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-- Obama killing the economy and stock market? Huh?
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Originally posted by Clovis It's not a comeback it's an observation. If you don't want to debate issues then stop posting in a forum where all we do is exactly that.

I was debating the "illegal immigrants getting stimulus jobs" issue with sarcasm, you said my sarcasm was fucking boring. I made a valid point, albeit through sarcasm, and you batted it aside with a personal attackish type of comment. What say you?

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Originally posted by delobbo jobs like this? http://www.usatoday.com/money/econo...rant-jobs_N.htm

the fact that mexicans can do certain jobs at the same quality as certain americans, and for significantly less money tells me that a certain segment of employees (cough cough - construction workers - cough cough) in our economy are too highly paid to begin with.

If people want better job security choose a skill that is more difficult to acquire (higher barrier of entry) and become a more dynamic job candidate. Taking the easy way out early in life usually results in (i) poor job security, and (ii) low wages.

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Originally posted by jerZ07002 I went to business school (specializing in finance) before law school. I spent a good part of a year reading milton friedman. Generally, I believe free markets will always have the right answer (with the caveat that there is sufficient transparency in the market); the relevant question is whether we, as a society, are willing to go through the pain that free markets can impose during a period of correction. It's probably the healthiest in the long term to allow free market corrections, however, people are very short-sighted and considering many people live pay-check to pay-check it can be quite difficult to expect the general population to by into the idea that free market corrections are better than government intervention. As a human being, I am sypathetic to the general welfare needs of people who aren't as fortunate as myself. So, I am willing to accept government intervention (if for no other reason than to prevent people from resorting to crime to feed their families).

What's your take on the news of another stimulus already in the works, before this first one even has time to work (or fail)? Check this out dude:

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�We are going to need more taxpayer money,� Mark Zandi, the chief economist at Moody�s Economy.com and a key economic advisor to Congressional Democrats, said after the meeting. �I think another stimulus package is a reasonable assumption because of the way things are going.� House Speaker Nancy Pelosi (D-Calif.), standing with members of her leadership team by Zandi�s side, said she agreed that another stimulus bill is being considered as an option. �We have to keep the door open,� Pelosi said. �The word of the day is confidence. Confidence in our markets, confidence in lending, confidence in our financial institutions.�

http://thehill.com/leading-the-news...2009-03-10.html

We were assured the one that just passed will "create or save" 3 million jobs. Do we need to create or save those jobs again so soon or will this new bill be creating or saving more? WTF? Nothing says confidence like an endless string of multi billion dollar emergency bailouts.

Then there's this- David Smick's op-ed this morning calculating that banks may need another $2 TRILLION in TARP before they're safely solvent again. That money would be on top of whatever other stimulus is to come, not part of it:

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I suspect Obama's advisers would like nothing more than to dismantle an irresponsible firm such as Citigroup. They are afraid to do so, for one reason: All the big banks are connected to a potentially lethal web of paper insurance instruments called credit default swaps. These paper derivatives have become our financial system's new master. The Obama team needs to remember that we got into this mess because of a lack of financial transparency. It's time to tell the American people what the stock market already knows: that the path to recovery will probably be expensive and politically unpopular, perhaps explosively so.

http://www.washingtonpost.com/wp-dy...id=opinionsbox1

Are they just going to keep coming back for more? Where is the bottom? Do you think they already know the true cost, and it's so high that they are trying to do it in incremental amounts? THis is some seriously scary shit.

love your sig 17sss... LMAO.

Forgot... about that "create or save 3 million jobs" thing, there is new data out today that it's already failing. Fuckin' sweet! (<--- sarcasm). What was projected at about $200,000 cost per job is now at $500,000 after the 2nd Stimulus passes (if it does)

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The report by a group of economists including Mark Zandi, chief economist of Moody�s Economy.com, says the recently enacted $787 billion stimulus package will fall far short of the Obama administration�s goal of saving or creating 3.5-million jobs. Zandi said only 2.5 million jobs will be saved or created over the next two years, and told House Democrats that a second stimulus is needed as well as more money for banking stabilization and housing.

http://blogs.abcnews.com/george/200...t-first-st.html

The water is rising a lot faster than we can stop it. ANd for the record, I can't stand this whole "saved or created" term. It's so gay. Obama "saved" 25 police jobs in Colombus, OH last week... but forgot to mention there is actually a 1 year time line on those "saved" jobs before they city won't pay for them anymore. How do you measure a "saved" job anyway? Stupid.

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Originally posted by delobbo love your sig 17sss... LMAO.

haha... it's pretty accurate in it's description I would say

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Originally posted by The17sss Forgot... about that "create or save 3 million jobs" thing, there is new data out today that it's already failing. Fuckin' sweet! (<--- sarcasm). What was projected at about $200,000 cost per job is now at $500,000 after the 2nd Stimulus passes (if it does) http://blogs.abcnews.com/george/200...t-first-st.html The water is rising a lot faster than we can stop it. ANd for the record, I can't stand this whole "saved or created" term. It's so gay. Obama "saved" 25 police jobs in Colombus, OH last week... but forgot to mention there is actually a 1 year time line on those "saved" jobs before they city won't pay for them anymore. How do you measure a "saved" job anyway? Stupid.

Yeah, I feel similarly about the saved job thing. I also wonder about the created. So, give a man a shovel and put him on the street, tell him to dig. Is this the kind of job creation we need? Don't we need to assess and try to remedy why jobs - I mean like corporate jobs - are being lost in the first place? Isn't that dependent on markets, confidence levels, general supply and demand, and other concepts such as that? They are approaching the job creation issue from the wrong angle. They are proposing all of these construction jobs - woop-de-fucking-doo that's just fucking great, let's do that, except the problem is that they then stab the markets repeatedly with a chain of bad decisions indirectly causing them to dive. Yes, I do believe actions made by this administration negatively affected the DOW. Create the jobs, that's fine, that's good, but don't create the jobs and then make foolish decisions in other MONUMENTALLY IMPORTANT and PIVOTAL areas which *CAN* instantly affect and influence consumer and business confidence levels.

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Originally posted by Groundhog Boy First, I'm getting tired of the inability to read/understand what's being said about this topic. No one is saying that Obama destroyed the market. They're saying that the he's taking a crippled market and either a) is not making it better or b) making a bad situation worse.

Well unfortunately I have to disagree with you slightly. The Right Wing Noise Machine is in full swing in it's apparent blame game based on what's being said by their various authors, not to mention what I hear on Hannity and Rush. Hell even a local talk show here in KC is running rampant with Obama supposedly destroying the market all on his own.

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That Kos article is a prime example of why I can't go onto that blog (and it's been spreading to HuffPo). It's full of completely incorrect information, like saying that the only people saying these things are right-wing cheerleaders during the 2000s. I'm saying it, and I was hardly a right-wing cheerleader a few years back. Also, it is a factual statement that Obama has its own bear market. We are down over 20% from inauguration, which is the technical definition of a bear market. Everyone knew Bush had a bear market, because he'd been there from the top. It's a rather obvious statement and was made constantly last year when we were headed down. Look at policy announcements and the hourly or daily charts. Particularly the lack of a bank plan when Geithner came out in early February and gave no details after Obama touted how he didn't want to steal the thunder by providing details. The market tanked (and didn't let up) after that announcement.

I think a relevant question is, given the data that I posted on how things were certainly tumbling downward at an accelerated rate prior to Obama being inaugurated, what do you think he could have done, hell what could anyone (even a Republican) really have done to slow things down?

More tax cuts for the wealthy?

Say "enough" with the handouts to the giant banks and allow them to fail? Allow Lehman-like situations to occur over and over again so we can have a nice "correction" occur?

These are not easy answers, and I don't presume to have them. I freely admit that Geithner is a tool and needs to go, but my contention that I share with the author Bonddad in my original article is that a large percentage of folks are trying very hard to blame Obama for the current mess we're in while having massive brain farts on how we got here in the first place.

Is there a bit of fault that needs to go to Obama? Absolutely. Does the majority of that fault, however, lie not in his administration barely 50 days in, but in an Administration prior to his that allowed these bastards to regulate themselves? You better fucking believe it.

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I mean, it works both ways. When Bernanke said it was possible for us to be seeing improvement in 2009, we rallied a little, until everyone realized it was a ridiculous notion.

Bernanke is another guy I'm not a terribly big fan of. But I will say that in many respects I'm glad people are not listening to folks like Bernanke trying to sugarcoat a piece of shit - good for the people wanting a bit more of the reality. One of the biggest problems I have with what Obama and Geithner are doing is failing to actually lay out the reality to the people with just how shitty the current situation is. Oh sure, that may tank the market even more if and when they do (and likely ineviteably setting up nationalizing the banks), so I guess they can't win with that either.

Like I said, this is a fucking mess.

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For me, the big thing was the budget. It took wavering confidence in the administration and added doubt about the administration's pragmatism. It's not the change from 36 to 39% in the top rate, it's cutting the deductions to charities and, most importantly for this crisis, mortgage deductions for the top earners. It just doesn't send a good message to investors who already want to hoard their money for the worst when we need them to be spending and investing it.

And on the flip-side of things, Obama has actually decided to include the full costs of all things, including both wars, in his budget. Again, a nice breath of reality that was completely gone for the past 8 years with Bush, but your point is well taken nonetheless.

The market shot up 5+% today. Obama boosting the economy and stock market? Huh?

shot up to what, 7000? heh

guys it should be clear that Im not an economist or politics guy. nor do I claim to be. im just disappointed by the decisions being made by the guy i voted for.

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Originally posted by Lebezniatnikov I'm just saying that there's a culture in this country of pinning the entire economy on the Dow... and that's simply not an accurate snapshot. Obama isn't worried about putting in place policies designed to stimulate the stock market (or at least he shouldn't be) - he's looking to stimulate demand in order to prop up GDP growth and limit the rise in unemployment. That's how you rebuild the economy, and that takes more time than the seven weeks he's been given.

Well said. This is the point that I think cannot be overstated. Because when things like this are stated later:

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Originally posted by delobbo But I was also optimistic that O could turn things around and invigorate markets - I know the market is not a direct indicator of presidential performance but I felt he was influential enough TO have some recognizable positive effect on it http://www.tranceaddict.com/forums/...d=&pagenumber=3

I just run over to CNN and notice something incredible:

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Stocks: Biggest gains of '09 The Dow gains 379 points, Nasdaq surges 7% and S&P 500 rallies 6.4% http://money.cnn.com/2009/03/10/mar...dex.htm?cnn=yes

Holy Shit! Incredible! Wait, what was said today?:

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March 10 (Bloomberg) -- Treasury Secretary Timothy Geithner said the Obama administration will do �what is necessary� to help revive bank lending and fix the faltering U.S. economy. Geithner, speaking in an interview from Washington with Charlie Rose scheduled to air tonight on PBS, also said that Wall Street boards of directors �made things worse� by continuing to pay large bonuses to executives even as banks fell apart. While the Treasury chief said the U.S. is in a �deepening recession,� he said President Barack Obama will be aggressive in trying to find a solution to end the crisis. �It is our obligation to clean it up and to fix it,� Geithner said. �We�re going to keep at it.� http://www.bloomberg.com/apps/news?...efJo&refer=news

By God, the markets must have gotten wind of this interview, and therefore Obama must have saved the day today. We cannot emphasize this point enough - Obama himself actually helped rise the stocks their highest levels all year!

Hooray! Hooraaaay!!!!

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Originally posted by delobbo is the information in the examiner link false?

If you're implying that "Obama insulted British Prime Minister Gordon Brown", or a remark that SoS Clinton gave to the EU, or that his picks as Commerce Secretary, HHS cabinet positions, or AG Holder's remarks, all somehow have something to do with why the economy is tanking with Obama being in office for merely 50 days.....

.....umm, yeah, just a little. And again I would like you to demonstrate evidence of such a causation between these events and the economy. If this wasn't your implication, then what was it, and why were these points relevant to the discussion about Obama's supposed influence on the economy?

way to leave out relevant info from that article.

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The stock advance picked up speed after Rep. Barney Frank, D-Mass. and the head of the U.S. House Financial Services Committee, said that the Securities and Exchange Commission would restore the "uptick rule." The SEC later confirmed to CNN that it could reinstate the rule as early as next month. The uptick rule -- in place until July 2007 -- limited short sellers from adding to the downward momentum of a stock that was already plunging. In short selling, traders make money when the price of a stock falls. Critics say the ending of the rule exacerbated selling in the financial sector over the last year and a half. Stocks were also bouncing Tuesday after the recent bloodletting in the markets. Year-to-date, the Dow and S&P 500 had both fallen 25% as of Monday's close, while the Nasdaq had fallen around 17%. The market close Monday left the Dow and S&P 500 at 12-year lows and the Nasdaq at 6-year lows. In light of the huge selloff, analysts have been saying for a while that the market was due for a sharp, bear market rally. That seemed to take hold Tuesday. "There's a chance that if this gets enough gas, it could move up a lot more," said Tom Schrader, managing director at Stifel Nicolaus. That turned out to be the case last fall after the stock market hit lows in both October and November.

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Originally posted by MisterOpus1 If you're implying that "Obama insulted British Prime Minister Gordon Brown", or a remark that SoS Clinton gave to the EU, or that his picks as Commerce Secretary, HHS cabinet positions, or AG Holder's remarks, all somehow have something to do with why the economy is tanking with Obama being in office for merely 50 days..... .....umm, yeah, just a little. And again I would like you to demonstrate evidence of such a causation between these events and the economy. If this wasn't your implication, then what was it, and why were these points relevant to the discussion about Obama's supposed influence on the economy?

confidence. the stuff in that examiner article affect confidence levels.

do I have proof? no. so stop asking for it.

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Originally posted by delobbo confidence. the stuff in that examiner article affect confidence levels.

How does what Hillary Clinton says to a foreign leader have anything to do with investor confidence? I'm sorry, but I don't see how gaffes are related to the market in any way at all - otherwise we would have hit zero long before Bush left office.

Again, I'll just leave this thread for the evening by re-stating that the market is far less important in our economic recovery than the things that the government is (and should) be focusing on: increasing consumer demand in order to decrease the output gap in order to stop the decline in GDP growth. And that takes months to implement, which is why Obama didn't wait months to gather more opinions.

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Originally posted by Lebezniatnikov How does what Hillary Clinton says to a foreign leader have anything to do with investor confidence? I'm sorry, but I don't see how gaffes are related to the market in any way at all - otherwise we would have hit zero long before Bush left office. Again, I'll just leave this thread for the evening by re-stating that the market is far less important in our economic recovery than the things that the government is (and should) be focusing on: increasing consumer demand in order to decrease the output gap in order to stop the decline in GDP growth. And that takes months to implement, which is why Obama didn't wait months to gather more opinions.

if they're making these kind of gaffes in the (very very important) International arena what kind of gaffes will they make on the homefront? = lower confidence levels.

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Originally posted by delobbo way to leave out relevant info from that article.

Exactly my point, thank you. Looking at the picture of Obama being the culprit of all the doom and destruction of the markets as the Wingnutters and mouthpieces want to portray does exactly that - leaving out the relevant information that led us to this point, much in the same way that I did above.

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Originally posted by delobbo confidence. the stuff in that examiner article affect confidence levels. do I have proof? no. so stop asking for it.

So wait, I'm just supposed to take your idle speculation as gospel then, without you demonstrating any evidence to support your correlations?

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if they're making these kind of gaffes in the (very very important) International arena what kind of gaffes will they make on the homefront? = lower confidence levels.

Ahh, I see. If these are gaffes in a "very very important" International arena, then I can't even imagine what you have to say about the dictionary of gaffes the previous president did, both on a national and international level (yes, the very very important arenas), and how he tanked the markets as a direct consequence on practically a daily basis.

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Originally posted by delobbo im just disappointed by the decisions being made by the guy i voted for.

Vote Republican next time.

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Originally posted by jerZ07002 With all that said, the future inflationary pressure is going to kill those who obama is trying to help most (the poor). The poor are the class of people who are hurt the most by inflation because their wages are least likely to keep pace with inflation. My wages (scratch that - my salary) should keep pace, so I'll likely benefit from inflation (reducing the real dollar cost of loans, and considering i don't have substantial savings at this early point in my life). It's too bad people are so short-sighted.

I don't really see it being a problem anytime soon. Right now the Fed is more worried about deflation being a bigger problem and rightfully so. Not only is deflation evident in economic data but I've experienced it first hand. My company just went through 10% pay decreases in senior management and pay freezes for everyone at the manager level and above.

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I spent a good part of a year reading milton friedman. Generally, I believe free markets will always have the right answer (with the caveat that there is sufficient transparency in the market); the relevant question is whether we, as a society, are willing to go through the pain that free markets can impose during a period of correction. It's probably the healthiest in the long term to allow free market corrections, however, people are very short-sighted and considering many people live pay-check to pay-check it can be quite difficult to expect the general population to by into the idea that free market corrections are better than government intervention. As a human being, I am sypathetic to the general welfare needs of people who aren't as fortunate as myself. So, I am willing to accept government intervention (if for no other reason than to prevent people from resorting to crime to feed their families).

First, let me ask you the same question I asked Shakka ... do you believe that Citi or BOA should be allowed to fail as a "free market correction"? Second, non-government intervention is not what Friedman really advocated. Friedman is not a laissez-faire economist in any sense of the imagination ... the distinction between him and a lot of other economists before his time is that he's a monetarist as opposed to a keynesian economist. He emphasized using monetary policy as being a more effective tool ... this is something I myself agree with because I am a monetarist. However, monetary policy is still very much government intervention ... as a matter of fact, if you read Freidman's analysis of the Great Depression in his and Anna Schwartz's A Monetary History of the United States 1863-1960, Friedman stated it was the federal reserve's laissez faire attitudes that contributed to the great depression. Bernanke summarized Friedman and Schwartz's stance in a speech several years ago:

quote:

It was in large part to improve the management of banking panics that the Federal Reserve was created in 1913. However, as Friedman and Schwartz discuss in some detail, in the early 1930s the Federal Reserve did not serve that function. The problem within the Fed was largely doctrinal: Fed officials appeared to subscribe to Treasury Secretary Andrew Mellon's infamous 'liquidationist' thesis, that weeding out "weak" banks was a harsh but necessary prerequisite to the recovery of the banking system. Moreover, most of the failing banks were small banks (as opposed to what we would now call money-center banks) and not members of the Federal Reserve System. Thus the Fed saw no particular need to try to stem the panics. At the same time, the large banks--which would have intervened before the founding of the Fed--felt that protecting their smaller brethren was no longer their responsibility. Indeed, since the large banks felt confident that the Fed would protect them if necessary, the weeding out of small competitors was a positive good, from their point of view. http://www.federalreserve.gov/BOARD...108/default.htm

If you are a firm monetarist let me ask you something else ... what monetarist policies would you advocate now? The federal funds rate is at zero ... the only other policies the fed can adopt now is qualitative easing aka printing money. It stands to reason that in these rare situations fiscal stimuli are required. The concept of the efficacy of Keynesian economics is really nothing new: http://www.tnr.com/story_print.html...36-a3b2f54243ec What kind of proof is needed?



I've been reading a lot of garbage about Republicans, libertarians, and some democrats opposing fiscal stimulus, allowing the Citi's, BOAs and AIG's to fail, and all the other populist bullshit that is being pandered back and forth and it blows my mind. Back in mid 2008, when tarp was being debated, people couldnt comprehend that shit that hits wallstreet rolls down to mainstreet HARDCORE ... now that mainstreet is getting killed from JUST Lehman going under and people STILL don't understand that fundamental concept is incomprehensible.

Instead of listening to Rush, Republicans should start listening to Republicans with some intelligence if they ever hope to reclaim the majority (or me) ...

quote:

Taking a Depression Seriously David Brooks The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is �no.� They�ve apparently decided that it�s easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand. If the Republicans wanted to do the country some good, they�d embrace an entirely different approach. First, they�d take the current economic crisis more seriously than the Democrats. The Obama budget projects that the recession will be mild this year and the economy will come surging back in 2010. Democrats apparently think that dealing with the crisis is a part-time job, which leaves the afternoons free to work on long-range plans to reform education, health care, energy and a dozen smaller things. Democrats are counting on a quick recovery to help pay for these long-term projects. Republicans could point out that this crisis is not just an opportunity to do other things. It�s a bloomin� emergency. Robert Barro of Harvard estimates that there is a 30 percent chance of a depression. Warren Buffett says economic activity �has fallen off a cliff� and is not coming back soon. Stock market declines are destroying $23 trillion in wealth, according to Lawrence Lindsey. Auto production is down by two-thirds since 2005. In China, 20 million migrant laborers have lost their jobs. Investment in developing countries has dropped from $929 billion in 2007 to $165 billion this year. Pension systems are fragile. Household balance sheets are still a wreck. Republicans could argue that it�s Nero-esque for Democrats to be plotting extensive renovations when the house is on fire. They could point out that history will judge this president harshly if he�s off chasing distant visions while the markets see a void where his banking policy should be. Second, Republicans could admit that they don�t know what the future holds, and they�re not going to try to make long-range plans based on assumptions that will be obsolete by summer. Unlike the Democrats, they�re not for making trillions of dollars in long-term spending commitments until they know where things stand. Instead, they�re going to focus obsessively on restoring equilibrium first, and they�re going to understand that there is a sharp distinction between crisis policy-making and noncrisis policy-making. In times like these, you�d do things you would never do normally. When it�s over, we can go back to our regularly scheduled debates. Third, Republicans could offer the public a realistic appraisal of the health of capitalism. Global capitalism is an innovative force, they could argue, but we have been reminded of its shortcomings. When exogenous forces like the rise of China and a flood of easy money hit the global marketplace, they can throw the entire system of out of whack, leading to a cascade of imbalances: higher debt, a grossly enlarged financial sector and unsustainable bubbles. If the free market party doesn�t offer the public an honest appraisal of capitalism�s weaknesses, the public will never trust it to address them. Power will inevitably slide over to those who believe this crisis is a repudiation of global capitalism as a whole. Fourth, Republicans could get out in front of this crisis for once. That would mean being out front with ideas to support the wealth-creating parts of the economy rather than merely propping up the fading parts. That would mean supporting President Obama�s plan for global stimulus coordination, because right now most of the world is free-riding off our expenditures. That would mean eliminating all this populist talk about letting Citigroup fail, because a cascade of insolvency would inevitably lead to full-scale nationalization. It would mean coming up with a bold banking plan, rather than just whining about whatever the Democrats have on offer. Finally, Republicans could make it clear that that the emergency has to be followed by an era of balance. This crisis was fueled by financial decadence, and public debt could be 80 percent of G.D.P. by the time it�s over. Republicans should be the party of restoring fiscal balance � whatever it takes � not trillion-dollar deficits as far as the eye can see. If Republicans were to treat this like a genuine emergency, with initiative-grabbing approaches, they may not get their plans enacted, but voters would at least give them another look. Do I expect them to shift course in this manner? Not really. http://www.nytimes.com/2009/03/10/opinion/10brooks.html?_r=1

keep sippin that kool-aid gents

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Originally posted by delobbo keep sippin that kool-aid gents

Now you're starting to get annoying. Is that your only line? That people who don't watch the same regurgitated news as you are somehow deluded? That people who base their opinions on macroeconomics and actual policy instead of gut feeling are kidding themselves?

"Drinking the Kool-aid" is probably the most disingenuous and adolescent comeback I've ever heard in a political discussion. GOOD ONE, YOU'VE SURE CONVINCED ME I WAS WRONG!!!11

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Originally posted by occrider I don't really see it being a problem anytime soon. Right now the Fed is more worried about deflation being a bigger problem and rightfully so. Not only is deflation evident in economic data but I've experienced it first hand. My company just went through 10% pay decreases in senior management and pay freezes for everyone at the manager level and above.

while that's likely true, the fed is going to have a hell of a time shrinking the money supply considering it has entered the business of purchasing liabilities of private companies.

quote:

Originally posted by occrider First, let me ask you the same question I asked Shakka ... do you believe that Citi or BOA should be allowed to fail as a "free market correction"? Second, non-government intervention is not what Friedman really advocated. Friedman is not a laissez-faire economist in any sense of the imagination ... the distinction between him and a lot of other economists before his time is that he's a monetarist as opposed to a keynesian economist. He emphasized using monetary policy as being a more effective tool ... this is something I myself agree with because I am a monetarist. However, monetary policy is still very much government intervention ... as a matter of fact, if you read Freidman's analysis of the Great Depression in his and Anna Schwartz's A Monetary History of the United States 1863-1960, Friedman stated it was the federal reserve's laissez faire attitudes that contributed to the great depression. Bernanke summarized Friedman and Schwartz's stance in a speech several years ago:

i'm not entirely sure where i stand; i have some slight reservations. Even so, I know the pain that would be felt if a too-big-to-fail institution went down. I'm not saying we would be better off in the near term. Far from it, i think our economy would go through an enormous near term contraction. If you read some of my previous posts about the bailout I say it is necessary. Nevertheless, I believe it presents an enormous moral hazard. That said, I'm about 80/20 in favor of a supporting the financial institutions (most of the 20 percent derives from the fact that it provides the wrong incentives).

I also think that if an institution is too-big-to-fail it's probably just TOO BIG. In the long term (> 5 year), it would probably be good to allow these institutions to fail and have the good assets purchased by others. This would also be good in the Darwinian sense, and it would provide the right incentives. I think the near term harm would be unbearable for most (probably including myself), and would certainly be a career ending move by any politician.

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Originally posted by occrider If you are a firm monetarist let me ask you something else ... what monetarist policies would you advocate now? The federal funds rate is at zero ... the only other policies the fed can adopt now is qualitative easing aka printing money. It stands to reason that in these rare situations fiscal stimuli are required. The concept of the efficacy of Keynesian economics is really nothing new: http://www.tnr.com/story_print.html...36-a3b2f54243ec What kind of proof is needed?

I'm not. I don't disapprove of anything being done by the fed.

quote:

Originally posted by occrider I've been reading a lot of garbage about Republicans, libertarians, and some democrats opposing fiscal stimulus, allowing the Citi's, BOAs and AIG's to fail, and all the other populist bullshit that is being pandered back and forth and it blows my mind. Back in mid 2008, when tarp was being debated, people couldnt comprehend that shit that hits wallstreet rolls down to mainstreet HARDCORE ... now that mainstreet is getting killed from JUST Lehman going under and people STILL don't understand that fundamental concept is incomprehensible.

I'm not sure if any of that was directed at me or if that was more general, but I have never said I opposed any financial support for our banks. To the contrary, as i said before, I think it is necessary. To reiterate, my only reservations are (i) moral hazards of bailing out institutions that caused the mess in the first place (which i can get over), (ii) if an institution is too big to fail, it is simply too big (something i can't easily get over - where was the DOJ when these institutions were getting so big?), and (iii) aligning incentives properly.

I only entered this discussion (or intended to enter this discussion) because i think obama's stimulus is garbage (i don't disapprove of the idea of a stimulus, but i don't agree with the allocation of funds). Less money should be allocated to temporary tax cuts, refundable tax credits for poor people, and projects that don't sustain long term growth. I would have liked to see far more than 20% of the stimulus allocated to education and energy. Those are the two areas that are most important for future growth. This was perhaps the best opportunity to absolutely transform american education. I think we let that opportunity pass without taking full advantage of it. Hopefully the educational spending is focused on math and sciences. I would also like to see some of that stimulus money go to URBAN development initiatives (i.e., mass transit and other smart growth initiatives) - but this is merely a personal preference, not necessarily something i think would be more stimulating for the economy.

I don't disapprove of any measures taken by the treasury or the fed. I absolutely appreciate the crucial role of the banks in our economy.

FYI - i agree with most of that article.

quote:

Originally posted by Lebezniatnikov Now you're starting to get annoying. Is that your only line? That people who don't watch the same regurgitated news as you are somehow deluded? That people who base their opinions on macroeconomics and actual policy instead of gut feeling are kidding themselves? "Drinking the Kool-aid" is probably the most disingenuous and adolescent comeback I've ever heard in a political discussion. GOOD ONE, YOU'VE SURE CONVINCED ME I WAS WRONG!!!11

this is not about being wrong or right. NOBODY KNOWS WHAT IS WRONG OR RIGHT, right now. we have absolutely no idea. we are playing roulette. lets see how things are in a few years. I hope the damn you can tell me "told ya so".

if america had currency like zimbabwe it would make bailouts a lot easier

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