Category Archives: Throw Da Bums Out

Guest Post: Geno says It Is Deliberate

Posted on by

Some back story:

On February 4, 2009, Congressional Budget Office Director Douglas W. Elmendorf wrote to Senator Judd Gregg that the CBO has conducted an analysis of the macroeconomic impact of the stimulus. CBO estimates that this Senate legislation would, in the long run, cause a “decrease in gross domestic product (GDP) compared with CBO’s baseline economic forecast.”

One of my correspondents replied, “It is difficult not to conclude that Congress is the arsonist who starts the fires and then rushes in as the firefighter to ‘save us,’ only to set yet another fire.”

He also reminded me of Congress recent culpability, to wit:

Congress has heard, over and over and over again, about the Social Security deficit coming in our lifetime and they have with all deliberation ignored it.

Congress has heard, over and over and over again, about the Medicare shortfall coming in our lifetime and they have with all deliberation ignored it.

Congress has heard, over and over and over again, about Mortgage Crisis I problem and they frittered away 350 billion dollars on it.

Congress has heard, over and over and over again, about Mortgage Crisis II (the “good” Option A and ARM notes coming due) problem and they have with all deliberation ignored it.

Congress has heard, over and over and over again, that throwing trillions of dollars to their friends while looting the last of the great and little manufacturers (the car companies and America’s small businesses) is a bad idea. They have with all deliberation ignored that, too.

With that as the discussion that goes before, regular correspondent Geno sent this along:

“We is doomed,” wrote Bob and Dick.

That, we may well be.

Congress (largely both sides of the aisle at this time) is a self-serving entity. Members of Congress see this as a money tree and a way to get reelected. The unuttered charge is, “don’t try to derail my gravy train with facts.”

They simply don’t want to hear it; so no amount of public opinion will slow the train’s engineers.

On the Right, a few conservatives are holding out, but only marginally. And, of course, moderates (read that republicans who are too wimpy to admit their liberalism) do not care because they have no core values upon which to stand. They are Right when Right fits their need and Left when Left best fits. Keywords here are “their need.” I hate that in both a leader and a follower.

The economy was bad during the Carter years, and interest rates were high double digits. Now it’s bad and interest rates are next to zero. So, where’s the connection? Maybe there is none. Maybe it is a mirage. Maybe even the way a nation measures its wealth is an aberation.

Of course, wealth is a virtue and a national treasure. But when wealth is measured by a string of numbers on paper–or worse by how much of it one can hold in ones hand, then it is a tenuous virtue indeed. Does anyone really believe that there are enough greenbacks in circulation to pay every American the amount he claims he owns? Or for that matter, enough gold in Fort Worth? (forgive the Texas joke).

Perhaps money has no color–green or otherwise–and exists solely in the elbow grease and common production of its citizenry.

We have strayed so far from that tenet that even I scoff when I write it.

Money is the root of all evil, some theologians will say. But, contrary to common wisdom, the Bible does not teach that. It clearly says that “the love of money” is the root of all evil.

And there are people committing that sin who don’t have a dime.

Entitled?

Posted on by

“There are only two English words that begin with ‘su‘ that have the ‘sh‘ sound,” a fellow commuter on the West Chester local told my grandfather a few decades ago. “Sumac and sugar.”

My grandfather, known as Grandpa to my cousins and Boppa to me, was amused. See, Boppa was a scientist as well as a Presbyterian elder. He knew his fellow commuter believed that vocabularic limit. He also knew the difference between fact and faith.

In what seems like a non sequitur, we might recall that the Miami-Dade school district plans to sue the state of Florida to recoup approximately $25 million in “lost revenue” because the state changed its funding formula to reflect the drop in income.

Meanwhile the structural issue in the Vermont budget is a $200 million shortfall this year and next. That seems small in the overall economy but it looms large in this state of 600,000 peeps. Governor Jim Douglas, R-Vermont, says the state will have to cut programs including $34 million from Human Services and charge higher premiums for people on state health care.

“Our message to the governor is this: Stop,” said Carlen Finn who spoke first for all the advocates for seniors, kids, the differently abled, and others who lashed out at the gov.

BROKEN NEWS


Fiscal desparation is why Gov. Douglas was in Washington today. He lobbied fellow Republicans to pass the stimulus bill and was the first governor invited to the White House by President Obama.

Vermont entitlement groups have offered a different solution to the problem of diminishing handouts: no lawsuits, just new taxes. They expect the state to raise the cigarette tax by a buck a pack and double the income taxes on the 2 percent of Vermonters who earn over half a million dollars annually. Oddly not one group thinks docking the salaries of non-profit executives by 5% is a good idea.

The entitlement group proposals would generate about $20 million. The rest, they say, should come from the federal stimulus package.

Wow. Maybe I can get that new laptop I need and the camera I really really need.

“There’s no question we should give as much money to the states as we can,” Congressman Charles Rangel, D-NY, said “But with so many of our infrastructure problems … we’re going to have to … remove the [governors’] discretion.”

One of my correspondents notes that, “on an economic scale of 1 to 50 Vermont prolly rates below Mississippi.” He doesn’t worry about the Vermont legislature mucking up an economic recovery. “I mean,” he says, “how much damage can they do?”

Hey. A billion here, a billion there, pretty soon we’re talking real money.

I hate to agree, even briefly, with anyone in the Barney Rubble gang in Congress but if Vermont is any indication, state legislatures can do a lot of damage.

Unfortunately, if the bank bailout is any indication, Congress can sink us all.

For the record, business is slow for us consultants this year and Anne’s hours have been cut as well. Our income is down a few grand compared to last year so WE HAVE TO SPEND LESS MONEY. That few grand seems small in the overall economy but it looms large in this family of two. See, faith in Congress notwithstanding, the simple fact is that I can’t buy the laptop or the camera if I don’t have enough cash for the cable bill.

“Somebody needs to explain to [Governor Douglas] that the word tax is not a four letter word,” said Christopher Curtis of Legal Aid.

“Are you sure?” Boppa asked the commuter all those years ago.

“We must have strong minds,
ready to accept facts as they are.”
–Harry S Truman
President Truman was a Democrat.

Singing Pigs

Posted on by

Robert A. Heinlein wrote, “Never teach a pig to sing. It wastes your time, and annoys the pig.”

The Congressional Budget Office is the de facto standard by both tradition and enforcement to provide all Congressional economic data. It was created by the Congressional Budget and Impoundment Control Act of 1974.

It is interesting to note that CBO’s budget projection rules require their economists to assume that federal laws and policies governing both spending and taxation will not change.

Acting Director Robert A. Sunshine delivered a stunning forecast to Congress on January 8:

  • A slow recovery in 2010, with real GDP growing by only 1.5 percent.
  • An unemployment rate that will exceed 9 percent early in 2010.
  • A continued decline in inflation, both because energy prices have been falling and because inflation excluding energy and food prices—the core rate—tends to ease during and immediately after a recession; for 2009, CBO anticipates that inflation, as measured by the consumer price index for all urban consumers (CPI-U), will be only 0.1 percent.
  • A decrease of more than 1 percent in real consumption in 2009, followed by moderate growth in 2010; the rise in unemployment, the loss of wealth, and tight consumer credit will continue to restrain consumption—although lower commodity prices will ease those effects somewhat.

Most important, “CBO anticipates that the current recession, which started in December 2007, will last until the second half of 2009, making it the longest recession since World War II.”

That means the recession, on paper, will be over by Christmas if Congress DOES ABSOLUTELY NOTHING AT ALL.

I have come to realize that Barney Rubble knows this. After all, Congressman Frank himself acknowledges that he is the smartest man in Congress.

The reason to get the stimulus passed in a hurry is the same as the reason to push through the $700 billion TART overnight: if they held it up to the cold light of day, people would realize it was a scam.

Mr. Heinlein also wrote that the best government is the government that doesn’t try to govern.

Acting Director Robert A. Sunshine lost his job on January 22.

What a surprise.

Barack Obama said, “There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.”

The Cato Institute, an inside-the-beltway think tank with strong libertarian leanings, disagreed. In fact, they found a few hundred economists to sign a full page newspaper ad the day after Mr. Sunshine testified.

Too bad no one reads newspapers any more.

Good Money After Bad, Redux

Posted on by

The news reported that the automaker CEOs will return to testify again this week

The President-elect will “pay close attention” to what the CEOs say. Barney Rubble plans to beat them up again no matter what the Congressman said on 60 Minutes. The Toyota Republicans say we ought not let Congress mess with a free market economy.

There is a timeworn and well known joke:

An older and particularly odious man approached a beautiful woman. “Would you sleep with me for 700 billion dollars?” he asked.

“Oh, I have to think about that. Yes!” she said.

“Would you sleep with me for one dollar?” he asked.

“Never! What do you think I am?”

“Madam, we have already established that. Now we are simply negotiating the price.”

We ought not let Congress mess with a free market economy??? Sorry, folks, that horse has long since left the barn.