Wanted: Personal Economic Trainers for the Senate
WaPo business columnist Steven Pearlstein really lets the Senate have it. Go read the whole thing:
As long as we're about to spend gazillions to stimulate the economy, I'd like to suggest we throw in another $53.5 million for a cause dear to all business journalists: economic literacy. And what better place to start than right here in Washington.
My modest proposal is that lawmakers be authorized to hire personal economic trainers over the coming year to sit by their sides as they fashion the government's response to the economic crisis and prevent them from uttering the kind of nonsense that has characterized the debate over the stimulus bill during the last two weeks.
At a minimum, we'd be creating jobs for 535 unemployed PhDs. And if we improved government economic policy by a mere 1 percent of the trillions of dollars we're dealing with, it would pay for itself many times over.
Let's review some of the more silly arguments about the stimulus bill, starting with the notion that "only" 75 percent of the money can be spent in the next two years, and the rest is therefore "wasted."
As any economist will tell you, the economy tends to be forward-looking and emotional. So if businesses and households can see immediate benefits from a program while knowing that a bit more stimulus is on the way, they are likely to feel more confident that the recovery will be sustained. That confidence, in turn, will make them more likely to take the risk of buying big-ticket items now and investing in stocks or future ventures.
Moreover, much of the money that can't be spent right away is for capital improvements such as building and maintaining schools, roads, bridges and sewer systems, or replacing equipment -- stuff we'd have to do eventually. So another way to think of this kind of spending is that we've simply moved it up to a time, to a point when doing it has important economic benefits and when the price will be less.
Equally specious is the oft-heard complaint that even some of the immediate spending is not stimulative.
"This is not a stimulus plan, it's a spending plan," Nebraska's freshman senator, Mike Johanns (R), said Wednesday in a maiden floor speech full of budget-balancing orthodoxy that would have made Herbert Hoover proud. The stimulus bill, he declared, "won't create the promised jobs. It won't activate our economy."
Johanns was too busy yesterday to explain this radical departure from standard theory and practice. Where does the senator think the $800 billion will go? Down a rabbit hole? Even if the entire sum were to be stolen by federal employees and spent entirely on fast cars, fancy homes, gambling junkets and fancy clothes, it would still be an $800 billion increase in the demand for goods and services -- a pretty good working definition for economic stimulus. The only question is whether spending it on other things would create more long-term value, which it almost certainly would.
Your idea is a very good one in principle. However, we must remember that we're dealing with idiots. (If you have any doubt about that, just go back and watch some of the past week's yammering on the floor of the Senate.) Teaching these people simple economics would be sort of like teaching calculus to a cage full of hyenas. I would suggest that you modify the approach by using coloring books with very large type. For the really advanced students, maybe we go "connect the dots".
Old:
Red - Terrorist Attack Imminent (duct tape the windows)
Orange - Be afraid, be very afraid!!! (keep your TV tuned to Fox News for special alerts)
Yellow - It's okay to go outside without police escort. (Clutch your pearls, things could get worse!)
Green - Ding-Dong the witch is dead, the witch is dead, the witch is dead!!! (al Qaeda has been destroyed, the war on terrorism is over)
New (for Senators only):
Red - "Senator, I'm sorry but you just lost to Al Franken!
Orange- "Senator, you can't go back to Utah right now. The riots have spilled over into the airport and the fire is out of control"
Yellow - " Senator, I'm gonna put this little earpiece in your ear and ...."
Green - "Senator, you have a very, very comfortable lead in the polls right now!"
it would have been even better had he called out by name the cable magpies who lie and push the republican tax plan -- the joe scarboroughs, mika brezinskis, neil cavutos, et al.
by David Brock
Founder of Media Matters.org
I guess it'll be just as good if the rich bastids who really ARE going to steal the $800B.
I guess...
Great theory , but.....
What happens when every Republican wants to hire Rush as their economic trainer?
Now you've scared me!
Sun, 02/08/2009 - 09:12 — barkleyg
What happens when every Republican wants to hire Rush as their economic trainer?
______________________________________________________________
Viagra sales would shoot through the roof?
Um...these morons are all millionaires. They don't need a trainer. They know exactly what they are doing and who is getting the money.
They are dedeply concerned that the govt. may be revived.
Grover Norquist to the bathtub, STAT!
The people of privilege will always risk their complete destruction rather than surrender any material part of their advantage." J.K. Galbraith
deeply. (awaiting caffiene effect)
The people of privilege will always risk their complete destruction rather than surrender any material part of their advantage." J.K. Galbraith
better to shrink him until he's small enough to slip under a urinal cake, then hit power flush.
Is that the cake Mary Anne wanted the peons to eat?
Mary Anne was always offering them coconut cream pie.
Instead I'd rather eat her.
Diabolus est Deus Inversus
And therefore doesn't penetrate the thick shell of ideology the Thugs have wrapped themselves in since 1980.
It's called the American Dream because you have to be asleep to believe it.
-George Carlin
You could teach these idiots that 1+1=2 and show them with apples and oranges and Prozac pills and they won't care. That is one of the biggest problems. They don't care about the truth. If a Democrat says "if you take one Prozac in the morning and one Ambian at night you have taken two pills" they will say something like "no I took one of each so you are wrong." If a Democrat says that if you take $1,000,000 and you give it to X amount of people those people will buy other things and the people who said those things will take their money and buy more stuff and on and on the dumb ass Republicans will say that you are giving away their money. It is just much to ask for them to do the correct thing because they only want to obstruct anything a Democrat wants to do.
They care more about the ease of political expediency and deferring tough choices than the more difficult but rewarding task of actually serving the greater public interest ahead of their self interest.
"We will find fulfillment not in the goods that we have, but in the good we can do for each other."
Robert F. Kennedy
thinks the remedy for the 1930s -- more deficit spending -- is the right prescription for today.
He's full of shit.
Big deficit spending will not do a damn thing to reduce credit card debt, clean up bank balance sheets, reverse the course of real estate prices, re-ignite debt-financed consumer spending, or otherwise bring back any economy the U.S. has had post-WW II.
I agree the fucks in congress are economic idiots.
But so are all the economic geniuses who think there's any possible return to a form of economy like that from 1946 to 1980 (manufacturing-based) or from 1980 to 2008 (credit-based).
That's just dependent on how it's spent.
War destroys war materials and the investments behind them.
Businessmen go into deficit when they buy ANY product needed to provide their services that creates a bookkeeping account, for example office furniture. Hopefully, just not at the same time.
Diabolus est Deus Inversus
will be war-based.
The U.S. holds one trump card, its military.
No country can seriously fuck with the U.S. without paying a prohibitive price.
Military spending creates jobs. The American people like it and are easily propagandized.
It's all a question of good choices and competent management. And you are correct: businesses almost always leverage up to advance their companies - inventories, fixed assets, even payroll. The question after that becomes one of competent management. If the choices and subsequent management of same are being handled by idiots (as has been the case for the past 8 years), then failure is likely. If, instead, the thing is initialized and run by more competent minds, we've still got a shot.
Judging by the shape of things, the Senate could use a few fiscal trainers.
Diabolus est Deus Inversus
really made me laugh when he mentioned Coburn (R)from Oklahoma. What a dunce. He got up and spouted that (gasp) 20% of the jobs would be (gulp) gov'mint jobs! (horrors) Coburn didn't know that %20 of the jobs in his own state were (oh nos) gov'mint jobs! (faint)
Yeah, this country is well served by the idiots. (snark)
Who are the idiots, these guys or the people that KEEP electing them over and over and over and over.......
What is the innocence/guilt of politicians that have been in CONgress for years? Should they not be as responsible for bad policies as good?
...they weren't re-elected because they had any fiscal responsibility. They were re-elected becaue of their stance on abortion.
is someone to administer a Dope Slap to them every time they say something stupid.
Then again, that might cause a lot of brain damage...we should probably give them helmets too.
So I don't think a helmet would be of much use unless these war loving fools want to play army.
"We will find fulfillment not in the goods that we have, but in the good we can do for each other."
Robert F. Kennedy
Another problem is although the government CAN provide good steady employment, it doesn't produce a product, but rather services. The cash outflow are clear if accurate records are kept, but it's not so clear how much you're getting back on your investments, which are dependent on economical reports that can be manipulated.
And yet conservatives who crowed we were becoming a services based economy, while out-sourcing our manufacturing base, never seemed to consider that.
Diabolus est Deus Inversus
roundup of all the essential spending that got cut out of the stimulus bill Friday night, courtesy of CNN. It's eye-popping, to say the least.
JP
http://giveusthisdayourdailtydread.blogspot.com
Then we can send billions to Boeing (new cruise missiles); General Dynamics, (new warships); KBR (kitchen and base services); and then blow things up so we can rebuild them (Bechtel).
That will employ thousands of people and help push the economic miracle of Ronald Reagan down to the little people who empty the trash cans.
You really have to wonder if anyone in Congress had ever attended economics 101. If we're going to continue operating in a debt based system which is exactly what the creation of the Federal Reserve in 1913 forced us into, then there are really two options.
Want to rev up the economy rather than giving billions to the banking whores? Give every tax payer and even those who don't pay taxes a government issued pre loaded debit card with $100,000 on it with the following caveat. It can only be used to purchase more junk that you as a consumer really don't need. How about a few plasma t.v.'s and a couple of Rolex watches. How about that new gas guzzling SUV that you had your eyes on a couple of years ago? The point to this nonsense is that just going out on a wild spending spree will do little to save us. The greatest problem which D.C. never seems to understand is that throwing money ( out tax dollars ) at the problem only increases the debt. A debt with interest that has to be repaid with interest to the Federal Reserve, that wonderful den of vipers that run a private banking cartel.
What the country needs to do is return to a sound money system. We had one prior to the creation of the Federal Reserve called the US Treasury and US Treasury banks and our dollars were backed with real assets such as gold and silver. I won't waste my time with the Jefferson or Lincoln quotes as to what would happen if you gave the creation of a countries money over to a bunch of crooks. Ooopps, I mean bankers.
How about rather than throwing trillions of dollars we don't have
to spare, to doing something that will really create change? We have already spent hundreds of billions backing banks that should have been allowed to go insolvent just as any other business has. Not throw mroe cash for trash as Stiglitz said at the Davos meeting last week and so did Roubini.
This is how you go about it.
1. Segregate all of a banks bad assets. You created them, you and your share holders and bond holders own them.
2. Use our tax dollars to buy the good assets from the banks through the US Treasury and create a new US Treasury banking system with the good assets that we purchase.
3. Introduce a new US Treasury note which we had prior to 1913 and the creation of the Fed and back these new dollars with gold and silver.
4.Let the banks that allowed these toxic assets to be created do what they want with them. They may only get pennies on them but that is not the American peoples problem, it's theirs.
5. After creating or re-inventing the new and improved US Treasury banks, Obama is to instruct Congress to raise the weights and measures value of all of our gold holdings which now are only valued at $42.50 an ounce to be allowed be worth what the world says gold is worth which as of today is $912.00 per ounce.
This is a real head banger. Why would any government in its right mind say all of its gold was only worth $42,50 an ounce when every other country says their gold is worth over $900 and ounce?
The reason is simple. Those greedy little bankers in bed with their paid for lackies the Congress that way can keep pushing thier make believe strong dollar ppolicy which is entirely based on a debt system, not a system backed with real money as the founders had set course for. Debt is our ultimate enemy and as long as these idiots in Congress allow more an more debt to be created while bailing out insolvent banks, we will continue to be indentured slaves just as Jefferson said over two hundred years ago.
Either we take these actions now, or countries like China, Japan and others that hold our debt in the form of T-bills that are returning no interest to them will start to dump them and the dollar will go into a faster death spiral that it is now. We will go from a recession, to a depression to a nuclear meltdown in the blink of any eye.
Do yourselves a favor. I know peoples eyes glaze over when it comes to the ponzi scam that has been created in the creation of the Federal Reserve. Write your Congressmen and Senators. Call them or camp on their door step. Tell them we the American people wish to return to an honest money system with real dollars backed by real assets. If the big banks that created this mess through their little black box trading programs that a nuclear physicist would have difficulty understanding, do you really think your elected officials do? Bad debt should be given back to the banks that created them. If they want to stay in business tell them we'll help you.....But, if we use tax payer dollars to bail you out or to take an equity stake in your bank which we have already, you then will have your charter changed from a Federal Reserve bank to a brand new US Treasury bank with dollars being as good as gold again. There actually used to be a time when that phrase meant something. Today you can use them as toilet paper.
If we return to US Treasury banks, the rest of the world will follow and convert their currencies as well. Keep one very important factor in mind. It isn't the amount of gold that is in the world that gives it its value. It is the value that mankind places on that gold. It is the fact that it has to be mined and processed. Not like dollars that are created out of thin air. If this were to happen, I have no doubt that gold would rocket past $3,000 an ounce and a great deal of our debt could then be washed away. Yes there will be short term pain, but the other options that are being talked about now are closer in analogy to the death march on Battan. Kill the multi heads of the Federal Reserve hydra and much of our problems will disappear. The banks created this mess, let them peddle their wares elsewhere.
[Paragraphs are the readers' friends. I edited by pressing enter where I'd seen you had some breaks. I hope you don't mind-Sitemonitor]
OWWW...my eyes are broken!!!
[Try it now, ys-Sitemonitor]
Diabolus est Deus Inversus
mine too. and too bad because if you read it, it's a good post.
the trick is turning all that into a soundbite.
once every american understands the debate, it really ought not be much harder to solve than it was for cowboys in the old west to throw quacks with their "medicine" wagons out of town.
But most people don't really understand how we got here. Kill the Federal reserve and most of the problems go away. We keep trying to reinvent the wheel, when the founders of our country showed us the way. That dream was killed in 1913. We're selling ourselves short if we think this can be solved with sound bites. The public needs to be educated.
and, again, i didn't find it too long. i'm old enough to have been born back when we just had books (and teevee and rotary dial.)
it's just that i've spent enough time on these doggone blawgs to know big chunks of text often get passed over, and it's unfortunate, because they often contain good info.
you're correct our founding fathers showed us the way; sad how we forget.
thomas jefferson warned us about the money masters, andrew jackson drove them out for a generation, lincoln warned us (and was later shot), theodore roosevelt warned us (and was later shot), and jfk warned us (and was later shot).
don't know if them being shot has anything to do with anything but that's kind of a bit of coincidence to digest, don't you think?
and not too get all religious (although it is sunday), do you understand why i pray for the president and my country every day, even when it was bush?
it could just be a bunch of superstitious horse$#!+, but i figure why not, it can't hurt...
Twas said:
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3. Introduce a new US Treasury note which we had prior to 1913 and the creation of the Fed and back these new dollars with gold and silver.
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FAIL. This would mean that the gov could only print (x) times the amount of gold into currency. This would work well for the USA. How? They have all the bombs and bullets to go invade Canada and South Africa for gold, and Mexico for silver.
Going back to a gold standard is an invitation to global warfare on a scale unimaginable in the age of petroleum. Because the new "gold standard" economies would still need petroleum, but more so, need gold to buy the petroleum. Since the middle east has all the petroleum, all the gold ends up in Saudi Arabia, and the USA then must go invade other countries to steal the gold to keep the abomination of suburbia rolling.
As I said: Gold = FAIL. Actually, EPIC FAIL.
It's called the American Dream because you have to be asleep to believe it.
-George Carlin
Damn but I feel so sad for Nebraska.
The problem with money based on hard metal is that it favors the wealthy over the working class, and stifles loans. It was part of the post Civil War Greenbacks controversy.
Diabolus est Deus Inversus
It was the industrialists that forced Wilson to create the Fed along with the I.R.S. Gold doesn't favor the wealthy, but rather the common man because when you own it, it is no one else's liability. It has no I.O.U. attached to it. It needn't stifle loans as the price of gold could head to $10,000 an ounce. If the only other alternative is printing more dollars that have nothing to back them, yes you can grow, but in time as in NOW, the ponzi scam implodes because the rest of the world will no longer accept paper when there is little chance there is any return on your investment.
Actually, our money is based on something, the GDP, but that's rather an abstraction. We were dependent on our Bretton Woods agreement partners to help shore up each other's currency value so it wouldn't fall out of an agreed upon range.
I would paraphrase Bill Clinton's fix it, don't end it mantra in regards to the Fed.
Diabolus est Deus Inversus
Part of the problem with banks with bad assets is alot of us on 401k plans, money market accounts, pensions and other ways of saving for retirement ARE among the shareholders. The last 3 months one of my retirement accounts lost $8,000.00.
And as for pre-1913 treasury banks, during that period we had four major depressions and any number of bank runs, including the one that started the Fed 1907--1910 (approximately). One can't contain the damage to just one region, it spreads like red ink stain.
Diabolus est Deus Inversus
But the depressions weren't as bad as the one that hit in 1929 and that will pale in comparison to the the barrel of the cannon we're starring at now.
Actually the one in 1873 was just as bad.
What happened in 1929 was with a much larger population, due to immigration, and the obstructionism of the Four Horsemen in the Supreme Court to FDR's proposals, leading to the Court Packing Scandal.
Diabolus est Deus Inversus
And after the '29 crash, such protections were put into place like the Federal Deposit Insurance on our deposits, so bank customers wouldn't get wiped out if the local bank failed. They also put in the Glass-Steagall Act, that was in force until 1999, and may've been a key reason we find ourselves where we are now with the credit freezes due to the sub-prime loan mortgages. The SPLM were then bundled up in various hedge funds and sold to foreign banks, who are now having their own trouble with frozen credits.
We have national and international corporations that would far dwarf any regional treasury banks.
Diabolus est Deus Inversus
However, with all the checks and balances that we have in place, we're still drowning in deep doo doo. JPMorgan alone has over 700 trillion in derivatives in which a market value cannot be placed. These exotic deals corrupted the system all in the name or growth and the experiment has failed leaving us with the mess we have now.
Now those foreign banks have a decision to make, Hold onto your debt paper and hope you might get your principal back let alone some interest, or change the system making it equitable for all concerned especially the American tax payer?
Who created these exotic deals, the Fed or recent MBA graduates? Although admittedly the Fed allowed them to happen, presumably because there were no laws against them.
The Fed's primary purpose is to set the federal funds rate and the discount rates. I believe they also set the reserve rates.
Diabolus est Deus Inversus
Pearlstein effectively shows that we've a bunch of morons in the Senate, and not all of them are Republicans (Senator Nelson - the means you!).
I had to shut off the Senate debate on Saturday. The amount of misinformation being stated by GOP Senators was absolutely terrifying. Their lack of even **basic** economic concepts in today's globalized, networked world is horrifying.
Congrats to the biz writer who slapped them down.
And I even have to tip my hat to the WaPo.
Now, this idea needs to catch fire.
There needs to be a far better informed discussion of what's at stake and how to fix it -- and relying on the 'invisible hand' and assuming that markets in a 365/24/7 have anything even remotely close to 'perfect knowledge' -- or that prices ever reach 'equilibrium' is about as relevant as saying that sails can power ships.
In a simpler, slower world it might have been true.
In today's world, it's downright dangerous to spout such outdated, ill-informed nonsense.
These Senators need a LOT more education about basic economic factors and how projects like a new electric grid make huge economic, educational, energy, and political sense.
that you cannot explain to these people how the economy works so.
[Edited. How many times, ratliff? How many times do you HAVE to be told "DO NOT ADVOCATE VIOLENCE ON THIS SITE." We know everyone is seriously ramped up, but don't make more trouble for yourself by threatening beatdowns-Sitemonitor]
Wouldn't it just be cheaper to hire each senator a guy who will throw his shoes at your head if you are making dumb statements and disasterous decisions?
Their wives could smile sweetly at them while digging their claws into their hands and wrists, a'la nancy ray gunn.
Diabolus est Deus Inversus
People in Congress say and do mind-numbingly, embarrassingly stupid things. Question is why. Among the possibilities: (1) They're stupid. (2) They're ignorant. (3) They're venal. (4) They're blindly ideological. (5) They're cowards, and what cows them most is the audience for hate-talk radio.
The list is not exhaustive, and none of its elements is mutually exclusive to any of the others. So which combination of these possibilities would be remediated by sound economic coaching? Which would be impervious to sound coaching? And who would choose the coaches?
http://www.youtube.com/watch?v=VQXECBdPgEA
Diabolus est Deus Inversus
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