Great week for America & Dems (bad, for everyone else)!

Happy Friday, all! What a fantastic week for Americans - and a bad week for Republicans, Tea Partyers, and many Libertarians (the ones who just. can't. stand any government interfence and regulating bodies)! Let me take a brief moment to give you two examples - from this week alone - detailing the differences between the Democratic party and Republican party (of which Ron Paul is a devout member). *WARNING: includes facts!

1) Dems, let by Obama, Nancy, Harry and all the others, two years ago, created the Consumer Financial Protection Bureau (CFPB). That means what it says: a body, that protects YOU, the consumer, from getting ripped the *&^% off by financial institutions. Republicans/Tea Partyers/many libertarians voted AGAINST this regulating body ...and since the bureau's been established, those same powers have made sure the President could not put someone in charge of it. Based on their actions, the GOP/others do not want YOU protected from predatory financial corps. Well, mercifcully, Obama decided to do some "fillibusting, baby!" and he put a leader - Richard Cordray - in place to start going about the business of protecting all Americans. This guy is an aggressive defender of consumer rights, having brought AIG to it's knees, with a $1,000,000,000 settlement, when he was prosecuting them for bad business practices, as Attorney General, earlier in his career. WINNING! GOP/tea partyers/many liberatarians be damned!

2) Today's job report (just released): a net of 200,000 jobs were added last month, and the jobless rate fell to 8.5%, it's lowest level since Feb, 2009, which was just a couple of weeks after Obama took office, when began fixing the God-awful mess that 8 years of Bush and the republicans made, with their wholly-unnecessary Iraq war (which caused 5,000 unnecessary deaths to our american heroes, and unnecessary physical and mental wounds for life, to another 100,000 american heroes), and TWO failed tax cuts (which added over $1,000,000,000,000 to the deficit). The unemployment rate has dropped, consistently, for a nice clip now, and we're in a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn’t happened since April 2006. April, 2006. For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. All of this is better than analysts expected. Why? Because the Dems, let by Obama, Nancy, Harry and all the others lead and legislated purposefully, with the goal of fixing the economy, implementing good ideas like the stimulus package (even FAUX news analsysts begrudingly admit the Stimulus/Recovery Act was successful), and the recent payroll tax cut, among other things (the GOP was against a tax CUT! ANYthing to ensure Obama's not re-elected)! ...policies and proposed legislation that the GOP, Conservatives and tea party (to a person!), voted AGAINST. Do not forget that.

In summary: Democrats good for America. Republican, Conservatives, Tea Party, many Libertarians, and some "Independents" bad for America.

"Enjoy your weekend, America!"

-sj

Our Great Sin - by Devin Coldewey

I just came across this today. It's fabulous. Have no idea who Devin Coldewey is, but i like him immediately. sj

Our Great Sin
Devin Coldewey
Feb 1, 2011

I recently watched, like many of our readers, the interview (1, 2) with Mike Daisey regarding the conditions under which Apple products are made in China. And at the risk of fomenting conflict with Mr. Daisey, I would like to editorialize on the topic in slightly broader and harsher terms.

Actually, it’s not that I disagree with the man, exactly. It’s that he doesn’t go far enough, and in doing so conveniently avoids requiring himself or anyone else from doing anything but being concerned. If you’re going to take on ideas like globalism, corporate responsibility, and cross-cultural morality, you don’t get off that easy. You can’t establish a predicate like “the way our lifestyle is made possible is immoral” and somehow avoid unpleasant conclusions.

The “great sin” isn’t Apple’s, or any one of the other major international corporations that use Foxconn or similar megafactories. And it isn’t Foxconn’s either. It’s clearly, inescapably, ours.

Now, I’m not going to get all Das Kapital on you. The idea here is simpler and closer to home than some grand idea of political and economic metatheory. The basic fact is this: an “ethical” iPhone would be too expensive. That’s literally all there is to it (replace iPhone with your device of choice). Everything follows from our own unwillingness to pay for the true cost of a device. People want a better world, but they don’t want to pay for it. Nothing new there, really.


To pretend otherwise is plain hypocrisy. The question is whether we are willing to take responsibility for our own immorality? We’re too cheap to care where our goods come from. Admitting to anything less is ridiculous.

There are three primary responses when confronted with incontrovertible proof of your own immorality:

Claim moral status and adjust actions
Claim moral status and justify actions
Claim no moral status and continue actions

There are precious few who will take door number one. It means giving up nearly everything that makes up the life of a first-world citizen. Very little in the way of consumer electronics, cars, and other status symbols is manufactured ethically. Door number one is abandoning the pleasant inequality inherent to the modern world. Can we be expected to do that? I guess it depends entirely on what we expect from ourselves, so I’m going to guess that no, we won’t be doing it.

Door number two is where you’ll find most people. I’m not sure how one does it, but you can apparently take the moral high ground while continuing the actions you condemn. Politicians have no trouble doing this, but their airport-bathroom dealings aren’t usually public (public information, rather). And millions of people will buy bottled water while deploring the state of the third world, and not feel the hypocrisy leaking from every pore. Last year everyone made a lot of noise over the supposed iPhone 4 suicide. The outrage was quickly forgotten and everyone became angry instead at Apple for a design flaw in the device. Easy come, easy go.

click HERE to see original piece and finish reading article (including the link to video interviews Devin is responding to). you'll be glad you did.

Ghandi, Stephen Colbert, Jesus Christ, & the GOP.

Stephen Colbert is one of the greatest comedians, simplifiers and messengers of my generation. This video proves it. Here are two quotes from this 4-minute clip.

"If this is going to be a Christian nation that doesn't help the poor, either we have to pretend that Jesus was just as selfish as we are, or we've got to acknowledge that He commanded us to love the poor and serve the needy and then admit that we just don't want to do it."

"Jesus was always flapping his gums about the poor, but not once did he call for tax cuts for the wealthiest two percent of Romans."

(damn embed code is broken from Colbert site, so all I can do is link it for now; click HERE, nonetheless, and watch. it kills!)

Perhaps Mahatma Ghandi said it best:
"I like your Christ. I do not like your Christians.
Your Christians are so unlike your Christ."

Eat the Rich: Bill Maher's "New Rule: Rich People Who Complain About Being Vilified Should be Vilified"

He consistently nails it. Whatever the 'it' is. This New Rule from his recent "Real Time with Bill Maher" -sj

New Rule: The next rich person who publicly complains about being vilified by the Obama administration must be publicly vilified by the Obama administration. It's so hard for one person to tell another person what constitutes being "rich", or what tax rate is "too much." But I've done some math that indicates that, considering the hole this country is in, if you are earning more than a million dollars a year and are complaining about a 3.6% tax increase, then you are by definition a greedy asshole.

And let's be clear: that's 3.6% only on income above 250 grand -- your first 250, that's still on the house. Now, this week we got some horrible news: that one in seven Americans are now living below the poverty line. But I want to point you to an American who is truly suffering: Ben Stein. You know Ben Stein, the guy who got rich because when he talks it sounds so boring it's actually funny. He had a game show on Comedy Central, does eye drop commercials, doesn't believe in evolution? Yeah, that asshole. I kid Ben -- so, the other day Ben wrote an article about his struggle. His struggle as a wealthy person facing the prospect of a slightly higher marginal tax rate. Specifically, Ben said that when he was finished paying taxes and his agents, he was left with only 35 cents for every dollar he earned. Which is shocking, Ben Stein has an agent? I didn't know Broadway Danny Rose was still working.

Ben whines in his article about how he's worked for every dollar he has -- if by work you mean saying the word "Bueller" in a movie 25 years ago. Which doesn't bother me in the slightest, it's just that at a time when people in America are desperate and you're raking in the bucks promoting some sleazy Free Credit Score dot-com... maybe you shouldn't be asking us for sympathy. Instead, you should be down on your knees thanking God and/or Ronald Reagan that you were lucky enough to be born in a country where a useless schmuck who contributes absolutely nothing to society can somehow manage to find himself in the top marginal tax bracket.

And you're welcome to come on the show anytime.

Now I can hear you out there saying, "Come on Bill, don't be so hard on Ben Stein, he does a lot of voiceover work, and that's hard work." Ok, it's true, Ben is hardly the only rich person these days crying like a baby who's fallen off his bouncy seat. Last week Mayor Bloomberg of New York complained that all his wealthy friends are very upset with mean ol' President Poopy-Pants: He said they all say the same thing: "I knew I was going to have to pay more taxes. But I didn't expect to be vilified." Poor billionaires -- they just can't catch a break.

First off, far from being vilified, we bailed you out -- you mean we were supposed to give you all that money and kiss your ass, too? That's Hollywood you're thinking of. FDR, he knew how to vilify; this guy, not so much. And second, you should have been vilified -- because you're the vill-ains! I'm sure a lot of you are very nice people. And I'm sure a lot of you are jerks. In other words, you're people. But you are the villains. Who do you think outsourced all the jobs, destroyed the unions, and replaced workers with desperate immigrants and teenagers in China. Joe the Plumber?

And right now, while we run trillion dollar deficits, Republicans are holding America hostage to the cause of preserving the Bush tax cuts that benefit the wealthiest 1% of people, many of them dead. They say that we need to keep taxes on the rich low because they're the job creators. They're not. They're much more likely to save money through mergers and outsourcing and cheap immigrant labor, and pass the unemployment along to you.

Americans think rich people must be brilliant; no -- just ruthless. Meg Whitman is running for Governor out here, and her claim to fame is, she started e-Bay. Yes, Meg tapped into the Zeitgeist, the zeitgeist being the desperate need of millions of Americans to scrape a few dollars together by selling the useless crap in their garage. What is e-Bay but a big cyber lawn sale that you can visit without putting your clothes on?

Another of my favorites, Congresswoman Michele Bachmann said, "I don't know where they're going to get all this money, because we're running out of rich people in this country." Actually, we have more billionaires here in the U.S. than all the other countries in the top ten combined, and their wealth grew 27% in the last year. Did yours? Truth is, there are only two things that the United States is not running out of: Rich people and bullshit. Here's the truth: When you raise taxes slightly on the wealthy, it obviously doesn't destroy the economy -- we know this, because we just did it -- remember the '90's? It wasn't that long ago. You were probably listening to grunge music, or dabbling in witchcraft. Clinton moved the top marginal rate from 36 to 39% -- and far from tanking, the economy did so well he had time to get his dick washed.

Even 39% isn't high by historical standards. Under Eisenhower, the top tax rate was 91%. Under Nixon, it was 70%. Obama just wants to kick it back to 39 -- just three more points for the very rich. Not back to 91, or 70. Three points. And they go insane. Steve Forbes said that Obama, quote "believes from his inner core that people... above a certain income have more than they should have and that many probably have gotten it from ill-gotten ways." Which they have. Steve Forbes, of course, came by his fortune honestly: he inherited it from his gay egg-collecting, Elizabeth Taylor fag-hagging father, who inherited it from his father. Of course then they moan about the inheritance tax, how the government took 55% percent when Daddy died -- which means you still got 45% for doing nothing more than starting out life as your father's pecker-snot.

We don't hate rich people, but have a little humility about how you got it and stop complaining. Maybe the worst whiner of all: Stephen Schwarzman, #69 on Forbes' list of richest Americans, compared Obama's tax hike to "when Hitler invaded Poland in 1939." Wow. If Obama were Hitler, Mr. Schwarzman, I think your tax rate would be the least of your worries.

"get ready, criminals: hell is coming to breakfast"

Obama nails it. No ambiguity. Elizabeth Warren has been hired to protect Americans from evil, and put financial institutions, predatory lenders, and other criminal entities in check. This is what real change looks like, baby!

clicking on title of this post will bring you to HuffPo piece, filled with mad information and details on who she is, why she rules, and what the particulars are; including an incredibly-simple breakdown of just how easy it was for the mortgage brokers and financial services industry to hoodwink americans and just how they were responsible for the near-depression we find ourselves still in. Following are some excerpts....sj

"Anyone who knows her knows that she would only take a position that had real meat to it," said one source who had worked closely with Warren in the past. "I mean, seriously, you've seen her in action. Do you really think she's going to be anyone's lapdog? She bites hard."

"Republicans, too, began to endorse her. A former top official in the Reagan administration said a vote for Warren was akin to a vote for capitalism and free markets."

"Later that year, her opposition widened to include much of the House GOP. Republicans on the House Financial Services Committee introduced an amendment to the pending financial reform legislation intended to prevent Warren from ever heading the agency. It was defeated."

Wanna see why she rules? Watch this...

Paul Krugman dropping science....

Paul Krugman's recent piece in NY TImes...

May 20, 2010
Lost Decade Looming?
By PAUL KRUGMAN

Despite a chorus of voices claiming otherwise, we aren’t Greece. We are, however, looking more and more like Japan.

For the past few months, much commentary on the economy — some of it posing as reporting — has had one central theme: policy makers are doing too much. Governments need to stop spending, we’re told. Greece is held up as a cautionary tale, and every uptick in the interest rate on U.S. government bonds is treated as an indication that markets are turning on America over its deficits. Meanwhile, there are continual warnings that inflation is just around the corner, and that the Fed needs to pull back from its efforts to support the economy and get started on its “exit strategy,” tightening credit by selling off assets and raising interest rates.

And what about near-record unemployment, with long-term unemployment worse than at any time since the 1930s? What about the fact that the employment gains of the past few months, although welcome, have, so far, brought back fewer than 500,000 of the more than 8 million jobs lost in the wake of the financial crisis? Hey, worrying about the unemployed is just so 2009.

But the truth is that policy makers aren’t doing too much; they’re doing too little. Recent data don’t suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth.

Let’s talk first about those interest rates. On several occasions over the past year, we’ve been told, after some modest rise in rates, that the bond vigilantes had arrived, that America had better slash its deficit right away or else. Each time, rates soon slid back down. Most recently, in March, there was much ado about the interest rate on U.S. 10-year bonds, which had risen from 3.6 percent to almost 4 percent. “Debt fears send rates up” was the headline at The Wall Street Journal, although there wasn’t actually any evidence that debt fears were responsible.

Since then, however, rates have retraced that rise and then some. As of Thursday, the 10-year rate was below 3.3 percent. I wish I could say that falling interest rates reflect a surge of optimism about U.S. federal finances. What they actually reflect, however, is a surge of pessimism about the prospects for economic recovery, pessimism that has sent investors fleeing out of anything that looks risky — hence, the plunge in the stock market — into the perceived safety of U.S. government debt.

What’s behind this new pessimism? It partly reflects the troubles in Europe, which have less to do with government debt than you’ve heard; the real problem is that by creating the euro, Europe’s leaders imposed a single currency on economies that weren’t ready for such a move. But there are also warning signs at home, most recently Wednesday’s report on consumer prices, which showed a key measure of inflation falling below 1 percent, bringing it to a 44-year low.

This isn’t really surprising: you expect inflation to fall in the face of mass unemployment and excess capacity. But it is nonetheless really bad news. Low inflation, or worse yet deflation, tends to perpetuate an economic slump, because it encourages people to hoard cash rather than spend, which keeps the economy depressed, which leads to more deflation. That vicious circle isn’t hypothetical: just ask the Japanese, who entered a deflationary trap in the 1990s and, despite occasional episodes of growth, still can’t get out. And it could happen here.

So what we should really be asking right now isn’t whether we’re about to turn into Greece. We should, instead, be asking what we’re doing to avoid turning Japanese. And the answer is, nothing.

It’s not that nobody understands the risk. I strongly suspect that some officials at the Fed see the Japan parallels all too clearly and wish they could do more to support the economy. But in practice it’s all they can do to contain the tightening impulses of their colleagues, who (like central bankers in the 1930s) remain desperately afraid of inflation despite the absence of any evidence of rising prices. I also suspect that Obama administration economists would very much like to see another stimulus plan. But they know that such a plan would have no chance of getting through a Congress that has been spooked by the deficit hawks.

In short, fear of imaginary threats has prevented any effective response to the real danger facing our economy.

Will the worst happen? Not necessarily. Maybe the economic measures already taken will end up doing the trick, jump-starting a self-sustaining recovery. Certainly, that’s what we’re all hoping. But hope is not a plan.

Read it and fucking weep: unemployment to peak above 10% next year

No one has been more accurate during the last decade than the Congrssional Budget Office, with regards to accounting for where the government's cash is going, what it takes to pay for everything, unemployment/job loss numbers, predictions looking forward on what money will be left, what will be needed, and "all-things US economy." So, here you go. - sj

U.S. unemployment likely to peak above 10 percent: CBO

Thu May 21, 2009 10:24am EDT

WASHINGTON (Reuters) - The U.S. economy will likely start growing again in the second half of this year but unemployment will likely keep rising through 2010 to peak over 10 percent, the Congressional Budget Office said on Thursday.

"The growth in output later this year and next year is likely to be sufficiently weak that the unemployment rate will probably continue to rise into the second half of next year and peak above 10 percent," CBO Director Douglas Elmendorf said in prepared testimony to the U.S. House Budget Committee.

It will likely take several years for the unemployment rate to fall back to levels seen before the recession hit, in the neighborhood of 5 percent, he said in the prepared remarks.

(Reporting by Jeremy Pelofsky)

Freedom, YES! Capitalism, NO!

Great piece on NPR over the weekend, backing up what many of us have been saying for years: in a Capitalist society, you MUST have regulations, because greed trumps all else; Capitalism begats greed. Simply, people cannot be trusted. Therefore, they must be regulated. Until two years ago, Judge Richard Posner was a diehard 'free markets' guy. Our current recession/depression has woken him up. Click here or click on title of this post to hear the 5 minute interview. - sj

Worries Rise on the Size of U.S. Debt

this is a very good - and very accurate - piece on what the debt situation is shaping up to look like in America in the not-too-distant future; and the trouble that's in store. I say, "accurate" (these are not predictions, per se), because the Congrssional Budget Office is the "bomb" when it comes to analyzing these types of things. No one - and I mean no one - was more accurate with their analysis during the Bush years than the CBO. They're experts in the field, to be sure. I trust their information more than I trust Obama's team on matters such as these. - sj

The New York Times
May 4th
by Graham Bowley and Jack Healy

The nation’s debt clock is ticking faster than ever — and Wall Street is getting worried.

As the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government.

Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery.

While that is still low by historical standards — it averaged about 5.7 percent in the late 1990s, as deficits turned to surpluses under President Bill Clinton — investors are starting to wonder whether the United States is headed for a new era of rising market interest rates as the government borrows, borrows and borrows some more.

Already, in the first six months of this fiscal year, the federal deficit is running at $956.8 billion, or nearly one seventh of gross domestic product — levels not seen since World War II, according to Wrightson ICAP, a research firm.

Debt held by the public is projected by the Congressional Budget Office to rise from 41 percent of gross domestic product in 2008 to 51 percent in 2009 and to a peak of around 54 percent in 2011 before declining again in the following years. For all of 2009, the administration probably needs to borrow about $2 trillion.

The rising tab has prompted warnings from the Treasury that the Congressionally mandated debt ceiling of $12.1 trillion will most likely be breached in the second half of this year.

Last week, the Treasury Borrowing Advisory Committee, a group of industry officials that advises the Treasury on its financing needs, warned about the consequences of higher deficits at a time when tax revenues were “collapsing” by 14 percent in the first half of the fiscal year.

click here for rest of story

Jim Cramer's take on Obama's stimulus package

I love Jim Cramer. Always have. I love his knowledge, his passion, his personality, his confidence, and especially his humor. I totally respect his opinion as well. He brings up some great and simple points in this recent article of his, as well as solutions. Points that counter Obama's on the economy, and expose the danger and weaknesses of Obama's stimulus package. This is a great read. I've posted a few excerpts below. sj

"...Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies (one of the few areas still robust in the economy), tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world's morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people."

"...I wish it were true right now that stocks played less of a role in peoples' lives. But stocks, along with housing, are our principal forms of wealth in this country. Only the people who have lifetime tenure, insured solid pensions and rent homes but own no stocks personally are unaffected. Sure that's a lot of people, but believe me, they aspire to have homes and portfolios. If we only want to help those who have no wealth to destroy, we are not helping the majority of Americans; we are not helping the broader population."

"...we have no time for some of this now, on the verge of a second Great Depression. This is an agenda that must be held back for better times. It is an agenda that at this moment is radical vs. what is called for. I am proud to have voted for the Obama who I thought understood the need to get us on the right path, and create jobs and wealth before taxing it and making moves that hurt job creation -- certainly ones that will outweigh the meager number of jobs he's creating."

The A-word

It's starting to look a lot like an apocalypse.
By David Sirota

Mar. 07, 2009 |

Any serious scribe will tell you that writing is, at its heart, the maddening struggle to find exactly the right words. Should the overcast sky be called "gray," or "beige"? Is Rush Limbaugh best described as "an enraged Jabba the Hut," or "a deranged Stay Puft Marshmallow Man"? Are we living through a "recession" or a "depression"?

Recently, I've been groping for the precise word to characterize the zeitgeist of this (unfortunately) historic moment. I know it's not merely "demoralized." It's something far more dread-laden -- a word I finally found during a visit last week to central Mexico.

Sitting atop the famed Pyramid of the Sun, I took in Teotihuacan -- the ancient metropolis outside Mexico City. Its weathered bricks and mortar look like many great archaeological wonders, except its annals include a harrowing asterisk: When the Aztecs discovered the site, it was abandoned, and nobody knows what happened to its inhabitants. The ruins thus feel like monuments to an apocalypse.

That's the term that popped into my mind as I baked in the Mexican sun -- "apocalypse": a phenomenon whose signs are everywhere these days.

Iraq bleeds from unending strife, while Israelis and Palestinians appear intent on annihilating each other. Pakistan just released A.Q. Khan, the scientist who delivered nuclear secrets to North Korea -- the country that's again threatening long-range missile tests. Colombia’s civil war rages, and the "great news" in Mexico is President Felipe Calderon's announcement that drug cartels haven't totally taken over the country.

In America, our apocalyptic symbols are usually subtler -- the birth of octuplets or a restaurant chain's Chicago Seven pizza, which consumerizes a renowned court case into a fast-food dish. But Wall Street and Washington exhibit a more overt Sodom and Gomorrah quality of late, to the point where even business magazines like Portfolio are invoking the A-word.

It's not just the economic turbulence or the corruption that evokes this new darkness -- both have been around for a while. It's the “I feel fine” obliviousness of R.E.M.’s cataclysmic ballad -- the aggressively defiant, adamantly proud ignorance that marks history’s end times.

As wages stagnate in a nation whose median household income is $50,000 a year, one financial executive tells reporters that bankers "can't live on $150,000 to $180,000." Another bemoans efforts to restrict CEO pay by saying that "$500,000 is not a lot of money" -- and the New York Times chimes in by insisting that it’s true: "Half a million a year can go very fast."

Similarly, as lawmakers hand banks trillions of taxpayer dollars, Sen. Kent Conrad, D-N.D., complains that Congress has gotten "very little done to help the financial sector," and Rep. Michele Bachmann, R-Minn., says America should be most worried that "we're running out of rich people." Meanwhile, reporter Rick Santelli is billed as a populist hero for standing amid wealthy commodities traders and telling CNBC’s viewers that the people being thrown out of their homes are "losers."

Hollywood, our cultural mirror, reflects this back as a simultaneous mix of hedonism and fatalism, an MTV beach party at the end of the world. During this economic crisis, we're given "Confessions of a Shopaholic," a comedy film that glorifies overborrowing and overspending. We'll soon be fed the final season of "Lost," a television show whose Benetton models stumble onto a mystery that might destroy the planet. And then it's on to a film version of "The Road," Cormac McCarthy's fable about cannibalism at the end of humanity.

Apocalypse ... it seems so biblical, but suddenly feels so now. And if we don't quickly wake up and turn things around, we will be left to mutter Col. Kurtz's despondent whisper: "The horror ... the horror."

Sun Rises, Market Falls

another interesting, well-written analysis from last week's 538.com (visit their site via left sidebar), on Obama, the markets, politics of, et. al. indeed, everything from 538 is interesting and insightful. sj

Sun Rises, Market Falls

One of the more unapologetically idiotic notions being advanced by
certain conservative commentators is the idea that the poor
performance of the stock markets represents a negative reaction to
Barack Obama's stimulus package.

For one thing, the trading markets aren't gauges of overall economic
health. They are gauges of future anticipated profits for the large
corporations that make up their components. In the long run,
certainly, these two things should be correlated. But they needn't be
perfectly so: an oil price shock, for instance, is possibly good for
the profitability of Exxon, while being damaging to the economy at
large. Likewise, the announcement of a plan to take over and
turnaround Citigroup, perhaps a necessary evil for economic recovery,
would certainly not be good for Citigroup's shareholders, who would
probably get wiped out in the process.

That's not the the basis of my critique, however. Rather, it's that
this line of argumentation often cites "evidence" that flies in the
face of Finance 101.

Robust markets like major stock indices are fairly good at
incorporating information. They don't literally have to see an event
occur in order to "price in" its effects. On Wednesday, for example,
Barack Obama signed the stimulus package into law. Once this
occurred, the prospects for the passage of the stimulus rose to 100%.
But what had been the probability of the stimulus bill passing the
very second before Obama put pen to paper? Probably about 99.999999%,
accounting for the small probability of a hostile takeover by space
aliens in the intervening moments. The performance of the market in
reaction to such events tells us no more about how it feels about
them than it does to the rising of the sun.

To the extent that we can learn anything about the market's
preference for the stimulus, we'd instead need to look at those
moments where the passage of a stimulus package became more or less
certain, or its magnitude became significantly larger or smaller than
previously anticipated. In the article I linked to above, professors
Bittlingmayer and Hazlett claim to have isolated a couple of such
moments:

More pointedly, key political victories for the Team Obama spending
plan have not been viewed as buying opportunities on Wall Street. A
string of negative market reactions began with the December 18
announcement of a stimulus bill of $700 billion (Dow down 2.5%),
continued with the January 7 announcement that the actual plan would
be “on the high side” (-2.7%) and continued with last week’s 61-36
Senate vote supporting the Administration’s fiscal plan. The White
House victory and the new bank bail-out plan announced the following
day by Treasury Secretary Geithner were met with a 5% wipe-out in the
DJI, and a decline in Treasury bond yields, indicating a “flight to
quality.”

Bittlingmayer and Hazlett's memories turn out to be rather selective.
Take the December 18th date they describe in their article, when the
markets fell by 2.5 percent. On this date, according to the Wall
Street Journal Obama had outlined the broad parameters of stimulus
package "worth between $675 billion to $775 billion" to Capitol Hill.
Was this a surprise to the markets? Not according to contemporaneous
accounts of the market's activity that day, which do not so much as
mention the stimulus. Moreover, at this time, there were as many
complaints that the stimulus was too small as that it was too large.
As the Journal then reported:

"The biggest fear is that people will do too little," said one
Democratic leadership aide, "like a start-up that fails because it
didn't do enough."

Obama aides hope to keep the package below the trillion-dollar mark,
a psychological threshold that could carry political consequences, as
they fear being accused of adding too much to the country's long-term
budget deficit.

One could advance an argument, which would be no less unconvincing
than Bittlingmayer and Hazlett's, that the market was behaving badly
that day because it wanted more stimulus rather than less.

How about January 7th, the next occasion cited by Bittlingmayer and
Hazlett? Bittlingmayer and Hazlett's phrasing to the contrary, there
was no major "announcement" about the stimulus bill that day.
Instead, there were some off-handed remarks made by Obama at a
morning briefing on the economy, which were described by MarketWatch
as such:

President-elect Barack Obama said Wednesday that his proposals to
jump-start the economy must also build a stronger nation in the long
run. Obama said the size of the stimulus package hasn't yet been
settled in discussions with lawmakers, but it would likely be on the
"high side" of his team's estimates and lower than some economists
have been recommending. The latest guesses are that it will be about
$775 billion over two years.

That sort of carefully-parsed response is hardly the sort of "shock"
that is likely to have altered Wall Street's expectations about the
stimulus. Indeed, Wall Street had many better things to be worried
about that day between a plethora of dour economic news.

And how about November 24th, when Obama rolled out his economic
advisory team and prompted the Wall Street Journal headline "Obama
Signals Big Stimulus Plan"? Bittlingmayer and Hazlett forget to
mention this date. And little wonder why: the Dow had closed up by
almost 400 points.

The fact is, there have been very few surprises in the entire debate
over the stimulus package, the passage of which was more or less
inevitable from the moment Obama took office, and the eventual size
of which -- just under $800 billion -- was in line with the
expectations that the markets had held for weeks and weeks. The
nearest exception was probably on January 29th, when the initial
version of the stimulus passed through the House without a single
Republican vote, something which looked as thought it might
theoretically imperil the prospects of the bill passing in the
Senate. If the market was anti-stimulus, it should have loved this
news; instead it dumped about 230 points.

Disclosure of conflict of interest: I own some mutual funds. I'd like
to see 'em go up. I'm not an anti-Wall Street guy. I'm just anti-stupid.

Buffett Says Economy Will Be ‘In Shambles’ for 2009

Warren Buffet really is the man. Cool as a cucumber. But losing hundreds of millions of dollars over the course of 18 months has REALLLLLLlly got to hurt. From Bloomber's website...sj

Buffett Says Economy Will Be ‘In Shambles’ for 2009

By Rick Levinson

Feb. 28 (Bloomberg) -- Billionaire Warren Buffett said the economy will be “in shambles” for the rest of this year as financial firms take losses tied to reckless loans made during the housing boom.

The Standard & Poor’s 500 Index will probably gain in three-quarters of the next 44 years, just as it did in the period since Buffett took over Berkshire Hathaway Inc. in 1965, he said today in his annual letter to the company’s shareholders.

While Buffett and business partner Charlie Munger can’t predict how stocks will perform in 2009, they’re certain “that the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,” he wrote.

Gross domestic product shrank at a 6.2 percent annual pace from October through December, the most since 1982, the Commerce Department said yesterday in Washington. Buffett said the consequences of the U.S. housing bubble are now “reverberating through every corner of our economy.”

Home purchases should involve an “honest-to-God down payment of at least 10 percent,” Buffett said. “Putting people into homes, though a desirable goal, shouldn’t be our country’s primary objective.”

Buffett endorsed efforts by the U.S. government to prevent the failure of financial firms including Bear Stearns Cos., which was sold to JPMorgan Chase & Co.

‘Immediate Action’

“Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown,” Buffett said. “Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.”

Buffett’s letter accompanied the release of Berkshire’s fourth-quarter results, in which net income fell 96 percent to $117 million on losses from derivative bets tied to stock markets. Berkshire shares have fallen 44 percent in the past year as the value of the firm’s top stock holdings dropped and losses increased on the derivatives.

By the fourth quarter of last year, “the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country,” Buffett said. “A freefall in business activity ensued, accelerating at a pace that I have never before witnessed. The U.S. - and much of the world - became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear.”

While we circle the drain economically, hoping that President Obama can convince the holdouts to enact some stimulus legislation before we drown...if I hear another dumbass say something about how "FDR made the Great Depression worse" my head will explode. That is simply not true.As one can see above, GDP moved along in a generally upward fashion during FDR's presidency. The one blip of decline was related to budget-balancing in 1937. By the time WWII began (in late 1939), the US was well on its way up and out of the hole, so that by 1941 and US entry into the war, the Depression had effectively ended already with record GDP achieved years earlier.

Obama is looking at charts & graphs showing a precipitous fall in employment. Note the green line. That's where we are now. Where's the bottom? The US lost almost 600,000 jobs in JANUARY. What's this month or next going to look like? Obviously, the GOP economic free-for-all orgy of greed left one hell of a mess for the rest of us.

I give you the Bush-Cheney Recession (or Bush-Cheney Depression). The past eight years will inhabit some seriously dark chapters in history books.

Zakaria: The legacy of America's most unpopular president

This is straight from CNN. I saw Fareed Zakaria's video discussion of this yesterday, and while there's nothing you haven't heard before in this article, Fareed does speak briefly on whether it's tax increases or tax cuts that truly help the economy. I will most definitely be exploring the facts behind this "debate" and posting more on this in the future. Here's one thing I know: Bush's tax cuts did absolutely nothing to help the economy; BOTH 'refund' checks during his 8 years here and his tax cuts exacerbated the the current economic woes.

Anything Fareed expresses in his interviews, books, articles, reporting, podcasts, etc, is highly informative and requires paying attention to. Of all the people in politics, news and worldwide affairs that I've come to "know," there is no one who I agree with more on such a wide array of issues, and no one who does as good a job as Fareed on breaking down FACTS, and what they actually mean to us as a people.


Story Highlights
Fareed Zakaria: Bush leaves office the most unpopular president in modern history
Bush tax cuts were "most significant bad decision," leading to sky-high deficits
Zakaria praises Bush's policies in Asia, attempting peace process in Middle East
Editor's note: Fareed Zakaria is a foreign affairs analyst who hosts "Fareed Zakaria: GPS" on CNN at 1 p.m. ET Sundays.

NEW YORK (CNN) -- In his final public address from the White House, a reflective President George W. Bush on Thursday recalled the ups and downs of his eight-year tenure while predicting a bright future.

"We have faced danger and trial and there is more ahead," Bush said. "But with the courage of our people and confidence in our ideals, this great nation will never tire, never falter and never fail."

Bush, who as president has been known for adamantly sticking to positions even when they've come under widespread criticism, acknowledged setbacks and said he would have done some things "differently, if given the chance."

CNN talked to world affairs expert and author Fareed Zakaria about Bush's legacy as the 43rd president.

CNN: What do you think history's judgment will be of President George W. Bush?

Zakaria: Well, he leaves office the most unpopular president in modern history. There are so many different strands of anger and disappointment in the president -- Iraq, Guantanamo, Katrina, torture, financial woes, his stand on the environment -- that I can't imagine it will fully dissipate over time. I certainly don't think he will ever be seen as a great hero.

CNN: In your view what was his biggest mistake?

Zakaria: I think the single most significant bad decision George Bush made came early in his presidency. It was a decision widely applauded at the time and with much bipartisan support. Remember the Bush tax cuts?

Remember their effect on America's finances? In 2000, the Clinton administration had almost balanced the federal budget and the nonpartisan Congressional Budget Office was projecting that over the next 10 years the United States would have budget surpluses that would add up to $5.6 trillion.

By the spring of 2002, two-thirds of that projected surplus had evaporated and the rest disappeared soon thereafter. It was the most profoundly un-conservative act of Bush's presidency. Rather than pay down debt and save in the good times for the inevitable bad times, Bush squandered it all so that all of us -- particularly high income earners -- could indulge in a bit more consumption.

And now, when times have gotten bad and we sorely need that reserve, we're clean out of cash. The federal budget deficit will likely range from $1.2 to $1.8 trillion over the next few years. Imagine what we could have done by either saving that money or spending it wisely on an energy revolution, on upgrading the infrastructure, on modernizing the health-care system.

CNN: But hasn't he kept us safe from another terrorist attack?

Zakaria: I give Bush, and the American government as a whole, credit for this but it can't be the only yardstick by which to judge a president. After all, Jacques Chirac and Nicolas Sarkozy have kept France safe; Angela Merkel has kept Germany safe, yet we don't regard this as a singular achievement. And the obsession with "keeping us safe" has led to some bad decisions that have compromised American liberty and ethics.

After 9/11, governments everywhere were aggressive in busting terrorists' networks, following their money and tracking their recruits with almost immediate results. As a result, in the six years since 9/11, al Qaeda -- the group led by Osama bin Laden -- has been unable to launch a major attack anywhere. It was a terrorist organization; it has become a communications company, producing the occasional videotape rather than actual terrorism.

Jihad continues -- but they operate on a local level, usually through groups with almost no connection to al Qaeda central. And this improvised strategy has a crippling weakness; it kills locals, thus alienating ordinary Muslims.

The one area where this analysis is not entirely true is in Afghanistan-Pakistan and there the Bush administration bears some significant blame for the resurgence of the jihadis and militants. So, Bush deserves some credit for preventing terror attacks but not as much as the administration keeps implying.

CNN: There has to be a bright spot in his tenure.

Zakaria: Oh, there are several. Nothing is all black and white. His policies in Asia were all intelligent. He kept a strong relationship with China while also strengthening ties with Japan, India, Australia, and Indonesia. That was smart strategy.

He was also wise enough to reverse some of his most egregious errors -- the North Korea negotiations, attempting a peace process in the Middle East, reaching out to Sunni tribes in Iraq. The problem in many of these cases was that it was often too late to get a dramatic result -- but still better late than never.