Tag Archive for ‘Economy’
The Federal Reserve is handing out money to banks deemed “too large to fail” without knowing how much funding will be required and how long it will take for them to be restored (or to fail). The regulators would be wise to consider the experience of the state of Texas, which went through a very severe recession, accompanied by a collapse of banking, in the 1980’s.
Thomas Jefferson has left us an account of a supper-table conversation in the very earliest days of the U.S. government. Vice President John Adams declaimed at length about the virtues of the British government, which, he said, if purged of its corruption, would be perfection. Secretary of the Treasury Alexander Hamilton differed sharply. It was its corruption, he avowed, that gave the British government its great stability and power. Add in Jefferson’s views, which agreed with neither, and you anticipate almost the whole history of American political economy.
The unaddressed question remains: Is the U.S. dollar’s status as world reserve currency threatened by the massive debt monetization and multiyear, multitrillion dollar issuance of new Treasuries?
Since America is in its worst economic mess in 70 years and since President Obama’s designated Mr. Fixit is Treasury Secretary Tim Geithner, you’d think the Obama presidency is in desperate shape. The reason? Mr. Fixit is surely the most derided man running the U.S. Treasury since Andrew Mellon cut spending and raised taxes amid the onset of the Great Depression in 1932. Even the bounce on Wall Street after the launch of Geithner’s most recent effort to bail out the banks didn’t stem the chorus of abuse.
The Federal Reserve says that its purchase of $1 trillion in existing bonds is part of its plan to revive the economy. Another way to view the Fed’s announcement is to see it as a pre-emptive rescue. Is the Fed rescuing banks from their bond portfolios prior to the destruction of bond prices by inflation?
President Obama has presented the most irresponsible budget in U.S. history. His fiscal year 2010 budget projects federal spending of $3.5 trillion and a federal deficit of $1.75 trillion. In other words, 50 percent of the government’s budget consists of red ink.
The Bush-Obama bailout-stimulus plans are not going to work. Both are schemes hatched by a clique of financial insiders.
The Bush-Obama 21st century policy of guns and butter makes LBJ look like a piker. The 2009 and 2010, federal budget deficits will be monstrous even without guns. But Obama is exiting (apparently) the Iraq War in order to start two, possibly three, more wars.
Beginning and ending in recession, the Bush presidency added a net of 407,000 private sector jobs over eight years, less than 51,000 a year, the worst eight-year record since 1927-35, which includes the first six years of the Great Depression.
Congress is sending a message: The rebuilding of America is to be a project of, by and for Americans, not outsourced. Sen. McCain’s free-trade amendment, to strip all Buy American provisions from the bill, was routed 65 to 31. The reaction of Barack Obama, a NAFTA skeptic in 2008 with bumper stickers that read, “Buy American, Vote Obama,” was to genuflect to the gods of globalism and recant his economic patriotism.