Reading Drudge can be so entertaining. Or educational. Edutational? Anyway, check out this series of headlines on your right, presented by Drudge without context.
The media critic’s job is to provide context, so here we go. Let’s start from the bottom and work our way up.
First headline – Big government spending programs — having opposite desired effect… :
The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
Well, duh. Some of us have been warning you about this since before Obama was even sworn in. Look, stimulus spending can’t work, because of one of three things happens:
1. That extra spending means extra taxes which means the whole thing is a wash. (Government spending having some “multiplier” effect unknown to consumer or business spending is a big, fat lie.)
2. That extra spending means extra debt, which drives up interest rates, which chokes off growth.
3. That extra spending means extra money being printed, which means inflation which means any growth is illusory.
Of course, there’s no rule saying you can pick only one result. Mix and match up to all three to suit yourself! If I had to bet, I’d say we will indeed get all three.
Next headline — Unemployment Rate Gallops Ahead of Expectations… :
The White House says America’s employment picture is worse than the Obama administration had anticipated just a few months ago. The somber admission follows the latest jobless report showing the highest unemployment rate the United States has seen in more than 25 years.
U.S. unemployment jumped a half percent in May, to 9.4 percent prompting this comment by Austan Goolsbee, a member of President Barack Obama’s Council of Economic Advisors:
“The economy clearly has gotten substantially worse from the initial predictions that were being made, not just by the White House, but by all of the private sector,” said Austan Goolsbee.
Here’s the missing context: The Obama people are the ones making it worse, those stupid idiot dumb-dumbs. What, with the printing of the money, the driving up of the interest rates, and the impending raising of the taxes.
Look. When you hire an employee, you’re betting on the future. You’re betting your own money that there will be enough new business to justify your new hire. And to put a human face on it, you’re making a commitment to another human being who will be counting on the power of your judgement to put food on his table.
Are you going to take that risk and make that commitment when the dumb-dumbs are in charge?
Next headline, sans link: NYT MONDAY: TENSIONS GRIP OBAMA ECONOMIC TEAM… DEVELOPING…
Well, duh.
Let’s pretend for a moment that, god forbid, you break your arm. And somehow you end up with a team of doctors all trained at Obama University. As you lie there on the table in the ER, one doctor treats your arm by banging on the unbroken one with a ball-peen hammer. The second doctor takes the unusual course of setting your hair on fire. And the third one uses leeches.
Undeterred by your arm’s stubborn refusal to set, soon the doctors start blaming one another. And even though all of them are doing nothing but compounding your injury, none will take any blame. In fact, the louder you scream, the harder they go to work on you.
That, apparently, is what’s going on in the West Wing these days. Our economy is being managed by Dr. Howard, Dr. Fine, and Dr. Howard.
Last headline, again no link yet: OBAMA PLANS FOR NEW BANKING REGULATIONS… DEVELOPING..
So now in walks a fourth doctor. This one has some Percocet and a splint, and when you see him you think, “Oh, at last, someone who knows what they’re doing!” At which point, Hospital Administrator Obama shoots the fourth doctor in the face with a pistol. And wait until you see the hospital bill – they’ll charge you for everything, including the bullet.
Are the banks too scared to move? Then threaten them with an all-new regulatory environment, one which might leave them as screwed as a GM bondholder!
Add up all the headlines and here’s what you have: The certainty that the government will screw up the markets, and uncertainty as to what new rules the markets will work under. Everyone is too scared to move, and for good reason. So there will be no new jobs, there will be no growth.
Until Team Obama gets its collective head out of our asses, all we have to look forward to is bumbling incompetence and pointless arguments. Which might be entertaining if they didn’t result in taxes, stagflation, and the Francification of a once-great nation.
Linked you here, in a completely cheeky fashion:
http://rsmccain.blogspot.com/2009/06/gotta-correct-vodkapundits-drunken-math.html
Your broken arm drama is hilarious. Thanks!
apparently, milt friedman was right. krugman falls flat on his face. money theory is a biatch.
Abdi –
Krugman has been arguing for weeks that the “stimulus” is too small. Of course, the bigger it is, the higher interest rates would spike. It’s the very definition of a self-defeating policy.
On the other hand, so long as Krugman keeps saying it’s too small, he can “prove” himself correct – in the sense that his negative can never be disproved.
On the other hand, so long as Krugman keeps saying it’s too small, he can “prove” himself correct – in the sense that his negative can never be disproved.
Hey, the guy’s gotta do something to get one right. If it takes cheating and using a logical loophole, so be it.
Along with the housing bubble and the stock bubble and the other bubbles everyone is talking about, most haven’t seen the obvious one: the government bubble. During our times of easy credit it was easy for consumers to spend and spend and also easy for local and state governments’ revenue growth to be based on property taxes and sales taxes that were inflated by unsustainable (or at least unsustained) growth. So governments at the local and state level grew at rates similar to the crazed Federal level, though the Feds were the ones doing it mostly by borrowing while the state and local governments went nuts with the new money and didn’t plan for rainy days and also used their new “wealth” to invest in bonds and such that are now looking worse and worse as they cost more and more. So the Feds are now bailing out many banks, many corporations, and also many state and local governments, but only with borrowed money.
The question isn’t whether taxes and rates will go up, but which ones and by how much. Since all the levels of government see tax increases as about as much fun as teabagging a bear trap, look for this to get much worse before it gets better. Which assumes it ever will get better, which isn’t even certain. All the talk of cycles and growth ignores the possibility that we just finished the biggest joyride in history and the economy is just plain broken. When I look at the mess we’re in and how we got here, I have trouble seeing the hope.
I don’t think that leftist economist understand that people read the paper.
The problem with their stimulus theory starts with their assumption that everyone will behave just as they would have had their been no stimulus up until the point that that the stimulus spending actually reaches a critical mass sometime next year. However, people read the newspaper see the tsunami of taxes, regulation and inflation coming their way and alter their behavior immediately. Simply passing the stimulus bill today and planning to raise taxes tomorrow, immediately alters people’s behavior right now. Long before the stimulus can hope to have any effect, the expectation of the cost of paying for the stimulus drives down economic activity.
Obama’s team can’t see this because they have an abstract ivory tower model of the economy in which people do not make economic decisions until they actually receive money. They can’t seem to grasp that the economy is the summation of the choices of real live human beings who can and do make plans based on their predictions of future conditions.
Obama expects people to just stand around passively until Obama does something that makes the react. Instead, they’re anticipating him.
You think the bond market is nervous…the middle market M&A biz has imploded because of the Obama factor…no one knows what the end game is to this disaster so no one is pulling the trigger on new deals. There’s a lot of cash out there shoring up balance sheets but no one is expanding nor thinking of expanding anytime soon. Consensus seems to be that more layoffs are going to be needed in order to survive. Obama has been a “man caused disaster” for this crucial segment of the economy and the first people that are going to pay the price for Obama are the employees he supposedly loves. Obama needs to go! and soon if we are to have an economy left.
Excellent point by Shannon Love, as usual.
It is the very misunderstanding of actual human behavior which dooms the anti-market left. If only they had a better lumpenproletariat to work with.
I don’t think that leftist economist understand that people read the paper.
I don’t think that leftist economists understand that people can do basic math.
We elected a guy who can’t even manage his own finances, why should he be better with other people’s money?
Mr. or Ms. Love, your theory sounds correct, but ignores the reality that the stimulus bills did not exist in a vaccuum. Jobs were being lost even before the Bush Administration stimulus bills. Housing and credit bubbles existed even before the stimulus bills. Huge increases in Federal spending preceded the stimulus bills. Interest rates were at historic lows for a very long time before starting to creep up a bit before either stimulus bill. A spike in fuel prices preceded the stimulus bills. Investment experts suggested that our government spending (at all levels) was out of whack before either stimulus bill. Consumers and the wise were each hit with a lot of things well before the stimuli, so economic concepts didn’t have to come into play because the hurting had already begun.
Things were well fucked before the stimulus, are fucked up during the stimulus era, and will remain fundamentally fucked long after we wise up and stop trying to sustain what was unsustainable. The fact remains that we very thoroughly turned away from taxing/earning and spending/investing and went full-bore toward borrowing and hoping (and this isn’t the Obama trademarked hope, but the generic) and now we have a pile of bills to pay. But we’re kind of broke unless we can come up with some vast reductions in our lifestyle. Or in our government spending. Not one credible plan for that has come from either party or even anyone with any power on either side of the political aisle. Instead, there’s a wishlist for things to pretty much be the same, with one side saying spend our asses off to buy that Golden Past while the other side says taxes are still too high. Neither one can even admit to the possibility that the Golden Past is gone, there’s only a desire to figure out how the entire world economy can be suckered into investing in our dreams when it’s now trying to live some of its own.
Well, good luck proving that to Obama’s Welfare Nation, most care nothing about jobs or the economy, absent the fact that it might affect their goodies from the government.
Most will simply believe what the college drop-out “experts” Obama selected to the greatest administration, evah tell them to believe that the employers are just mad at George W. Bush and are laying these people off in payback.
Uni-tards.
Silly wingers. You’re so delusional and misguided, you want to believe the electorate has absolved the Bush-Cheney team of any and all economic fuck ups that led us to this point. Furthermore you all expect miracles in less than 6 months of Obama’s tenure. Dumb asses. No wonder you can’t win.
DOA –
Silly lefties. I just spent 800 words explaining why Obama’s plans won’t work, not why they haven’t. If The One’s comprehension skills are on par with yours, then I’m afraid we’re in for more of the same. A year ago I’d have said it would be impossible to do worse than Bush. It seems I was wrong.
Krugman is nuts, and Stephen is right, this is all about covering his ass on the stimulous.
So let me get this straight, Bush sucked beyond suck in “wasting” the Clinton suprlus and then running deficits, so the cure for that is to run deficits four times as big?
And Krugman wants them even bigger.
Even Andrew Sullivan can’t justify that logic, can he?
What am I missing here?
And right on queue comes the moronic Obama supporter! Told ya, so!
They simply lack the mental ability to understand, that is why they and other boobs, like Obama, simply refuse to give up on the decaying corpse of communism\socialism\progressivism or whatever they are trying to call it his time.
But I guess GOP08_idiot thinks that the college drop-out political science student, Obama appointed to run GM really will know what the hell his is doing and “save” the company??? Leftists prove a new level of stupid every single day.
Leeches. Not leaches.
Oops. That’s what I get for relying on spellcheck instead of some watchful editing. I’ll get that fixed in a sec. Thanks!
How much more damage can Obama do in the next 40 months? Hold on to your hats (errr wallets). You ain’t seen nothin’ yet (Obamism).
Then again, the big O is becoming a laughing stock to anyone who understands 2 + 2 = 4. Of course, the left wing tards and dummies who voted for him are going to ignore the flames around his butt.
You made me go see what the bookies are saying about Obama.
Stephen, this is your very best ever.
It’s a feature, not a bug.
Very good post – good comments!
Muchas gracias companeros!
“Will the real Dr. Fine please report to Neurosurgery. IMMEDIATELY!”
Aside from my objecting to your sullying the reputation of Drs Howard, Fine and Howard, those stooges are working on Nationalizing Health Care. Obama’s team of Dewey, Cheatam & Howe are doing the economic planning.
Watt wood-eyed dew width aught mine ice bell Czech her?
I always thought Obama was doing the work of three men.
Your line about the removal of the Obama Team’s collective heads from our asses is one of the best I’ve seen. I did a “Danny Thomas coffee spray” when I read that. Well done.
I suggest we call in Drs. Howard, Fine and Howard to perform this surgical procedure. The only problem is it won’t be covered by ObamaHealthCare.
The NY Times describes Larry Summers as a “right-wing” economist. Am I missing something? If the Times is the center, perhaps.
When spendulous started last fall, I facetiously suggested that instead of propping up insolvent institutions, our government should simply Fed Ex to every household in the U.S. a thousand hundred dollar bills. I am now not sure being facetious was warranted. It may have made us no worse off, it would have been less favorable to a lot of unlikeable people, and it also would have been a damned sight more entertaining, which is not nothing.
I love the Three Stooges reset, but it’s lacking something. It can’t quite capture the fawning press and the mendacity of Obama’s followers.
I’ve got it. The administration is Jerry Lewis, and the press are the French.
You are a total libertarian bullshitter.
One small thing that you forgot to mention… Drudge is against Obama. Therefore everything is written as to make Obama look bad.
I ain’t Mr Change fan but can you image what will happen to USA if the major US banks collapse? The WHOLE system is based on Fed giving loans to the Treasure that it then uses to prints money and gives them to banks who then loan it out. The system isnt right but that’s how it works. he is trying to protect the very system. Wif it collapses there will be civil war II in the streets.
Your libertarian fantasy bullshit has never worked anywhere nor will it ever.
If you guys don’t stop being so hurtful to the Obama administration, I’ll sic Chris Matthews (he of the ‘tinkle down the leg’) from MSDNC after you.
Extra spending by the gov’t CANNOT result in increased growth. In fact, the exact OPPOSITE is true.
That’s because the gov’t doesn’t actually CREATE anything.
All it does is take money out of the relatively efficient private sector in the form of taxes, then put that money into the relatively inefficient public sector (famous for $9000 hammers, bridges to nowhere, non-service airports subsidized by public funds, $200,000 Air force one photo ops, etc).
For the most part, the gov’t provides no goods and/or services with the tax money, and to the extent that it does, these are generally LESS efficient than the private sector counterparts, as there is no competition or market pressure and far less oversight.
In short, the whole PREMISE of the “spendulus” is a fraud. Its a massive expansion of gov’t, designed to suck money away from the productive (via taxes) and use it to reward various political constituencies.
And of course like all massive gov’t programs everywhere since the inception of gov’t the spendulus will be (and already is) fraught with waste, abuse, and out-and-out corruption.
It looks like it is about time to bring out of storage an old word that hasn’t been needed for awhile – “stagflation”. We’ve got the “stag” already, though more is to come, much more. The “flation” will come when the government cranks up the old spending machine. China is already starting to buy commodities instead of our treasury issues to protect themselves in the coming runaway inflation. We’re going back into the Carter economy only this time on steroids. Is there a Reagan in the wings to save our butts like there was last time? Let us hope.
While much of the literate middle class is screaming because their jobs, retirement plans, and the prospects for their children and grandchildren are disappearing, the Democrats are baloney slicing away, with almost unreported legislative tricks, the Bill of Rights and looting the treasury for personal gain. Do they really care whether their economic moves are dumb while they are gaining more and more power over the rest of us? Unless their is a massive loss for the Democrats in the 2010 midterms, We may end up with President for Life Obama and the US will just be another two class third world dictatorship. Tyrants on top, peasants below.
Plamen,
The banks are asking to pay back the TARP money. They don’t want to be subject to any conditions that come with that money as they claim it’s bad for business.
Try again.
It’s going to be obvious, and soon, that it will be a lot worse than originally projected (again, duh!).
Tax receipts, from top to bottom, are falling off a cliff. Debts (like savings!) are compounded, so each additional 100 or 200 billion in debt explodes into a subsequent additional trillion or so, in fifty years. So the bond market (not owned by Obama, yet) will drive interest rates up (more compounding!) and, eventually, the Emperor will have no clothes… the whole impossible utopia to be provided for the takers from the fruits of the givers, will collapse.
And having lost two American icons – the car, cruising down Route 66 to the American Dream; and the dollar, as the world’s currency, Obama might not be quite as popular as he is now……
toad, you sound like the BushHitler people. Obama will, at most, be around for 8 years.
The question is: Is there going to be anything worth being President of, when he leaves?
How many times does an intellectual dildo like Krugman have to be wrong before he is considered to be a toadie dupe? 10? 20? 100? 1,000?
At what point can we regard all this as economic sabotage?
I mean, if somebody was deliberately trying to undermine us…I don’t think it would it look any different.
Contact your representatives now and tell them to stop. Not just stop but repeal. So at least when we’re sitting in the rubble, we can have a clear conscience.
We know that. And because he doesn’t hide that fact we also know…
…and take it into account.
Judging from your command of English, I’m pretty sure you’ve had to deal with biased media before this. At least Drudge is up front about it.
Many theories, and this is mine. Barack found the DNA of Keynesian economics inside a mosquito trapped in 80 year old amber. Using modern theory and a huge dose of Krugmanism, the brought back from extinction Citibank, AIG, GM and even non-viable species such as universal healthcare. For now, the electric fence constructed by the mainstream media is still able to contain the obaminations. Sad to say, the man’s misguided arrogance about his ability to control nature, and economies are natural systems, is postured to lead this country to chaos.
I just listened to Krugman talk for 58 minutes. He says he doesnt know why the depression did not return after World War II ended. Doh? I wouldve thought the reconstruction would have been obvious. For a straight forward analogy between then and now, we’d have to burn the country to the ground, and then rebuild, stooopeeed!
It is clear that Obama never got into trouble with credit cards. That is what we are facing. You max out you credit card at 0%. Your lender hits you with a over the credit limit fee. your other lenders seeing this decide that you are starting to get into trouble and they raise your rates. The increase rates means you can no longer pay all your min payments. You are late on one of the cards. the lenders see this and again raise your rates. your are late on more bills after this and the lenders again raise your rates. this feedback loop will continue until one of two things happens. the lenders tire of the the games and cut you off. Or you default on all your debt. If you default you will never get yuor credit back and lenders will never lend to you again unless you pay 20-30% interest. It’s time to visit the loan shark.
If the lenders cut you off you have to pay down the debt before you can borrow again which takes years. And its a very lower standard of living you are under for those years.
We are in the interest raising stage now. Pray we do not get into the default stage or the cutting off stage.
gov spending only works when it is spendings from savings. I.e money that was taken out of the sytem during good times and placed back during bad times. This keeps the economy on an even footing. since all this spending is from debt it will do nothing but decrease economic activity.
unseen,
Government spending, no matter how much we wish to complain about it, is only a portion of the economy as a whole. Long and short term debts are what make the whole thing hum along for government, businesses large and small, and certainly for individuals. Consumer and corporate saving is what allows the government (and business) to borrow. But consumers were getting so addicted to credit while governments were getting so addicted to spending, so it all led to part of the economic quagmire we’re in today. Businesses didn’t really help themselves, but put themselves into that position of helplessness by growing too fast. Consumer debt soared. Government debt rocketed. And the enabling lenders only recently started to wonder if it could be sustained, and they finally decided it couldn’t. End result: we’re broke.
And now that we’re here, the government actions become much more important. They were before, but in the recent days of “Everybody is happy! Look at the financing on that!” consumers forgot and business was only too happy to let us do so. The government’s choices are: reduce government spending (hahahahaha!), raise taxes (haha!), raise interest rates (blame the market forces!), or reduce the value of our currency (blame China!) We are so fucked.
Moderate, Independent and middle-of-the-road voters must be delighted knowing they helped to empower such fine Centrists politicians such as Barack Obama, Nancy Pelosi, Harry Reid, Chuck Schumer, John Murtha, Chirs Dodd, Joe Lieberman among so many fine Centrists in the Democratic Party.
Thanks Moderates, I am looking forward to seeing how the middle-of-the road works out for you, your family, your health care, your financial freedom, and your security.
I am all for Individual Liberty which is why I am an unabashed Conservative however it appears Moderates rather prefer quasi-serfdom just because the slave masters appear really cool.
syn,
It’s too bad there isn’t a conservative party for you to vote for. Also, please update your list to include Lieberman in the “Independent” column. It’s only been that way for three years now, and that’s just counting the time he made it official. And do you really think people voted for Murtha, Reid, Pelosi, and Dodd for their cool image? I think your theory regarding voting habits needs work.
He’s been caucusing with the Democrats all that time.
McGeehee,
Most Democrats consider Lieberman in the same way Republicans considered Specter: one of ours, sort of and for what it’s worth. Neither one represents/represented the party as a whole.
Specter was caucusing with the GOP until very recently. When he changed parties there was no doubt that he was no longer a Republican. We called him a RINO for a lot of reasons, but his claim to be a Republican had some force to it, however weak.
Lieberman and Jeffords both caucused with Democrats while claiming to be Independents. Their claim to be Independents has a great deal less force to it.