Wait, so you're saying a bad investment in the past justifies a bad investment in the future?

Maybe it's better to face the realization that you can't control a 3000+ km border and mass Stasi-like raids to root out all existing illegal immigrants (which let's face is what would be required for any total solution) is neither practical nor American? Instead maybe all that wasted money you recognize could be spent on policing to prevent the associated crime?

I mean you've gone so far as to acknowledge money has been wasted so far. Is it really a far cry to realize that this wall idea would fail momentously too? That maybe just because it's illegal doesn't mean it's practical to enforce and that laws should change to manage an unavoidable reality?

Particularly since it should be obvious any company that loses access to immigrant labor can just shift their factories a few km over the border with relative ease, meaning the only jobs created from this wall will be those created in a temporary and ultimately redundant government construction project.

You're half the way there on your logic, just make the final leap already.

>> ^Yogi:

Soooo should I just get outa Nursing school?


No way, stay in- Medical fields a-booming....Best return on the investment in the realm of "higher" learnning.

Military
Police
EMT/Medical
Prison System
Rich People (%1%)

Professions that will make up over %50 of all "employment" opportunities in our evolving paradigm...

all of those bills are just ones the GOP themselves say are jobs bills, not anything having to actually do with jobs

And Obama's bill is just one that he says is a job bill, not anything having to do with jobs.

UCwhutididthere? From a fiscally conservative position, the GOP bills are about jobs. To a hard-left prog-lib-dyte, they aren't. To a fiscal conservative, Obama's bill is an absolute joke, but to a proglib-dyte it looks wonderful.

The truth is that both approaches are "methods" for creating jobs, but take different approaches. The GOP is using free markets, natural resource development, and small business tax breaks as a means of spurring job growth. The Democrats approach is taxes and deficit spending on temporary jobs and unions. But the past 3 years has shown us that Obama's approach is crap, and the GOP is saying "here's a viable alternative - let's try it". The Democrats in the Senate are saying, "Oh no you ain't going there!" Meanwhile the Democrats and President are saying, "Let's keep going what we've been doing for the past 3 years..." and the GOP in the House are saying, "Oh no you ain't going there!" It's a philosophical debate, and the nation as a whole prefers the GOP approach - not the President's. So he's trying to get the stupid and the suckers to buy into this moronic "do nothing" congress line. He's got nothing else because poll after poll shows both him and his plan are cratering.

the second thing you cite to is a bill basically eliminating the EPA

No - it is a bill to reduce the EPA to a less stupid level. EPA regulation of Co2 is not something the people voted for. It was rammed through by legislative fiat by Obama as a means of stifling energy production and imposing regulations on businesses which (in turn) hurt jobs. Obama's administration is rife with such bullcrap. He bans drilling in the Gulf which COSTS jobs. He blocks the Canada pipeline - which COSTS jobs. He blocks Ohio natural gas drilling - which COSTS jobs. Meanwhile he is literally dumping billions into failed projects like Fisker, Solyndra, and others which they KNOW are bad investments and are going bankrupt left and right. The GOP effort to halt that would almost immediately create over a MILLION jobs. The result will be more energy production, which will lower costs and create work. THAT is a job plan. Obama's plan kills jobs and raises energy costs.

I'm disappointed in Cornell West. The harder he tries to push Keynesian spending, the less sense he makes.

We have a "Lost Decade" coming up, because just like Japan, we bailed out the corrupt banks. Keynesian spending won't help because the bad investments are still on the books.

The government forced them to create CDO's? to bundle up non-AAA holdings and sell them as AAA? to extend themselves beyond their ability to cover their loses?

In a word - yes - the government forced the issue. Before the government interfered, lenders had actuarial tables and KNEW with 100% certainty who could and couldn't afford a loan the second they walked in the door. Mortgage rates were in the 8% to 10% range. Banks 'made' money on loans with the interest. People who earned less than 30K a year had a tough time getting into a house because (DUH!) they didn't really earn enough money. It was common sense. People that were POOR couldn't just go out and buy houses willy-nilly.

Then the government came along. They wanted people to get loans cheaper and more often and entirely for political reasons. But banks aren't charities and if they can't make the money on the interest (which you can't with sub-prime) then how do you make money? Hmmm... Oh yeah - let's get rid of this little thing called "Glass Steagall"! Now let's use the Fed to jack around interest rates until they are below 5%. Now you banks are commanded by government to make your profits by bundling the loans as derivatives. Now it is almost impossible to survive as a lending institution without doing what we tell you. Oh yeah, you banks? When it all blows up down the road it is YOUR fault... There you go banks!

That was government meddling with the market. They changed the rules so Barney Frank could tell voters that they had "UFFODUBBLE HOW-SING!". It was true left-wing, neolib stupidity on parade and it screwed up the entire planet. They were the ones that changed the laws. The private sector had no choice but to react to the rules that government barfed up.

The system that GOVERNMENT established turned the housing market within a very short time from a staid system of "moderate loans paid off by interest" into a crazed gold-rush of "cheap loans for everyone paid off by bundling". Banks had no choice to play that game because that was playing field that GOVERNMENT created. Any bank offering a SANE loan at an 8% interest rate and making its profits over 30 years was getting clobbered by lenders handing out loans at 2.5% ARMs that were making a bundle on the back end. Banks knew it was crazy, but those were the rules that GOVERNMENT set up and they didn't have any choice but to operate within that rubric. But government said, "Hey - if the loans blow up don't worry about it! We'll cover those bad loans with Freddie/Fannie and you won't be on the hook for it..." Government.

You see, that's what that happens when government interferes with the market and picks the winners and losers by changing rules, laws, and policy. The whole thing would have been impossible without a corrupt government starting the ball rolling for political purposes.

Everybody on the planet learned after the Great Depression that having an 'environment' where bundling and other such investments could exist was not good. That's why Glass-Stegall was created. It stopped a BAD investment practice and it worked for over 50 years without government being "involved" in a single, bloody thing. That's what !good! government does. It establishes a simple, basic set of rules and then STOPS INTERFERING. The reason for the housing failure was not because government WASN'T regulating the market. It was because the government WAS regulating the market in a terrible way.

Reinstate Glass-Steagall - a common sense law - and then ban the government from EVER interfering with the housing sector again. Things work just fine when you set up a simple, transparent system and then forbid the government from coming within a million miles of it.

No. It may jumpstart it temporarily but as you print more money, the value of the dollar drops, and then we're stuck with inflation. And so to incentivize people to spend money in an inflated economy the Fed then in turn manipulates interest rates (cheap credit) and creates market bubbles that give the impression people are making more money because more money is available than before and there's no major change in interest rates, so it's cheap credit.

And so because credit is cheap we no longer spend from savings, but spend from credit. That means we don't save our money before buying that TV or buying that car, but instead buy it on credit. This poses a major problem because we become accustomed to living in debt, and we tend to spend more. And why shouldn't we when saving money means it will be devalued over time based on inflation.

Between 1813 and 1913 the cost of gold per ounce remained rather steady (approx. $30/ounce), and it wasn't until we abandoned a value backed currency (meaning currency that cannot be printed out of thin air like the Fed has been doing since 1913) that we saw increases from 1913 to 2010. Today gold is closer to $2000/ounce. This is why saving money in a bank is a bad investment (and so is saving your cash in a coffee can) and therefore people are incentivized to spend from credit and invest in risk retirement investments.

Capital is savings. Capitalism is spending from savings. What we have now isn't not true Capitalism, but rather spending from credit, i.e., spending from debt. And it's dangerous. Eventually the dollar bubble will pop, and we'll most likely be left where the Germans were after WWI with a worthless currency they burned in the winter to stay warm.

The largest scam of the fiat currency system, however, is who is rewarded and who is most strongly affected negatively. when money is printed, the government, the banks and the military industrial complex receives the money first and spends it before "inflation" drops the value. It then gets circulated through society, and the last people to have their cost of living adjusted for inflation tends to be those on Social Security. It's really an unfair and cruel system.

Anyhow, that's the gist of it as far as I understand it.

Sure, but unless the paper is primed in some way, the oil will rot the paper.
Not very archival and therefor a bad investment!

>> ^Doc_M:
Forgive my ignorance but this seems like good advice. Gold seems like the investment of choice to keep your dollars worth something in the years to come. I normally hold Glen Beck in the realm of right wing craziness and don't normally support anything that he says but I don't know much about investing in commodities and he's giving a tip on how to do so with reliability. It's not like using the company he recommends will raise the price of gold to his advantage. Using ANY gold investment will do so. Though he is an asshat when it comes to generally everything, investment in gold seems like good advice and information on who is reliable over others is not in my opinion "bad advice". Gold vendors are notorious for being greedy douches when it comes to investing. Glen is a capitalist in the most extreme way and therefore, I see this as the best bet for that investment.



Except that he stated himself on his own show (via the Jon Stewart clip) that gold jumped $30 during his last show.
Plus, gold is an extremely bad investment over the past few centuries. It's rate of growth is below almost always under the rate of inflation, meaning it'd be better to invest in the underside of your mattress than in gold. The only exception has been the past few years.
I've been tempted before to invest in gold, but after talking to multiple financial advisers, they steered me clear of a classic pitfall that this guy is selling.
There's a reason the commercials for gold seem like infomercials played late at night to sap gullible suckers out of their money - because they are.

There are SOME things that government can do OK (if not necessarily WELL). Those things are generally limited to actual physical public works - like roads and dams. However, the actual need for federal involvment in these kind of things is limited. Most of the time such needs can be handled just fine at the state or local level. For the few rare exceptions, a SMALL federal amount of funding is all that is necessary.

What the government is NOT good at is pretty much anything else - particularly social programs like retirement, medical care, education, and so forth. There are a few very rare exceptions where government has managed get involved in these kinds of programs without spectacularly failing. However, by and large when the federal government steps into this arena the result is disaster at unprecedented levels. For example - Medicare, Medicaid, Social Security, Departmenet of Education, ad nauseum.

The preponderance of evidence shows that Federal taxation is just plain out and out a bad investment. When a Federal solution is proposed, people should view it with suspicion and caution prima facie - because 9 times out of 10 it will fail. Government has proven that it cannot be trusted to manage social care needs. Therefore government should be rejected as a solution to a social care issue.

>> ^imstellar28:
1. I [will] never get seriously sick or injured.

This is a false assertion, especially when you put the implied "will" into it.

2. I already have health insurance with a no-drop clause.

This too is a false assertion.

3. I'm a millionaire. I pay for healthcare in cash.

The plan will reduce the cost of the care you receive by making sure doctors no longer have incentives to pad your bill with unneeded tests and procedures, as well as allowing group plans to negotiate prices with care providers and pharmaceutical companies.

Plus, chances are if you're a millionaire you've got insurance coverage now, especially since medical costs can easily wipe out the bank account of a mere millionaire.

4. I'm ideologically and superstitiously opposed to placing bets against my own health.

Then your irrational fears will no longer hamper you from receiving care when inevitably you encounter a problem with your health. Though I suspect they will allow groups like Christian Scientists to be able to have an exemption from mandates on a religious basis.

5. I'm a doctor, surgeon, and pharmacist. Healthcare is free for me.

6. All my friends are doctors, surgeons, and pharmacists. Healthcare is free for me.

It's not free for the provider of the benefit. Reducing their costs will mean they have more money to spend on other things, like private jets and hookers, or hopefully higher doctor salaries, higher investment in the facility, etc.

7. I don't believe in modern medicine; rather I believe in a healthy diet, exercise, and the avoidance of unnecessary risk.

Modern medicine believes in those things as well, and one of the sub-goals of this is to get more preventative care covered, so things like dieticians, personal trainers, gym memberships and the like will also be covered in some form.

6. I live on a remote farm with no physical access to healthcare.

False premise, everyone has physical access in a world where we have helicopters. Presumably if there's a large enough pool of people who only have access to medical care via medevac someone will create a HDHP product that's aimed at such a market. If not, and they earn too much to qualify for Medicaid somehow, they're going to get a subsidy to help them pay for their choice of private/public individual plans, or pay a fine.

7. I don't believe in medical intervention. If injury or disease are in my cards, so be it.

Again, I presume there will be provisions that allow exclusion on religious beliefs.

8. I rely on foreign healthcare paid in cash. Its a free vacation and is much cheaper than healthcare in the US - even with insurance.

It might make care cheap enough for you to be able to get care here. I doubt there are many people for which this statement is 100% true though.

If it's true, we should copy the system of this hypothetical other country -- presumably Canada's -- and go for a much stronger form of government involvement in health care.

9. I have a large network of friends and family. We have agreed to donate money if one of us is seriously ill. None of us need insurance.

I'm not familiar with the finest of details of the plan, but I believe that allowing the formation insurance co-ops is going to be in there. In other words, such a scheme could qualify as being insurance.

10. Health insurance is a bad investment for me because I am rarely sick or injured. The money I save on premiums goes into a high-yield investment portfolio, whose funds I will draw upon in the event of an emergency.
Please explain how health care reform helps me?

If you have enough money in the investment portfolio, it may qualify as insurance (e.g. auto insurance requirements can be satisfied by this kind of thing now). If not, I suspect there will be many private insurance products targeted at just this sort of person, since I think there are nearly 20 million people who're uninsured for exactly this reason now.

I doubt you'd get resistance from the left on things like adding provisions for people to self-insure via co-op or high-value Health Savings Account, or letting people opt out on the basis of religious beliefs. I think your second #6 would be a worthy topic if there truly were lots of people in that category, though I suspect the response would be to look into what could be done to give them physical access to care, rather than just exempting them from the relevant mandates.

"How Health Care Reform Will Help You, No Matter Who You Are"

1. I never get seriously sick or injured.

2. I already have health insurance with a no-drop clause.

3. I'm a millionaire. I pay for healthcare in cash.

4. I'm ideologically and superstitiously opposed to placing bets against my own health.

5. I'm a doctor, surgeon, and pharmacist. Healthcare is free for me

6. All my friends are doctors, surgeons, and pharmacists. Healthcare is free for me.

7. I don't believe in modern medicine; rather I believe in a healthy diet, exercise, and the avoidance of unnecessary risk.

6. I live on a remote farm with no physical access to healthcare.

7. I don't believe in medical intervention. If injury or disease are in my cards, so be it.

8. I rely on foreign healthcare paid in cash. Its a free vacation and is much cheaper than healthcare in the US - even with insurance.

9. I have a large network of friends and family. We have agreed to donate money if one of us is seriously ill. None of us need insurance.

10. Health insurance is a bad investment for me because I am rarely sick or injured. The money I save on premiums goes into a high-yield investment portfolio, whose funds I will draw upon in the event of an emergency.

Please explain how health care reform helps me?

>> ^gtjwkq:
Setting working conditions and minimum wages is the art of benefiting the hired at the expense of the employers and the unemployed. Pretty soon a black market for illegal hiring will grow as businesses and people try to survive in tough times despite such ill-considered regulations. So you actually end up with 3rd world salaries that way.

Minimum wage is a whole other topic, but my read of what you're saying here is that 3rd world salaries in the US are unavoidable, and we should just accept it. Suffice to say, I disagree.

Just FYI, almost 70% of America's GDP accounts for consumer spending, its not reliable as an indicator of a nation's productivity. Over the years, a lot of that spending is just people borrowing with their home equity extractions and mostly credit card debt. Now that we're in a credit crunch, GDP will probably fall (unless statisticians come up with a more hedonistic interpretation for it).
In a recession like we're having, in the private sector you need more productivity and you need to flush out the malinvestments and money wasting businesses.

I agree with this, though I'd replace the Austrian-defined "malinvestment" with just plain "bad investments." Why did the market go for an asset bubble, rather than go after investments with a real long-term prospect?

In the public sector, you need less govt so it can be less of a burden on the private sector.
How can that possibly happen if govt borrows/taxes/prints a stimulus into existence (adding to the burden of debt), then proceeds to use all that taxpayer money to expand govt programs and spending (more burden),

How does laying off schoolteachers, firefighters, police officers, closing VA hospitals, etc. Help recovery? It seems like a highly ideological statement to say that no one the government gives money to should be employed.

Being worried about the debt seems natural, but why you would say the spending itself adds burden? That seems to presuppose that money spent by government is automatically, intrinsically going to purchase nothing of value to anyone.

[It] bails out the inefficient businesses that should've failed otherwise (more burden)

For what it's worth, the left (myself included) isn't pleased about the bailouts. We're mollified slightly when the CEOs of several of these institutions is asked to resign. I'm not so worried about the auto bailouts (since they're all loans, and I suspect they'll be repaid), but the bank bailouts should involve more pain from people who aren't taxpayers.

and poorly hands that money out to businesses via govt contracts instead of letting consumers make better choices with their money themselves (burden burden burden)?

As a general proposition, I would agree with this, though we're "fortunate" in that successive rounds of conservative politicians have let our infrastructure crumble, so we have a very convenient, worthwhile target for stimulus. That's in contrast to Japan, whose stimulus mostly went towards things of little long-term economic benefit, like increasing their level of hurricane and earthquake resistance.

Blaming mostly investment banks for this recession is like force-feeding alcohol to a bus driver and blaming him for killing all the passengers in the resulting crash. Don't you have any idea of the Fed and other federal institutions' role in causing the market distortions that led to this recession? How can you give them a free pass as the major culprits?

I've seen Peter Schiff use this metaphor (and others like it) several times. It makes no sense.

You say government force-fed them alcohol, when really what it did is give them money. Why is government solely or primarily at fault for the investment bank using that money to make bad investments?

To me, this seems like trying to jail the CEO of Smith & Wesson for a murder committed with one of their guns, while holding the person pulling the trigger blameless.

It is a kind of selection, just not as brutal as you described, because its not the end of the world: people get fired, businesses go bankrupt, the assets of incompetent people are transfered to the competent people, people are hired again somewhere else and eventually the economy resumes growth.

Yes, people get fired, lose their health insurance, lose their savings (what's left of them), go even more deeply into debt, potentially lose their home...yep, nothing at all brutal in that!

The market is not an omnipotent unstoppable force, its complexity just eludes the narrow-mindedness of the fools that try to plan it, specially when they're the same fools that screwed it up in the first place. A market is already planned by those in it, and they have the best incentives in place to make the best plans, because they are usually the first ones to pay for their mistakes. Politicians and bureaucrats, on the other hand, are exempt from responsability and are seldom punished when they waste huge amounts of money. They are the ones who commited the worst sins.

Why are politicians exempt from accountability? Don't we have elections?

Which CEO of these companies is now on welfare or in jail? Seems to me, other people wind up paying for their mistakes, government bailout or no.

The terrible mistake in your criticism of the market is that you constantly blame its "emergent" irrationality as an excuse for thinking on its behalf. What you correlate to auto-immunity on an otherwise healthy body I would compare to a heavily medicated pacient that undergoes daily surgeries after years of treatment for what started out as a sore throat.

I think anyone familiar with the history of the Great Depression, and the 1920's generally would view things my way. This is why I decry Austrians with such venom -- they engage in revisionist history rather than adapt to the revelation that government isn't Satan, and that the market can indeed do the wrong thing all by itself.

>> ^NetRunner:
>> ^imstellar28:

That is of course, the classic counter argument to what I (and everyone on the Hill) is proposing.
My view is that the picture you draw is too static. If the market is always better at providing prosperity, why are people losing jobs and having to spend less?
It's not crushing taxes levied to pay off the debt -- we've never really had anyone try to do that.
It's not crushing regulation stopping people from starting businesses, it's the bankers themselves cutting off investment capital because they're afraid they've already gambled and lost every penny they own.
Maybe it's because when the market is left to its own devices, it pushes empty ponzi schemes as the main engine of the economy, instead of the old-fashioned idea of actually producing goods and services that require work.
I'm not saying that incurring the debt is a good idea, I'm just saying that if we slash government "spending" to a level below our falling revenues, you'll only make the situation worse, and make revenues drop even further as the economy grinds to a halt.
I think we both agree that this whole thing will sort itself out, in the same way that we'd agree that life, in some form, would survive a nuclear war, the difference is, I want to fight the nuclear proliferation because I don't really want my survival skills tested that much, while you say "nukes for everybody!" because you have faith that the natural order of things will work out to the best possible result.
As for the thought that this is the result of 90 years of government meddling, I don't think there's evidence for that at all. Again, the issue isn't with our national debt or regulation, it's with what the private sector did when government "got out of the way".


I was being somewhat facetious in my earlier post, Imstellar's post is much closer to my line of thinking. I disagree with the Krugman/Summers/Geithner/Obama plan which is what you are advocating. My problem is I don't trust them. You seem to be hoping for a Cinncinnatus when history shows you always get a Caesar to some extent. I think things will get very bad no matter what we do. The Obama Administration's hope is to get the "economy going again." Obama's plan is skipping an important part of the process though. Savings and production need to be built back up again which will mean huge asset declines in the mean time. If this process is skipped (it will be largely) then we will have massive inflation. These bad investments need to be liquidated not propped up or we'll be stuck in this rut a lot longer than we would be otherwise. There will always be a buyer at the right price. The problem is that the banks are insolvent and instead of selling their deposits to smaller less politically connected and better capitalized banks they are threatening to take the whole system down. The government should let them fail but they won't because then JPM and GS won't be around to naked short gold to keep the dollar looking good for Obama's big spending plans. Well, I don't know how long they can keep that going we're 2 weeks in Obama's presidency and gold is skyrocketing. You want to know where that TARP money went? Covering short positions in gold.

I'm not a raving capitalist but I do believe that companies need to take responsibility for bad investments.

Do they need to be bailed out to avert further crisis? Perhaps. Does that mean they get a free ride? F#ck no...

I wish I had the time to learn more about this. Thank you for staying on top of it NetRunner!

In reply to this comment by NetRunner:
The plan as passed does call for actual purchases of assets -- it's not just a $700 billion giveaway.

In the Paulson plan, the assets being purchased are the bad loans. In other words, the worst of the crap that's out there, and the least likely to be worth anything.

In the alternative plan that seemed to have become the consensus late in the process, was for the $700 billion to be used to buy stock in the failing banks themselves; nationalizing them, at least to a degree.

That way the banks have some capital they can use to continue to issue loans, and the government can fire the dickheads who screwed the company up, and hire a new set of dickheads to screw it up, then sell the shares on the market, and potentially make boatloads of profit for the taxpayers (at the expense of the current shareholders).

Instead, the Bushies want to try to protect the shareholders from their own failures, by buying off the bad investments with taxpayer moolah, so that we absorb all the losses from their bad decisions.

Word is, thanks to the corporate pay restrictions on the bailout, almost no one is opting in. They'd rather see the global economy crumble than lose the opportunity to buy a 3rd private jet.

We're probably going to have another shot at the bailout before long.

Here's hoping we have a President-Elect Obama by then.