Deficit Hawk Orszag Plays Against Type - WSJ.com
Gee - I feel entitled - so don't ask me to cut back or to pay my own way! Oh no! That's unfair.
Well, I guess Orszag, et al just hope the economy will magically heal itself. There isn't anything in this article that says anything at all about making a better business climate - only about a better 'entitlement' climate and guaranteeing benefits.
This sure is scary. Sort of like a husband asking a wife to cut back spending because he's out of work and she just skoffs at him while running off with a credit card to the mall.
We've see what UAW retiree entitlements did to the car industry in the US and the government and politicians are scared like heck to ask people to pay for things they want themselves.
The middling paragraph says it all:
"Mr. Orszag told The Wall Street Journal that the "unusual situation" the government finds itself in—with other countries willing to finance U.S. debt at low rates—"won't last." And, he added, "when it flips, the question is how do you get ahead of that to avoid the downward spiral" of rising interest rates, a plunging dollar and a sinking economy."
Sunday, January 31, 2010
Public Pensions Look at Leverage Strategy - WSJ.com
Public Pensions Look at Leverage Strategy - WSJ.com
You don't believer public pensions are extravagant. Let's see a couple of examples from the news.
1) Orinda California fire chief retired in June 2009 at $300,000 per year - fully indexed for inflation - I'd say that's way beyond rich! Certainly extravagant.
2) New York City Teacher's Union - pay in 3% of salary for 10 years toward a pension; then pay nothing. Average income before retirement $100,000. Again, I'd say both are extravagant.
3) Philadelphia unions striking for pay increases (2009) when we have 10% unemployment (can we say, they don't care a hoot about their neighbors).
If you want to think about wages and why there is such angst - think about the need for more investment into jobs and to education (but, of course, Charter schools or educational performance are anathema to the unionized teachers); and, no politician wants to tell Americans that they have been overspending and underinvesting.
So, the new bubble is the huge Federal borrowing to support domestic consumption and transfer payment and benefit programs. Rather than investing in technology, education and capital creation, the government is largely borrowing to support consumption and social benefits.
People are blaming banks for lending money to them to bid up the price of housing - but, people had no problem playing the Ponzi scheme of the housing bubble. Now, they have no problem with government borrowing - ostensibly to create jobs; but, the investment behind the jobs isn't there, so the jobs aren't sustainable. A bubble that people (except a slight majority in Massachusetts) seem willing to abide.
What happens, happens. Maybe a third party could change things - but????? A free lunch is always nicer - if, one can believe there is such a thing.
You don't believer public pensions are extravagant. Let's see a couple of examples from the news.
1) Orinda California fire chief retired in June 2009 at $300,000 per year - fully indexed for inflation - I'd say that's way beyond rich! Certainly extravagant.
2) New York City Teacher's Union - pay in 3% of salary for 10 years toward a pension; then pay nothing. Average income before retirement $100,000. Again, I'd say both are extravagant.
3) Philadelphia unions striking for pay increases (2009) when we have 10% unemployment (can we say, they don't care a hoot about their neighbors).
If you want to think about wages and why there is such angst - think about the need for more investment into jobs and to education (but, of course, Charter schools or educational performance are anathema to the unionized teachers); and, no politician wants to tell Americans that they have been overspending and underinvesting.
So, the new bubble is the huge Federal borrowing to support domestic consumption and transfer payment and benefit programs. Rather than investing in technology, education and capital creation, the government is largely borrowing to support consumption and social benefits.
People are blaming banks for lending money to them to bid up the price of housing - but, people had no problem playing the Ponzi scheme of the housing bubble. Now, they have no problem with government borrowing - ostensibly to create jobs; but, the investment behind the jobs isn't there, so the jobs aren't sustainable. A bubble that people (except a slight majority in Massachusetts) seem willing to abide.
What happens, happens. Maybe a third party could change things - but????? A free lunch is always nicer - if, one can believe there is such a thing.
Friday, January 29, 2010
Washington Bickering Leaves Little Hope for Change - WSJ.com
Washington Bickering Leaves Little Hope for Change - WSJ.com
Isn't part of the problem the fact that government is trying to do too much?
In other words, as government tries to portray itself as the provider of benefits and services (Democrats) or to enforce social rectitude (Republicans) or to favor particular interests (e.g. unions for Democrats and certain businesses), isn't Washington just sticking its neck into areas that should be left to individuals?
Every tax dollar Washington raises comes from someone's pocket - depriving that person or business of a chance to make their own decision.
Why save for retirement - there's social security.
Why take care of one's health - their Medicare, Medicaid.
Etc., etc.
Isn't part of the electorate really saying that the government should do less and take less?
Sadly, the other part of the political framework (right and left) believes government should do more (as noted above on the left and religious right). What should scare people is that rents in Washington, DC are now higher than in New York City.
So, while we excoriate our banks (and as reported this morning Morgan Stanley is planning to move some of its banking offshore), we build up more and more government.
What's the figure? For every dollar government takes, that's 2 less for the private sector (read: economy) today and $5 for the future?
Isn't part of the problem the fact that government is trying to do too much?
In other words, as government tries to portray itself as the provider of benefits and services (Democrats) or to enforce social rectitude (Republicans) or to favor particular interests (e.g. unions for Democrats and certain businesses), isn't Washington just sticking its neck into areas that should be left to individuals?
Every tax dollar Washington raises comes from someone's pocket - depriving that person or business of a chance to make their own decision.
Why save for retirement - there's social security.
Why take care of one's health - their Medicare, Medicaid.
Etc., etc.
Isn't part of the electorate really saying that the government should do less and take less?
Sadly, the other part of the political framework (right and left) believes government should do more (as noted above on the left and religious right). What should scare people is that rents in Washington, DC are now higher than in New York City.
So, while we excoriate our banks (and as reported this morning Morgan Stanley is planning to move some of its banking offshore), we build up more and more government.
What's the figure? For every dollar government takes, that's 2 less for the private sector (read: economy) today and $5 for the future?
Wall Street Journal: Toyota How will the massive recall over sudden acceleration affect Toyota's reputation for quality?
Wall Street Journal: Toyota How will the massive recall over sudden acceleration affect Toyota's reputation for quality?
The sad comment all Americans should be concerned about was the statement on Bloomberg by a Toyota spokesperson in which they said part of the problem was that they farmed out some of the work to non-Japanese companies and that the partner company that caused the accelerator problem was an American supplier - i.e. read: it's not a Japanese problem (primarily) but an American one. (As above mentioned by Steele, the US (read: GM, etc.) approach to car problems is to try and paper them over and, as shown in statistics on % of sales invested in R&D, the US companies were way below their Japanese rivals.)
Everyone can have a problem occur sometime, it's then how it's handled. I'll never forget a GM problem in the 80's with the engineering on a Pontiac. The company comment, as reported in the media, was they thought their money would better be spent on marketing than on engineering.
Hmmm...could this be part of America's job problem - consumption vs. investing??????
Or, as Pelosi and Obama would say - benefits and borrowing before investing and jobs.
The sad comment all Americans should be concerned about was the statement on Bloomberg by a Toyota spokesperson in which they said part of the problem was that they farmed out some of the work to non-Japanese companies and that the partner company that caused the accelerator problem was an American supplier - i.e. read: it's not a Japanese problem (primarily) but an American one. (As above mentioned by Steele, the US (read: GM, etc.) approach to car problems is to try and paper them over and, as shown in statistics on % of sales invested in R&D, the US companies were way below their Japanese rivals.)
Everyone can have a problem occur sometime, it's then how it's handled. I'll never forget a GM problem in the 80's with the engineering on a Pontiac. The company comment, as reported in the media, was they thought their money would better be spent on marketing than on engineering.
Hmmm...could this be part of America's job problem - consumption vs. investing??????
Or, as Pelosi and Obama would say - benefits and borrowing before investing and jobs.
Wednesday, January 27, 2010
Banks Help Employees With Wall Street Pay - WSJ.com
Banks Help Employees With Wall Street Pay - WSJ.com: "Help me out here, but aren't we all missing something?
Let's challenge this red herring of banker pay! There's something more serious evident here:
In other words, how does a 'market' or 'free-market' economy work? How is it supposed to work?
Aren't we all getting bitten by the socialist angst of no new businesses can be created so we have to manage what we've got? (Isn't that what led to the Democrats losing the election in 1980 and being proven wrong by Reagan - i.e. he grew the economy that the Democrats argued couldn't be grown?)
If banking pays so well (and the jealousy drips from all these articles and comments), why aren't people asking - Why isn't it easier to start a new bank?
(After all, if people aren't getting anything on their savings (i.e. an almost zero interest rate) and small businesses aren't able to borrow - here is a gap in the market (if all of the above is true). So, isn't a better concern to ask 'Where's the competition?'
If banking really makes all that money, pays all those salaries - why aren't new banks able to be set up?
This is more likely to find out why jobs aren't being created than jealousy. Wouldn't it be better to have new jobs than try to take someone else's?
Big bank paychecks aren't the problem. The problem is that there are some reasons why the banks aren't facing competition!
High salaries might be an indicator that there is something wrong! But, that's a longer comment."
Let's challenge this red herring of banker pay! There's something more serious evident here:
In other words, how does a 'market' or 'free-market' economy work? How is it supposed to work?
Aren't we all getting bitten by the socialist angst of no new businesses can be created so we have to manage what we've got? (Isn't that what led to the Democrats losing the election in 1980 and being proven wrong by Reagan - i.e. he grew the economy that the Democrats argued couldn't be grown?)
If banking pays so well (and the jealousy drips from all these articles and comments), why aren't people asking - Why isn't it easier to start a new bank?
(After all, if people aren't getting anything on their savings (i.e. an almost zero interest rate) and small businesses aren't able to borrow - here is a gap in the market (if all of the above is true). So, isn't a better concern to ask 'Where's the competition?'
If banking really makes all that money, pays all those salaries - why aren't new banks able to be set up?
This is more likely to find out why jobs aren't being created than jealousy. Wouldn't it be better to have new jobs than try to take someone else's?
Big bank paychecks aren't the problem. The problem is that there are some reasons why the banks aren't facing competition!
High salaries might be an indicator that there is something wrong! But, that's a longer comment."
Monday, January 25, 2010
Obama Unveils Tax Initiatives to Help Middle Class - WSJ.com
Obama Unveils Tax Initiatives to Help Middle Class - WSJ.com
Sure looks like 'same-ol, same-ol' Democratic and union-type policies where the big picture of the economy is reduced to what's in it for the middle class. Where the money comes from and what the damage is that is done to the rest of the economy is totally ignored.
Sadly, it is exactly this union/Democratic thinking which on one hand continues to drive jobs out of the country while on the other hand, it makes it unattractive to bring jobs to the US.
The Republicans aren't much better in trying to configure policies to support business in the US; but, the Democrats have clearly not got the message and are substituting an expansion of their wrong-headed policies.
After Reid was shown to have made all sorts of unfair deals to get certain Senators to vote for the Obama health plan, the idea that the White House is again calling Senators to get their votes to reappoint Bernanke to head the Federal Reserve weakens Bernanke's appointment (as said by lots of commentators the last few days) and will likely hurt the dollar and, as a result the economy.
It sure would be nice to see some basic fiscal and governmental policies that would cut back government and encourage business and investment, but it seems as though everywhere one looks, all one sees are expansions of government's demands on producers and investors.
Sure looks like 'same-ol, same-ol' Democratic and union-type policies where the big picture of the economy is reduced to what's in it for the middle class. Where the money comes from and what the damage is that is done to the rest of the economy is totally ignored.
Sadly, it is exactly this union/Democratic thinking which on one hand continues to drive jobs out of the country while on the other hand, it makes it unattractive to bring jobs to the US.
The Republicans aren't much better in trying to configure policies to support business in the US; but, the Democrats have clearly not got the message and are substituting an expansion of their wrong-headed policies.
After Reid was shown to have made all sorts of unfair deals to get certain Senators to vote for the Obama health plan, the idea that the White House is again calling Senators to get their votes to reappoint Bernanke to head the Federal Reserve weakens Bernanke's appointment (as said by lots of commentators the last few days) and will likely hurt the dollar and, as a result the economy.
It sure would be nice to see some basic fiscal and governmental policies that would cut back government and encourage business and investment, but it seems as though everywhere one looks, all one sees are expansions of government's demands on producers and investors.
Saturday, January 23, 2010
Loan Demand Raises Worry - WSJ.com
Loan Demand Raises Worry - WSJ.com
Right on - people and businesses borrow when in an expansive and positive mood. High government borrowing can crowd out private borrowing either through higher rates; or, through fiscal policies (particularly the current situation).
Clearly neither party has a clue as to what it takes to be pro-business. The Republicans are anti-immigration so talent and entrepreneurial skills are kept out (they could fight to lower transfer payments to those they consider here for welfare and social benefits or recognize that low paid work can either be done in the US (generating some revenue and better paying jobs); or, it can move offshore with no revenue and few if any better paying jobs.
The Democrats of course only worry about those who can't afford the benefits they want (welfare and retired or low earners) or those who extort excess benefits (read: UAW, teachers unions, public employee unions, etc.).
People hoped for magic under Obama and they got Democratic values in spades. Now people have shown in MA how they feel about Obamanomics - but will there be changes?
Right on - people and businesses borrow when in an expansive and positive mood. High government borrowing can crowd out private borrowing either through higher rates; or, through fiscal policies (particularly the current situation).
Clearly neither party has a clue as to what it takes to be pro-business. The Republicans are anti-immigration so talent and entrepreneurial skills are kept out (they could fight to lower transfer payments to those they consider here for welfare and social benefits or recognize that low paid work can either be done in the US (generating some revenue and better paying jobs); or, it can move offshore with no revenue and few if any better paying jobs.
The Democrats of course only worry about those who can't afford the benefits they want (welfare and retired or low earners) or those who extort excess benefits (read: UAW, teachers unions, public employee unions, etc.).
People hoped for magic under Obama and they got Democratic values in spades. Now people have shown in MA how they feel about Obamanomics - but will there be changes?
Friday, January 22, 2010
Fannie, Freddie Losses May Hit U.S. - WSJ.com
Fannie, Freddie Losses May Hit U.S. - WSJ.com:
"And, why should people be surprised that small business isn't hiring!
We are effectively taking capital out of the privately directed economy and channeling it into the 'favored' by government parts of the economy. In any other way, this is nothing but a SUBSIDY.
As such, the cost of something else has to go up in order to push the cost of the subsidized product down. The country is on the slippery slope where government's hand is in the 'economic-utility' equation.
As such, capital is being consumed as well as diverted and the country will overall have less capital, less jobs and just more government directed redistribution of resources.
Having defined and seen the problem, the people of Massachusetts decided to try a Republican to hold back the Democrats. But, will there really be any will to make changes? Or, is the country stuck with the status of a retrograde economic picture?"
"And, why should people be surprised that small business isn't hiring!
We are effectively taking capital out of the privately directed economy and channeling it into the 'favored' by government parts of the economy. In any other way, this is nothing but a SUBSIDY.
As such, the cost of something else has to go up in order to push the cost of the subsidized product down. The country is on the slippery slope where government's hand is in the 'economic-utility' equation.
As such, capital is being consumed as well as diverted and the country will overall have less capital, less jobs and just more government directed redistribution of resources.
Having defined and seen the problem, the people of Massachusetts decided to try a Republican to hold back the Democrats. But, will there really be any will to make changes? Or, is the country stuck with the status of a retrograde economic picture?"
An Extreme Real Job Creation Program - Mortimer Zuckerman: The Great Recession Continues - WSJ.com
Mortimer Zuckerman: The Great Recession Continues - WSJ.com
Sometimes it's also helpful to consider extremes that can highlight where current policies have gone wrong. Wrong, not out of malice per se, but from ignorance of unintended consequences.
Example: (to create jobs) - what if anyone starting a business was told that they would pay no tax on any gains from that business (or only 5% tax); and, that every employee they hired would be an independent contractor - i.e. they would take care of their own health insurance, social security, workmen's comp., unemployment insurance, etc. - and, there would be no minimum wage, etc.? Also, the business could hire anyone - foreign or domestic (and, only perfunctory paperwork for immigrants).
Also, no unionization would be permitted and any local and state taxes would be zero; also, other than environmental permits, there wouldn't be any government regulators breathing down the back of the business owner.
If the business owner wanted to get investment capital, any money he paid back to investors would be tax-free!
I can't help but think it would be an incentive to start a business.
It is clearly idealistic in today's economic and political environment. But, every place where the above is violated, and the degree to which it is violated, shows why jobs are not being created or being lost!
Sometimes it's also helpful to consider extremes that can highlight where current policies have gone wrong. Wrong, not out of malice per se, but from ignorance of unintended consequences.
Example: (to create jobs) - what if anyone starting a business was told that they would pay no tax on any gains from that business (or only 5% tax); and, that every employee they hired would be an independent contractor - i.e. they would take care of their own health insurance, social security, workmen's comp., unemployment insurance, etc. - and, there would be no minimum wage, etc.? Also, the business could hire anyone - foreign or domestic (and, only perfunctory paperwork for immigrants).
Also, no unionization would be permitted and any local and state taxes would be zero; also, other than environmental permits, there wouldn't be any government regulators breathing down the back of the business owner.
If the business owner wanted to get investment capital, any money he paid back to investors would be tax-free!
I can't help but think it would be an incentive to start a business.
It is clearly idealistic in today's economic and political environment. But, every place where the above is violated, and the degree to which it is violated, shows why jobs are not being created or being lost!
Thursday, January 21, 2010
Obama Retreats on Health - WSJ.com
Obama Retreats on Health - WSJ.com
Sadly, even after the defeat of their senate candidate in MA, the idea of making things better for doing business in the US is totally amiss from Democratic concerns.
But, would the average American and particularly the younger Americans prefer having a chance to get a good paying job - or, are they more concerned that the union guy who retired at age 50 with a full, lavish pension, is getting all the healthcare and other benefits they feel entitled to?
My guess, people would rather have jobs than find themselves and the businesses that might have had jobs for them (before they closed down or shifted work overseas) have one more entitlement charge to support a government handout!
Guess a majority of the voters in Massachusetts felt the same way.
Now, if only America could clarify and position itself to be "pro-business" and "pro-jobs". A lot of turnback will be needed.
Sadly, even after the defeat of their senate candidate in MA, the idea of making things better for doing business in the US is totally amiss from Democratic concerns.
But, would the average American and particularly the younger Americans prefer having a chance to get a good paying job - or, are they more concerned that the union guy who retired at age 50 with a full, lavish pension, is getting all the healthcare and other benefits they feel entitled to?
My guess, people would rather have jobs than find themselves and the businesses that might have had jobs for them (before they closed down or shifted work overseas) have one more entitlement charge to support a government handout!
Guess a majority of the voters in Massachusetts felt the same way.
Now, if only America could clarify and position itself to be "pro-business" and "pro-jobs". A lot of turnback will be needed.
Sunday, January 17, 2010
Barron's Roundtable: Upbeat Stock Market Outlook for 2010 - Barrons.com
Barron's Roundtable: Upbeat Stock Market Outlook for 2010 - Barrons.com
More on aspects of the labor connundrum:
Jobs accounting:
“Median household income has barely kept up with inflation for more than 10 years.”
A serious question should be “why not?”
Ans. Part of the answer is that the government is trying to provide a lot of social benefits. These include Medicare and Medicaid. In the former case, users pay pennies on the dollar; and, in the latter case, little or nothing.
Now the government has tried to shift part of the latter cost to the states. So, what is the result? Higher state taxes and the transfer of tax revenues to medical and social consumption rather than to education, infrastructure and job creation. (Sound familiar? – poor roads, etc.)
Additionally, since the government can’t afford to pay market rates to its doctors, clinics, hospitals, etc. and the Medicare tax rates are fixed legislatively, the government does the next best thing – “cost shifting” – i.e. the government pays 70 cents on the dollar for services and the private payer pays 130 cents on the dollar. Can we say tax or subsidy in all but name?
So as the government increases its redistribution of the production of the society, it raises the costs both directly and indirectly on producers. If the government is taking more, then it only makes logical sense that there is less for the actual producers (read also ‘workers’) to keep for themselves.
Thus, the old saying “there’s no free lunch” applies. We just don’t like to admit it! (either as producers who keep less or recipients of government largess, who feel entitled).
The bottom line again is the same – producers move jobs from the country or pay lower salaries (manufacturing, some services); producers find ways to increase productivity – maintaining salaries (read: banks and finance); workers keep salaries but bankrupt their companies or states (read: the UAW and GM, public sector unions, etc.).
Let everyone do the math and decide for themselves where they think the country will be in the future?
More on aspects of the labor connundrum:
Jobs accounting:
“Median household income has barely kept up with inflation for more than 10 years.”
A serious question should be “why not?”
Ans. Part of the answer is that the government is trying to provide a lot of social benefits. These include Medicare and Medicaid. In the former case, users pay pennies on the dollar; and, in the latter case, little or nothing.
Now the government has tried to shift part of the latter cost to the states. So, what is the result? Higher state taxes and the transfer of tax revenues to medical and social consumption rather than to education, infrastructure and job creation. (Sound familiar? – poor roads, etc.)
Additionally, since the government can’t afford to pay market rates to its doctors, clinics, hospitals, etc. and the Medicare tax rates are fixed legislatively, the government does the next best thing – “cost shifting” – i.e. the government pays 70 cents on the dollar for services and the private payer pays 130 cents on the dollar. Can we say tax or subsidy in all but name?
So as the government increases its redistribution of the production of the society, it raises the costs both directly and indirectly on producers. If the government is taking more, then it only makes logical sense that there is less for the actual producers (read also ‘workers’) to keep for themselves.
Thus, the old saying “there’s no free lunch” applies. We just don’t like to admit it! (either as producers who keep less or recipients of government largess, who feel entitled).
The bottom line again is the same – producers move jobs from the country or pay lower salaries (manufacturing, some services); producers find ways to increase productivity – maintaining salaries (read: banks and finance); workers keep salaries but bankrupt their companies or states (read: the UAW and GM, public sector unions, etc.).
Let everyone do the math and decide for themselves where they think the country will be in the future?
Friday, January 15, 2010
Democrats, Unions Reach Deal on Health Tax - WSJ.com
Democrats, Unions Reach Deal on Health Tax - WSJ.com
It's all about cost shifting. What has brought us to this problem today with affordability can be laid directly at cost shifting and mandates.
Now both are increasing. Again, say goodbye to jobs as the economy changes the economic utility factors to lower the price and increase the use of health services.
As the demand for the services goes up, the supply demand equation naturally will either require higher salaries to the needed health workers or a decrease in the level of education and skill. Likely both will occur at the same time. We'll have fewer doctors wanting to enter an increasingly government managed system; and, those who provide care will increasingly have less education.
As always, there's no free lunch. But now the government will be closing off the options and forcing everyone into the same overpriced canteen. It may seem cheaper; but, the quality will probably be the sacrificial lamb - along with a lot of other more productive jobs that the economy will no longer be able to support as it shifts additional (ever more costly) resources to supply more and more healthcare.
The healthcare cost isn't being paid willingly in a normal supply-demand/economic utility equation; it is being force-fed by government and the power of taxation!
Enjoy a lower standard of living even if more healthcare!
It's all about cost shifting. What has brought us to this problem today with affordability can be laid directly at cost shifting and mandates.
Now both are increasing. Again, say goodbye to jobs as the economy changes the economic utility factors to lower the price and increase the use of health services.
As the demand for the services goes up, the supply demand equation naturally will either require higher salaries to the needed health workers or a decrease in the level of education and skill. Likely both will occur at the same time. We'll have fewer doctors wanting to enter an increasingly government managed system; and, those who provide care will increasingly have less education.
As always, there's no free lunch. But now the government will be closing off the options and forcing everyone into the same overpriced canteen. It may seem cheaper; but, the quality will probably be the sacrificial lamb - along with a lot of other more productive jobs that the economy will no longer be able to support as it shifts additional (ever more costly) resources to supply more and more healthcare.
The healthcare cost isn't being paid willingly in a normal supply-demand/economic utility equation; it is being force-fed by government and the power of taxation!
Enjoy a lower standard of living even if more healthcare!
Thursday, January 14, 2010
The Wagers of Congress (and, hope we don't have to pay up): Obama to Unveil Proposal on Bank Taxes - WSJ.com
Obama to Unveil Proposal on Bank Taxes - WSJ.com
There were some in Congress that tried to rein in Fannie and Freddie but the Democrats would have nothing to do with it.
Now they are upping the bet by having Fannie, Freddie and the Fed basically (along with FHA) support almost the entire housing industry.
Does this at all seem like the idea back in the 70's and 80's when the savings and loans were getting hit because Regulation R was removed and they had to start paying higher interest rates on deposits to keep their funds in the inflationary 70's. Money markets funds had been created?
I recall the banks being given the green light to invest in real estate - in the hope that government wouldn't have to bail out the banks (I think the then cost would have been 30 billion). So instead, Congress hoped that these inexperienced bankers could recoup their funds by 'gambling' on real estate investment (after all, inflation was still there and prices were rising).
As we all recall, the bet went bad and we had the Savings and Loan Crisis of the 1980's.
Could this happen again? Or, do big wagers sometimes pay off? Hmmmm........
There were some in Congress that tried to rein in Fannie and Freddie but the Democrats would have nothing to do with it.
Now they are upping the bet by having Fannie, Freddie and the Fed basically (along with FHA) support almost the entire housing industry.
Does this at all seem like the idea back in the 70's and 80's when the savings and loans were getting hit because Regulation R was removed and they had to start paying higher interest rates on deposits to keep their funds in the inflationary 70's. Money markets funds had been created?
I recall the banks being given the green light to invest in real estate - in the hope that government wouldn't have to bail out the banks (I think the then cost would have been 30 billion). So instead, Congress hoped that these inexperienced bankers could recoup their funds by 'gambling' on real estate investment (after all, inflation was still there and prices were rising).
As we all recall, the bet went bad and we had the Savings and Loan Crisis of the 1980's.
Could this happen again? Or, do big wagers sometimes pay off? Hmmmm........
Obama to Unveil Proposal on Bank Taxes - WSJ.com
Obama to Unveil Proposal on Bank Taxes - WSJ.com
From the article:
"The banks that are in question were significantly responsible for the enormous degree of the reckless risk-taking that was borne throughout the economy," one official said.
As if the actions of the government (including Barney Frank and Fannie and Freddy) and the current actions of the Democratic congress and administration aren't dangerously eroding the US economy through their reckless spending on entitlements....
As the old Democratic saying goes - "I've never seen a golden goose that doesn't need slaying"!
Hmmm...are some people recommending gold buying?
From the article:
"The banks that are in question were significantly responsible for the enormous degree of the reckless risk-taking that was borne throughout the economy," one official said.
As if the actions of the government (including Barney Frank and Fannie and Freddy) and the current actions of the Democratic congress and administration aren't dangerously eroding the US economy through their reckless spending on entitlements....
As the old Democratic saying goes - "I've never seen a golden goose that doesn't need slaying"!
Hmmm...are some people recommending gold buying?
Wednesday, January 13, 2010
Let's see - Jobs or Entertainment? - Jonathan Macey: Government Bailouts Feed Wall Street Bonuses - WSJ.com
Jonathan Macey: Government Bailouts Feed Wall Street Bonuses - WSJ.com
Thinking about Wall Street bonuses (are we talking bankers or investment bankers?), the worst feeling is watching a pro football game and hearing about the salaries paid to people who provide entertainment by knocking heads.
Mind you, I'm not contesting the right of people to knock heads (or shins if you think of soccer as the sport), nor am I contesting the public's interest in watching such sporting events.
However, it does strike one as odd that while sports stars provide entertainment, it is the financial resources and the skills of bankers that support the creation of the jobs that pay for the ability of the public to sit back and watch a game. Somehow a relatively small bonus (small in relative terms) to a banker is 'outrageous'; whereas sports stars can righteously command far greater sums. It just seems rather backwards!
And, if that wasn't enough, the latest hullabaloo about the star of American Idol leaving with (per a CNN interview) the hope to move up to be a billion (yes a 'billion') dollar a year entertainer - well, there we go again. Jobs/Entertainment; Entertainment/Jobs??????
Thinking about Wall Street bonuses (are we talking bankers or investment bankers?), the worst feeling is watching a pro football game and hearing about the salaries paid to people who provide entertainment by knocking heads.
Mind you, I'm not contesting the right of people to knock heads (or shins if you think of soccer as the sport), nor am I contesting the public's interest in watching such sporting events.
However, it does strike one as odd that while sports stars provide entertainment, it is the financial resources and the skills of bankers that support the creation of the jobs that pay for the ability of the public to sit back and watch a game. Somehow a relatively small bonus (small in relative terms) to a banker is 'outrageous'; whereas sports stars can righteously command far greater sums. It just seems rather backwards!
And, if that wasn't enough, the latest hullabaloo about the star of American Idol leaving with (per a CNN interview) the hope to move up to be a billion (yes a 'billion') dollar a year entertainer - well, there we go again. Jobs/Entertainment; Entertainment/Jobs??????
Pennsylvania Tax Incentives Questioned - WSJ.com
Pennsylvania Tax Incentives Questioned - WSJ.com:
"The following quote from the article should be looked at as saying it all: '|The Pennsylvania study found that more jobs were lost to other countries than to other states by a 30-to-1 ratio'.
To compete economically, one has to do exactly that - i.e. 'compete'.
If money has to come from some other entity to fund a job (as believed by the gang currently running Washington), then it's likely a negative sum game.
However, if a state reduces the cost of a company expanding or coming into the state, then they may be offering a discounted cost for a new benefit - i.e. a new taxpaying entity.
What the quote above shows is that America just isn't competitive - be it unionization, employer taxes, investor taxes, etc. Sadly, the situation is growing quickly and markedly worse as the share of GDP is being taken by government to support entitlements and government services.
It would seem as though all of America should be supporting the kind of business efforts that will keep the country's economy competitive; not, the taxation policies that will strip the country of its ability to compete economically and in terms of jobs by paying out benefit after benefit, which is all consumption.
Sadly, a positive business and investor supported policy turn seems ever more remote as populist rhetoric seems to preoccupy the public and Washington.
As the old saying goes - 'sometimes you have be careful what you wish for'. So many people are mad and want to punish someone (read: bankers; but never the scoundrels in Congress) that they may find themselves in the 'law of unexpected consequences' - in other words, less capital going into jobs and more financial services moving offshore!"
"The following quote from the article should be looked at as saying it all: '|The Pennsylvania study found that more jobs were lost to other countries than to other states by a 30-to-1 ratio'.
To compete economically, one has to do exactly that - i.e. 'compete'.
If money has to come from some other entity to fund a job (as believed by the gang currently running Washington), then it's likely a negative sum game.
However, if a state reduces the cost of a company expanding or coming into the state, then they may be offering a discounted cost for a new benefit - i.e. a new taxpaying entity.
What the quote above shows is that America just isn't competitive - be it unionization, employer taxes, investor taxes, etc. Sadly, the situation is growing quickly and markedly worse as the share of GDP is being taken by government to support entitlements and government services.
It would seem as though all of America should be supporting the kind of business efforts that will keep the country's economy competitive; not, the taxation policies that will strip the country of its ability to compete economically and in terms of jobs by paying out benefit after benefit, which is all consumption.
Sadly, a positive business and investor supported policy turn seems ever more remote as populist rhetoric seems to preoccupy the public and Washington.
As the old saying goes - 'sometimes you have be careful what you wish for'. So many people are mad and want to punish someone (read: bankers; but never the scoundrels in Congress) that they may find themselves in the 'law of unexpected consequences' - in other words, less capital going into jobs and more financial services moving offshore!"
Job Data Set to Fuel Fight Over Stimulus - WSJ.com
Job Data Set to Fuel Fight Over Stimulus - WSJ.com: "From observation, it would appear that America is of two camps.
One camp (Democratic) can't believe they could be doing anything damaging to the economy by raising taxes and raising entitlements. (Of course, they ignore what the UAW did to GM and high taxes and entitlements have done to the economies of New York, Michigan, California, etc.).
The other camp (Republican) thinks the Democrats can do no good.
Somehow in the middle ought to be the logic that we are in a globally competitive economy where the US has high labor costs and a high relative standard of living. As such, we can either cannibalize ourselves to keep our standard of living going a bit longer (read: borrow lots from the rest of the world); or, we can start to economize and build the infrastructure (read: education, new technologies, etc.) to sustain a high standard of living in a globally competitive economy.
Sadly, people feel keeping someone in jail for drug use is better than sending 2-4 people to college; and, unions like to retire with high pensions and benefits for 40 years having only worked for 30.
Now, in populist righteousness, we're going to punish people for working for banks (read: move to hedge funds to do some serious financial manipulation and gambling) and reduce the equity banks have to back loans. Some think this is a bright idea; but, do they ask themselves is it better to have the government take a $120 billion dollars to payout in entitlements or would it be better (assume roughly 10:1 ratio) to have the money lent out to businesses to create jobs?"
One camp (Democratic) can't believe they could be doing anything damaging to the economy by raising taxes and raising entitlements. (Of course, they ignore what the UAW did to GM and high taxes and entitlements have done to the economies of New York, Michigan, California, etc.).
The other camp (Republican) thinks the Democrats can do no good.
Somehow in the middle ought to be the logic that we are in a globally competitive economy where the US has high labor costs and a high relative standard of living. As such, we can either cannibalize ourselves to keep our standard of living going a bit longer (read: borrow lots from the rest of the world); or, we can start to economize and build the infrastructure (read: education, new technologies, etc.) to sustain a high standard of living in a globally competitive economy.
Sadly, people feel keeping someone in jail for drug use is better than sending 2-4 people to college; and, unions like to retire with high pensions and benefits for 40 years having only worked for 30.
Now, in populist righteousness, we're going to punish people for working for banks (read: move to hedge funds to do some serious financial manipulation and gambling) and reduce the equity banks have to back loans. Some think this is a bright idea; but, do they ask themselves is it better to have the government take a $120 billion dollars to payout in entitlements or would it be better (assume roughly 10:1 ratio) to have the money lent out to businesses to create jobs?"
Tuesday, January 12, 2010
Is Washington Killing Employment? - Even in a Recovery, Some Jobs Won't Return - WSJ.com
Even in a Recovery, Some Jobs Won't Return - WSJ.com
We might also focus on the big picture re: employment.
Ask some questions:
1) What is employment?
Ans. It's the part of the production equation:
Production = raw materials + labor + capital
2) What might the US do to improve its demand for labor?
Ans. The obvious first answer is if nothing else changed, the cost of labor has to come down. This could mean the actual wage paid or it could mean the total cost to the employer of hiring an employee (i.e. all the mandated other costs, including social security through healthcare, etc. - sometimes suggested to be at 300-400% of the actual gross wage).
3) What is the impact of this anti-bank, let's tax capital approach currently being discussed by populists and the administration and congress?
As in the above equation, if the production sale price is to be held constant, if the cost of labor is high and the cost of capital goes up, then something else has to give. It appears unlikely that raw materials are going to get cheaper, so the answer can be that the business closes down because it's no longer profitable or sustainable (as with GM and its bankruptcy).
SUMMARY: Solutions to unemployment should involve the basics, but they don't. Rather we are hitting business with every negative impact we can: the dollar is declining (in part because the US wants to see it go down and in part because of high government borrowing, etc.) so raw materials will cost more to import (think of fuel as a start); labor costs are going up even if workers don't see it in the paycheck, they are just being asked to support additional government sponsored benefits (are they really a benefit if you don't have a job); and, by raising the cost of capital, it makes it harder to compete and can put American-based companies at a global disadvantage.
But, you take your choice; and, while there are laments at the employment picture coming from Washington, it's Washington policies that are driving away jobs!
We might also focus on the big picture re: employment.
Ask some questions:
1) What is employment?
Ans. It's the part of the production equation:
Production = raw materials + labor + capital
2) What might the US do to improve its demand for labor?
Ans. The obvious first answer is if nothing else changed, the cost of labor has to come down. This could mean the actual wage paid or it could mean the total cost to the employer of hiring an employee (i.e. all the mandated other costs, including social security through healthcare, etc. - sometimes suggested to be at 300-400% of the actual gross wage).
3) What is the impact of this anti-bank, let's tax capital approach currently being discussed by populists and the administration and congress?
As in the above equation, if the production sale price is to be held constant, if the cost of labor is high and the cost of capital goes up, then something else has to give. It appears unlikely that raw materials are going to get cheaper, so the answer can be that the business closes down because it's no longer profitable or sustainable (as with GM and its bankruptcy).
SUMMARY: Solutions to unemployment should involve the basics, but they don't. Rather we are hitting business with every negative impact we can: the dollar is declining (in part because the US wants to see it go down and in part because of high government borrowing, etc.) so raw materials will cost more to import (think of fuel as a start); labor costs are going up even if workers don't see it in the paycheck, they are just being asked to support additional government sponsored benefits (are they really a benefit if you don't have a job); and, by raising the cost of capital, it makes it harder to compete and can put American-based companies at a global disadvantage.
But, you take your choice; and, while there are laments at the employment picture coming from Washington, it's Washington policies that are driving away jobs!
Sunday, January 10, 2010
Dragons and Other Fairy Tales - Up and Down Wall Street Daily - R. Forsyth - Barrons.com
Dragons and Other Fairy Tales - Up and Down Wall Street Daily - R. Forsyth - Barrons.com:
Some say that there is nothing to worry about with inflation as incomes will keep up?
"What a great many people are concerned about is that there income is 'not' keeping up with the cost of things.
Which, of course, makes sense when the economy is not keeping up with the level of either (or both) capital formation or capital investment.
This can take the form of too much consumption (i.e. social redistribution) or excess allocation of societal resources to non-producers (read: excessive public and union retirement packages - see article on LA public unions effectively causing taxpayers to fund 2 sets of civil servants, one working and one retired) or lack of rewards to producers (read: taxes on investment capital and equity).
The United States is not self-sufficient in all materials (read: oil, etc.), so the value of the dollar clearly impacts some of the underlying cost structure. And, as seen in lots of industries, the way to keep a lid on prices is to reduce the allocation to labor - i.e. wages don't keep up."
Other people suggest that if people had a legitimate concern about inflation, we'd see hoarding?
People may also not be hoarding because their credit lines are tapped out and they're unemployed.
Back in the 70's people leveraged up into real estate. But, that was after inflation got going.
Today the driver could be the combination of anti-business government policies with huge credit demands from government going into socially redistributive consumption?
Clearly, the country and investors haven't made up their minds. However, there was an interesting news note in December on the Asian central banks likely to decide by April 2010 about whether to continue resisting the falling dollar by printing their own money and using it to buy Treasuries.
If Randy is right that US investors will be using their money to buy treasuries, it certainly doesn't seem very positive for investment of capital into creating new jobs in the USA. After all, the government borrowing isn't going into infrastructure or investment, it's going into current consumption.
Some say that there is nothing to worry about with inflation as incomes will keep up?
"What a great many people are concerned about is that there income is 'not' keeping up with the cost of things.
Which, of course, makes sense when the economy is not keeping up with the level of either (or both) capital formation or capital investment.
This can take the form of too much consumption (i.e. social redistribution) or excess allocation of societal resources to non-producers (read: excessive public and union retirement packages - see article on LA public unions effectively causing taxpayers to fund 2 sets of civil servants, one working and one retired) or lack of rewards to producers (read: taxes on investment capital and equity).
The United States is not self-sufficient in all materials (read: oil, etc.), so the value of the dollar clearly impacts some of the underlying cost structure. And, as seen in lots of industries, the way to keep a lid on prices is to reduce the allocation to labor - i.e. wages don't keep up."
Other people suggest that if people had a legitimate concern about inflation, we'd see hoarding?
People may also not be hoarding because their credit lines are tapped out and they're unemployed.
Back in the 70's people leveraged up into real estate. But, that was after inflation got going.
Today the driver could be the combination of anti-business government policies with huge credit demands from government going into socially redistributive consumption?
Clearly, the country and investors haven't made up their minds. However, there was an interesting news note in December on the Asian central banks likely to decide by April 2010 about whether to continue resisting the falling dollar by printing their own money and using it to buy Treasuries.
If Randy is right that US investors will be using their money to buy treasuries, it certainly doesn't seem very positive for investment of capital into creating new jobs in the USA. After all, the government borrowing isn't going into infrastructure or investment, it's going into current consumption.
Saturday, January 9, 2010
Policies that Would Support Employment: Our Financial Godfathers - Up and Down Wall Street - A. Abelson - Barrons.com
Our Financial Godfathers - Up and Down Wall Street - A. Abelson - Barrons.com
In dealing with the lack of employment, what we have not seen, do not see and would like to see are policies that are "pro-business". Instead business is looked upon as either a 'cash cow' to supply the funds to the do-gooder bureaucrats; as a bunch of miscreants who could but don't create American jobs; etc.
We need to have policies that support education (read: get rid of teachers unions; or, better yet consider jailing their leaders); support small business owners (read: lower taxes); support employment and fair pay to workers with worker choice of benefits (read: less money taken from worker paychecks to support government redistribution programs) - fight the labor conundrum; support venture capital (lower capital gains taxes - or, at least don't raise them; we need cutting edge new jobs); etc., etc.
In dealing with the lack of employment, what we have not seen, do not see and would like to see are policies that are "pro-business". Instead business is looked upon as either a 'cash cow' to supply the funds to the do-gooder bureaucrats; as a bunch of miscreants who could but don't create American jobs; etc.
We need to have policies that support education (read: get rid of teachers unions; or, better yet consider jailing their leaders); support small business owners (read: lower taxes); support employment and fair pay to workers with worker choice of benefits (read: less money taken from worker paychecks to support government redistribution programs) - fight the labor conundrum; support venture capital (lower capital gains taxes - or, at least don't raise them; we need cutting edge new jobs); etc., etc.
Friday, January 8, 2010
A Realistic Jobs Program (Take you pick): Report Raises Pressure on Obama to Focus on Jobs - WSJ.com
Report Raises Pressure on Obama to Focus on Jobs - WSJ.com
What the economy should be concerned about is not bringing back jobs that have to shift to the large part of the world that doesn't enjoy America's standard of living; but, to do everything to encourage learning and entrepreneurial start-ups and venture.
On one hand, a lot of small businesses using current technology could be sustained by not being drained through taxes to support income transfers and overly generous benefits (e.g. Los Angeles scheduling a vote to reduce gov't employee benefits because "they're now paying for 2 police forces and other sets of gov't employees - one working, one retired" - see LAT 1st week of Jan., 2010).
Next, we have to support venture capital. High capital gains and income taxes is pulling the wool out from under this industry.
To rely on government to fund make-work jobs just runs up taxes and the deficit - both of which work against sustaining small scale entrepreneurship and venture capital.
Thus, it would seem reasonable that current gov't policies need to be turned around.
However, if one sees government as the true panacea, then one doesn't really care about supporting the private economy (e.g. Obama, Pelosi) - it's all just talk. The private economy is just there to fund government programs. (One can see how that works in US states like Michigan and foreign countries like Greece.)
What the economy should be concerned about is not bringing back jobs that have to shift to the large part of the world that doesn't enjoy America's standard of living; but, to do everything to encourage learning and entrepreneurial start-ups and venture.
On one hand, a lot of small businesses using current technology could be sustained by not being drained through taxes to support income transfers and overly generous benefits (e.g. Los Angeles scheduling a vote to reduce gov't employee benefits because "they're now paying for 2 police forces and other sets of gov't employees - one working, one retired" - see LAT 1st week of Jan., 2010).
Next, we have to support venture capital. High capital gains and income taxes is pulling the wool out from under this industry.
To rely on government to fund make-work jobs just runs up taxes and the deficit - both of which work against sustaining small scale entrepreneurship and venture capital.
Thus, it would seem reasonable that current gov't policies need to be turned around.
However, if one sees government as the true panacea, then one doesn't really care about supporting the private economy (e.g. Obama, Pelosi) - it's all just talk. The private economy is just there to fund government programs. (One can see how that works in US states like Michigan and foreign countries like Greece.)
Should the States be Helped? Richard Ravitch: Washington and the Fiscal Crisis of the States - WSJ.com
Richard Ravitch: Washington and the Fiscal Crisis of the States - WSJ.com:
"Sadly, the states and the Democrats in Washington and their union cronies believe there is always another golden goose to sacrifice to social benefits, early retirements, etc., etc., etc.
Never do we hear about doing things to encourage the well-being of businesses and rewarding productive workers. Instead, the producers are looked upon as limitless suppliers of largess to be handed out by government - with no consequences.
Well, there are consequences. Those states with higher tax rates also show higher unemployment rates. Where union demands have really run-a-muck, as with the UAW and GM, investors have been wiped out.
This article would have been more productive if it had looked at building up the economy rather than looking for ways to sustain what is clearly excessive government spending.
As citizens, we just have to make decisions as to expected outcomes. Sadly, for those receiving government benefits, the liklihood is that at some point they'll be reduced (by how much and how drastically, that's something else - as the lieutenant governor discusses in part). Even more sadly, for those who would like to sustain, grow or start a business, they have to recognize that more of what they produce will likely be taken by government - so they'll end up with less; and, that as government borrows more and more money, the long-term debt will grow, debt servicing costs will rise and private borrowing will become both more expensive and less available.
Nothing is said about encouraging Americans to accumulate capital and look to taking care of themselves.
History and common sense certainly don't suggest a positive outcome."
"Sadly, the states and the Democrats in Washington and their union cronies believe there is always another golden goose to sacrifice to social benefits, early retirements, etc., etc., etc.
Never do we hear about doing things to encourage the well-being of businesses and rewarding productive workers. Instead, the producers are looked upon as limitless suppliers of largess to be handed out by government - with no consequences.
Well, there are consequences. Those states with higher tax rates also show higher unemployment rates. Where union demands have really run-a-muck, as with the UAW and GM, investors have been wiped out.
This article would have been more productive if it had looked at building up the economy rather than looking for ways to sustain what is clearly excessive government spending.
As citizens, we just have to make decisions as to expected outcomes. Sadly, for those receiving government benefits, the liklihood is that at some point they'll be reduced (by how much and how drastically, that's something else - as the lieutenant governor discusses in part). Even more sadly, for those who would like to sustain, grow or start a business, they have to recognize that more of what they produce will likely be taken by government - so they'll end up with less; and, that as government borrows more and more money, the long-term debt will grow, debt servicing costs will rise and private borrowing will become both more expensive and less available.
Nothing is said about encouraging Americans to accumulate capital and look to taking care of themselves.
History and common sense certainly don't suggest a positive outcome."
Maybe It's Wiser to Rent - Fed Plan to Stop Buying Mortgages Feeds Recovery Worries - WSJ.com
Fed Plan to Stop Buying Mortgages Feeds Recovery Worries - WSJ.com
What I never see reported on is the common sense of a traditional (or new) homeowner?
In other words, if jobs are hard to come by and (as shown on a recent series on job hunting on CNN), lots of Americans have had to make major geographic moves to find a new job.
Thus, would you want to buy a house, which it's likely you won't be able to sell (and, it used to be you needed to plan to spend 5-7 years in a house to recoup the selling costs); or, would you want to rent?
I'd think a great many potential home buyers would be renting now. Especially as the job market isn't forecast by anyone to revive vigorously in the next few years!
What I never see reported on is the common sense of a traditional (or new) homeowner?
In other words, if jobs are hard to come by and (as shown on a recent series on job hunting on CNN), lots of Americans have had to make major geographic moves to find a new job.
Thus, would you want to buy a house, which it's likely you won't be able to sell (and, it used to be you needed to plan to spend 5-7 years in a house to recoup the selling costs); or, would you want to rent?
I'd think a great many potential home buyers would be renting now. Especially as the job market isn't forecast by anyone to revive vigorously in the next few years!
Monday, January 4, 2010
Deficit, Budget Woes Need Solutions as U.S. Nears the Precipice - WSJ.com
Deficit, Budget Woes Need Solutions as U.S. Nears the Precipice - WSJ.com
What clearly needs to be on the table if one wants to have economic growth (including the changes and adaptations to a post-industrial economy) is a reduction in the amount of GDP being taken by government (i.e. the 19% number discovered in the 1980's).
The alternative, which the Democrats believe will work but hasn't in the US (i.e. California, Michigan, etc.) is the soak the rich and businesses and hope you can continue to give people benefits based on need and not on the ability or desire to pay (which appears to be the approach as outlined in this article).
It sure looks as though the US is embarked upon the current consumption vs. a better future life mode. It's impossible to think of the US going back to the image of the hardworking immigrants who do menial jobs to give their children an education and chance for a better future.
Instead we want everything we can get now; and, the country is taking the place of the consumer running up their own credit cards, they are asking (with Pelosi, et al being more than willing) to have the Federal and State governments run up government credit cards - with a never mind about ever paying them off.
If the rest of the world acts like the banks who raise rates and fees to consumers - but, this time, raises them for the whole society - the current period may look like a golden era (just as the 1960's did for those who saw the country languish in the 1970's).
What clearly needs to be on the table if one wants to have economic growth (including the changes and adaptations to a post-industrial economy) is a reduction in the amount of GDP being taken by government (i.e. the 19% number discovered in the 1980's).
The alternative, which the Democrats believe will work but hasn't in the US (i.e. California, Michigan, etc.) is the soak the rich and businesses and hope you can continue to give people benefits based on need and not on the ability or desire to pay (which appears to be the approach as outlined in this article).
It sure looks as though the US is embarked upon the current consumption vs. a better future life mode. It's impossible to think of the US going back to the image of the hardworking immigrants who do menial jobs to give their children an education and chance for a better future.
Instead we want everything we can get now; and, the country is taking the place of the consumer running up their own credit cards, they are asking (with Pelosi, et al being more than willing) to have the Federal and State governments run up government credit cards - with a never mind about ever paying them off.
If the rest of the world acts like the banks who raise rates and fees to consumers - but, this time, raises them for the whole society - the current period may look like a golden era (just as the 1960's did for those who saw the country languish in the 1970's).
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