Those Unpatriotic, Debt Free Americans

Posted by Jason | Posted in Economics | Posted on 23-10-2011

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With the economy in the crapper and possibly heading into a double dip recession, the Wall Street Journal did some brilliant journalism this weekend pointing out who is at fault for this economic malaise.

American consumers’ long-running love affair with debt is on the rocks. And as they repent for their credit-driven Bacchanalia, the foundering U.S. economy is left to pick up the pieces.

Ah ha! The American consumer is repenting from their “credit-driven Bacchanalia”, and those bastards are destroying Obama and Bernanke’s economy.

I’m not the only one who had to Google Bacchanalia, am I?

Anita Bullock-Morley, a 36-year-old speech therapist in Atlanta, is one who talks about her old borrowing habits like a recovering drug addict: “My life is so much better not having that haunting debt.”

Well, we obviously know how selfish Anita is. That’s great your life is so much better Anita. What about the rest of America who is suffering because you won’t enslave yourself to the bankers.

Jason Jacobs and his wife Kathy Jacobs, at home in Richmond, Va., are among those who are reducing debt.

She used savings to help pay for her wedding last year. And after wiping out the balance on two dozen credit cards—and swearing off boutique-label purchases and fancy vacations—she is working her way through $50,000 in student loans and the $215,000 left on her mortgage. Ms. Bullock-Morley is among a generation of Americans who were taught the value of saving as children but had to learn the hard way how to spend wisely.

I guess her paying for her wedding from her savings doesn’t help the economy. It would have had she borrowed it though. As far as paying off $50,000 in student loans. She apparently didn’t go to school long enough. Maybe that’s why she is so ignorant about the benefits of borrowing.

Since the financial crisis erupted, millions of Americans have ditched their credit cards, accelerated mortgage payments and cut off credit lines that during the good times were used like a bottomless piggybank. Many have resorted to a practice once thought old-fashioned—delaying purchases until they have the cash.

I can’t believe these people are going back to the stone age. Next they’ll want to go back oral communications instead of texting.

As a result, total household debt—through payment or default—fell by $1.1 trillion, or 8.6%, from mid-2008 through the first half of 2011, according to the Federal Reserve Bank of New York. Auto loan and credit-card balances in August had their biggest drop since April 2010, the Federal Reserve said.

But doesn’t that mean as a society, we have actually become wealthier? I mean, if I’m trying to figure out my networth (wealth), I take my assets minus my liabilities. Doesn’t this mean that households have increased their networth $1.1 trillion in the positive direction? I would think that would be a good thing for the economy. Then again, that’s $1.1 trillion in future labor that the banks no longer get first dibs on. People will actually get the fruits of the labor.

The national belt-tightening, known as deleveraging, comes as the U.S. economy struggles to fend off a double-dip recession. Paying off bills slows consumer spending on appliances, travel and a slew of other products and services. Home sales, the engine of past economic recoveries, remain depressed.

Yes, but doesn’t it free up capital to be lent out elsewhere? If the problem is lack of credit being available, people paying off credit should free up credit for others to borrow. Also, it should lower interest rates, which in turn would increase borrowing. Of course, it’s hard to lower interest rates when the Fed has print so much money that interest rates are at historic lows.

Deleveraging should help the U.S. economy in the long-run, putting households on a sounder footing and easing the nation’s reliance on the savings of Chinese and other foreign nationals. But there are short-term dangers.

Yes, there are horrific dangers that Obama’s cronies over at Goldman Sachs will not have enough people enslaved to them. They won’t be able to earn the interest off money that was printed, given to the bank as bailouts, and then lent out to consumers to have to pay back through future earnings. This danger is almost as dangerous as the Iranians who have yet to start a war with anyone and all the sudden they are going to nuke us.

During the Great Depression, economist John Maynard Keynes warned of a so-called paradox of thrift: When everyone turns frugal, everyone suffers. Synchronized thrift slows the economy, according to Keynes, which hobbles income growth and makes people even stingier in a pernicious cycle.

Some experts worry that is happening now. Since the recession ended in mid-2009, the U.S. economy has expanded at a 2.5% annual rate, far slower than the average growth of 4.3% during the first two years of the previous four recoveries.

Let’s not even mention that the last four recoveries where no where near as bad as this one, which might explain why we’ve only had 2.5% annual growth. They aren’t calling it the Great Recession for nothing. I also don’t recall a world-wide collapse and debt crisis during the last four recessions.

No, let’s not mention any of that. No, let’s talk about John Maynard Keynes. I mean, who cares that the government was following Keynesian economics when this economic disaster occurred. Just ignore that and say, well what does Keynes say about this. If everyone turns frugal, what they are doing is saving. What happens when the banks are flush with savings? Do banks, especially under fractional reserve banking, like having everyone’s savings just sitting there? No. They want to lend it out, but if no one is borrowing (basically buying the banks goods) at the interest rate (price) the bank is offering, the banks will lower interest rates. Lower interest rates will eventually entice business investment and spending.

“Folks aren’t borrowing,” said Jim Ernest, executive vice president at Provident Credit Union in Redwood Shores, Calif. “They are paying down debt and continuing to save.” Since January, 12% of the credit union’s mortgage customers have made at least $1,500 in extra payments.

via Americans Debt Cutting Hampers Growth – WSJ.com.

Well, as you can see, the American people are a bunch of unpatriotic idiots haplessly destroying the economy because they refuse to enslave themselves to lenders. If you are one of these Americans, quit being selfish. Go down to your local bank and borrow as much money as you can. Then go buy a house you can’t afford. It worked so well last time.

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Is The Tea Party Over?

Posted by Jason | Posted in Government | Posted on 20-10-2011

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The rising of the Occupy Wall Street movement makes me wonder what happened to the what appears to be the short lived Tea Party movement. I know. I know. They still exist. After all, they had a Republican Tea Party Debate.  That should tell you all you need to know about the Tea Party. They are a Republican caucus and a complete waste of a movement.

I may sound a little harsh, but what was the whole point of the movement. Unless I’m completely off base, the Tea Party’s one underlying message was to get control of government spending. They vowed to kick any politician who voted for TARP out of office.

Fast forward to the next Presidential election. Who does the Tea Party seem to be backing? So far, it looks like Mitt “Wall Street” Romney, Herman “9-9-9″ Cain, and for a short period of time Rick “Al Gore” Perry.

What are these supposed fiscal hawks proposing that will cut the deficit? I haven’t seen anything.  Have you?

Herman Cain just repeats 9-9-9 to every answer like a catchy commercial line. He has mentioned no cutting. He even says 9-9-9 is revenue neutral. Well, that’s great. So we’ll keep government taking the same percentage of the economy. On top of that, we’ll still be running trillion dollar deficits.

Romney, who constantly tells us he understand the economy because he ran corporate chop shops, then goes on to tell us he’s going to focus tax cuts on the middle class and the poor. Wasn’t this the Obama plan during the 2008 election?  He also mentions no cuts, although according to the Wall Street Journal..

Mitt Romney, a former Massachusetts governor, has called for an initial cut to non-security discretionary spending of 5%, or $20 billion.

Wow, that Mitt Romney is a real game changer huh? We’re running almost $2 trillion a year in the red, but watch out Romney is ready to cut $20 billion.

Lastly, Rick Perry, who was the darling of the Tea Party until he opened his mouth is proposing to cut…. Who the hell knows. Every debate hekeeps saying he’ll be laying out a plan, but has yet to do so. He does talk about energy exploration every chance he gets.  Not sure how that cuts the deficit, but I’m sure it gets energy companies lined up to fill his coffers.

Next to cutting the deficit, what was the next big issue for the Tea Party? Was it not TARP, the same issue that Occupy Wall Street seems to be upset about? They said they were kicking out anyone who voted for TARP. Well, how do the three candidates stack up with TARP?

All three candidates supported TARP.

Rick Perry is smart enough to at least lie about that support now, although it’s hard to lie after you sent a letter of your approval. Romney and Cain on the other hand still say they support it. Now, they claim that at the time they thought it was the right thing to do. Of course, they would have done it better. They would have not given as much to one bank and instead gave more to another. Now I see why the Tea Party thinks these guys are great.

What the candidates are basically saying is they would do TARP II when Wall Street comes knocking for another bailout. They are not against TARP because it’s fundamentally immoral and ineffective. They are not against TARP because it bails out the unproductive by stealing money from the productive. No, they are against the way TARP was handled, but only after Obama took it over. They would have bailed out the bankers, but they would not have bailed out those evil car companies, like that makes a dime’s worth of difference to our fiscal situation.

There is one candidate who has propose substantial cuts and was against TARP. That candidate is Ron Paul, who proposed $1 trillion in cuts his first year. He’s a guy who is literally talking about shrinking government, as his plan cuts five federal departments. He even threw in his own salary as President, knocking down the President’s pay to the median household income.

 

On TARP, Ron Paul was against TARP from the get go. If you know Ron Paul, you know he would be against TARP before it was even conceived. His beliefs are constant. You don’t need to question which way he’s going to fall on some government proposal. You know, because you know his beliefs.

So does the Tea Party back Ron Paul. Yeah, right. They have shown their true colors. The Tea Party is over. It’s nothing more than a rebranding of the Grand Old Party (GOP).

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Steve Jobs, The Artist

Posted by Jason | Posted in Miscellaneous | Posted on 06-10-2011

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Steve Jobs was an artist. You may say that’s absurd, but what is an artist. An artist is someone who takes common, plain resources and makes something that only the artist could see in their mind until the masterpiece was completed and shown to the world.  Steve Jobs took a vision of something no one else could see and made it a reality. He worked with his palette of people, hardware, software, and processes. He arranged them in a way that created beautiful products that people could not wait to see, touch and share with others. While other CEOs focus on making a better mouse trap, decreasing costs, and increasing market share, Steve Jobs focused on creating his masterpiece.

I’ve heard many people say about rich people like Steve Jobs that they don’t deserve all that money. They couldn’t do it all by themselves. No one is an island. This is true. The painter could not paint his masterpiece without his paints and canvas that someone else might have made. The musician could not produce music we all sing to without instrument builders, producers and concert venues providers. Shakespeare would not be able to create his plays without actors, printers or the maker of his writing utensils.

Here is the problem though. All of those people and resources can be provided by anyone. The painter can get someone else to make the paint and canvas. The musician can find another instrument maker, producer or concert venue. Shakespeare could have found other actors, printers and writing utensils. And Steve Jobs could have found other programmers and hardware manufactures. The difference between the artist and everyone else is you can replace everyone else and still end up with the masterpiece. You cannot replace the artist. You cannot replace Steve Jobs.

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