The Republican Thread

[whitesoxfan101]

Oh no, Keynesian is the only way to go. The government is the only thing big enough to save us to keep us from going into a deflationary cycle we can't get out of. Is that right, Balta?

 

 

On a sadder note, stay classy Jim Bunning

 

ELIZABETHTOWN, Ky. (AP) — U.S. Sen. Jim Bunning said his support for conservative judges may come into play shortly because he believes one of the Supreme Court's liberal members, Justice Ruth Bader Ginsburg, could die in less than a year from pancreatic cancer.

 

Ginsburg has "bad cancer. The kind that you don't get better from," the two-term Kentucky Republican said during a 30-minute Lincoln Day dinner speech Saturday in Elizabethtown, according to the Courier-Journal of Louisville.

 

Doctors diagnosed the 75-year-old justice and removed a small tumor this month. They said the cancer was caught early, when it is most curable.

 

"Even though she was operated on, usually, nine months is the longest that anybody would live" with pancreatic cancer, said Bunning, a Hall-of-Fame major league pitcher, who has no medical background.

 

Bunning spokesman Mike Reynard did not have an immediate comment Monday about the speech. Ginsburg was in court Monday, 18 days after undergoing surgery.

 

The American Cancer Society estimates that 20 percent to 24 percent of patients whose pancreatic cancer is caught early survive five years.

 

With comments like those, he might as well have gone all out, thrown on a party hat, and said "I hope she dies soon so I can try and promote the cause of a neocon to replace her."

Edited February 23, 2009 by whitesoxfan101

[Balta1701]

Oh no, Keynesian is the only way to go. The government is the only thing big enough to save us to keep us from going into a deflationary cycle we can't get out of. Is that right, Balta?

We could try another round of tax cuts and bank deregulation. I haven't seen any problems that could possibly be associated with those actions.

[Cknolls]

Of course, you also manage to leave out the data that totally undermines your point. California has really high income taxes, sales taxes, etc. But is there any tax, any tax that is typically a major fundraiser in other states, that California is totally out of whack low on?

 

Yes, there is. Property taxes. Thanks to the ridiculous Prop 13, California's property tax base, especially on certain groups, is ridiculously low. Rewriting even a part of prop 13 to bring property taxes in line with the rest of the country would generate tens of billions of dollars per year.

 

The reason every other tax in California is so high is that the cities are unable to collect normal amounts of property tax from most of the inhabitants. The state government has then put itself on the line to make up for the difference. Because of this one alteration, when you compile lists of the total individual tax burdens on residents, California is usually in the top half, but is no where near the top (link to data from 2005 that sat at the top of google search), because that one gigantic subsidy to homeowners exists. And when you factor in that California's going to be in the upper half of tax receipts anyway simply because of the high cost of living in so much of this state, the only reason it's out of the ordinary on so many taxes is that Warren Buffet pays significantly more in property taxes on his $500k home in Omaha than he does on the several million worth of homes he owns in California.

 

 

So what is NJ's excuse? How about CT? I believe they are in the top 5 for property taxes in the U.S.

[southsider2k5]

http://www.politico.com/news/stories/0209/19206.html

 

Obama's test: a nation of Santellis

By ANDIE COLLER | 2/24/09 5:25 AM EST

 

CNBC’s Rick Santelli argued last week that President Barack Obama’s mortgage bailout plan would force hard-working Americans to pay for their neighbors’ mistakes.

Photo: Composite image by Politico.com

 

When CNBC’s Rick Santelli argued last week that President Barack Obama’s mortgage bailout plan would force hardworking Americans to pay for their neighbors’ mistakes, White House press secretary Robert Gibbs dismissed him as a know-nothing derivatives trader out of touch with Main Street.

 

But if the White House simply dismisses Santelli’s point, it may do so at its peril: A Rasmussen poll released Monday found that 55 percent of those surveyed thought federal mortgage subsidies to those most at risk of losing their homes would be “rewarding bad behavior.”

 

Santelli’s “Network”-style diatribe has already spawned a Facebook group and plans for “tea parties” protesting the bailout in major cities including Chicago and Washington.

 

Former House Majority Leader Dick Armey’s group FreedomWorks has spun off a site called angryrenter.com to organize those who don’t own their homes to oppose the mortgage plan.

 

And it’s not just Republicans who are complaining.

 

Although Obama still floats on air among Democrats generally, he’ll need to use Tuesday night’s unofficial State of the Union address to build support for his housing plan even among members of his own party. According to the Rasmussen poll, even 49 percent of Democrats oppose mortgage subsidies like the ones Obama has proposed.

 

Among them: Lynn Powers, 39, a Bethesda, Md., resident who describes herself as a “liberal Democrat” who has been hardworking, prudent and responsible — and now feels “like a fool.”

 

“We were in the market,” she says. “We put out eight bids and got outbid every time. It was very upsetting for us. I want to see some accountability and responsibility across the board. The only way for me to have an affordable home, and I’m not looking for a McMansion at all, is if we let the chips fall, in a sense. This is still the bubble — the prices have to come down. You can’t just subsidize some of the people. I don’t know how you deleverage. It is going to be painful, but this is also hurting the people who behaved responsibly.”

 

What does she mean by “responsibly”?

 

“People who didn’t overbuy. Who stuck to their guns. Who read their contracts,” she says. She and her husband wound up buying a 600-square-foot studio and moved to a rental when they had their daughter, now 18 months old.

 

“My husband and I paid for our cars in cash,” she says. “We have no credit card debt. We have no student loans. I don’t buy Starbucks, but that’s because they’re non-fair trade, nonenvironmental.”

 

When they tried to buy a house, she said, “We just felt outgunned.” And now, she says, “I feel very outgunned as a citizen.”

Another Maryland resident concurs: “I am an Obama supporter, campaigned for him, baked cookies for him; my husband and I are Democrats all the way, but this is the issue that gets our goat.”

 

Echoing Santelli’s complaint, a Silver Spring, Md., mom who did not want her name used adds: “I’m not sure why we should work and pay for someone else to have a granite countertop or an extra bathroom.”

 

When asked about people who hadn’t overreached but had lost their down-­payment money when the value of their homes had dropped, she replies, “We put money in a 401(k), and we lost that money, and no one is going to give it back.”

 

Rep. Bruce Braley (D-Iowa), who founded the House Populist Caucus, says the president has actually gone “to great lengths” not to reward people who have been irresponsible, and that the plan is really an effort to stem another wave of foreclosures in order to stabilize the housing market, which would be to everyone’s benefit.

 

Michigan Gov. Jennifer M. Granholm, also a Democrat, agrees: “This is not directed at those who didn’t play by the rules,” she says. “It’s directed at trying to fix a system so everyone can stay in their homes and so that everyone’s community is not negatively affected by the foreclosures that are popping up all over that neighborhood.”

 

Still, notes Braley, “I just don’t think that that message has been said often enough and loud enough that people are starting to accept it as a justification of this plan.”

 

Braley says he expects the president to “go into more detail about how average homeowners are going to benefit on this” during his speech to a joint session of Congress.

 

Like Braley, Alyssa Katz, author of “Our Lot: How Real Estate Came to Own Us,” a book due out in June about the making of the mortgage crisis, says she does not believe the message has come through clearly enough yet — and that the administration needs to do more to make sure it does.

 

“Ultimately, yes, it’s about homeowners, but it’s about the stability of the financial markets,” she says. “We have to give up this illusion that it’s about you and me. We have to accept, sort of blindly, the notion that we have to do this for the sake of the nation. Whether you’re lucky and get aid or you already lost your home and you’re screwed, we’re all in this together.”

 

[kapkomet]

The government just needs to own all the houses. It's the only thing that's big enough to stop this potentially dangerous deflationary style we're working toward. In that way, we can be sure that everyone is on "equal footing". "Spread the wealth!"

 

 

[southsider2k5]

http://www.forbes.com/2009/02/23/mark-to-m...l?feed=rss_news

 

Why Mark-To-Market Accounting Rules Must Die

Brian S. Wesbury and Robert Stein, 02.24.09, 12:01 AM EST

They eliminate the time and growth needed to fix the economy.

pic

 

We have been accused of beating a dead horse when it comes to our support for either suspension of, or targeted relief from, market-to-market accounting.

 

And we suppose after writing thousands of words, producing videos and giving speeches about the issue, some might be tempted to let it go. But we can't do that, especially when the government continues to spend trillions of dollars and is coming very close to bank nationalization.

 

This is a real shame. Suspending mark-to-market accounting could fix major problems at no cost. Unfortunately, many people dismiss this issue without really understanding its impact on the economy.

 

We are economists, not accountants or bank analysts. We really don't think a debate about how big the housing bubble was, or whether a certain bank is viable or not, is worthwhile when it comes to accounting rules. That misses the point. Mark-to-market accounting rules affect the economy and amplify financial market problems.

 

The history seems clear. Mark-to-market accounting existed in the Great Depression, and according to Milton Friedman, who wrote about it just 30 years after the fact, it was responsible for the failure of many banks.

 

Franklin Roosevelt suspended it in 1938, and between then and 2007 there were no panics or depressions. But when FASB 157, a statement from the Federal Accounting Standards Board, went into effect in 2007, reintroducing mark-to-market accounting, look what happened.

 

Two things are absolutely essential when fixing financial market problems: time and growth. Time to work things out and growth to make working those things out easier. Mark-to-market accounting takes both of these away.

 

Because these accounting rules force banks to write off losses before they even happen, we lose time. This happens because markets are forward looking. For example, the price of many securitized mortgage pools is well below their value, based on cash flows. In other words, the market is pricing in more losses than have actually, or may ever, occur. The accounting rules force banks to take artificial hits to capital without reference to the actual performance of loans.

 

And this affects growth. By wiping out capital, so-called "fair value" accounting rules undermine the banking system, increase the odds of asset fire sales and make markets even less liquid. As this happened in 2008, investment banks failed, and the government proposed bailouts. This drove prices down even further, which hurt the economy. And now as growth suffers, bad loans multiply. It's a vicious downward spiral.

 

In the 1980s and 1990s, there were at least as many, and probably more, bad loans in the banking system as a share of the economy. The difference was that there was no mark-to-market accounting. This gave banks time to work through the problems. At the same time, the U.S. cut marginal tax rates and raised interest rates, which helped lift economic growth. Time and growth allowed those major banking problems to be absorbed, even though roughly 3,000 banks failed, without creating an economic catastrophe.

 

In Japan, during the 1990s, the government allowed banks to operate without ever recognizing bad loans, which certainly bought time. However, Japan increased taxes and ran an excessively tight monetary policy, which undermined growth. This created an economic disaster. The real problem with Japan was not zombie banks; it was that there was no growth. After all, foreign banks were allowed to lend in Japan and were not in bad shape like the Japanese banks. They stayed away from Japan because the economy was not vibrant.

 

A final example: In the 1930s, because mark-to-market accounting existed, we limited the amount of time available to fix problems. At the same time, the U.S. raised taxes, increased spending and economic interference, and became protectionist. This hurt growth. The reason the Great Depression was so bad is that we took away time and growth.

 

Anyone worried about repeating the errors of Japan in the 1990s or the U.S. in the 1930s should focus on the policies that impeded recovery. Suspending mark-to-market accounting is a cost-free way to buy time. It does not allow banks to sweep bad loans under the rug. Bad loans are still bad loans, and banks cannot hide from them. Not suspending it, while at the same time interfering in the economy with massive stimulus and bank nationalization, is a recipe to undermine both time and growth and therefore hurt the economy even more.

 

Brian S. Wesbury is chief economist, and Robert Stein senior economist, at First Trust Advisors in Lisle, Ill. They write a weekly column for Forbes.

[kapkomet]

Mark to market works, most of the time. The problem now is, you have undervalued markets that is forcing writedowns that go too far.

 

I could explain in a lot more detail, but that's the main point. I spent a lot of time reading the FASB on this and there are so many more complexities involved then just what the article addresses above.

[southsider2k5]

So this is pretty timely with Bernanke saying that the recession could end by the end of 09, with a recovery in 10. What happens when you have tons of spending coming on board, during the recovery? Video at link.

 

http://www.ns.umich.edu/htdocs/releases/story.php?id=6999

 

Economic policy must balance short-term gains with long-term stability

Click for video

 

ANN ARBOR, Mich.—Policymakers could face long-term challenges with the country's financial stability as the new stimulus plan provides short-term solutions to the economic collapse, a University of Michigan researcher says.

 

With the financial rescue package, the Treasury and the Fed are creating money and credit to jumpstart lending and to alleviate the recession, thus avoiding a deflationary spiral, says Marina Whitman, a professor at the Gerald R. Ford School of Public Policy and Ross School of Business.

 

"But as the economy recovers, it will be important to mop up the liquidity they created," said Whitman, whose research interests include international economics and corporate governance. "Otherwise, there will be strong inflationary pressures from it."

 

The stimulus package must be large and effective enough to revive spending by businesses and consumers, she says. The programs in the stimulus plan must be both timely and temporary, but terminating them when economy rebounds could be difficult, she adds.

 

"Can you imagine the public backlash if government assistance to the unemployed in maintaining their health care coverage or for education at the local level was suddenly cut off?" Whitman asked.

[Cknolls]

Anyone else hear Obama say this stimulus will not be enough and we will need MORE money in the months to come or did I mishear(Bushism)?

[EvilMonkey]

Thank god we dodged having Palin as our VP, we have Joe 'The brain' Biden, God love'em. "Do you know the webiste number?" It's a webiste, Joe, not a phone bank.

 

Edited February 25, 2009 by Alpha Dog

[Balta1701]

The President was probably wrong last night when he gave America credit for inventing the automobile and solar energy.

[mr_genius]

The President was probably wrong last night when he gave America credit for inventing the automobile and solar energy.

 

i thought it was common knowledge Germany 'invented' the automobile.

 

doesn't really matter in the bigger picture

[StrangeSox]

Credit for inventing the automobile is usually given to (German) Karl Benz. America invented mass-producing it via Ford's assembly lines.

[kapkomet]

Semantics. Obama meant to say "perfected the automobile"... but since I'm a HARDCORE GOP'ER, HANG HIM!

 

 

[lostfan]

Semantics. Obama meant to say "perfected the automobile"... but since I'm a HARDCORE GOP'ER, HANG HIM!

Nice balance of the truth and Kaperbole™ in there.

[southsider2k5]

Credit for inventing the automobile is usually given to (German) Karl Benz. America invented mass-producing it via Ford's assembly lines.

 

Neither mass production, nor assembly lines, were American inventions. They just won the PR battles.

[StrangeSox]

Neither mass production, nor assembly lines, were American inventions. They just won the PR battles.

 

In regards to MP or assemblies in general or specifically in the automobile industry? I was speaking about cars only, though I could still be wrong.

[southsider2k5]

In regards to MP or assemblies in general or specifically in the automobile industry? I was speaking about cars only, though I could still be wrong.

 

Yes, in cars, Henry Ford was the first. Sorry, I misread your post.

 

See my day hungover at the Ford Museum paid some dividends

[NorthSideSox72]

Neither mass production, nor assembly lines, were American inventions. They just won the PR battles.

Its like this with most inventions. The true inventor is usually obscured in history, by someone who came after and sold it better.

 

[southsider2k5]

Its like this with most inventions. The true inventor is usually obscured in history, by someone who came after and sold it better.

 

One of America's greatest known inventors, Thomas Edison, was the perfect example of this. We owe way more of our existance to Nikola Tesla, and yet basically no one knows who he is.

[lostfan]

Alexander Graham Bell was lucky enough to be the first one to get to the patent office, lol.

[bmags]

One of America's greatest known inventors, Thomas Edison, was the perfect example of this. We owe way more of our existance to Nikola Tesla, and yet basically no one knows who he is.

 

I feel like Tesla is just one of those people where everyone acts like nobody else knows who he is because they like the framing of an unknown talking point.

[bmags]

Alexander Graham Bell was lucky enough to be the first one to get to the patent office, lol.

 

my friend told me this story of someone in their town, who invented the new glue for braces, but didn't know how to sell it. So they sold the patent to their neighbor, who made millions.

[southsider2k5]

Obama's popularity rating has fallen 10 points in 4 weeks.

 

 

http://www.gallup.com/poll/116077/Obama-Jo...First-Time.aspx

 

PRINCETON, NJ -- For the first time since Gallup began tracking Barack Obama's presidential job approval rating on Jan. 21, fewer than 60% of Americans approve of the job he is doing as president. In Feb. 21-23 polling, 59% of Americans give Obama a positive review, while 25% say they disapprove, and 16% have no opinion.

 

 

To date, Obama has averaged 64% approval, but, as the graph shows, there has been a slight but perceptible decline in his approval rating since he took office. This decline has largely occurred among Republicans.

 

The drop below 60% approval within the past week -- from 63% in Feb. 18-20 polling to 59% in Feb. 21-23 polling -- has mostly come among independents. Late last week, 62% of independents approved of Obama, compared with 54% in the last three days. His approval rating among Democrats has dipped slightly (but not to a statistically significant degree), while approval among Republicans has not changed.

 

nuuutprrckicp6ksqp1hoa

 

While Obama's overall approval rating has fallen by four percentage points in recent days (from 63% in Feb. 18-20 polling to the current 59%), his disapproval rating has been steady (24% in Feb. 18-20 polling to the current 25%). Rather, the percentage of Americans without an opinion of his job performance has increased, from 13% to 16%. In essence, Americans in recent days are becoming increasingly unsure about how Obama is doing, rather than becoming more critical.

 

As the table suggests, most of the movement among independents in recent days has been from the approval to the no opinion category. And his disapproval rating has dropped among Republicans, with a concomitant increase in no opinion. Thus, Americans' assessments of Obama are in a period of flux.

 

Given that Obama is addressing the nation tonight, he has a tremendous opportunity to convert Americans who are now on the fence -- in addition to those who now disapprove of him -- into supporters. The latest USA Today/Gallup poll shows Americans are most interested in hearing about economic matters, particularly how Obama will address unemployment, the mortgage crisis, and how the economic stimulus package will be administered.

 

Survey Methods

 

Results are based on telephone interviews with 1,553 national adults, aged 18 and older, conducted Feb. 21-23, 2009, as part of Gallup Poll Daily tracking. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.

 

Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).

 

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

[kapkomet]

Wow, why didn't AHB post this?