Obama and the State of Democrats

The signature characteristics of all Marxist states, or Marxist wannabe states, are operational inefficiency and institutional corruption.  The Soviet Union died of Marxist inefficiency and Marxist corruption. Other Marxist states have fared poorly, including Social Democratic Old Europe, not to mention NorK, Cuba, and that wannabe Marxist in Venezuela that is destroying his country. 

Marx knew nothing about the real world, much less about economics, but he was a strong advocate of eliminating Western Judeo-Christian values.  So It is not surprising that Marx’s followers can’t make an economic system work and that they are dishonest and corrupt.  This is true whether they call themselves Marxists, communists, socilists, leftists, Liberals, Progressives, or free-thinkers. 

So we have now elected a Marxist president who has an overwhelming majority in both houses of congress, and he (and they) are so inefficient they can’t pass their most important programs.  And they are so corrupt and dishonest that they have driven a major segment of their voters away in just one year. 

Way to go, Marxists!

Posted by scorp on Feb 17, 2010 at 11:01 AM

The problem is not that Democrats no longer represent the working man

Posted by whattheheck on Feb 17, 2010 at 11:36 AM

whattheheck , I do agree with your analysis , but as far as Obama , one has to give this guy more time….

I have never seen in my 50 years on this here planet , so much anger and disrespect for the office of the president….Bush could have shown up drunk , and nobody would have said a thing , but now that Obama is in office , it’s like open season on the guy…

He gets it from both ends , radical leftist and neo-con rightwingers…People have forgetted about those 8 looooong years of Buckfush and his bumbleing band of incompetences…

Folks seem to think that Obama can fix all of this mess over night , and by the way , by himself….

Hey , I do not agree with every policy decision that the guy has made , but , he’s a damn sight better then that other guy….......

Posted by blackhorse on Feb 18, 2010 at 2:49 PM

Blackhorse,

It’s not a case of the other guy being worse

Posted by whattheheck on Feb 19, 2010 at 7:12 AM

Many shallow minds seem to think that Capitalism is a benign giant that produces a benign economic system. During slavery and colonialism capitalism had an openly brutal hand; and since then it has had a powerful hand (invisible to the shallow mind) that is still exploiting workers foreign and domestic. It must be checked.

Multinational corporations and banking interest are moving jobs offshore because foreign workers are easier to exploit.  They are less protected by a democratic government. As this piece points out American workers are also losing protection rapidly.

American wages are being pressed down so

Posted by George Davis on Feb 20, 2010 at 9:18 AM

George Davis,

Capitalism is not the problem

Posted by whattheheck on Feb 20, 2010 at 1:24 PM

Whattheheck, I agree

Both the Bush and Obama administrations have left the perpetrators unpunished and have actually rewarded them with taxpayer bailouts.

We are victims of the biggest pyramid scheme in world history and watching the takeover of the world by very well organized gang in 3-piece suits.

Does anyone dare punish them.  There is so much money involved and so much ruthlessness.

Question: Do you think it is too dangerous for any person to go after the perpetrators and the powerful interest behind them?

I am not pro-Capitalism or Anti-Capitalism. I am a novelist and so my job is to depict life as it is lived so that people can see it more clearly, especially the hidden aspects.  I am not inclined to reach into history to assign blame, but:

Question: Do you think capitalism could have been successful without slavery and colonialism.

In the present I think that strong unions are the best checks against the greed that capitalism seems to produce. I eventually want to do some blogging on the effects of Reaganomics

Posted by George Davis on Feb 20, 2010 at 3:10 PM

Scorp

Where in the world do you get the idea that our President is a Marxist? Read:
Spiritually Liberal, Socially Conservative
Jan 6, 2010. . . Both political liberals and political conservatives took Barack Obama to be a raging left-wing radical. Liberals now feel betrayed; but we have been betrayed by the stories that we tell ourselves about black people.
http://www.psychologytoday.com/blog/modern-melting-pot/201001/spiritually-liberal-socially-conservative

Posted by George Davis on Feb 20, 2010 at 3:17 PM

Davis -

Many shallow minds seem to think that Capitalism is a benign giant that produces a benign economic system. During slavery and colonialism capitalism had an openly brutal hand; and since then it has had a powerful hand (invisible to the shallow mind) that is still exploiting workers foreign and domestic. It must be checked.

Slavery was an economic and social system that was exploitive, was not very efficient, and did not last.  Colonialism was a different economic and social system, it was exploitive, was not very efficient, and did not last..  Marxism, in all its premutations and perversions, is universally corrupt, inefficent, exploitive, and frequently genocidal, and has lasted through repeated disasters and mass murder. 

Capitalism was much less exploitive, depending on volunteer labor as it does, even back in the times of slavery and colonialism, whatever muddled point you are trying to make here.  Capitalism is wonderfully efficient and creates more wealth than any other system known to man, and the beneficiaries are us; the benefits are our cars, our computers, our houses, our infrastructure, and our health and jobs. 

Ok , Deep Mind, answer a few questions. 

When a government takes the wealth produced by some of the citizens, whether they be laborers or tradesmen or professionals or capitalists, and gives it to other citizens who produce little or no wealth, is this thievery or Marxism, and is there any difference between thievery and Marxism in this instance?  Would it not be better to make the unproductive into productive citizens, rather than allow the state to engage in thievery?

LBJ’s War on Poverty took $6.6 trillion from workers, tradesmen, professionals, and capitalists and gave it to the poor for the stated purpose to eliminate poverty.  Poverty was not eliminated and was barely affected, but the War on Poverty became so wasteful, corrupt, and fraudulent that President Clinton, no stranger to corruption, found it politically necessary to eliminate the War on Poverty.

So, at the end of the $6.6 trillion War on Poverty, the total national debt stood at just $5.2 trillion, indicating that capitalism paid for all normal governmet operations, the Kennedy/Johnson Vietnam War, the Carter Catastrophe when unemployment, inflation, and interest rates all went to double-digit levels, and paid off a small part of the War on Poverty as well. So capitalism did quite well, even when faced with the waste, corruption, inefficiency , and foolishness of the Democrats, including their Marxist War on Poverty, don’t you agree?.

But that national debt has compounded rapidly.  The dot.com bubble popped almost exactly one year before Clinton left office, and the NASDAQ fell $2.5 trillion during Clinton’s last year.  As a result of the dot.com bubble implosion, markets, government revenues, and the Clinton surplus were falling like rocks by the time Clinton left office.

Fortunately, President Bush took the proper corrective actions, the economy stabilized, unemployment was held to a minimal 6.1%, and recovery was swift and sure.  Capitalism in action is awsome, right?

But then the Democrats unaffordable housing program struck and the housing market fell one trillion dollars.  Worse, because of the national debt primarily left over from the War on Poverty and the Bubba Bubble, coupled with the uncertain values locked in the Democrats’ securitized mortgages, a worldwide $50 trillion markets meltdown ensued.  Aren’t those Democrats stupid?

As this piece points out American workers are also losing protection rapidly.

Did it ever occur to you that wealth is protection, and the Democrats’ programs (War on Poverty, dot.com bubble, unaffordable housing) have massively destroyed our individual and community wealth, and that the poor, the supposed beneficiaries of the War on Poverty and the unaffordable housing program, were hurt worst of all?

About once in a generation, the Democrats install some incredibley stupid economic policies (LBJ, Carter, Clinton, Obama), the citizens wealth is destroyed, and the citizens react by installing a Republican who restores prosperity.  Do not worry, capitalism will save your ass again.

Posted by scorp on Feb 20, 2010 at 3:41 PM

George,

“Question: Do you think it is too dangerous for any person to go after the perpetrators and the powerful interest behind them?”

Not physically, but I am hoping it becomes increasingly dangerous politically NOT to go after them.  While the incumbents try to spin the Tea Parties as a conservative plot, I believe Massachusetts showed it is a genuine reaction of a growing number of independents who are dissatisfied with both major parties catering to big special interest blocs.

“Question: Do you think capitalism could have been successful without slavery and colonialism.”

Yes, I do.  I am an avid reader of history and within the last years read “1776” and books about John Adams, Andrew Jackson, “At Dawn We Slept,” (the attack on Pearl Harbor), plus several contemporaneous accounts from 1930s Readers Digest articles.  My most recent, “Founding Father, ” an account of George Washington’s personal, military and political views on a wide range of issues.

Washington had inherited slaves through his marriage. All were well treated, he refused to sell any (owners often split families) and were freed upon his death.  He favored negroes as being allowed to join the war effort if they so chose.

I think even without the Civil War slavery was doomed to replacement by machinery.  I think the same is true for the use of underpaid and ill treated “guest workers” today.  What was a specialized skill in the making of Tequila has been mechanized by cloning plants.  The exactness makes machine use possible.  Why not similar for lettuce or grapes?

The essence of capitalism is a willingness of someone to risk his “capital” to make a product and a profit.  What is going on in the bailouts is as anti-capitalist as can be.  With true capitalism the possibility of failure is inherent. No one should be considered “too big to fail.”

What we are seeing today is a rigged wheel with the biggest players given the numbers to play and the money to play with.  We ordinary people have no chance, zero, ZIP

Posted by whattheheck on Feb 21, 2010 at 10:06 AM

Hi, Scorp,

I am in agreement with much of your general commentary, but not this part:

“...the Democrats unaffordable housing program struck and the housing market fell one trillion dollars.

Posted by whattheheck on Feb 21, 2010 at 10:23 AM

Whattheheck

I flew combat missions n Vietnam.  I was in the Strategic Air Command, which for years was the primary deterrent to a possible Soviet air attack. I have been a business owner for many years, and I am more invested n the American economy than most people. I say this to slow down any attempts to say my views reflect a lack of high regard for America.

All the writing that I now do reflects my deep belief that America offers the world

Posted by George Davis on Feb 21, 2010 at 12:33 PM

WTH -

The Community Reinvestment Act (CRA) was passed by a Democratic congress in 1977 and signed by President Carter.  CRA required banks, under penalty of law, to provide qualified buyers with access to loans and, particularly, mortgages.  To no great effect, since banks had little problem loaning to qualified borrowers, meaning that the borrowers were in position to pay the money back. 

Beginning In 1993 during President Clinton’s term, Fan and Fred began issuing sub-prime and Alt-A mortgages as prime mortgages.  The rating agencies picked up these “prime” mortgages as highly-rated investments, and the banks then packaged and securitized those “prime” mortgages and sold them all over the world.  To terrible effect. 

At the same time, there was much agitation to expand mortgage lending, including invasions and demonstrations in banks and in the halls of congress.  There was a young community organizer in Chicago who was particularly effective in drawing attention to the “need” for lending to people who were less able to pay off a mortgage. 

In 1998, the Federal Reserve Bank of Boston issued a booklet called, “Closing the Gap: A Guide to Equal Opportunity Lending.”  This booklet gave detailed instructions on how to make an unqualified borrower appear to be qualified for the purpose of obtaining a mortgage.  This booklet and the policies contained therein were adopted as official government policy by the Clinton Administration.  Essentially, the policy of the Clinton Administration was that all mortgage borrowers are qualified regardless of their ability to repay the mortgage.  If the guidelines within “Closing the Gap” had not been official national policy, they would have constituted criminal fraud.  Which, as it turned out, they were frequently fraudulent and they were incredibly stupid economic policy.  To terrible effect. 

This is the way it works:

A home is sold with a mortgage.  The homeowner gets in trouble because he cannot repay the mortgage.  The value of the home falls and the owner owes more on the mortgage than the home is worth.  (The home is then said to be “under water”.)  The loan goes into default, there are legal costs.  So now someone is out the amount not paid on the mortgage (say, $5000), the legal costs ($3000), and the amount the home is under water ($30,000).  The ex-homeowner is liable for this total amount unless he declares bankruptcy.  Someone, somewhere gets stuck with the costs.  In the event, taxpayers mostly.  Add all the costs of millions of homes in this condition to get the $1 trillion cost of the Democrats’ mortgage stupidity.  The math is simple and direct (and enormous).. 

But you say the bankers are at fault..  Bankers were certainly not at fault when they followed Carter’s CRA law.  Bankers were not at fault for accepting Fan and Fred’s determination of the status of the mortgages F& F were issuing.  Bankers were not at fault for following national policy spelled out in “Closing the Gap.”

If bankers are at fault, the costs can be identified, as in the mortgage example above.  If bankers are at fault, they must also have violated some law or some regulation.  But you have made many unsupported charges that sound suspiciously like Democratic talking points rather than well-grounded facts.

So, give us some support for your contentions about the faults of the bankers.

Posted by scorp on Feb 21, 2010 at 6:25 PM

George,

“I take it that you believe that when you read a history book that you have read the

Posted by whattheheck on Feb 22, 2010 at 5:32 AM

George,

P.S.  Thanks for the book referral, I’ll check it out.

Posted by whattheheck on Feb 22, 2010 at 5:34 AM

Scorp,

I would say we are in agreement the mortgage situation evolved into a non-realistic situation and people were encouraged to buy beyond their ability to pay. 

There are many participants who made this stupid situation possible for a variety of motives.

IMO, the largest banks were primary participants who knew full well what they were doing and had historical reasons to expect they would be protected.  They have been bailed out multiple times. Remember when Citibank was up to their ears in Ceminex uncollectable loans. Citybank was bailed by the US gov. getting Mexico to devalue.

I see Goldman Sachs as the common thread in a long time, multi-administration program which consisted of systematically getting laws changed (Paulson lobbied for and got a huge increase in allowable margin dealing) , regulations removed (Rubin, as Sec. of Treasury allowed the removal of Glass-Steagall). Investment banks had massive conflicts of interest after such changes which Congression Oversight Committees simply “overlooked.”  Greenspan/Bernanke kept rates in the basement far too long),  all are Goldman alums.

GS was not lone, but has been the major guiding light for investment banks seeking unfair advantages.

Congress (Barney Frank, Chairman of the House Banking Committee, for one) cooperated in raising housing loan limits to $400,000 and paying Fannie and Freddie based on a percentage of dollars loaned out. (BTW Barney’s live-in boy friend was a Fannie exec.)

“If bankers are at fault, the costs can be identified, as in the mortgage example above.”

Just one example: Elizabeth Warren, Chair of the Committee to investigate the TARP program has been unable to identify where Paulson “mislaid” $85B

Posted by whattheheck on Feb 22, 2010 at 6:07 AM

whattheheck

Fair enough.  Looking in the past and singling out any particular atrocities is pointless except as a means of saving all peoples, all nations, all economic systems, and religions have been guilty of them. I think we are on the verge of getting entire peoples, nations, economic systems, religions out of the atrocities business. Muslims in Indonesia, for example, could not be persuaded to fly airplanes into buildings. Most Christians in America do not feel that God sent us to war against Iraq or Afghanistan.

In Afghanistan we are fighting to close down training areas for state-less forces inspired by narrow interpretations and adherence to a religion.

QUESTIONS:

1.  Do you think that an international banking concern, using a narrow, distorted interpretations of Capitalism (the distortion is that the bankers are not risking their money). . .would such bankers do all they can to push America into a foreign war to

Posted by George Davis on Feb 22, 2010 at 6:31 AM

Scorp,

An additional indication of the influence of bankers on government (both parties) in addition to the bailouts:

The Federal Accounting Standards Board (FASB) has allowed the toxic assets which caused the housing meltdown to be valued by

Posted by whattheheck on Feb 22, 2010 at 6:31 AM

Judging from the little flag it looks like I am in Germany.  However, at times I do find it hard to recognize things which used to be typically American.

Posted by whattheheck on Feb 22, 2010 at 8:44 AM

George,

“I think we are on the verge of getting entire peoples, nations, economic systems, religions out of the atrocities business.”

I wish I could believe this is so, but little has changed in human behavior in all recorded time.  There always seems to be a “new kid on the block” who just has to follow the pattern. 

Take religion as an example:
My background is Christian and about 30 years ago I had a lot of questions, so I signed on for a two year study, two year teaching of the Bible.  What I concluded was what is in the Bible is not necessarily true because it is in there, but much of what is in it is there because over time people have discovered it to be true.

The Old Testament stories (Judaism) which seemed to me to conflict with the New Testament (Christian) were similar to stories in even older writings of other religions.  IMO, as people gained more education and experience they changed their thoughts and behavior.

The present day Muslim suicide bombers are followers of a younger religion and largely following the same pattern as Judaism and examples in Christianity.  Some sects in both even today have the attitude if you don’t believe as I do

Posted by whattheheck on Feb 23, 2010 at 8:50 AM

WTH , my apologies for not getting back with you sooner…...The point I was trying to make is that Obama is in a different situation based on the race issue…Sense he has taken control of the presidency , threats on the presidency have gone up a whopping 400 percent , the man gets 30 threats a day , no other president has had to deal with that kind of situation….Understand these threats are not just on him but his family also…

Additionally , I think it is too soon to label the guy as a get along go along type , the presidency has always been beholden to the bankers and such , Obama is no different….Remember that , although he is a fast track politician , with all the baggage that comes with moving into power that quickly , the fact that Mr. Obama , made his play on the presidency is a move of brillance , because for all of the blame that will come his way , he also has the power to make changes that are substantial….Many of the problems he faces are not problems he was a part in developing , so yes , he lacks experience , but once all of the bodies are dugg up , you have a guy that can look at the situation from a ( HOPEFULLY ) fresh perspective…

Hey , you mentioned ol’ Harry Truman , and I would probably have to agree to a point , but what about his association with that Kansas City mob boss Pendergast ( I am not sure if that is the correct spelling ), and he did authorize the bombing of Japan ( when I was in grade school ,I wrote a paper agreeing that it vwas necessary to bomb Japan , these days I know better ),and of course Korea…...Remember , people thought ol’ Harry was a boob…...

Patience WTH , patience , that is what is in order right now…Look Blackhorse is sorry your retirement benefits are not what they should be , but Obama didn’t do that , that nonsense was the effect of 20 plus years of Reaganomics and the Buckfush generation…Not Obama….And as far as him promoting himself , that’s how the game is played,,,How else is some guy , from nowhere going to get known , again his brillance is the key , what he does with it , we can only what an see….

Posted by blackhorse on Feb 23, 2010 at 2:24 PM

WTH -

Ref your 1407 hours post.

You certainly have a hard on for the banks.  You don’t like the ones that were bailed out (Citibank) and you don’t like the ones that managed their affairs more prudently (did not require bail-out - GS). 

But you have not shown me where the banks have caused you or anyone any great loss.  The TARP $85 billion went to AIG and GS benefitted.  But AIG and GS were both relying on the securitized bond ratings, and the United States Government vouched for the ratings, both by endorsing the FRB Boston loan policies and by encouraging Fan and Fred to make foolish loans.  When the government requires banks to make loans and declares that these loans are good, what is a poor banker to do?

And the Democratic Party fraud was $1 trillion for the unaffordable housing fiasco and $6.6 trillion for the War on Poverty.  On the pretense of helping poor people, the Democrats have destroyed much wealth, and the poor have been hurt the worst, as always.

Posted by scorp on Feb 23, 2010 at 9:13 PM

Blackhorse,

While I can accept Obama as being “in a different situation based on the race issue”, I don’t see that as nearly as significant as I thought it might be.  I can honestly say that even among friends and acquaintances who are very unhappy with his presidency, none have referred to his race as an issue a reason for dissatisfaction.

Certainly the 1960s showed we are an equal opportunity target nation.

I still think his basic personality is similar to what I have come to believe was FDR’s

Posted by whattheheck on Feb 24, 2010 at 6:13 AM

(continuation)

My retirement savings have been directly affected by the policies of George W. Bush and the continued of same by Obama

Posted by whattheheck on Feb 24, 2010 at 6:13 AM

Scorp,

“...you have not shown me where the banks have caused you or anyone any great loss.”

Well, in the past year we have spent as much as in all US history.  We’re talking $TRILLIONS!  Bush allowed it and Obama has continued with a vengeance

Most of this has gone to “solve” the problems caused by the sale of toxic derivatives from which the big banks and their “brilliant employes” who have just received bonuses which reportedly are up 17% this year.

I would say allowing the banks to value the mortgages on their books at face amount has

Posted by whattheheck on Feb 24, 2010 at 6:41 AM

Scorp,

Losses due to the bankers which are yet to be felt…

Big increases in taxes at all levels to pay for the bailouts.  New creative taxes and de facto taxes.

Near impossible sale of our Treasuries

Posted by whattheheck on Feb 24, 2010 at 8:30 AM

WTH , as far as the race issue ; just ‘cause nothing is said out loud doesn’t mean it’s not a problem , race has always been the silent killer in Amerika…..

Now concerning the 60’s ; yes , the 60’s civil and human right campaigns were extremely important , but the reaction by the power elite is even more important , based on the fact that is when this industrial military complex really began to take shape….All those black folks marching around arm and arm with white folks ,” talkin ’ bout liberty ande justice for all ” ; scared the hell out of rank and file bigots and the power elite….So their reaction was predictable….

It is strange that folks expect Obama , to be fundementally different than any other president , based on the fact that the power structure has not change ; really what can the man do….Being the president has to be like being the commander of an aircraft carrier…Too turn things around , you have to take a extremely wide angle , this nation wouldn’t turn on a dime….

Now WTH , Blackhorse does agree that the country is run by; let us say ; an unseen hand…Sure ; makes sense to anyone who is paying attention….But how do the people regain control of the Fed , that is the 6 million dollar question ? ? ?

As far as Obamas future ? ? ? If you listen to ol’ Dick Cheney , ya sure he might be a one term president , but Cheney is not a fair judge of the situation…My gut feeling is that Obama will serve two terms….

And finally ol’ Harry ; look all you are saying is true ; to a point ....But there was another way to go about this situation…The alternative was to alloow the Japanese military and civilian leadership to witness a test bombing , see for themselves that this was no bluffing matter….Nobody at that time in history really knew what the A bombs could do , threating the Japanese with the bomb , but not showing them the true destructive nature of the device ; was simple a racist rush to judgement…If the situation was that bad , Hitler should have been nuked also…Just the same as FDR , interning Japanese Amerikan citizens , but not pulling the same trick on German Amerikan citizens…

....German prisoners of war got better treatment here in the States , than Black Amerikan troops….

WTH , in this humble ‘horse opinion ; Harry came into office needing a hell of a lot more ON THE JOB TRAINING , than Obama ; but you seem to sympathize with the situation of history , more than you are willing to understand the circumstances now….But , that is indeed your choice and or right….

Anyway , good talking to you again , and have a good day sir…........

Posted by blackhorse on Feb 24, 2010 at 2:41 PM

Blackhorse,

I never meant to infer that there is no race issue today, just that the criticisms I am hearing are based on policy and lack of, not on racial considerations.  People are disappointed in his performance.

My first and most shocking racial awakening came when my army reserve unit was in Alabama in 1963.  My black (colored in those days) classmates in JR and SR high school were no problem that I ever saw (doesn’t mean they saw it that way), but we had a black college kid from Chicago assigned with us and a bunch of us went to town in the weekend to a movie.

The lady in the ticket booth said, “He ain’t goin’ in with you,” and pointed to the Colored Only entrance.  My smart aleck remark, “It’s OK, he can sit in the middle and we’ll act as insulation.”  WRONG THING!  She nearly exploded, “You damn Yankees come down here

Posted by whattheheck on Feb 25, 2010 at 6:50 AM

(continuation)

“It is strange that folks expect Obama , to be fundementally different than any other president…”  This is exactly why he was elected

Posted by whattheheck on Feb 25, 2010 at 6:51 AM

(Correction)
He and his buddies from the New York Fed, Bernanke and Geithner, worked out the TARP deal.

Posted by whattheheck on Feb 25, 2010 at 6:56 AM

WTH

.......Being black doesn’t make him either better or worse….....

If only everybody thought that way , but the fact is that a lot of the criticism coming his way has a tinge of bigotry in the mix…..I am not referring to you , but that is the way I see a lot of what I hear….

I was under no delusions that Obama would do anything drastically different than any other president , many black politicians have fallin’ short of their stated glory….

If in four years he has not accomplished anything , then sure , vote the guy out , but until then ,Blackhorse will continue to watch and wait….The opportunities I am looking for will be produced by myself , not some guy downtown on Penn Ave….......

This is my basic attitude…

Thanks for your response , and have a good day sir…..

Posted by blackhorse on Feb 25, 2010 at 1:54 PM

Blackhorse,

Thanks, I enjoyed exchanging views with you.  If, in fact, he does a better job than I remember from the Illinois Senate I will be pleasantly surprised and my mind will be changed.

Posted by whattheheck on Feb 25, 2010 at 3:04 PM

Blackhorse,

Just one additional comment about capitalism.

You mentioned the military industrial complex.  The capitalistic factory jobs which were added during the all-out manufacturing push during WW2 opened up thousands of good jobs and drew many black people from sharecropper jobs in the south to cities like Detroit and also around Chicago and other major cities.

These jobs were a key factor in bringing people of all races into the middle class and maintaining a far better life style until… globalization, NAFTA, downsizing, etc. allowed CEOs (with the aid of Congress) to export those jobs to Mexico, Asia, or wherever the labor was cheapest.

Our city of 150,000 has lost over 10,000 of these jobs since NAFTA began to be pushed by both parties in 1991. People here are now scrambling for telemarketing jobs with few or no benefits at far less than half of what they used to earn.

It was not capitalism

Posted by whattheheck on Feb 26, 2010 at 7:19 AM

True , true , so true , but WTH , you have to understand that the industial military works programs that you speak of was most probably funded by tax payers dollars…

To be truthfully a CAPITALISTIC endeavor , the manufacturers would have to fund said projects on their own , but I seriously doubt if that was the case…...

Isn,t that a big part of the scuttle-butt behind the funding for the so-called health care bill , many congresspersons keep calling the Obama plan socialist , because Obama wants to fund the project with tax payer dollars…..

Big time capitalist rarely have a problem with so-called socialistic financial programs as long as the money goes to them instead of you and me…...

Socialism for the rich , capitalism for the poor…..

Greed , ya greed as always been a factor in Amerikas economic history…It was greed that drove slave owners to single out the afrikan worker in juxtaposition to the white worker….

Both found working condition unacceptable , both decided to run for the hills as it were….But when captured the white worker was sent back to the plantation for the remainder of his indentured contract , in converse to how the white laborer was dealt with , the black labor was sent back to the plantation for a life sentence of hard labor….

Now this was done purely for economic , capitalist reasons….There were many poor white labors during the good ol’ slave days , many couldn’t find decent work because of slavery , their labor value was undercut by the forced so-called ” free ” labor of the blacks….

Many other indentured white laborers were shackled next to black laborers , and as mentioned above ran off together with the black laborer….But the separation or ” segregation ” came about when the slave owner and his posse’ , went looking for his so-called property….

In the sea of poor white humanity at that time a slave owner was hard pressed to find HIS white indentured servant , but the blackman , because of his hue , his phenotype if you will , was a clear target , that skin tone difference that had always been an advantage and surely never a drawback , suddenly ; overnight , became a marker…

It became increasingly clear to the slave owner that for HIS economic survival , that the Afrikan worker MUST become the so-called ” beast of burden…So began the denegration campaighn against afrikan people….

In order to successfully get the colonial society at the time to believe this was just , all kinds of lies and misrepresentations were promoted…

This was also the beginning of what is called ” white skin privlege “.....Now those days are gone ; but the concept lives on till this day…...etc.,etc.,etc…....

Good day WTH , have a good weekend , and hopefully we will talk next week…..............

Posted by blackhorse on Feb 26, 2010 at 2:32 PM

Blackhorse,

You are right about tax dollars funding the WW2 manufacturing.  The jobs created out of necessity for defense bailed the country out of the Great Depression.  My dad had gone from office manager at a brick plant to night watchman and coal shoveling after 19 years with the company

Posted by whattheheck on Feb 27, 2010 at 9:18 AM

i like barack obama’s policies and i wanna to meet him but it is not possible because i have no any identification to meet him

‘Celebrity Teeth Whitening

Posted by jackleth on Mar 2, 2010 at 10:54 PM

jackleth,

All you need is to represent a union or a special interest of significant size. In lieu of that a large sum of money to donate to his campaign.

If you can identify with either of the above you are in the door

Posted by whattheheck on Mar 3, 2010 at 6:15 AM

Scorp,

I remember you from long ago. I don’t know whether you are serious or just trying to provoke us on the left. Your ranting about “Marxism” and defunct Marxist regimes is totally irrelevant, especially in a discussion about our very centrist Democratic Party. You certainly don’t understand the problems facing America today. We are in a tremendous crisis and you seem to have no answers.

Posted by cabdriverinchicago on Mar 9, 2010 at 3:52 PM

CDC-

Oh, I remember you, too.  As i recall, you had an advanced degree in Marxist Indoctrination, and could not understand why there were no job openings for you except in your present occupation. 

“Marxist” is the proper term for lineal descendentsof Marx, whether they call themselves communists, socialists, leftists, liberals, progressives, or free thinkers.  They all share a common world view, summarized by Candidate Obama as a “share the wealth” philosophy.  Obama went on to say that the Constitution needed to be changed to reflect his Marxist views.  The reason Marxists quit referring to themselves as Marxists, socialists, and communists was because the American voters rejected them every time they tried to run under their own belief system labels.  So they stole the liberal and progressive labels to conceal their core beliefs. 

For example, Henry Wallace was FDR’s third-term VP and was booted for his open flirtation with Stalin and communism.  Wallace ran for president in 1948 on the Progressive Party ticket (Theodore Roosevelt was a leading progressive, for God’s sake!) and lost badly.  So then you Marxists hi-jacked the liberal label (the Bill of Rights and the Second Amendment are liberal, for God’s sake!).  Subsequent to his loss in 1948, Wallace was shocked - shocked! - that the fraternal peace-loving North Koreans invaded South Korea. 

So here we have the world’s most socially and economically advanced nation in history, and you Marxists want to change it to a philosophically decrepit and bankrupt system that has failed every time in a variety of attempts: Soviet Union, Communist China, NorK, Cambodia, Cuba, Social Democrat Old Europe, and now Venezuela.

We are in a tremendous crisis ...

Ummm, we are in a tremendous financial crisis.  At the root of this problem is the national debt.  The beginnimg of this modern debt problem was LBJ’s Marxist share the wealth War on Poverty.  WoP wasted $6.6 trillion in fraud and corruption over a thirty year period.  In 1995, WoP ended and the national debt stood at just $5.2 trillion, meaning that capitalism was working well despite the Marxist fraud and corruption. 

Then the Bubba Bubble became the Bubba Recession; the NASDAQ fell $2.5 trillion BEFORE Clinton left office, and the recovery was masterfully engineered by President George Bush with minimal damage but not without costs: job training, unemployment comp, lost tax revenues, a couple of trillion more added to the national debt. 

Followed quickly by the Democrats’ Unaffordable Housing Policy, which surprisingly cost only about $1 trillion.  But added onto all the debts that the Marxists had already piled up, it proved a shocking blow to the world, compounded by Social Democrat Old Europe’s shaky Marxist structure. 

... and you seem to have no answers.

No answers?  In many ways the Carter Catastrophe was worse than the present crisis, but President Reagan found answers by returning to low taxes, free markets, and market and regulatory reform, i.e., capitalism.  This solution lasted perfectly for almost twenty years until the Bubba Bubble destroyed it.  Similarly, after President Bush paid for the Bubba Recession we had four years of growth,employment, and falling deficits before the Democrats’ Unaffordable Housing Policy again destroyed progress. 

So, Obama has a crisis made by Democrats and he wants to do just the opposite of what worked so well for Presidents Kennedy, Reagan, and GBush?

Every time Democrats screw everything up, they say the country is ungovernable.  Every time Democrats try to help the poor, they make everyone else worse off and the poor much worse off. 

Oh, there are answers, but you have to take off your blinders and look around to find those answers.

Posted by scorp on Mar 9, 2010 at 9:24 PM

Scorp,

“Henry Wallace was FDR

Posted by whattheheck on Mar 10, 2010 at 12:07 PM

I’ve never seen so much nonsense in my entire life. In the first place, Reagan didn’t revive the US economy to the extent that he is credited for having done. If one looks at the entire course of the business cycle covering the full extent of his two terms (the cycle which ran peak to peak from 1980 to 1990) instead of merely “the seven fat years” from 1983 to 1990, we have an annual average rate of GDP growth of about 3.1%, lower than that of the Carter years of the late 1970s when there was both high unemployment and inflation.

Futhermore, Reagan eviscerated the US middle class with high interest rates and a strong dollar at the start of his first term of office. Millions of high paying jobs went overseas and over a quarter million family farms went bankrupt due to the loss of export markets due to the strong dollar. Wage and income growth slowed but corporate profits grew as did the financial economy. The growth of the stock market, where more savings from tax cuts were invested than in fixed capital investment, probably accounted for more GDP growth during Reagan’s presidency than did job and income growth. 

People certainly do have a right to healthcare and a living wage. The vast majority of the growth in the last three decades have gone to the upper 20% with much of that going to the top 1% which now earns a quarter of the nation’s income and holds more than a third of the wealth. Between 2001 and 2007, about two-thirds of the GDP growth went to the top 1% of income earners. At the same time, private health insurance rates are increasing from between 18% to over 50% in some cases while insurance company stock has doubled in value over the last fiscal year and their declared profits for 2009 have increased by more than half. All this is occuring while more and more people are losing their employer based and private individual health insurance coverage and average real wages and salaries remain flat. This is highly unfair and people have the right to demand change.

It is the government’s responsibility to fix these problems. There is no market solution.

Posted by cabdriverinchicago on Mar 10, 2010 at 12:48 PM

Cabdriver,

“People certainly do have a right to healthcare and a living wage. “

They have the right to life, liberty and the pursuit of happiness.  In the pursuit of that happiness they may demand fair treatment and work to obtain such.  They may organize to gain better wages and therefor e be able to pay for health care.

People appreciate what costs them something.

Perhaps one of the best examples is education as a “right.”  In my father’s era education was something he valued, but when his father could no longer work in the mines due to a stroke, Dad had to quit school to support his mother,  younger brother and the three remaining girls still unmarried. He made sure I stayed in school and got all I could from it.

Today we have police in the halls, gangs and drugs, but it is nearly impossible to expel a troublesome kid.

The outrageous pay of CEOs should not be tolerated, but redistribution by government interference is an unacceptable remedy.  We are now suffering due to a bipartisan long-term partnership between legislators and big business.

I lost my business of over 40 years largely because of the sale of manufacturing jobs to the lowest international bidder and the legislation favoring it.

The government is not to be trusted to “fix” anything.  There has never been any government program in my 70 plus years worth anywhere close to what it cost us.  It is up to us to force change for the better.  Social Security, Medicare, Aid to Dependent Children, Student Loans, The War on Poverty and now the mortgage without down payment — all are disastrous.

Individuals need to take responsibility for their own lives and well being.  Charity from caring individuals beats impersonal government aid any day.

Posted by whattheheck on Mar 10, 2010 at 5:48 PM

Scorp,

“You certainly have a hard on for the banks.  You don’t like the ones that were bailed out (Citibank) and you don’t like the ones that managed their affairs more prudently (did not require bail-out - GS). ”

Here is a very clear explanation of derivatives and why I blame Goldman Sachs.  This young lady speaks about what took me several years to piece together from many sources.  She has the advantage of knowing many of these guys and having worked in the highest financial circles.

In total it is about an hour long, but even the first 15 minutes covers the basic issues pretty well.  Goldman’s fingerprints are all over this fraud.

(She also has interesting personal comments about life in Iran before, during and after the Shah.)

http://tiny.cc/0xuWv 

Posted by whattheheck on Mar 10, 2010 at 6:03 PM

Scorp…In one of your posts it seems that you mistakenly separate slavery from capitalism….Fact ; without slavery , whether in Europe , Asia or Afrika , capitalism would have never gotten off the ground….

Read , Capitalism and Slavery , by Prof. Emeritas at Howard Univ. and former Prime Minister of Trinidad and Tobago Dr. Eric Williams….

Dr.Williams gives a complete economic breakdown as to how the transatlantic slavery trade was the birth place of the contemporary capitalist state gov’t…...

Posted by blackhorse on Mar 11, 2010 at 1:54 PM

WTH,

I can’t agree with anything you posted. In the first place, many government programs have helped keep people healthy, educated, employed and out of poverty. Social Security, an example of one of the most successful and solvent programs, is still in the black. In fact, there is currently a couple hundred billion dollars surplus in the SS Trust Fund. The Fund earns interest, which critics often fail to count as available funds, plus the Fund owns over $2.5 trillion in US Treasury Bonds which it can sell to meet benefit obligations. Raising the cap on the FICA tax could easily fix any cash flow problem as the baby boomers begin to retire. The program is necessary and more than half of retirees rely on SS for more than half their income.

The same goes for Medicare and Medicaid. If those programs were eliminated close to 90 million people would cease to have medical benefits. As it stands now, about 60% of every health care dollar spent in the US is covered by tax payer funded programs at some level of government.  It looks like “socialized” medicine creeped in of necessity due to an utter lack of a viable market solution to the problem of health care for most people in this country.

Currently, one in six people are on food stamps, many of them children. This program can only be helpful not only because it feeds people but because it sustains a market for our surplus food production thus helping family farms.

The government may not be perfect but the capitalist system is highly unstable, unresponsive and inequitable in many instances. A large public sector will always be needed. Obama’s stimulus bill saved nearly 2 million jobs and brought the average monthly rate of job loss down from over 700,000 at the peak of the current crisis to 27,000 over the last four months. Despite this fact, the rate of long term unemployment (people unemployed for more than six months) has never been higher in our history; it is currently 41% of all those now unemployed. Government job creation could help solve this problem. Business investment won’t occur otherwise due to an effective demand constraint on output.  Capitalism, without public stimulus, tends toward chronic stagnation.

Housing foreclosure rates on a national level rose 6% this quarter over a year ago at this time but it is the slowest rate of increase in four years. According to the FHA, hundreds of thousands of first time homeowners would be shut out of the housing market without subsidized interest rates, low down payment requirements and easy terms. From late 2008 through 2009, government entities purchased about 95% of all the mortgages that were sold as Mortgage Backed Securities thus recapitalizing the banks. Without this, and FDIC guarantees, credit would have frozen even worse than it did and the entire housing market, and along with it the US economy, would have collapsed.

Our economy has never been in worse shape.  This last crisis came after thirty years of consistant tax cuts, deregulation and supply side, free market policies. The problem isn’t government but capitalism. It is a highly unstable system. The last thirty years of free market policies and their impact on the US middle class is clear evidence of that.

Posted by cabdriverinchicago on Mar 11, 2010 at 2:13 PM

Cabdriver,

” I can’t agree with anything you posted. In the first place, many government programs have helped keep people healthy, educated, employed and out of poverty. Social Security, an example of one of the most successful and solvent programs, is still in the black.”

“The same goes for Medicare and Medicaid. “

I can see we have no basis to continue this discussion if you believe the above.

Each of the programs you’ve listed are in dire straights and NOT funded — they constitute what is called the National Debt.

Social Security bonds are not the same as Treasury Bonds, but it makes little difference since no one in his right mind will continue to buy our Treasuries. China and Japan are the largest holders and are trading them big time right now for real assets like shares of stock (and whole companies), commodities — anything to unload them as the dollar diminishes in value (down 50% since 2000).

I hardly know where to go from here in trying to explain the situation both parties have forced us into.  The problem is not capitalism it is simply plain old greed and fraud.  The Soviet Union had the same problems under their system too.

Posted by whattheheck on Mar 11, 2010 at 5:14 PM

Much of the projected shortfall in the SS Trust Fund doesn’t count on future economic growth and the resulting growth in tax revenues. Furthermore, the fund has been earning in the hundreds of billions in interest annually. According to the SSA, annual benefit payments come to less than 5% of the GDP. It is not the kind of a strain on the economy that military and war spending is. The SS Fund is not that broke. This is a conservative myth propagated by those who want to privatize SS.  Those who think this is fiscally sound forget that doing so will leave more than one third of Americans with no pension at all at retirement.  Social Security is one issue for which there is no satisfactory market solution for the vast majority of the country.

Posted by cabdriverinchicago on Mar 11, 2010 at 5:58 PM

Black Horse -

We need a common language with common definitions in order to communicate.  Piaget said that small children have an egocentric understanding and definition for terms, and consequently talk past each other, and past adults, because each small child has his own understanding of what he is saying.

Marx defined capitalism as an industrial system that followed medieval serfdom; serfdom, indentured servitude, and slavery were of a type, and preceded Marxist capitalism.  Interestingly, Lenin justified the Soviet jump from serfdom to socialism, the post-capitalist era in classical Marxist theory, by declaring that a couple of centuries of capitalist development in the West occurred in Russia in an eighteen-month period between the October Revolution and the establishment of the Soviet state. Decades of social development were compressed into a year-and-a-half in Russia to meet Marxist ideological imperatives.  Russia went form serfdom to socialism in eighteen months, whereas it took a couple of centuries elsewhere.  This makes no sense, but neither does your good Dr. Williams. 

Marxists strive to define terms that assure their own advancement, to the detriment of the rest of us.  This distinction is worth fighting for by such as myself and probably by you.  Let’s get the good shit on.  You will lose.

Posted by scorp on Mar 11, 2010 at 8:25 PM

WTH -

You have a personal narrative that conflates evil bankers and terrible free trade with industrial collapse in your area of the country (Ohio?) and your personal losses.

So, how do you account for the fact that industrial production is at record levels in the USA, some (low tax, low regulation) states are doing quite well considering the downturn, and all USA auto manufacturers except Government Motors are surviving nicely during the current problems?

You think the bankers are greedy and are the cause of your problems, but the bankers were required by law to make mortgage loan to unqualified borrowers.  This is the cause of the latest downturn, not derivatives or regulations.  You constantly assert that derivatives and deregulation are at fault in your problems, with no facts or understanding of the situation.

LBJ’s War on Poverty cost $6.6 trillion, did nothing to alleviate poverty, and collapsed in corruption, fraud, and public anger.  There is your greed and thievery.  Same with the Democrats Unaffordable Housing Project, cost $1 trillion and triggered the worldwide finanacial meltdown.

You can blame anyone you wish, but the leftist (Marxist) Democrats have been behind every financial crisis since WWII.  And that is a fact.

Posted by scorp on Mar 11, 2010 at 9:13 PM

Scrop,

Obviously we are seeing an entirely different picture of the US economy (not just here in Illinois).

“So, how do you account for the fact that industrial production is at record levels in the USA, some (low tax, low regulation) states are doing quite well considering the downturn, and all USA auto manufacturers except Government Motors are surviving nicely during the current problems?”

Sounds like what Mayor Daley once said about crime. “Violent crime is down in the city

Posted by whattheheck on Mar 12, 2010 at 9:38 AM

Cabdriver

Where are you getting these fairy tale numbers?  “5% of the GDP” ???

Social Security has NEVER been funded, EVER.  The Soc. Sec.bonds you referred to previously are non-negotiable and pay no interest.  They are only another name for an I.O.U.  The payments we have made all went into the General Fund and have been spent.  Much of it went for those other programs which you see as so great.  Medicare is in even worse shape.

Each year the tax exempt amount of Social Security is less and Medicare deductible goes up.  I handled my dad’s for him in the 1980s and can assure you what I get is far less.  My kids will not be eligible until age 70 — another way the cost is going up — work longer before collecting.

What we have nationally is similar to an individual who charges everything on a VISA card.  He then pays only on the interest, nothing on the principal.  This means he not only doesn’t pay off his debt, but is adding to it each month with new purchases (new retirees).

With the falling value of the US dollar (down 95% since 1913 and 50% between 2000 and today) the only way to get more credit (by selling T-bonds) is to pay higher interest to the borrowers. Some credit cards are now charging 28% — we don’t know how much we will eventually need to pay, but China, one of our biggest debt holders has been buying less the last several years.  Most Treasury Bonds are now being “bought” by the Fed which only serves to lower the value of the dollar even faster.

Posted by whattheheck on Mar 12, 2010 at 9:54 AM

Scorp,

For some reason you seem to think this is about Republican vs Democrat or capitalism vs Marxism…

I see it as the professional politicians and some of the biggest in business and unions against We the People.

Neither economic theory nor political party represents “the good guys”.  Some individuals try their best, but the deeply entrenched in congress favor whoever can deliver cash and votes.

Their sole goal in life is to maintain their elite lifestyle. If they had to have the new health plan we would see some genuine cost saving proposals. They have it knocked, intend to keep what they have and to hell with us peons.

Posted by whattheheck on Mar 12, 2010 at 12:34 PM

WTH,

I get my information from the SSA and the Congressional Budget Office, both poitically non-partisan government sources. The CBO analyzes the economy and makes projections. The SSA, as I noted above, has stated that total annual SS benefit payments have been less than 5%  of the GDP on average prior to this year and may go as high as a bit over 6% in the next year before declining again. For fiscal 2009, total SS expenditures were about $670 billion which is close to 5% of the GDP. The CBO expects expenditures to nearly double in just over ten years but hopefully the economy will grow by that rate as well. The danger that the growth rate of SS obligations will outpace GDP growth is a real concern.  Much depends on fiscal stimulus efforts.

According to the SSA, the combined Old Age, Survivors and Disability Insurance Trust Funds had a combined surplus of $137 billion for fiscal 2009. The CBO projects surpluses well into the future, certainly at least until 2024, averaging between $100 billion and $138 billion.  Much of this is based on the income from interest earned on US Treasury Bonds.  For nearly two and a half decades, SS has run a surplus above what it pays in benefits and administrative costs. They have used the surpluses to purchase US Treasury Bonds which have paid an annual average interest rate of 4.7% with the total value of the Bonds currently at $2.5 trillion. According to CBO baseline projections, interest payments earned by the Trust Fund will pay about 15% of average annual future expenditures over the next ten years as they did in 2009. The CBO has also projected that the SS Trust Fund is expected to run a $120 billion surplus by the end of 2010.

The idea that “all” the SS funds have been taken by the general fund is false. Yes, there is a problem with keeping the two funds separate but the idea that SS have been totally cleaned out is a conservative myth. 

I agree that the fund is in potential trouble but scrapping it altogether is no solution. It would be simple to fix just by raising the cap on taxable income for SS (which would affect less than 6% of US income earners) and allow the Bush tax cuts for the rich to expire. If the economy recovers so will revenues and SS benefits should never have to be cut.  According to the recent CBO report (January 2010) the fund will be able to pay full benefits at the current rate until 2037 without any further borrowing. This should not be necessary with sufficient GDP growth and tax revenues. The fund is actually quite solvent.

Posted by cabdriverinchicago on Mar 12, 2010 at 3:59 PM

Cabdriver,

“I get my information from the SSA and the Congressional Budget Office, both poitically non-partisan government sources.”

Well, that explains a lot.

“Non-partisan” bureaucrats?  Both parties are their bosses as administrations shuffle the deck.

Are you at all aware that government numbers are a shell game of mouse clicks?  Have you ever heard of hedonic adjustments, the Birth/Death index, do you know how the CPI is calculated using “owner quivelent rent” to compute housing data (the largest CPI category)?

The CBO works out their estimates and projections beginning with data which are pre-juggled to assure a better looking picture.  Same for the SSA and all other government agencies.  National unemployment data are revised to extremes due in part to a deadline for reporting before real numbers can be gathered. If you were ever in the military you know how “the right answer” (what the boss wants) trumps the real answer al up and down up the chain of command.

My son has a degree in statistics and if he used contaminated data like the government, business customers would never know how to plan for the real world.

“The idea that

Posted by whattheheck on Mar 13, 2010 at 7:02 AM

First of all, your post is completely wrong.  Government agencies such as the CBO and the SSA don’t lie about the fact that the SS trust fund actually earns interest on its US Treasury bonds or other statistical information. In the second place, all that BS about statistics being conflated and the major political parties controlling various government bureaucray is bunk. Those who claim this know nothing of how the US government actually works.

Right wingers have been complaining about SS since its inception. The truth of the matter is that real median incomes in the US have been flat for about three decades and real incomes for most workers below the median have decreased. The only reason the median has increased at all is that people have added hours, work two jobs and have a two income household which adds to household income in the census figures. Your absurd stock phrase that “people need to learn to take care of themselves…” is irrelevant regarding the vast majority of hard working people in the US who have worked harder, been more productive and who have seen their real income buy less over the years.  Real incomes have not kept pace with productivity increases. Most working people don’t currently have the ability to save enough in the private capital markets and receive the same rate of return as they would with SS.

Fewer than half of all income earners in the US can actually do better in private financial markets to save for retirement than they can do with SS. If SS were privatized today, more than a third of the working population would have no income at retirement at all. Wall Street wants to get its hands on all the money currently being paid into the SS Fund. They don’t care about most people’s pensions. Look what’s happened to 401ks. Had all the money now in SS been invested in the stock market, as would have occured if the program were privatized, the fund would have been wiped out with the recent stock market decline whereby over $8 trillion in stock value was lost due to the financial crisis. It takes more savings than most people have to adequately save for retirement. Private funds require large amounts of savings and big up front investments to get any reasonable rate of return. Remember, they are in this for profit not to help average working people. Privatization of SS would leave most people out in the cold just as private health insurance has obviously done.

As far as Japan is concerned their problem is not with social insurance but with a long 20 year deflation and deep recession brought on by the collapse of the real estate market bubble in 1990 all of which was a result of financial deregulation. It is not relevant to SS.

Posted by cabdriverinchicago on Mar 14, 2010 at 1:32 PM

I agree with your assessment of the flat incomes, the multiple family members working, etc.

See: Changes in Median Household Income 1969 to 1996
http://www.census.gov/prod/3/98pubs/p23-196.pdf

As far as people taking care of themselves — that is what the people did who made this country great.  They rebelled against a government which was in their face.  They packed up and headed into the unknown with no government protection.  Many started businesses risking all they owned.  I did just that at beginning at age 19 (except for three years in my 20s working at corporation and my time in the army) and have no regrets.

My dad quit school and supported two sisters, a younger brother, his mother and his coal miner father who had a stroke.  There was no union, no pension and go government aid.

My father-in-law came here at age 19 from Sweden and spoke no English, but learned the language and worked his way of from cleaning muck out of Lake Michigan ore boats to a job as a machinist.

Now it is time to take back control from these arrogant bastards in Washington and Wall St. and vote out those in Congress who cater to them.

Until they began eliminating regulations, ignoring laws, falsifying bond ratings and lifting FASB accounting rules for the crooked bankers, I averaged over 10% per year on my retirement account between 1983 (when I was first allowed to manage it) until 2006.  It takes time and it takes work. I don’t have a college degree and I never had any economics classes, but nobody cares about your money like you do and we need to take responsibility for our own old age.

As for government data:
The CPI is a good place to start — the owner equivalent rent portion kept housing prices from showing true inflation increases, since rents rise far slower than sale prices. The same measure is now holding back the numbers as home prices deflate big time.

As for Japan — deflation and deep recession don’t simply appear like a tornado or the flu — they are caused by bad economic practices like keeping people on the payroll past productive age and expecting a shrinking pool of young workers to carry the load.  Japan has done this for decades and is paying dearly.  We are doing the exact same thing.  It will cost $trillions and keep us from competing internationally.

Posted by whattheheck on Mar 14, 2010 at 3:39 PM

Let me start with your last point regarding Japan. In the first place, neither Japan nor the US are “keeping people on the payroll past productive age.” Both countries have high productivity rates. The US has the highest of all. In the US, no one unproductive is kept on a payroll; 8.4 million lost jobs in the past two and a half years is evidence of that. Japan’s problems started with financial deregulation not government spending. Financial deregulation in the late 1980s resulted in an explosion of the corporate bond market. Large Japanese firms began to raise revenues in private capital markets rather than borrow from commercial banks which were once the mainstay of Japanese finance. Faced with declining loan revenue the banks turned to real estate lending at low interest rates causing a bubble on the Tokyo real estate market. When the bubble burst, trillions of Yen were lost and the Japanese economy has never fully recovered. The US can learn quite a lesson from the Japanese experience with financial deregulation.

It is of course true that many people made it on their own in the early days of America’s history. But America was a different place back then. As of the 1980s,  many changes have taken place in this country. The middle class is quickly shrinking, opportunities are disappearing, income and wealth are concentrating and high paying jobs are disappearing as the average annual rate of economic growth has been slowing compared to the first three decades of the immediate post-WWII era.  Education and health care is increasingly out of reach for the average person. America has become a place where only the rich enjoy its benefits. 

I too believe that a good work ethic is important. Without it we get nowhere. But a strong work ethic has never been a problem in America. People work more hours and are more productive here than anywhere else in the industrialized western world. Yet America’s workers enjoy less of the fruits of their labors despite having the lowest tax rates anywhere. The problem is shrinking real wages and the skyrocketing price of basic human needs like health care, education, housing, food and energy. Most of the profits and income growth has accrued to the very few. There is rampant inequality which has worsened over time.

There are things which are best left to markets but health care and retirement pensions are definately two that are not in that category. Most people, especially under current circumstances, require government intervention. Without it, they are left with nothing. Government help isn’t shirking individual responsibility; it’s taking responsibility to care for those hard working people who, in your own words, “have made this country great.”

Posted by cabdriverinchicago on Mar 15, 2010 at 7:29 AM

Cabdriver,

“People work more hours and are more productive here than anywhere else in the industrialized western world and yet America’s workers enjoy less of the fruits of their labors despite having the lowest tax rates anywhere.”

This is largely responsible for the increased productivity data.  As people have been laid off, those remaining are picking up the slack, often doing what two or more people did in the past.  An additional boost to US productivity numbers comes from sub-assemblies made in US corporations’ foreign operations and assembled back here.

I saw this in local companies whose annual reports I worked on over the course of three decades.  Operations increasingly went to Mexico, Asia and South Africa causing a loss of more than 10,000 manufacturing jobs in our city of 150,000 between the mid 1980s and 2003.  At the same time management got bonuses and big stock gains, especially through stock options.  The bottom line jumps immediately when jobs are cut here and low paid foreign labor takes over.

Defined benefit pensions began to disappear in the private sector in the early 1980s when the 401(k) was firrst instituted.  However, union pensions and public pensions such as municipal, state and federal (including legislators) have continued to allow early retirement at very high levels of pay during productive years.  They are a major drag at this point and must be changed — we simply cannot afford to keep paying on these at these levels with so many out of work.

Free stuff is nice, but is a fairy tale.  I would point to the grand socialist experiments which have eventually failed — Sweden, where the elderly are not even considered for certain medical procedures. ( My wife’s cousin is a nurse there.)  Britain where a good friend had to get on a list — to apply for a waiting list — to get her knee x-rayed.  The 7-years of the Soviet Union fiasco.  Our own War of Poverty.

I can see we are never going to connect on these issues, but time will tell no matter what you and I believe.

Thanks for the chat.

Posted by whattheheck on Mar 15, 2010 at 7:52 AM

I generally agree with the first half of your post. The second half is dubious. Union pensions are increasingly a smaller share of total corporate expenses as there are fewer and fewer union jobs. The few such pensions that remain can hardly be said to be a drag on the US economy. This gets into the argument heard during the GM bailout debate about what exactly caused the industry’s financial problems. The issue most stressed in the media, and in corporate testimony to Congress, was the high “legacy costs” of union negotiated defined pension benefits. This was misleading and greatly inflated the real average labor costs of GM given the rising real costs of automobiles and declining real and absolute wage levels of new lower wage employees who replaced the old ones. This was enabled by two-tier bargaining and other union concessions to the company. The media also failed to mention that about 60% of all auto workers were employed in the parts division where wages were lower and no such legacy pension costs existed. The problems experienced by the US auto industry was based on declining sales due to the slow economy. The pension issue was contrived as an excuse to contain wages.

As far as the health care systems of other countries, most people wouldn’t trade their system for ours and they openly say so. Sarah Palin, who’s only response to the Obama health care reform proposals have been inane cries of “death panels” and “socialism,” has recently said that as a young girl, her father would take her and her siblings to Canada to receive health care from their “socialist” system because it was all they could afford. This is quite telling, indeed!!

Capitalist welfare states in Europe don’t fare any worse than the US does economically. They have very similar rates of productivity, employment, economic growth and median income. The idea that higher taxes, wages and social spending by government reduces initiative, productivity and investment is a myth. The US has had three decades of the lowest marginal tax rates and significant industrial and financial deregulation yet US economic growth rates have never been lower while rates of gross fixed non-residential capital investment hovers around 1% a year according to a recent CBO report.

Posted by cabdriverinchicago on Mar 15, 2010 at 8:14 AM

bdriver,

“Union pensions are increasingly a smaller share of total corporate expenses as there are fewer and fewer union jobs.”

It’s not the current workers, it is the thousands who are drawing as much as 75% of the pay they got at the best years of working.  In some cases (Illinois state pensions) they pay no state income taxes on the pension.  They can draw for life after as little of 20 years on the job.

“The problems experienced by the US auto industry was based on declining sales due to the slow economy.”

In my opinion the problems were largely due to management giving in to union demands rather than risk a strike and a drop in their precious share prices.  Read “Rivet Head,” written by a UAW worker who tells how one guy could actually do the work of three and did. The other two would then take off to a bar or the parking lot to sack out or, in his case, to do drugs.

“As far as the health care systems of other countries, most people wouldn’t trade their system for ours and they openly say so.”  I don’t know most people, but I do know a few quite well who are not sold on the treatment availability and service.

Sarah is not, IMO, presidential material — so no argument on that. But while the “Death Panel” talk is hyperbole, there will be rationing due to a lack of medical personnel.  In fact, this is exactly what my examples in Sweden and Britain exhibit is in our future — waiting lists or outright rejection for a hip replacement in Sweden for persons past a given age limit.  Not being able to afford health care is a problem for the not rich enough to buy the best and the not poor enough to qualify for Medicaid. We could fix that without forcing everyone into one mold.

“Capitalist welfare states in Europe don’t fare any worse than the US does economically. They have very similar rates of productivity, employment, economic growth and median income.”

They have had and still have far higher unemployment rates, but we are gaining on them since the mortgage/derivatives fraud hit us.

Low tax rates are part of the problem, but the biggest cause of the economic mess is interest rates far too low for far too long.  The now money down house deals and idiotic borrowing against home equity made $millions for a few and doomed other millions to being stuck with house they can’t afford and can’t sell.

The deregulation was part of a long term Wall St. (primarily Goldman Sachs) scam on the entire nation and even spread to other nations like Greece, Britain and Europe.  That’s how derivatives came to be. 

Check this out for the story in on spot.
http://tiny.cc/0xuWv 

Posted by whattheheck on Mar 15, 2010 at 3:16 PM

As far as pensions are concerned,  there are too few high cost legacy pensions to blame for the economy’s slow performance or for the problems in any one industry. One indication is that before the current financial crisis, which suddenly erased about half the value of the stock market, corporate profits were soaring and growing each year.

The average hourly wage in the US automotive industry, according to the BLS, was about $28/hour in 2009. For parts it was about $21/hour. These figures are set to decline in 2010 by about half a percent in parts manufacturing and remain the same in vehicle production. These wages are better than the national average but have increased far slower than either the price of vehicles or the salaries of upper management. The post tax income for the average auto production worker is about $750/week and for parts about $525/week; these are hardly exhorbitant wages. Many workers in plants in some parts of the country are starting at about $14/hour which is a decline in real wages over the past twenty years by a significant amount. 

US auto industry employment has been halved over the past 10 years from about 1.3 million to around 650, 000. This has surely raised productivity levels per hour and per employee. According to the BLS, US auto industry productivity increased by 3.4% a year between 1991 and 1998, just higher than the national average. According to the 2006 Harbour Report North America The big three US auto manufacturers had all lowered their assembly labor hours per vehicle (HPV) ratios by roughly 31% between 1997 and 2006. Chrysler and GM each had an HPV ratio of about 24 and 33 respectively. Ford motors came in last at 34. The key here is that auto industry experts have recently declared that the US/Japanese auto industry productivity gap is virtually closed. I have always found that statistical analysis of any issue renders more truth than popular anecdotes.

People in other countries are not “rejected” for treatment or forced onto long waiting lists. There is not a shortage of health care professionals in these countries either and we shouldn’t expect any in our country from health care reform. The AMA once ensured that the US had the lowest doctor/patient ratio in the industrialized world to squeeze supply and maintain doctors’ incomes. Government health insurance doesn’t lower the supply of doctors. Cuba has the highest per capita ratio of doctors in the world and they are a communist country. A strong public option is necessary. At least everyone should be able to sign up for Medicare.

The US/EU unemployment rates are, as you mentioned, very close.  It is also true that low interest rates created a housing bubble in the 2000s but the explosion of financial derivatives caused the problem. The government recapitalized the banks after the 2008 crash by purchasing most of the MBS through Fannie and Freddie. WIthout this, there would have been a total housing market and thus financial collapse and deep depression.

In sum, we need reforms that will restore the middle class. One of the problems the reforms should address is the growing economic inequality that has contributed to the current crisis.

Posted by cabdriverinchicago on Mar 16, 2010 at 12:15 PM

“US auto industry employment has been halved over the past 10 years from about 1.3 million to around 650, 000. This has surely raised productivity levels per hour and per employee. “

The total world auto production is too high and growing. This means prices will fall per car.  It may mean people in India and China will get a car, but it will also mean retired Americans will have their pensions and health care cut.  It has already happened to people know who worked in manufacturing here.

Robotics and automation have allowed them to operate in this manner.  There are computer chip producers with facilities need no one except a watchdog to check occasionally.  Freight trains of over one hundred cars now operate with as few as two people.  Great productivity numbers, but with population growing (over twice as many legally in the uS since I was born) and fewer workers needed for so many categories, does it occur to you that we may have a bit of a problem brewing? 

“People in other countries are not

Posted by whattheheck on Mar 16, 2010 at 4:59 PM

With regard to the banks and the injustice of the bailout, I fully agree.  Financial regulation is required. Perhaps we should have done what the Swedes did; nationalize the banks until they were stable and then return them to private hands. It seem to have worked. It has been pointed out that it would have been cheaper to purchase majority shares in these banks (considering the collapse of their stock prices after 2008) and simply run them. Considering all the money and guarantees that were given by the federal government, we are entitled to this advantage. And the stingy lending practices are delaying the recovery. Nationalization would have been a better option but politically the banks are obviously too powerful!!

Health care reform in the US need not result in poor service and denial of service. This is actually what is going on now with exhorbitant insurance premiums, co-payments and deductibles. Our system can handle large numbers of people, especially if there was a medicare buy in. All the money now being wasted in the private insurance sector,  could be more cost effectively used and cover all Americans. We spend more than twice per capita what other developed countries spend and get less of the population covered. This is not necessary. We are paying for administrative inefficiency and redundency, CEO salaries and bonuses, shareholder dividends and high profits, not health care.

Posted by cabdriverinchicago on Mar 17, 2010 at 11:17 AM

Most americans especially those who are affected with the recession agree that the current health care needs to be reformed. And the present bill is way better than the current system. When it is passed even with some imperfections, it is still good and would benefit the 32million uninsured. So go go go Democrats, pass the bill! You are given the mandate for change that the Republicans were unable to do so for the past 10 years. Republicans and their supporters who benefited the current system and therefore bancrupted this country, do not want change. They love status quo. Dont mind them. 10 years is enough for them. Now is your time. Go and do the change.

Jon Forex

Posted by jonathan sloan on Mar 20, 2010 at 5:41 AM

I agree. It seems that the current bill also contains the public option which is the only thing that is going to contain heath costs through competition. I hope the bill passes. It will be a great tragedy if it doesn’t!!

Posted by cabdriverinchicago on Mar 20, 2010 at 2:21 PM

Sounds good will read in detail and comment latter

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