More commentary against the economic bailout plan

[Craig234]

Two from www.commondreams.org.

The first is additional problems with how the bailouts can be exploited for profit, and links to other good commentary.

Link

The second is by Chris Hedges, on my short list of recommended commentators.

His point: 'Revolt or become serfs'. it's more strident than his usual, but the situation seems to require his tone. Also good links to related commentary.

Link

Excerpt form #2:

The bullet to our head, inevitable if we do not radically alter course, will be sudden. We have been borrowing at the rate of more than $2 billion a day over the last 10 years, and at some point it has to stop. The moment China, the oil-rich states and other international investors stop buying treasury bonds the dollar will become junk. Inflation will rocket upward. We will become Weimar Germany. A furious and sustained backlash by a betrayed and angry populace, one unprepared intellectually and psychologically for collapse, will sweep aside the Democrats and most of the Republicans. A cabal of proto-fascist misfits, from Christian demagogues to simpletons like Sarah Palin to loudmouth talk show hosts, who we naively dismiss as buffoons, will find a following with promises of revenge and moral renewal.

I stop short of endorsing Hedges' comments at face value, but think there's some truth in them.

I thnk these are worth reading, and we should be talking about how to get more organized in correcting the errors in the approach on the recovery plan.

This is a major re-alignment of the global economy that's reactive to a crisis, not planned for good results for the public.

The people who are determining much of the plan seem to be the few most politically connected.

President Obama has said a number of things I think are right on, but the policies seem to fall short of his statements.

It reminds me a bit of the rush to the Iraq war, when debate was technically allowed, but dissenters were ignored.

We can use some organization on this, and IMO it should not come from the Republicans or Libertarians. it could be outsiders, or progressives.

 

[BoberFett]

There are so many things wrong with this, I don't even know where to start.

When fiscal conservatives warned about bailouts and their propensity to funnel money to entrenched interests last fall, your kind ignored it and said that something had to done immediately and there wasn't time to plan. Funny how your tune has changed.

It's exactly like the Iraq war, dissenters were not just ignored, but ridiculed and Democrats such as yourself were leading the charge. Now that bailout money is just appearing to go to the politically connected elite, you're suddenly feeling all butt hurt. Awww, poor baby.

And it's hilarious that you have such contempt for anybody outside your football team... I mean party. Why is it so hard to admit that you're not always right? Sometimes us libertarian kooks actually have some good ideas. Too bad you're too busy being the party of exclusion that you only have room for those who goosestep down the party line.

 

[StageLeft]

Beyond the proven apathy of the lay person, there is of course the fact that this is a gray issue. Even among those who are well read (I consider myself decently read, somewhere between a pig in sh*t and a true scholar--you can judge where on the line I fall), there is nothing obvious about what the result of current policy is.

When the facts are inconclusive, though, I think a catch valve is common sense, and there is a lack of this right now. I think the government inundation of money right now is overblown, but then I am neither privy to all the information, nor paid or expected to spend 16 hours/day, 7 days/week (as I hope the leadership is spending) analyzing it. Thus to some degree I must absolve myself (notwithstanding the fact I can't vote anyway, but I can opine) and then if the leadership screws it up take them to task.

 

[soccerballtux]

Originally posted by: BoberFett
There are so many things wrong with this, I don't even know where to start.

When fiscal conservatives warned about bailouts and their propensity to funnel money to entrenched interests last fall, your kind ignored it and said that something had to done immediately and there wasn't time to plan. Funny how your tune has changed.

It's exactly like the Iraq war, dissenters were not just ignored, but ridiculed and Democrats such as yourself were leading the charge. Now that bailout money is just appearing to go to the politically connected elite, you're suddenly feeling all butt hurt. Awww, poor baby.

And it's hilarious that you have such contempt for anybody outside your football team... I mean party. Why is it so hard to admit that you're not always right? Sometimes us libertarian kooks actually have some good ideas. Too bad you're too busy being the party of exclusion that you only have room for those who goosestep down the party line.

Well, problem is last fall was serious. September 15th, for example. That $700B was an absolute necessity, or the world would have stopped turning, thanks to the way our business tax code works. Businesses can't invest and grow if they can't take on debt. In a recession, they can't survive/keep functioning without borrowing to run a deficit. They can lay people off, but there comes a point where the business can't lay anyone else off; if they want to survive past the recession they have to suck it up and hold onto their [human] capital for a better day. Otherwise if they were forced to keep laying off workers, we'd enter an endless (ie nobody knows when it will end, and it's not anytime soon) deflationary spiral.

What's different now is we're no longer solving a MBS derivatives crisis which will eventually be over, we're throwing money into a bottomless pit-- Credit Default Swaps. The effect of these being unregulated is akin to me being able to go start new kind of bank that is not subject to the reserve requirement. Limitless growth on the way up; but smack-your-head-on-the-concrete on the way down. According to a survey by the WSJ, this needs to change before people will feel more secure about investing in the market, participating in the economy. Obama would do well to look into this-- putting a reserve requirement on CDS's would be a great start.

I still identify myself as a Conservative/Libertarian, yet Craig234 and I agree on a lot of things. The linked article (right now both are the same link) sounds extremist/doomsday, but the fact of the matter is these are very possible futures.

Craig I guess I've concluded there's nothing stopping this mess until it's too late. We've had 25 years of prosperity (longer if you want to go back to 1950's after WW2 and we were the sole producer for the world) and most of us have become complacent. I think about the people I went to highschool with, the kinds of grownups our public schools are spitting out, the quality of people in the non-top-100 schools...and it's truly scary. America, as a hole, does not want to work. We are not interested in innovating, in thinking, in developing; and under Obama we're headed for a tax code that's going to remove the last incentive to innovate-- money. Cap your salary at $250k and watch foreign countries drain us of our talent. Also concerning-- expansion of government, unwillingness to trim (Calif and NY being prime examples), and government's seeming inability to produce anything of value but paperwork. Also, it's nearly impossible to get fired or laid off for poor performance in the government.

I've since devoted less time to raising awareness (crowd is too fickle, cannot reason for themselves) and more to simply being ready for it when it comes. Just have to stay ahead of the curve. America will not instantly become a 3rd world country, there will still be opportunities, you just have to keep your eyes out for them.

My analysis has been the Fed will pursue a policy of inflation...but I'm assuming they want to keep everything rolling smoothly. Their ultimate job is to protect the Banks, and, historically, this is what they've done. Inflation is bad for banks, which means if they act how they have acted historically, they will keep inflation to a minimum. Which would be bad for us, because it means all that debt our government is taking on, and which the Fed is encouraging people to take on (keeping low interest rates), will become more burdensome eventually.

So how to come out on top? Hunker down and build your nest egg, watch for inflationary measures, and accordingly take on debt. This way you can capitalize on either possibility. Other questions to ask yourself-- what markets does America specialize in that, should the dollar rapidly lose value, will become attractive to foreigners? What things that we make, that foreigners want, will become cheaper due to a weakened dollar? What will the government _not_ cut spending on? Get a job in this market.

 

[Jiggz]

Bailouts were necessity for those in need and most of all for those who will receive! Otherwise, it's nothing but a PITA for those who have to pay for it!

 

[Genx87]

Somebody pinch me, is Craig possibly questioning where the money is going? Ill read the links tomorrow and add input if I have time.

 

[Wreckem]

Originally posted by: Skoorb
Beyond the proven apathy of the lay person, there is of course the fact that this is a gray issue. Even among those who are well read (I consider myself decently read, somewhere between a pig in sh*t and a true scholar--you can judge where on the line I fall), there is nothing obvious about what the result of current policy is.

When the facts are inconclusive, though, I think a catch valve is common sense, and there is a lack of this right now. I think the government inundation of money right now is overblown, but then I am neither privy to all the information, nor paid or expected to spend 16 hours/day, 7 days/week (as I hope the leadership is spending) analyzing it. Thus to some degree I must absolve myself (notwithstanding the fact I can't vote anyway, but I can opine) and then if the leadership screws it up take them to task.

GAO, CBO, and other government reports say otherwise. The current policy only hastens their projections. It may help short term economic problems(even this 50/50), but long term there is a 100% change it just compounds the problem.

 

[cubby1223]

Drill for oil and build nuclear power plants. That's the only chance we have at paying back the debt while maintaining our entitlement based lifestyle.

Else, we'd be hoping for a war to break out (and stay confined within) Asia taking out their production capacities, then they'd have to buy from us during their rebuilding years.

And of course we have to start shifting our country off of oil. Have no clue how that could be done, though.

 

[rchiu]

One thing I want to raise is that a lot of the "bailout" money is actually used to purchase "trouble assets" like the ones from TARP. Those money are not actually gone, it is used to hold certain asset.

How much of those asset is going to worth in the future depends heavily on what you are going to do with this crisis. If we let those Ron Paul people run the country, mostly likely the financial market is gonna be f'ed up big time and those hundreds of billion of asset will truely be worthless. If we make wise investments in financial industry and help it recover, we maybe able to recover a big portion of those asset when the demand and liquidity is back. So it's really up to American people if you truely want those hundreds of billion turn into debt or recover big portion of it in the future.

 

[cubby1223]

Originally posted by: Jiggz
Bailouts were necessity for those in need and most of all for those who will receive! Otherwise, it's nothing but a PITA for those who have to pay for it!

It's a PITA for those who have to pay for it, and also for those in need who instead will not receive anything & instead have to pay for it!

 

[cubby1223]

Originally posted by: rchiu
One thing I want to raise is that a lot of the "bailout" money is actually used to purchase "trouble assets" like the ones from TARP. Those money are not actually gone, it is used to hold certain asset.

How much of those asset is going to worth in the future depends heavily on what you are going to do with this crisis. If we let those Ron Paul people run the country, mostly likely the financial market is gonna be f'ed up big time and those hundreds of billion of asset will truely be worthless. If we make wise investments in financial industry and help it recover, we maybe able to recover a big portion of those asset when the demand and liquidity is back. So it's really up to American people if you truely want those hundreds of billion turn into debt or recover big portion of it in the future.

The wisest way to handle the financial industry may be to keep the government the F out of it! I mean, when the tax-payer funded ACORN is gathering the masses to, basically, destroy A.I.G.... While those who were actually good at their jobs are fleeing to foreign based firms out of reach of our government...

So there's also the counter-argument that if we let Obama / Pelosi / Frank run the country the financial market will also be f'ed up big time. Whichever path we take is a gamble. The only difference with the Obama plan is we are gambling on a scale of trillions.