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View Full Version : Conservative Gregg Easterbrook takes Both Dems and Reps to task for crisis


Mosca
09-23-2008, 01:59 PM
From today's TMQ....


Gimme! Gimme! Gimme! Last week, TMQ asked why no one was paying attention to the fact that the national debt ceiling was quietly raised by $800 billion during the summer. Well, toss that column: The White House just asked the national debt ceiling be raised another $700 billion, for the proposed financial-sector bailout. If that happens, in 2008 alone, $1.5 trillion will have been added to the national debt: every penny borrowed from your children and their children. Stated in today's dollars, in 1979 the entire national debt was $1.5 trillion. George W. Bush and Congress have in a single year added an amount equal to the entire national debt one generation ago. And the year's not over!

It took the United States 209 years, from the founding of the republic till 1998, to compile the first $5 trillion in national debt. In the decade since, $6 trillion in debt has been added. This means the United States has borrowed more money in the past decade than in all our previous history combined. Almost all the borrowing has been under the direction of George W. Bush -- at this point Bush makes Kenneth Lay seem like a paragon of fiscal caution. Democrats deserve ample blame, too. Harry Reid and Nancy Pelosi, Democratic leaders of the Senate and House, have never met a bailout they didn't like: Harry and Nancy just can't wait to spend your children's money. Six trillion dollars borrowed in a single decade and $1.5 trillion borrowed in 2008 alone. Charles Ponzi would be embarrassed.

If you borrowed, borrowed, borrowed, you could afford to live high for a while -- then there would be a reckoning. Hmmm that sounds a little like what many Americans did with gimmick mortgages in 2005 and 2006. They were only imitating their political leadership! Why is it both parties in Washington think the United States can borrow, borrow, borrow without a reckoning ever coming? Bush, Reid and Pelosi seem poised to transfer hundreds of billions of dollars of borrowed public money to political insiders on Wall Street and in banking, whose bonuses will now be tax-subsidized. The capitalist maxim is, "She who reaps the gains also bears the losses." Now Washington wants those who reaped the gains to shift the losses to those who lived humbly. The young will pay and pay for these cynical ploys to insure the luxury of the powerful old. Why aren't the young outraged?

TMQ's pal Isabelle Sawhill, among the leading public-policy economists of our day, says Washington does indeed need to intervene in the financial system -- the harm to the average person of letting credit markets freeze would be greater, she thinks, than the harm caused by more public debt. Fair enough. But it doesn't inspire confidence that on Sept. 12, Treasury Secretary Henry Paulson said the financial system had been fixed and "under no circumstances" would there be further bailouts; on Friday, Paulson said the system was collapsing and another $700 billion was needed. Suddenly Paulson is insisting the country has no choice other than immediately to hand over $700 billion to Wall Street fat cats, with barely any debate or even explanation of the plan. Why should anyone believe this guy, when just one week previously he said no further bailouts would occur? It seems clear Paulson had no idea what he was talking about then, while if the problem is really as bad as Paulson says now, his past delay in facing the problem has made the cost far higher. With such a poor track record, why is the treasury secretary suddenly viewed as a superbrilliant genius whose marching orders must be followed?

It is not public intervention that is objectionable. University of Chicago Nobel Prize winner Gary Becker, among the top conservative economists, just said, "I have reluctantly concluded that substantial intervention was justified." Rather it is size of the bailout, and the hurry-up-give-the-money-don't-stop-to-think aspect, that are troubling. Much of the $700 billion will flow to investment-community friends of Paulson, Bush and other administration figures. Average Americans who behaved irresponsibly by signing gimmick mortgages may get some taxpayer aid from the Paulson proposal, and maybe they should get none. But in the end, average Americans will still be liable for most of what they owe -- that is, will still be held responsible for their actions. Wealthy, politically connected insiders who run banks and companies such as American International Group will be exempt for responsibility for their actions, and will stuff taxpayer-subsidized millions into their pockets.

On Sunday, Paulson called the self-serving actions of top Wall Street figures "inexcusable" -- yet the plan is not only to excuse them, but to shower them with free money. Paulson said Wall Street pay levels were "excessive," but should be discussed later, after the bailout is done. Now is the moment of maximum leverage! Once they are holding the public's money and laughing about how easily they got it, financial executives will have no incentive to compromise on pay. Here's an idea: Any company that participates in the bailout agrees to limit its top-tier executives to the federal minimum wage. That is, after all, the amount Washington says is enough to live on. Meanwhile, of the two jokers who drove Fannie Mae and Freddie Mac into the ground, one was paid $19.8 million in 2007, the other $14 million; each will get nearly $5 million in taxpayer-funded "retirement" bennies.

Yet there's scant outrage. Maybe this is because in an era of fiscal irresponsibility by both parties, everybody wants a bailout. Wall Street, bankers, homeowners who lied on their mortgage applications, Detroit automakers, farmers -- gimme, gimme, gimme! Rather than asking whether the $700 billion giveaway is too large or being structured in a way that benefits the rich, numerous members of Congress are instead demanding more bailouts be appended: for seniors (see below), cities, states, more "stimulus" checks, you name it. Give money to whoever will fund my re-election! The money is being forcibly extracted from the pockets of our children and their children. Every dollar borrowed today by the irresponsible old of Washington will subtract two dollars from future economic growth, leaving our children and their children a legacy of stagnation.

The 1980 Chrysler bailout, which was nationally debated for months before happening, cost $3.2 billion, in present-value dollars, and was financed by revenue rather than by borrowing. Here is the borrowing that's happened in 2008 alone, with precious little public debate:

$29 billion to bail out Bear Stearns.

$40 billion in the first mortgage-holder bailout.

$80 billion for an additional year of Iraq war operations. (Another $150-$200 billion in war costs such as future veterans' disability benefits were incurred but not funded.)

Up to $85 billion to bail out AIG.

$153 billion to households for "economic stimulus."

$200 billion, and possibly more, to bail out Fannie and Freddie.

$290 billion in farm subsidies, despite agricultural prices and grains profits being at record highs.

$700 billion general bailout of securities backed by bad debt. (The International Monetary Fund estimates this figure will rise to at least $1 trillion.)

That comes to $1.6 trillion, explaining the debt-ceiling rise, and does not include roughly $300 billion in essentially interest-free cash issued to banks by the Federal Reserve on an emergency basis, which may or may not be repaid, but which in any case make all existing money somewhat less valuable. Why is the debt aspect of the splurge barely being remarked on by the mainstream media and by politicians? Why are the young not furious? And about that $700 billion about to the shoveled to the Wall Street elite -- in 2007, George W. Bush vetoed an increase of $7 billion per year in health care spending for the poor, saying the country couldn't afford it.

X-Terminator
09-23-2008, 04:32 PM
Yep, more examples of the government raping the little guy to benefit the rich guys who put big bucks into their campaigns.

I can't even begin to think about how this mess can be fixed, but I DO know that I and every other taxpayer on this board should look forward to their share of the pie that feed those blood-suckers in Washington to go up, no matter who wins the Presidency.

Preacher
09-23-2008, 05:19 PM
See...

THIS is all I am asking for. a NON-PARTISAN discussion. NOWHERE in this article can you point and say he is advocating for a party or a person for president. It is an honest-to-goodness discussion of the PROBLEM.

Thank you for that article.

And again, it highlights what I started in another thread... which probably should be merged with this one now...

My problem is that we have put the power-hungry in charge of the money over the money hungry. Yeah, that is going to work out well...

my other problem is that if there is a bailout... then the execs. MUST be held accountable and fall in line with a preset salary.


I think a good figure, would be to set the salary to the level of congress! That way, if there is complaint about how much they pay.. then congress has to justify THEIR pay as well! :chuckle:

revefsreleets
09-23-2008, 06:04 PM
The problem I see is this: Why the rush? Why do we have a 2 1/2 page proposal that HAS to be passed in 24 hours?

No offense, but giant gains/losses in power during moments of crisis scare the EFF out of me.

Preacher
09-23-2008, 06:34 PM
The problem I see is this: Why the rush? Why do we have a 2 1/2 page proposal that HAS to be passed in 24 hours?

No offense, but giant gains/losses in power during moments of crisis scare the EFF out of me.

I think the argument would go... though I am doing this off the top of my head....

That they are trying to keep foriegn money in the US through wall street. If foreign money was pulled out quickly, it may start a massive deflationary cycle.

Massive deflation has another name. Depression.

Mosca
09-23-2008, 07:44 PM
The problem I see is this: Why the rush? Why do we have a 2 1/2 page proposal that HAS to be passed in 24 hours?

No offense, but giant gains/losses in power during moments of crisis scare the EFF out of me.

That was my first thought as well; what's the rush? the grocery stores are still open, the TV stations are broadcasting, there are no cars burning in the streets. There are no angry mobs. Sit down, look it through, and take the time to pass a bill FREE OF PORK that addresses the issue of ensuring the economy, but without the ensuring the yacht and the second vacation house.

revefsreleets
09-23-2008, 08:07 PM
Let me clarify: I love the idea of simplicity. How many pages is our tax code up to now? 400,000? But I'm a tad worried about giving a very few people what amounts to almost absolute control over what could be called the cornerstone of capitalism.

I'm not a conspiracy theorist (well, not a big one anyway) but these kind of things make me wonder...

A little "stop and think this over" equates to an ounce of prevention in my book...

tony hipchest
09-23-2008, 08:46 PM
in 2007, George W. Bush vetoed an increase of $7 billion per year in health care spending for the poor, saying the country couldn't afford it.:banging: i guess welfare is only good if its for the corporations and 1% in the upper echelon.

the whole article is frighteningly disgusting. the thought of these folks getting tax breaks is even worse.



My problem is that we have put the power-hungry in charge of the money over the money hungry. Yeah, that is going to work out well...



question? we all know money = power.

im wondering what parameters you use to seperate the money hungry/power hungry into 2 seperate groups?

Preacher
09-23-2008, 09:01 PM
That was my first thought as well; what's the rush? the grocery stores are still open, the TV stations are broadcasting, there are no cars burning in the streets. There are no angry mobs. Sit down, look it through, and take the time to pass a bill FREE OF PORK that addresses the issue of ensuring the economy, but without the ensuring the yacht and the second vacation house.

:hatsoff:

Preacher
09-23-2008, 09:09 PM
:banging: i guess welfare is only good if its for the corporations and 1% in the upper echelon.

the whole article is frighteningly disgusting. the thought of these folks getting tax breaks is even worse.



question? we all know money = power.

im wondering what parameters you use to seperate the money hungry/power hungry into 2 seperate groups?

The politicians are power first... money second. Wall Street is money first, power second.

Maybe I should have said money hungry/POLITICAL power hungry.

:banging: i guess welfare is only good if its for the corporations and 1% in the upper echelon.

the whole article is frighteningly disgusting. the thought of these folks getting tax breaks is even worse.

Those corps. rep. NUMEROUS jobs, not to mention yours and my retirement funds. So it is a little more complicated than that. BUt in essence I agree, if a company fails... IT FAILS.

I am for free-markets and capitalism. If I don't want govt. regulation, then I DEFINITELY don't want govt. bailouts either.

And that is the prob. WHat do you do when you have to bail out corps, because the retirement and jobs of so many of the average joe is hurt???

The answer is neither over-regulation, nor is it TURNING A BLIND EYE.

That is why I think Mosca's idea makes a LOT of sense. Take your time, do it right.

Heck, get a couple wall-street moguls in that HAVE made the RIGHT choices, put them with a few senators and let them talk.

Stick Even Bayh, dem from Indiana (I beleive) on it with another dem and a couple Republicans and WORK IT OUT.

tony hipchest
09-23-2008, 10:05 PM
The politicians are power first... money second. Wall Street is money first, power second.

Maybe I should have said money hungry/POLITICAL power hungry.
.ok. it was pretty evident thats what you meant, but i wanted to make sure. its worthy to note that the waters are muddied. one rarely gains political power w/o the capital to back them.

if its a "chicken or the egg" scenario, money always supercedes political power. but i definitely see whqat youre saying.

i kinda liken this whole mess to the regulation of tobacco. i mean im still gonna buy the shitsticks of death until i personally decide to quit, but DONT hide the FACT that it causes cancer, in the name of protecting big tobacco's profit margin.

these mortgage brokers handing out loans was like tobacco executives handing out packs of cigs to 5th graders as they left school for the day and saying "theres no risk. this will make you feel good."

im as "pro-capitalism" as anyone, but i dont mind paying taxes, and i dont mind regulation.

a big problem in this country is that left vs. right is becoming marginalized as pro- communism vs. pro- anarchy.

balance is key, as the scales of freedom suggests.

i believe in a political ebb and flow. it has ebbed, and now it is time to flow.

Preacher
09-24-2008, 02:24 AM
ok. it was pretty evident thats what you meant, but i wanted to make sure. its worthy to note that the waters are muddied. one rarely gains political power w/o the capital to back them.

if its a "chicken or the egg" scenario, money always supercedes political power. but i definitely see whqat youre saying.

i kinda liken this whole mess to the regulation of tobacco. i mean im still gonna buy the shitsticks of death until i personally decide to quit, but DONT hide the FACT that it causes cancer, in the name of protecting big tobacco's profit margin.

these mortgage brokers handing out loans was like tobacco executives handing out packs of cigs to 5th graders as they left school for the day and saying "theres no risk. this will make you feel good."

im as "pro-capitalism" as anyone, but i dont mind paying taxes, and i dont mind regulation.

a big problem in this country is that left vs. right is becoming marginalized as pro- communism vs. pro- anarchy.

balance is key, as the scales of freedom suggests.

i believe in a political ebb and flow. it has ebbed, and now it is time to flow.

See... I don't think it has ebbed or flowed. The water has begun to move sideways and no one knows what to do about it. Instead, they just blame the other side and try to make political hay out of it.

We are in a new financial world-- have been for about 15 years. There are new rules in this world, but we don't know what they are.

Worse yet, there is so much rhetoric out there that it is virtually impossible to quantify anything and thus come up with answers. I fear we are headed for a major depression, not because the market justifies it, but because the rhetoric drives fear. The biggest contributer to the last depression? Not because the market crashed, but because of the loss of confidense. Not one dollar disappeared from the system. People were jusrt afraid to spend anything they had.

The problem is, we don't know how that will play out in a new set of rules in this new "super-state" economy.

tony hipchest
09-24-2008, 02:24 PM
i think this is a thread we all are in agreement. i came across this, that adresses "why the rush"?

http://edsops.blogspot.com/

Disaster Capitalism

Jim Mitchell, in The Dallas Morning News Opinion blog, says it's irrelevant whether Barack Obama or John McCain warned against the recent financial meltdown on Wall Street or even whether either has a plan to fix the mess. Mitchell says the crisis is upon us, events are moving too fast, and political talking points are mere distractions to the decisions that have to be made now.

The urgency Mitchell feels is exactly how the Bush administration wants Americans to feel about the crisis. The Bush administration, through the Treasury Department and its Secretary Henry Paulson, is rushing through a $700 billion bailout plan, pressuring Congress to act swiftly, without due consideration, without input. Taxpayers ought to be very suspicious of the Bush administration's haste. Check out this sentence buried in the administration's plan:

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

If that doesn't scare the daylights out of you, I've got a bridge to nowhere in Alaska to sell you. Taxpayers would do well to read The Shock Doctrine: The Rise of Disaster Capitalism, a 2007 book by Naomi Klein. Klein details how practitioners of Milton Freidman's free market economics have exploited (and in some cases, even created) disasters and upheavals in order to impose their radical policies on shocked societies. Chile, Russia, Iraq, even New Orleans after Katrina, all have seen wholesale imposition of economic shock therapy. The beneficiaries of this are a narrow group of the economic elite who control the companies adept at profiting from disasters (think Halliburton and Blackwater). The losers are the devastated communities left picking up the pieces of a destroyed economy and infrastructure. That section of the bailout plan quoted above is the kind of license the free marketers give themselves in order to take advantage of the chaos in a market collapse. Congress would do well to resist being stampeded into hasty action by an administration whose primary interest may be in applying another dose of economic shock therapy, this time on the American economy itself. They were responsible for the disaster. Now they are exploiting it. It's how disaster capitalism works. Read the book.

Preacher
09-24-2008, 04:05 PM
i think this is a thread we all are in agreement. i came across this, that adresses "why the rush"?

http://edsops.blogspot.com/

I do want it all to slow down, but I think that last quote is a bit of alarmism mixed in with some truth.

I look at it from a different point... "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

Is a result of congress investigating EVERYTHING UNDER THE SUN... As a result, the exec. branch is now moving to protect themselves from that investigation/witch hunt. The fact is, these witch hunts have to stop... from the left AND the right, because they are causing horrible results.

It goes back to my last post. With so much rhetoric and idiocy thrown out by both parties, there is no ability to properly quantify what truth is, or what has really happened. EVERYTHING is spun for political gain.

For instance, the above quote can be spun by the left for Bush paying off his friends before he leaves office, and spun by the right as a result of the dem's trying to investigate everything in search of an acorn.

In both cases, there is no objective ability to have a discussion, because real-politik raises its ugly head.


I do think there is LEGITIMATE reason to move quickly. I do think this is a crisis. BUt I think the reason BOTH parties are moving TOO fast is because BOTH parties are afraid of blow-back on their election candidates, since BOTH parties have their hands too far into the pie to come out clean.

Mosca
09-24-2008, 04:41 PM
But Preach; NON-REVIEWABLE? Sorry. Our government is based on checks and balances, and this leaves neither.

Preacher
09-24-2008, 05:04 PM
But Preach; NON-REVIEWABLE? Sorry. Our government is based on checks and balances, and this leaves neither.

I am not arguing that is good... just that it is a result. It is where BOTH parties have driven politics.

Mosca
09-24-2008, 05:13 PM
I disagree. NO appointee should have that much authority. Not in this country. That is tantamount to imperialism, totalitarianism, whatever you want to name it.

Why would you want to surrender to a higher EARTHLY power?

Preacher
09-24-2008, 05:30 PM
I disagree. NO appointee should have that much authority. Not in this country. That is tantamount to imperialism, totalitarianism, whatever you want to name it.

Why would you want to surrender to a higher EARTHLY power?

Mosca...

I think you are spoiling for a fight that I am not offering....

Please re-read my posts.

You and I agree. I am just saying that this is cause and effect, this wording is the effect of the political bickering.

I am not placing any value, good or bad on it in this discussion. Only looking at the WAY we got here.

Mosca
09-24-2008, 06:00 PM
Mosca...

I think you are spoiling for a fight that I am not offering....

Please re-read my posts.

You and I agree. I am just saying that this is cause and effect, this wording is the effect of the political bickering.

I am not placing any value, good or bad on it in this discussion. Only looking at the WAY we got here.


Hey, I should have put :laughing: at the end of that "earthly power"; it was meant as a jibe, not an insult, sorry.

My point is that lack of oversight is exactly how we got here, and continuing that doesn't work. If our society acts like an organism, there has to be something regulating the interactions, and the systems need to have feedback. Too much regulation and you get all feedback and no action, like being in a coma; not enough regulation you get all action with no feedback, unchecked growth as in cancer. There's no reason to surrender any and all oversight to one person.

Preacher
09-24-2008, 06:35 PM
Hey, I should have put :laughing: at the end of that "earthly power"; it was meant as a jibe, not an insult, sorry.

My point is that lack of oversight is exactly how we got here, and continuing that doesn't work. If our society acts like an organism, there has to be something regulating the interactions, and the systems need to have feedback. Too much regulation and you get all feedback and no action, like being in a coma; not enough regulation you get all action with no feedback, unchecked growth as in cancer. There's no reason to surrender any and all oversight to one person.


I didn't take it as an insult... I knew it was a friendly jibe... :wink02:

What I meant by spoiling for a fight was that I thought (and still think) that you think I am supporting the choice to make it non-reviewable.

I wasn't and am not. I am only trying to track how it came to manifest, and my thoughts are that it came because of the intense political scene.

As a result, in order to back away from it and not get into another partisan battle, the current partisan battles need to be put away. The rhetoric needs to cease, and good, strong, tough FAIR AND HONEST questions need to be asked of BOTH candidates and parties.

Furthermore, the rewriting of history every 2 years to favor one's particular viewpoint must cease.

Here is an example from both sides.

1. Bush lied about WMD. The facts are that almost every western nation had the same facts and came to the same conclusions about Iraq having WMD. Bush didn't lie. He and the rest of the western world were misled by Iraq in general and Saddam in particular.

2. Dems are peaceniks that don't care about our national security. But after 9-11, there wasn't more than one or two national democrats that opposed a war. Matter of fact, many dems opposed the war in Iraq because they thought it would draw from the war in Afganistan.

Yet... in both cases, those truths have been twisted into the mantra first given, and both of them are QUITE damning, both here and abroad. Now, when it comes to the bailout...

my thoughts are that RIGHTLY OR WRONGLY... (and I think wrongly), Bush wants to avoid this political game by not allowing it to be a football tossed back and forth and having things added on and carved out... and not allowing for a show-boat-poltical forum to start casting stones in both directions, which is EXACTLY what happened in the 9-11 commission.

THAT is what I am saying.

Mosca
09-24-2008, 07:14 PM
Understood, thanks for clarifying.

Preacher
09-24-2008, 08:04 PM
Understood, thanks for clarifying.

No prob!! :drink: <---pepsi


What's your thoughts on this idea:

Every time America prepares for a war... we usually end up preparing to fight the LAST war...

Now, we are preparing to save ourselves from the financial crisis.... of the 1930's.

Quick govt. bailouts would have really helped in the 1930's. the run on the banks would have stopped if the people realized the govt. would fund the bank... sure, it would have been inflationary... but that wouldn't have hurt nearly as bad. Is this a case of fighting the last (economic) disaster?

Mosca
09-24-2008, 09:18 PM
Ender's Game, bra. Look it up if you don't know it.

Vis
09-25-2008, 07:28 AM
Ender's Game, bra. Look it up if you don't know it.

Great book.

So how do we get that Gregg Easterbrook is a conservative?

Mosca
09-25-2008, 09:27 AM
Great book.

So how do we get that Gregg Easterbrook is a conservative?


I only got it from reading his stuff. I figured it from his beat-down of "An Inconvenient Truth"

This raises the troubling fault of An Inconvenient Truth: its carelessness about moral argument. Gore says accumulation of greenhouse gases "is a moral issue, it is deeply unethical." Wouldn't deprivation also be unethical? Some fossil fuel use is maddening waste; most has raised living standards. The era of fossil energy must now give way to an era of clean energy. But the last century's headlong consumption of oil, coal, and gas has raised living standards throughout the world; driven malnourishment to an all-time low, according to the latest U.N. estimates; doubled global life expectancy; pushed most rates of disease into decline; and made possible Gore's airline seat and MacBook, which he doesn't seem to find unethical. The former vice president clicks up a viewgraph showing the human population has grown more during his lifetime than in all previous history combined. He looks at the viewgraph with aversion, as if embarrassed by humanity's proliferation. Population growth is a fantastic achievement—though one that engenders problems we must fix, including inequality and greenhouse gases. Gore wants to have it that the greener-than-thou crowd is saintly, while the producers of cars, power, food, fiber, roads, and roofs are appalling. That is, he posits a simplified good versus a simplified evil. Just like a movie!

and his defense of capitalism. Now, after doing some research, I find that he is more of a centrist:

"Easterbrook's journalistic style has been characterized as "hyper-logical" and he himself as "a thoughtful, deliberate, and precise journalist ... a polymath and a quick study." His main areas of interest are environmental policy, global warming; science; space policy; "well-being" research; Christian theology; and sports, most notably professional football."

From what I've read of him, he has never failed to gore a ripe ox, regardless of on which side of the political fence it has stood, most specifically NASA. He loves to rip on the waste of the space program. I personally love the space program, and he makes sense even to me!