Saturday, February 28, 2009
Thursday, February 26, 2009
Following in W's Footsteps
This is of course not just Bobby's incompetence. It is the actual Republican strategy. By being unhelpful naysayers, they will feel entitled to complain about anything that doesn't seem to be working exactly as hoped, and complain that the President's plans that do work didn't work as well as claimed, or really just slowed down a recovery that would have happened anyway. They really do think that we are a mob of idiots. And why shouldn't they? Until this past year, we've proved them right in 5 of the past 7 Presidential elections.
But that's not putting country first. Which of course is the point. The Republican's successful strategy is to get the labor class to unite with the moneyed class against the interest of the middle class, by baffling the uneducated buffoons with bullshit. And it usually has worked, as it has for centuries, since the middle class came into existence.
So, I'm loving the public ridicule that Bobby is so deservedly catching for his performance. But he'll be back. Rascals and con men have a shameless way of coming back to life.
Meanwhile, "conundrum" seems to be the word of the week, as non-economists realize that an economy based on the circulation of wealth is really tricky to mess with. Any solution to one problem creates a new imbalance somewhere else. It's a lot like trying to re-start a jet engine in flight without blowing it up. It's harder than it sounds.
Take our friends in Detroit. Despite decades of selling us clinking, clanking lead sleds through sleezy sales methods, they are now in need of public assistance. No crime there. Everybody needs a break now and then. But what's the problem? And what's the solution?
Our newsie friends give us the impression that Detroit needs money. Well, sure. Not having money is a problem. So is the solution to give them some? Well, not so fast.
The "Big 3" don't have any money because sales are down. Ford, which is the best condition of the three, has sales down about 2 million cars per year. That's a lot of cars. And a lot of jobs. So maybe the real need isn't money, but sales.
So here's an idea. Let's increase sales. That would give Detroit more money without just handing over a big old bag o' cash.
How? Incentives! Tax cuts! Republicans have to love this idea. And it sort of makes sense. And not just tax cuts, but tax credits. A tax credit is a dollar for dollar discount off of your tax bill for evey dollar that you spend on a BRAND NEW CAR! (Use Monty Hall voice.)
So, we give a big tax credit to everybody who buys a brand new car. I know that I would love a new car. Who wouldn't?
But Worldview, won't that flood the car market with used cars that will compete with new cars for overall car sales?
Well, yes, of course! That's the conundrum part. So, what to do? Export them! How? Tax credits again! Give dollar for dollar tax credits to folks who donate their used cars to overseas charities. This will not only help overseas charities, which is good, but also deplete the stock of available cars for sale, thus helping demand for cars recover. Hah. That wasn't so hard.
In the meantime, how about regulating these doofuses into building something that makes sense for our future. Just selling "what the market wants" is a crack dealers ethic. It doesn't stand up to scrutiny and should not be incorporated into public policy. And cars sales has now become a part of public policy whether you like it or not.
Now that's a car.
Tuesday, February 17, 2009
Conflict of interest of rating agencies?
Collateralized Debt Obligations? Whatever they are?
Alan Greenspan for not reigning in credit availability?
Barney Frank for pushing easy mortgage credit?
Phil Gramm for pushing repeal of Glass-Steagal?
Well, it beats the hell out of me. But it seems that everyone agrees we have a big problem.
Asking what the solution is gets a lot of talk and a lot of plans, but not any real explanation of why The System can't absorb these credit failures without completely breaking down. It's all about confidence, say our experts. Confidence? What happened to rationality? Remember the rationality of the markets? Just last year our good Republican leaders were telling us that markets were soooo rational that we should, as a society, allow The Market to determine healthcare and education policies.
At least we are having a better day that Sir Allen Stanford whose stock appears to be falling in the market of public opinion.
Among other things I don't understand is why gold is so grand these days. Why are yellow rocks that we can dig out of the ground any better money than papers with Presidents? Well, many people believe in gold (idolatry!) and think that the yellow brick road to the gold standard is the best way back to confidence.
But I doubt it. Confidence is just a stepping stone to what we really need, which is spending! And the best way to get people to spend today instead of save is good old fashioned inflation. Inflation also has the benefit of being selective, which allows today's inflated markets, like housing, to stay flat while other prices in the consumer's basket rise.
So let's go back to those pre-Volcker days and pump up the money supply. Size matters and we need a big fat M1 for a de facto devaluation. I'm telling you, it's the cure.
Tuesday, February 3, 2009
This is the song President Obama referenced in his Inauguration Speech. I learned it as a child, when my Grandparents and their generation of Aunts and Uncles would sing it to us.
Click the PLAY arrow
So, tonight I'm back in Vegas, starting all over again.
Things are starting off unevenly. My flight got moved to a different concourse, and nobody told me. I made it, and sat next to some very enthusiastic cowboys. They were a chatty bunch. I still managed to sleep about half of the 4 1/2 hour flight.
Vegas has a long cab line at the airport. I was assigned spot number 13. 13? In Vegas? I can't believe they even use that number here. Not the good omen I was hoping for.
At the hotel the countergirl gives me a room on the second floor. Why not just write "low roller" on my forehead? I briefly wonder if I inadvertently offended her.
But, I must say, my room is fantastic! They've completely made over this place, and they did a great job. It's funny how a nice room can pick up your spirits. And when I say "your spirits" of course I really mean my spirits.
Natch I've only packed one pair of pants when I thought I had two. I hope I don't spill anything! No red sauce tonight. The conference is about to start, so I'm showered and dressed and ready to schmooze. Let's see what opportunities we can dig up.
America. Still the land of opportunity.