Two pieces of great interest to people opposed to Obama's bizarre accumulation of debt and his reduction of our nation's security: (Gov. Palin asked yesterday why Obama is cutting Alaska's missile defense at precisely the moment when North Korea seems to have drawn a nuclear bead on Sarah's home state. Obama has not provided any soothing, albeit meaningless, words to her yet.)First, please consider listening to (and calling) the all-night Blog Talk Radio program originating Wednesday night. It should be a dandy.
Host: THE YOUTUBE FORUM
Type: Party - Night of Mayhem
Network: Global
Start Time: Wednesday, April 8, 2009 at 8:30 pm
End Time: Thursday, April 9, 2009 at 10:00 am
Location: http://www.blogtalkradio.com/The-Youtube-Forum/2009/04/09/
Phone: 718-508-9104
Email: utubeforum@gmail.com
Description: "How to Bring the Internet Resistance to the Ground and Ways We Can all Work Together."
W.A.M. Strategist and Tsunami Media founder, Jacquerie.
This program is dedicated to a current vlogger (sallee5) who was suspended for exercising her 1st Amendment Rights. Anyone who would like to call in and comment about the outrage of her suspension please participate. 8:30 PM EST. Call-in Number: (718) 508-9104. Caution! Danger Zone! Please come locked and loaded! Molon Labe!
Second, if you're disturbed by the current economic situation and wondering what caused it, please read the following story in The Atlantic: http://www.theatlantic.com/doc/200905/imf-advice.
The story by an MIT economist is called "The Quiet Coup," and it appears in the May 1 issue of The Atlantic. If you ever wondered why investment banks (which no longer exist as such) and other financial institutions, including Goldman Sachs, Merrill-Lynch, AIG, and Citigroup contributed millions of dollars to candidate Barack Obama, the Atlantic piece will give you great insight. (You may have noticed that said financial institutions have gotten hundreds of billions of dollars in bailout money, while, say, autoworkers, are getting squat. Guess why.)
Also, Glenn Beck has discovered one of my favorites, Niall Ferguson, an economic historian at Oxford, Standford, and Harvard -- and that's saying a lot for a guy (Ferguson) who's basically conservative. On today's (Tuesday's) Beck program on FOX, Niall discussed how he predicted -- in 2004 -- that debt would eventually crush the U.S. economy (in his book "Colossus: The Rise and Fall of the American Empire).
Another piece that predicted exactly what would happen (in 2005 in the magazine Foreign Affairs is by Brad Setser and Nouriel Roubini. It's called "How Scary is the Deficit?" It's at: http://www.foreignaffairs.com/articles/60840/brad-setser-et-al/how-scary-is-the-deficit
At the time, some economists made fun of Setser and Roubini for suggesting that the unthinkable might happen -- i.e., that both housing prices and the stock market might tank. None of those critics is laughing anymore.
Basically, what Setser, Roubini, and Ferguson point out is that the U.S., under Clinton and Bush, made a "Deal with the Devil," Communist China. They would finance trillions of dollars of our debt, and in exchange, we would send all the money (plus some more) back to China to keep their factories humming 24X7. Obama's "solution" to the Deal/Devil is to increase sharply the borrowing from China -- the better to keep those Chinese factories going (while ours of course shut down).
The "good news" about Obama's policies for those of us in the current generation is that the truly crushing part of the debt will be paid off by future generations, specifically, our children, grandchildren, and great-grandchildren, who may end up not liking us very much when they find out we've arranged to have them pay our bills. I wonder what Malia and Sasha will say to daddy (and mommy) when they find that out?
Showing posts with label AIG. Show all posts
Showing posts with label AIG. Show all posts
Wednesday, April 8, 2009
Tuesday, April 7, 2009
Obama Shortchanges American Citizens
While Obama is busy "saving the world" (with his trusty TelePrompter), he's doing a terrible job protecting the U.S. . . .
With TARP (Troubled Assets Relief Program) and the Stimulus Package, Obama has essentially thrown money (nearly $1.5 trillion) in the direction of his favored groups (bankers, unions, and big city governments) -- and done little or nothing for the American people.
How much is $1.5 trillion? Basically, it adds up to $5,000 for every American -- men, women, and children. In other words, if the Obama Administration had been so inclined, which it was not, it could have sent a family of four nearly $20,000. The "Octomom," with a total of 14 children, would have received $75,000.
Instead, Obama has favored financial institutions, the same ones that caused the global economic crisis. AIG has received nearly $175 billion, the equivalent of nearly $600 from every Americans. Other firms, including the Bank of America, have also received huge sums. Famously, of course, AIG executives received $165 million in "Chris Dodd bonuses." That adds up to about $555 from every American. By the way, did you receive even $1 as a bonus?
Of course, Obama/Geithner pretend that this is "free money." They don't link it to taxpayers. Instead, they imply that the government has a money tree that it can pluck to give payments to favored groups. They forget to mention the huge campaign "donations" Obama and other leftists received from financial institutions like Fannie Mae, Freddie Mac, AIG, Citigroup, Goldman Sachs, Merrill-Lynch, and other entities. (Note: Goldman Sachs received the government money indirectly, the better to protect its executives' huge bonuses.)
In fact, giving every American $5,000 would have produced much better results. Because part of the money would have been spent and part invested, the results would have been much better. People would have bought houses, cars, and other goods. How would it have helped, say, banks? Frankly, a lot of the money would have been deposited, which is exactly what banks need. With a big infusion of deposits, banks would have had a great deal more money to lend.
As usual, Obama's politically driven approach has shortchanged the American people. Americans want to believe in the man, but he's giving them precious little reason to do so.
With TARP (Troubled Assets Relief Program) and the Stimulus Package, Obama has essentially thrown money (nearly $1.5 trillion) in the direction of his favored groups (bankers, unions, and big city governments) -- and done little or nothing for the American people.
How much is $1.5 trillion? Basically, it adds up to $5,000 for every American -- men, women, and children. In other words, if the Obama Administration had been so inclined, which it was not, it could have sent a family of four nearly $20,000. The "Octomom," with a total of 14 children, would have received $75,000.
Instead, Obama has favored financial institutions, the same ones that caused the global economic crisis. AIG has received nearly $175 billion, the equivalent of nearly $600 from every Americans. Other firms, including the Bank of America, have also received huge sums. Famously, of course, AIG executives received $165 million in "Chris Dodd bonuses." That adds up to about $555 from every American. By the way, did you receive even $1 as a bonus?
Of course, Obama/Geithner pretend that this is "free money." They don't link it to taxpayers. Instead, they imply that the government has a money tree that it can pluck to give payments to favored groups. They forget to mention the huge campaign "donations" Obama and other leftists received from financial institutions like Fannie Mae, Freddie Mac, AIG, Citigroup, Goldman Sachs, Merrill-Lynch, and other entities. (Note: Goldman Sachs received the government money indirectly, the better to protect its executives' huge bonuses.)
In fact, giving every American $5,000 would have produced much better results. Because part of the money would have been spent and part invested, the results would have been much better. People would have bought houses, cars, and other goods. How would it have helped, say, banks? Frankly, a lot of the money would have been deposited, which is exactly what banks need. With a big infusion of deposits, banks would have had a great deal more money to lend.
As usual, Obama's politically driven approach has shortchanged the American people. Americans want to believe in the man, but he's giving them precious little reason to do so.
Saturday, April 4, 2009
What Caused the Economic Collapse?
People like Barack Obama, Chris Dodd, Barney Frank, and Maxine Waters weren't the major causes of the financial collapse, but by their inaction and greed they certainly played major roles. They provided little or no oversight on firms who were basically bankrolling their political careers.
[Note: For those of you who have not yet seen it, please refer to Ron Devito's blog (link below) for the counter-attack against the latest smears against Sarah Palin:http://sarahs-accomplishments.blogspot.com/2009/04/salacious-coverage-of-palin-family-some.html Also see Gary Jackson's fine blog piece: http://hotrodsnitroandconservatism.blogtownhall.com/2009/03/10/with_sarah_palin,_barack_obama_shows_rod_blagojevich_how_pay_-for-play_is_done!.thtml
The best article on how the current economic disaster came about is in The Atlantic: http://www.theatlantic.com/doc/200905/imf-advice (Simon Johnson, "The Quiet Coup," The Atlantic, May, 2009)
I don't agree with it 100%, but it's still up in the A-plus category. I've been trying for months to write simply and accurately about WHAT HAPPENED? As a staunch defender of capitalism, I'm saddened that so many supposedly capitalist companies or entities borrowed a lot more money than they could repay -- and have turned to the government for bailouts that they really don't deserve.
If the economy goes bad, as it has, companies need to have the capital and other resources to survive, which many of them did not. They had no real plan for long-term sustainability. In a sense, they were something like . . . Bernie Madoff. As long as the economy was booming, Bernie could pay off his new participants. When it stopped booming, Bernie was up a creek.
The banks, insurers, and other who have essentially failed were not running classic Ponzi schemes, but were excessively leveraged and thus totally unprepared for a sharp downturn. Borrowing money to buy stocks or other products when markets are going up quickly appears to make sense. It's what led to all those huge Wall Street bonuses. It stops making sense when the markets head downward for a sustained period of time. (At the same time, credit dries up because yesterday's reliable borrowers have become un-creditworthy.)
Many big companies have borrowed money -- or engaged in contracts -- that they now can't repay. Unfortunately, millions of individuals have done the same, especially in buying houses they couldn't afford -- or chalking up credit card debts they can no longer pay.
Why weren't we told this was going on by elected officials or the media, whose job supposedly is to tell us what's happening and what lies ahead? Party because they were engaged in similar, questionable behavior, incurring huge amounts of public debt to pay off constituents (or themselves).
They, too, were "betting" that markets (including stocks and housing) would keep on going up forever. However, as Isaac Newton discovered long ago, "What goes up eventually comes down." (Of course, the financial industry was providing huge campaign "contributions" to people like Barack Obama, Chris Dodd, and Barney Frank. They weren't about to interfere with that situation.)
Does all thise prove that capitalism doesn't work? No. It proves that capitalism conducted like a Las Vegas "craps" game or "roulette" table doesn't work. Many years ago in NV I bet on red on a roulette table ten times and it came up red . . . ten times. I ended up making more than $1,110, and then I stopped. What if I kept doubling down on red? Eventually, I would have lost all my gains. It was just a matter of time. I got out before I lost everything.
What we saw from financial institituions was that they weren't just doubling down -- they were borrowing tons of money to "bet" on their (metaphoric) roulette table. They set themselves up not to lose $1,100 but rather billions. We as a country have given AIG $170 billion and the money seemingly has gone into a bottomless pit.
The following is from Simon Johnson's Atlantic article:
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
[Note: For those of you who have not yet seen it, please refer to Ron Devito's blog (link below) for the counter-attack against the latest smears against Sarah Palin:http://sarahs-accomplishments.blogspot.com/2009/04/salacious-coverage-of-palin-family-some.html Also see Gary Jackson's fine blog piece: http://hotrodsnitroandconservatism.blogtownhall.com/2009/03/10/with_sarah_palin,_barack_obama_shows_rod_blagojevich_how_pay_-for-play_is_done!.thtml
The best article on how the current economic disaster came about is in The Atlantic: http://www.theatlantic.com/doc/200905/imf-advice (Simon Johnson, "The Quiet Coup," The Atlantic, May, 2009)
I don't agree with it 100%, but it's still up in the A-plus category. I've been trying for months to write simply and accurately about WHAT HAPPENED? As a staunch defender of capitalism, I'm saddened that so many supposedly capitalist companies or entities borrowed a lot more money than they could repay -- and have turned to the government for bailouts that they really don't deserve.
If the economy goes bad, as it has, companies need to have the capital and other resources to survive, which many of them did not. They had no real plan for long-term sustainability. In a sense, they were something like . . . Bernie Madoff. As long as the economy was booming, Bernie could pay off his new participants. When it stopped booming, Bernie was up a creek.
The banks, insurers, and other who have essentially failed were not running classic Ponzi schemes, but were excessively leveraged and thus totally unprepared for a sharp downturn. Borrowing money to buy stocks or other products when markets are going up quickly appears to make sense. It's what led to all those huge Wall Street bonuses. It stops making sense when the markets head downward for a sustained period of time. (At the same time, credit dries up because yesterday's reliable borrowers have become un-creditworthy.)
Many big companies have borrowed money -- or engaged in contracts -- that they now can't repay. Unfortunately, millions of individuals have done the same, especially in buying houses they couldn't afford -- or chalking up credit card debts they can no longer pay.
Why weren't we told this was going on by elected officials or the media, whose job supposedly is to tell us what's happening and what lies ahead? Party because they were engaged in similar, questionable behavior, incurring huge amounts of public debt to pay off constituents (or themselves).
They, too, were "betting" that markets (including stocks and housing) would keep on going up forever. However, as Isaac Newton discovered long ago, "What goes up eventually comes down." (Of course, the financial industry was providing huge campaign "contributions" to people like Barack Obama, Chris Dodd, and Barney Frank. They weren't about to interfere with that situation.)
Does all thise prove that capitalism doesn't work? No. It proves that capitalism conducted like a Las Vegas "craps" game or "roulette" table doesn't work. Many years ago in NV I bet on red on a roulette table ten times and it came up red . . . ten times. I ended up making more than $1,110, and then I stopped. What if I kept doubling down on red? Eventually, I would have lost all my gains. It was just a matter of time. I got out before I lost everything.
What we saw from financial institituions was that they weren't just doubling down -- they were borrowing tons of money to "bet" on their (metaphoric) roulette table. They set themselves up not to lose $1,100 but rather billions. We as a country have given AIG $170 billion and the money seemingly has gone into a bottomless pit.
The following is from Simon Johnson's Atlantic article:
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
Thursday, March 5, 2009
Barack Obama: Bankrupting the Nation
Handing money out to AIG is "like donating blood at a morgue." (Troy Dunn)
Him: "Look, he's giving us all money just like he primised."
Her: "He has your wallet."
Him: "Look, he's giving us all money just like he primised."Her: "He has your wallet."
Financial expert Troy Dunn says, "It's like donating blood at a morgue." He's talking about the government's stupid decision to throw more cash at hapless AIG.
In coming days, I'll discuss what's gone wrong with the economy -- and what the Obama Administration is doing to make it worse. The reality is that you'll find much more of value here than you will on CNN and the rest of the mainstream media. The MSM continues to find it difficult to ask serious questions about Obama's policies, which are designed mainly to pay off his voters rather than to benefit the nation. (If you come here regularly, please sign up as one of my "followers" -- in the sidebar at the upper right.)
Economics, my friends, is relatively simple, involving a finite number of variables, including: supply, demand, investments, profits, and taxes. Obama is focusing on demand and ignoring the other components. Worse than that, he's looking for scapegoats rather than solutions. It's a tactic disastrously practiced during the Franklin Roosevelt Administration.
Consider Obama's disastrous plunge into class warfare. Yes, many people love to hate "the rich" (whether they're really rich or not). But consider this: Mayor Michael Bloomberg recently spoke out against soaking the rich people in his city. He explained that high-tax, high-cost New York has eight million residents. But a mere 40,000 of the eight million -- one-half-of-one-percent -- provide city tax revenue totaling a massive 63%..
What if one-eighth of those people -- 5,000 -- moved out of the city? That would do serious damage to the city's capacity to provide services. What if one-fourth of them -- 10,000 -- moved out, which they certainly have the resources to do? It would cripple the city's ability to meet the needs of its people.
Is Obama aware of such a situation? He hasn't shown any sign yet that he is. Sarah Palin does understand such realities, and that's one reason she'd be a much better President than Obama. In Sarah's world, which is also my world, a company that operates efficiently, wisely, and profitably can grow and flourish. Companies that perform poorly will flounder and, eventually, fail.
Not so in the political planet occupied by Obama and people like Treasury Secretary Tim Geithner. They look at companies such as GM and AIG as "too big to fail." Thus, such companies qualify for huge bailouts, which are somehow never quite enough money to change their prospects.
GM says it needs another $30 billion -- with a "b" -- to stay afloat. However, GM is the corporate version of a bottomless pit. Most insightful observers believe the company is headed for bankruptcy. Even that drastic step might not save America's largest automaker. At the same time, the overpaid members of the automakers union seem blissfully unaware of GM's lurch toward oblivion. GM wants to cut nearly 50,000 jobs, but even that probably will not be enough.
GM qualifies as one of Obama's companies that's "too big to fail," but fail it will. "Its auditors have serious doubts about its ability to survive," as one news report just said. Please let it die in peace.
What about insurance Godzilla AIG? So far, it has received a total of about $150 billion in bailout money. Guess what? It will need more, much more. In last year's fourth-quarter, AIG lost a whopping $60 billion. Is it doing better in this year's first quarter? Apparently not.
What's AIG's problem? It insured many of the companies that were up to their eyeballs in the subprime lending debacle. In other words, AIG insured companies that matched it in irresponsibility and bad financial practices. For that, we're supposed to bail it out?
What about the concept that a company like AIG is "too big to fail?" I have news for Obama (and AIG): it is failing. Last fall, its stock price was $20 a share. Today, a share of AIG stock is worth . . . 50 cents. Its terrible performance is one of the reasons owners in listed shares of all American companies have lost a total of $1.1 trillion -- with a "t" -- in wealth in the past six weeks. Obama is bankrupting the nation. (Citigroup, once the most valuable financial institution in the world now has its stock trading at $1.03 per share.)
This morning on FOX News (an island of sanity in a sea of nonsense), self-made millionaire Troy Dunn said this about AIG: "It's not too big to fail." He added, "It has already failed."
About throwing additional taxpayers' money at AIG, Dunn observed: "It's like donating blood at a morgue."
If AIG collapses -- actually, when it collapses -- many companies around the world will suffer. Some of the will fail. However, Obama, Geithner, and Bernanke are incapable of saving AIG. They are involved in trying to resuscitate a corpse stiffened by rigor mortis.
Today (Thursday), the stock market is continuing to fall. That's about as newsworthy as saying "The sun came up once again this morning." Wall Street is sending a message to Obama, who remains tone deaf to the sobering music of the market. Wall Street is saying that it doesn't believe Obama has a clue about how to turn the situation around. In that view, Wall Street is correct.
[Tomorrow (Friday), I'll be writing on how to cure a serious recession, with emphasis on how it's been done effectively in past, specifically in the Administrations of Calvin Coolidge in the 1920s and Ronald Reagan in the 1980s. They did so by taking steps the exact opposite of what Obama's doing. A situation where companies aren't allowed to fail becomes one where companies eventually aren't allowed to succeed.]
In coming days, I'll discuss what's gone wrong with the economy -- and what the Obama Administration is doing to make it worse. The reality is that you'll find much more of value here than you will on CNN and the rest of the mainstream media. The MSM continues to find it difficult to ask serious questions about Obama's policies, which are designed mainly to pay off his voters rather than to benefit the nation. (If you come here regularly, please sign up as one of my "followers" -- in the sidebar at the upper right.)
Economics, my friends, is relatively simple, involving a finite number of variables, including: supply, demand, investments, profits, and taxes. Obama is focusing on demand and ignoring the other components. Worse than that, he's looking for scapegoats rather than solutions. It's a tactic disastrously practiced during the Franklin Roosevelt Administration.
Consider Obama's disastrous plunge into class warfare. Yes, many people love to hate "the rich" (whether they're really rich or not). But consider this: Mayor Michael Bloomberg recently spoke out against soaking the rich people in his city. He explained that high-tax, high-cost New York has eight million residents. But a mere 40,000 of the eight million -- one-half-of-one-percent -- provide city tax revenue totaling a massive 63%..
What if one-eighth of those people -- 5,000 -- moved out of the city? That would do serious damage to the city's capacity to provide services. What if one-fourth of them -- 10,000 -- moved out, which they certainly have the resources to do? It would cripple the city's ability to meet the needs of its people.
Is Obama aware of such a situation? He hasn't shown any sign yet that he is. Sarah Palin does understand such realities, and that's one reason she'd be a much better President than Obama. In Sarah's world, which is also my world, a company that operates efficiently, wisely, and profitably can grow and flourish. Companies that perform poorly will flounder and, eventually, fail.
Not so in the political planet occupied by Obama and people like Treasury Secretary Tim Geithner. They look at companies such as GM and AIG as "too big to fail." Thus, such companies qualify for huge bailouts, which are somehow never quite enough money to change their prospects.
GM says it needs another $30 billion -- with a "b" -- to stay afloat. However, GM is the corporate version of a bottomless pit. Most insightful observers believe the company is headed for bankruptcy. Even that drastic step might not save America's largest automaker. At the same time, the overpaid members of the automakers union seem blissfully unaware of GM's lurch toward oblivion. GM wants to cut nearly 50,000 jobs, but even that probably will not be enough.
GM qualifies as one of Obama's companies that's "too big to fail," but fail it will. "Its auditors have serious doubts about its ability to survive," as one news report just said. Please let it die in peace.
What about insurance Godzilla AIG? So far, it has received a total of about $150 billion in bailout money. Guess what? It will need more, much more. In last year's fourth-quarter, AIG lost a whopping $60 billion. Is it doing better in this year's first quarter? Apparently not.
What's AIG's problem? It insured many of the companies that were up to their eyeballs in the subprime lending debacle. In other words, AIG insured companies that matched it in irresponsibility and bad financial practices. For that, we're supposed to bail it out?
What about the concept that a company like AIG is "too big to fail?" I have news for Obama (and AIG): it is failing. Last fall, its stock price was $20 a share. Today, a share of AIG stock is worth . . . 50 cents. Its terrible performance is one of the reasons owners in listed shares of all American companies have lost a total of $1.1 trillion -- with a "t" -- in wealth in the past six weeks. Obama is bankrupting the nation. (Citigroup, once the most valuable financial institution in the world now has its stock trading at $1.03 per share.)
This morning on FOX News (an island of sanity in a sea of nonsense), self-made millionaire Troy Dunn said this about AIG: "It's not too big to fail." He added, "It has already failed."
About throwing additional taxpayers' money at AIG, Dunn observed: "It's like donating blood at a morgue."
If AIG collapses -- actually, when it collapses -- many companies around the world will suffer. Some of the will fail. However, Obama, Geithner, and Bernanke are incapable of saving AIG. They are involved in trying to resuscitate a corpse stiffened by rigor mortis.
Today (Thursday), the stock market is continuing to fall. That's about as newsworthy as saying "The sun came up once again this morning." Wall Street is sending a message to Obama, who remains tone deaf to the sobering music of the market. Wall Street is saying that it doesn't believe Obama has a clue about how to turn the situation around. In that view, Wall Street is correct.
[Tomorrow (Friday), I'll be writing on how to cure a serious recession, with emphasis on how it's been done effectively in past, specifically in the Administrations of Calvin Coolidge in the 1920s and Ronald Reagan in the 1980s. They did so by taking steps the exact opposite of what Obama's doing. A situation where companies aren't allowed to fail becomes one where companies eventually aren't allowed to succeed.]
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