Just to clarify, while I have been lobbying hard for Obama’s economic recovery plan to pass, I still think it’s asinine to bail out those distressed American financial institutions, that, in my opinion, brought it on themselves. What we as a country need is to invest our limited resources in green jobs, education and infrastructure, not piss money down a rat hole so that unrepentant executives at our failed banks can continue their opulent lifestyles. I know that Nobel Prize-winning economist Joseph Stiglitz was referring to England yesterday when he said that the government should let every failing bank go bankrupt, and create a new, more credible banking system under temporary state control in its place, but his words ring true on this side of the pond as well.
I can appreciate that people are scared, and that they don’t want to send the economy spiraling into depression, but how in the world can we ever expect to set things right without first facing the reality of the situation head-on and dealing with the systemic problems resulting from years of criminally poor oversight and unparalleled greed?
Someone needs to start a serious grassroots “Stimulus YES, Bailout NO” campaign today. Clearly nothing is going to change until our leaders in Washington know that we’re watching and intend to hold them responsible.
26 Comments
I would add “NO Pork” to the slogan. The stimulus bill needs to be un-porkedified.
Obama is proposing caps on executive pay today in hopes of making the bailout more palatable to American voters. ($500,000 for bank CEOs taking government funds.) Clearly he’s feeling pressure. People just need to keep it up.
http://www.nytimes.com/2009/02/04/business/04pay.html?hp
I think it was Citgroup who recently spent part of the bailout money on a new corporate jet. Makes you sick.
The heads of these companies should be pleading for their lives, not negotiating as to how much of the bailout package they should be able to take home. This is ridiculous.
Isn’t Obama really starting to sound like Bush now with all this “catastrophe if it doesn’t pass now” rhetoric? Red flags still not going up yet?
Tell you what, I’ll not mention hyperinflation/devaluation of the dollar again if everybody promises not to blame it on free market capitalism if it happens. Seeing as how free market capitalists are the major voices crying hyperinflation as a result of government over spending. Deal?
Even some republican governors are for it because PORK is what is needed, we in Ypsi need help w/ Water Street. Every state needs bridge repair money, road repair money, money for public schools, money for fire & police… and on & on, give us PORK. Tax cuts started us down the road to perdition and now the economy is finishing us off.
I would have been nice if the government gave the money to the people to pay off their debt to the banks. Then the banks have money again and the people are on their way out of debt. Win win right?
Why don’t we all just get $100,000 each from the feds, while we’re at it?
The problem with “Pork” is that the concept is so subjective … Frankly, while people usually feel that federal funding for a new building or road in their own district is a worthwhile investment, they often feel that similar funding for projects in other areas equals “pork.”
In normal times, the goal should be to direct federal spending toward those projects that can bring the most positive long-term impact to the greatest number of people; but these are clearly not normal times. With millions of people losing their jobs, and the economy continuing to spiral downward, there is an urgent need to not pump money into the economy — and to stimulate the creation of much-needed jobs.
Since the final, c. $900 billion (!) stimulus package will have to gain favor with a majority of Congress, it will no doubt be jam-packed with line-items. Therefore, I’m not foolish enough to argue that there won’t be any spending in it that isn’t absolutely essential (i.e. “Pork.”) Still — from what I understand, it seems the Obama Administration is working hard to focus the bulk of the funding on the kinds of things that will not only quickly inject money into the economy and create needed jobs — but toward items that will also bring longer-term public benefits by rebuilding our frayed infrastructure, gaining greater energy efficiency, fostering scientific research, and improving education, health care, and the environment.
Like many people, I’m very concerned about the rapidly-growing mountain of debt we are leaving to future generations (although, frankly, much of of that tab was run up by the previous administration.) Still, since we are already going to saddle future generations with such enormous debt — I hope we can, at least, also leave them a society that is healthier and better-educated, and an economy that is more sustainable and equitable.
I think that is what President Obama is trying to do. While there are many things about the proposal I’d like to see changed … less money for roads and more for rail-freight and public transit, for instance … it is probably the best we’re going to get, given the gravity and urgency of our situation– and the existing political process.
Only time will tell whether it will actually work or not. But, so far, I certainly haven’t heard anyone offer up a better alternative …
Sorry, I mean to say … “urgent need TO pump money into the economy…”
Brackache, what mechanisms keep free market capitalism from being hijacked by crony-capitalism?
A government that doesn’t do shit it isn’t explicitly authorized to do with unlimited fiat money to fund it.
Failing that, a populace that gives a shit enough to do something about it.
Failing that, an economic catastrophe.
Tell you what, I’ll not mention hyperinflation/devaluation of the dollar again if everybody promises not to blame it on free market capitalism if it happens. Seeing as how free market capitalists are the major voices crying hyperinflation as a result of government over spending. Deal?
Since nobody seems to believe in their pro-government-spending position as strongly as I believe in my anti-government-spending position, and has shown it by not taking me up on my hyperinflation deals/bets, I have no choice but to post another annoying Peter Schiff hyperinflation sky-is-falling video that no one wuill watch.
IGNORE ME!!!!
Another buzzkill.
Brackache, I’m not sure your answer makes sense to me. Are you saying the first line of defense against crony-capitalists overrunning a free capitalist system is some sort of government intervention? What kind? What would trigger it? How would it be carried out?
I understand the second and third lines of defense you mention though. Of course the second line of defense is hopeless and the third line of defense is actually the consequence.
From wikipedia (I know, I know. I use wikipedia for simplicity’s sake) —
Crony capitalism is a pejorative term describing an allegedly capitalist economy in which success in business depends on close relationships between businessmen and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.
I mean if Government legislators stuck to their legal limitations, rather than taking on illegal powers not granted them by the Constitution (highest law of the land), in rebellion against the highest authority of the land (the People), crony capitalism couldn’t happen nearly as easily as it does now. Using the general welfare and commerce clauses to completely nullify the 9th and 10th ammendments as clear indicators that the Constitution was designed to be stictly constructed as limiting the powers of the Federal government is what makes crony capitalism possible. It always happens under the guise of promoting the general welfare — like the bank bailout, which was one of the most heinous, blatant examples of crony capitalism on the books … and which the leadership of both parties voted for and promoted with the same rhetoric the similarly unconstitutional stimulus is being promoted with. Most likely with equally shitty results.
That’s why a strict constructionist interpretation of the Constitution is not only correct, but necessary, especially in the face of fear-mongering politicians.
Brackache, how to you stop narrow sets of interests from placing their stooges into elected government positions?
For instance, how do you keep developers from running their own stooge candidates for township board, gaining a majority, and then simply representing those developers’ interests over all other priorities?
Basically, it’s up to us people who care to be vigilant, raise hell, educate other people about our rights (and the limits of government), and resist tyranny. The consequences of not doing so are, eventually, a powerful motivator. We are the highest authority of the land, and we have to exercise our authority for good if we don’t want everything going to shit. If we don’t resist corruption, lies, and tyranny, everything will go to shit, and we will deserve it. There’s no magic wand you can wave to make all the bad things go away.
How would you do it?
Here’s some entertainment news:
Now with many film studios setting up shop here in Michigan, many locals are auditioning for roles.
Ytown and designated republican have landed two key roles in the upcoming teen slasher, political/economic thriller titled, “I know what you did the last 8 summers.”
Since unemployment remains very high; the ratio of job seekers to open employment positions is higher than ever before recorded; since the price of most goods is flat, wages are flat, banks are still failing, and home foreclosures are still rising; since business profits are falling and basic industry folding, and government run deficits are not yet enough to get the US economy out of the “Great Recession” — isn’t it time for somebody on MM.com to raise the specter of hyper inflation? There’s absolutely no reason to fear hyper inflation at this time, but hey, I can’t help but stir the pot, fondly remembering the rage of right-wing dogmatists from last winter and a half century and a full century and 150 years ago.
Come on, BA, please take the bait. Argue for the dire risks associated with economic problems that are exactly the opposite of the actually existing economic crisis of this moment in time. Doing so would add some much needed laughter to the readers of the blog o sphere.
Before long, I’m sure, it’ll take ten wheelbarrows of cash to buy a beer, and don’t say I didn’t warn you!
I’ve bookmarked this very comment for future reference, Higglesbee.
Too bad, Higgles, you weren’t as confident that the dollar wouldn’t be devalued by the increase in the supply of money and credit (which is the traditional definition of inflation — higher prices is just what it leads to) back when I offered this wager.
Had you been, you could have bought two troy ounces of silver for $22, and sat on them for 5 years until the alotted time for the wager had passed. Now if you want in on it, it’ll cost you upwards of $32 for two troy ounces of silver.
Economy: I’m in a bad mood.
Keynesian: You need some heroine!
Austrian: Dude, don’t take that, you’ll die.
Keynesian: Hogwash! Here, I’ll just stick some into your arm…
Economy: Wow! I feel great! Austrian economists are idiots!
[much gaiety ensures…]
Economy: Oh man, I don’t feel so good…
Austrian: See! Heroine is bad for you. Just let it get out of your system and you’ll be fine.
Keynesian: Fool! Don’t you care for this poor economy’s suffering! Clearly it’s suffering, not from heroine, but from the LACK of heroine! Here, have some more, we’ll just boost the dosage….
Austrian: You guys are idiots.
[much gaiety ensues…]
Economy: Oh man! I feel worse than ever now! Give me more heroine!
Austrian: Seriously dude, you have to stop doing that stuff or you’ll die.
Keynesian: Oh hateful man! Any fool can see he’s suffring from not-enough-heroine syndrome! Proof again that he needs more heroine!
[and etc.]
Economy: Ah, I’m unexpectedly dying! Nothing makes me feel even remotely better! I need all the heroine you’ve got! A little just won’t do it anymore!
Austrian: You’re going to O.D. on heroine, and die. The withdrawal you’re suffering is from doing heroine in the first place. I told you so. You need to stop doing it, moron. Yeah, withdrawal sucks, but the alternative is death.
Keynesian: You Austrians have been predicting gloom and doom about heroine use from the beginning, and he hasn’t died yet! In fact, heroine makes everything better for him, isn’t that so, economy?
Economy: Shut up and give me more heroine! I need it!
Keynesian: See? He has yet to die from heroine; historically taking heroine has made evrything better for him, and not taking heroine has made him feel terrible! You silly Austrian dogmatists and your disproven anti-heroine bias! Away with you! Here you go, economy, here’s all the heroine I’ve got. Who loves ya, baby!
Economy: You love me, heroine dealer!
[cannibal holocaust]
Wow, BA, I thought heroin was a depressant. You have it being used as a economic stimulant in this argument by far-fetched analogy.
Still, glad to see that you swallowed the bait, and had no actual argument that hyper inflation is a threat today.
Wasn’t the last time that Austria or any part of Central Europe suffered hyper inflation back in the 1920s? A decade before Keynesianism was birthed with Keynes’ THE GENERAL THEORY. Yet you seem to blame that Austrian problem on a heroin pushing Keynesian who’s too stupid to know the difference between a depressant and a stimulant. Very funny — funny enough to be in the next Marx Brothers movie.
BA, thanks for the laughs! Plenty of that. Appreciate it, really do.
Cannibal Holocaust is kind of a glass half full, glass half empty kind of thing, depending on how you look at it.
Mark H., Austrian economics is a school of economic thought, your eminance. Do you really think my analogy was about whether a drug is a stimulant or a depressant? It was about long-term problems of drug-addiction (meaning the collapse of the currency due to hyperinflating — coming down the pike because of bailouts and stimulus) vs. short-term problems of drug withdrawal (deflationary pressures caused by an inflationary bubble bursting — what we’re experiencing now, which is why we’re trying to reinflate the bubble). We could just as well use cocaine in the example, if you prefer. Clearly the point of a simple analogy is entirely lost on your excellence, who isn’t all that well versed in the competing schools of economic thought.