America's Financial Mess

[softwareNerd]

I guess today is the confirmation of the "helicopter drop" phase (to use Friedman's term).

Definitely. We could almost here the engines!

[gags]

To paraphrase Pres.-Elect Obama's favorite man of the cloth, "the chickens are coming home to roost."

The dollar, which rallied from historic lows in the summer, is firmly back on a downward trajectory as the world digests the implications of a brutal recession in the United States.

On Wednesday, the dollar hit its lowest level against the yen since 1995 - 87.14 yen - while the euro soared past $1.44 in its sharpest daily movement ever.

http://www.iht.com/articles/2008/12/17/business/euro.php

[Thomas M. Miovas Jr.]

In this news story, Obama is promising tough new financial regulations, especially in light of the recent scandal.

In making the announcements, Obama pointed to Wall Street money manager Bernard Madoff, under investigation in an alleged $50 billion fraud, and said the scandal underscored the need for tougher regulators. The scandal "has reminded us yet again of how badly reform is needed," he said.

President Bush is also considering running the auto makers through a Federally guided bankruptcy.

Obama is saying the regulators were to blame, because they didn't regulate enough, which is contrary to free market principles, as we know, but now every downturn in the economy will be used to enforce more strict regulations.

[utabintarbo]

...

In making the announcements, Obama pointed to Wall Street money manager Bernard Madoff, under investigation in an alleged $50 billion fraud, and said the scandal underscored the need for tougher regulators. The scandal "has reminded us yet again of how badly reform is needed," he said.

...

As if this type of fraud were not already made illegal decades ago.

wtf.

[gags]

In making the announcements, Obama pointed to Wall Street money manager Bernard Madoff, under investigation in an alleged $50 billion fraud, and said the scandal underscored the need for tougher regulators. The scandal "has reminded us yet again of how badly reform is needed," he said.

Obama acts as though the government hasn't been hard at work spending our money in a futile effort to protect us.

"Since 2000 and especially after the fall of Enron, the SEC's annual budget has ballooned to more than $900 million from $377 million. Its full-time examination and enforcement staff has increased by more than a third, or nearly 500 people. The percentage of full-time staff devoted to enforcement -- 33.5% -- appears to be a modern record, and it is certainly the SEC's highest tooth-to-tail ratio since the 1980s."

http://online.wsj.com/article/SB122956314669716617.html

[Steve D'Ippolito]

It's very simple. Any failure is blamed on the remnants of the free market, and clearly only an additional dose of socialism will help.

This is why I did not buy into any arguments that with Obama in power, socialism would get the blame for anything bad that happens in the economy. Socialism will *never* get the blame, so long as in our culture, the socialists are the ones assigning it.

[Clawg]

It's very simple. Any failure is blamed on the remnants of the free market, and clearly only an additional dose of socialism will help.

This is why I did not buy into any arguments that with Obama in power, socialism would get the blame for anything bad that happens in the economy. Socialism will *never* get the blame, so long as in our culture, the socialists are the ones assigning it.

And if everything breaks down Obama will be celebrated as the People's hero because at least he spoke out against capitalism!

Facts don't matter to people who are unable and unwilling to think rationally.

[Tenure]

Or people will say that he was an Idealist, and the cruel cronies in Washington just wouldn't let his dreams soar.

[Nicole Pearce]

I was talking with my parents the other day about the bailout and they were bringing up all of these objectivist points, which I found interesting because I never considered that my parents might also have objectivist values. I assumed this because when I once mentioned ayn rand and both parents said something along the lines of "I heard she had crazy ideas". Prime example of an objectivist that's never read any of miss rands works

[AndrewRyan]

Or people will say that he was an Idealist, and the cruel cronies in Washington just wouldn't let his dreams soar.

I've already heard people saying this. "Obama will fail because the rest of Washington is stubborn and greedy." I hate my town.

[Tenure]

I was talking with my parents the other day about the bailout and they were bringing up all of these objectivist points, which I found interesting because I never considered that my parents might also have objectivist values.

I'd wager, as with my parents, that's it probably just a few hand-me-down Libertarian ideas that they've gotten ahold of somewhere. There are many people who hold a stubborn view, that the government has "no right to take my money", is terribly inefficient at anything except policing, the courts and the army (and still manages to screw that up often enough) and that welfare programs don't work -- and yet they will see no problem with demanding that the government bail out the big banks, send aid to Africa, enact Protectionist policies such as raising tariffs or enforce protection of the Countryside from 'greedy' developers.

[fletch]

enact Protectionist policies such as raising tariffs

Speaking of protectionism and tariffs, wasnt that part of what caused the Great Depression? And isnt the FED basically doing the same thing by other means today? A plummeting dollar has the same basic effect as a tariff--causing the rise in the cost of imported goods.

[utabintarbo]

Speaking of protectionism and tariffs, wasnt that part of what caused the Great Depression? And isnt the FED basically doing the same thing by other means today? A plummeting dollar has the same basic effect as a tariff--causing the rise in the cost of imported goods.

http://en.wikipedia.org/wiki/Smoot_Hawley_Tariff

[Zip]

One farce deserves another.

[gags]

Speaking of protectionism and tariffs, wasnt that part of what caused the Great Depression? And isnt the FED basically doing the same thing by other means today? A plummeting dollar has the same basic effect as a tariff--causing the rise in the cost of imported goods.

Fletch, take a look at this article by Walter Williams: http://www.gopusa.com/commentary/tsowell/2008/ts_12231.shtml

"...They put the unemployment rate at 5 percent in November 1929, a month after the stock market crash. It hit 9 percent in December-- but then began a generally downward trend, subsiding to 6.3 percent in June 1930. That was when the Smoot-Hawley tariffs were passed, against the advice of economists across the country, who warned of dire consequences.

Five months after the Smoot-Hawley tariffs, the unemployment rate hit double digits for the first time in the 1930s."

"Moreover, the unemployment rate rose to even higher levels under both Presidents Herbert Hoover and Franklin D. Roosevelt, both of whom intervened in the economy on an unprecedented scale. Before the Great Depression, it was not considered to be the business of the federal government to try to get the economy out of a depression. But the Smoot-Hawley tariff-- designed to save American jobs by restricting imports-- was one of Hoover's interventions, followed by even bigger interventions by FDR.

The rise in unemployment after the stock market crash of 1929 was a blip on the screen compared to the soaring unemployment rates reached later, after a series of government interventions."

Hmmmm......sound vaguely familiar?

Edited December 27, 2008 by gags

[fletch]

Fletch, take a look at this article by Walter Williams: http://www.gopusa.com/commentary/tsowell/2008/ts_12231.shtml

"If Barack Obama wants political success, following in the footsteps of FDR looks like the way to go. But people who are concerned about the economy need to take a closer look at history. We deserve something better than repeating the 1930s disasters."

Barack Obama seems to want to emulate the uplifting rhetoric of Reagan, the Camelot of JFK, the cabinet of Lincoln and the New Deal of FDR. He seems to think that if he can personify the best qualities of these four great presidents, he can achieve Uber-presidential historical status. But his second hand mentality is bound to leave him wandering through the halls of the White House muttering: "What would FDR do?" "How would Reagan say it?" "What swim suit would JFK wear?" "What play would Lincoln see?" As to what actual policies this guy will pursue, who the hell knows. But the degree of government involvement in the market is much greater today than it was in the 1930's, so theoretically, Obama can do a great deal more damage.

[softwareNerd]

Andrew Medworth makes a great analogy to the financial crisis.

[AndrewRyan]

"If Barack Obama wants political success, following in the footsteps of FDR looks like the way to go. But people who are concerned about the economy need to take a closer look at history. We deserve something better than repeating the 1930s disasters."

Barack Obama seems to want to emulate the uplifting rhetoric of Reagan, the Camelot of JFK, the cabinet of Lincoln and the New Deal of FDR. He seems to think that if he can personify the best qualities of these four great presidents, he can achieve Uber-presidential historical status. But his second hand mentality is bound to leave him wandering through the halls of the White House muttering: "What would FDR do?" "How would Reagan say it?" "What swim suit would JFK wear?" "What play would Lincoln see?" As to what actual policies this guy will pursue, who the hell knows. But the degree of government involvement in the market is much greater today than it was in the 1930's, so theoretically, Obama can do a great deal more damage.

This is Obama's cult of personality. It's more important for him to embody greatness than it is for him to be great.

[Thomas M. Miovas Jr.]

Now they want to bail out newspapers, claiming that a free press and a democracy go hand in hand.

"I truly believe that no democracy can remain healthy without an equally healthy press," said Fiedler, now dean of Boston University's College of Communication. "Thus it is in democracy's interest to support the press in the same sense that the human being doesn't hesitate to take medicine when his or her health is threatened."

Sorry guys, but a free press does not mean one supported by the government -- it means one free from government censorship. Besides, there was a news story recently that said the majority of Americans are now getting their news from the Internet. And so, if a particular newspaper cannot compete, it should not turn to the government for financial help -- it should find a profitable means of operating or go out of business.

[Jake_Ellison]

If this flies, with less than a month since Blagojevich was caught on tape trying to get rid of hostile editors at the Chicago Tribune in exchange for bailout money, we're truly doomed as a nation.

The story

[Benpercent]

Now they want to bail out newspapers, claiming that a free press and a democracy go hand in hand.

While they're at it they might as well bailout cassette tapes. This is the most absurd action I have seen proposed. How do they suppose to keep the papers afloat without their readers, their lifeblood? Will they soon, like an echo of mandatory health-insurance, require mandatory newspaper subscriptions?

If this flies, with less than a month since Blagojevich was caught on tape trying to get rid of hostile editors at the Chicago Tribune in exchange for bailout money, we're truly doomed as a nation.

The story

The comments are rather misinformed in thinking it's serious that he's trying to get someone fired (as opposed to the serious violation of freedom of speech), but it is nice to see that there is a negative reaction at least.

But I wonder: How much weight does Blagojevich's words carry? Who can take seriously a guy that swears that much other than when he's carrying an actual gun and carry a bag with a dollar sign on it?

Also, are there any other politicians as gangster-like as him?

[Greebo]

From the article:

"I truly believe that no democracy can remain healthy without an equally healthy press," said Fiedler, now dean of Boston University's College of Communication. "Thus it is in democracy's interest to support the press in the same sense that the human being doesn't hesitate to take medicine when his or her health is threatened."

He considers the idea of a Press paid for by Government "Healthy"?

[Benpercent]

He considers the idea of a Press paid for by Government "Healthy"?

Plus he doesn't seem to understand that the press' health isn't faltering in any way; it just so happens to be that the consumer base is shifting to a different *form* of the press.

[Thomas M. Miovas Jr.]

Now leading Democrats want to bail out 41 states to the tune of $1 trillion!

Stop taxing and spending, reduce the government function to protecting individual rights, and you will make some headway

[gags]

Also, are there any other politicians as gangster-like as him?

The former Mayor of Detroit, Kwame Kilpatrick, is a self-styled "gangsta". He was frequently referred to as "America's first Hip Hop mayor" and now he's cooling his heels in prison. The man is an obvious thug and a thief, but Detroiters elected him to the mayor's office twice. Of course, skin color trumps most other considerations here. http://en.wikipedia.org/wiki/Kwame_Kilpatrick

Now leading Democrats want to bail out 41 states to the tune of $1 trillion!

Stop taxing and spending, reduce the government function to protecting individual rights, and you will make some headway

During economic downturns, individuals and businesses are forced to live within their means. On the other hand, government at all levels can continue to spend wth reckless abandon while claiming to be fixing the mess that government itself created.