conversation shifts on auto company bailout

I haven’t been watching it so closely these past few days, but my sense is that Bush is backtracking on his offer to help the Big Three. Earlier this week I believe he was suggesting that a bailout was imminent, but now it seems as though he’s more in the “let them fail” camp. According to the most recent reports, all he’s saying now is that he wants to avoid a “disorderly” collapse. Instead of helping them stay afloat, it sounds as if he’s saying that he’ll try to make their deaths as painless as possible… For what it’s worth, I think at this point it’s pretty clear that this is all about destroying the unions.

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  1. mepatrickyounot
    Posted December 19, 2008 at 12:38 am | Permalink

    Don’t you think the unions have done a good job destroying themselves?

  2. Paw
    Posted December 19, 2008 at 10:43 am | Permalink

    Why couldn’t Citigroup and AIG have “orderly collapses”?

    It’s an issue of class and privilege.

  3. Brackache
    Posted December 19, 2008 at 1:02 pm | Permalink

    Save the wheelwrights!

  4. Bruce Fields
    Posted December 19, 2008 at 3:53 pm | Permalink

    Bush Approves $17.4 Billion Auto Bailout

  5. Brackache
    Posted December 19, 2008 at 7:05 pm | Permalink

    Take that, unions.

    Boy am I skeptical that this 17.4 billion bailout will do jack shit to save the big 3 (understatement).

    Anyone like to venture a guess as to where all this bailout / stimulus money is supposed to come from?

    Perhaps unicorns will shit it out as they dance and frolick in lollipop land ever so merrily a-tra-la-la?

  6. Bob
    Posted December 19, 2008 at 7:06 pm | Permalink

    What exactly have the unions done to destroy themselves?

  7. mepatrickyounot
    Posted December 20, 2008 at 1:16 am | Permalink

    You are exactly right, Bob. I got mixed up. The government is destroying the unions; the unions are destroying the big three.

  8. Not a Bailout, a loan!
    Posted December 20, 2008 at 6:48 am | Permalink

    There once was a union maid who never was afraid
    Of the goons and ginks and the company finks
    And the deputy sheriff who made the raid
    She went to the union hall where a meeting it was called
    And when the company boys came around
    She always stood her ground

    Oh, you can’t scare me, I’m sticking to the union
    I’m sticking to the union, I’m sticking to the union
    Oh, you can’t scare me, I’m sticking to the union
    I’m sticking to the union ’till the day I die

    This union maid was wise to the tricks of the company spies
    She couldn’t be fooled by the company’s stool
    She’d always organize the guys
    She’d always get her way when she struck for better pay
    She’d show her card to the company guard
    And this is what she’d say:

    Oh, you can’t scare me, I’m sticking to the union
    I’m sticking to the union, I’m sticking to the union
    Oh, you can’t scare me, I’m sticking to the union
    I’m sticking to the union ’till the day I die

  9. Brackache
    Posted December 20, 2008 at 10:51 am | Permalink

    Have fun singing your union songs in the unemployment line. Mainstreet, Wallstreet, Bailout, Rescue Package, Loan, Stimulus, whatever; it’s all Greek for Inflationary Bullshit. I wish I could turn common sense into a 2×4 and smack folks on the back of the head with it. Lovingly.

  10. LAKE
    Posted December 20, 2008 at 4:21 pm | Permalink

    I am shocked how anti-union people are around here. Really, I am. As we all know, the wealth does not trickle down from the top, so, what’s wrong with people banning together to get paid for the hard work they do? I think people who work at McDonald’s should get paid more, too. Though my father is not an educated man, is 58, and sadly, at this point, works for Chrysler, I think you’re an asshole for not giving a shit about the people who are going to lose everything and have no time left in life to start a new career. Shame on you for not caring about your fellow man and fellow families.

  11. Brackache
    Posted December 20, 2008 at 4:47 pm | Permalink

    LAKE: Shame on you for insulting me with your inane demagoguing horseshit, if that was indeed aimed at me.

    First of all, I’m not anti-union in principle. Secondly, I do care about people who are about to lose everything, which is why I’m trying to persuade an often hostile audience of a better economic policy than the one the US government is persuing, which is leading us to ruin.

    My point is that this is way bigger than the unions (trying to destroy them or whathaveyou), it isn’t about getting more money, it’s about a collapse of our inflationary economic system. No amount of kumbaya banding together and tellin’ it to the man is going to solve the current economic crisis. EVERY bailout is making it worse. I keep saying so because I fucking care.

  12. Not a Bailout, a loan!
    Posted December 20, 2008 at 5:28 pm | Permalink

    I’ve traveled round this country
    From shore to shining shore.
    It really made me wonder
    The things I heard and saw.

    I saw the weary farmer,
    Plowing sod and loam;
    I heard the auction hammer
    A knocking down his home.

    But the banks are made of marble,
    With a guard at every door,
    And the vaults are stuffed with silver,
    That the farmer sweated for.

    I saw the seaman standing
    Idly by the shore.
    I heard the bosses saying,
    Got no work for you no more.

    But the banks are made of marble,
    With a guard at every door,
    And the vaults are stuffed with silver,
    That the seaman sweated for.

    I saw the weary miner,
    Scrubbing coal dust from his back,
    I heard his children cryin’,
    Got no coal to heat the shack.

    But the banks are made of marble,
    With a guard at every door,
    And the vaults are stuffed with silver,
    That the miner sweated for.

    I’ve seen my brothers working
    Throughout this mighty land;
    I prayed we’d get together,
    And together make a stand.

    [Final Chorus:]
    Then we’d own those banks of marble,
    With a guard at every door;
    And we’d share those vaults of silver,
    That we have sweated for.

  13. Old Goat
    Posted December 20, 2008 at 6:21 pm | Permalink

    I don’t understand something. Unions have always been about employees banding together and demanding better wages and benefits, not just for themselves, but for everyone across society, even non-union labor. Why then, is there such a public sentiment which supports calling back those wage gains. Shall we drag everyone down to the lowest wages, or bring everyone up to best wages? Begs the question: “Whose side are you on?”

  14. Brackache
    Posted December 20, 2008 at 8:55 pm | Permalink

    Again, if that were addressed to me, Old Goat, I’m not against unions in principle, just like I’m not against business owners in principle. If I’m against AIG CEOs taking huge bonusses from public moneys they didn’t earn, does that somehow make me anti-business? What sides am I supposed to be choosing from and why?

    My basic economic philosophy is built on the following foundation: the fact that money doesn’t grow on trees.

    Once you understand that, the things I say start making sense.

    Money has to come from somewhere.

    Where’s the money you want supposed to come from?

  15. mark
    Posted December 20, 2008 at 10:42 pm | Permalink

    I have issues with the unions. On the whole, I think they’re a good thing, though. Among other things, they’re responsible for the 40 hour work week and the fact that we no longer have five year old coal miners in this country. With that said, I think they’ve done a terrible job in recent years, especially as it pertains to the auto companies. They could have pushed harder for reform – they knew just as well as anyone that making SUVs wasn’t sustainable with our oil running out – but they chose to do nothing. And, while they did nothing, the Japanese began rolling out hybrids. And when myself and others tried to warn them – protesting in front of John Dingell’s office – they sent people out to intimidate us. That’s how they chose to deal with reality. And, as a result of their shortsightedness, the working class is losing a great deal of ground. I hesitate to think how bad it will become for workers in this country in the coming years. It’s going to take a hell of a lot of effort to get back.

  16. Old Goat
    Posted December 21, 2008 at 12:40 am | Permalink

    The UAW has made tremendous gains on the factory floor for its members in recent years. At GM Powertrain, I’ve seen major upgrades in machine guarding, elimination of mists and particles in the air by the installation of air scrubbers and dust filtration. Infrastructure has been improved through union insistence, i.e. bathroom upgrades, plant floor and ceiling repair, snow removal, lighting, etc. Improvements are also found in safety procedures, emergency equipment, and training. Countless potential lawsuits have been avoided through internal negotiation and settlement. Management has become less confrontational and has become more cooperative and sensitive to personal problems and ergonomic concerns. GM (and the other Big Two) has benefited with ever increasing productivity and quality improvements. The list goes on and on. For all of our hard work and years of labor, a few moronic Republican Senators want to pull the rug out from under 75 years of worker/management relationships and reward us all with a hefty cut in pay and benefits. The recent problems are not the fault of the UAW, they are rooted in the assault of Big Oil and the Banking Industry, who, with the support of the Republican Party, want to destroy collective bargaining in America. Thank God Mr. Obama has been elected. After Jan. 20, their war against the workers will be brought to a halt. People who seem so ready to dis on the UAW, in all fairness, don’t know what they’re talking about, and are most welcome to go south and work for less!

  17. mepatrickyounot
    Posted December 21, 2008 at 12:51 am | Permalink

    Mark, you got a little taste of what the unions have become out there in front of Dingell’s office.
    If anyone really believes that the average McDonald’s worker should make $29.78 an hour like the UAW workers (that is what happens after years of antagonistic union methods), this country is in serious trouble. And the bailouts make the trouble worse.
    On the other hand, the unions and big three management with their golden parachutes are easy targets for people looking to place the blame. I will leave them alone for now.
    I think it is a better idea to wonder why we need the capability in this country to make a gazillion cars and trucks per month. It seems like a fair question to ask if we could make do with say, the big two or the big one, instead of the big three.
    If we juice the system with more bailouts and just print more money, we are really, really, really asking for it sometime in the future. Easy money is what brought us our problems in the first place.

  18. Old Goat
    Posted December 21, 2008 at 1:03 am | Permalink

    Mepatricky, the money is by no means easy. The real problem is that nearly everyone else is underpaid and they are either ignorant to the fact or can’t do anything about it.

  19. mepatrickyounot
    Posted December 21, 2008 at 2:02 am | Permalink

    I can’t say that I agree with the “everyone else underpaid” statement, Old Goat. Do you mean all over the world? If the economy really is global, US workers are in direct competition with workers everywhere on earth. Sorry, but I can’t help it. There is a huge, huge “correction” in store for us. It cannot be solved by printing more money.
    Anyway, here is a article about the UAW and the bailout.

  20. Old Goat's Wife
    Posted December 21, 2008 at 8:03 am | Permalink

    It is fairly simple, read Nickle & Dimed. McDonald’s workers of the world unite…
    We pass laws that make our workers compete on a lopsided playing field in order to flood our markets with cheap goods and in the meantime shoot ourselves in the foot. The correction, (I assume you mean a cut in pay to our workers) will simply add to the problem of foreclosures and bankruptcies.
    We need to build good stuff here in the US, right here with living wages for workers. Minimum wage is a joke.

  21. kjc
    Posted December 21, 2008 at 9:18 am | Permalink

    Brackache, I think if you really wanna convince anyone of anything–or at least me–you should change your condescending tone and grating know-it-allness. Don’t you get tired of making the same basic comment over and over? Or of rolling your eyes at the naked ignorance of everyone but yourself? When I asked you previously what’d you do (instead of all the stupid things other people want to do), your answer wasn’t exactly compelling. I really don’t think you’re advancing the argument. I’m personally not learning anything from you.

    My two cents.

  22. mark
    Posted December 21, 2008 at 11:04 am | Permalink

    The following comes from Mark Higbee. It wasn’t going up for him, so he asked me to me to give it a try.

    Money doesn’t grow on trees, obviously. But this is a very wealthy country, though the distribution of wealth and income is more imbalanced now than anytime in 75 years.

    So the real question is how can we allocate society’s resources in order to best promote increasing the existing wealth of the nation/world, and improving its distribution to raise the living standards of most people, while also sustaining the earth.

    In our present historical moment of economic crisis, the US govt. has allocated close to a trillion dollars to bail out the financial industry’s giant firms, with virtually no strings attached. Meanwhile, that same govt. has delayed and debated at length about providing less than $20 billion in loans to the auto industry, which is at best a short term expedient, but one that could save millions of jobs. The feds now seem poised to provide some loans to GM and Chrysler while stipulating that their employees take more cuts and job losses than were imposed on the financial firms whose held out hands were greased with billions upon billions.

    More money can be grown from wise investments in our communities, investments aimed at long term sustainability. That kind of goal too rarely enters into decision makings by govt. or large firms. Hence, communities are devastated, living standards fall, and the earth is imperiled.

    Seems like a double standard, eh, one that is biased in favor of the financial-insur@nce-real estate sectors of the economy that have been dominate politically for a couple of generations — and biased against manufacturing and its workers. The Wall Street, anti-Main Street values still dominate the political system despite the massive discrediting of the Wall Street promise of economic growth thru unregul@ted business. Will Congress use the auto crisis to help smash one of the great American l@bor unions? Stay tuned.

    That said, I make no excuses for the mismanagement of the American auto industry. Short sighted pursuit of profit is a fatal flaw of capitalism, and it’s perhaps worse for American capitalism than other national capitalist economies, and worst of all in the auto industry. But the UAW has not been making policy for its employers. It has tried to hang on to what it has won for its member over the years. No doubt lots of unionists are short sighted, and opposing enviornmental regulations and trying to intimidate industry critics is short sighted in the extreme. But the UAW failed 60 years ago, in the great strikes of the late 1940s, to win any power over auto industry investment policies.

  23. Bob
    Posted December 21, 2008 at 11:07 am | Permalink

    Brackache, you’re really just an asshole. Dressing up your Sean Hannity inspired nonsense in more sophisticated terms doesn’t change the mean-spirited, blame the worker shit that you are peddling. Comparing the banking scandal to helping the big three is ridiculous. Really, go fuck yourself for Christmas.

  24. Posted December 21, 2008 at 11:55 am | Permalink

    The UAW have a serious PR problem. When I’m told that the average high school educated UAW worker makes $150K a year in wage and benefits, it’s gonna piss me off as it would anybody.

    Noone is going to argue that fighting for fair work weeks and safe working conditions is a bad thing, but when you see UAW guys buying boats, big trucks, going on Ted Nugent hunting trips and generally acting like idiots, you have to wonder what all the rest of the working world thinks that pay for the cars that pay for those lifestyles.

    Granted, they are getting laid off and there’s lots of shit we don’t know, but from a PR perspective, it’s pretty bad.

  25. Mark H.
    Posted December 21, 2008 at 1:17 pm | Permalink

    Brackache, you seem very worried about the threat of inflation. But in case you’ve not noticed, for the last few months, the US and global economies have been gripped by the opposite – deflation. That’s what the housng crisis is all about, isn’t it, falling home prices and negative equities? The last time the US faced a serious problem of deflation was during the Great Depression. Wise observers today are far more concerned about the risks of deflation than about inflation.

  26. Brackache
    Posted December 21, 2008 at 1:38 pm | Permalink

    Sticks and stones may break my bones, and I doubt that you have either.

    As far as how kjc and Bob got my character wrong (especially Bob), I’m confident that the people on this blog who actually know me might (hopefully) say different.

    As far as my being able to persuade you, kjc, I answered your question honestly. What more do you want? Your believing it or not is not my responsibility; time will tell if I’m right or wrong. Luckily for you, if I’m wrong I will have nowhere to hide from looking like a complete idiot. I was sure wrong about Bush and the Iraq War, for instance! And if I’m right, you can ignore it completely and pretend the inflationary economic collapse I’ve been describing was free market capitalism’s fault. So it’s really win-win for you.

    Seems like a good time to re-mention that Obama, Frank, Dingell (& Waxman), Levin, Pelosi, pushed and voted for the bank bailout. Y’know, I do believe some of them even AUTHORED the bill! Those darn corporate crony Republicans trying to stick it to the proles!

  27. Brackache
    Posted December 21, 2008 at 1:39 pm | Permalink

    That wasn’t in response to you, Mark H., you beat me to the post.

  28. Brackache
    Posted December 21, 2008 at 2:04 pm | Permalink

    Mark H. (and everyone else): wiki def of inflation

    Our monetary supply is being increased hand over fist to pay for war, bailouts, and domestic spending programs for which we do not have the money. This IS monetary inflation, is it not?

    I believe the current state of price deflation is temporary. Some argue it’s the result of a lot of “going out of business sale” sell-offs, some argue that the initial rush of newly created money into the market makes things a little better before it gets worse, some have argued both.

    I am simply of the opinion that monetary inflation will inevitably lead to price inflation, no matter how many times it dips or peaks in the short term. Look at the value of the dollar from 1913 to now. A steady decline in dollar value, a steady rise in prices, a policy of fed-controlled inflation.

    It also bears noting that the few economists who predicted the bursting of the housing bubble were Austrian Economists, and they were scoffed at at the time. Now they’ve been proved right, and are predicting massive inflation and an economic collapse. I think it’s wise to value the opinions of the guys who were proven right over the guys who were proven wrong.

    Remember how you were wrong about South Carolina’s declaration of secession (got me — I can’t remember if it were actually called that) being all about slavery and not being about the other States’ violation of the Constitution, specifically the 10th Ammendment? You challenged me to read it, as if it were going to prove my guess wrong, but it proved my guess exactly right. My guess was more accurate than your expensive history education. I say this only so that you won’t rely on your being a historian counting more than the actual facts, as apparently historians can be wrong too.

  29. Mark H.
    Posted December 21, 2008 at 2:26 pm | Permalink


    For a moment your citation of the Wikipedia entry on inflation had me worried that you’d acidentially found a serious factual error in that famed online source, since your claims about inflation are so clearly incorrect. But then I read the entry, and saw that its first sentences invalidate the argument you try to rest on it: namely,

    “In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] The term “inflation” once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation.”

    Your concept of monetary inflation is irrelevant to the fact that prices are now going down – in housing, for food, for oil, for labor, for borrowed money. You counter my argument that deflation is an actual current problem by asserting that you think this deflation is temporary (I hope so, too! but let’s deal in facts), and by asserting that your boggeyman, monetary inflaiton, is a greater concern. Well, maybe, but that’s no justified by the source you cite.

    As for your non sequitor about the South Carolina Declaration on the Causes of Secession — no, I don’t remember me being wrong and you being right. If you read the actual SC Declaration, you appear to have read it as carelessly as you read the wiki entry on inflation.

    I’m not sure who the Austrian economists you cite are, but lots of folks predicted the bursting of the housing bubble. It was predicted in Prayharrold as early as 2003, and the bursting of the tech bubble was also predicted. So what? These are easy predictions to make – economic bubbles burst. Know your economic history and you know this. Know exactly when they will burst, and you have a crytal ball or a lucky guess.

    And of course historians can be wrong. WHo’d deny that?

  30. Brackache
    Posted December 21, 2008 at 3:18 pm | Permalink

    Mark H. — As a reminder regarding my non sequitor: I had never formed an opinion regarding the legality of secession. In the process of forming that opinion, I guessed that S. Carolina seceded because they felt their Constitutional rights as a State were being violated, especially in regards to the 10th Ammendment. A bunch of people got mad at me (both pro- and anti-secessionists), and you said that I should actually read the South Carolina Declaration on the Causes of Secession , which you said clearly shows they seceded over slavery only, pure and simple. Well, I was right and you were wrong. Some other State’s reasons for seceding were all about racism, but not S. Carolina’s. Slavery was a factor, of course, but it was primarily about other States’ violation of the Constitution. It’s a pretty airtight argument for the legality (not morality) of secession (not slavery), really.

    Anyway, regarding inflation/deflation. We have been in a period of steady inflation since the early 1900’s. It is undeniable. There are always dips and peaks in the short term, but prices have been increasing steadily since then. And the first sentence you’ve chosen to disprove my assertions does not. Firstly, we’re undeniably in a period of monetary inflation, like I specified using the word “monetary.” Secondly, we’re undeniably in a period of price inflation “over a period of time” — I’m focussing on a longer period of time than you are focussing on. Here’s why:

    Prices are going down right now (short term price deflation) due to a bubble bursting. Fine. Let them. What is the Government’s solution? To not let them: to inflate the money supply through bailouts, and encourage more spending, loans, etc. leading to long-term price inflation.

    Do you really think injecting billions and trillions of dollars into the system to solve a natural market correction WON’T devalue the currency??? And before you start talking about the Great Depression, please recall that the dollar was still losely based on gold at the time. Now it is based on nothing, which historically leads to inflation, because it’s harder to artificially inflate the supply of a valuable commodity than it is to just print shit up.

    Why is it so much easier to understand that natural resources run out if you use them all up, than it is that the value of a currency runs out if you print too much of it?

    Therefore, I stand by my assertion that the greater boogyman is the price inflation that the unnecessary correction of the current price deflation is causing.

    Monetary inflation is not a guess or prediction, THAT type of inflation is a current fact, and has been so for decades.

  31. Posted December 21, 2008 at 3:47 pm | Permalink

    “Anyway, regarding inflation/deflation. We have been in a period of steady inflation since the early 1900’s.”

    I’m not going to get into the specifics of economic theory, but I can say that shit’s much cheaper than it was in the early 90’s. Not in terms of sticker price, but in terms of wage vs. price of goods. Cars are much cheaper than they were then, housing is much easier to get and the jobs pay more overall than they did then. Sure, shit sucks now as it did then, but my guess is that you are too young to remember how expensive it was and how much fewer decent paying jobs existed in the past.

    In the early 90’s, killing yourself seemed like a better option, there weren’t very many work options out there at all. If you go back to the early 80’s, it just gets worse. Things now really aren’t that bad in comparison. It’s much easier to get by unless you are really dead set on living like a UAW worker.

  32. Posted December 21, 2008 at 3:48 pm | Permalink

    And, given that you make great claims without providing substantial references, I can only conclude that you are as full of shit as I am.

  33. Brackache
    Posted December 21, 2008 at 3:55 pm | Permalink

    Inflation calculator thingy.

    Fun for several seconds.

  34. Brackache
    Posted December 21, 2008 at 3:57 pm | Permalink

    Is that a substantial reference for our currency being devalued for decades?

  35. Posted December 21, 2008 at 4:01 pm | Permalink


  36. Brackache
    Posted December 21, 2008 at 4:06 pm | Permalink

    I know the hyperinflation of the Weimar Republic is also common knowledge, but, just in case, I’m throwing it out there. There are differences, obviously (no Versaille treaty, etc.), but some similarities as well. Note that the hyperinflation was not solved until they issued a new currency based on a commodity (real estate). Also note that naziism’s rise to power is considered to have been aided by hyperinflation, which is one reason I keep posting the same shit over and over like a broken record.

  37. Brackache
    Posted December 21, 2008 at 4:08 pm | Permalink

    dude: yeah huh. It’s the US Dept. of Labor.

  38. Posted December 21, 2008 at 4:24 pm | Permalink

    Your bls calculator doesn’t say anything. All the calculator shows you is what $20.00 in 1912 would be worth in 2008. It doesn’t say a damn thing to support your point.

    Again, you present some historical “facts” but there is no citation aside from some Wikipedia link. Why should we believe you? I’m not saying I do or don’t, but your tactics don’t differ much from that moron who tried to claim that condoms don’t prevent HIV in most cases by quoting some stupid pro-life site’s quoting of some stupid 1999 rubber industry article.

    You don’t seem like a moron, if you want to make sweeping claims, you can do a lot better. Trust me, I want to believe you since you don’t seem like a complete idiot.

  39. Brackache
    Posted December 21, 2008 at 6:58 pm | Permalink

    Thanks, dude! That was the most positive feedback so far!

    The little calculator thingy supports my point that we’re in a decades-long period of inflation. You can tell this because the word “INFLATION” is at the top of the page, and $20 in 1913 had much more purchasing power than it has now, which is what inflation is.

    Everyone with me?

    You can test it by punching in a dollar amount, picking a year, and hitting “enter”. I’m not sure it’s possible to make this point any clearer or get a more credible source for my current target audience.

    So can we agree on this point at least before we go any further and talk about my other points?

  40. Posted December 21, 2008 at 7:20 pm | Permalink

    No, it still doesn’t say shit.

    A beer may cost $.20 in 1908 and I may make $.20 an hour working in my shit job. In 2008 a beer may cost me $5.00 and I may make $10.00 an hour working the same shit job. The beer is actually cheaper in 2008 than it was in 1908.

    My point is, you can’t talk about inflation or deflation unless you have a reference point, which this fun little calculator does not provide.

    Now, I don’t know shit about economics, but I know this calculator does not support your point at all.

    I agree on South Carolina. They did not secede because of slavery. Those other states suck ass. I bet they’d write the same shit today if they could.

  41. herkuloid
    Posted December 21, 2008 at 7:21 pm | Permalink

    brackache is the only one whose cited anything.

  42. Brackache
    Posted December 21, 2008 at 7:39 pm | Permalink

    My point is, you can’t talk about inflation or deflation unless you have a reference point, which this fun little calculator does not provide.

    Now, I don’t know shit about economics, but I know this calculator does not support your point at all.

    Hmmm. So the Department of Labor’s Inflation Calculator is not enough to convince you that there’s been steady inflation over the decades since 1913.

    How ’bout this one?

    I suggest you attack the actual weak point in my argument, which is the current price deflation over the past few months and my assertion that it is only temporary and that the bailouts (and other spending) will lead to runaway inflation. Not only is that the most important part of my argument, but I will have a much harder time backing that one up.

  43. Brackache
    Posted December 21, 2008 at 7:44 pm | Permalink

    Also, watch the markets. Everytime the dollar goes up, you can be all like “see, Brackache! The dollar’s actually GAINING value!!!” all up in my face.

  44. Mark H.
    Posted December 21, 2008 at 7:56 pm | Permalink

    Dude — you are quite right on prices over time: The real issue is the ‘real cost’, or inflation adjusted costs. But you are mistaken on South Carolina, and the link to the secession documents that brackache provided appears on first glance questionable. It does not even identify hwo created the web site. It is crazy to think that the civil war was caused by some esoteric dispute over constitutional theory rather than over an actual material conflict of interests. The Declaration on the Causes of Secession plianly shows that protecting slavery was the motive of South Carolina’s scessionists.

    Bararche writes
    “Why is it so much easier to understand that natural resources run out if you use them all up, than it is that the value of a currency runs out if you print too much of it?” Well, gosh, isn’t it clear that fresh water, coal, lumber and fertile soil are in fact “natural resources” — unlike works of art, factory buildings, and currency, which are NOT natural resources but rather the creations of human beings? These creations are of course derived at least in part from natural resources, but they are not inexhaustible in any way comparable to true natural resources.
    Currency is valuable for one reason: Because we believe it is valuable. IF you have faith or trust that the $20 bill or credit card or electronic check or IOU that is presented to you for payment is valid and worth something recognizable to others, well, then you have currency. Currency is a means of exchange of value. If you don’t have that faith or trust, then that $20 isn’t worth much — especially if others doubt its value too.

    The experience of hyperinflation in Germany in the 1920s involved, if I recall correctly, inflation measured by thousands of percentage points. The highest inflation rate ever in the US in the last century was around 12% per year, if I recall correctly. So neither the current deflationary situation in the US, nor the worst modern inflationary period in American history, has much parallel to the horrid experience of hyperinflation in Germany in the 1920s (or, for that matter, to the hyperinflation now happening in Zimbabwe).

    However, if someone regards currency as a “natural resource” as though it’s part of the natural abundance of the earth, rather than a creation of humans – and thus inherently subject to continuing change — well, then that’s a belief based not on actual history or ecnomic behavior, but on faith. Can’t argue with faith. All faiths have dogmas: Beliefs not subject to proof. Brackache argues from dogmas on these currency questions. So too did those who thought gold was the true foundation of American currency, rather than the wealth and productivity of the American economy.

    Barache’s currency faith require all evidence be fitted into the framework of dogma – hence, the Bureau of Labor Statistics inflation calculator is presented here as proof of something it is not proof of….just as an image of the Virgin Mary seen in a melting pile of snow or in a cloud is taken as proof of some divine force. Maybe it is. But in the economic realm, there’s lots of evidenece that can’t be fit into the framework of hard currency dogma.

  45. mepatrickyounot
    Posted December 21, 2008 at 9:02 pm | Permalink

    Old Goat’s Wife wrote, “The correction, (I assume you mean a cut in pay to our workers) will simply add to the problem of foreclosures and bankruptcies.”

    The “correction” (I wish I could come up with a better word for it) could be cuts in pay to workers or it could be just outright failures of the businesses, or many other things. If we keep trying to stave off what seem to me to be natural results of competition in the marketplace, it could mean a monstrous collapse in the end, maybe not. For example, when we get in trouble for lending money with no regard to how it will be paid back, and then we just print and lend more money at low rates just to get us out of the trouble (at even lower rates with even less chance of ever getting the money back, because we are lending to businesses with a proven record of failure and mismanagement) we are getting burnt coming and going.
    If you look at things that way, then you might consider that the “correction” itself is foreclosures and bankruptcies. Or you can consider those the cause of it all if you like. It makes no difference.
    I hope for the best with the big three. Just like I hope for the best for Lehman Brothers and Bear Sterns (although I was also against those bailouts). You can call them bailouts or buy-ins, but who really wants the government to buy-in or be part owner of the whole damn United States. After the auto bailout, the poor UAW worker will have three layers of bosses; the Company Management, the UAW, and the Government. That does not sound like a formula for success to me. Like I say, I hope for the best, but pardon me if I lack the faith and enthusiasm about the future of the companies, workers, and I won’t even mention the taxpayers for fear of sounding like one of those Republican assholes that everybody likes to trash these days.
    By the way, George McGovern (a democrat) had some interesting things to say about Right to Work laws in my newspaper today.
    In Virginia before the Civil War, the Western counties had to secede from the State of Virginia just to remanin in the Union. Then, they had to beg the union to protect them from their own state’s soldiers. Kind of a double standard to secession, huh? It’s always okay to secede unless you have resources or a tax base or in the case of the Civil War, white people to fight to defend an institution that was evil from the start(SC was majority black at the time, Virginia had a few white men of fighting age). Whatever SC might have written as their reasons to secede, it was all about money, and whatever reason Lincoln Buchanan or whoever it was at the time wrote for preserving the Union, you can bet it was all about money. Does that sound cynical? Sorry.
    Dude, what you call a PR problem, I would call a fundamental problem. It is not about perception.
    I have been to McDonald’s restaurants on a few different continents, and I have seen maybe three or four employees who really did what I would call a good job. They should be paid three hundred dollars an hour and all the pension and benefits they want. All the others should have their asses fired. If they organized, that would mean even less time they would expend on doing their job and more they would spend on demanding stuff from their bosses and all the organization that goes along with all the demanding.
    My advice to the auto companies would be to do what Harley Davidson did. Make the same terrible product but spend all your time selling the brand itself and the image of the owner of the product. Then, we will be able to buy, for example, a Ford car with a fancy logo and glittering generalities Americana Native American name such as “Bad-Ass-Rebel-Great-American-Tattoo-Wearing-Cage-Match-Fighting-Wolf-Dog-Chief Joseph-George Custer-Kill Liberal French People-Joe-Six Pack-Plumber-Construction Worker Car” and tow it around on our foreign made trailer hitched to our foreign made pickup. Maybe they should start making cars out of soy beans and corn and subsidize those a little more.
    Also, Merry X-mas to everybody, and of course, Happy Hannukah and Happy Winterfest.

  46. mepatrickyounot
    Posted December 21, 2008 at 9:26 pm | Permalink

    Mark H., I think you might be neglecting to consider a couple of things in your “natural resource” currency argument. The Fed changes interest rates at will and prints money whenever it wants, therefore affecting the amount (supply) of its currency. This does seem to me to affect the “faith” in the currency. When the market is flooded, people tend to seek more reliable places than the dollar to put their wealth.
    If you consider the currency just a token of natural resources (timber, energy resources, human resources, time) and the products of those resources (labor, art and artistry, functional items such as automobiles), then you will sense that if the currency itself is completely renewable and infinite, at least the proportion and allocation of the currency as a resource is not infinitely adaptable and changeable. And, in fact, the credibilty of the currency as a representative of the resources is shaken and possibly eventually worthless. There are the famous pictures of the Germans burning banknotes in their furnaces because the money is worth less than the timber needed to heat the house.
    Therefore, printing more money and hoping for inflation (I actually heard the term “hope for inflation” on Mad Money a few days ago) is not the answer to the lack of “faith” that we share in our currency and the markets’ ability of our token (fiat)currency to “represent” actual resources to the people we expect to use it.
    I am not arguing. I am not an economist, and I am not Austrian. I am just thinking out loud maybe. Enlighten us, Mark H.

  47. Brackache
    Posted December 21, 2008 at 11:25 pm | Permalink

    Mark H. Nice to know the Department of Labor’s definition of inflation is wrong. Jimminy fucking Christmas. I suppose the bright side is that I’ll be able to discredit the Department of Labor in some future argument.

    I’m the only one required to cite anything.

    Everything I cite is invalid because it just is dammit! Produce the accurate copy of the S. Carolina yada yada and I’ll change my damn mind if it shows otherwise. But do you? NO! You just sweep it aside and say that it’s absurd to think otherwise than you think. Well, I think what you think is absurd, so buttons.

    I’m condescending and knowitally, but the only person here to actually be called names in this conversation is me. As far as accusing me of grasping at straws to justify my blind faith, I’d judge not, pal, because so far YOU’RE the guy who’s making nothing but dogmatic assertions without support.

    Natural vs. man-made resources: if there were 8 trillion identical Mona Lisas, they wouldn’t be worth as much as would the one we have now. Capice? It’s pretty basic supply and demand after all’s said and done. Do I need to cite a website that explains supply and demand? Or basic math? So long as it’s not a Wikipedia article or a Government website?

    And to say we won’t face runaway inflation because we haven’t before is just poor logic. I haven’t been in a head-on high speed collision before either, but if I start driving on the wrong side of the freeway it’s pretty likely. Just like if we keep dumping trillions of dollars into the economy to encourage stupid loans and stupid investments, thinking those two things are the secret to perpetual economic pain-free growth, businesses and banks will fail, and the currency will be devalued, just like the damn Department of Labor INFLATION Calculator shows has been slowly happening since the creation of the federal reserve system, undemotherfuckingniably unless you’re intellectually capable of dismissing clear evidence, which is a possibility.

    As final support, I appeal to time telling. If I’m wrong, the bailouts will cure everything and Obama’s whatever trillion stimulous will likewise cure everything. Then I will admit I was totally wrong, endure a deserved shellacking, and change my mind. If I’m right, an even shittier economic collapse at least within the next ten years, worse case within the next 2.

    And not that many people predicted the collapse of the housing bubble. It’s only obvious in hidsight, or else people wouldn’t have been buying too much house hand over fist at the time.

  48. Collapse is inevitable
    Posted December 22, 2008 at 1:10 am | Permalink

    The only reason that we haven’t seen enormous inflation in the recent past is because China keeps trading goods to us and holding the paper (T-bills) – keeping it out of circulation. They have the ability to destroy our economy at a time of their choosing.

    You don’t create value by printing paper currency. Brackache is the only person on this site that has a clue about economics.

  49. factsareterriblethings
    Posted December 22, 2008 at 7:56 am | Permalink

    Mepatrickyournot you refer to the Lehman Brothers bailout. Either you have made a simple mistake or you live in an alternate reality. Lehman Brothers was not saved by the government – it was allowed to collapse. This example of letting the “natural” force of the “free market” was quite successful in deepening the collapse of the financial markets. An example of failure so extreme it even motivated the ideologues of the Bush administration and the GOP to rethink their willingness to let the rest of the financial sector risk going into free fall.

  50. Mark H.
    Posted December 22, 2008 at 10:51 am | Permalink

    A few responses to some of the statements made on history and economics in this tread. I hope to keep them quick but pointed.

    “regarding inflation/deflation. We have been in a period of steady inflation since the early 1900’s. It is undeniable.” Actually this is totally incorrect — if the decade of the 1930s matters. Very serious deflation occurred then. Deflation is happening now – hopefully just for a brief while, but the future is unknown. Simple minded explanations of why we are not now experiencing inflation do not establish that the real problem is inflation. But the inflation is the boggeyman idea does with with old ideas of “hard currency” and their political allies. Brachache seems to be the ghost of Andrew W. Mellon come back to life.

    Hyper inflation has NEVER been a problem for the US. Maybe it will in the future. More likely, based on historical precedent, is that the US and the world capitalist economy are going into a depression – which would mean serious deflation. (Note i am not making predictions).

    I’ve not found an online copy of the South Carolina Declaration on the Causes of Secession, but get Henry Steele Commager’s DOCUMENTS OF AMERICAN HISTORY, vol. 1 or the single vol. edition, and you can read it. Try a library. It clearly states that Lincoln’s election was the cause of SC breaking away because they feared Lincoln and his party would attack slavery; every cause of secession was derived from defending slavery. If this subject really interests Mark Maynard readers, I’d be glad to provide hard copies of the document to all concerned, and buy beers at the Corner for the first 5 people to sign up for this ‘drink and discuss a historical document’ seminar with me. Email me at mhigbee at emich dot edu if you’re interested.

    Brakache writes “Mark H. Nice to know the Department of Labor’s definition of inflation is wrong. Jimminy fucking Christmas.” But I never said that the BLS definition of inflation is wrong. i did say that price inflation or deflation is a concern, and I suggested that the monetary version of what barache calls inflation is less important than price inflation. Indeed, sometimes inflation is a postive good – the post 1896 inflation was the solution to the great economic depression that confronted farmers and firms alike in the late 19th century.

    Nor did I engage in ad hominem attacks against Brachache, though he accuses me of that. But as others have pointed out, such seems to be the usual mode of Brackache’s argumentation. I do misspell his name and apologize for that.

    There is a strange ideological affinity between those arguing that the civil war wasn’t caused by slavery (and was instead over some technicality of law) and arguing that American economic problems arise fundamentally from inflation even in periods when deflation is present. Both are viewpoints derived from right wing tendencies of the American past, as is the continual resort to ad hominem criticisms. Perhaps this is a casual linkage, or maybe it is mere coincidence.

    No other advanced industrial country on earth lets its basic industry face collapse while diverting hundreds of billions to prop up failed financial institutions. The right wing, dogma worhshiping, “hard currency”, anti-labor ideologies that continue to play a role in American political and economic discourse, are related to these strange and costly American choices.

    Cites wanted? Read James Livingston’s book on the origins of the Federal Reserve, for one. And Lawrence Goodwin’s DEMOCRATIC PROMISE.

  51. Posted December 22, 2008 at 2:19 pm | Permalink

    Firstly, we’re undeniably in a period of monetary inflation, like I specified using the word “monetary.” Secondly, we’re undeniably in a period of price inflation “over a period of time” — I’m focussing on a longer period of time than you are focussing on.

    Well, yes, we’re in a period of monetary inflation. But that’s good, in moderation.

    Monetary inflation occurs a couple of different interrelated ways that are good for the economy. (See “Money Creation”).

    Basically, inflation also gauges the relative increase of value of goods in the economy. Or, more succinctly, profit equals inflation, as there is more value in the system than there was prior to the economic operation.

    It does get more complicated than that, because inflation is about ratio, which is a curve and not a linear relationship. And there are confounding factors, like that the goods we buy are generally of better quality than the relative expense of 100 years ago. Or even 20 years ago—think about televisions, which have gone up in price a bit from the ’80s, but not all that much, and a $300 television now is far superior to a $300 television in 1980. Hell, it’s far superior to a $773 television in 1980. The term for this is Hedonic Regression or Hedonic Adjustment. The Consumer Price Index has been criticized for including a Hedonic Regression, which Austrian economists charge understates real inflation, but countries without hedonic regression often overstate their inflation (which leads to unsustainable bond prices).

    You might also be interested in Measuring Worth, which gives several different indices for measuring relative inflation, and a guide to which ones to use for which arguments.

    Finally, inflation is a good thing if you’re in debt and your rates aren’t pegged to the rate of inflation.

  52. Old Goat's Wife
    Posted December 22, 2008 at 2:42 pm | Permalink

    UAW workers do not make 150K in wages & benefits. That is a grossly exaggerated figure. And what workers spend their money on is their own business. And yes buying cars means those workers w/ only a high school ed. get paid enough to buy those cars too and send their kids to school.
    It is funny that it has suddenly become a big problem, borrowing from the Chinese, only when it comes to protecting blue collar jobs. I sense a certain classicism or is it racism. The UAW leveled that playing field.
    Looking north to our Canadian neighbors- seems they think the big 3 are viable for loans, those same neighbors that have the “socialized medicine” that we say they hate but they say they love.

  53. Posted December 22, 2008 at 3:16 pm | Permalink

    Perhaps I am reading this article incorrectly:

    I could be wrong, and I think that the figures being thrown around by both sides are grossly oversimplified, but nothing dispels the popular impression that UAW workers are overpaid for what they do.

    Even if I am to believe this article,

    which claims that UAW workers only make $28.00 an hour, which appears not to include benefits, it appears that UAW workers make $58K a year to do unskilled labor, not including benefits. Mind you as well, this is an average, meaning that some people make even more.

    Personally, I think that wages should be set by the market and the costs for labor should be determined by the market. We have a large supply of uneducated people (especially in Michigan), thus they are cheap and affordable and should be paid no more than an average fast food worker.

    Also, this disregards the 0 dollar investment that factory workers have in their professions. No college money, no tools, they just show up and work. Even auto mechanics have to invest more and get paid less.

  54. Posted December 22, 2008 at 3:18 pm | Permalink

    No matter how you slice it, they are grossly overpaid.

  55. Posted December 22, 2008 at 3:20 pm | Permalink

    While one may argue that it is in societies interest to be able to pay the working class big bucks to do manual labor,

  56. Posted December 22, 2008 at 3:21 pm | Permalink

    When educated UAW workers are overpaid for manual labor, that wage comes directly out of some other person’s pocket when they buy a car, not magically from some money-machine in the sky. The poor and nonUAW pay for the artificially inflated lifestyles of a few that were privileged enough to join the exclusive club of the UAW. And you want to talk of classicism.

  57. Posted December 22, 2008 at 3:22 pm | Permalink

    Sorry for the piecemeal approach to the last comments, I was having trouble posting.

  58. kjc
    Posted December 22, 2008 at 3:58 pm | Permalink

    “We have a large supply of uneducated people (especially in Michigan), thus they are cheap and affordable and should be paid no more than an average fast food worker.”


  59. Posted December 22, 2008 at 4:11 pm | Permalink

    Hey, the truth hurts. Maybe the comparison with fast food workers is extreme, but the truth is, that until uneducated people become scarce, wages will never improve.

    You want better wages, get educated, get a salable skill, get good at something, get something that other people don’t have. It doesn’t have to be a university degree, it just has to be something that’s in demand that people can’t do for themselves. Even your local plumber knows this (they deserve what they make).

    Until then, the Wal-Marts of the world will be waiting, $5.00 bill in hand since that’s all a high school dropout is worth to the greater economy.

  60. kjc
    Posted December 22, 2008 at 4:21 pm | Permalink

    Uh huh…

  61. Brackache
    Posted December 22, 2008 at 4:48 pm | Permalink

    Wallstreet Journal essay 2 days ago about the inflation cure being worse than the deflation disease, like I’ve been saying.

    Not proof, obviously, but just to show I’m not just some lonely kook making shit up on a blog. …not just that, I’m also a toenail collector.

    Here’s the exact same S. Carolina yada yada document from Yale Law. Hopefully Yale Law is a credible source. Note the similarities to the first one I linked to. Just read it. It’s plain as day. I’m sorry Mark H., but I shant be joining your book club, since the text of the document itself is pretty plain, and I don’t have the time or inclination to read a few books between comments. I hope at your CB historical document discussion someone brings up S. Carolina’s history of State’s Rights thought, nullification (during that known abolitionist Andrew Jackson’s Presidency (sarcasm)), and tariffs. Again, I’m not saying slavery wasn’t a cornerstone issue. What I am saying is that S. Carolina had a legal right to Secede, which they spelled out quite plainly, citing legal precedent. It’s right there in the damn document.

    I’d appreciate it if you don’t imply that I’m basing my beliefs on blind faith, dogma worship, and political ideology, since it’s not true. Nor am I anti-labor. I think I’ve demonstrated more open mindedness and intellectual honesty than many of my detractors. I am trying to use my “I” statements here, for shit’s sake.

    Thanks Collapse and js. I know you disagree with my li’l thesis, js, but I’m eternally grateful for your acknowledging the decades-long inflationary period we’ve been in, which I can’t believe was even in dispute in the first place. Now we can move on from that point, at least.

  62. Brackache
    Posted December 22, 2008 at 7:20 pm | Permalink

    Peter Schiff is thought by some to be less condescending and gratingly know-it-ally than myself… at least one month ago. He may be feeling more exasperated these days, however.

  63. kjc
    Posted December 22, 2008 at 7:39 pm | Permalink

    Sorry if I hurt your feelings, Brackache. I really was just tiring of your rhetorical
    “seeing man among the blind” thing. It was on my nerves, that’s all. I know you’re attached to this way of addressing others, and those who know your character (admittedly i don’t, nor does anyone here know mine) think it’s cute or charming or whatever. My friends like me too.

    I really can’t parse you or Peter Schiff, which maybe means I don’t know enough. Mark H makes more sense to me–and his idea of underlying dogma in your argument resonates. But I’ll just try to learn what I don’t get I guess. There’s plenty.


  64. Mark H.
    Posted December 22, 2008 at 7:46 pm | Permalink

    See the following article for a detailed discussion of the vital point about the Big Three and their history, namely that their workers earned enough to become middle class, thus doing a great deal to create American prosperity.

    Auto Destruct
    by Jonathan Cohn
    The tragic nobility of Detroit.
    Post Date Wednesday, December 31, 2008.

    The Wall Street Journal piece James Grant, cited by barache, is basically just a high-flying version of the hard currency religion barache adheres too: Dogmas substituting for evidence. Grant’s claim that —
    “In ages past, it was so simple. A central banker had one job only, and that was to assure that the currency under his care was exchangeable into gold at the lawfully stipulated rate. It was his office to make the public indifferent between currency or gold” is patently absurd as history. But it is powerful as ideology. He is a direct descendant of those who opposed the Federal Reserve Act of 1913, those who opposed inflating the currency in the 1890s. Likewise with Heritage Foundation piece that the Dude points to. Come on, Dude, don’t rely on right-wing think tanks with their anti-labor corporate funders to educate you!

    Economics is complex. The Wall St Journal has both admirable reporting, and the most dogma driven, ideologically predetermined editorial and op ed pages in the western world. If you can’t read the Financial Times – a respectable Tory outfit – read the Journal’s journalism and skip its two pages of ideological commentary.

    JS, JCK, Old Goat’s Wife – thanks for the sage observations. In varous ways, you point out that we have an economy for the sake of people, not the other way around.

    There is no actual ‘free market’ – the market is always shaped by now market forces. Some good, some bad. Forces that tend to raise the standard of living of Americans and other working people, by my moral code, are admirable. What “hard currency”, pro free market ideologues favor is a race to the bottom, and that’s a race toward destruction.

    The Big Three have countless flaws, and so does the UAW. But they did raise the standard of living for American workers – which is a good thing indeed. Nelson Lichtenstein’s book THE MOST DANGEROUS MAN IN DETROIT; WALTER REUTHER AND THE FATE OF AMERICAN LABOR (1995) does a great job of showing how ambitious the early leaders of the UAW were, and how their defeated ambitious narrowed the range of the possible for the rest of America.

  65. Mark H.
    Posted December 22, 2008 at 7:49 pm | Permalink

    opps – “now market forces” should have been “non market”


  66. Brackache
    Posted December 22, 2008 at 7:49 pm | Permalink

    cheers, kjc. Sorry I blew up at you about the guns that one time.

    Here’s more random videos for everyone.

    This is Jim Rogers. He has a powder blue bow-tie and lives in a widescreen t.v.

  67. Brackache
    Posted December 22, 2008 at 8:02 pm | Permalink

    Again Mark H. makes sweeping generalizations that everything I think or say on the subject is to be dismissed as blind faith in a religious dogma that is incorrect, subtly works in a little class warfare to emotionally hook the target audience and demonize my motives a smidge, then doesn’t back up his detractions at all.

    Now that’s real scholarship.

    I hope you paid a lot of money for your degrees, cause my worthless BFA is kicking your ass.

  68. Brackache
    Posted December 22, 2008 at 8:53 pm | Permalink

    Also, kjc, your feeling of the impressions I leave are perfectly valid. It bears noting that none of my friends who read and occasionally comment on mark’s blog came to my defense, unless Collapse was one in disguise.

    I’d even go so far as to say your impression of my demeanor was probably more accurate than my embattled-feeling self was prepared to admit at the time. They were probably sitting there saying, “you’re not dragging me into this, you off-putting, self-absorbed ass. You’ve got it coming.”

  69. Mark H.
    Posted December 22, 2008 at 9:30 pm | Permalink

    Thanks for keeping up the ad hominem attacks, Braachache, glad you’re not being unpredictable in style of argument.

    For people seriously interested in the causes and cures of this economic crisis, reading the eonomist Robert Pollin is worthwhile. And he writes clearly.

    See his essay “How to End the Recession from the Nov. 24 issue of The Nation,

    This essay’s subtitle is “the economy needs a shot of public investment – and if it’s green, the payoff will be the greatest.” I think it’s among the best stuff written this fall — it is a great assessment of, among other things, the issue of deficit spending and debt in the context of. The answer is thru stimulating public spending to create wealth and sustain living standards. And he shows that America’s $14.4 trillion economy can afford the necessary deficits – a trillion this year would about equal, in inflation adjusted dollars, the 1982-83 deficit, when federal deficits reached 6% of the GDP.

    Pollin also published “We’re All Minskyites Now”, an essay from the Nov. 17 issue of the Nation magazine. It’s also available online but the one I cited above is broader in scope — though I love the title of this second essay, with it’s rift on Richard Nixon’s famous “We’re All Keynesians now” statement circa 1971. If only the nation’s leaders in govt. and business had retained some of that Nixonian Keynesianism instead of embracing the Freidmanite free market ideology, then maybe we’d not now be facing a major crisis.

    Pollin argues far better than I can that the root of the economic crisis is inadequate aggregate demand (weak consumer spending). And that brings me back to how Mark started this tread so long ago – the bailout of the auto industry: Jobs and spending power are what’s at stake.

    Oh – the Nation also recently had a great essay on revitallizing the Big Three by converting them to green companies. I like the idea, it’d be good for Michigan and the earth, and there’s no way that the ‘free market’ would do such a thing without govt. leadership. That’s what democracy is for, among other things, to help society solve its problems.

    By the way, if I recall correctly, Pollin and William Greider are among the writers i read who’ve predicted, in broad outline, the collapse of the economy that we’re now living thru. But seldom are the smartest commentators on the TV screen.

    Peace and prosperity to one and all! We’re all mark marynard readers now.

  70. Old Goat's Wife
    Posted December 22, 2008 at 10:52 pm | Permalink

    Dude says “UAW workers aught to get an get educated, get a salable skill, get good at something, get something that other people don’t have.” (you have to wonder at Dude’s age) Don’t you realize these are your elders. There are very few UAW men or women that are under 40 years old. In fact most are over 50 and older. It is not as if they can begin an entry level job after 4 years at university. Many UAW workers have accumulated lots of community college credits, yet they have age working against them at every corner. Most older workers that are unemployed have given up looking for work. You may snear at decent living wages, but we boomers know better.

  71. Posted December 22, 2008 at 11:02 pm | Permalink

    First of all, you’re never too old to get an education or a new skill. You don’t give people enough credit. I have had excellent students starting new careers in their 60’s after having been laid off from the factories. In fact, I ran into one the other day and she had just starting working up at UM hospital and was doing great. She’s 62.

    Second of all, you guys should have planned ahead. The writing’s been on the wall for decades. It’s not like the signs weren’t there.

  72. Posted December 22, 2008 at 11:04 pm | Permalink

    Oh, and you changed my sentence. I didn’t say UAW workers should get educated (although they should). I said “You” as in an ambiguous “One”.

  73. Old Goat's Wife
    Posted December 22, 2008 at 11:04 pm | Permalink

    And, try standing 8 hours doing physically demanding (“unskilled”) repetitive motion work on a fast moving line all day, day in and day out. If you need to use the bathroom, you must wait till someone can relieve you for your break, and all this breathing air that is unfit and does not meet clean air standards. The only way they earn the bigger bucks is to stay half a day into the next shift or work their days off. Working overtime most weeks of the year with a shift premium advantage won’t earn you anywhere near 100K a year. With the past contract medical benefits were slashed dramatically, w/ 150% increases in co-pays, with those concessions the bennies aren’t great anymore either.

  74. Posted December 22, 2008 at 11:08 pm | Permalink

    I’ve done it many times. It sucked. The best wage I got was $12.00 an hour because that’s all that particular job was worth. Most of the shit factory jobs I’ve had paid less. Of course, the union people always got more, but that’s another topic.

    Your pay scale is not relative to the job suck-ass-ness. If that were true, most of the world would be millionaires.

    You strike as feeling rather entitled.

  75. Posted December 22, 2008 at 11:11 pm | Permalink

    However, the things you mention about working conditions, schedules and bad air are precisely what factory unions are for. Has the UAW done a good job in that regard? I bet they have. Maybe I’m wrong.

  76. Old Goat's Wife
    Posted December 22, 2008 at 11:13 pm | Permalink

    American workers deserve good wages, good benefits and good retirements. We use every penny to educate our kids. We should be working together to raise the American standard of living not tearing each other apart and envying what the blue collar worker works so hard to earn, raising the standards for white collar too. My UAW husband has been getting educated all along the way but again, who will make the house payments and EMU payments while we start new work. As for handwriting on the wall, well now my crystal ball says that my retirement should have been in my mattress. I am excited for your 62 year old friend that got a job, crack open the champagne for her…

  77. Old Goat
    Posted December 22, 2008 at 11:47 pm | Permalink

    Hey buddy, you’ve been doing a tremendous job there. Productivity is up, quality is up, work places are safer than ever. Here’s your reward: a pay cut, a lay-off, theft of your pensions, higher taxes. Maybe you should consider working for free. We could lower the price of the automobile by a whopping 10%. That’ll get ’em moving again, that is, if we can find a bank to underwrite the car loans. The banks don’t need the American Auto Industry to make money from car loans anymore, they can make just as much off of a Jap or Chinese car. Just like T.V.’s and hair dryers, you won’t be able to get an American made car in 20 years. Union auto workers are a dying breed. Killed off by unfair trade laws and public animosity. Have fun at your new job, pushing paper and producing nothing.

  78. Brackache
    Posted December 23, 2008 at 12:11 am | Permalink

    Thanks for keeping up the ad hominem attacks, Braachache, glad you’re not being unpredictable in style of argument.

    Your accusing me of relying on ad hominem attacks both in this argument and as a consistant tactic in general is unjustified and untruthful. Of course I’ve done it in the past, but to characturize me as relying on ad hominems as a fall back to a lack of logic in my argument is a mischaracturization, especially in this specific case.

    Unless you consider my pointing out your own ad hominem attacks and criticizing the unscholarly nature of your argument as an ad hominem attack. Which would be silly. Pointing out logical falacies is not an ad hominem attack.

    Is my pointing out that you continue to spell my name wrong despite your claim to sincerity in your apologizing for doing so an ad hominem attack, for instance?

  79. Brackache
    Posted December 23, 2008 at 12:16 am | Permalink

    spelling sucks

  80. Brackache
    Posted December 23, 2008 at 12:23 am | Permalink

    If only the nation’s leaders in govt. and business had retained some of that Nixonian Keynesianism instead of embracing the Freidmanite free market ideology, then maybe we’d not now be facing a major crisis.

    Now that’s somethin’.

  81. Brackache
    Posted December 23, 2008 at 10:53 am | Permalink

    Imagine a 50 year old Philip Seymour Hoffman talking economics with a 50 year old Larry from the 3 Stooges, after both sat in a car full of exhaust for a couple minutes.

    If you have trouble picturing it, try watching this.

    Please be advised that everyone on Forbes may or may not be a right wing secessionist gold fanatic who you should immediately ignore because they’re out to make your children work in the coal mines.

  82. Brackache
    Posted December 23, 2008 at 11:23 am | Permalink

    Here is an English guy and a German fella talking about a depression+hyperinflation as well. The German fella explains our similarities to the Weimar Republic’s situation much better than I did… actually I didn’t really explain it at all.

    It is distictly possible that the German guy is a closet nazi, and the English guy wants to reconquer the American colonies and destroy the unions, so watchers beware.

  83. Mark H.
    Posted December 24, 2008 at 2:01 pm | Permalink

    See James Livingston’s essay “Their Depression and Ours,” part I, posted on the History News Network a couple of months ago:

  84. Brackache
    Posted December 25, 2008 at 8:30 pm | Permalink

    Merry Christmas, Mark H. & everyone else, by the way. Happy Holidays, happy nonholidays, happy free days off for athiests.

    I look forward to continuing to drag this out afterwards, when this whole peace on earth, good will towards men thing has grown stale again.

  85. Mark H.
    Posted December 26, 2008 at 10:57 am | Permalink

    Happy holidays back at you Brackache and all others!

    While sorting out a pile of periodicals for recycling, I came across the April 14 2008 issue of THE NATION magazine, featuring Jeff Faux’s article “Is this the big one?” which sagely explores how “the blowback of housing deflation on our massively overleveraged financial markets has seriously constricted the flow of credit — the lifeblood of the world’s largest debtor economy”.

    The same issue also has Robin Blackburn’s “For a Social Bailout” arguing that the bailout of Bear Stearns was stupidly handled, and instead should have involved the Government acquiring assets, to be held and used for socially constructive purposes, rather than just giving public monies to private interests. Both remain very relevant pieces now, when the fiscal crisis is so much worse – but in ways not surprising to readers of Faux and Blackburn.

    The federal govt. should save the Big Three auto companies, but should do so with some serious strings and some serious plans for the public good. Blackburn’s ideas on this are very relevant, but too progressive to be taken up in the mass corporate media.

  86. mepatrickyounot
    Posted December 29, 2008 at 12:49 am | Permalink

    factsareterriblethings wrote, “Mepatrickyournot you refer to the Lehman Brothers bailout. Either you have made a simple mistake or you live in an alternate reality.”
    Just a simple mistake. I realized it while I was typing it, but just kept on typing anyway.
    For a while there while I was watching those rotating new shows on television, I was thinking the gov’t would in fact bail out Lehman Brothers.
    I am taking a break for a while. I am going to bone up on Economics. I’ll be back.

  87. Brackache
    Posted December 30, 2008 at 5:13 pm | Permalink

    And we’re back.

    I think we should (and are beginning to) fight this battle in the style of ancient Maditteranean peoples: via champions.

    Accordingly, here are people who get paid to argue about this same tedious economic shit, for everyone’s viewing pleasure:

    Part 1

    Part 2

    Peter Schiff, who we’ve already heard from, is the champion of the free market capitalist (i.e., my) side.

    I can’t rightly elect Mark H.’s champion for him, but in this case I guess the other guys represent the other side(s), for argument’s sake.


  88. Brackache
    Posted December 30, 2008 at 5:14 pm | Permalink

    I know I spelled it wrong.

  89. kjc
    Posted December 30, 2008 at 6:34 pm | Permalink

    Peter Schiff…he’s a maverick, right?

    Do I have to be smarter than Peter Schiff to find his faith in the market dogmatic? Or reactionary–based on what he perceives to be bad govt economic policies, going back at least to the (wrongheaded) creation of the Federal Reserve? I don’t know more than he does, but to my mind there’s something wrong with govt bad/market good. He has faith in markets and capital and the govt just needs to get out of the way, which they’ve never adequately done according to him (despite appearances). If he can point to govt economic policy he thinks has turned out badly, ok. But that everything would have been fine–no great!–if govt had done nothing? How can he prove this? He suggests if Hoover had TRULY done nothing, the Great Depression would never have happened. This is based on a belief in capitalism that I don’t share or understand or see how he can justify. He just asserts that it’s true.

    He wants every company to fail and jobs to be lost willy nilly cuz that’s just the medicine we need. Then he says Americans should stop consuming and save. But save what? How do people with no jobs save money? Obviously he’s smart and knowledgeable but he’s also cavalier about the lives of the people who will be affected. He says of course it sucks but that’s just how it is–the govt can’t help. If I believed the world were composed only of economic forces, I’d let him be head preacher. But in the meantime, I distrust his perspective. (On the upside, Brackache, he makes you seem shy and unassuming).

    I also don’t like this hype about how he called the collapse (of course NPR had to jump on this bandwagon too). The progressive end of the political spectrum has been indicting Alan Greenspan et al for years. And they’ve done it without referring to “overpaid auto workers”.

    Anyway, this is all to say: I watched the videos.

    (Still trying to think of a progressive champion. Krugman?)

  90. Brackache
    Posted December 30, 2008 at 7:13 pm | Permalink

    A perfectly fair response.

  91. Mark H.
    Posted December 30, 2008 at 7:57 pm | Permalink

    Peter Schiff seems to me to be an ideologue who uses his ideal of a free market Utopia as a critique of actual historical reality. This is annoying habit, using an ideal but never yet realized Utopia that exists in the mind of true believers, to debate against actual reality. Communists used to use their Ideal of Communism to critique capitalism — and that was as pointless as what Schiff does today.

    Let’s evaluate reality — the reality is that no society has ever become a capitalist society without strong and vigorous support of the State; and no capitalist economy has long prospered without direct and sustained support by the State.

    In short, capitalism and businesses NEED government. There are no meaningful historical exceptions to this…..yet there are ideologues that believe otherwise, as a matter of faith or dogma. John McCain is one such person – he argued that our economy suffers from too much regulation; yet when the bottom fell out on Wall St. the traders there of course clamored for Government intervention.

    May God save us from ideologues of the extreme left and right alike. May we, as citizens of a democratic society, invest the time and effort required to comprehend reality and make appropriate decisions!

    Champions for my point of view? I thought I’d put my point of view forward rather well on my own, and cited a lot of authors too. Jeff Faux, Robert Pollin…. Paul Krugman is a great and clear thinker, and he earned that Nobel prize on the merits. Schiff? isn’t he just a paid hack of the corporate right wing? He hasn’t got an original idea in his head, and no observations about the actual economic situation of our present moment in time that aren’t just recycled ideas from the hard currency, anti-central bank Robber Baron class of the last century. Don’t rely on anything posted on the corporate cable networks for anything in debt or meaningful or too critical of the status quo….not if you want champions for a democratic point of view.

  92. Mark H.
    Posted December 30, 2008 at 8:48 pm | Permalink

    I meant “depth” not “debt” in the 2nd to last line above. sorry.

    the economy exists for the sake of people. economic ideas ought to comport with reality, not with utopian theories. and yes, i ought to be more careful with my spelling.

  93. egpenet
    Posted December 30, 2008 at 10:50 pm | Permalink

    History as defined by Professor Robert Deasey is: “People in events.” The economy is such an event, now on a global scale.

  94. Brackache
    Posted December 31, 2008 at 12:14 am | Permalink

    Tell you what, Mark H. All unresolved issues of who’s making sweeping dogmatic subjective statements based on blind ideology and who isn’t aside, let’s have an intellectual honesty contest:

    If we don’t have hyperinflation, I’ll admit on this thread that I, Schiff, and everyone else who’s predicting hyperinflation are wrong….

    IF you agree that if we DO have hyperinflation, you admit that we were right.

    Let’s give it five years (12/31/13) just so I can’t keep pushing back the deadline into infinity, as Austrian’s are wont to do. Of course, if hyperinflation happens before then, game’s over.

    I’ve put this thread in my favorites just for the occasion.

    We could add a monetary componant to it, but I think it should be tied to our competing ideologies: I pay you a set amount of fiat US dollars, you pay me a set weight of silver bullion.

  95. Brackache
    Posted December 31, 2008 at 12:24 am | Permalink

    Silver closed at $11/oz 12/30/08, so let’s round up and say $25 of my fiat dollars vs. 2 troy ounces of .999 silver from you.

    …if proposing such a thing is legal. If it isn’t, I want nothing to do with this dastardly idea.

  96. Brackache
    Posted December 31, 2008 at 1:21 pm | Permalink

    Your yay or nay is requested, Mark H.

  97. Mark H.
    Posted January 1, 2009 at 3:46 pm | Permalink

    Brackache — thanks for the invitation to bet. But first, can you quote anything i wrote here that asserted that there will be no hyper inflation in the next five years? Don’t think I said that. I did say that deflation was at present a problem, and the economic crisis has more to do with a scarcity of available credit and inadequate aggregate demand than with the alleged debasing of the currency that hard money ideologues always imagine to be lurking around the corner. What’s your argument with me about? My beef with you is that you are barking up the hyperinflation tree and attacking labor and the living standards of unionized workers, when in fact the current economic problems do NOT stem from either hyperinflation or inflation of any kind. Nor do our current economic problems stem from highly paid workers in the auto industry. (Too highly paid CEOs – well, there’s some merit to blaming the current economic crisis on them. More merit in blaming it on a too little regulated ‘free market’ that allowed the crimes of Wall Street that have prevailed since the repeal of Glass-Steagall in 1999).

    Government is hardly the answer to all problems. But the capitalist economy has NEVER had a true crisis that was resolved (meaning, the resumption of economic growth and rising living standards) without government, or the State, playing a leading role.

    what Brackache is your recommended response to the current economic crisis? It seems you favor doing nothing aside from taking every possible step to minimize the risks of inflation (a la Mellon circa 1931), including steps that would greatly reduce the wages of American workers and perhaps close down the last great American manufacturing companies. I don’t mean to put words in your mouth, but from re reading your posts here, that’s the closest thing to a program I can detect in your comments. If fear of inflation is to drive everything, the logical result is to do nothing – as Mr. Mellon recommended to Hoover: let the economy wring out its own weaknesses. Depressions were thought to be self-curing. The men running the Fed didn’t know how aggregate demand drove markets. Keynes was not yet published. So if you could please clarify you idea of what the proper wise response is the current response, I will perhaps have reason to not identify you further as the ghost of Andrew Mellon and his ilk.

  98. Brackache
    Posted January 1, 2009 at 9:19 pm | Permalink

    What’s the matter McFly… CHICKEN???

  99. Mark H.
    Posted January 1, 2009 at 9:52 pm | Permalink

    Ah, that name calling habit again. So unbecoming – it does nothing to make your case credibile. Calling me “CHICKEN” because I avoid accepting a bet on a proposition framed entirely on your terms. Wow, that’s impressive….when you’re in the first grade, maybe. It’s a form of argumentation that allows you to avoid ideas, evidence, facts, and meaningful interpretations.

    You call me chicken, but you refuse my intellectual challenge to you — “can you quote anything i wrote here that asserted that there will be no hyper inflation in the next five years? Don’t think I said that.” Only a fool would agree to a bet in a favor of a prediction that is defined by one’s opponent and does not reflect one’s own opinion. (Note however that I am not signing on to your doctrine of faith that we face a hyper inflation threat.)

    If you are incapable of making a case for your ideas, or not interested in doing so, fine, that’s your choice, Secretary Mellon. But I am bored with trying to argue with someone who can’t respond to a pointed issue and so often changes the topic rather than facing up to complex facts and ideas. You avoid all the issues of the contemporary economic crisis, and wave the same hard currency flag that’s been flown since 1896 hard currency dogmatists.

    And other than putting down auto workers, I think you’ve contributed nothing to the actual theme on which this tread started – the auto industry crisis.

    I’m done here, Mr. Baraache/Mellon, since you’ve had almost nothing to say of substance for so long.

    My thanks to for hosting this long string of comments.

  100. Brackache
    Posted January 1, 2009 at 10:07 pm | Permalink

    And goodnight.

  101. Brackache
    Posted January 2, 2009 at 4:04 am | Permalink

    If anyone else has the courage of their derisions to take me up on the bet, let me know.

    In the meantime, here’s an embarassingly uncharismatic guy with terrible production values and a huge bow-tie doing a really long and boring 5-part lecture about why the Federal Reserve and fiat paper currency suck so bad. It’s more of a scholarly approach than the quick econ cable show videos I’ve posted, if you’re into that sort of thing. I’m only 1/2 way through the second one myself so far. One time he calls Hamilton Jefferson, and he keeps saying “and back to me, please” to his slide show operator. It’s really embarassing.

  102. Brackache
    Posted January 2, 2009 at 7:23 am | Permalink

    Well, since I slept all day with a hangover, I stayed up all night watching the lecture myself, and I think it’s a worthwhile watch. It ties into the original topic quite nicely; it ended very pro labor, contrary to the unsupported class warfare derisions Mark H. was making regarding the free market, anti federal reserve, pro gold currency philosophy.

    It occured to me a long time ago that many people misunderstood my early “take that, unions” and “Have fun singing your union songs in the unemployment line” remarks. If you look back, you’ll see I tried to correct those misunderstandings to no avail. I’ll try again, just so we’re all clear, cause there’ve been a lot of inaccurate accusations thrown around to try to stir up prejudice.

    mark first theorized that the big 3 bailout wasn’t happening in order to destroy the unions. Then the big 3 bailout happened. So I teasingly said “take that, unions,” because irony is funny, not because I was rooting for people to destroy the unions. Get it?

    My union songs comment was in regard to thinking that solidarity and bailout money was the solution to the problem. The worse problem, I assert, will be massive inflation caused by the very bailouts everyone is gunning for. Again, not being all ra-ra for the destruction of unions, although I can see how both of my comments were misconstrued.

    To be forthright, I am against unethical, unwise union practices as much as I’m against unethical, unwise business practices. I don’t take sides that demand putting on a pair of moral blinders, no matter who calls me what names.

    Anyway, if even one person is still reading this thread besides me and gives a damn enough to watch a long boring lecture, you should watch the long boring lecture at some point.

  103. Brackache makes a concession, then ruins it with an I-told-you-so
    Posted January 9, 2009 at 11:00 am | Permalink

    Perhaps mark’s instincts regarding intent to destroy the unions was more right than I gave him credit for!

    Luckily, I’m still right about the bailout sucking. Funny how both bailouts had suckitude hidden in the fine print. Haste makes waste. That’s why we have to beware the “we have to pass it now or we’re all dead” rhetoric that they keep using.

    Free Press article about the bailout’s fine print stating that the deal’s off if the union strikes.

  104. Robert
    Posted January 9, 2009 at 1:37 pm | Permalink

    Brackache, I still don’t see how your proposed bet would have in any way demonstrated the truth or falsehood of anything you or Mark H said in your disagreements.

  105. Brackache
    Posted January 9, 2009 at 4:46 pm | Permalink

    Really? Beyond my moral beef with bailouts, and that they probably won’t work anyway, my whole warning regarding the bailouts has been that they would lead to hyperinflation. What’s not to get?

  106. Brackache
    Posted January 25, 2009 at 7:22 pm | Permalink

    I just found this and sent it to OEC, because I think it’s really funny in a self-depricating sort of way. Maybe some folks don’t believe it, but I am so stinkin’ intellectually honest (and humbler than all you contemptable jerks) that I delight in finding chinks in my own armor and broadcasting them.

    A well-known political figure who agrees with me on bailouts, the threat of spending-induced hyperinflation, ending central banking, and hard currency.


  107. Brackache
    Posted January 25, 2009 at 7:27 pm | Permalink

    It’s a joke, by the way.

  108. mark
    Posted January 25, 2009 at 8:47 pm | Permalink

    That’s great stuff, Brackache. Did Ron Paul send the link to you?

  109. Brackache
    Posted January 25, 2009 at 10:04 pm | Permalink

    No, he and I got trashed and whipped it up over the weekend. It was way funnier at the time.

    Also, I totally thought it was real at first because I’m a fucking moron.

  110. Brackache
    Posted January 26, 2009 at 5:29 pm | Permalink

    GM lays off 2000, union says will scratch job banks, even after auto company bailout.

    Somebody explain to me how the auto company bailout actually helped auto workers, cause I’m a simple minded fucking moron.

    While it can be forestalled, in the end supply and demand (the marketplace) trumps everything, and teaches hard lessons the only way it knows how — the hard way. I’m not gloating, I think this sucks.

  111. Brackinald Achery
    Posted February 9, 2009 at 7:21 pm | Permalink

    Apparently, GM is going to invest $1billion from the US taxpayer-funded auto company bailout… in Brazil.


    Disclaimer: I have no idea if this source is reliable or not.

    No one is too big to fail. All bailouts are crony capitalism and suck balls. Don’t buy the rhetoric to the contrary.

  112. Brackinald Achery
    Posted February 9, 2009 at 7:53 pm | Permalink

    Here’s an article disputing the last one I just posted.

  113. Brackinald Achery
    Posted March 5, 2009 at 9:09 am | Permalink

    Here’s a NYT article which mentions that Ford (refused to take a bailout) is doing better than both GM and Chrysler (both bailed out). It’s also in the news today that GM is thinking it might go bankrupt.

    Bailouts suck because they create moral hazard, among other things. Dulling a company’s need to compete by providing a publicly funded safety net dulls its ability to compete, and without the ability to compete, it will fail.

  114. Oliva
    Posted March 5, 2009 at 10:22 am | Permalink

    It pays to be the one in trouble first–or to fess up to trouble first. Ford did its restructuring months (year?) ahead of the others. Plus, it has that little made-for-USA Fiesta coming out at the end of the year, 40+ mpg, plenty of airbags, affordable.

  115. Brackinald Achery
    Posted March 13, 2009 at 2:55 pm | Permalink

    China is the main reason we can spend a lot of money. They loan it to us. If they cut us off, which they’re making noises about more and more, good bye gravy train.

    Please note their predictions of massive inflation (by that I mean devaluing of our currency) in a few years, which is only caused by big government spending of money based on nothing… not by small government free marketteerery or hard currency ideologies such as mine. If you want to blame greed, blame the greed of the American people for “free money” from the Feds at someone else’s expense.

    The benefit of using gold and silver or other worthy commodoties as currency instead of fiat money is that governments can’t easily devalue it by printing more and more to pay for their elaborate unconstitutional vote buying schemes (i.e.: big government). Devaluing a currency screws everybody by making their savings and wages invisibly worth less, without us having recourse.

    I haven’t ranted in a while, that was nice.

  116. Brackinald Achery
    Posted March 13, 2009 at 3:33 pm | Permalink

    Same story, different article.

  117. Brackinald Achery
    Posted May 2, 2009 at 12:23 am | Permalink

    China’s cutting us off, like I feared. That means the fed has to print up more money to buy our own treasuries to pay for government obligations, which devalues the dollar, which is what treasury bonds promise to pay, which will make sensible people less interested in buying treasury bonds, which is the only way to reign in runaway inflation, which means the fed has to print up more money to buy more treasury bonds to pay for government obligations, etc., until a Happy Meal costs $300.

  118. Brackinald Achery
    Posted September 9, 2009 at 9:18 am | Permalink

    Taxpayers face heavy losses on auto bailout.

  119. Brackinald Achery
    Posted September 9, 2009 at 9:20 am | Permalink

    What I meant to say was, Taxpayers face heavy losses on auto bailout.

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