Political leanings

[strocube]

That's right. She could not buy her way in, ha!
I'll take Jerry over that vile cunt, Meg Whitman, any day.

Suck it bitches, for once, Californians did not allow themselves to be duped.

[Torurot]

 Not so fast!

Four Deformations of the Apocalypse
By DAVID STOCKMAN
NY TIMES Published: July 31, 2010

IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation€™s public debt €” if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 €” will soon reach $18 trillion. That€™s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation€™s wealthiest taxpayers be spared even a three percentage-point rate increase.

More fundamentally, Mr. McConnell€™s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts €” in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance €” vulgar Keynesianism robed in the ideological vestments of the prosperous classes.

This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one.

The first of these started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit €” the combined shortfall on our trade in goods, services and income €” has reached nearly $8 trillion. That€™s borrowed prosperity on
an epic scale.

It is also an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves. Just let the free market set currency exchange rates, he said, and trade deficits will self-correct.

It may be true that governments, because they intervene in foreign exchange markets, have never completely allowed their currencies to float freely. But that does not absolve Friedman€™s $8 trillion error. Once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors.

In fact, since chronic current-account deficits result from a nation spending more than it earns, stringent domestic belt-tightening is the only cure. When the dollar was tied to fixed exchange rates, politicians were willing to administer the needed castor oil, because the alternative was to make up for the trade shortfall by paying out reserves, and this would cause immediate economic pain €” from high interest rates, for example. But now there is no discipline, only global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve.

The second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40 percent of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970. This debt explosion has resulted not from big spending by the  Democrats, but instead the Republican Party€™s embrace, about three decades ago, of the insidious doctrine that deficits don€™t matter if they result from tax cuts.

In 1981, traditional Republicans supported tax cuts, matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration€™s hastily prepared fiscal blueprint, however, was no match for the primordial forces €” the welfare state and the warfare state €” that drive the federal spending machine.

Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget €” entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans€™ fiscal religion.

Through the 1984 election, the old guard earnestly tried to control the deficit, rolling back about 40 percent of the original Reagan tax cuts. But when, in the following years, the Federal Reserve chairman, Paul Volcker, finally crushed inflation, enabling a solid economic rebound, the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts.

By fiscal year 2009, the tax-cutters had reduced federal revenues to 15 percent of gross domestic product, lower than they had been since the 1940s. Then, after rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures, George W. Bush surrendered on domestic spending cuts, too €” signing into law $420 billion in non-defense appropriations, a 65 percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy.

The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector. Here, Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation. As a result, the combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.

But the trillion-dollar conglomerates that inhabit this new financial world are not free enterprises. They are rather wards of the state, extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives. They could never have survived, much less thrived, if their deposits had not been government-guaranteed and if they hadn€™t been able to obtain virtually free money from the Fed€™s discount window to cover their bad bets.

The fourth destructive change has been the hollowing out of the larger American economy. Having lived beyond our means for decades by
borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs in goods production and in service categories like trade, transportation, information technology and the professions has shrunk by 12 percent, to 68 million from 77 million. The only reason we have not experienced a severe reduction in nonfarm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.

It is not surprising, then, that during the last bubble (from 2002 to 2006) the top 1 percent of Americans €” paid mainly from the Wall Street casino €” received two-thirds of the gain in national income, while the bottom 90 percent €” mainly dependent on Main Street€™s shrinking economy €” got only 12 percent. This growing wealth gap is not the market€™s fault. It€™s the decaying fruit of bad economic policy.

The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing €” as suggested by last week€™s news that the national economy grew at an anemic annual rate of 2.4 percent in the second quarter. Under these circumstances, it€™s a pity that the modern Republican Party offers the American people an irrelevant platform of recycled Keynesianism when the old approach €” balanced budgets, sound money and financial discipline €” is needed more than ever.

[alan1chef]

Oh yes...you'll take Jerry...he will insure that California remains a haven for welfare recipients....beggars with signs will pop up on every street corner now....and Jerry will do nothing...as usual...he's just here for the retirement money. When your only legacy is the fact that you once dated Linda Ronstadt...what do you expect?

[Torurot]

Tea party (facts don't matter) love to talk about Reagan..

Paul Craig Roberts and David Stockman WERE the Reagan architects.

Reagonomics
http://www.npr.org/templates/story/s...ryId=129052425

You can listen here:

http://www.npr.org/player....9052419

or read:

This is ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

If the collapse of the financial markets in 2008 taught us anything, it's that economics - or rather, economic forecasting - is an art rather than a science. Some economists say the rest of this year will feel very much like a recession. And others aren't so pessimistic. But this week's jobless numbers and weaker-than-expected growth are playing into a debate here in Washington over tax cuts.

But before we get to that, a story - and it begins when David Stockman met President Reagan in 1981.

Mr. DAVID STOCKMAN (Economist): He was one of the, you know, greatest human beings I've ever met.

RAZ: In the early 1980s, Stockman became a kind of Washington wunderkind, the vanguard of a new type of economic thinking: supply side, deregulation, low taxes to stimulate growth.

As the White House budget director, Stockman was an architect of what would come to be known as Reagonomics. But a few years into the job, he became disillusioned.

Mr. STOCKMAN: The military budget got out of control, and the tax cuts went to special interests as much as they did to the broad public.

RAZ: And he noticed a problem. The government wasn't collecting enough money to cover its costs, and he started telling that to Reagan.

Mr. STOCKMAN: As time passed, he was less and less enthusiastic about what I had to say.

RAZ: So in 1985, Stockman left. Now these days, he's still a conservative and still a Republican, but he doesn't think his party is taking a responsible position on taxes any longer. At the end of this year, the Bush-era tax cuts are set to expire. Republicans want them renewed; Democrats want to keep the tax cuts for the middle-class, but not for the wealthiest 2 percent of Americans.

Now, Stockman says they're both wrong. And he says extending either of those cuts is tantamount to the government declaring bankruptcy.

Mr. STOCKMAN: We've had a rolling referendum on what we want in government and what we don't, ever since the first Reagan spending cut program - which I was part of in 1981. And it seems pretty clear to me that by 2010, we've decided a lot of things that cost a lot of money, the American people want. I might not agree with that but apparently, they do.

So we're spending $3.8 trillion in defense, non-defense, entitlements, everything else, and we're taking in only 2.2 trillion. So we got a massive gap. You have to pay your bills; you can't keep borrowing from the rest of the world at that magnitude, year after year after year. So in light of all of those facts, I say we can't afford the Bush tax cuts.

RAZ: Now, I think many people would be surprised to hear Ronald Reagan's former budget director make this argument. I mean, what happened to the idea you once pushed, that tax cuts ultimately stimulate the economy?

Mr. STOCKMAN: I think that's true. But we're in a much different world today than we were in the early 1980s. We have had a spree of debt building for the last 30 years, both in the public and in the private sector. So in that environment, the highest priority is solvency now, not incentives for growth.

RAZ: You seem to suggest that many of our economic troubles are the result of Republican economic policies over the past few decades. You are a Republican. You are a conservative. Why do you think Republicans are largely to blame?

Mr. STOCKMAN: Because the Republicans abandoned their old-time fiscal religion in favor of two theories, which I think are now proving to be both wrong and highly counterproductive and damaging.

One was monetarism, which said let the dollar float on the international markets. Let 12 men and women at the Fed decide whether to raise or lower interest rates, and use the Fed to try to run this massive economy. What they've done instead is run the printing press; they've flooded the world with dollars. The whole monetarist policy has been a mistake.

The second thing was the perversion of supply side. Yes, there was a good idea that in certain circumstances, lower tax rates will encourage economic activity and savings. But when you make it a religion, when you make it a catechism and you say you cut taxes no matter what the circumstance, what the season, what the condition, then I think the whole idea has been perverted.

By getting off track over the last 30 years, the Republican Party has basically given up its historic view that the key thing was financial discipline, financial responsibility, and that we had to live within our means. Today, we have two free lunch parties and as a result, we're borrowing ourselves into grave danger with each passing month and year.

RAZ: Now, Republicans - David Stockman in the Senate, led by, obviously, the Minority leader, Mitch McConnell - they say they're simply following, you know, the Reagan philosophy of supply-side economics, a policy that you pushed. Do you think they're being disingenuous?

Mr. STOCKMAN: Utterly disingenuous. I find it unconscionable that the Republican leadership, faced with a 1.5 trillion deficit, could possibly believe that good public policy is to maintain tax cuts for the top 2 percent of the population who, after all, have benefited enormously from this phony boom we've had over the last 10 years as a result of the casino on Wall Street.

And I blame Paulson on it. I blame the Bush White House. They basically sold out the birthright of the Republican Party when they bailed out Wall Street unnecessarily, in a state of complete panic in September 2008. That's really, at the end of the day, one of the greatest misfortunes in fiscal governance since the Reagan revolution tried to straighten things out beginning in 1980.

RAZ: Do you hold President Obama and his economic policies responsible for some of this growing deficit?

Mr. STOCKMAN: Absolutely. The only thing worse than the Republican leadership position is that of the White House. I don't know how they think they're helping the economy by every month, coming up with a new plan to borrow tens of billions more, drive us deeper into debt. Never in history has anyone said that for very long, you can sustain a circumstance where the debt is growing at twice the rate of the economy.

So I think the White House with the stimulus is totally wrong. A lot of it has been wasted. Why did they put all that money in the automobile industry? There's far too much capacity already. Why did they waste the money on the housing credit? Why are they continuing to try to pump money into state and local governments? I understand there's severe budget pressure there, but the federal government is in deeper debt than the state and local governments.

But in the end of the day, I would say Obama is really wrong when he says, I'll extend the Bush tax cuts except for the top, you know, 2 percent - above 250,000.

RAZ: In other words, you're saying he has to not just end the tax cut for the top 2 percent or 1 percent of Americans, but the middle-class, the so-called middle-class tax cuts as well.

Mr. STOCKMAN: Absolutely. The tax - the Bush tax cuts costs $300 billion a year: 100 billion to the top 2 percent, 200 billion to the middle-class. So I ask the White House, why is a $175,000-a-year family going to be given a tax break that we can't afford - a large tax reduction, tens of thousands of dollars a year? To me, it makes no sense.

RAZ: I wonder, David Stockman, where is your political home these days? I mean, where does somebody like you go?

Mr. STOCKMAN: Well, I don't know. I think I'm in the unwashed middle, let's say, with more and more of the American people. And one of these days, I think the public is going to speak in no uncertain terms - that we've had enough of this crony capitalism, and that we're going to have to now clean things up.

At some point, we're going to either be forced to do it by the global bond and currency markets, or the American people are going to wake up and demand it through an election that really cleans house in terms of both parties and the irresponsible behavior that each of them engages in today.

RAZ: That's David Stockman. He was the director of the White House Budget Office under President Ronald Reagan and is widely credited as the architect of Reagonomics.

David Stockman, thank you so much.

Mr. STOCKMAN: Thank you.

[BlueBallz]

California is a financial basket case. You get what you deserve!! With the last group of people with money please turn out the lights!!!!

[Jake_Sully]

You know, you don't even have to be a rocket scientist to figure out what the 2012 election is going to be about:

GOP: Kill obamacare, social security, food stamps, legal immigration, federal education.. every federal program to stop owing China money, except a strong national defense and spy agency. The only way to get this done is put a gop president in the white house even if it is someone retarded so we don't have to worry about a veto.

Dems: Leave everything alone. We're not totally fine but we're getting there.

The scary part is fear and ignorance might win over facts.

[deepthroat]

(alan1chef @ Nov. 08 2010,03:57) California will be really screwed up.

Welcome back to Planet Earth Alan1Chef. As you've apparently been gone for a while, I'll break it to you gently:


California....
Has...
Been...
Screwed...
Up...
For...
Quite...
A...
While


And all this under a Republican Governor! *SHOCK*

[alan1chef]

You can't fault Arnold for his effort...his first term was very productive but then the Democrats in the
State Assembly decided to block anything he wanted to do and guess what...California went downhill fast. I've lived in this state for 50 years...so I know much more about what is going on here than you...obviously. I came here in 1954...and you've got your facts backwards. The state has regularly elected Democrats to be governor however when they totally screw things up...the electorate has turned to Republicans to fix things. Perhaps I should remind you how really screwed up the state was when Arnold took over....oops...you missed that one, didn't you...lol

[BlueBallz]

You know I have been hearing LOTS of commercials on the radio trying to sell California bonds. You hvae to be fucking kidding me?? I would rather invest in "bargirl faithfulness futures" than that load of shit California is offering.....

[kahuna]

(alan1chef @ Nov. 10 2010,10:26) The state has regularly elected Democrats to be governor however when they totally screw things up...the electorate has turned to Republicans to fix things.

Wrong Mr. California...There have been more Republicans than Democrats elected to govern California...Approx 55% have been Republicans...39% Democrats...And 6% other parties...

And those Republicans who fixed everything surely include Wilson, Deukmiejian and Reagan...As I recall they left the State's affairs pretty fucked up when they left office...

For the record, I've lived in California much longer than you have and I have never been registered to vote as a Democrat...Luckily for me I don't live there now...

Perhaps the best critics come from without rather than within...

[pacman]

The G20 conference came & went in Seoul last week & poor old Obama was given short shrift to his proposals by the rest of the world. It is obvious they don't believe in the ability of the US economy to make any sort of swift recovery.

More quantative easing by the Federal Reserve is further diluting the strength of the US dollar leading them ever closer to financial Armageddon. I can't believe what a dangerous game Bernanke is playing there. And history shows that flooding the marketplace with liquidity brings no guarantee that it will get the wheels of industry moving.

The big thing in the US' favour is that its debt is all in US dollars. Hyperinflation can reduce their debt to nothing, the only problem is how would the US government stop the inevitable collapse of society?

We won't have long to wait to see how it will play out with massive amounts of US Bonds rolling over next year. For some time now the only buyer of Fed paper has been the Fed themself. Are they brazen enough to buy all their own debt? Or do they have any other choice?

No other country could ever contemplate such a move but as long as everyone plays along, they just might get away with it. China alone has two trillion (give or take a billion or two) dollars at stake. I can't see them sit idly by & allow that to be destroyed but what can they do?

We all have to go along with the charade, to do otherwise is to risk financial havoc & the likelihood of World War III.

[Jake_Sully]

So what do you see happening paccie?

What is the future of western currencies?

[pacman]

If I knew the answer to that, I doubt I would post it, I would be too busy trading the forex market. But there are simply too many variables for anyone to be making assertions.

My thoughts (this week) are that the dollar is doomed but allowances will be made that will stop the domestic panic & an orderly transition will take place to another, debt-free currency that will replace the dollar. This will be gold backed as the US forefathers dictated in the Constitution.

China will be taken care of, other nations on a needs-by-needs basis. If this all sounds bizarre, google Amero. The information about the Amero will surprise everyone.

[manarak]

The G20 conference came &  went in Seoul last week & poor old Obama was given short shrift to his proposals by the rest of the world. It is obvious they don't believe in the ability of the US economy to make any sort of swift recovery.

Well, Obama proposed that countries which have a big trade surplus "take measures" to reduce it.

WTF?
Countries with successful industries need to step on the breakes because the US can't follow?

The German trade surplus is the only reason why the Euro hasn't collapsed yet.

What is the future of western currencies?

One just needs to look at the global flows of goods to answer that one.

In older times, western countries had it all: raw materials production, transformation, sales. It stayed that way until after the industrial revolution.

Then raw materials extraction (minerals) and production (foodstuff) was outsourced to the colonial empire and then to "controlled" third world countries, while trade unions destroyed the economic structures in western countries.
The income gap narrowed too much, and everyone felt entitled to a car, a house, a flat, whatever.
The business still made money by exploiting poor third world countries.

Then came the age of globalization.
Manufacturing was outsourced too to other countries.
Industry groups shifted progressively to financial holdings, owning the foreign production facilities, and western retailing groups sell the products in western countries, while using offshore trading companies, where the bulk of the profit remains.

i.e. western countries bleed out.

Do you also notice that thrid world countries now have both the raw material production AND the manufacturing?

Long term, the currencies will reflect this at some point or another.
This will lead to a crisis.


Then there will be 2 possibilities:
- the western countries impose harsh restrictions on trade and will tax on turnover instead on profit

- the western countries do nothing and bleed out

at one point or another, there will be a return to a "normal" society, i.e. one where cheap labor is again available and where poor people will have just enough enough to live (without car, without TV, without computer), and where a middle class family can again employ the services of an unqualified worker.

[PigDogg]

(manarak @ Nov. 16 2010,02:11) poor people will have just enough enough to live (without car, without TV, without computer),

I often thnk about what is essential and what is luxury for the clues on how to invest for when the sh*t hits the fan.

Used cars may be essential for the rural poor to get to work.

If one is not working TV and broadband are "almost essential" as other than sex perhapsthe cheapest form of entertainment.