Global Economic September Thread

Talk about the global and national economy to your heart’s content, as much as it takes to get it out of your system so the rest of the site can stick to real estate and housing.

For previous economic open threads, click here.

As of 09/07/2010, global economic comments that do not directly relate to Seattle-area real estate go only in threads designated for this specific subject.


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

145 comments:

  1. 1
    David Losh says:

    An earlier comment:
    “What do you know about the worst outcome? Have you ever been to a country that’s coming apart? It’s far more dramatic in life than watching it on CNN. Look at history of countries where banking system collapsed. You would not want to live it.

    Scotsman brought up a collapse of the banking system. This was a reply. I have lived in the Middle East, and South America where banking is much different than it is here.

    I think banks, big banks, have out lived their usefulness. Now that there has been merger mania the default rate is still very high for a variety of loans. There is no more bail out money, so how will the zombie banks continue?

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  2. 2
    Blurtman says:

    Why do we bail out criminal enterprises? And if somehow, by some stretch of the imagination, the well being of US citizens depends on the existence of large parasites like Goldman Sachs that steal from us, one must ask – what kind of a system is this?

    Goldman Sachs slapped over robo-signing

    NEW YORK (CNNMoney) — The Federal Reserve sanctioned Goldman Sachs on Thursday, saying the investment bank must investigate questionable lending and foreclosure practices in its former mortgage unit.

    The action orders Goldman to review foreclosure proceedings by Litton Loan Servicing between 2009 and 2010 to address “a pattern of misconduct and negligence relating to deficient practices,” the Fed said.

    http://money.cnn.com/2011/09/01/news/companies/goldman_sachs_federal_reserve/

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  3. 3
    ricklind says:

    http://rick.bookstaber.com/
    Good article on income disparity, written by someone who was an early writer on the debt bubble.

    http://www.websterscommentaries.com/
    Halfway through the article is a great image of historical business booms and depressions since 1775. Great historical perspective.

    I think we will be awhile unwinding this huge bezoar of debt.

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  4. 4
    David Losh says:

    RE: ricklind @ 3

    I read the articles about protests in Israel. 400,000 people, in Israel, have nothing, absolutely nothing, better to do than demand to know who is getting more. The country is surrounded by enemies. The only way to have commerce is on a grand scale, or earn your daily bread. I have yet to hear 400,000 people anywhere talking about how to establish free trade.

    I’m sorry that Israel is a subject that is fraught with emotions, but that is exactly the symbol we need. You can not isolate people from doing trade, and commerce.

    Unless Israel, the people of Israel, have the ability to expand market share they have no hope.

    We have the same here in the United States. If I want to trade with people in South America, Mexico, or Canada, I need to get counseling, in more ways than one. It’s a night mare of taxation, regulations, and impediments to protect the big corporate interests we have here. Corporations have the ability to add a couple of lawyers, and make a million dollars.

    Those are the kinds of things people mean by having less government.

    In Israel it is ten times worse. You can only sell so much to your friends, and neighbors. They have a limited population. The government controls everything.

    I’d really like to open that up as a discussion. The government of Israel is building a wall that is separating it’s people from the rest of the world. The United States thought that was such a great idea we are doing the same with Mexico. For some reason Canada doesn’t need a wall.

    In Europe they opened borders, and created a currency out of it.

    There must be some way to establish security while building economy.

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  5. 5
    Scotsman says:

    We are saved!! Lord Obama has put forth another $300B in stimulus to create millions of jobs! Dow is up 2%!

    Life will once again be great- until reality returns.

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  6. 6

    One reason Seattle real estate prices are higher than other parts of the country–we earn more.

    http://www.msnbc.msn.com/id/44426975/ns/local_news-seattle_wa/

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  7. 7

    RE: Scotsman @ 5 – I think this is another instance of the DOW being affected more by Europe than the US.

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  8. 8
    pfft says:

    By Scotsman @ 5:

    We are saved!! Lord Obama has put forth another $300B in stimulus to create millions of jobs! Dow is up 2%!

    Life will once again be great- until reality returns.

    what reality? the reality that the last sitmulus saved over 2 million jobs or the reality that this stimulus needs to be double to fill the output gap which is $900 billion dollars?

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  9. 9
    David Losh says:

    RE: Scotsman @ 5

    I think that’s a rumor that will never pass Congress.

    By the way, I am fascinated with the conservative right bashing Obama. Obama has done more for this country in two years than Clinton, and Bush combined.

    Do you really think North Africa, and the Middle East just happened? You don’t see that a black President, who addressed the Arabic Nation directly, would be seen as an ally?

    Obama has held corporations accountable, we are on a path away from Iraq, and Afghanistan that is measured to the massive damage we did there, and our economy is remarkably stable compared to Europe, China, and Russia.

    What more could you ask for? Jobs?

    If the government provides jobs it’s welfare to work. The private sector, those benevolent corporations, are the ones withholding jobs, because they want to be assured greater government concessions. Global corporations are the ones sending jobs to the lowest bidder. They are the ones to be held accountable.

    Our President, the greatest President of my life time, should focus on the politics that are crushing this once great country.

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  10. 10
    David Losh says:

    Does any one want to discuss the wall of white debate last night?

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  11. 11
    pfft says:

    the republican party is a sad joke. people like ron paul are just a big joke.

    Rate this comment: Thumb up 0

  12. 12
    David Losh says:

    Or how about that Obama speach?

    Rate this comment: Thumb up 0

  13. 13
    whatsmyname says:

    By David Losh @ 9:

    RE: Scotsman @ 5

    Our President, the greatest President of my life time, should focus on the politics that are crushing this once great country.

    Dave, Disappointment has the “D” in the front, and the “P” in the middle. They do both end in “T”.

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  14. 14
    David Losh says:

    RE: whatsmyname @ 13

    I don’t see how any one can be disappointed.

    We got to this point in global economic disaster by corporate greed.

    I’ve been listening to the Republican responses. They say if we just give corporations lower taxes, strip away EPA regulations, stop collective bargaining against Boeing, in particular, in South Carolina, we will create more jobs, and jump start the economy.

    In other words, if we just cater to the wealthy few, we will have the trickle down effect all over again.

    The President doesn’t have a chance of getting this jobs bill passed. He did lay it at the feet of the Republicans. He has proposed taxing the wealthy. He has proposed universal health care. This Presidant has actually called out the very people who function best in the dark.

    All this President needs to do is close down the Iraq, and Afganistan military action we are currently engaged in and his work will be complete.

    He did his job. We should be thankful.

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  15. 15

    I unfortunately missed the speech, but I can’t see how cutting the SS tax for individuals is going to create many jobs. And the tax on the rich isn’t going to pass the House. Doesn’t leave a lot left, but it will be nice driving on freeways without traffic!

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  16. 16

    RE: Kary L. Krismer @ 15 – Looks like Wall Street was as unimpressed as I was (although again, it could be due to Europe too).

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  17. 17
    whatsmyname says:

    RE: David Losh @ 14
    It’s not so much that Obama will fail to make jobs happen. The problem is that he failed to drive the issue for the last 3 years, so focused was he on republican language and the republican narrative. The GOP can’t credibly own this issue, but I question whether Obama can either. That’s why Romney was pre-prepared to point out that Obama’s plan is over 900 days late. This is a self-inflicted wound. Someone is not asleep at the switch, but that someone is not in the WH, and not on our side.

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  18. 18
    David Losh says:

    RE: whatsmyname @ 17

    It’s like they say, memory is short. Before this it was the debt ceiling, before that it was the expiration of tax credits, before that it was the Tea Party.

    This Congress has been a circus of clowns, with Boehner in the top hat, and tails.

    The Republicans are upset that a person, who happens to the President of the United States, has called out the greed that brought us to this point of global economic collapse.

    What I really didn’t appreciate is the Republican party campaign against the American People. I don’t see why a political party can be so openly anti American. Why are people so blinded to the fact Republicans send jobs over seas? Why are people blinded to Republicans trying to take away collective bargaining? How did workers, in America, asking for a living wage, become the face of greed?

    Do you even listen to Republicans? They want us to compete globally by cutting our wages to Chinese levels. Republicans want to do away with the EPA so British Petroleum can save $50 million dollars in EPA fines, while paying the lowest tax rates we can give them.

    The Republican party is openly advocating the destruction of the middle class so a few, a very few people, globally, not even Americans, can not pay taxes, dump toxic chemicals, and write obscure language in contracts so that working Americans pay hefty interest, and fees.

    To me it’s extremely clear the Republican party hates America, and everything America stands for. The Republican party wants to destroy America so some rich Europeans can take over our natural resources.

    Why isn’t that a prominent conspiracy theory?

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  19. 19
    Blurtman says:

    RE: whatsmyname @ 17 – He was a bit focused on health care. He is eiher not too bright re: economics and things financial, or he is co-opted by the financial oligarchy. No longer can one say he surrounds himself with bad advisors. Anyone would know better by now.

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  20. 20
    Blurtman says:

    RE: whatsmyname @ 17 – He was a bit focused on health care. He is either not too bright re: economics and things financial, or he is co-opted by the financial oligarchy. No longer can one say he surrounds himself with bad advisors. Anyone would know better by now.

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  21. 21

    By David Losh @ 18:

    It’s like they say, memory is short. Before this it was the debt ceiling, before that it was the expiration of tax credits,. . .

    This Congress has been a circus of clowns, with Boehner in the top hat, and tails.

    I don’t want to be seen as supporting Congress, because I think all of them should be thrown out. But as to the tax credit expiring, at that point it would have been a tax increase, and few economists thought a tax increase was a good thing given the state of the economy at that point in time. On the other hand, what I’ve promoted here has been some tax increases which wouldn’t hit job creators, so I’m not entirely in the Republican’s camp on that issue.

    As to President Obama’s tax cuts, I’m actually opposed to them to the extent they come from social security taxes. Social security is in trouble, and cutting the taxes it receives makes the situation worse. I suspect he wants to cut those, in part, because that doesn’t show up on certain calculations of the deficit the same way a cut in income taxes would. But again, I don’t see the cut in taxes for non-job creators to be a significant influence on jobs, so I wouldn’t support that cut even if against the income tax. I just don’t think it helps that much, especially in the short term.

    I do like part of President Obama’s plan to allow tax credits for new hires (although I’m concerned about the 6 month off work requirement for that).

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  22. 22

    By Blurtman @ 19:

    RE: whatsmyname @ 17 – He was a bit focused on health care. He is eiher not too bright re: economics and things financial, or he is co-opted by the financial oligarchy. No longer can one say he surrounds himself with bad advisors. Anyone would know better by now.

    I think he has definitely learned that he needs to ratchet down the rhetoric attacking business for no good reason. That has been almost absent the past year, but business people remember it, and are planning their business accordingly. And that means fewer new jobs.

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  23. 23
    Blurtman says:

    RE: Kary L. Krismer @ 22 – I am not disagreeing with you about anti-business rhetoric, which would be pointless (the rhetoric, that is), but I cannot recall examples of this. And I do recall and have verified by looking up the transcript, that when Obama was newly into his first term, and appeared on the Jay Leno show, he remarked that while the financial crisis was serious, no crimes had been commnitted. I always wondered how he could have determined this in the scant 1-2 months into his term.

    If the new “Obama care” plan increases costs for employers, that could be an issue. Does it? I really do not know.

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  24. 24

    RE: Blurtman @ 23 – The thing about Obamacare is at a minimum it creates a lot of uncertainty. Personally I think it will greatly increase the costs for anyone who is paying for insurance, be that an employer or an individual.

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  25. 25
    Blurtman says:

    RE: Kary L. Krismer @ 24 – In my brief research of Obama anti-business rhetoric, I find nothing substantial. As you believe that Obama has engaged in anti-business rhetoric, perhaps you could provide some interesting examples.

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  26. 26
    pfft says:

    since Greece is about to default(92% chance according to CDS’) Europe is starting to rethink it’s failed austerity.

    will you guys admit you were wrong? that a contraction policy is indeed contractionary and doesn’t help the economy? people told you austerians this would happen.

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  27. 27
    David Losh says:

    RE: pfft @ 26

    What are you talking about?

    Are you talking about destroying the Euro? That is a great idea, but Greece will still default. Spain will default. Italy might possibly default, but they have much more skin in the game.

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  28. 28

    By Blurtman @ 25:

    RE: Kary L. Krismer @ 24 – In my brief research of Obama anti-business rhetoric, I find nothing substantial. As you believe that Obama has engaged in anti-business rhetoric, perhaps you could provide some interesting examples.

    The specific one that comes to mind without doing any research is when Las Vegas got mad at him because conventions and such were being cancelled. Not only did he not understand the system, he didn’t understand the impact upon others. More will need to wait until tomorrow.

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  29. 29

    RE: Blurtman @ 25 – I still haven’t had time to search for examples, but this is the type of activity the business community would be concerned about. Try a venture, fail and be investigated for criminal activity, possibly for the simple reason that you embarrassed the President.

    http://www.washingtontimes.com/news/2011/sep/8/fbi-raids-solar-panel-company-hailed-by-obama/

    Not that we know what happened there yet, but it’s not terribly surprising that type of business would fail. Perhaps there was wrongdoing–that’s not my point. My point is this is the type of activity business people would be concerned about, based on the rhetoric. During the Obama Administration it’s better not to take risks, and that means it’s better to not employ additional people.

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  30. 30

    This is perhaps the best example of President Obama being anti-business–proposing to tax innocent people at 90% just because they happen to work at the same company as a couple of slimballs who no longer work at the company.

    http://www.msnbc.msn.com/id/29856242/39540278

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  31. 31
    whatsmyname says:

    By Kary L. Krismer @ 30:

    This is perhaps the best example of President Obama being anti-business–proposing to tax innocent people at 90% just because they happen to work at the same company as a couple of slimballs who no longer work at the company.

    http://www.msnbc.msn.com/id/29856242/39540278

    Kary, read again. Obama didn’t propose the tax – which was only on the bonuses. The House did. Obama had called the bonuses reckless and unjustified – and they were. It is common in the financial industry to reduce or eliminate bonuses across the board when the company is doing poorly. I know this from personal experience, and from companies doing a lot better than AIG.

    What Obama did was to SAVE the company (with a huge infusion of cash), and expect management of the saved company to exercise ordinary business prudence. If that’s “anti-business”….

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  32. 32
    Blurtman says:

    RE: Kary L. Krismer @ 30 – Hardly anti-business rhetoric. Anti-bankrupt financial firm that engaged in massive fraud rhetoric, perhaps. How does this illustrate an anti-business stance? Obama saved everyone’s job there by bailing out the company. Please try again with a meaningful example.

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  33. 33
    Blurtman says:

    RE: Kary L. Krismer @ 29 – You seem like a decent fellow, occassionally entertaining poster, and hard working realtor. But frequently, you resemble pfft in making unsubtantiated statements, typically repeating talking points, and then posting links, a la pfft, that refute your own claims. In the Solyndra story that you posted a link to, it appears that the Republicans are anti-business.

    “News of the raid prompted key Republicans in Congress, who already were investigating the loan to the company, to issue a statement calling for answers from the company.”

    “Republicans have been looking into the Solyndra loan for several months and have subpoenaed documents concerning it from the White House Office of Management and Budget (OMB). Mr. Stearns and Mr. Upton sent a letter last week to the White House seeking information about its role in the loans to Solyndra.”

    Obama has been pro-business in this case. The Republicans, anti-business, using your own link and “logic.”

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  34. 34

    By Blurtman @ 32:

    RE: Kary L. Krismer @ 30 – Hardly anti-business rhetoric. Anti-bankrupt financial firm that engaged in massive fraud rhetoric, perhaps. How does this illustrate an anti-business stance? Obama saved everyone’s job there by bailing out the company. Please try again with a meaningful example.

    It’s anti-business because it tends to cause a talent drain at those companies. Bailing out a company and then making it less likely it will succeed, maybe that should just be described as stupid, but I call it anti-business.

    Also, remember these policies caused the companies to pay off their loans early, rather than using the funds to make loans which would have promoted the economy, which is part of what they were trying to accomplish. Again a stupid policy that leads to bad results.

    BTW, you can find numerous examples of company CEOs complaining about President Obama’s rhetoric, including the head of GE, Intel and many other companies. Here’s a lesser known CEO (you do have to get a way into this one):

    http://www.theblaze.com/stories/steve-wynn-rants-calling-obama-a-socialist-new-audio/

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  35. 35

    RE: Blurtman @ 33 – You forget I don’t like the Republicans any more than I like the Democrats. But the story at issue is the Executive Branch taking action against a company, so that only involves the President. So even though some Republicans might have been opposed to the loan program, that doesn’t mean the story is an an example of what business people are afraid of. Really different issues.

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  36. 36

    By whatsmyname @ 31:

    By Kary L. Krismer @ 30:
    This is perhaps the best example of President Obama being anti-business–proposing to tax innocent people at 90% just because they happen to work at the same company as a couple of slimballs who no longer work at the company.

    http://www.msnbc.msn.com/id/29856242/39540278

    Kary, read again. Obama didn’t propose the tax – which was only on the bonuses. The House did. Obama had called the bonuses reckless and unjustified – and they were…

    I was aware that it was the House that passed the bill (I’m pretty sure I complained about that here), but President Obama was the one that gave the idea life and then walked it back. From the article I linked:

    “President Barack Obama is trying to dampen a fire he once stoked, urging a more tempered response to public furor over bonuses paid to executives of the publicly rescued insurance giant American International Group. ”

    And:

    “On Sunday, Obama signaled opposition to the bonus tax when he told CBS’ “60 Minutes,” “let’s see if there are ways of doing this that are both legal, that are constitutional, that uphold our basic principles of fairness.”

    Thus, he wanted to accomplish the same result, through a different means.

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  37. 37

    By Kary L. Krismer @ 15:

    I unfortunately missed the speech, but I can’t see how cutting the SS tax for individuals is going to create many jobs. And the tax on the rich isn’t going to pass the House. Doesn’t leave a lot left, but it will be nice driving on freeways without traffic!

    A number of stories are starting to indicate that economists are just as skeptical of the Jobs plan as what I am.

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/09/11/BUCC1L2GCJ.DTL

    http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2011/09/11/MNGB1L2EI8.DTL

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  38. 38
    David Losh says:

    Obama has opened up a discussion about American, and global business models. As an example, this idea that shipping jobs over seas is the government’s doing.

    Unemployment is a business decision. The talking point today is that business wants more certainty. They want to know what is going to happen with health care, or taxes, or government regulations before they hire. Business wants to know they can count on our government to stop collective bargaining if a business, like Boeing, gets cornered.

    Business is making demands. Congress is making demands, the Tea Party is making demands, all to benefit a very few individuals. That’s not what America is about. America is about Public Welfare, and Defence.

    As near as I can tell Obama is true to the Constitution. He has said, and done the right things. Congress on the other hand has shown a complete disregard for what the American people want.

    Republicans point to the Tea Party as a mandate. In reality it is a back lash of fear mongering from a fringe group. I think the Republicans can see at this point that they need to distance themselves from the no new taxes chants.

    In my opinion, business should just do what is right for their business, and stop demanding the government give them more concessions.

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  39. 39
    Blurtman says:

    RE: Kary L. Krismer @ 35 – Sorry, but the Solyndra story that you reference contains absolutely zero evidence of anti-business rhetoric by Obama. I await more relevant examples, as you indicate you may provide with further research.

    You seem to be indicating that Obama is responsible for Republicans attempting to discredit Obama by investigating companies that he promoted and that received federal financing. Amazing. Much easier to admit that you sometimes post talking points without knowing if they are true or not.

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  40. 40
    Blurtman says:

    Why we will beat China. In China, you cannot check on line if they put mushrooms on your pizza. USA! USA!

    http://www.usatoday.com/money/industries/food/2008-01-29-pizza-tracker_N.htm

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  41. 41
    whatsmyname says:

    By Kary L. Krismer @ 36:

    By whatsmyname @ 31:
    By Kary L. Krismer @ 30:
    This is perhaps the best example of President Obama being anti-business–proposing to tax innocent people at 90% just because they happen to work at the same company as a couple of slimballs who no longer work at the company.

    http://www.msnbc.msn.com/id/29856242/39540278

    Kary, read again. Obama didn’t propose the tax – which was only on the bonuses. The House did. Obama had called the bonuses reckless and unjustified – and they were…

    I was aware that it was the House that passed the bill (I’m pretty sure I complained about that here), but President Obama was the one that gave the idea life and then walked it back. From the article I linked:

    “President Barack Obama is trying to dampen a fire he once stoked, urging a more tempered response to public furor over bonuses paid to executives of the publicly rescued insurance giant American International Group. ”

    And:

    “On Sunday, Obama signaled opposition to the bonus tax when he told CBS’ “60 Minutes,” â��let’s see if there are ways of doing this that are both legal, that are constitutional, that uphold our basic principles of fairness.”

    Thus, he wanted to accomplish the same result, through a different means.

    Obama said that the bonuses were “reckless” and “unjustified” (this is from your article). They were, and going back to my post, they should never have been paid. That is what motivated the House action. Obama saved the company, and management responded by continued looting of the company. Do you think that Warren Buffett would have put up with that? Is he anti-business?

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  42. 42

    By Blurtman @ 39:

    RE: Kary L. Krismer @ 35 – Sorry, but the Solyndra story that you reference contains absolutely zero evidence of anti-business rhetoric by Obama.

    I didn’t say that was an example of rhetoric by Obama. I said: “I still haven’t had time to search for examples, but this is the type of activity the business community would be concerned about.” What I meant by that is it’s the type of event that is consistent with his prior anti-business rhetoric: Fail in business and you will be demonized. In such an environment, it’s safer to park your money and wait.

    That was a company President Obama was previously using as an example of a great American company, so as far as I know there was no negative administration rhetoric about the company prior to the the FBI showing up at the company’s doors. That wasn’t my claim.

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  43. 43
    whatsmyname says:

    in summary:
    Obama saved the company,
    Management abused this, and did the wrong thing with taxpayer money.
    Obama then told the truth about what management was doing.
    Congress reacted to the truth with a bill to possibly shortcut the constitution.
    Obama stood up for the Constitution, but still opined we should try to do the right thing.

    This is a horror for business?

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  44. 44

    By David Losh @ 38:

    Obama has opened up a discussion about American, and global business models. As an example, this idea that shipping jobs over seas is the government’s doing.

    I’m pretty sure that wasn’t an Obama original thought. Here’s an article from 1976 partly on the issue of the foreign tax credit and it’s effect on jobs (although they argue it creates more jobs than it costs).

    http://news.google.com/newspapers?id=GSMqAAAAIBAJ&sjid=0UYEAAAAIBAJ&dq=corporate%20foreign-tax-credit%20export-jobs&pg=3757%2C4251180

    Go to page 24 and then drag the page down below the swimming pool comic with your mouse to read the entire thing.

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  45. 45

    By whatsmyname @ 42:

    in summary:
    Obama saved the company,
    Management abused this, and did the wrong thing with taxpayer money.
    Obama then told the truth about what management was doing.
    Congress reacted to the truth with a bill to possibly shortcut the constitution.
    Obama stood up for the Constitution, but still opined we should try to do the right thing.

    This is a horror for business?

    Assuming you’re talking about the bonuses, how is it an abuse to give bonuses which were already contractually obligated, and which the Administration knew about prior to giving the money? Alternatively: How is it an abuse to compensate the employees of a company in the way they are typically compensated, when the employees were in no way responsible for what happened to the company?

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  46. 46
    whatsmyname says:

    RE: Kary L. Krismer @ 45

    “Assuming you’re talking about the bonuses, how is it an abuse to give bonuses which were already contractually obligated, and which the Administration knew about prior to giving the money? Alternatively: How is it an abuse to compensate the employees of a company in the way they are typically compensated, when the employees were in no way responsible for what happened to the company?”

    As I posted above, there is a lot of wiggle room in bonus obligations, and there is nothing unusual about financial companies canceling bonuses when the company is not doing well. I am talking about bonuses of employees who were in no way responsible for the company’s troubles, but actually contributed positive economic benefit.

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  47. 47

    By whatsmyname @ 45:

    As I posted above, there is a lot of wiggle room in bonus obligations, and there is nothing unusual about financial companies canceling bonuses when the company is not doing well. I am talking about bonuses of employees who were in no way responsible for the company’s troubles, but actually contributed positive economic benefit.

    As to the first sentence, that may be true (it would depend in part on how the compensation package was written out), but it’s highly unusual for the President of the United States to condemn the bonuses and demand that they be repaid to the company.

    As so the second sentence, I’m not understanding. You don’t have a problem with punishing employees who were not responsible and offer a positive economic benefit to the company?

    BTW, I would add to this argument that just as the President didn’t understand the secondary impacts of his Las Vegas rants, he didn’t understand the secondary impact of his cutting bonuses. That money goes somewhere. It’s almost funny that he thinks a few dollars extra every week from SS tax cuts is going to create jobs, but didn’t realize that six figure bonuses also create jobs. I’m not sure where he thinks that money goes.

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  48. 48
    whatsmyname says:

    “As to the first sentence, that may be true (it would depend in part on how the compensation package was written out), but it’s highly unusual for the President of the United States to condemn the bonuses and demand that they be repaid to the company.”

    It is also unusual for the President of the United States to spend over a hundred billion dollars to bail out a company. Most investors of that magnitude insist on something

    “As so the second sentence, I’m not understanding. You don’t have a problem with punishing employees who were not responsible and offer a positive economic benefit to the company?”

    I have been that employee. I don’t like it, but that’s the way the game is played, and it happens all the time. In counterpoint, you only have a problem with that when it is done in a taxpayer bailout?

    “BTW, I would add to this argument that just as the President didn’t understand the secondary impacts of his Las Vegas rants, he didn’t understand the secondary impact of his cutting bonuses. That money goes somewhere. It’s almost funny that he thinks a few dollars extra every week from SS tax cuts is going to create jobs, but didn’t realize that six figure bonuses also create jobs. I’m not sure where he thinks that money goes.”

    A lot of that 6 figure money just goes into investment accounts. The SS dollars are more likely to wind up in purchases.

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  49. 49

    By whatsmyname @ 47:

    “As to the first sentence, that may be true (it would depend in part on how the compensation package was written out), but itâ��s highly unusual for the President of the United States to condemn the bonuses and demand that they be repaid to the company.”

    It is also unusual for the President of the United States to spend over a hundred billion dollars to bail out a company. Most investors of that magnitude insist on something

    I would say that it’s not uncommon in that situation for the investors to allow the key employees additional compensation so that they don’t jump ship. That used to happen quite frequently in bankruptcy reorganizations. In the case of AIG and the government, the only chance of the government being repaid was the sale of the parts. It’s now apparent that the parts won’t repay the government entirely, and I would argue that’s in part because many key people probably didn’t like what President Obama was doing to them and they had options elsewhere.

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  50. 50

    By whatsmyname @ 47:

    A lot of that 6 figure money just goes into investment accounts. The SS dollars are more likely to wind up in purchases.

    Assuming that’s the case, then it will be productive in the economy, and help create jobs. But in any case I’d bet a lot of it also goes into expensive toys, paying help, etc. And the dig on the tax cuts is the money goes into paying off consumer debt, not things that employ people.

    In reality it’s a bit of both all around.

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  51. 51

    Here’s an example close to home of AIG losing a key person. Steven Udvar-Hazy formerly of International Lease Finance, one of Boeing’s biggest customers, left and he started his own company. The government is now still trying to sell the AIG entity.

    http://www.seattlepi.com/default/article/ILFC-s-future-could-affect-Boeing-Airbus-1286114.php

    http://blog.seattlepi.com/aerospace/2011/04/04/air-lease-corp-launches-ipo/

    Less money for taxpayers!

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  52. 52
    David Losh says:

    No one can have it both ways. If you want less government then you fire a whole bunch of people. If you want “government” to create jobs they need to hire a whole bunch of people.

    I don’t get how government giving away more free stuff to a very small number of businesses is going to benefit any one other than a very small number of corporations.

    We gave a way free stuff, and tax credits, then got nothing. Why is the focus on Obama, or government? Why aren’t the American People outraged at huge global business that are only interested in profits with the least amount of effort?

    Low interest rates here in the United States means more money to invest in emerging markets. That means more credit. The entire world is now focused on credit without any concern about how that money will be repaid, or where it is going.

    Let me tell you that money will never be repaid. That money is going into the cash reserves of corporations that will go bankrupt. The money will be hidden in back room deals that will leave a smoke screen.

    We should focus on ferreting out these cash reserves and put that money to work.

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  53. 53
    Blurtman says:

    RE: whatsmyname @ 43 – Unreasonable. If you work for a company, and the performance of a business unit is so bad, even criminal, that it brings the entire company to bankrputcy, it is perfectly natural to expect the government to bail you out. And even if you would have been suddenly unemployed but for the bailout, it is perfectly reasonable to demand your bonus, even if you worked in the criminal and incompetent business unit.

    It is stunning that people actually believe this, but there are a lot of low information folks out there.

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  54. 54

    RE: Blurtman @ 53 – I’m not sure exactly what you’re saying there, but using AIG as an example, the people who caused the problem were long gone. I believe even the CEO had changed over, if you want to say the CEO is responsible. And the division that caused the problem was a relatively small part of the problem because AIG had been gobbling up fairly large companies for some time, like Sunamerica (remember they used to sponsor the NBC NFL pre-game shows) and ILFC mentioned above.

    So yes, expecting a bonus to stay so that your employer and company owner (the government) can recover more money for the sale of your unit, that’s not unreasonable. That’s especially true for the most productive employees who have options elsewhere that don’t require that you carry a business card that says AIG on it.

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  55. 55

    By Kary L. Krismer @ 54:

    And the division that caused the problem was a relatively small part of the problem because AIG had been gobbling up. . ..

    That should have read “small part of the company.” Rather obviously that division was the entire cause of the problem.

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  56. 56
    Blurtman says:

    RE: Kary L. Krismer @ 54 – I was quite amazed to learn that AIG had invested in a technology that could measure responsibility. I think the cut-off was 30% and higher.

    Of course you are blathering again. You have no access to information that would allow you to state that “the people who caused the problem were long gone.”

    And the firestorm was caused by the AIG financial products group unit receiving bonuses, the group responsible for bankrupting AIG. Not folks at the other business units.

    You really are a troll, aren’t you?

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  57. 57

    By Blurtman @ 56:

    Of course you are blathering again. You have no access to information that would allow you to state that “the people who caused the problem were long gone.”
    You really are a troll, aren’t you?

    You’re becoming a troll.

    http://www.heraldscotland.com/aig-traders-in-london-blamed-for-company-s-huge-losses-1.904987

    “Mr Cassano received $280m dollars (£201m) in salary and bonuses over an eight-year period before his resignation in March last year [2008]. . .” This has been rather widely reported, even here.

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  58. 58

    As to the CEO changing:

    http://www.insurancejournal.com/news/national/2008/06/16/91004.htm

    There may have been a change since then, but this is the relevant one.

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  59. 59
    Blurtman says:

    RE: Kary L. Krismer @ 57 – Your quote “the people who caused the problem were long gone. I believe even the CEO had changed over, if you want to say the CEO is responsible.”

    The links you provide do not describe that the people who caused the problems at the AIG finiancial products group being gone, only Casano, and the CEO of the overall company, who you even imply might not be responsible.

    The first step to gaining knowledge is to admit being ignorant.

    You have provided zero proof that the traders responsible for the fraud at the financial products group are gone. Zero proof.

    You blather, make unsubstantiated statements, provide meaningless “proof” to back it up only when challenged on the blather. That seems to fit the definition of “troll.”

    “The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.

    The bonus plan covers 400 employees, and the bonuses range from as little as $1,000 to as much as $6.5 million. Seven executives at the financial products unit were entitled to receive more than $3 million in bonuses.”

    http://www.nytimes.com/2009/03/15/business/15AIG.html

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  60. 60

    RE: Blurtman @ 59 – Do you even know who Casano is? He was the head of the division that made the bad decisions from 2002 to 2008. Unless the “traders” operating below him were doing their transactions without authority, I wouldn’t say they were responsible. That would be like saying a loan officer with WAMU who made loans to customers who asked for WAMU loan products was responsible for the downfall of WAMU. AIG was not a situation where rouge traders were making risky trades, as occurred many years ago with Orange County.

    Funny, you claim I don’t know what I’m talking about, but if anything is becoming apparent here, it’s that you don’t know what you’re talking about.

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  61. 61

    By Blurtman @ 56:

    And the firestorm was caused by the AIG financial products group unit receiving bonuses, the group responsible for bankrupting AIG. Not folks at the other business units.

    BTW, this is just BS. The firestorm over bonuses applied to all the AIG bonuses as well as the bonuses at other entities that received federal bailouts. Talk about ignorant blathering.

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  62. 62
    Blurtman says:

    RE: Kary L. Krismer @ 60 – OK. So “people” is plural. Casano alone would not qualify the word “people.” You imply that the CEO of AIG corporate might not have been responsible, so who besides Casano is gone that would allow one to claim that the “people who caused the problem were long gone.”

    And “long gone” is yet another untrue statement. Do you research anything? Casano had “retired” in March 2008. The firestorm surrounding the AIG financial products group bonuses began with the disclosure of the March 2008 bonuses. That is “long gone?”

    Further, Cassano was still retained by AIG FP after he retired in March 2008 at a $1 Million per month retainer.

    You and I do have one thing in comon – neither of us know what the heck you are talking about.

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  63. 63

    RE: Blurtman @ 62 – The CEO comment is based on my prior comments that CEOs don’t necessarily know everything going on with the company. I think the example I used was that the CEO of BP probably didn’t even know about the existence of the oil well that blew out, although clearly he knew that there were such wells. He also probably didn’t know about the procedures used to drill the well, or have enough of an education on such topics that it would matter is he had known. So is he responsible? As the head of the company, arguably, but based on what his job duties were, probably not.

    In the case of AIG I think that’s a much harder claim to make because from what I’ve read in the past the old CEO was informed of these risky bets. But I don’t even know why you think this is an issue. You acknowledge that what I’m saying is that they “might not” (your term) be responsible. That means it could be seen as either way. Might or might not. I’m not saying he was or wasn’t.

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  64. 64

    By Blurtman @ 62:

    And “long gone” is yet another untrue statement. Do you research anything? Casano had “retired” in March 2008. The firestorm surrounding the AIG financial products group bonuses began with the disclosure of the March 2008 bonuses. That is “long gone?”

    You should become a politician. AIG was taken over in September of 2008. That there was an uproar well after March 2008 over events that occurred in March 2008, doesn’t change the fact that he was “long gone” at that point in time. Not even members of the Senate can go back and change history. He was gone and whatever he was entitled to was set in stone given the fact that AIG didn’t file bankruptcy.

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  65. 65
    Blurtman says:

    RE: Kary L. Krismer @ 63 – All I am trying to do is illustrate that your claim that the “people who caused the problem were long gone.” is pure hogwash, Who besides Cassano was long gone by March 2009?

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  66. 66

    By Blurtman @ 65:

    RE: Kary L. Krismer @ 63 – All I am trying to do is illustrate that your claim that the “people who caused the problem were long gone.” is pure hogwash, Who besides Cassano was long gone by March 2009?

    First, perhaps you don’t know what I mean by “long gone.” It isn’t X number of months or years. It means too long to do anything about what happened. Long gone very well could have been the day after he resigned. By the time AIG blew up it was too late to change his compensation.

    Second, who do you think besides Casano and possibly the CEO was responsible? I think before you say what I said was hogwash, you need to point out someone who was responsible, and show that they are still there. But in any case, it is my understanding that dealing with mortgage derivatives was his baby. That others under him might have carried out his program doesn’t make it their responsibility. This isn’t something like a military officer ordering civilians to be killed, where it is so morally repulsive that those carrying out the orders are also responsible.

    Third, I’ve never understood why so many people seem to think that employees who cause an entire company to fail would be allowed to stay at that company. Do they think these people just have a really great personalities such that no one wants to fire them? Do they think that the employee won’t lose their job despite the fact that the employee’s actions probably substantially destroyed the wealth of everyone working with them? In the case of the person we’re talking about above, I would question that he “resigned.” You’re not going to bring down an entire company and still be their unless you happen to own the company.

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  67. 67
    Blurtman says:

    Cassano and Sullivan were gone before the contentious bonuses were paid in March 2009. Not 2008 as erroneously indicated previously. And the bonuses were paid quarterly thereafter. To folks whose actions led to the destruction of AIG, and its takeover by the NY Fed.

    Cassano’s post-“retirement” $1 million per month was cut off in September 2008, when this was disclosed in a congressional hearing.

    You seem to absolve everyone at AIG financial products from the responsibilities of their actions, attributing this responsibility to Cassano alone. As posted previously, “The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.

    The bonus plan covers 400 employees, and the bonuses range from as little as $1,000 to as much as $6.5 million. Seven executives at the financial products unit were entitled to receive more than $3 million in bonuses.”

    Now if these folks did not know what they were doing was wrong, executing a trading strategy that was disastrous, clearly they are incompetent. Why would incompetent employees be awarded bonuses?

    And if they did know that what they were doing was disastous, why would they be awarded bonuses.

    And yes, incentive contracts can be changed all the time in the business world.

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  68. 68
    pfft says:

    Obama jobs bill will create jobs.

    Macroeconomic Advisers: Jobs bill could create 1.3 million+ jobs
    http://www.washingtonpost.com/blogs/ezra-klein/post/macroeconomic-advisers-jobs-bill-could-create-13-million-jobs/2011/08/25/gIQAXxmfNK_blog.html

    Mark Zandi: Obama plan would add 1.9 million jobs
    http://www.washingtonpost.com/blogs/ezra-klein/post/mark-zandi-obama-plan-would-add-19-million-jobs/2011/09/09/gIQAAx9kEK_blog.html

    Greece shows that austerity doesn’t work, keynes wins again!

    Greece Default Risk Jumps to 98%
    http://www.bloomberg.com/news/2011-09-12/greece-s-risk-of-default-increases-to-98-as-european-debt-crisis-deepens.html

    Last March Trichet insisted that massive public sector austerity was the way to calm the bond markets and bring down interest rates. Greece, he said, had a “role model” in Ireland, which had enacted its own brutal emergency budget in December 2009. He repeated this austerity prescription in an FT article in July. But by the end of 2010, austerity had utterly failed and the eurozone, with some help from the International Monetary Fund, had been forced to bail out both countries. Portugal followed in May this year

    http://blogs.independent.co.uk/2011/07/18/jean-claude-trichet-not-a-good-crisis/

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  69. 69

    By Blurtman @ 67:

    Now if these folks did not know what they were doing was wrong, executing a trading strategy that was disastrous, clearly they are incompetent. Why would incompetent employees be awarded bonuses?

    As I noted earlier, this isn’t the type of situation where a military officer orders privates to kill civilians. I don’t think you should punish anyone just because they worked under Mr. X, or just because they were doing the job that was dictated by upper management.

    The real issue of bonuses isn’t the past, it’s the present and future. Is the employee doing a job that is important to the company? Does the presence of that employee improve the value of the unit that the employee is working for? And sometimes you need to have employees kept around because they understand the mess better than others and they are needed to help clean up the mess.

    Maybe rather than say President Obama is anti-business it should be said that he doesn’t have a clue when it comes to understanding operating a business. That very well might be why you see so many CEOs coming out saying that President Obama is anti-business. It’s not that he wants business to fail, it’s that he doesn’t have a clue what it takes for a business to be successful.

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  70. 70

    RE: pfft @ 68 – Given that the jobs bill is funded by tax code changes that the Republicans are extremely unlikely to vote for, I think it’s hard to say that the jobs program will create a single job, ignoring perhaps the jobs of those in government who print the thing.

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  71. 71
    David Losh says:

    RE: pfft @ 68

    Greece default has nothing to do with austerity, the same with Spain.

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  72. 72

    The issue with the solar firm in CA going under, and then immediately being investigated for criminal wrongdoing is heating up. But the target might not be the company! Apparently the Obama Administration pressured the DOE to make the loans. Apparently it was known in advance that the company had a business model that didn’t work, but President Obama wanted to announce the loans during a trip to California.
    http://abcnews.go.com/Blotter/emails-obama-white-house-monitored-huge-loan-connected/story?id=14508865

    [Edit: Fixed link.]

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  73. 73
    Blurtman says:

    RE: Kary L. Krismer @ 69 – Utter and absolute nonsense! I have worked at several companies, including one where I and an advisor took on the CEO head on, and refuted the disastrous strategy he was engineering. Intelligent, competent people know when horsechocolate is going on or being dictated by the CEO. If you know you have two choices. Only one is doing the right thing. The wrong thing, going along, does not merit a bonus, but some jail time in the case of AIG.

    Once again, you are FOS. You have not substantiated your claim that the people responsible for the AIG disaster were gone ny March 2009. You have not substantiated your claim that Obama engages in anti-business rhetoric. You post statements that are not based in fact. You fit the definition of a troll perhaps, but certainly a low information type.

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  74. 74

    By Blurtman @ 73:

    Once again, you are FOS. You have not substantiated your claim that the people responsible for the AIG disaster were gone ny March 2009.

    Newsflash. Merely disagreeing with something does not mean you’re right. If you think someone is at AIG who is responsible, it’s your duty to identify them before claiming I am wrong. Doing otherwise is just childish “no you are” nonsense. If you think I am wrong, prove it. Otherwise STFU.

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  75. 75

    We Need Our Sunshine Back Again

    Reading the blogs above convinces me we get grumpy when the sun goes away.

    BTW, I agree with both Kary and Blurtman….evidence is king and frustration is understandable. Teaming the two together is the solution.

    P.S. I have my grumpy days too….it’s my birthday today, so I’m in a good mood.

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  76. 76
    Blurtman says:

    RE: Kary L. Krismer @ 74 – You made the claim about AIG, and could not provide any proof. Ditto Obama. My comments about you are accurate.

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  77. 77
    Blurtman says:

    RE: softwarengineer @ 75 – I try to provide links to the things that I claim on this and other blogs. When others make statements that I believe are not true, I will ask them to provide substantiation. When they cannot, I will point this out. A better approach would be to admit fault, but that may be intolerable to some. I make mistatements and try to correct them when provided with more accurate information.

    Prejudice, bias, shallow thinking underly much of the malaise in this country. I would like to encourage a debate based upon facts to blow through the crud.

    I am in the sunshine, BTW.

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  78. 78
    Kary L. Krismer says:

    By Blurtman @ 76:

    RE: Kary L. Krismer @ 74 – You made the claim about AIG, and could not provide any proof. Ditto Obama. My comments about you are accurate.

    Apparently you didn’t understand my comment about being childish, because you’re still being childish.

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  79. 79
    pfft says:

    By David Losh @ 71:

    RE: pfft @ 68

    Greece default has nothing to do with austerity, the same with Spain.

    really? most of the experts would disagree with you and they did when austerity was being enated.

    austerity is a contractionary policy at a time when the economy is contracting. it worsens deficits and the economy. people without jobs or with less income are less able to pay off debt.

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  80. 80
    David Losh says:

    RE: pfft @ 79

    Greece will default no matter what. Greece is a socialist country.

    Spain will also default. Italy may hold out because they have a vested interest in the Euro, but no one is fooled by the politics of the economy.

    All countries will turn on Germany, just as we should.

    I mean, really, it’s nothing personal, it’s all politics.

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  81. 81
    David Losh says:

    As soon as I posted that I realized a lot of people here are talking economics like the entire world has the same set of politics.

    Not every country is capitalist. Not all people are interested in economics. Most people are looking for something to eat, on a day, to day basis.

    So when we talk the economics of corn futures some people talk revolution. That should be made real clear.

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  82. 82
    Blurtman says:

    RE: Kary L. Krismer @ 78 – Yes, you are right, I should provide links to every statement that Obama ever made to show that he did not engage in anti-business rhetoric. Don’t you think (wasted question) that it might be more feasible for you to provide evidence of things he said that are anti-business, to back up the claim that you made? Doh!

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  83. 83

    RE: Blurtman @ 82 – Examples of anti-business rhetoric have already been given above. The statements that got him in trouble with Las Vegas, because he was killing convention business, and the statements that he wanted to try to find another way (something Constitutional) to accomplish effectively the same thing as the House legislation on bonuses.

    But you’re missing the point. On the AIG claim, if you think I’m wrong about everyone responsible having left (using my definition of not including those simply following orders from above), then find evidence of that. Otherwise just realize we either disagree on the definition or that you have no basis for thinking my claim is incorrect.

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  84. 84
    pftt says:

    hey guys the absolutely unbearable spending binge of the economic bailout from a few years ago that will bankrupt our economy and send interest rates skyrocketing is going to cost us in 2012…$78 billion.

    cost of the unfunded Iraq War next year= $192 billion

    cost of the unfunded bush tax cuts for the very rich= $322 billion

    http://www.cbpp.org/images/cms/12-16-09bud-rev6-28-10-t11.jpg

    so much for the argument that the stimulus will bankrupt us.

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  85. 85
    pftt says:

    By Kary L. Krismer @ 83:

    RE: Blurtman @ 82 – Examples of anti-business rhetoric have already been given above. The statements that got him in trouble with Las Vegas, because he was killing convention business, and the statements that he wanted to try to find another way (something Constitutional) to accomplish effectively the same thing as the House legislation on bonuses.

    But you’re missing the point. On the AIG claim, if you think I’m wrong about everyone responsible having left (using my definition of not including those simply following orders from above), then find evidence of that. Otherwise just realize we either disagree on the definition or that you have no basis for thinking my claim is incorrect.

    obama is pro-business. he has bowed to them whenever he can. he just scrapped new clean air rules.

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  86. 86

    RE: pftt @ 85 – That was a recent event. I was talking about the first two years of his term, or not quite two years. The part before the election that let President Obama know he was on the wrong track with voters.

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  87. 87
    pfft says:

    By Kary L. Krismer @ 86:

    RE: pftt @ 85 – That was a recent event. I was talking about the first two years of his term, or not quite two years. The part before the election that let President Obama know he was on the wrong track with voters.

    I listed stuff that was from the first two years. the vegas thing is a non-issue.

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  88. 88
    Blurtman says:

    RE: Kary L. Krismer @ 83 – You have provided no proof that the people responsible at AIGFP were long gone. You have provided proof that one person was gone, Cassano. You have made and continually make untrue statements, consistent with my claim that you blather, are a low information person, and troll like. .

    Here are two easily found links that refute everything you have claimed. The first clearly states that some of the AIGFP traders were gone, not all. The second derides the logic of paying retention bonuses to the boobs that created this mess, as if anyone would hire them at all.

    You also refuted my statement that the public outrage was not over the AIG financial products group bonuses, but AIG bonuses overall, which the second link also refutes. The more you try to hide your ignorance, the more mistatements you make.

    “But the Journal says the number is actually $450 million to execs at the financial products division and a $1.2 billion spread across the whole company.

    As you can see, despite the fact that this relatively small division of the company created almost all the loses, it’s still drawing in a vastly disproportionate share of the cash bonuses. ”

    There are many such stories from reputable news and financial sites. If you want to increase your knowledge base, and rise up from your ignorance, the first step is admitting you are wrong. In your case, that would be a huge undertaking considering the enormity of the deficit.

    http://www.marketwatch.com/story/aig-pay-450-mln-bonuses-financial
    http://talkingpointsmemo.com/archives/2009/03/the_best_and_the_brightest.php

    Also see: http://articles.cnn.com/2009-03-16/politics/AIG.bonuses_1_recklessness-and-greed-aig-bonuses?_s=PM:POLITICS

    “Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?”

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  89. 89
    pfft says:

    By Blurtman @ 88:

    RE: Kary L. Krismer @ 83I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?”

    because it’s worth it to the taxpayers to keep the economy afloat. the taxpayers just paid to keep themselves afloat.

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  90. 90
    pfft says:

    wonder what this will do to property values?

    Rising Seas to Wash Away Iconic California Beaches, Tourism
    http://www.treehugger.com/files/2011/09/rising-seas-to-wash-away-iconic-california-beaches-tourism.php

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  91. 91

    RE: pfft @ 90 – Some properties will go down in value as they are flooded, others up as the become waterfront. ;-)

    Rate this comment: Thumb up 0

  92. 92
    David Losh says:

    I was waiting for the foreign markets to open to the good news that Greece will plow ahead with it’s tax increases, and promises to cut spending, when the news leaked that Obama is going to ask for $1.4 trillion in tax increases for the wealthy. GOP immediately labeled it class war fare. Well, they are correct on that point. It is class war fare, and it is about time.

    I’m even going to go a little further with this comparison to Greece.

    The Germans in Europe are wealthy by comparison to other countries. They were rebuilt after World War II while Palermo Sicily still has bombed out buildings. The Germans then had to rebuild East Berlin, but in that process found a whole new wave of development.

    In Italy, Spain, and Greece the lifestyle is more relaxed from the rigidity of the central Europeans. Those are the vacation spots that are now over built, over leveraged, and overly indebted to the new found wealth of the European Community.

    It is also class war fare there.

    In my opinion there is a shift taking place that will demand that paper profits be forced into production. I think the days of make a billion and wait for retirement are over. Where is any one going to go that there isn’t unrest?

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  93. 93
    pfft says:

    at least some good news on the economic front.

    August Industrial Production: Double Dippers Get Dunked
    http://www.cepr.net/index.php/blogs/beat-the-press/august-industrial-production-double-dippers-get-dunked

    remember industrial production has weather the weather, the Japan disaster, the global slowdown and Hurricane Irene.

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  94. 94
    pfft says:

    the economy hasn’t had overall government stimulus since Q4 2009.

    Austerity USA
    http://krugman.blogs.nytimes.com/2011/09/18/austerity-usa-2/

    note that the president’s jobs bill would have positive effect on GDP and unemployment according to Goldman Sachs.

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  95. 95
    pfft says:

    this pretty much sums up where the Republican party is.

    I’ve never felt like I had to back up what people tell me. You assume that you’re given good information,” Haley said. “And now I’m learning through you guys that I have to be careful before I say something.”

    APNewsBreak: SC Gov can’t back drug test claim
    http://www.chron.com/news/article/APNewsBreak-SC-Gov-can-t-back-drug-test-claim-2177956.php

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  96. 96
    pfft says:

    wanna stabillize our deficit? support the obama tax plan.

    President’s Budget Plan Would, Indeed, Stabilize the Debt
    http://www.offthechartsblog.org/president’s-budget-plan-would-indeed-stabilize-the-debt/

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  97. 97
    pfft says:

    this isn’t that good.

    CHART OF THE DAY: Financial Conditions Are At Their Weakest Level Since Lehman
    http://www.businessinsider.com/chart-of-the-day-2011-9#ixzz1YvXPGECR

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  98. 98
    Blurtman says:

    RE: pfft @ 97 – A bit off topic, but why does everyone call the Greece possible bankruptcy a Lehman event? I don’t think Lehman’s possible bankruptcy was in the news for years before it happened.

    Regarding the economy, I do not discount sentiment. And neither Bush the war criminal nor Obama has helped build positive sentiment in the US by making it painfully obvious that we have a two tiered justice system.

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  99. 99
    David Losh says:

    RE: Blurtman @ 98

    Excellent point about Greece as compared to Lehman. The other part to that puzzle is China, and what the heck are they gonna do now.

    What’s interesting to me is that no one wants inflation, no one wants the Euro to collapse, and no one wants contraction of the global economy. So what’s left? Something has to give.

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  100. 100
    HappyRenter says:

    Gold and silver. It seems that the bubble has popped?

    Rate this comment: Thumb up 0

  101. 101
    pfft says:

    By HappyRenter @ 100:

    Gold and silver. It seems that the bubble has popped?

    2008 was a lot worse.

    Rate this comment: Thumb up 0

  102. 102
    Scotsman says:

    Oh well, looks like Germany won’t be saving the euro after all- put on your shades- there’s going to be a big “boom”:

    http://globaleconomicanalysis.blogspot.com/2011/09/germanys-top-judge-throws-major-monkey.html

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  103. 103
    Blurtman says:

    RE: pfft @ 101 – No one knows. Lots of foks making confident prognostications based upon a short term move. And define “bubble” while you are at it.

    Rate this comment: Thumb up 0

  104. 104
    Blurtman says:

    RE: David Losh @ 99 – It’s time for the Rapture.

    Rate this comment: Thumb up 0

  105. 105
    David Losh says:

    RE: Scotsman @ 2

    This guy has been beating this drum for a long while. Let’s just call the Euro over ambitious, and without value.

    It’s interesting that China keeps challenging the dollar and they are the ones who own the gold, or control the gold, or are actively mining gold. I keep hearing some noise about a return to the gold standard, but that would never make any sense again.

    In the world of Fiat Money Central Europe could never compete. My thoughts have always been that Germany, France, and Great Britian, as opposed to England, just wanted to expand the currency in a hope that they could play with the United States, China, and Russia.

    In my opinion the Euro can die an orderly death with debt forgiveness. My opinion is that we are going to need to see a lot of debt forgiveness, everywhere.

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  106. 106

    On the topic of stagnant wages, they actually have been going up, but just not in a way that’s reported. Yesterday the news was that health care insurance costs have doubled in 10 years. That’s roughly an extra 7-8k of benefits for a family on average.

    I think if most people realized what being able to go to see the doctor for a $20 was really costing them, they’d chose something else, like more money.

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  107. 107
    pfft says:

    By Kary L. Krismer @ 106:

    On the topic of stagnant wages, they actually have been going up, but just not in a way that’s reported. Yesterday the news was that health care insurance costs have doubled in 10 years. That’s roughly an extra 7-8k of benefits for a family on average.

    I think if most people realized what being able to go to see the doctor for a $20 was really costing them, they’d chose something else, like more money.

    no.

    “Skin in the Game” Fails As a Health Care Cost Control Idea
    http://fdlaction.firedoglake.com/2011/09/27/skin-in-the-game-is-failure-as-a-health-care-cost-control-idea/

    Rate this comment: Thumb up 0

  108. 108
    pfft says:

    it won’t pass. republicans don’t want a better economy because it helps obama’s already great chance to have a second term.

    Obama Plan Prevents 2012 Recession: Economists
    http://www.bloomberg.com/news/2011-09-28/obama-jobs-plan-prevents-2012-recession-in-survey-of-economists.html

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  109. 109
    David Losh says:

    RE: pfft @ 108

    I think the Jobs Bill was the most brilliant move this President could have made. Of course the Republicans won’t pass it. They are too busy trying to get a canidate together; hey how about Sarah Palin?

    The Jobs Bill comes with a tax increase for the wealthy which the Tea Party won’t allow. It puts pressure on the debt reduction commission to work in Obama’s favor. It gets political movement where none existed before. It launches his reelection campaign.

    I don’t see what Republicans can do at this point. The African American pizza guy just won the Florida staw poll. There has to be something wrong with that. He’s the one who wanted to put oil companies in charge of the EPA. Sheesh.

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  110. 110
    Daryl Kelb says:

    By pfft @ 11:

    the republican party is a sad joke. people like ron paul are just a big joke.

    Anyone who is educated about the economy realizes that Ron Paul has correctly predicted and offered educated solutions for the current crisis we are in. If you prefer to pump presidential candidates who are financially backed by corrupt central bankers, be my guest; however, not everyone blindly “trusts” the central banker controlled mainstream media or the various sock puppets employed across the Internet’s comment forums, using MetalGear software specifically developed to control several different realistic personas in an effort to sway mass public opinion with disinformation.

    Some of us are aware, friend. This makes sock puppetry a little more difficult than simply announcing that candidates working against central banker-supported communitarianism (ref: Niki Raapana and Joan Veon; Google them) are simply “a big joke.”

    Polls conducted for many years in the US clearly show that the vast majority of Americans are Libertarian in their beliefs (Ron Paul is Libertarian). Libertarians have been under attack by the central bankers, IMF, World Bank, and Bank of International Settlements for decades now, since the Libertarians are aware of the central banker con job that seeks to disinform the public and control governments through the lending of private banker money, at interest.

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  111. 111
    Daryl Kelb says:

    By David Losh @ 10:

    Does any one want to discuss the wall of white debate last night?

    What does color have to do with the presidential debate? Please explain.

    Also, are you aware that for the last few presidential elections, private thinktanks such as the CFR have been financially supporting several hand-picked candidates on both the right and the left, in an effort to dominate US politics with central banker-friendly candidates?

    If you are truly concerned about color, then you will be more concerned about the private purchasing of the majority of presidential candidates we are asked to select from (this excludes Ron Paul, by the way, since he is not backed by central banker monies).

    Central banker monies have been funding the disinformation that Ron Paul is a racist. This makes it easy for people to turn off to the single candidate that is not backed by private banker money. How convenient.

    Please stop perpetuating the lies.

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  112. 112

    By pfft @ 7:

    By Kary L. Krismer @ 106:
    On the topic of stagnant wages, they actually have been going up, but just not in a way that’s reported. Yesterday the news was that health care insurance costs have doubled in 10 years. That’s roughly an extra 7-8k of benefits for a family on average.

    I think if most people realized what being able to go to see the doctor for a $20 was really costing them, they’d chose something else, like more money.

    no.

    �Skin in the Game� Fails As a Health Care Cost Control Idea
    http://fdlaction.firedoglake.com/2011/09/27/skin-in-the-game-is-failure-as-a-health-care-cost-control-idea/

    I don’t think that article is very complete. They look at one factor and track it against prices, and assume that one factor (number of people with higher deductibles) doesn’t affect prices.

    Health care costs are determined by many factors. If, for example, you had more people either insured or getting government benefits for treatment (total), you could tend to see higher prices even with a slight increase in the number of people with high deductibles. One thing would tend to increase prices, and one tend to decrease them.

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  113. 113

    By David Losh @ 9:

    I think the Jobs Bill was the most brilliant move this President could have made.

    If you judge brilliance by being politically astute, I’d agree with you. If you view brilliance by actually proposing something that he thinks will work and has a snowball’s chance of passing, it would fail miserably.

    IMHO it’s just another example of how extreme partisan politics is keeping things from getting done in Washington DC (and there are other examples on the other side–it’s not just one side).

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  114. 114
    doug says:

    RE: Kary L. Krismer @ 111

    I think you’re half right here. Kary. It’s a political move, and probably an astute one, and it won’t pass.

    On the other hand, I DO think Obama would like nothing more than if the bill actually passed. This bill raises taxes slightly on the wealthy (who were essentially unhurt by the recession) to create middle-class blue-collar jobs that our country desperately needs, and rebuild infrastructure that’s going to need to be rebuilt very soon anyway.

    That that’s considered “extreme(ly) partisan” speaks more to the mindset of the current GOP than anything else.

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  115. 115

    By doug @ 112:

    That that’s considered “extreme(ly) partisan” speaks more to the mindset of the current GOP than anything else.

    I think both are extremely partisan because there is an obvious middle ground which neither side ever mentions. Tax those with higher income at a greater rate, unless that income is generated from a business activity where the business employs people. So for example, you have an individual or corporation that employees people, they would pay a lower rate on the portion of income generated from their business activity than they would from interest income.

    Although I still think a complete overhaul of the tax system would be best.

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  116. 116

    BTW, I was watching Jon Stewart the other night, probably from a show a week ago last Monday, and he was mocking a Subway franchise owner who made the mistake of referring to needing $200,000 to “feed” his family. The guy’s numbers, as I recall them, were $6M in gross revenue and $800k in net income. Stewart made a comment that made him think that if they guy took $600k of that profit, and plugged it back into the business, that he wouldn’t be taxed on that income. That’s not the case since whatever the investment was would likely be some type of capital investment, which would need to be depreciated over time.

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  117. 117
    Sweet Pea says:

    I would think a wealth tax could be more effective than higher taxes on higher income tiers. As others have pointed out, some people with higher incomes are still on the upward trajectory of building businesses, making capital investments, etc.

    Smaller-time savers who are fiscally prudent and trying to preserve their nut sitting in cash are earning nothing. Yet, if they invested that it would have relatively little impact systemically, but a big impact on them individually if it disappeared.

    Tax the massive wealth that’s just sitting around in cash and bonds, not being deployed for hiring or purchasing or investing, particularly for individuals and corporations that have it in abundance. Tier it, so the more you have sitting, the more it hurts to let it sit. Currently, all savers of cash are being penalized, some are just more equal than others; encourage mom and pop and joe(sephine) schmoe to continue to try to save what they can, and stick it to the 8+-figure-multi-millionaire and billionaires whose futures wouldn’t be jeopardized by deploying relatively more savings.

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  118. 118
    Blurtman says:

    UBS rogue trader to hit City bank bonuses

    Bankers across the City of London are preparing to have their bonuses slashed in the wake of the rogue trader scandal at UBS.

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8790552/UBS-rogue-trader-to-hit-City-bank-bonuses.html

    Here, a lone rogue trader causes losses at UBS so large that folks at UBS and other banks who had nothing to do with this are having their bonuses cut.

    On the other hand, we have Tim “Arsewipe” Geithner defending the need to pay bonuses to the AIG Financial Products Group employees who did cause the downfall of their company through their own actions.

    There must have been something very special about the AIG Financial Products Group people.

    Doh!

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  119. 119
    doug says:

    RE: Sweet Pea @ 117

    I don’t disagree. Nor, do I disagree with Kary’s proposal (though the big cut in payroll taxes was a stab at this, no?) I’d MUCH MUCh rather raise the capital gains tax than raise the highest tax rate. I think it would have beneficial effects above and beyond raising a little scratch, by reducing volatility in the markets, and speculative bubbles.

    However, that doesn’t mean Obama’s proposal to raise taxes to a level that’s still historically quite low is extremely partisan. Take the emotion out of it, it’s a smallish tax bump on a segment of the population that is doing extremely well (and is hoarding cash) in order to supplement programs that should have the net effect of stimulating demand, which our economy needs. What would be the end effect? The government would have a little extra money, the top incomes would probably be more inclined to invest their money rather than sit on it (a good thing!) and their standard of living would be completely unchanged.

    I’m willing to give a few percentage more for the financial health of the country. I’ll survive. Honestly, I’d probably just move my contributions out of a Roth and into a standard 401k, boo hoo. The top bracket will survive too. Count on it.

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  120. 120
    Scotsman says:

    How are we going to “grow” our way to higher home prices, etc. without increasing productivity? No productivity gains, no real wage gains. Without real growth the whole scheme falls apart:

    http://libertystreeteconomics.newyorkfed.org/2011/09/the-productivity-slowdown-reaffirmed.html

    http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c014e8be0c88a970d-450wi

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  121. 121

    By Blurtman @ 18:

    UBS rogue trader to hit City bank bonuses

    I really don’t think those bonuses were probably very big, since City Bank went under on 4/16/10.

    Did you mean Citibank? ;-)

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  122. 122

    By doug @ 19:

    I don’t disagree. Nor, do I disagree with Kary’s proposal (though the big cut in payroll taxes was a stab at this, no?) I’d MUCH MUCh rather raise the capital gains tax than raise the highest tax rate.

    Part of the reason for a lower cap gain rate was that in prior years the tax rate went up to 70%, and if you had a large capital gain that could really nail you due to grouping income all in one year. It’s not as necessary now, and is just a device to encourage capital investment.

    Perhaps a better approach would be to create a Jon Stewart rule (reference to my prior post) where an entire investment in certain active capital assets could be deducted entirely in the year incurred, and then taxed at normal rates when sold.

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  123. 123
    pfft says:

    By Daryl Kelb @ 110:

    By pfft @ 11:
    the republican party is a sad joke. people like ron paul are just a big joke.

    Anyone who is educated about the economy realizes that Ron Paul has correctly predicted and offered educated solutions for the current crisis we are in.

    ron paul doesn’t have a clue about the economy and politics. see his civil rights stance. his “solutions” would only make the economy worse not better.

    he thinks inflation is 10%. not a clue.

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  124. 124
    Scotsman says:

    RE: pfft @ 123

    OMG- you’re correct! It’s actually even higher- try 12%!

    http://www.shadowstats.com/alternate_data/inflation-charts

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  125. 125
    Blurtman says:

    RE: Kary L. Krismer @ 121 – No, City of London, i.e., City (of London) bank bonuses. Read the linked story.

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  126. 126
    pfft says:

    By Scotsman @ 124:

    RE: pfft @ 123

    OMG- you’re correct! It’s actually even higher- try 12%!

    http://www.shadowstats.com/alternate_data/inflation-charts

    shadow stats is bogus. even the owner of the site says so. he just adds a fixed number to whatever the inflation rate is. by his inflation rate the economy has contracted by nearly 10%! none of that shows up in any statistics like industrial production or unemployment. of course you’d believe him.

    MIT’s billion prices project has inflation at right about what the government numbers are.

    http://bpp.mit.edu/usa/

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  127. 127
    pfft says:

    btw the way scotsman, you should love obama’s buffet rule/budget as it will stabilize our debt to gdp ratio that you are supposedly so concerned about.

    President’s Budget Plan Would, Indeed, Stabilize the Debt
    http://www.offthechartsblog.org/president’s-budget-plan-would-indeed-stabilize-the-debt/

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  128. 128
    Scotsman says:

    RE: pfft @ 126

    ” by his inflation rate the economy has contracted by nearly 10%!”

    Sounds about right. Something about trillions of dollars in lost equity comes to mind….. I guess you missed that- Krugman must not have mentioned it, since it didn’t fit his meme.

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  129. 129
    Scotsman says:

    RE: pfft @ 27

    Would that be like the budget from 2002 that had us running big surpluses by now?

    And what has Obama done to “stabilize” the debt? Oh, I forgot- he doesn’t even have a budget, hasn’t had one for over two years. I hope when he does come up with one it fares better than the claim that unemployment will be drop to less than 8% that accompanied the first stimulus request. That worked well, eh? Jokers.

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  130. 130
    David Losh says:

    RE: Scotsman @ 129

    I thought Congress supplied the budget.

    Actually I was surprised that the stimulus worked as well as it did. There is no doubt now from any one that unemployment was stabilized by the governments, I mean globally, infusions.

    I think this is where a lot of people get confused. It’s not only, or solely the United States government that is incurring debt to boost the global economy. It’s China, Russia, and Europe. South America is where the next shoe will drop as the emerging markets are rapidly building consumer debt.

    This is a “Financial Crisis.” The financial markets, are debt markets. The global economy is trading debt, including government debt in the form of bonds.

    It’s all debt. The United States debt isn’t standing alone out there. We can’t just fix that. Well, we can, but it means we crash the global market place and millions, if not billions, of people will be in worse shape then they are today.

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  131. 131
    David Losh says:

    RE: Daryl Kelb @ 11

    I missed this, and it is one of my favorite topics. I have no idea who Ron Paul is. I had to check the spelling. If he is a Libertarian then he is main stream, ultra conservative. So what, no one cares.

    What I was referring to is that the point of the debate was that we have to get Obama out of office. The debate of the conservative crowd was that Obama may have an agenda so that would be a bad thing.

    I was especially impressed with how this group of white, ultra conservatives, put an African American pizza guy in the middle podium. He’s the one who wants to put the oil companies in charge of the EPA. It was both sad, but a little humorous. He, by the way won the straw poll of conservative canidates in Florida. What a hoot.

    Never mind that. I just find white people funny. No one in that debate, of white people, talking about white people issues, and concerns, addressed any positive steps to help America, or the global community. It was all negativity about what can we do to protect white interests around the world.

    It was just white people talking about petty little white people business about how much more they can get for white people.

    Is that a little more clear for you? or do you want to talk some more about white people business, like Central Banking.

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  132. 132
    Scotsman says:

    RE: David Losh @ 130

    “Actually I was surprised that the stimulus worked as well as it did. There is no doubt now from any one that unemployment was stabilized by the governments, I mean globally, infusions.”

    Are we on the same planet? Third rock from the sun, right?

    David- try to get one thing through your head and focus on it: Nothing is stabilized. Today people are saying europe is “stabilized” because the Germans decided to play along with the newest-latest-greatest attempt to save the euro. You know, the one where they borrow their way out of debt by increasing the size of the new debt and spreading it around so it will infect even the last few healthy economies.

    That’s not stability- it’s just another nail in the coffin lid so the stink won’t leak out quite so soon. But don’t think the body isn’t still rotting away in there. They bought 6 months max.

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  133. 133
    Scotsman says:

    RE: David Losh @ 30

    Yeah, congress supplies the budget- except that they haven’t gotten around to it for a couple of years. Who cares, it’s all make believe any way. Obama did submit a suggested budget- it was voted down almost unanimously. That was funny.

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  134. 134
    David Losh says:

    RE: Scotsman @ 132

    This is real simple. Greece, Spain, Portugaul. and Italy will default out of the Euro. They had peferfectly fine currencies that could withstand all of the bogus accounting they wanted, or needed to do. It’s no big deal. England still has the Pound, no big deal.

    All of those are socialist countries.

    Russia is already making to move to re elect Putin and dominate the global economy. China is cooked. They made a lot of extended financial moves that will bury them. The investment they have in the United States is going to turn around to bite them.

    You’re really concerned about the United States debt. I can’t figure out why. We have the dominate currency, and a mechanism to deleverage our consumer debt through bankruptcy. Our economy can grow while sending the losses off shore. The financial markets are global. The debt will transfer to where ever it’s been sold.

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  135. 135
    pfft says:

    By Scotsman @ 128:

    RE: pfft @ 126

    ” by his inflation rate the economy has contracted by nearly 10%!”

    Sounds about right. Something about trillions of dollars in lost equity comes to mind….. I guess you missed that- Krugman must not have mentioned it, since it didn’t fit his meme.

    huh? what do you even mean? that’s a contraction of 10% THIS YEAR! the data simply does not support your false inflation figures.

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  136. 136
    pfft says:

    By Scotsman @ 29:

    RE: pfft @ 27

    Would that be like the budget from 2002 that had us running big surpluses by now?

    And what has Obama done to “stabilize” the debt? Oh, I forgot- he doesn’t even have a budget, hasn’t had one for over two years. I hope when he does come up with one it fares better than the claim that unemployment will be drop to less than 8% that accompanied the first stimulus request. That worked well, eh? Jokers.

    you made the same mistakes twice. in both cases we didn’t have all the data.

    1. we(they) didn’t know that bush would run up the deficit with 2 unfunded wars, 2 unfunded tax cuts for the rich and an unfunded medicare part D giveaway to the drug companies.

    2. Romer didn’t have enough real-time data to show that the recession was going to be so bad. the stimulus saved millions of jobs though.

    Obama’s Economic Stimulus Program Created Up to 3.3 Million Jobs, CBO Says
    http://www.bloomberg.com/news/2010-08-25/obama-s-economic-stimulus-program-created-up-to-3-3-million-jobs-cbo-says.html

    “he doesn’t even have a budget, hasn’t had one for over two years.”

    probably because the republicans are filibustering it.

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  137. 137
    pfft says:

    remember most of the national debt is from republican presidents and most of our future deficits are from bush’s policies.

    Whose Deficit Is It, Anyway?
    http://www.offthechartsblog.org/whose-deficit-is-it-anyway/

    then there is this.

    71% of national debt happened during GOP presidencies; 28% under Dem presidents
    http://www.americablog.com/2011/07/71-of-national-debt-happened-during-gop.html

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  138. 138
    Sweet Pea says:

    RE: Kary L. Krismer @ 121

    “City” is a common term for London’s financial industry.

    Rate this comment: Thumb up 0

  139. 139

    By Blurtman @ 125:

    RE: Kary L. Krismer @ 121 – No, City of London, i.e., City (of London) bank bonuses. Read the linked story.

    Actually, I only had to read the link you had.

    It was a joke, but thanks to Sweat Pea for the further explanation.

    I only brought it up because every time I think of the local City Bank I wonder WTF were they thinking with that name?

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  140. 140
    pfft says:

    possible recession coming.

    “It’s Going to Get a Lot Worse”: ECRI’s Achuthan Says New Recession Unavoidable
    http://finance.yahoo.com/blogs/daily-ticker/going-lot-worse-ecri-achuthan-says-recession-unavoidable-141929160.html

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  141. 141
    Scotsman says:

    All of you who think government spending/stimulus is the way out should spend a few minutes pondering this:

    http://azizonomics.files.wordpress.com/2011/09/unemp-vs-spending1.jpeg

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  142. 142
    pfft says:

    By Scotsman @ 141:

    All of you who think government spending/stimulus is the way out should spend a few minutes pondering this:

    http://azizonomics.files.wordpress.com/2011/09/unemp-vs-spending1.jpeg

    you should probably read basic textbook economics. we know stimulus works. krugman said we could use a 1950s textbook to fight this slump.

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  143. 143
    whatsmyname says:

    By Scotsman @ 141:

    All of you who think government spending/stimulus is the way out should spend a few minutes pondering this:

    http://azizonomics.files.wordpress.com/2011/09/unemp-vs-spending1.jpeg

    Wow, Government spending is less volatile than the private sector, and therefore represents a growing percentage of a shrinking GDP when the private economy is falling into recession. Not only that, but unemployment goes up during recessions.

    This fellow has brilliantly conflated two pieces of common knowledge into a chart, and suggests on his site that it means something more. I think he knows better, but also knows that this will be spread far and wide by fools and shills.

    Did you not even notice that unemployment was the leading rather than following indicator on this chart?

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  144. 144
    pfft says:

    By whatsmyname @ 143:

    By Scotsman @ 141:
    All of you who think government spending/stimulus is the way out should spend a few minutes pondering this:

    http://azizonomics.files.wordpress.com/2011/09/unemp-vs-spending1.jpeg

    Wow, Government spending is less volatile than the private sector, and therefore represents a growing percentage of a shrinking GDP when the private economy is falling into recession. Not only that, but unemployment goes up during recessions.

    This fellow has brilliantly conflated two pieces of common knowledge into a chart, and suggests on his site that it means something more. I think he knows better, but also knows that this will be spread far and wide by fools and shills.

    Did you not even notice that unemployment was the leading rather than following indicator on this chart?

    good answer. scotsman doesn’t know that not only does gdp fall during recession but revenue falls because of unemployment while spending goes up because we’re spending more on unemployment, food stamps and etc.

    unbelievable. what do you expect from someone who gets his views from a fiction author while trashing a nobel winning econimist?

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  145. 145
    whatsmyname says:

    RE: pfft @ 144

    I am sure I don’t know who you mean, but here is a quote from Paul Krugman that contains more wit and wisdom than anything (and everything) ever written by Ayn Rand:

    “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.”

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