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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Fannie and Freddie Tab Could Hit $363 Billion

Posted by Jason | Posted in Economics, Government | Posted on 21-10-2010

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According to the Wall Street Journal, the tax payer may be looking at another $363 billion bailout, but this time just for Fannie and Freddie.

Fannie Mae and Freddie Mac’s regulator said Thursday that the companies could end up costing the government $363 billion as they absorb losses from bad mortgages.

Fannie Mae and Freddie Mac’s regulator said Thursday that the companies could end up costing the government $363 billion.

The Federal Housing Finance Agency ran stress tests under varying scenarios. The best case, with improving housing prices, saw the government-sponsored mortgage operators drawing a cumulative $221 billion in taxpayer money. If house prices drop, the bill would hit $363 billion.

“These are not predictions; the results reflect the potential effects of a limited set of hypothetical changes in house prices, a key variable driving credit losses for the enterprises,” said FHFA Acting Director Edward DeMarco.

To date, Fannie and Freddie have drawn $148 billion from the Treasury Department under the Preferred Stock Purchase Agreements program. The government took over the two enterprises in September 2008 as they faced a financial crunch.

via Fannie, Freddie Tab Could Hit $363 Billion – WSJ.com.

Why are tax payers on the hook? If these GSEs wanted to act like businesses with their profits and their million dollar pay packages for the executives, then they should be handled like the rest of the private sector, where you go bankrupt if you run your business into the ground. Of course, that won’t happen. The reason that won’t happen is the other banks, you know the ones that surround Obama, use Fannie and Freddie to sell off their crappy mortgages. They want their profits now, and they want the tax payer to take the long term risk. Add to that, the amount of money being made by those who are in government one day and running these GSEs the next, making millions of dollars a  year in the process, and it’s no wonder they won’t let these criminal institutions go under.

Does the media explain it to you that way? Of course not. They make it seem like something has to be done to save these GSEs, and they just pass the government propaganda along to the public. Jefferson was right. If I had to choose a government with no press or press with no government, I’d choose the latter. We currently have the former, so can we give the latter a shot now?

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The United States Cause of Death, Plundered to Death

Posted by Jason | Posted in Miscellaneous | Posted on 01-06-2010

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Now that the government has already plundered trillions of dollars from the people to bailout wall street bankers and General Motors, they are now getting set to plunder hundreds of billions more to bail out the unions.

Feeling tapped out after stimulus, ObamaCare and everything else? Senator Bob Casey has one more deal for you. If the Pennsylvania Democrat gets his way, U.S. taxpayers will also pick up the astonishing tab for poorly managed union pension plans.

Mr. Casey is gathering support for his curiously named “Create Jobs and Save Benefits Act,” a bailout for union-run retirement plans. Similar to House legislation from North Dakota Democrat Earl Pomeroy and Ohio Republican Patrick Tiberi, the bill would transfer tens of billions of dollars worth of retiree liabilities to the Pension Benefit Guaranty Corporation, i.e., to taxpayers.

via Review & Outlook: The Union Pension Bailout – WSJ.com.

So let’s put this in layman’s terms. Unions have lied to themselves all these years about the real value of their labor, crushing the businesses they work for. Then they fell for their union leaders’ lies and “pension plans”. Because of their choices, everyone else in society is supposed to suffer. They should have no responsibility for their choices. Their leaders should walk away scott free thinking they did a great job, and the rest of American workers should be enslaved to pay for their mistakes.

In Frederic Bastiat’s book, The Law, he laid out the choices societies make in regards to their laws.

“The few plunder the many. Everybody plunders everybody. Nobody plunders anybody.”

Which one do you think we fall under? It seems to be we are under “The few plunder the many” heading towards “Everybody plunder everybody”. There is a good chance this country will be bankrupt though before we get there. It seems there is not a concern in the world that politicians have where they don’t look at the American workers as human sacrifices to be offered up to they cause. The only problem is they will eventually run out of sacrifices. They will have killed the Country.

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Robert Reich Should Be A Motivational Speaker For The Unemployed

Posted by Jason | Posted in Economics | Posted on 12-04-2010

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After all the stimulus, bailing out Wall Street to save Main Street, devaluing the dollar with the printing press, and TARP, Robert Reich tells us we are looking at a horrible job market for the foreseeable future.

The U.S. economy added 162,000 jobs in March. That sounds impressive until you look more closely. At least a third of them were temporary government hires to take the census—better than no job but hardly worth writing home about.

Reich doesn’t tell you that almost every month previously was basically all government jobs. What do those jobs produce? They produce absolutely nothing, which means all they are doing is consuming what would have otherwise went towards other economic activities that would have produced something, and when there is production, there are real jobs. Every dollar spent by the government is taken out of the real job creating private sector. Considering the current regime, it’s no wonder Reich is so bleak.

Since the start of the Great Recession in December 2007, the economy has shed 8.4 million jobs and failed to create another 2.7 million required by an ever-larger pool of potential workers. That leaves us more than 11 million jobs behind. (The number is worse if you include everyone working part-time who’d rather it be full-time, those working full-time at fewer hours, and people who are overqualified for the jobs they’re in.) This means even if we enjoy a vigorous recovery that produces, say, 300,000 net new jobs a month, we could be looking at five to eight years before catching up to where we were before the recession began.

Lovely. Add ObamaCare on top of that, and what will we be looking at? Maybe Reich’s five to eight years is taking into account how long it will take for companies to adapt to the new costs of doing business. Of course, that ignores the countless businesses that will never form and jobs never created because of the cost of ObamaCare. No worries though! They’ll have free health care!

Given how many Americans are unemployed or underemployed, it’s hard to see where we get sufficient demand to support a vigorous recovery. Outlays from the federal stimulus have already passed their peak (Did I miss the peak? Man I wanted to see the peak. I bet it was amazing considering how much it cost.) , and the Federal Reserve won’t keep interest rates near zero for very long (let’s hope not). Although consumers are beginning to come out of their holes, it will be many years before they can return to their pre-recession levels of spending. Most households rely on two wage earners, of whom at least one is now likely to be unemployed, underemployed or in danger of losing a job. And even households whose incomes have returned are likely to be residing in houses whose values haven’t—which means they can’t turn their homes into cash machines as they did before the recession.

This to me sounds like an admission that Keynesian economics and it’s economic manipulating tools have lost effect. In the past, they would create a false boom that would eventually bust. This is what happened in the DotCom bubble and then the housing bubble. While the Keynesians probably stood around in delight to the boom they manufactured, eventually they came crashing down on us in progressively worse busts. Now it seems the bust is so big, that their tools can’t create the false booms they once did. While I’m glad the tools aren’t working, because maybe we can get back to real growth, I’m sure they’ll keep trying and we’ll keep paying.

What’s likely to slow the jobs recovery most, however, is the indubitable reality that many of the jobs that have been lost will never return.

The Great Recession has accelerated a structural shift in the economy that had been slowly building for years. Companies have used the downturn to aggressively trim payrolls, making cuts they’ve been reluctant to make before. Outsourcing abroad has increased dramatically. Companies have discovered that new software and computer technologies have made many workers in Asia and Latin America almost as productive as Americans, and that the Internet allows far more work to be efficiently moved to another country without loss of control.

Companies have also cut costs by substituting more computerized equipment for labor. They’ve made greater use of numerically controlled machine tools, robotics and a wide range of office software.

Where have I heard this before? Maybe we should just throw all the technologies out. Then maybe we can pay some people to dig holes, while others are paid to fill them. It’s amazing that such a famous economist is so ignorant about technology. Technology doesn’t cost us jobs and drive business overseas. Technology increases productivity, which leads to more wealth and a better standard of living. We’ve had increasing technology throughout mankind, and it has always led to a higher standard of living. There are always going to be people harmed by the changes though, but then they will adjust, and their standard of living will be better as well. Just think of those poor horse carriage builders who were put out of work with the introduction of the automobile.

The problem with driving business overseas is a self inflicted wound. Our government continually piles burdens on business and citizens, which ultimately drives up the cost of each US based employee to the point where the foreign employee is much more competitive.

These cost-cutting moves have allowed many companies to show profits notwithstanding relatively poor sales. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. It managed this largely by cutting 28,000 jobs, 32% of its work force. But for workers, there’s no return. Those who have lost their jobs to foreign outsourcing or labor-replacing technologies are unlikely ever to get them back. And they have little hope of finding new jobs that pay as well. More than 40% of today’s unemployed have been without work for over six months, a higher proportion than at any time in 60 years.

And guess what, we are all better off for it. Would we be better off if Alcoa didn’t layoff employees, and 80,000 employees lost their jobs when the company went bust? As crappy as layoffs are, they are in the economic interests of the company and the society as a whole. They allow companies to stay in business, to keep the remaining workers employed, and to fight another day.

I guess to a statist like Reich companies should run themselves into the ground, so they can then stand around telling us how the free market has failed and the government needs to take over.

The only way many of today’s jobless are likely to retain their jobs or get new ones is by settling for much lower wages and benefits. The official unemployment numbers hide the extent to which American workers are already on this downward path. But if you look at income data you’ll see the drop.

Among those with jobs, more and more have accepted lower pay and benefits as a condition for keeping them. Or they have lost higher-paying jobs and are now in new ones that pay less. Or new hires are paid far lower wages than the old. (In January, Ford Motor Co. announced that it would add 1,200 jobs at its Chicago assembly plant but didn’t trumpet that the new workers will be paid half of what current workers were paid when they began.) Or they have become consultants or temporary workers whose pay is unsteady and benefits nonexistent.

Americans will once again be employed, but they will also be back on the downward escalator of declining pay they rode before the Great Recession.

Robert Reich: The Jobs Picture Still Looks Bleak – WSJ.com.

So Americans can look forward to declining pay with devalued dollars. Man, Reich is making me feel positive today. The reason you have declining pay in recessions is because the rise in pay during the previous boom wasn’t based on real productivity increases. It was based on false booms created by the Federal Reserve. People need to wake up and see the game that is played here. The government creates false booms and claims credit for it. It creates new government programs, because “In a wealthy nation, no one should go without ….”. Then when it all comes crashing down, government tells us the free market failed and we must implement  “insert deceiving name here”, because the “the government must save the free market from itself”

What Reich doesn’t tell you is Keynesian economics promotes declining wages in order to stimulate a recovery. It wants to devalue the currency, so that employees don’t realize they have taken a pay cut. While this might have worked in the past to trick workers, no one seems to be playing along anymore. Pay is still being devalued in real dollars, but companies are still cutting pay in nominal dollars.

With all this pessimism by Reich, can we at least get him to admit that the government can’t fix it, that is has made things worse, that the Fed needs to quit creating false booms, and finally that the government needs to stay the hell out of the economy? Ah, probably not.

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How’s that social security trust fund working out for you? Suckers!

Posted by Jason | Posted in Economics, Government | Posted on 04-02-2010

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Our government, the same idiots liberals look to for health care and the same idiots neocons look to for protection from overseas boogeymen, has looted and spent our way into what is going to be the beginning of the end.

Last month, we noted that Social Security had delivered its worst performance in decades. Now, Allen Sloan warns investors at Yahoo Finance that the entire program has gone into the red — and will stay there. Get ready, Sloan says, for the mother of all bailouts:

Don’t look now. But even as the bank bailout is winding down, another huge bailout is starting, this time for the Social Security system.

A report from the Congressional Budget Office shows that for the first time in 25 years, Social Security is taking in less in taxes than it is spending on benefits.

Instead of helping to finance the rest of the government, as it has done for decades, our nation’s biggest social program needs help from the Treasury to keep benefit checks from bouncing — in other words, a taxpayer bailout.

via Hot Air » Blog Archive » Social Security tipping over into the red.

So, how are these morons going to attemp to get us back to solvency? Will they have the guts to cut back social security or abolish it all together? (that was rhetorical) My guess is this will be the beginning of what Peter Schiff calls the coming currency crisis. They will attempt to print their way out of it, which will send the dollar falling, hurting those on social security and everyone as a whole.

Better stock up on food, cigarettes, and bullets. They’ll be great for bartering.

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Government of the people huh? Tim Geithner’s NY Fed Begged SEC To Keep AIG Bailout Details Secret

Posted by Jason | Posted in Government | Posted on 25-01-2010

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By way of The Business Insider, the New York Times has an article about how Tim Geithner’s Fed wanted to keep the details of the AIG bailout from the people.

The New York Times unearths more documents showing the lengths to which Tim Geithner’s New York Fed went to try to keep the AIG bailout and counterparty details secret.

The Treasury’s response will no doubt be that Tim Geithner had no knowledge of any of these discussions.

And he may not have have been involved in the discussions. But it’s ludicrous to think that his folks weren’t trying to do what he wanted done.

via Tim Geithner’s NY Fed Begged SEC To Keep AIG Bailout Details Secret.

It is amazing the amount of people that still look to government to take care of them and protect them. Our government is supposed to be “of the people, by the people, and for the people”. Yeah right. The only thing our government is is “from the people”. They take from the people to protect their friends. They take from the people to empower themselves. They take from the people to buy votes. The take liberties from the people to prevent a challenge to their power.

If this was truly the people’s government, then the people would have a right to know what their representatives are saying on their behalves. There would be no closed door sessions of congress, back room dealings or secret bailouts.

This is just more proof that the elites of this country view the government not as the protector of the people, but as their personal tool to do as they wish. The government is the nations largest bank ready to write checks to the power brokers as they demand.

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Unlimited Fannie And Freddie Bailouts

Posted by Jason | Posted in Government | Posted on 28-12-2009

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According to a post on The Business Insider, the Treasury department gave Fannie and Freddie a blank check, so they can be as stupid as they want to be.

The Treasury snuck in another big bailout on Christmas Eve: It removed the cap on the amount of money it will provide to Fannie Mae and Freddie Mac to cover their ongoing mortgage losses. There is now no limit on how much we taxpayers will shovel down these black holes.

The move is designed to reassure Fannie and Freddie bondholders, who provide a lot of the money the companies use to support the housing market. These bondholders have now apparently been given an explicit government guarantee, in perpetuity. The move is also obviously designed to continue to prop up house prices, which, thanks to artificially low mortgage rates, are still above long-term norms.

On a more positive note, the Treasury also announced that it will stop buying Fannie and Freddie mortgages (though the Fed will presumably keep doing so). The total bailout so far is $111 billion.

The removal of the cap will further distort prices and activity in the housing market, which is now massively subsidized by government programs. It will continue to reward bondholders for being stupid. And it will likely result in additional huge losses for taxpayers.

It was obviously not an accident that the Treasury announced the plan after the market close on Christmas Eve, or that the press-release headline made the announcement sound like a mere “update.” Republicans, understandably, are screaming.

via Geithner Gives Housing Industry A Huge Christmas Present: Unlimited Fannie And Freddie Bailouts.

If you were told no matter what risky investments you made you would not take loses, would you be more risky or less? Apparently, the government thinks that removing the risk is the best way to fix these irresponsible government sponsored entities.

This must be more of the transparency of the Obama administration releasing this information on Christmas Eve, when most people are trying to enjoy time with their families. Little did they know, they were getting bent over by the government again.

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What encourages more risk on Wall Street?

Posted by Jason | Posted in Government | Posted on 06-11-2009

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The Wall Street Journal  has an op-ed today by Charles Gasparino, a CNBC on air-editor and author, in which he explains why the government encourages the risk that led to our current crisis.

We’ll never know if LTCM’s demise would have tanked the financial system or simply tanked a couple of firms that bet wrong. But one thing is certain: A valuable lesson in risk-taking was lost. By 2007, the years of excessive risk-taking, aided and abetted by the belief that the government was ready to paper over mistakes, had taken their toll.

With so much easy money, with the government always ready to ease their pain, Wall Street developed new and even more innovative ways to make money through risk-taking. The old mortgage bonds created by Messrs. Fink and Ranieri as simple securitized pools had morphed into the so-called collateralized debt obligations (CDOs), complex structures that allowed Wall Street banks as well as quasi-governmental agencies Fannie Mae and Freddie Mac to securitize ever riskier mortgages.

Mr. O’Neal, the man considered most responsible for Merrill’s disastrous foray into risk-taking, told me in an interview last year that in the fall of 2007, when he saw that the firm’s problems were insurmountable, he had a deal to sell Merrill to Bank of America for around $90 a share. But Merrill’s board rejected it, believing he would be selling out cheaply. The CDOs would eventually recover, they argued, as the Fed pumped life into the markets.

Likewise, nearly to the minute he was forced to file for bankruptcy, former Lehman CEO Dick Fuld believed the government wouldn’t let Lehman die. After all, government largess had always been there in the past.

All of which brings me back to Mr. Fortsmann’s comment about policy makers helping turn a cold into cancer. What if the Fed hadn’t eased Wall Street’s pain in the late 1980s, and again after the 1994 bond-market collapse? What if policy makers in 1998 had allowed the markets to feel the consequences of risk—allowing LTCM to fail, and letting Lehman Brothers and possibly Merrill Lynch die as well?

There would have been pain—lots of it—for Wall Street and even for Main Street, but a lot less than what we’re experiencing today. Wall Street would have learned a valuable lesson: There are consequences to risk.

via Charles Gasparino: Three Decades of Subsidized Risk – WSJ.com.

This is another case of where we think government behavior can get different outcomes than we get in our personal lives. The results are the same. How many of you know a parent that constantly bails their child our of trouble? Does it lead to less trouble? How about someone who gives money to a drug or alcohol addict? How about someone who always gives or lends money to that one person who always seem to be broke? In our personal lives, we call these people enablers. They are not helping the person in question. They are enabling them to continue the bad habits they are claiming to help.

This is no different when the government does it. Are we to believe that executives and banks will not be more cautious if they know that the government will not bail them out? Of course they would be. The problem is mommy government has always bailed out and enabled her baby Wall Street. The behavior will continue as long as Washington continues enabling. Don’t fall for the excuses. Mommies always have what they believe are good reasons for bailing out their children, but the problem is they aren’t letting their children learn their lessons.

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