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« Democratization, U.S. Foreign Policy, and The Middle East | Main | Rethinking The Criminal Justice System »

Assessing The "Economic Growth Package"

(Photo by Robin Holland)

Ordinary Americans and the media alike have been astir this week with discussions of the looming recession and the “economic growth package” Washington quickly assembled in response. In her conversation with Bill Moyers on the JOURNAL, sociologist Katherine Newman shared her thoughts about their plan:

“It's a bad news situation out there for millions of Americans who are really going to worry about their futures and their children's futures... I think they'll be pleased to hear that Congress and the President have found some way to cooperate with one another. But a lot of people will be left out and left in the cold.

I'm more encouraged than I thought I would be, because it provides rebates for people lower down the income spectrum that I thought it would. But I am very concerned about the long-term unemployed, which is rising, not only in general, but as a proportion of the unemployed. And that's one of the disappointments of the stimulus package... I think if we built more infrastructure, we would see a greater long term benefit from the money we're investing, because we will improve our roads, our schools. And you know, that's exactly what Franklin Roosevelt thought. And that’s why he put millions of Americans to work.”

What do YOU think?

  • Do you support the “economic growth package” announced this week? Why?

  • Are you “pleased to hear” that the quick formulation of the “economic growth package” is the result of bipartisan cooperation?

  • Do you think it is a good idea for government to expand public employment in areas like infrastructure maintenance and education as a means to mend our economy?


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    Comments

    Doug that's not quite true. Most of the wealth is held by the top 5%. If they gave back their check you would have a true middle class again. Not that it would ever happen, but it's not a true statement.

    Car Parts Warehouse

    The fundamental challenge to economic growth is stimulating responsible profits. Only the PROFIT Act legislative proposal provides a link of profits to responsible behavior. Consider the previous blogger utilizing the Moyers site to promote a product. In Moyers' segment "Who Will Guard the Guardians" it discusses the challenge facing the nation. It is not only the guardians that are responsible for abuse: it is pervasive as the blogger immediately below this demonstrates. Only when we engage the citizenry in broad participation in countering the "bad actor" will we succeed in making this democracy just and will we create economic growth. It is time for people to take a hard look at the PROFIT Act and the solution it represents. Feel free to email me at christopherdunn7@hotmail.com or google "the PROFIT Act" - putting it in quotes to learn more.

    I listened to the Winter Soldier hearing from WBAI (streaming) on the computer all day. They were much more informative than the Henry Waxman re-run on the journal tonight. Why didn't hostage (for 42 days) Bill Moyers make a new show this week?

    Maybe he couldn't talk about investment banker Bear-Stearns which was bailed out by the FED in a move not seen since the Great Depression, couldn't discuss the web of debt that envelopes the investment world and all of the indicators threatening American consumption. If it takes 200 billion to buy 2 good days for the DOW, how long can the FED put out?

    Maybe he didn't have the heart to play Bush drunkenly singing "The Brown, Brown Grass of Home" at the fundraiser after he'd called the financial train wreck a rough patch. (See it on You Tube.)

    Maybe Bill heard about UG99, a fungus rust unleashed in Yemen, which will threaten the world's wheat production in the next decade. Once a biological weapon in the U.S. arsenal, it may now have been released to ignite profits from a planetary food panic. I expect Bill sent the help out for 50 bags of King Arthur flour, because he expects hot buttermilk biscuits every morning, can't do without 'em. Fungicide makers and gene splicers also stand to profit. O Lordy, please continue to give us Thy daily bread.

    Maybe Ellie Spitzer let him down, by getting caught in Bush's trap. We all know such liasons are routine for most men of Spitzer's prominence, but he failed to have an underling run interference for him. Bill knows all the princes, barons and margraves have "tasters" sampling the fruits.

    And maybe the lifeless Democratic party, soggy as a rained-in cardboard box was just too fragile to take the shock waves of discussing its complicity in the hollowing out of America, or of the noodle like resolve of Hillary and Barack to face our demise. McCain's church spanking last week may have taken its toll, during Pledge Week.

    Don't let us down like Elliot, Bill. I'm being strong here in the teacher's house at the end of Calle Terminale, San Sebastian, Puerto Rico, above Rio Grande Louisa. I have not touched the liquor, sought porn on-line or eaten all the sweets in the kitchen yet. There are some pretty books here you'd love , Bill. Several are in Greek and Hebrew, ancient languages.
    SEERAUBERS: contact beretco.op@gmail.com.

    Robert (Mar. 12-5:48pm) As I understand it SS recipients must have an income of at least $6,000 (including SS) and must file an income tax return. In most cases these low income retirees will qualify for $300. Considering how heating fuel and gasoline and some foodstuffs have gone up they will need it all for inflationary costs. There was a token SS COLA last spring but that index will not offset the new higher inflation. If the FED continues to increase the money supply rapidly, considering other conditions of deficit and debt, we could experience a hyperstagflation by Fall. (Reputable economists explain inflation as primarily a monetary phenomenon.) Prepare to supplement your retired relatives or move to a contingency plan of homesharing and cooperative multigenerational family life. I don't know what to say about their real estate with sale prices falling. Best wishes, Robert.

    How does this affect people on
    Social Security income?

    Grady L. Howard Feb. 28-2:22pm
    Sir: You are mistaken as to the proportion of non-supervisory manufacturing jobs in the U.S. workforce. 2007 estimates put it below 13% and falling. That's about 18 million jobs, not 25 million. So WE make even less of nothing than you thought.

    Yesterday it was reported that, on average, mortgage underwriters own more interest in American residences than mortgage payers.(Remember that the homes of the wealthy and the comfortable "retired mortgage" elderly, as well as the lucky inheritors and paid up homeowners are figured in.)About 2.5% of mortgages are somewhere in the foreclosure process.
    Many of these mortgage paying "homeowners" are event toteing a negative equity and may walk away. And as prices and market valuations fall more and more people will find themselves paying on less and less. How bad the situation may become no one can predict.

    What I must emphasize is that when political candidates review this issue they might only look at the superficial statistic and say, "What I see is a glass half full."
    A person who understands the truth will know that the glass is nearly empty for a sizable proportion of mortgage payers and that the coming Depression has its straw in the veritable glass and is sucking away.
    Trends are what we must watch.

    Conclusion: Don't feel too bad if you are a renter: Your "homeowner" neighbor also pays taxes and upkeep on his "melting butter."

    It's 3 months until the "growth pittance" arrives. The horror of northern New York and central Ohio have soured Hillary's taste for NAFTA juice, see how her mouth puckers. Jim Bullis thinks the U.S. industrial capacity remains a big asset when manufacturing employment is below 18%. That's only 25 million jobs (of a shrinking 140 million peak, in a population of 320 million), and what do they make? Plastics, weapons, outmoded crap related to the internal combustion engine (including ethanol and petroleum distillates), a little steel, aluminum and wire that is not off-shored. Soon there will be no drywall made in the U.S. We have said goodbye to appliances and electronics. What will the Jim Bullises of America do with these crumbs when our trade deficit credit runs out?
    We should have had tariffs to protect vital industries and preserve jobs with manufacturing expertise, but no, profit dictated we off-shore everything. So Jim thinks capitalism and manufacturing can save us?
    It will not happen until monopoly capitalism is overthrown and we return to a friendly competition of pride among geeks and mechanics. To avoid destructive domination we must have worker ownership and cooperative organization. Government will reflect this new reality where people designate tax expenditure and chart policy by plebiscite without media propaganda, only informational education. We are probably coming to a revolution in education where everyone will learn on the job including farmers, researchers,doctors, teachers, journalists, engineers and artists through an internship accreditation. Yale and Harvard and Stanford will dry up replaced by public philosophy and policy exchanges. Think tanks will rust until scrapped under direct democracy.

    We want to instigate a grassroots seizure of vital abandoned manufacturing resources (as in Argentina) by the workers themselves and build a new economy from the ground up under sustainable principles. (stone soup) Such is the seed of any new move toward justice. "It is difficult or impossible to become or remain extremely wealthy in a peaceful and just society." Try them pants on for size, Jim Bullis.

    Simon sez, Jim Bullis
    Grady said "Corporate" capitalism is dead. If we had smaller scaled competing manufacturing industries still in this country we'd be a paradise compared to the debt-ridden corpse we have become. First there must be anti-trust enforcement busting up the collusive monopolies.REMEMBER IN 1750 HOW ENGLAND KEPT THE COLONIES AGRICULTURAL AND RESOURCE EXTRACTING? WELL, JIM, IT WAS MANUFACTURING (protected by tariffs) THAT PRODUCED AMERICAN WEALTH AND POWER. YOU CAN'T DO IT WITH RAW MATERIALS, FOOD COMMODITIES AND SERVICES ALONE. And was that old West India Company ever a monopoly? It had it's own private army, just like Blackwater.(Old Speaker Jim Wright told Reagan,"You can't have an economy by washing each others cars and delivering pizza: Voodoo economics is a debt recipe with Depression sauce.") How can one remain patriotic when the corporate dominated travesty has negated a functional nation state with wealth serving trade agreements that deplete the ecosystem and put workers in wage slavery? We make little or no cloth, shoes, clothes... Much of our fruit, veggies, meat are imported. We even buy defense parts overseas. Is that national security? Fuel is only half the insanity.
    Solution: Tariffs, ever hear of taxing imports to protect de homeland? The money goes to run the government, lower Social Security and Medicare deductions.
    Wages:Workers have provided a phenomenal rise in productivity since Fuerher Reagan while real wages and family incomes have fallen (wage gap). We need a higher minimum wage.
    Inflation from this is bogus. It is currency devaluation to fight the trade deficit from insane free trade that causes inflation. Bernanke is about to initiate hyperstagflation with his rate cuts and rapid money supply increases.(Mark my words!)
    Progressive tax structure: We've led the entire developed world into a debt trap! How can people be expected to spend on green technology when their credit is exhausted? $600 won't prime a broken pump.
    We have to make the wealthy (who own most everything and get all the income) pay for the infrastructure that makes it possible, and their corporations too. Gradually the income gap and wealth gap will shrink back to normal, but we have to chock the wheels with legislation and not let it get away again.
    Also: We must devolve corporate personhood and tax inheritance. Levelling makes things dynamic and gives hope and incentive,
    How many cars and houses and sex slaves can one person use anyway? It is those of us out for a two liter coke and a sack of potatoes who really do the spending. We have no choice.
    Investment? Rich boys don't invest, they speculate, put it on the long shots for big returns. Now we let them derive and hedge so they win even when they lose and the little guy pays the difference.
    Poor old droopy drawers John McCain is reading Adam Smith (230 years old). I may have told you Ted Nace and Lester Brown are available on line. Some libraries now have Naomi Klein's books. I've found Ravi Batra of Southern Methodist University to be the best plainspoken economist, though he has some Indian mystical baggage. Anyone can see we need worker owned and managed industries and businesses, various kinds of cooperatives and such, not just profit sharing.
    Wealthy sadists like the President are financial predators looking for a taxpayer handout (Rangers) or a prearranged outcome (bin Laden family money in Arbusto and Harken Energy.) You don't need to think Chelsea Clinton got her hedge fund job on merit,
    Jim Bullis, your car is nutty, but there are many things you could do. Teach carpenters how to install solar water heaters, (China already has 40 million operating.) Calculate components for reverse metered solar panels. Guesss how many wind turbines it takes to replace a coal plant.
    I am old and crippled Jim Bullis, but if I had a great and caring engineer to instruct me I would give my last effort to save this planet. It's all humanity will ever have, and although I hate Christian retarded visions of Heaven, I believe we are all connected and all related. Help your brother and sisters to help your brothers and sisters. Down with the Big Man. (Watch People and Power on AlJazeera/You Tube.)Hillary and Barack are pretending they don't know all this is the truth. I guess we'll have to waterboard them.

    As Erin states, "we should not let the issue pass." My concern is that we act effectively. That includes not making the food supply situation worse by using cropland to make SUV fuel and by further aggravating the water distribution problem by using water in the quantities needed for growing ethanol feed stock. Grady Lee Howard's view is right about these concerns.

    But corporate capitalism and the industrial capacity that goes with it should be thought of as a very valuable resource. It should be expected to operate more effectively than it does, more honestly than it seems to be able to manage, and without the influence over government that it has seized.

    I can understand how people can be discouraged with the way business operates, but I think we will get along better if we keep a critical eye on it, with a hope that it will improve.

    I don't hear enough from the political candidates on this topic.

    Perhaps we have met the enemy and it is us. There is probably some room for improvement in all quarters.

    I think it is a good idea to help those in need. At least we are doing something instead of nothing. It is easier to just let things go and take their course, but at least something is being done to help. This growth package comes in the form of tax cuts, not a bad thing. It is going to help the economy. I may be naïve to some of the more political issues behind this economic growth package, but I guess I can see the opinions from both sides. I can see where people do not think this will be a real solution, but again we are trying something rather than just letting the issue pass.

    The economic growth package won't do any good when the price of food shoots up even more. All aware citizens can read Lester Brown's Plan B 3.0 (What a sucky title for vital information!) at the Earth Policy Institute site for free. You can also download his recent interviews about collapsing world ecology. Securing food is the first priority: Water justice is second: Sustainable energy is third. (Maybe 9/11 Truth could wake people to resist?) Corporate Capitalism is over, either by heroic reform, or by collapse into horror. Our last chance is now. Get talking to everyone you know.(That's Democracy.) The Presidential election is hardly more important than the soon forgotten Superbowl. Only People Power can save civilization now. $600? Might as well be a cream cheese bagel...
    beretco.op@gmail.com

    Oops, I meant to say something about how important to the economy it would be if US industry were to have a more worthwhile product. Thus, Jack would be ok with getting his money in dollars rather than euros.

    Please think of this as part of my previous post, otherwise I have no claim to being on the subject.

    Ok, Shotgun Jack Martin. I can clearly see through you now. You are really a retired, high ranking military officer. Is it correct to address you as General Shotgun Jack?

    Clearly Miastrada Corp. should put your talents to work. I am thinking of a high level marketing job, say, VP of business planning and military marketing. Maybe a little on the job training would be a good idea so there wouldn't be any confusion between mph and mpg.

    But I have to say, "your Cadillac Coocoo has to have a 500 acre solar cell farm" Being more like a suitcase car than a Cadillac, the Miastrada uses very little power so it is best to use a small motor-generator along with batteries within the car; a little like a Prius hybrid with extra batteries.

    Oh yes, as to comfort, the Miastrada interior layout is set up with seats that fold to the side so people walking up the ramp in the back can walk into the car. Then the seats fold into place as you would expect. The roof opens so there is very little bending, like you do to get into your CadillacCooCoo.
    (General disclaimer: everything said in this post should be verified, scrutinized, validated, and otherwise taken with a grain of salt. In fact, nobody should pay any attention to it.)

    No Jim Bullis, seriously, I am selling a CadillacCooCooRamjetSuitcase car that exceeds the MiaStrada in both luxury and efficency, though it can't go 200mph forward and 80mph backward like your doozy. I don't yet have an adequate battery, but I'm also planning a 500acre extension cord plant in northeast China. DARPA has already expressed interest in an ejection-seat model and Hugo Chavez is ready to let me open a factory "down there." Just like Edsel Ford I'll be profiting on both sides of the war (He made trucks in France for the Nazis during WWII.)when Reichsfurher McCain is ready to attack South America (Those llama-loaders of evil).
    Investors please send cash (Euros only) directly to me.
    Jim, let's embrace glasnost and quit wasting space. You drive your car and I'll drive mine, ELSEWHERE.

    As to the topic “the package”, I’m finding it pathetic and insulting by many points.

    I don’t need “tip” from the government, I work and earn fair and square my earnings, pay taxes and am proud to do so, as they go (or so do I think) for a good cause. I don’t need your packages. A mandatory “standard of living pay increase” would be preferable. Yet all the lobbies in DC will condemn it as chauvinistic and dogmatic.

    What is happening these days reminds me an old story my grandpa used to say.

    Two brothers decided to teach their donkey to work without eating (save some money). The day passed, then second, a week… donkey worked hard as usual until it dropped dead. Moral of the story is “if you wish your donkey to work for you, you have to take care of it”.

    I make 30K before tax, after tax and deductions such as medical, dental insurance. It goes under 20K. I have child, rent, car payment, bills of any color and size. I’m specialist in “dollar stretching”. Yet never mind how good I am, lately is getting impossible to stretch enough.

    I’m curios when the average working, voting, spending… American will drop dead? Who will you, govern then? And who will pay the taxes that support this country? That reminds me of Gogol’s “dead souls” but I highly doubt you read it.

    Are G. B. and his greedy bunch (hereinafter refer as “they”) going to get away like nothing had happened? Like, they didn’t do anything?. Why? I keep asking my American friends this question over, and over again, why? Why? Why are you, as citizens of this country, going to allow “they” to just get away? The answer I usually get is:” Well, we know our president is a criminal, but there is nothing we can do about it, and besides his time will be up soon”. That’s what I get as an answer, so Mr. Moyers, most Americans, and most of the world know “it”, and still they’re going to walk away? I’ve tried very hard to accept it, but I cannot. It hurts so much to see this country bleeding, as it is, while those responsible for everything that’s happening, are happily waiting to just walk away.

    Mr. Moyers, how come Nixon was forced to step down by something, let’s say, minor; well, Watergate seems very minor if we compare it to the crimes committed buy “they”. How many crimes must a president commit before we can call him a criminal? I really need an answer to this question Mr. Moyers, please write me a note; it will give me peace of mind.

    Mr. Moyers, deep inside your heart, don’t you feel like it must be a way to get “they”? It must be a way, Mr. Moyers. Please tell me that there is a way. Please tell me that Americans are going to democratically ask “they” to step down, after all democracy is what they preach.

    Mr. Moyers, is it against the law to call a president “criminal”,even if he is, in fact, one? Could somebody please give me a logical explanation as of why are “they” still in power? To me it is impossible to accept that “they” will get away with all their crimes, if they do, it is a crime, and all of us will be responsible for having witnessed all their crimes and letting them just walk away. I’ve decided that this will not happen in my life time, these Peter Pans, as Aldous Huxley called them in his novel “Island”, have to be stopped once and for all otherwise, they will never live us alone. They have a lot of people in their pockets, but in turn, even those who they think they have bought, will turn against them.

    Take Ecuador are as an example, do you remember that crazy president Abdalá Buckram?, well, couldn’t Americans just declare “they” as “crazy”. They must be crazy Mr. Moyers, don’t you think? Or how else will you logically explain their behavior? It is insane, I don’t know how else to call it

    What Americans are experiencing right now is just the beginning of the consequences of such regimes. I’m pretty well versed in the subject; I was born in one of those unbalanced society countries where same type of regime, as “they” want to incorporate in this nation, has always existed. The saddest thing Mr. Moyers, is that at the end, such regimes benefit nobody, in our countries even those “few” who think are getting the benefit, also pay the consequences: their families or themselves get kidnapped and/or in many cases killed (Diana Turbay daughter of a Colombian ex-president is just one example) or they have to live outside the country, and for sure send their kids to live abroad because they fear for their safety. Can you Imagine Americans living in fear like we do in our countries?

    I love your country Mr. Moyers, United States has everything that it takes to become the true leader of the world that we desperate need. If I knew of another country that could lead us, trust me, I’ll be writing to journalist from that country. There isn’t another country with all the resources that you have here, and besides could somebody mention one other country, besides United States, where people from all over the world, and I mean from all over the world, live in peace regardless of their ethnicity or religion? It is you guys, I’m sorry, but it is what it is. So let’s get “they” out of our way for good, so we could finally say…..Shall we dance?

    I can go on and on, but all I need is an answer to my question why? Why?.

    Kind regards,
    Angela

    Although it's churlish and misanthropic to welcome the economic bad news, and I will personally be effected by a recession for sure,I do think the recent economic news illuminates one very powerful idea. All the "little guys" who are getting so squeezed and "don't have any say" in policy are directly responsible for all the current economic dynamics....its US who bought all those mortgages, US, who realized we should stop consuming like shopaholics, US ,who the powers that be are counting on to spend those rebates and get the big corporations economics going again.....US who actually DO get to control whether those corporations are profitable or not (i.e. At&T is in trouble because so many of us little guys are not paying their phone bills). So I say this really shows us we DO have power- immense power. What if we were to REFUSE to spend our rebates willy nilly on tvs and handbags and instead made a concerted, purposeful, group decision on what our economic priorities should be. The power of purposeful group consumer decisions has a long history- boycotts can work. Normally it's pretty tough to get most people to "sacrifice" something they want for some idealistic idea or even a long range abstract public good- like stopping global warming. But- when people are already feeling great personal financial stress and they can, by banding together, force real economic change by making their priorities crystal clear, THAT is empowering. And I believe a new era and new definition of consumer power is about to be born. At least I hope so.

    Jack Martin,
    You fire a heavy guage shell in that criticism gun of yours.

    While I never thought I would get into a sentence with Henry Ford, my pride went to horror as I remembered a few things about him. In addition to his well known offenses, he did a worse killing job on the cycle cars in 1916 than ever was done by GM to the electric vehicle. The cycle cars might have developed into far more efficient cars than the Model-T. But Henry did build an industry, without which we would not have produced like we did to win World War II. And it was industrial activity that ended the depression in the build up leading to that WWII.

    As far as advertising, I hope for some redemption from the fact that it will be a long haul before there are any cars to sell. Miastrada is way more non-profit than PBS. I also am trying to be inclusive of other companies that have the kind of efficiency as the Miastrada. Look at http://www.aptera.com for one example.

    The Aptera looks unusual, but nothing as unusual as the Miastrada. In your subtle way, you do leave the impression that you don't much care for the way that Miastrada looks. But coocooramjetsuitcase would fit better without the Cadillac part.

    At http://www.miastrada.com, a plan is shown to solve the problems of energy dependence and global warming. An uncertain part of it is how to get the public to change the way they think about their cars.

    But if there is a problem with oil and with global warming, people should try. And if there is a need for a productive stimulus, then the Miastrada plan shows how to get that as well.

    In the sense of what Henry Ford did for the American way of life, I hope to be "harmless" like him. But on further thought, by setting us up to think we have to have right front seats in our cars, it now seems that he did do harm. He, along with everyone else, saw no problem with pumping oil out of the ground as fast as possible. The unintended outcome of this has been enormous waste of energy over the last almost 100 years. Getting rid of that right front seat was the key to finding a way to solve our energy related problems.

    Wait, I also wanted to say that I'm glad Dr. Newman is finally admitting that education is no guarantee of a good job. Older people who are dumped by employers have been saying this for years. It is probably not even worth it for younger students who have to borrow, now that real wages have fallen. Education has not only gone up in dollars, the quality of the product has gone down. What is the point of having so many MBAs, just a vocational degree in manipulation and systematic greed? Remember, Our Furher is a Harvard MBA who defrauded the Texas taxpayers for a ballpark. It used to be that college taught people the methods of thinking and researching, not obedience to some crude business ideology. Where's the higher learning? It cannot often be found in the overspecialized compartments of graduate school. In fact, critical thought is usually an impediment to employment in this capitalist madhouse.
    I tell my kid college is not important. There are no community college courses that are not beneath his knowledge and ability, except vocational specialties designed to overpopulate specific job markets and drive down wages. My boy Benjamin came to me with an essay by Thorstein Veblen he found on the internet about "The Higher Learning, and Its Administration by Businessmen." I said Holy Hell, this has been going on since before my grandma was born. Why can't America wise up? Does Ben have to spend the rest of his life protesting the perpetual war and collecting frat boys' beer cans to make his living. I wish I could send him overseas to some saner place. Damnit, I wish I could go myself.

    Apparently Iris Gross favors selling Johnny Mathis music: That's what she believes in. Hit on her name below. This blog should not be another commercial whorehouse where weak people try to eek out a miserable living.
    Also, I wanted to say that the economic stimulus is just borrowing more money from wealthy people we will have to pay back with interest through taxes. It would be better to extend unemployment and raise food stamps for the people on the edge while we look at longer term fixes. I'm not starving for a measly $600 yet.

    I favor economic downturn. I favor thinking globally and acting locally. I do not favor buying a Chinese-made cloth bag from Wal-Mart so that I don't have to take a plastic one home. I do not favor a tax rebate that I'm going to have to pay state taxes on. I favor simple living. I favor buying secondhand items. We have more than enough stuff, and we do not need to buy anything more. It's time people made do with less so that they can learn what's really important. This is what I believe.

    Oh, Please, Please buy my CadillacCooCooRamjetSuitcase car idea. I want to be the next Delorean. I am going to succeed by advertising on a PBS blog for free.
    People, you'd better be looking at the seed catalog and breaking up some ground because this is going to be a long haul. If you want to follow the Sin Patron (No Bigmen) route we can discuss it. Sorry you were in the crosswalk Jim Bullis. You and Henry Ford are harmless enough, I guess. beretco.op@gmail.com

    In response to Trog69,
    I think that Mr. Wikrent's quote of Liu is a good assessment of our situation. An economic stimulus that provides "unproductive liquidity" is not going to be a real solution.

    I am trying to show a way to reinvigorate our productive capacity, with the solutions discussed on http://www.miastrada.com. This commercial endeavor is 'my way' to stimulate our economy.

    Jack Martin, I am going to pretend that you stopped after saying the first three lines.

    I try to think of human beings, with all our failings, as our most important resource. We are the workers and the consumers. Most business people are workers. I am trying to draw on people to also be innovators.

    I also think of our economic system, with all its defects of character,
    as an important resource.

    I try to be optimistic that we can make it all work for everybody.

    A transportation system that enables us to get about quickly, without wasting energy, would also be a resource.

    People must eat, drink clean water, wear clothes, seek shelter and care for one another. All wealth comes from labor (using available resources) People should not have to invest, save, scheme defraud or manipulate (manage )others. We own the Earth communally, and no one can change that truth. Doug Diny (Jan. 25-10:02pm), It is the perverted and artificial system of Capitalism (Bushiness) that is dying in this Depression. Socialism is the cultural capital of the community. He who would kill it has a dead mind and heart. Did Jim Bullis teacher (Jan.25-8:51pm & 11:29pm)feed you too much candy?
    And Jim Bullis, the last guy who said a people's car would solve hyperstagflation lived in Germany and had a mustasche. It is time us fat asses got walking,biking, skateboarding, riding the bus and public trans. where it exists, and demanding it. Ivan Illich showed in the 60s that 15mph is adequate for humans. Slow down you capitalist idiots. Why hasn't Congress lowered the speed limit to conserve fuel and limit Co2? Cars and SUVs hum my residential street (25mph) at up to 70mph (while my town police collect protection money and cram barbeque). Who's on your tail speeders? Is the Big Man trying to spank you?

    economic stimulus! wow...i sure need some of that! but i won't be running to tiffany or my local hummer dealership...

    I can use the "bread" for bread! in Jan 2007,the price of bread at my local grocery stor was $1.69. as of two days ago, it was $2.49. that's an increase of...wait for it...

    47% in 1 year.

    our florida presidential preference primary is coming up tuesday jan 29. hmmm...what to do, what to do...hmmmm. i liked that guy who wrote the introduction to *the missing class*...what was his name again? :)


    I don't think the economic package will help at all -- we are in a
    Perfect Economic Storm:

    Reagan's "Trickle Down" + Bush's "Privatization" + Clinton's "NAFTA" =DISASTER!!

    When the country is needing economic stimulus, I agree that it is a time to embark on projects that will put people to work and provide useful infrastructure. I hate the idea of makework projects or projects that set up undesirable systems.

    Building highways has been suggested, but I think this is a bad choice. I have been working on a project for some years now which was originally intended as a motor vehicle that would make roads less congested. If this were adapted, existing highways would be satisfactory for some time to come. The intended car carried intrinsic fuel efficiency advantages.

    As this car evolved into a very efficient vehicle, I realized its potential importance in reducing the need for oil and for reducing carbon dioxide emissions.

    Cars having this efficiency, when implemented as battery powered electric vehicle, can be charged using mostly the existing residential electrical power infrastructure.

    After analyzing the effects of such a car on our country and the world, I have come to believe that cars like this should be a national priority. If we were to do this it would do much for our leadership position in the world. Prospects for the environment would look up if we could make this type of car an example to the world.

    Although I hope for some financial gain in this, I believe there should be a national project that is open to others having like performance. While I would like to hold a unique position, I expect a variety of alternates to come forward.

    I call my version the Miastrada. A major change from todays car is provision for tandem seating. Such a seating arrangement enables a tall and narrow vehicle. A special stabilizing system then makes it work.

    If this form of car were to be taken on as a national project, it could revitalize the American automobile industry, providing jobs and bringing back profitable operations.

    Perhaps the most difficult obstacle is the way people think cars should look and how seating should be arranged. Such notions have to change to open the way for serious innovation.

    Another obstacle is a pervasive attitude that meaningful progress will be achieved by a lot of small improvements in how we do things. It is now clear that major changes must be made in the level of carbon dioxide that we emit.

    I have tried to outline a plan to win the war on waste, which I see as a necessary American project, which we need to start now. These ideas can be seen at www.miastrada.com.

    Be prepared for something beyond the box.

    Thank you for that, Mr. Wikrent. Fascinating and scary beyond words.

    it seems it is time to start regulating again, the "fat cats" need help....also, why is a couple making $150,000 per year getting $2000? What does a stimulis have to do with taxpayers?

    So housing has been going up and up since the depression. Some place house prices have gone 100% in less than 10 years. Even now they have not come down. What part of this is capitalism.

    One day it has to go back to the depression because the corporation are rapacious and all the law enacted to protect against that have been repealed.

    Does anyone here expect a different result. Talk about definition of Stupidity.

    In Asia Times Online, the inestimable Henry C. K. Liu lays out his view of where the world financial crisis is headed. In a lengthy article entitled, The Road To Hyperinflation, Fed Helpless In Its Own Crisis, Liu responds to the former U.S. Federal Reserve chairman Alan Greenspan’s defensive but arrogant article in the December 12, 2007 edition of the Wall Street Journal, in which Greenspan blamed the current world financial crises on China and the developing world for “saving too much.” Liu harshly condemns Greenspan, explains how Greenspan engineered the mess during his tenure as Fed chairman, and concludes that now there are only two options left:

    The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity.

    The first web page of the article is rather dry, as Liu reviews the fundamentals of how the U.S. Federal Reserve functions. Along in the second web page, things get more interesting. First, Liu demolishes the idea that the current bi-partisan “stimulus” package in the U.S. will do any good, and heaps scorn on the Bush tax cuts of 2001 and 2004 as ill-conceived and implemented without preparation of proper incentives for new investment. And Liu is not shy about pointing directly at the underlying problem:

    … for the last two decades, even in boom time, the US middle class has not been receiving its fair share of income while increasingly bearing a larger share of public expenditure. The long-term trend of income disparity is not being addressed by the bipartisan short-term stimulus package.

    Liu then surveys the explosive growth of credit swaps (CDS) (now at $45 trillion, three times the size of U.S. GDP) and collateralized loan obligations (CLO), and details why and how the loan insurers like MBIA and Ambac Financial were brought to their knees, and explains how the crises is now heading toward territory outside the banking system and will soon cause the collapse of companies other than banks.


    For the insurers to maintain the necessary triple-A rating, their capital reserve would have to be repeatedly increased along with the premium they charge. There will soon come a time when insurance premium will be so high as to deter bond investors. Already, the annual cost of insuring $10 million of debt against Bear Stern defaulting has risen from $40,000 in January 2007 to $234,000 by January of 2008. To buy credit default insurance on $10 million of debt issued by Countrywide, the big subprime mortgage lender, an investor must as of January 11, 2008 pay $3 million up front and $500,000 annually. A month ago, the same protection could be bought at $776,000 annually with no upfront payment.

    Credit-default swaps tied to MBIA's bonds soared 10 percentage points to 26% upfront and 5% a year, according to CMA Datavision in New York. The price implies that traders are pricing in a 71% chance that MBIA will default in the next five years, according to a JPMorgan Chase & Co valuation model. Contracts on Ambac Financial, the second-biggest insurer, rose 12 percentage points to 27% upfront and 5% a year. Ambac's implied chance of default is 73%.

    SNIP

    As big as the residential subprime mortgage market is, the corporate bond market is vastly larger. There are a lot of shaky outstanding corporate loans made during the liquidity boom that probably could not be refinanced even in a normal credit market, let alone a distressed crisis. A large number of these walking-dead companies held up by easy credit of previous years are expected to default soon to cause the CLO valuations to plummet and CDS to fail.


    At he begins to wrap up, Liu is not interested in taking prisoners.

    The last decade has been the most profligate global credit expansion in history, made possible by a new financial architecture that moved much of the activities out of regulated institutions and into financial instruments traded in unregulated markets by hedge funds that emphasized leverage over safety. By now there are undeniable signs that the subprime mortgage crisis is not an isolated problem, but the early signal of a systemic credit crisis that will engulf the entire financial world.

    Both former Fed chairman Greenspan and his successor Ben Bernanke have tried to explain the latest US debt bubble as having been created by global over-saving, particularly in Asia, rather than by Fed policy of easy credit in recent years.


    Yet the so-called global savings glut is merely a nebulous euphemism for overseas workers in exporting economies being forced to save to cope with stagnant low wages and meager worker benefits that fuel high profits for US transnational corporations. This forced saving comes from the workers’ rational response to insecurity rising from the lack of an adequate social safety net. Anyone making around $1,000 a year and faced with meager pension and inadequate health insurance would be suicidal to save less than half of his/her income. And that’s for urban workers in China. Chinese rural workers make about $300 in annual income. For China to be an economic superpower, Chinese wages would have to increase by a hundredfold in current dollars. . .

    Not only do Chinese and other emerging market workers lose by being denied living wages and the financial means to consume even the very products they themselves produce for export, they also lose by receiving low returns on the hard-earned money they lend to US consumers at effectively negative interest rates when measured against the price inflation of commodities that their economies must import to fuel the export sector. And that’s for the trade surplus economies in the developing world, such as China. For the trade deficit economies, which are the majority in the emerging economies, neoliberal global trade makes old-fashion 19th-century imperialism look benign.

    The role central banking plays in support of this systematic fleecing of the helpless poor everywhere around the world to support the indigent rich in both advanced and emerging economies has been to flood the financial market with easy money, euphemistically referred to as maintaining liquidity, and to continually enlarge the money supply by financial deregulation to lubricate and sustain a persistently expanding debt bubble.

    Concurringly, deregulated financial markets have provided a free-for-all arena for sophisticated financial institutions to profit obscenely from financial manipulation. The average small investor is effectively excluded from reaping the profits generated in this esoteric arena set up by big financial institutions.

    SNIP

    Greenspan blames "the Third World, especially China" for the so-called global savings glut, with an obscene attitude of the free-spending rich who borrowed from the helpless poor scolding the poor for being too conservative with money.

    Yet Bank for International Settlements (BIS) data show exchange-traded derivatives growing 27% to a record $681 trillion in third quarter 2007, the biggest increase in three years. Compared this astronomical expansion of virtual money with China’s foreign exchange reserve of $1.4 trillion, it gives a new meaning to the term "blaming the tail for wagging the dog".


    Liu’s conclusion is stunning in its brutal truth:

    While the equity markets are hanging on for dear life with the Fed’s help through stealth inflation, the bond markets have collapsed worldwide, with dollar bond issuance falling to a stand still, euro bonds by 66% and emerging market bonds by 75% in Q3 2007. Lenders are simply afraid to lend and borrowers are afraid to take on more liabilities in an imminent economic slowdown. The Fed has a choice of accepting an economic depression to cut off stagflation, or ushering hyperinflation by flooding the market with unproductive liquidity. Insolvency cannot be solved by injecting liquidity without the penalty of hyperinflation.

    My parents would have found my writing seriously flawed in my previous comment.
    I meant to write:

    Both my parents were veteran teachers. My reaction to the economic stimulus package reminds me of their reaction to the impending fate of the young teacher who was reported to be giving candy to her elementary class students to get them to behave.

    Bill, I enjoy your show but must take issue with some of the comments regarding housing/foreclosures during the economic segment this week. The truth is this: the best thing that can happen in the housing market is for prices to fall back to levels in line with the average salary having the ablity to buy the average house with a sane level of indebtedness.

    Many of these "victims" helped drive up prices to levels unaffordable even to those of us that dilligently saved and sacrificed to acheive homeownership. Do I get to blame them for the fact that I'm still a renter? Is it really such a tragedy that they will now become fellow renters? Is it really "their home" to lose if they took out a loan they would NEVER have the ability to repay? I take no pleasure from the situation but propping up prices will only push the problems down the road (much like the stimulus package).

    I would much rather see the price of stocks go down, than interest rates go down. I appreciate Bloomberg's remarks, but so far I haven't seen any sign that he knows any more economics than those he decries. There is no doubt that investment in infrastructure will do less harm than other things, but what we really need to do is to stop "stimulating" and start redistributing in order to redress the imbalances caused by all this easy money.

    The real problem for the citizens of this country is whether to go along with dishonesty and injustice for self-preservation, or try to be honest and lose their shirts. That's why a third party is necessary. Montesquieu divided polities into 3 types: those which rule by fear, by bribery, and by virtue. It seems the last is always split between the other two and rarely therefore the force it could be if there were an organized effort at it. It was once largely sustained from the pulpit, although the churches are not, themselves, exempt from this tripartite division.

    Your desire to rob from the rich and give to the poor has no basis in reality. Do the math. If all the corporate executives returned their pay checks, you wouldn't raise the wages by 1/2%. Then who would run the companies? Socialism is dead Bill.

    The economic stimulus package reminds me of my parents, both veteran teachers, reacting to the impending fate of the young teacher who was reported to be giving candy to her elementary class students to get them to behave.

    A more appropriate fix is to embark on a national program like that suggested at www.miastrada.com.

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