Category: economy
Solving the Economic Crisis in One Easy Step
Written by Troglodad
Saturday, 21 February 2009 09:39
42 Comments

Okay, I keep seeing all these folks whining about solving the economic crisis. Like on the news, when someone dared to wonder why Chairman Maobama hadn't even formulated a plan yet for the bank recovery money.

Well, first off- lay off Baracknarock! Cmon people, you didn't hire him because he had experience or skills. You hired/elected him because he was black. Don't whine now that he can't do the job. That's like hiring a man with no hands to play the piano and complaining that you aren't hearing any music.

Secondly,  let's take a moment to analyze who is really suffering, economically, right now. A bunch of rich people pissing their money away on the stock markets?- failing to realize someone has to lose in order for them to win; ergo, not all investors will see gains? Or everyday folks who have to pay more for a loaf of bread, gallon of milk or cable TV?

Personally, I couldn't care less about the rich slackers who have so much money they can gamble it on stocks. Or who invested in Bernie Made-off and didn't know their money was missing until they saw it on the news. I'm more concerned about the poor schlubs losing their jobs because they get laid off.

Do folks get laid off because business is bad? Do you honestly think the number of shoppers dropped at Circuit City because their customer base took a beating on Wall Street? No, the layoffs are because the greedy corporations aren't making ENOUGH profit. Instead of being happy they are making a profit at all, the suits- who make obscene salaries for little to no work- are worried they won't be able to give out billions of dollars in bonuses. Rather than tighten their belts, they adopt a "let them eat cake" attitude and fire the minimum wage-earners in the companies. As if that is going to make a difference.

Here's the solution to the current economic "crisis": a maximum profit law. No more selling things for 1000x what it costs to make them. No more execs making 14 million dollar a year salaries while there are folks in their companies making minimum wage. I'm not calling for a communist "everybody-makes-the-same-pay" way of doing things. I'm talking about putting the same kinds of limits on businesses that loan sharks and pawn shops have- laws preventing obscene, over the top profits. If there can't be monopolies, why can there be such crazy salaries?

With less profits, items will be lower priced. That means everyday folks can buy more. And since the suits know they won't have the same gobs of cash to give themselves God-like salaries, they'll have to spread the wealth around.

That's right, I'm calling for the criminalization of greed. Just like we can't trust drunks not to drive home intoxicated, we can't leave these robber barons to follow their own internal, moral compasses. Because after years of unchecked excesses, they are lost in the wilderness.

 
Musings From The Old Man – Part 2
Written by Chuck Phillips
Friday, 06 February 2009 03:51
1 Comment

So let me pick up where I left off – it’s all about the money, or as James Carville famously opined, “It’s the economy, stupid!” And before you go off about him being a democratic hack, remember that he also said, “The reason I became a Democratic operative instead of a Republican was because there were more Democrats that didn’t have a clue than there were Republicans.” You got to love a guy with that level of political egalitarianism.

So anyway, in our present crisis, we must first decide how we feel about the government spending gobs of money to encourage economic growth. For the record, this concept of spending our way out of a recession is by no means a new idea, but rather a very old one. It goes back to the British economist, J. M. Keynes, who’s ideas were implemented by Franklin Roosevelt and the New Deal. It is an article of liberal faith, devoutly believed in and fervently preached by our new president, that government spending by an alphabet soup of newly created federal agencies (WPA, CCC, etc) dug us out of the Great Depression in the 1930’s, and that this same process will save us again today. This is an entirely predictable tax and spend solution from a community organizer from Chicago. The problem with this approach, however, is that it attempts to address a fundamentally new problem, with an old and still much-debated economic answer.

Remember that our new president has pledged that his stimulus plan will add 3-4 million new jobs to the economy. When Roosevelt created the New Deal in 1932, core unemployment in this country stood at 25%. Seven years later, in 1939, on the eve of WWII, it was still 19%! A strong case can be made that military enlistments and spending associated with the war did far more to finally end the Depression than the New Deal did. There is simply no evidence to suggest the remotest likelihood that government spending can meaningfully impact employment over the long term. So soak in the hot tub and digest that idea for a minute or two.

The other big problem with the Keynesian government spending solution is that when the government borrows and/or prints money to spend, the twin devils of inflation and currency devaluation inevitably follow. Following the Great Depression, and faced with the shared peril of world war, we allowed our government to impose broad rationing and nearly absolute wage and price controls to hold down inflationary pressures.

Our new president has mercifully declined to speculate about what his new administration’s answer will be when rising interest rates and inflation begin to consume our deficit-spending-driven recovery, as they surely will. Even Dr. “Change-You-Can-Believe-In” Obama will fail in getting the American public to swallow the medicine of wage and price controls, and when his approval ratings plummet as he tries, you can say you read it here first!

So now that I have scourged the Democrats for trotting out their 70-year-old prom queen in some tarty new makeup, do I have a better answer? Only this – let’s be uncommonly cautious about heeding the siren song of “show me the money.” Let’s demand, again and again, that we have accountability for a level of debt that will dog our way of life for decades to come. Let us focus patiently on the creativity of our free-enterprise system to find the answers we need, and the operative word here is “patiently.” I will agree with the president only in this – we have the capacity to rebuild our economy, and we will, but it will take time. Now let’s talk about dislocation and new beginnings – what American workers need to hear as we go forward, but that’s a rant for another day.

(Editor's note: You can find part one of this series here).

 
Proof that government handouts work
Written by Chad Phillips
Thursday, 11 December 2008 15:59
4 Comments

This just in from the AP: "More than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again." Imagine that. This is exactly what any normal well adjusted intelligent human being would expect. Yet, somehow Uncle Sugar never saw it coming. And that's not the worst of it. They plan on rewarding the attendant bad behavior of mortgage holders by giving away more of your money.

One article had the audacity to print this "The main goal of the program is to get financial institutions to lend money more freely again, which would help revive the economy." Yeah…that makes a lot of sense to me. Let's "lend" (wink wink, nod nod) more tax payer money to those who can't or won't pay that money back. I mean, it's working already isn't it?  This is insanity.

And now the Bush administration with the connivance of liberal democrats are poised to lend tax payer money to the auto industry. This is all under the auspices of saving jobs. Jobs for which employees are overpaid, CEO's are overpaid, and for a company infrastructure which has failed to remain competitive. I'm wondering, if the auto industry was ever going to get their act together, wouldn't they have done it already?  So why or how is another taxpayer funded handout going to get them to fix their broken machine now? Here, I'll make a little prediction: This loan isn't going to fix anything. It's just going to prolong certain death. Just as the $700 billion bailout isn't fixing anything, but only prolonging the inevitable. The reason none of this is going to work is because bad choices (behavior) is largely behind it all. The money won' t change the behavior that led lenders into the shape they were in. It won't change the behavior of irresponsible mortgage holders and it won't change the behavior of the fat cats running the auto industry. It will merely enable these people to continue behaving in ways which harm themselves and others.

But even if these spending policies worked. Is it right to give away someone else's money without their consent, especially, when that money is being used to enable the bad choices of others? I don't think so. I think what our "representatives" are doing is morally wrong and I am outraged. You should be too.

Still, our fearless leaders press onward seemingly oblivious to the fact that the house is coming down all around them. They remain deaf to the cries of a majority of Americans who are begging them to, "Please, for the love of God, STOP!" Their stealing from public coffers so they can sink their teeth into private enterprise won't save them or us. What it will do is make things worse by enabling mediocrity at taxpayer expense. Yes, it's sick; it's obscene; it's immoral…and what's worse is that, practically speaking, those of us who are paying the tab are powerless to stop it.

Editor's Note: I wish to thank, MTW contributor and resident photoonist, T.R. Oglodad for whipping up the liberal Fudd graphic which accompanies this commentary.