public is a must or we’re going it to go down the drain. That’s where our responsibility as bloggers and fellow writers comes in – to reach the forgotten women and men. If our enterprise is limited to the pages of Blogcritics, a self-contained community of peers, we will have failed.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    Spelling correction: “awry.”
    Sorry

  • Arch Conservative

    “I argue that by and large we have produced a nation of morons and that re-education of the American public is a must or we’re going it to go down the drain.”

    So true.

    All one needs to do to see how scary the future is going to be is turn on MTV to get a brief glimpse of what kinds of things that appeal to our young people and the things that they value.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    So your pen name “Arch Conservative” is a misnomer. Actually, you’re a rational human being.

  • http://www.fontcraft.com/rod/ Dave Nalle

    Sometimes being a rational human being can lead you to being an arch conservative, or at least to considering yourself one.

    Dave

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    No disagreement there. Winston Churchill definitely thought so. I was referring, however, not so much to a state of mind as to one’s psychological/emotional makeup in a more vulgar sense. It’s full of contradiction – akin to a kind of fundamentalism. I’m writing a piece on it, so perhaps we can discuss this later.

  • http://www.maskedmoviesnobs.com El Bicho

    “for what I deem unnecessary corrections”

    You deem incorrectly. btw, great idea to ingratiate yourself with the editors by bad-mouthing them in a public forum.

  • http://takeitorleaveit.typepad.com/ Roger Nowosielski

    I already took this matter with the editors.
    I apologize for having offended your sensibility.