After investigators said an engineer in last week's collision had been texting on the job, regulators temporarily banned the use of all cellular devices by anyone at the controls of a moving train.
In the video above, Pat Robertson and Glenn Beckkk discuss the idea that government regulations and public assistance are un-Christian. I’ve read all four Gospels a few times, and I couldn’t find any condemnations of either regulations or public assistance.
Beckk says that because laws take away choices, they “take away the divine right to learn and to grow,” and Robertson concurs. I’ve been living in a society governed by laws all my life, and I’ve still managed to do a lot of learning and growing. Are Robertson and Beckkk saying that they’ve lived outside the law their entire lives, or are they saying that they’ve neither learned anything nor grown spiritually during their lifetimes?
Finally, Robertson claims that Obama has taken advantage of the current economic crisis to “insert socialism” (into what?). Unmentioned is the fact that the economic crisis was created by the policies of Bush and his allies in congress. And let’s have a look at just how socialist America has become:
Well, it’s better than the unadulterated bad news that we’ve been getting, but it appears that the American economy has a ways to go before we’re out of the woods.
On the one hand, Wells Fargo posted a huge 1st quarter profit, sending financial shares soaring to levels not seen since… well, since not so long ago, and not nearly to where they were before the crisis began.
On the other hand, Wells Fargo might still need as much as $50 billion to cover loan losses, and foreclosures are up 76% from the first quarter of 2008.
We can take some comfort from the fact that recovery of the housing market usually lags behind recovery for most other sectors. But the bottom line is that it’s still too early to start celebrating the end of the recession.
In many small towns, finances were run by people who proved to be easy marks
A lot of small towns are now headed for bankruptcy, thanks to financial advisers who sold them risky derivatives:
Lewisburg, Tennessee is one of hundreds of small cities and counties across America reeling from their reliance in recent years on risky municipal bond derivatives that went bad. Municipalities that bought the derivatives were like homeowners with fixed-rate mortgages who refinanced by taking out lower-interest, variable-rate mortgages. But some local officials say they were not told, or did not understand, that interest rates could go much higher if economic conditions worsened — which, of course, they did.
Five years ago, this small factory town was struggling to pay the interest on a bond for new sewers. Bob Phillips, Lewisburg’s part-time mayor and full-time pharmacist, was urged by the town’s financial adviser, an investment bank named Morgan Keegan & Company, to engage in a complex financial transaction to lower interest rates.
When a Lewisburg official attended a state-sponsored seminar intended to lay out the transaction’s benefits and risks, he was taught by investment bankers from Morgan Keegan.
And when Lewisburg decided to go ahead with the transaction, who was there to make the deal? Morgan Keegan.
In January, local officials were shocked to discover that annual interest payments on the bond had quadrupled to $1 million. Morgan Keegan, they said, did not serve them well in any of its roles.
In Lewisburg, the fallout from the bad bonds confronted the city of 11,000 people at an inopportune moment. Unemployment just nudged past 10 percent, businesses like Penny’s Home Cooking are shuttered, and a sprawling new corporate park sits mostly empty. A nearby employer, Sanford Pencil, the maker of Sharpie pens, is preparing to move toMexico.
There don’t seem to be any good options here. Do we allow these towns to gut their own infrastructure and educational systems, ending any chance of development? Or do cash-strapped state and federal agencies bail them out?
And how is it that the very firm which sold Lewisburg these municipal bond derivatives was also the firm which advised Lewisburg to buy these risky investments, and also the firm which trained Lewisburg’s employee to sell the investments to his colleagues? The answer, of course, is deregulation:
In our old Brit Londoner’s famous rhyming-slang, cockney-speak, it’s called “boracic lint”. To the rest of we Brits it signifies absolutely “skint”.
Translated into American, it says “stony broke”.
U.S. economy is in worst decline for more than a quarter century
The U.S. economy suffered a huge nosedive in the final three months of last year, shrinking by a staggering 6.2 per cent.
The figures released by the U.S. department of commerce yesterday far outstripped the worst fears of the government and the gloomiest predictions by financial analysts.
The contraction is the worst decline in America’s gross national product for more than a quarter of a century.
Surely only the extremely stupidest of suckers couldn’t see it coming.
Boy, oh boy, oh boy.
What BushCo & their various criminal, greedy and corrupt cronies broke, Barak Obama has got one hell of a job to fix. Temporarily to repair, even.
Well, we sure wish him lots & lots of luck, since he’s certainly going to need some.
It’s long been said that whenever the US sneezes, the rest of the world catches a cold.
The terrible truth of today is that America has actually already succumbed to one sodding serious case of the ‘flu. And as almost all of us have already learned by past personal experience, the flaming ‘flu sure is one infamously contagious critter.
Sad to say, we strongly suspect that things are set to get a lot worse before they start to get better.
But what should silly old sods such as ourselves know?
Eh?
After all, this is the 21st century. Things are so much different these days.
So long as one stays silent regarding mere trifles such as wanton warfare, woeful welfare and (still) hardly any real health care.
Economic thought from the folks who pushed the economy off a cliff
Writing in Reason, a Libertarian monthly, Jeffrey Miron proposes that we eliminate the corporate income tax as a way of saving the economy:
One policy change can stimulate both the economy in the short-run and enhance efficiency in the long-run: repeal of the corporate income tax, which collects up to 35% of the difference between revenues and costs of incorporated businesses.
Repeal means higher stock prices and improved cash flow. Corporations would respond to this change by investing in plant and equipment, and by hiring additional workers. These investments would be more productive than the ones funded by stimulus projects, since corporations respond to market forces, not to political influence. Since corporations could more easily invest out of retained earnings, repeal would also circumvent many banks’ reluctance to lend.
The budgetary impact of a corporate income tax repeal—roughly $300-350 billion per year—might seem daunting, but this amount falls well short of the Obama fiscal package. The long-run impact will be less than what is implied by current revenues, since repeal will expand economic activity and therefore increase other kinds of tax revenue.
The stimulus impact of a corporate income tax repeal is likely to be substantial. Recent estimates by Christina Romer, the head of Obama’s Council of Economic Advisers, suggest that tax cuts have a multiplier of three, meaning that repeal would increase GDP by roughly $1 trillion. By comparison, the administration’s assumption that the government spending multiplier is about 1.5 suggests that the $500 billion in the Obama stimulus package would increase GDP by about $750 billion.
There you have it: repealing the corporate income tax would cost less than Obama’s package, and even Obama’s top economic adviser thinks it would create more jobs. What’s not to like?
Well, one thing I don’t like is Jeffrey Miron’s dishonesty. Here’s respected economist Brad DeLong on Christina Romer’s alleged views on the multiplier effect of tax cuts and spending:
David Gregory reports the unvarnished truth for a change
Yesterday, David Gregory of NBC’s Meet the Press derailed a potentially informative discussion by injecting his own ignorance into the conversation.
Mark Zandi of Moody’s and Erin Burnett of CNBC were talking about the merits of President Obama’s stimulus package, and whether or not the possible benefit outweighs the cost of significantly increasing the federal budget deficit. Both Zandi and Burnett were well prepared, offering pertinent figures and drawing a comparison to the Japanese meltdown of the 1990s:
MARK ZANDI (Moody’s Economy.com chief economist): Let me make a point about the debt. It’s 40 percent of GDP now. If the projections are right, we get to 60, maybe 70 percent of GDP, which is high, but it’s manageable. In our history, we’ve been higher, as you pointed out. And moreover, it’s very consistent with other countries and their debt loads. And more — and just as important, investors understand this. They know this and they’re still buying our debt, and interest rates are still very, very low. So we need to take this opportunity and be very aggressive and use the resources that we have at our disposal.
ERIN BURNETT (CNBC anchor): It’s true. But you look at 67 percent, that’s where Japan was when they did their first stimulus package back in 1989. And then they ended up going obviously significantly higher than that, which is why it all comes down to — you’re right, it’s manageable, other countries are there, but if you don’t get — if you’re not spending that money well, you’re going to have to keep spending more and more and more. So it’s a significant point.
So far, so good. In terms easily understood by lay people, Zandi and Burnett made a strong case for increasing federal spending in the short term in order to avoid an economic collapse, even if it means running a higher deficit, with the caveat that the money had to be spent wisely. But then David Gregory decided to show how little he knows about the subject:
DAVID GREGORY: And in terms of government spending, you have that if it’s at 70 percent, we’re not factoring in some of these unfunded entitlement programs like Medicare, the fact that Social Security is about to go — pay out more than it’s taking in by 2010. So there are some real concerns down the road.
A good point, if true. But because that’s not true, it’s a rather silly point. In reality, Social Security will start paying out more than its revenues in 2017. By that time, either the economy will have improved significantly, or the budget deficit will have exploded due to falling tax revenues. In either case, the $800 billion that Obama plans to spend on economic stimulus will look like pocket change. That’s the point that Burnett made in response to Gregory’s idiocy:
By coincidence, I was about to feature his critique of the Bush/Paulson economic bailout package when I read the news. Here’s a sample, and make sure you click through to read it in its entirety:
Europe, lacking a common government, has literally been unable to get its act together; each country has been making up its own policy, with little coordination, and proposals for a unified response have gone nowhere.
The United States should have been in a much stronger position. And when Mr. Paulson announced his plan for a huge bailout, there was a temporary surge of optimism. But it soon became clear that the plan suffered from a fatal lack of intellectual clarity. Mr. Paulson proposed buying $700 billion worth of “troubled assets” — toxic mortgage-related securities — from banks, but he was never able to explain why this would resolve the crisis.
What he should have proposed instead, many economists agree, was direct injection of capital into financial firms: The U.S. government would provide financial institutions with the capital they need to do business, thereby halting the downward spiral, in return for partial ownership. When Congress modified the Paulson plan, it introduced provisions that made such a capital injection possible, but not mandatory. And until two days ago, Mr. Paulson remained resolutely opposed to doing the right thing.
But on Wednesday the British government, showing the kind of clear thinking that has been all too scarce on this side of the pond, announced a plan to provide banks with £50 billion in new capital — the equivalent, relative to the size of the economy, of a $500 billion program here — together with extensive guarantees for financial transactions between banks. And U.S. Treasury officials now say that they plan to do something similar, using the authority they didn’t want but Congress gave them anyway.
The question now is whether these moves are too little, too late. I don’t think so, but it will be very alarming if this weekend rolls by without a credible announcement of a new financial rescue plan, involving not just the United States but all the major players.
