From 3.10.2008 [Posted by rycK on Monday, March 10, 2008 11:19:13 AM]
We
can inspect the lengthy histories of propaganda and find repeating elements
that form the basis of the political thrusts from those who compose these
pieces. Today, we are treated to yet another tautological essay with the usual
blame placed upon the Republicans, as if we might read something else in a neo-Marxist ragzine. . In a Dooms Day Screed entitled The Face-Slap Theory we are introduced
to the salient elements of the party line starting with:
“Friday’s
employment report — which was so weak
that it had many economists declaring that we’re already in a recession — was
bad news. But it was actually less disturbing than what’s going on in the
financial markets.”[1]
It is going to be worse
than a recession!! Oh, woe be us!! Depression? [We are still at 5% unemployment. That is not so bad.]Stalin had a zero unemployment rate.
“To understand the gravity of the situation,
you have to know what the Fed did last summer, and again last fall.” [2][Emphasis
in all quotes are mine.]
The Fed Pitch:
“…the favorite buzzword of financial officials
was “contained”: problems in subprime mortgages, we were assured, wouldn’t
spread to other financial markets or to the economy as a whole.”[3]
I
don’t think they promised anything like that.
The Panic
“… a full-fledged financial panic began.
Investors pulled hundreds of billions of dollars out of asset-backed commercial
paper, …”. [4]
The Money Stuffers Act:
“…Fed responded by rushing money to banks, and markets
partially calmed down, for a little while…” [5]
Second Stuffing [what
else would they do? Raise interest rates?] and Second Calm:
“Again,…Fed responded by rushing money to
banks… new arrangement called the Term Auction Facility. Again the markets
calmed down, for a while.”
The Next Panic:
“… respite was only temporary… another market
you’ve never heard of, the $300 billion market for auction-rate securities
(don’t ask), suffered the equivalent of a bank run.
Last week two big financial companies announced that
they had been unable to raise the cash demanded by their lenders. …
Fannie Mae and Freddie Mac, …, are now having trouble attracting funds.”
The Wrong Move: Cutting Interest Rates:
“… while the Fed has been cutting the
interest rate it controls — the so-called Fed funds rate — the rates that
matter most directly to the economy, including rates on mortgages and corporate
bonds, have been rising. And that’s sure to worsen the economic downturn.”[6]
If
it was wrong to cut interest rates
then we have two options: raise rates of keep them constant and ignore the lack
of supply of money to cover loses or just keep the rates constant and let
things get sorted out. That leads to losses and unemployment but not inflation.
Take your choice
The Analysis:
“What’s going on? [we
await your solution Mr. Krugman ed] Mr. Geithner described a vicious
circle in which banks and other market players who
took on too much risk are all trying to get out of unsafe investments at
the same time, causing “significant collateral damage to market functioning.”[7]
They are selling bad
investments!
“…
JPMorgan Chase was even blunter. … what’s
happening as a “systemic margin call,” … whole financial system .. demands to
come up with cash it doesn’t have. …”[8]
“…Fed’s latest plan … — to turn itself into
Wall Street’s pawnbroker. Banks that might have raised
cash by selling assets will be encouraged, instead, to borrow money from the Fed, using the assets as
collateral. In a worst-case scenario, the Federal Reserve would find itself
owning around $200 billion worth of mortgage-backed securities.”[9]
This
apparently means that the NYT advises banks to keep bad debts! Let the banks
absorb the losses?! That makes sense. Nobody should unload their loses—that smacks
of capitalism and is unfair.
Part of the Solution
Unfolds:
“…plan to restore the credibility
of municipal bond insurance would be a start (how crazy is it that New York State
This
farce was mentioned two weeks ago, an eternity in leftist politics, by the
krugmaniacal author of this screed and his associates at the Times.[11] The ‘idea’ here is to let bankruptcy courts adjudicate mortgages and force the
banks to restructure the loans. The facts here are that nobody wants to insure New York State California Michigan New Jersey
Why
doesn’t the NYT just come out and advocate raising taxes?
In any other circumstance we would learn, ad nauseum, that we must always raise
taxes. Where is this clarion call today?
From a previous article:
““Lenders object that by giving homeowners the right to modify their mortgages
under court supervision, the bankruptcy amendment would raise the cost of
mortgages for everyone, forever. That concern is surely overstated, but not
entirely without merit. To address it and other industry worries, lawmakers have proposed constraints, such as
limiting the bankruptcy relief to junk mortgages of the past few years.”[13]
I
would like to have ‘control’ of my taxes as well. If I run out of cash, I think
I should be entitled to get my tax bill adjudicated so as to ‘be fair’ and
‘help me out.’ Sure. I would also want to ‘adjust’ my utility bills as I object
to the phony offshore windmill follies that will attempt to sell me electrons
at wildly inflated prices. [14]
I also need to sell my carbon credits too as I conserve in certain areas and am
playing the EcoNazi[15]
game in some circumstances. Maybe the NYT can buy some of my credits and help
the environment.
And
New York State
““With major bond insurers hobbled by an
ill-advised foray into subprime mortgage territory, Mr. Buffett made a tough offer
[16]aimed
at the biggest and healthiest chunk of their ailing business. The insurers
either turned Mr. Buffett down or haven’t responded, which puts the onus on
them to devise their own rescue plan. Mr. Spitzer
on Thursday gave the insurers five more days to do just that. If they
fail, they face a potential breakup by New York State
Government
control of insurers? Is that how the railroads went broke in the East?? The
government controlled passenger rates and schedules and erased profits and
owners just sold out and the government now runs that wreckage.
Krugman slyly presents a
wish:
“Nobody wants to put taxpayers on the hook for the financial industry’s follies;
we can all hope that, in the end, a bailout won’t be necessary. But hope is not
a plan.” [18]
Oh
Really? NYC
wanted the Feds to prop them up during the 70s [Abe Beam administration] and
who except the taxpayers would have kept
easy money flowing into the City. And we hear of NO PLAN here from the New York Times[19]
either. When you have the top 1% now paying 39% of all federal taxes and the
Democrats want to raise that much higher we can believe that “Nobody wants to put taxpayers on the hook?” The New York Times
does.
Really??
Well, the Democrats put the taxpayers on several hooks for the phony Social
Security Ponzi Scheme, the phony medical systems of the various states, and
more.
Usually,
the NYT
would advocate a sudden and steep hike in taxes to pay their way out of this
mess. Why don’t the Democrats just raise state taxes in New York California New Jersey right left thing to do.”
The
very fact that the primordial shrieks for more taxes and more and more taxes
are not invoked
in this screed, means that the leftists must have come to the conclusion that
it is politically best to let the banks absorb the losses. After all, the banks
cannot vote and the folks on welfare and the illegal aliens won’t object.
I
am surprised that the New York Times did not suggest that we model our economy
after the wonderful works of Hugo Chavez and Fidel Castro and Daniel Ortega.
They have wonderful economies and have no rich capitalists to deal with. Maybe New
York State
All
this is just fluff. The hidden tax increase here is to buy votes from marginal
earners and other favorites of the left and make the banks take the losses.
That is a de facto tax transfer.
But,
the NYT misses their opportunity to show us how to pay down the debt:
Let Inflation Run Wild.
The
9.3 trillion national debt could be wiped out a decade with a mere 10-12%
annual inflation rate. Cities can just put in more inflation riders in their
benefit packages and we can see how Brazil
The
second economic factor, actually a law, is that money has a price like melons and cars:
it is the interest rate which specifies how much must be spent to barrow a
dollar for a fixed amount of time. When you lower interest rates you cheapen
the dollar and we should not wonder why gasoline prices soar. The interest
rate, surprisingly, follows a supply and demand schedule. How novel of Adam
Smith to tell us that.
We
are heading into a major recession with high inflation. The
solution for the governments is to try to soak the capitalists for this. Hillary
wants to grab the profits of the oil companies. This is crypto-Communism at its finest.
Unmentioned
above, inter alia, is the obvious
tactic that big businesses will just go global and escape the gaping tax jaws
of the US
The
anti-anti-Communists [20]who
support our enemies and hate capitalism have a grand opportunity to make the
biggest grab in history. And they will try.
Go
defensive in your investments and perhaps look at gold coins. The system is
going down. Hugo Chavez is winning and will be the new economic darling of the
left.
rycK
Comments:
ryckki@gmail.com
[1] The Face-Slap
Theory By PAUL KRUGMAN Op-Ed
ColumnistPublished: March
10, 2008 . http://www.nytimes.com/2008/03/10/opinion/10krugman.html?_r=1&ref=opinion&oref=slogin.
[2] The Face-Slap
Theory By PAUL KRUGMAN Op-Ed
ColumnistPublished: March
10, 2008 . http://www.nytimes.com/2008/03/10/opinion/10krugman.html?_r=1&ref=opinion&oref=slogin.
[3] More Big Government and
Maniacal Mortgage . Ibid
[4] More Big Government and
Maniacal Mortgage . Ibid
[5] More Big Government and
Maniacal Mortgage . Ibid
[6] More Big Government and
Maniacal Mortgage . Ibid
[7] More Big Government and
Maniacal Mortgage . Ibid
[8] More Big Government and
Maniacal Mortgage . Ibid
[9] More Big Government and
Maniacal Mortgage . Ibid
[10] More Big Government and
Maniacal Mortgage . Ibid
[11] More Big Government and
Maniacal Mortgage Manipulation from The New York Times
Posted
by rycK on Wednesday,
February 27, 2008 10:29:21
AM
[12] Isn’t that where the
money is?
[13] Getting Real About the Rescue.
Editorial Published: February
27, 2008 . http://www.nytimes.com/2008/02/27/opinion/27wed1.html?_r=1&hp&oref=slogin
[16] Buffy had a plan to make
billions off of a insurance scheme. The ‘offer’ was not tough on Buffet .
[17] The New York Times
Advises Us on a Debt ‘Bailout,’ Watch Your Pocket Books!
Posted
by rycK on Saturday,
February 16, 2008 11:53:02
AM
[18] More Big Government and
Maniacal Mortgage . Ibid
[19] [19]
Red
in honor of Stalin. Walter Duranty. “ He said that these people
had to be "liquidated or melted in the hot fire of exile and labor into
the proletarian mass". Duranty claimed that the Siberian labor camps were
a means of giving individuals a chance to rejoin
Soviet society but also said that for those who could not accept the
system, "the final fate of such enemies is
death.". Duranty, though describing the system as cruel, says he
has "no brief for or against it, nor any purpose save to try to tell the
truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine
was motivated by the "hope or promise of a subsequent raising up" of
Asian-minded masses in the Soviet Union which
only history could judge.” http://en.wikipedia.org/wiki/Walter_Duranty
[20] Defacto Communists.
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