KEYNESIAN SOLUTIONS – AFTER TOTAL FAILURE – TRY, TRY AGAIN

100 comments

Posted on 23rd August 2011 by Administrator in Economy |Politics |Social Issues

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“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.” – John Maynard Keynes – The Economic Consequences of the Peace

  

While Barack Obama vacations on Martha’s Vineyard this week he’ll be thinking about his grand vision to save America – again. There is one thing you can say about Obama – he’s predictable. He promises to unveil his “new” plan for America in early September. The White House said Obama will give a speech after the September 5 Labor Day holiday to outline measures to boost hiring and find budget savings that surpass the $1.5 trillion goal of a new congressional deficit-cutting committee. It is heartening to see that Barack has turned into a cost cutter extraordinaire. He should be an inspiration to the Tea Party, except for one little problem. The plan he unveils in a few weeks will increase spending now and fret about spending cuts at some future unspecified date.

I can reveal his plan today because the White House has already leaked the major aspects of his plan. He will call for an extension of the Social Security payroll tax cut of 2% for all working Americans. This was supposed to give a dramatic boost to GDP in 2011. Maybe it will work next time. He will demand that extended unemployment benefits be renewed. Somehow providing 99 weeks of unemployment benefits is supposed to create jobs. It’s done wonders thus far. He will propose some semblance of an infrastructure bank or tax cuts to spur infrastructure spending. It will include a proposal for training and education to help unemployed people switch careers. He will attempt to steal the thunder from the SUPER COMMITTEE of 12 by coming up with $2 trillion of budget savings by insisting the Lear jet flying rich fork over an extra $500 billion.

You may have noticed that followers of Keynesian dogma like Paul Krugman, Larry Summers, Brad Delong, Richard Koo, John Galbraith, every Democrat in Congress, and every liberal pundit and columnist have been shrieking about the Tea Party terrorists and their ghastly budget cuts that are destroying our economy. They contend the stock market is tanking and the economy is heading into recession due to the brutal austerity measures being imposed by the extremists in the Republican Party. There is just one small issue with their argument. It is completely false. It is a bold faced lie. This is 2011. The economy has been in freefall since January 1. No spending cuts have occurred. Nada!!! As the CBO chart below reveals, the horrendous slashing of government will amount to $21 billion in 2012 and $42 billion in 2013. Of course, those aren’t even cuts in spending. They are reductions in the projected increases in spending. Politicians must be very secure in the knowledge that Americans are completely ignorant when it comes to anything other than the details of Kim Kardashian’s wedding and who Snooki is banging on Jersey Shore.

 

I’d like to remind the Harvard educated Keynesian economists that Federal government spending is currently chiming in at $3.8 trillion per year. Federal spending was $2.7 trillion in 2007 and $3.0 trillion in 2008. Keynesians believe government spending fills the gap when private companies are contracting. Obama has taken Keynesianism to a new level. Federal spending will total $10.8 trillion in Obama’s 1st three years, versus $8.4 trillion in the previous three years. Even a Harvard economist can figure out this is a 29% increase in Federal spending. What has it accomplished? We are back in recession, unemployment is rising, forty six million Americans are on food stamps, food and energy prices are soaring, and the middle class is being annihilated. The standard Keynesian response is we would have lost 3 million more jobs, we were saved from a 2nd Great Depression and the stimulus was too little. It would have worked if it had just been twice as large.

The 2nd Great Depression was not avoided, it was delayed. Our two decade long delusional credit boom could have been voluntarily abandoned in 2008. The banks at fault could have been liquidated in an orderly bankruptcy with stockholders and bondholders accepting the consequences of their foolishness. Unemployment would have soared to 12%, GDP would have collapsed, and the stock market would have fallen to 5,000. The bad debt would have been flushed from the system. Instead our Wall Street beholden leaders chose to save their banker friends, cover-up the bad debt, shift private debt to taxpayer debt, print trillions of new dollars in an effort to inflate away the debt, and implemented every wacky Keynesian stimulus idea Larry Summers could dream up.  These strokes of genius have failed miserably. Bernanke, Paulson, Geithner and Obama have set in motion a series of events that will ultimately lead to a catastrophic currency collapse. We have entered the 2nd phase of the Greater Depression and there are no monetary or fiscal bullets left in the gun. Further expansion of debt will lead to a hyperinflationary collapse as the remaining confidence in the U.S. dollar is exhausted. We are one failed Treasury auction away from a currency crisis.

John Maynard Keynes argued the solution to the Great Depression was to stimulate the economy through some combination of two approaches: a reduction in interest rates and government investment in infrastructure. Investment by government injects income, which results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so forth. The initial stimulation starts a cascade of events, whose total increase in economic activity is a multiple of the original investment.

It sounds so good in theory, but it didn’t work in the Depression and it hasn’t worked today. It is a doctrine taught in every business school in America with no actual results to support it. Who needs facts and actual results when a good story believed and perpetuated by non-thinking pundits will do? Every Keynesian play in the playbook has been used since 2008. The American people were told by Obama and his Keynesian trained advisors that if we implemented his $862 billion shovel ready stimulus package, unemployment would peak at 7.9% and would decline to 6.5% by today. The cascade of recovery was going to be jump started by a stimulus package that equaled 27% of the previous year’s entire spending. Obama’s complete package was implemented. The outcome was an eye opener. If you show a Keynesian this chart, their response would be: “Imagine how bad it would have been if we didn’t spend the $862 billion.”

 

John Maynard Obama got everything he asked for in January 2009. He had both houses in Congress and did not need to consult Republicans to pass his Keynesian $862 billion porkulus bill. It seems that $252 billion, or 29% of the package was nothing more than transfer payments. Of course, according to Keynesians, the $252 billion should have had a multiplier effect when it was handed out. I think they were right. Obama was able to multiply the number of people on food stamps in January 2009 from 32 million to the current tally of 45.8 million. The monthly food stamp transfer payment has gone from $3.6 billion to $6.1 billion. Keynesians should be thrilled by this success story.

 [Review & Outlook]

Obama’s Keynesian dream bill included:

  • $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years.
  • $2 billion for child-care subsidies.
  • $50 million for that great engine of job creation, the National Endowment for the Arts.
  • $400 million for global-warming research.
  • $2.4 billion for carbon-capture demonstration projects.
  • $650 million on top of the billions already doled out to pay for digital TV conversion coupons.
  • $8 billion for renewable energy funding.
  • $6 billion for mass transit that had a low or negative return on investment.
  • $600 million more for the federal government to buy new cars. Uncle Sam already spends $3 billion a year on its fleet of 600,000 vehicles.
  • Congress earmarked $7 billion for modernizing federal buildings and facilities.
  • The Smithsonian received $150 million.
  • The Department of Education got $66 billion, more than the entire Education Department spent a just 10 years ago. $6 billion of this subsidized university building projects.

Obama declared in December 2008 there were shovel ready projects across the land that would create immediate jobs. Too bad he didn’t tell the American public only $30 billion of the $862 billion mountain of pork was earmarked for highways and bridges. Obama declared his stimulus would create 3.5 million jobs, later changed to “create or save”. There were 144 million Americans employed in January 2009. Today, there are 139 million Americans employed. Obama gives the term “success story” a new meaning. The Keynesians had their chance and now they want a do-over. Sorry, that isn’t how it works in the real world. As Speaker Nancy Pelosi put it, “We won the election. We wrote the bill.” No truer words have ever been spoken.

As we know, that was only the beginning of our Keynesian debt nightmare. Let’s do some critical thinking and assess the results of Obama’s other Keynesian solutions:

  • The Homebuyer Tax Credit cost taxpayers $27 billion or $43,000 per additional house sold. The Keynesians handed 3.9 million people $7,000 to do something they were going to do anyway. They lured first time home buyers into the market. Since the credit expired, median home prices have fallen $15,000 and continue to fall. This wonderful government program has created more underwater homeowners and did nothing to stabilize the housing market or home prices.
  • Cash for Clunkers cost taxpayers $3 billion. An incremental 125,000 cars were sold at a cost of $24,000 per car. This Keynesian dream program lured more people into debt and warped the used car market by destroying used cars and driving up prices for poor people who couldn’t afford a new car. There were no carryover benefits except for government controlled union car makers.
  • Obama’s HAMP program allocated $11 billion to supposedly allow 4 million homeowners to modify their mortgages, reduce their monthly mortgage payments and avoid foreclosure. HAMP has proven a colossal failure that has done more to harm than help debt-laden homeowners. It has achieved slightly more than 500,000 permanent modifications, 40% of which the Treasury expects to default. Far more borrowers have dropped out of the program than successfully achieved permanent loan modification. These borrowers, along with those who later default, will often be left with larger outstanding debt, worse credit scores, and less home equity.
  • Obama even handed $30 billion to the largest homebuilder corporations in the country, run by billionaires like Bob Toll, by allowing them to carry back their losses and wipe out tax liabilities in prior years. This did wonders for the housing market. It did stimulate bonus payments for the CEOs of these companies.
  • Billions of tax revenue was lost by handing out $1,500 tax credits for people to buy new windows, doors, and appliances they were going to buy anyway. We are still waiting for that multiplier effect.

The usual suspects are now declaring that we can’t make the same mistakes FDR made in 1937 resulting in a dramatic downturn in 1938. As usual, the Keynesian storyline about the Great Depression is false.

Depression Keynesian Fallacy

One thing to remember is that while the depression that started in 1929 may have come to a bottom in 1933, it took a long time to recover. There was a cyclical recovery in 1937, and why was that? Roosevelt had the good luck to have been elected dead flat at the bottom. So it wasn’t his policies that cured the last depression, it was luck and good timing, combined with the fact that they were creating a lot of money after Roosevelt took the dollar off the gold standard. That resulted in a false recovery, from 1933 to 1937, and it went downhill again. – Doug Casey   

 

Keynes′ theory suggested that active government policy could be effective in managing the economy. Rather than seeing unbalanced government budgets as wrong, Keynes advocated what has been called countercyclical fiscal policies, that is, policies that acted against the tide of the business cycle: deficit spending when a nation’s economy suffers from recession or when recovery is long-delayed and unemployment is persistently high—and the suppression of inflation in boom times by either increasing taxes or cutting back on government outlays. He argued that governments should solve problems in the short run rather than waiting for market forces to do it in the long run. Keynes had too much faith in the wisdom of politicians and Federal Reserve bankers. They mastered the art of deficit spending, but fell a little short on paying off the debts during boom times. About $14.6 trillion short so far.

The Great Depression had the same origins as our current Greater Depression. The three Republican administrations of the 1920s practiced laissez-faire economics, starting by cutting top tax rates from 77% to 25% by 1925. Non-intervention into business and banking became government policy. These policies led to overconfidence on the part of investors and a classic credit-induced speculative boom. Gambling in the markets by the wealthy increased. While the haves got richer, millions of have-nots lived below the household poverty line of $2,000 per year. The rip roaring party came to an abrupt end in October 1929, with the Great Stock Market Crash.

Between 1929 and 1932, the market fell 89% from its high. The Keynesian storyline is that Herbert Hoover’s administration did nothing to try and revive the economy. It took Franklin Delano Roosevelt and his New Deal Keynesian policies to save the country. It’s a nice story, but entirely phony. Between 1929 and 1933 the Hoover administration increased real per-capita federal expenditures by 88%, not exactly the austerity measures described in fantasy stories concocted by the mainstream media.  

Bureau of Economic Analysis National Income and Product Accounts Table

Table 1.1.6A. Real Gross Domestic Product, Chained (1937) Dollars [Billions of chained (1937) dollars]
 
 1929 
 1930 
 1931 
 1932 
 1933 
 1934 
 1935 
 1936 
 1937 
 1938 
 1939 
Gross domestic product
87.3
79.8
74.6
64.9
64.0
71.0
77.3
87.4
91.9
88.7
95.9
Personal consumption expenditures
63.1
59.7
57.8
52.6
51.5
55.1
58.5
64.5
66.8
65.8
69.4
Gross private domestic investment
12.2
8.1
5.1
1.5
2.3
4.1
7.6
9.7
12.2
8.0
10.3
Net exports of goods and services
0.8
0.4
0.2
0.0
-0.1
0.2
-0.5
-0.3
0.1
0.9
1.0
Government consumption expenditures and gross investment
9.2
10.2
10.6
10.2
9.9
11.1
11.5
13.4
12.8
13.8
15.0

 

The Great Depression officially lasted from 1929 until 1940. What is not well known is that real GDP was at the same level in 1936 as it had been in 1929. In no small part because real GDP soared by 37% between 1933 and 1936. The unemployment rate in 1929 was 5%. In 1936, even after real GDP had recovered to pre-depression levels, the unemployment rate was still 15%. It spiked back to 18% in 1938 and stayed above 15% until World War II. Tellingly, in 1936, private domestic investment was 21% below the level of 1929. 

By contrast, government expenditures surged by 46% between 1929 and 1936. With the government creating new agencies and employing people in make-work projects, private industry was crowded out. The extensive governmental economic planning and intervention that began during the Hoover administration swelled drastically under Roosevelt. The bolstering of wage rates and prices, expansion of credit, propping up of weak firms, and increased government spending on public works prolonged the Great Depression.

The facts powerfully contradict the notion endorsed by Krugman and other Keynesian devotees that the supposed 1937-38 Depression within the Great Depression was caused by Roosevelt slashing spending. In fact, real GDP only dropped by 3.5% in 1938 and rebounded by 8.1% in 1939. What actually collapsed in 1938 was private investment, which fell 34%. By contrast, government spending declined by only 4.5% in 1938, proving that Roosevelt did not drastically cut spending. To the extent that he eased up on the accelerator, it was by cutting back on useless jobs programs like those provided by the Works Progress Administration and the Public Works Administration. Austerity did not derail the recovery.

The reason private investment collapsed in 1938 was Roosevelt’s anti-business crusade. He denounced big business as the cause of the Depression. In March 1938, FDR appointed Yale University law professor Thurman Arnold to head the antitrust division of the Justice Department. Arnold soon hired some 300 lawyers to file antitrust lawsuits against businesses. Arnold launched cases against entire industries, with lawsuits against the milk, oil, tobacco, shoe machinery, tires, fertilizer, railroad, pharmaceuticals, school supplies, billboards, fire insurance, liquor, typewriter, and movie industries.

Paul Krugman’s recent veiled yearning for a war or staged crisis to revive the economy through spending to fight the war is another Keynesian fallacy perpetuated by the mainstream media. These mindless non-critical thinking talking heads actually believe World War II ended the Great Depression. Doug Casey obliterates their fantasy:

“People say that World War II cured the Depression, but in fact, it made it worse. As bad as things were in the ‘30s, they were worse during the war in the ‘40s. You couldn’t get shoes. You couldn’t get gasoline. You couldn’t get tires. You couldn’t get just about anything that was being used for the war. The war prolonged and deepened the Depression. The thing that ended the Depression was not the war but the fact that since people could not consume, they were forced to save. That delayed consumption resulted in a huge amount of savings, and that’s what caused the recovery in the late 1940s.

 

The fact that the entire world was left in smoldering ruins after World War II, except for the United States, may have contributed slightly to our recovery from the Great Depression.

According to Murray Rothbard, in his book America’s Great Depression, the artificial meddling in the economy was a disaster prior to the Great Depression, and government efforts to prop up the economy after the crash of 1929 only made things far worse. Government intrusion delayed the market’s correction and made the road to complete recovery more difficult. Today’s myopic politicians, captured monetary authorities and Harvard trained Keynesian economists have learned the wrong lessons from the Great Depression. The upshot will be a second Greater Depression and further impoverishment of the dwindling middle class. The implications of more wasteful government stimulus programs, more quantitative easing and more debt are: further debasement of the currency and ultimately a hyperinflationary collapse. The great economist John Maynard Keynes understood currency debasement:

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

How to Cut Spending While Actually Increasing Spending

“Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.” – John Maynard Keynes – The Economic Consequences of the Peace

Obama’s plan to revive America will be announced with great fanfare in two weeks. We know for sure he will propose these two brilliant ideas:

  • Extending unemployment compensation again at a total 2012 cost of $65 billion. Because we know that paying people to not work creates millions of jobs. The multiplier effect is off the charts. Why work when you can watch The View and chow down on cheese doodles purchased with your SNAP card for 99 weeks?
  • Extending the payroll tax cut at a total 2012 cost of $100 billion. This was supposed to give a dramatic boost to the economy in FY11. Have you noticed any boost? A Keynesian will argue, “Imagine if we hadn’t done it.” A critical thinker might ask: Is it prudent to increase the unfunded Social Security liability by another $100 billion and hand the bill to future unborn generations, so we can buy a new IPod 2 today?

It is a certainty that Obama will announce an infrastructure bank or some variation to spur investment in our national infrastructure that is crumbling by the day. Top Keynesian, and architect of the Obama stimulus plan, Larry Summers has been blathering about this for months. Even though the first stimulus plan was sold as an infrastructure plan, they mean it this time. As usual, the storyline is false. You can’t drive anywhere in this country and not be inconvenienced by road widening, bridge building, and repaving projects. The Keynesians act like infrastructure projects are highly unusual and need new Federal dollars to jump start the engine. The fact is that every Federal, State and municipal government has a capital fund that is budgeted every year. Most of the projects have multiple year lead times. They require planning and coordination. The reason we have 160,000 structurally deficient or obsolete bridges and thousands of miles of crumbling underground pipes is because politicians decided to spend their budgets on something more useful like train museums, murals, turtle crossings, and studies on the mating habits of ferrets.

The country has lost approximately seven million jobs since 2007. Five million of the jobs were lost in sales industries and manufacturing industries. There are 139 million jobs in America today and only seven million, or 5% of all jobs, in the construction industry. How do Keynesians expect to revive the job market with an infrastructure bank that will benefit, at most, 5% of the U.S. workforce? Let me guess. They will propose billions of new spending on education so they can retrain sales clerks from Wal-Mart into architects for designing 160,000 new bridges.

Barack Obama will stand in front of the American people and lie. He is a born again cost cutter, who will propose new spending. As anyone with a calculator can figure out, the two guaranteed proposals from his upcoming speech will increase spending by $165 billion in 2012. If you go back to the handy dandy chart from the CBO showing the “horrific spending cuts” from the recent debt ceiling deal you will see  these “cuts” total $122 billion between 2012 and 2014. Barack will wipe out all of the supposed savings through mid 2015 with his new Keynesian plan. But don’t worry. His plan will have huge spending cuts in 2017 after his hoped for 2nd term is finished. Keynesians always promise to cut spending once their current emergency ends.     

The Keynesians had their chance. They controlled the Presidency and both houses of Congress. A Keynesian runs the Federal Reserve. They implemented everything they proposed. The $862 billion porkulus program, the $700 billion TARP program, home buyer tax credits, energy efficiency credits, loan modification programs, zero interest rates, QE1 and QE2. They increased social welfare transfers for Social Security, Unemployment Compensation, food stamps, Medicare, Medicaid, and Veterans by $600 billion since 2007, a 35% increase in four years. No one has foiled their plans. The Tea Party didn’t really exist until 2010. They didn’t lose the House until November 2010. They cannot blame the Tea Party extremists, but they do.

The Keynesians have successfully increased Federal spending by $1.1 trillion, or 41% since 2007, and are running deficits exceeding 10% of GDP, but they call the Tea Party extremists. Domestic investment is still 9% below 2008 levels as the Federal government has crowded out the small businesses that create the jobs in this country. And now the Keynesians declare we need more stimulus, more programs, more debt, more quantitative easing and lower interest rates. It just wasn’t enough the first time. You have to give the Keynesians credit. Despite the utter absolute failure of every scheme they have implemented, they will worship their models and theories until they successfully collapse our economic system. Then they’ll blame the Tea Party terrorists who foiled their plans.

None of the Keynesian solutions worked during this crisis, just as they didn’t work during the Great Depression. The solution was simple, yet painful. The banking system needed to be saved, not the banks. The bad debt needed to be purged from the system. Wall Street criminals needed to be prosecuted. Bondholders and stockholders needed bear the losses from their foolish investments. Saving and investment in the country needed to be encouraged, while borrowing and consuming needed to be discouraged. Our leaders have failed to lead. The American people have failed to accept the consequences of their actions. And now we are going to pay a heavy price as Ludwig von Mises predicted:

“There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved.”

 

100 Comments
  1. Steve Hogan says:

    Great piece. I love a good rant, especially when it’s backed by facts.

    We’re being led by morons and they’re driving us into the abyss. Fasten your seatbelt, folks.

    23rd August 2011 at 2:24 pm

  2. Stucky says:

    Even Mr. Homo Keynes didn’t believe his own bullshit.

    From the Introduction, “The General Theory of Employment, Interest and Money”

    “The theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the CONDITIONS OF A TOTALITARIAN STATE than the theory of production and distribution of a given production put forth under conditions of FREE COMPETITION and a large degree of laissez-faire.”
    ——————– J.M.KEYNES, September 7, 1936

    23rd August 2011 at 3:07 pm

  3. Dave Doe says:

    Jim, good piece.

    For those similarly depressed after reading this
    A little comic relief from Youtube.

    Keynes vs Hayek Rap: Fight of the Century – Part 1
    http://www.youtube.com/watch?v=d0nERTFo-Sk

    Part 2

    23rd August 2011 at 3:14 pm

  4. Muck About says:

    Really good piece. It will be picked up widely, I bet.

    Now that all the bullshit goobermint actions that didn’t work are going to be tried again (with, I’m sure, equal success), when will they address the real problems and quit not “fixing it”??

    Default on the mathematically impossible to pay back debt. Breakup the TBTF banks. Review every law on the books with the idea of eliminating every law or “rule” that discourages formation of small businesses _IN_ANY_WAY. Don’t cut SS withholding – that’s like putting a small slit in the throat of an already busted program. Increase the retirement age by one month per year (Terry Coxen’s idea!), do away with the FSA except for those who truly can’t take care of themselves – and check on them to make sure. Obesity is not a disability – it’s a license to eat less. Eliminate the war on drugs, regulate them sensibly, tax the living shit out of them and use all the proceeds to educate and rehabilitate (SSS forgive me for I know what I say offends you!) and jail anyone being a bad guy while under the influence (like DUI or robbery to support a habit – that’s a no-no). No DOE, No HUD, No hundreds of political appointed “committees” with members paid from the Federal weal.

    A constitutional amendment to force CONgress to eat its own cooking. No more mandating the several States to do things without funding.

    I could go on for a books’ worth.

    Free small businesses from taxes, reporting, labor law BS, abolish the minimum wage, go to a Fair Tax on consumption, delete any Federal Agency with more than one letter in it’s name and cut DOD in half and redesign it to fight the next war, not the last two.(Keep the Boomers and Fast Attacks for doomsday).

    Since none of the above will ever happen, now I’ll go buy a little gold on the dip today and finish reading Jared Diamonds “Collapse”.. Great now and then history book..

    MA

    23rd August 2011 at 4:07 pm

  5. Muck About says:

    To summarize the above rant: Governments (Federal, State and local) can not create jobs except those paid for by more taxes on citizens or borrowing either of which discourages true job growth.

    Catch 22.

    All government (at all levels) can do to “create jobs” is to eliminate all obstacles, rules, laws, reporting requirements and everything else that makes it difficult to impossible for new business to be created. They they must get out of the way and let things get underway.

    Sure, some regulation may be necessary to protect public health, squash the bad guys to try to steal and plunder the public (although they haven’t done even that _at_all_ for the past 40 years) but keep it to a minimum and start throwing miscreants in jail (fill up all that space left when the pot smokers leave).

    Done now.. Feel better. Time for a toddy..

    MA

    23rd August 2011 at 4:15 pm

  6. How well has the Keynesian economic theory worked for the US? And what about Japan? | Seetell.jp says:

    [...] are some excerpts, read the entire article to get the details on how to destroy an economy while increasing the wealth and power of the [...]

    23rd August 2011 at 4:15 pm

  7. Administrator says:

    Muck

    I’d vote for you in 2012 with that platform. I’m starting When Money Dies tonight. Thanks for sending it.

    23rd August 2011 at 4:24 pm

  8. cv51 says:

    Beautiful work Jim!

    As the Barack Obama/Larry Summers experiment tries to stimulate we see roads being ground back to gravel, flash mobs, cities and counties going bankrupt, and pension funds not writing checks.

    Great job Obama!! Your a real winner. You make the Republicans look smart.

    23rd August 2011 at 4:48 pm

  9. Administrator says:

    Stand upright, speak thy thoughts, declare The truth thou hast, that all may share; Be bold, proclaim it everywhere: They only live who dare.

    Voltaire

    23rd August 2011 at 4:53 pm

  10. Administrator says:

    obama-hat-magic.jpg

    23rd August 2011 at 4:55 pm

  11. scott says:

    Its well to remember that “President” Obama began his improbable journey from sophomore senator from Illinois to the White House as the ‘anti-Iraq war’ candidate. He hadn’t been around in 2003 when most of the Congress voted for the invasion and to his and most of the Congress’s mind the economy was humming along on HELOCs, CDO and MBS issuance when he began his campaign.

    He saw no problems or potential for career advancement by making an issue of the economy as that was Bush’s strong suit. It was 24/7 Iraq 100% of the time on the one issue Obama THOUGHT could gain him the White House. So much for the deep thinking of Obama’s mind. It was, and is, all campaign tactics. How to consolidate the left and the black vote to deny Hillary his parties nomination while, at the same time, manoveuring John McCain into the GOP’s! There was never any real ‘plan’ for governing the nation especially when, in spring and summer of 2008 the economy began to fall apart. Obama had not studied or campaigned on economic issues so he was ill prepared to deal with the situation when he managed to win the election. His ‘stimulus’ plan as Admin brilliantly exposes in the above article was not a plan at all just a hodgepodge of various Democrat wish lists of things to fund. If Keynes was the ‘conventional wisdom’ then Keynes would have to do. No time or thought had been given to what was really taking place so like a washed up football coach trapped in a time warp he just kept calling the same plays over and over again even if they didn’t work. It was all he knew.

    23rd August 2011 at 6:11 pm

  12. Kill Bill says:

    “Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. -MK

    No need to do that – its self debauching but unlike modern ovens its not self-cleaning.

    23rd August 2011 at 6:15 pm

  13. Latest News | The Aussie Digger : Home of all Australian Veterans ex Service and Serving members says:

    [...] —————————————————————————————— KEYNESIAN SOLUTIONS – AFTER TOTAL FAILURE – TRY, TRY AGAIN [...]

    23rd August 2011 at 6:27 pm

  14. efarmer says:

    The fact that Hogan got a thumbs down shows that Krugman and Obama read this site.

    EF

    23rd August 2011 at 7:23 pm

  15. FRED FLINTSTONE says:

    Debasing the currency is the 2nd fastest way to kill Capitalism. The fastest way is to interfere with what should be FREE MARKET FUNCTIONS! Allow the chips to fall where they may. Malinvestment will have loss of capital as consequence. Failure to deploy capital will erode purchasing power via inflationr. If left to its own devices pure capitalism performs. This bastardized Keynesian crap with a little corporate fascism and socialism thrown in does not get it.

    Just pretend I posted the requisite picture of fat people on scooters to emphasize my point.

    23rd August 2011 at 7:25 pm

  16. llpoh says:

    Fucking idiot politicians. I can hardly stand to think about it. I am still steamed up over the 13 million on SS disability – with 2 million more waiting to get on – and Admin comes up with this to make my day.

    For the love of all that is good – all I ask is that they stop helping me, and the rest of the population, for just a couple of years. If they do that, we will be able to help ourselves. We do not need their help – can’t they see that?

    23rd August 2011 at 7:29 pm

  17. Administrator says:

    Obama%20Job%20Approval.jpg

    23rd August 2011 at 8:53 pm

  18. llpoh says:

    Admin – so almost 40% of the shit for brains population believe that that fucking nitwit is doing a good job? That is absolutely un-fucking-believable. The country is flushing itself down the shitter and 40% think that chief flusher is doing a good job. Just what would he have to do to get them to change their minds? Maybe if he just walked outside the whitehouse and started pissing on passers-by that would get their attention. After all, he is symbolically pissing all over the country by what he is doing anyway, so he might as well go out and have an actual go at it.

    You keep making my day. You must be a real chuckle around the house.

    23rd August 2011 at 9:01 pm

  19. Kill Bill says:

    If one Arizona resort has its way, vacationers will soon be skiing over snow made of reclaimed sewage water.

    The Hopi Tribe filed a lawsuit Friday in Arizona Superior Court against the city of Flagstaff over their plans to sell 1.5 million gallons of reclaimed wastewater to Snowbowl Ski Resort.

    Resort owners say that in light snow years, attendance drops from 150,000 skiers to less than 3,000 skiers. To make up for the shortfall, the resort has plans to pipe sewage water 15 miles uphill to a reservoir until it is needed for making fake snow.
    ~~

    Yeh, shit on those who do attend your ski slope in off peak times. Morons.

    23rd August 2011 at 9:29 pm

  20. llpoh says:

    KB – people use, even drink, reclaimed sewer water all over the world. Hell, for that matter, all water is reclaimed. As fresh water becomes increasingly scarce this will happen more and more.

    23rd August 2011 at 9:37 pm

  21. llpoh says:

    Once again the people are getting FUCKED. Bank of America wants their fraud case swept under the rug.

    http://news.yahoo.com/bank-americas-no-good-very-bad-enablers-170931303.html

    23rd August 2011 at 10:25 pm

  22. llpoh says:

    doppelgang llpoh alert. But nice post anyway.

    23rd August 2011 at 10:38 pm

  23. ron says:

    Bill you think that water out of the tap is some prestine glacier water?the whole area needs water,im sure itll be filtered and you wont be walking on turds in off peak times.I think Trump called it right when he said theyre all stupid.

    23rd August 2011 at 10:40 pm

  24. Kill Bill says:

    As fresh water becomes increasingly scarce this will happen more and more. -llpoh

    I agree.

    I still dont care for it.

    23rd August 2011 at 10:56 pm

  25. Kill Bill says:

    Bill you think that water out of the tap is some prestine glacier water?

    Even a boomerist is smart enough to not believe that.

    23rd August 2011 at 11:02 pm

  26. Colma Rising says:

    Republicans, Democrats and in between just love to shovel government cash into their business and hence Keynes is their man. Wasn’t it Nixon who said “We’re all Keynesians now”? Do the markets not hang on the words of their central planners?

    The results speak for themselves. The flushing you hear is the echoes of the toilet bowl we’re so joyously enjoying.

    Mr. “In the long run we’ll be dead” Keynes was quite right. He’s long dead and his monster-baby of a theory isn’t working here in the future.

    But the professors kneel at the foot of his bust and await their very own money shot.

    23rd August 2011 at 11:09 pm

  27. Benjamin says:

    The fundamental problem is that jobs are being eliminated by technology faster than they are being created. This has nothing to do with the government – it’s purely free-market.

    Capitalists replace workers with machines, and then are surprised when the machines don’t buy their products. The only way to solve this is artificial demand creation by the government.

    If you disagree, please name the emerging industry which will create enough jobs to increase employment rates. If you can’t, you agree.

    24th August 2011 at 5:20 am

  28. Novista says:

    Mighty fine work, Jim.

    I will add this, not exactly off-topic: What made the Roaring 20s roar was the EZ credit from the FedRes. That was a concerted effort to assist Great Britain in restoring the gold standard they’d dropped to finance their way through WW1 (along with lots of funding from ‘allied war bonds’.

    GB insisted on restoring the pound at $4.86, the pre-war value. To do that needed planned monetary inflation in many places, but particularly U.S. involvement.

    Funny thing happened on the way to the forum, GB initiated the gold-exchange standard to support their mercantilist strategy. Other countries were roped into the inflationary bias too, call it early globalization. It all fell apart in a few years anyway.

    Oh, and let’s hear it for Hoover’s Smoot-Hawley Interventions have consequences.

    24th August 2011 at 6:49 am

  29. Administrator says:

    Benjamin

    Capitalists who have bought off the politicians replaced American workers with Chinese workers. Germany did not do so and their manufacturing industries are still thriving. Government destroys. They do not create jobs.

    24th August 2011 at 7:21 am

  30. Rob in Nova Scotia says:

    Benjamin

    You have constructed your argument like a five year during his first trip to school yard.

    If a person has 50,000 dollars laying around what do they invest it in.

    Thanks to ZIRP, inflation and all the user fees the banks pile on, putting money in the bank is just giving permission to them and government to steal your money. You could buy gold but that just gets put in safe place to be taken out once and a while to admire.

    None of the these things create jobs.

    You could put it in the stock market to prop up Zombie banks, car companies or any number of ridiculously overpriced companies. Mutual funds are the same thing, just a turd wrapped in a statement mailed to you quarterly.

    These things might create jobs.

    What used to happen was people of ambition with an idea would start a business. This is where most of the good jobs have and will in future come from.

    I feel this is the only way to create jobs.

    Right now in my community the paper mill which employs 600 direct and 400 indirect workers is shutting down indefinitely. The knee-jerk response from government the last few days is to offer them incentives to reopen (newsspeak for more tax breaks). Governments everywhere have to quit deciding the winners and losers in the economy and let the market decide. I will say the market as in true market not the abomination that we have right now.

    24th August 2011 at 8:08 am

  31. Welshman says:

    Admin.,

    Great Rant, really enjoyed the Dragnet Approach, “Just the Facts”.

    24th August 2011 at 8:59 am

  32. Administrator says:

    A (Hopefully Fake) Paul Krugman Laments The Lack Of Death And Destruction Following Today’s Earthquake

    Submitted by Tyler Durden on 08/24/2011 01:28 -0400

    We truly can only hope that this Google Plus account of Paul Krugman is merely a well-orchestrated parody, because if it is indeed that of the self-styled uber-Keynesian, the time for the public outrage, his economic beliefs aside, has arrived. In a blast post on Google’s imitation of twitter and facebook, which should immediately result in the termination of the Nobel prize winning economist if it was indeed penned by him, this particular account of “Paul Krugman” writes: “People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.” Translation…well it’s pretty obvious, but for those laboring under the aftermath of a full frontal lobotomy, the person who tweeted this essentially yearns for his voodoo economic religion to be validated following countless failures of Keynesianism (no, really, after this latest injection of Xx *illion dollars into the economy things will really be well), at the expense of death and destruction. Even more poignant translation: “Krugman” would like nothing more than to put an equal sign between the death of a human being and its proportional GDP replacement value. What next: Krugman lamenting that only certain races end up getting killed in conflict, those whose replacement potential is too low, demanding more death? Or that X number of deaths would have been more stimulative if it was really XXX? This is about as close as we will get to a Keynesian admitting that reparations for death and destruction are the only two special clauses under which fiscal stimulus does work. Which of course means that with idiots such as the poster of the above who actually thinks this, be it Krugman or some of his countless voodoo brethren, and with their proximity to the president, the only logical explanation is that a war is coming, and is being welcomed by all these s[h|c]am “economists”, for whom human death and suffering is a fair tradeoff in preserving their tenure or modestly-paid, liberal publication blogging jobs. If this indeed Krugman’s account, it is imperative that the NYT immediately terminate this pathologically deranged and homicidal psychopath. Institutionalization in a mentally insane ward may be a proper subsequent action.

    24th August 2011 at 9:01 am

  33. Petey says:

    Benjamin, people shouted the same thing hundreds of years ago. Technology allows more people to be involved in a process. Are you saying the invention of the computer is a bad thing? That is a machine.
    http://www.econlib.org/library/Enc/Innovation.html

    “Henry Hazlitt provides the example of cotton-spinning machinery introduced in England in the 1760s. At the time, the English textile industry employed some 7,900 people, and many workers protested the introduction of machinery out of fear for their livelihoods. But in 1787 there were 320,000 workers in the English textile industry. Although the introduction of machinery caused temporary discomfort to some workers, the machinery increased the aggregate wealth of society by decreasing the cost of production. Amazingly, concerns over technology and job loss in the textile industry continue today. One report notes that the introduction of new machinery in American textile mills between 1972 and 1992 coincided with a greater than 30 percent decrease in the number of textile jobs. However, that decrease was offset by the creation of new jobs. The authors conclude that “there is substantial entry into the industries, job creation rates are high, and productivity dynamics suggest surviving plants have emerged all the stronger while it has been the less productive plants that have exited.”

    24th August 2011 at 9:39 am

  34. Petey says:

    Admin you need to get better trolls and dolts to come by here. Lately, most have been low hanging fruit.

    24th August 2011 at 9:42 am

  35. Maureen says:

    Gee Guys, I think this will work! UNTIL WE RUN OUT OF OTHER PEOPLES MONEY TO PAY FOR IT.

    WHAT THEN?

    I think we need more Margaret Thatcher types as leaders.

    24th August 2011 at 11:29 am

  36. Colma Rising says:

    We do indeed need more Margaret Thatchers, minus the menopause.

    24th August 2011 at 1:22 pm

  37. Gordon says:

    Solutions: Maximum number of employees in any single company 500 or less.
    Eliminate elections and have selections, like lottery, allowing for anyone with the correct qualifications to get any of the selected (elected) political positions.

    Remember, 500 employees maximum, this includes government. In this manner,
    all companies will have to learn to work together with standardizations, and the problem we
    have now will never occur. If a failure occurs in one company, there are thousands ready
    to take over. Today,if a large company fails, they are the to big to fails, and they push their
    own agenda, and they go down because people want their own agenda, not theirs.
    Thanks

    24th August 2011 at 1:59 pm

  38. Michael says:

    Should Israel Embrace Glenn Beck?
    Tuesday, 23 Aug 2011 11:08 AM
    By Alan Dershowitz

    Share: More . . . A A | Email Us | Print | Forward Article

    All decent people, whether on the left or the right, should support Israel’s right to exist as the democratic nation state of the Jewish people.

    All decent people should support Israel’s right to defend its civilians from terrorist attacks. All reasonable people should favor a just peace that assures Israel’s ability to thrive in a dangerous neighborhood and to defend its borders.

    These issues should not divide decent people along ideological or political lines. Israel’s existence and right to defend itself should be bipartisan issues, not only in the United States, but in all democratic countries of the world.

    The reality, however, is very different. The Jewish state is demonized by the hard left in America, by virtually the entire left in much of Europe, and by most of the left and right in Ireland, Norway, and Sweden. Its right to exist is denied by a high proportion of Arabs and Muslims, and most of the Arab and Muslim nations do not have diplomatic relations with Israel.

    In many circles, anti-Zionism easily morphs into anti-Semitism, and in some countries Jews are afraid to walk the streets wearing any clothing or symbols that identify them as Jewish.

    The general assembly of the United Nations has become the world’s new Der Sturmer, whose podium hosts, and many of whose audience members cheer, virulent anti-Semites such as Iran’s Mahmoud Ahmadinejad.

    Defenders of Israel, even those critical of some of Israel’s policies, are banned from speaking at universities, are attacked personally by the hard-left media and are treated as pariahs by their academic colleagues.

    It is against this sad and increasingly dangerous background that one must evaluate Glenn Beck’s visit to Israel. I disagree with much of Beck’s politics and with virtually all of his conspiracy theorizing. Yet I admire his courage in putting his body in the line of fire. I believe him when he says:

    If the world goes down the road of dehumanizing Jews again, “then count me a Jew and come for me first.”

    At a time when old friends and allies who should be supporting the Jewish state are abandoning it in droves, Beck’s willingness to stand up for Israel must be accepted with gratitude. I, for one, do not question his motives. I believe they are genuine.

    One need not accept all of Beck’s positions on Israel — and I certainly do not — in order to agree with him that support of Israel is one of the great moral issues of the 21st century.

    Those who thoughtlessly attack Israel no matter what it does and thoughtlessly defend Israel’s enemies regardless of what they do, are making peace far more difficult. They incentivize terrorism by Israel’s enemies and disincentivize compromise on all sides.

    I will wait to hear precisely what Glenn Beck says during his visit to Israel before I evaluate it. Just as I feel free to criticize the Israeli government when I think it is wrong, I certainly feel free to criticize defenders of Israel when I think they are wrong. But I will not prejudge Beck until he is given a full opportunity to express his views.

    I certainly admire Beck’s decision to go to Israel far more than the decision of so many so-called artists and intellectuals who call for a boycott against the Jewish state without even bothering to go there and see for themselves.

    I welcome the support of religious Christians who love Israel for religious reasons. I abhor the ignorant and misguided efforts of other Christians, such as Jimmy Carter and Desmond Tutu, who misuse their faith against the Jewish state.

    I hope that more Christians will follow in Beck’s footsteps and take the time to visit Israel. They will see Christianity thriving in Israel while at the same time being dismantled and destroyed in Lebanon, in Gaza, in Egypt, and in other areas in which Islamic fundamentalists have taken over.

    Christian religious sites are preserved in Jerusalem and other areas under Israeli control. When the Jordanian government controlled parts of Jerusalem, it destroyed many historic religious sites sacred to both Jews and Christians.

    Nation states are entitled to engage in Realpolitik so long as they do so within the limits of acceptable morality. Realpolitik requires accepting support from, and sometimes giving support to, nations and people who are not in complete agreement over policies.

    Consider Nelson Mandela’s alliances with some of most brutal dictatorships (Libya, Cuba, Syria) and supporters of terrorism (P.L.O., Iran) while he was engaged in his just struggle against the evils of apartheid.

    I do not recall the left condemning Mandela for doing what he had to do. But the same left was unforgiving in Israel when it was forced to make some strategic military deals with South Africa, while strongly opposing its apartheid policies.

    I do not mean to compare dictatorial, terrorist, or apartheid regimes with Glenn Beck, only to make the point that the Jewish state is often subjected to a double standard when it comes to the support it receives or gives.

    Many Israelis will welcome Glenn Beck’s support. Some will oppose it. Others will wish his views were more consistent with their own. This is as it should be in a democracy.

    The fact is that Israel is the only country in the Middle East that would allow Glenn Beck to express his views, without censoring them or even knowing in advance what he was going to say. This too is as it should be in a democracy.

    Read more on Newsmax.com: Should Israel Embrace Glenn Beck?
    Important: Do You Support Pres. Obama’s Re-Election? Vote Here Now!——————————————————————————–

    “Ben Bernanke belongs in an orange jumpsuit”

    Welcome to The Michael Savage Newsletter, your weekly insider report on all things “Savage.”

    In this issue, find out how to download a FREE chapter of Michael Savage’s next book, the thriller “Abuse of Power”.

    ——————————————————————————–
    On Monday night, while so many talk radio hosts were on vacation, Savage told listeners:

    “I am the last man standing in broadcasting. …

    “Obama says ‘we’ were inspired by the ‘peaceful protests’ that broke out in Libya. Who’s ‘we’? Him and his mother in law? What’s with that imperial ‘we’?

    “So why isn’t O-bummer inspired by the peaceful protests here at home, the tea party? Instead he castigates everyone they represent: the American taxpayer.

    “Did you know if you took every dollar from everyone earning a million dollars, it would only take away 2 percent of the national debt? Without reducing spending, we’re finished as a nation.

    “But Obama needs a 20-car motorcade to visit the CEO of Comcast, which owns NBC and MSNBC. Is that appropriate? Can you name any other president who has visited another big media company? I don’t think so.

    “Anyway, the only other person excited about the overthrow of the Gadhafi regime is Anderson Cooper. He’s celebrating because the men in Libya have tight dungarees and they look like they visited Berkeley once.

    “For the vermin in the media today, ‘rebel’ means ‘good’ — unless you mean the rebels in the Tea Party. Then they’re no good. But you and I know the tea party members are the real rebels of today, not the liberal media.

    “Like I always say: Liberalism is a mental disorder. Someone should put it in the Diagnostic Manual psychiatrists use, then all Obama’s followers could claim disability and never have to work again

    24th August 2011 at 3:22 pm

  39. Colma Rising says:

    Michael Savage is awesome… my favorite Talk Radio by miles, even if I don’t agree with the dude 15% on a good year, 50% in election years, the guy rips new asses on the deserving, notably the Marin County Libtards. I would shit a brick if “Michael” was him… I’m pissed he’s off air in SF.

    That being said, Beck, for the most part is a dunce in my opinion. Bailout Beck, says I. An admittedly ADD rittled doofus.

    Nonetheless, prepare for a blogosphere battle as TBP is war weary and stuffed to the brim with vets and shitbags alike who can’t stomach the continuous drums of war. Ron Paul all the way.

    Good luck.

    24th August 2011 at 3:51 pm

  40. AWD says:

    Dr. Coburn wrote this peice on where some of the Obama porculus went:

    Some projects funded by the President Obama’s Stimulus Package:

    Midwestern Region: An Illinois county spent $173,824 from a weatherization grant on eight pickup trucks. A Wisconsin nursing home received $2.8 million in stimulus money it didn’t need or request. Road signs costing $300 each are being placed at construction sites to alert motorists that the project is being paid for by stimulus money. In Illinois alone, the signs are expected to cost $150,000, according to the Illinois Department of Transportation (IDOT). IDOT spent millions of stimulus money in Harrisburg, Illinois for a two lane highway around the town that nobody will use and directs traffic away from an already decimated downtown. In Macomb, Illinois, $643, 945 was spent on a Prairie view public housing parking lot that no one wants. Illinois will spend $350,000 to build a four-person bunkhouse at Crab Orchard National Wildlife Refuge. The median price for a home in Marion, Illinois, the site of the park, is currently $71,000.
    Akron, Ohio used up to $1.5 million to erect a suicide-prevention fence to keep people from jumping off the All-American Bridge despite concerns such a project would be wasteful, ineffective and ugly. Rather than help welfare recipients obtain jobs and escape poverty, $1 million will be used to study whether 300 people in Chicago are healthier when living in “green” public housing facilities. The National Institute of Health gave an Indiana University professor $356,000 to study how kids perceive foreign accents.
    T
    he Tallgrass Prairie National Preserve’s new visitor’s center and a pedestrian and bike project over U.S. Highway 75 in Kansas were some of the first projects approved for stimulus funds in the state. Failing to cite an economic benefit from the projects, officials noted that they chose “projects that strengthen the cultural, aesthetic or environmental value of our transportation system.” A National Forest in Missouri will receive $462,000 to replace toilets.

    The Southern Region: Memphis, Tennessee spent $1.5 million to redevelop fairgrounds and $250,000 to rehabilitate a dilapidated laundromat. Stimulus money paid for housing used by Soyono the Sumatran tiger and Luke the Lion at the National Zoo in Washington, D.C. Despite federal law that prohibits spending federal funds on local zoos, money will go to the National Zoo. The Smithsonian, which runs the zoo, is spending $11.4 of its $25 million in stimulus funds on the National Zoo and its Zoo research center in Virginia. Washington, North Carolina is using stimulus funds to pay for a “project-funding manager” whose job it is to secure even more stimulus funds. Lexington, Kentucky, spent $4.7 million on a trail connecting downtown with a horse farm. Virginia spent $340,000 on a rural bridge that carries only 20 cars a day. The South Carolina Department of Natural Resources spent $1.7 million to grow oysters.

    Western Region: Washington State University (Vancouver) is receiving $148, 438 to analyze the use of marijuana in conjunction with medications like morphine. According to local reports, this is the first ARRA funding received by WSU. The project is uniquely qualified to receive these funds because of its potential to stimulate the economy and create or retain jobs within the community. “Microsoft Bridge” in Seattle received $11 million in stimulus funds. Despite having nearly $20 billion in cash reserves, Microsoft will be the prime beneficiary of $11 million for construction of a bridge to connect the two campuses of its headquarters. Oregon spent $4.2 million to raise railroad track 18 inches. In Scappoose, Oregon (pop. 6,200), drivers are tired of taking a detour to get past railroad tracks that are not level with the main road. Portland, Oregon, spent $1 million in stimulus funds for bike lockers. TuaLatin, Oregon, plans to spend $2.5 million on a “train-horn-free” zone. A Utah sheriff’s office has plans to purchase a Harley-Davidson motorcycle. Montana’s state-run liquor warehouse will receive $2.2 million in stimulus cash to install skylights. A California skate park will get a $620,000 “facelift.” The Bureau of Land Management is using stimulus funds to study the impact wind farms have on the sage grouse population in Oregon.

    Northeastern Region: Pawtucket, Rhode Island is spending $550,000 on a skateboard park. Yale and the University of Connecticut are receiving $850,000 in stimulus for research “to study how paying attention improves performance of difficult tasks.” Maine to spend over $1.3 million on “government arts jobs,” including $30,000 for basket makers, $20,000 for story telling, and $12,500 for a music festival. The National Institutes of Health is giving Yale University $680,100 in stimulus funds to study the effectiveness of diet and exercise at reducing obesity. Altoona, Pennsylvania is getting $819,000 for a homelessness prevention program despite local reports that the town may not have enough of a homeless problem to use it. Nantucket, Massachusetts, will spend $5.6 million in stimulus cash to resurface 6.4 miles of road and bike path, or roughly $875,000 a mile.

    (Source: 100 Stimulus Projects: A Second Opinion, Sen. Tom Coburn, 111th Congress, June 2009, Coburn.senate.gov. Used with permission)

    24th August 2011 at 4:19 pm

  41. db says:

    “Being angry is like drinking poison and expecting the other person to die.” – Buddhist saying

    24th August 2011 at 4:22 pm

  42. Colma Rising says:

    JMKES

    24th August 2011 at 6:06 pm

  43. RHenson194 says:

    @Gordon
    You would make a great addition to BHO’s think tank Gordon. Maybe if you forced everyone to make the exact same amount of money, we could live in a utopia…just one more idea for you to submit when you’re at your think tank interview!!!!

    24th August 2011 at 6:55 pm

  44. Colma Rising says:

    Ooh baby – Margaret Thatcher is so hot. I would do her. Ooh ooh ooh. Yes yes yes.

    thatcher1.jpg

    24th August 2011 at 7:08 pm

  45. Kill Bill says:

    All decent people, whether on the left or the right, should support Israel’s right to exist as the democratic nation state of the Jewish people.

    I have no problems with Israels existence. Or the countries that surround them. Or Americas.

    Get along already.

    24th August 2011 at 8:30 pm

  46. llpoh says:

    The only place for women in politics is in the waiting room, serving the men drinks and Hors d’oeuvres, Colma, menopause or not.

    24th August 2011 at 8:35 pm

  47. Kill Bill says:

    The only place for women in politics is in the waiting room, -llpoh

    I have a hard time telling them apart what with the Ronald McDonald costumes they wear.

    24th August 2011 at 8:37 pm

  48. Kill Bill says:

    Based on Federal estimates, the State of Oklahoma was awarded an “estimated” $2.6 Billion in recovery funds. from arra.ok.gov

    24th August 2011 at 8:44 pm

  49. Kill Bill says:

    Broadband Technology Opportunities Program
    (National Appropriation: $4,700,000,000)

    Oklahoma spent these stimulus funds

    and then more

    Job Corps Centers
    (National Appropriation: $250,000,000)

    Description: The American Recovery and Reinvestment Act allocates funds for the construction, rehabilitation and acquisition of these centers. Up to 15 percent of these funds may be allocated for Jobs Corps Centers for operation, which may include training for careers in energy efficiency, renewable energy and for environmental protection agencies.

    http://www.ok.gov/recovery/Funding_Categories/Business_&_Employment/

    24th August 2011 at 8:49 pm

  50. Kill Bill says:

    What Coburn didnt specify in his finger pointing rant is that Oklahoma took home 2.6 billion from the recovery act.

    Coburn is hoping that you will look, over there, stimulus waste, while ignoring his stimulus spending.

    You cant polish a turd but you can spray it with BS.

    24th August 2011 at 9:01 pm

  51. angryspittle says:

    “Useless jobs programs” like the WPA and the PWA. I wonder how useless those were to the millions of people who benefited from them.

    25th August 2011 at 2:05 am

  52. Administrator says:

    angryspittle

    Businesses create jobs. Government destroys jobs. Digging ditches and filling them up again does not contribute to the advancement of an economy. It creates mal-investment. Back to your regularly scheduled Keynesian channel

    25th August 2011 at 6:01 am

  53. Novista says:

    angryspittle

    Did you happen to notice FDR’s stimulus methodology? It was based on the voting record. Swing states got the lion’s share; sure states got enough to keep them from whining, and enemy states got little or nothing.

    What’s your take on the New Deal practice of maintaining high prices? Five million hogs slaughter, and two million cattle; cotton fields burned.

    Sure, give a man a government job, a paycheck, and he is better off. Who pays his wages? The taxpayers. Where is the productivity, you know, the P in GDP.

    25th August 2011 at 7:41 am

  54. Benign says:

    Quinn -

    You are allegedly a servant of the ruling class in your position with an Ivy League college, and your (updated, what we used to call) white liberal guilt overflows.

    Would you not provide food stamps to families without food? Would you not provide subsistence level income to those without jobs? As Cain remarked sarcastically when asked where Abel was, “Am I my brother’s keeper?”

    It’s time to recognize the fault is with capitalism–a system that, once a social contract is abandoned, aids and abets the excessive concentration of income and wealth to those that already have. You subscribe to Strauss and Howe’s thesis, as do I; but you need to take the next step and admit that the problem arises with misplaced beliefs in markets and capitalism. Both Keynesianism and Monetarism are failures, and have provided cover for the kleptocrats. When the circular flow of income and product becomes unbalanced, aggregate demand collapses. The failure of Keynesianism is that it doesn’t address the distributional underpinnings of the collapse of effective demand. Marx got that one right, and Keynes almost did in the quote you begin with (which alludes only to currency depreciation).

    What we need is government that has the balls to address distributional issues in a real way, instead of piling guilt trips on the already downtrodden.

    25th August 2011 at 10:39 am

  55. ron says:

    Governments declare war.Government spends money it dosent have and created our dept.Try to think of something the government does well?I think we really need term limits,same as the president,two four year terms,if relected.

    25th August 2011 at 11:15 am

  56. Administrator says:

    Benign

    We don’t have capitalism. We have a corporate fascist welfare warfare state. There should be a safety net for the truly needy. Don’t ignore the fact that millions of Americans are gaming the system and sucking as many entitlements as they can get their hands on. Yes the ruling elite are sucking the country dry from one end, but the lazy entitlement class is sucking from the other end. Ideologues always see one side of the issue.

    And fuck you with your Ivy League bullshit. I have no time for that drivel.

    25th August 2011 at 11:15 am

  57. Benign says:

    the “entitlement class” I worry about is your Ivy League students who will come out feeling entitled to run the country with the same arrogance you condemn it with to make yourself feel better. neo-feudalism, here we come, unless we address the distributional issues through a new more egalitarian social contract

    25th August 2011 at 1:08 pm

  58. Colma Rising says:

    Benign…

    Name a marxist government that isn’t feudal in nature.

    Name any western/European socioeconomic or political theory that doesn’t stratify eventually.

    Of course, I’d really like to know if you’re typing with calloused, swollen hands or the dainty fingers of
    privelege.

    25th August 2011 at 2:24 pm

  59. Administrator says:

    Benign

    What world do you live in? You surely don’t drive through West Philly every morning. Let me guess. You live in a Mcmansion in the suburbs and pretend to care about the poor while sipping wine on your deck and drive a BMW. Have I got you pegged?

    By the way, I’m not an Ivy League professor hotshot.

    25th August 2011 at 2:36 pm

  60. Administrator says:

    Benign

    You mean we need to redistribute some more of that wealth. Right big guy? The Federal government takes $2.3 Trillion per year from the productive and hands it to the poor masses. You clearly don’t spend much time among the huddled masses as they get out of their Mercedes to use their SNAP cards at the Taco Bell while talking on their iPhone in West Philly. You need to get out more.

    25th August 2011 at 2:53 pm

  61. Novista says:

    Benign

    … or Benighted? Let me offer you $1.37 trillion for your proper distributional issue. Do the math.

    Where does the wealth come from for this thought exercise? The combined kitty of the Forbes-400.

    Meanwhile, contemplate this: 76,069,000 non-paying tax filers for 2011. Top 20% group, 443,000. The 0.1% of the top, 3,000. How much more progressive do you want?

    26th August 2011 at 3:11 am

  62. Enriqueriosh says:

    I don’t really believe in Keynesianism, but there is an example where the Keynesian concepts worked. The funny thing is that the example is taken prior to birth of Keynes, it was during the Meiji Revolution in Japan.

    The Government, in an effort to modernize the country, spent money in those sectors with the potential of creating wealth, which lacked of private financing due to risk or the volume of the investments required. Once the companies were profitable, they were sold to private investors. Basically the State acted as a Venture Capital fund.

    That’s the only way to make Keynesianism works. Unfortunately, it is neglected by politicians; First because more right-oriented parties trust in Liberalism (I am very liberal), and second because more left-oriented parties, more pro-Keynesian solutions, believe in the superiority of the public sector over the private initiative.

    26th August 2011 at 9:22 am

  63. Dave Conna says:

    I see an enormous amount of (deserved) criticism for Obama and Keynes but apparently little recognition of the fact that the FUNDAMENTALS of our economic system are simply absurd: constant, EXPONENTIAL growth in a finite world.

    After all the vitriol in so many of the above comments is sifted through, what SOLUTIONS do you propose? We have a country of ignorant people – somewhat understandably so b/c the systems are so complex – but more than necessary since, as the author so humorously puts it, collectively we know more about Kim Kardasian and Snooki than what really matters.

    The article makes many very good points but in the end simply looks like an angry rant by an ideologue.

    Our goal should be to figure out a way to assist people to be independent and self sufficient. Our system of greed and self centered-ness is ultimately self destructive.

    28th August 2011 at 11:51 am

  64. Administrator says:

    Dave

    I’ve been writing this blog for two years with plenty of solutions offered. Good to see you are able to judge me so quickly. What does that make you ideology wise? What ideology am I espousing in your humble opinion?

    28th August 2011 at 11:56 am

  65. Dave Conna says:

    @ Admin

    I have not tried to “judge you so quickly”; rather, I am giving you my gut reaction to the article and more so to the comments of so many of your readers.

    But I am not interested in arguing about what your or my ideology is – I am interested in whether or not we want solutions that help get the world out of this horrific mess or just ways to help ourselves.

    I do not pretend to have a lot of solutions. I think I have some really good ideas to START from – but most of them challenge SOMEONE – and we don’t seem to listen to people who tell us things we do not like to hear.

    I would say that that is because life has been WAY too easy for us in the US – and I mean too easy for just about EVERYONE: the ultra-wealthy, the poor and the middle class.

    I hope that clarifies (just a little bit) where I am coming from.

    I am most interested in what you think of my first statement: that the problem is a fundamental problem with an economic system that expects constant, exponential growth forever. (Sounds pretty absurd when you put it that way, doesn’t it?)

    The best discussions come from those whose viewpoints differ from our own, provided there is honest open debate without trying to dimiss or discount someone because they have a different ideology or viewpoint or whatever.

    I have to go now – Tropical Storm Irene is making a mess of my yard and garden – but I will check back a bit later.

    Dave

    28th August 2011 at 12:19 pm

  66. Administrator says:

    Dave

    It sounds like you are on the same page as me when it comes to our ridiculous debt based fiat currency dependent system. You will find that this site is frequented by more libertarian minded people who would for the most part support most of Ron Paul’s positions on economics and empire building.

    As you stated, there are no easy solutions. Only less bad ones at this point.

    The criminal bankers must be brought to justice.

    The corporate fascist military welfare state needs to be dismantled.

    I think you will like this site and we welcome your future comments.

    28th August 2011 at 12:33 pm

  67. Petey says:

    Dave

    “Our goal should be to figure out a way to assist people to be independent and self sufficient. Our system of greed and self centered-ness is ultimately self destructive.”

    I think these are contradicting sentences. You want to ASSIST someone to be INDEPENDENT and SELF sufficient. But then you say SELF centeredness is destructive. But moving on….

    I think we all can see how “from each according to their ability, to each according to their needs” fails. Why in the world should I as an engineer, physician, etc. achieve and contribute as much as I can when anything I gain will be taken away from me by a third party setting arbitrary values. To say that “I am my brother’s keeper” perpetuates dependency and too many vote themselves this dependency.

    I think the solutions are simple:

    1. No more money special money printing schemes out of the Fed.

    2. No bailouts of banks, automakers, insurance companies, etc.

    3. Eventually eliminating direct transfer payments. I think many of these programs (Medicaid, LIHEAP, Food Stamps) are corporate welfare in disguise. The only welfare I would support as Milton Friedman suggested is a negative income tax rate. That way there aren’t special interests vying for specific programs and the poor spend the money how they want to spend it.

    4. Slashing Militarism and the DoD budget.

    5. Junking many federal EPA and OSHA regulations on manufacturing. The employees should handle any safety hazards on their own or with management and not expect big daddy to do it for them. Now I’m not saying pollute to high heaven. I’m saying localities and adjacent property owners should deal with companies in the area who are damaging property.

    6. Free market energy. A lot of this talk about deficits and inflation are meaningless unless we have enough energy inputs. Oil, Nat gas drilling. Eventually I am assuming price of both will allow alternatives like solar to be more economical. I don’t know, maybe the efficiency of solar has to be developed more as well. But subsidizing solar is how you destroy that alternative. I think maybe the smaller Thorium Nuke plants might be a better alternative to the large ones. Of course the large ones are paid for with subsidies. Maybe smaller, safer ones would be built when the gravy train is taken away.

    A certain amount of public spending is necessary to perform government functions. Roads, bridges, tunnels, buildings to house legislators, police, fire, etc. are necessary to provide services. What I am concerned about is when these things are considered as a means of providing employment. That’s when politicians have to invent a project. The argument is always to provide more employment but if you look beyond the surface you are taken tax money away from people who would have spent money on more needed things instead of the ginned up projects.

    That’s my plan, but I would never be elected because I can’t think of a cute 5th grade slogan to appeal to the masses or another welfare scheme. I actually want to solve our problems and eliminate dependency.

    28th August 2011 at 12:35 pm

  68. Petey says:

    7. Entitlements have to be reformed. (raise the SS age, change the Medicare price controls/fees, eliminate them all together eventually, etc.)

    I think your exponential growth question is tied in heavily with energy inputs and the fiat/credit monetary system. I have already shared my thoughts on energy inputs. People expect the exponential growth forever because of the credit system. Right now, the banks are not lending and thus the economy not growing because of tighter standards. Once they do, I think we will see “growth” but it will be more of the trickle down effect. Yeah there will be more jobs, but the inflation and the exponential credit expansion will be off charts as it is already.

    Working gold into the monetary system somehow would limit exponential credit growth. Of course the bankers would take the heaviest hit from that and would likely oppose it mightily. But you wouldn’t need exponential growth with a hard currency because prices would be kept in check and people could maintain their standard of living.

    28th August 2011 at 1:00 pm

  69. Novista says:

    Dave Conna

    “The article makes many very good points but in the end simply looks like an angry rant by an ideologue. ” But oh no, your initial comment was not judgmental.

    You want solutions? Quite a few have been offered by others. Sometimes a comment, like mine about tax, implies an answer. Work that out for yourself. Here’s one quick solution to one problem: recall all politicians who’ve violated their oath of office. The difficulty is in implementing it … remember the tale of belling the cat.

    The real problem you have is, how do you prohibit (exponential) growth with growing populations?

    And factor in the history of banking and money, which reveals the constant lure of inflationary policies.

    28th August 2011 at 7:59 pm

  70. eugend66 says:

    May I suggest an mises.org clip on the topic ? Long enogh, 57 mins. but the first 20 mins
    may be skipped: http://www.youtube.com/user/misesmedia#p/u/0/TxcjT8T3EGU
    Oh, it`s an non-economist`s speech rather a historian. I liked the last 15 mins most.

    29th August 2011 at 8:29 am

  71. Thinker says:

    Jim, have you seen PIMCO’s report on Keynesianism?

    29th August 2011 at 3:57 pm

  72. Administrator says:

    Thinker

    I hadn’t seen that report. It seems a little light on sarcasm, vitriol and Krugman cracks. I think my article was more entertaining and humorous.

    29th August 2011 at 4:07 pm

  73. Andrew Baker says:

    Interesting piece. However, those who wax nostalgic about the gold standard should provide a convincing analysis of the “Panics” of the 1870s and 1880s, which were in fact a combined 20-year Depression, far longer than what we call the Great Depression of modern memory. That “golden age” of hard money was a let-the-chips-fall-where-they-may era of unregulated capitalism and gold standard money supply. What better laboratory for gold lovers? So why all the panic?

    A well regulated economy is a little like the 2nd Amendment — no one on the Right remembers the first clause: “in order to maintain a well-regulated militia….” One small example of a well-regulated economy: the recent mandate to increase energy efficiency in light bulbs actually created new markets for private enterprise and was praised by light bulb manufacturers. Writ larger, that example can provide a model for a job-creating regulatory framework for productive investment. Unfortunately, we tend to swing wildly between conservative de-regulators that coddle the too big to fail and liberal over-regulators that stifle small businesses while benefiting the larger corporations that can handle paperwork (witness many of the regs proposed for the emerging organic food industry.) In both cases, politically connected big business wins and the real competitive capitalism of Main Street suffers.

    Challenge then — a well regulated economy. Light bulbs anyone?

    30th August 2011 at 11:18 pm

  74. llpoh says:

    Andrew Baker – that is some of the stupidest shit ever posted here. Government regulations do not add jobs. Perhaps the light bulb sector did ok out of this, but at what cost to the public at large? And a quick Google indicates that light bulb manufacturers are closing down left right and center. The number of Americans employed in the manufacture of light bulbs is miniscule. How many Americans lost their jobs from the flow on effect of the increased prices of the bulbs.

    Here is a quote for you, you stupid left-wing ignorant shit-for-brains:

    “The current price of CFLs reflects the manufacturing of nearly all CFLs in China, where labour costs less. In September 2010, the Winchester, Virginia General Electric plant closed, leaving Osram Sylvania and the tiny American Light Bulb Manufacturing Inc. the last companies to make standard incandescent bulbs in the United States”.

    Yep, government regulation sure does work. Ignorant asshole.

    30th August 2011 at 11:50 pm

  75. Petey says:

    llpoh you beat me to it. Regulating efficiency, emissions, etc. requires that the companies meet a standard. To meet this standard they have to put capital into redesigning a product. What companies are usually the ones with more capital? Maybe larger ones? It should be plainly obvious that the regulations are almost always there to coddle the big boys. I would assume very few are actually there with the intent to protect the consumer. Apparently, some people can’t see the forest from the trees and they tend to be the hit and run trolls.

    31st August 2011 at 12:00 am

  76. Colma Rising says:

    Anrew Baker. You’ve been fed a spatula creamed with shit and swallowed it’s nutty goodness.

    The 1870′s was a post Civil War decade. That meant a recall of bank notes, scarce pennies (copper was melted for bullets) and even the demonetization of silver. Sound deflationary?

    The credit expansion of a war, you’ve been told, was a form of Keynesian boom. Bullshit. Rations, destruction, conscription… sound like “wealth creation”? No. It sounds like hell. Sounds like a “well-regulated economy” too.

    If you pause for a second before throwing around misnomers like “Bust” and look at the facts: You know… inventing light bulbs, telgraphs, airplanes and, incidentally, American Trade Unions… you MIGHT conclude, if you stop burping your Keynesian fecal dinner, that the Gold Standard and the “Bust” was one of the greatest things that could happen to a working person. Wouldn’t it be great if taco bell had a 45 cent menu again? How’s about a home for only 3X your yearly income? Wow! Think of the true wealth creation!

    If robbing the Middle to pay the rich and poor is your idea of a boom, I must kindly ask you to blow it out your ass.

    So is it?

    31st August 2011 at 12:23 am

  77. llpoh says:

    Petey/Colma – nice smackdown on that troll Asshole Baker.

    31st August 2011 at 12:35 am

  78. AKAnon says:

    Mr. Baker, I will leave to others your economic education-they are doing fine. But I must ask, are you suggesting that the “well regulated militia” phrase somehow implies that law-abiding individuals are not guaranteed the right to privately owned firearms? Can you find any evidence from the era that was the intent of the framers? Are you sure you want to go there? Think carefully.

    31st August 2011 at 12:39 am

  79. Novista says:

    Andrew Baker

    Several have given you points to think on. I suspect you won’t and will likely not return. But, should you venture where angels fear to tread, I will offer a factoid or two.

    The first easy one, Henry Hazlitt, “Economics in One Lesson.” Additional elective reading, Bastiat’s “The Law”. Advanced work, “A History of Money and Banking in the United States” which may shed light on … “the ‘great depression’ of the 1870s is merely a myth … prices in general fell from 1869 to 1879 by 3.8% per annum … ” Meanwhile, productivity and exports rose significantly, and lo! wages were up. too. Some depression.

    Of course, you have to factor in Lincoln’s war and greenbacks trashed the bimetallic standard that the Constitution had mandated. And the ‘crime of 1873′ killed silver as a monetary metal. Really, the Cliff’s Notes version won’t do you any service.

    As for:

    “A well regulated economy is a little like the 2nd Amendment — no one on the Right remembers the first clause: “in order to maintain a well-regulated militia….”” And the Left never remembers, “the right of the People” … as SC Justice Antonin Scalia said: “Nowhere else in the Constitution does a “right” attributed to “the people” refer to anything other than an individual right.””

    Strange how I’ve met many Democrats in cyberspace, IRC, usenet, blogs, and, like as not, they’re women and supportive of gun rights. Whatevs.

    A well-regulated economy would have to encompass the ‘robber barons’ working hand-in-glove with Washington, DC. (Pity James T. Hall didn’t fit in, eh?) And from there through FDR’s cartels to Amtrak. And now, corn-for-ethanol. And while lightbulbs are topic of the moment, it appears the CFL is the loser to the LED (when they get the cost right.)

    Maybe innovation should be left to the innovators, and let God sort them out?

    31st August 2011 at 6:58 am

  80. eugend66 says:

    You guys may like this presentation Peter Schiff made some time ago:
    http://www.youtube.com/v/EgMclXX5msc&rel=0&hl=en_US&feature=player_embedded
    For those with time to “spare” ; some 75 mins !

    31st August 2011 at 8:12 am

  81. eugend66 says:

    Some years ago … . Great guy.

    31st August 2011 at 8:15 am

  82. Smokey says:

    Andrew Baker,

    This site is not flooded with witless pussies lapping up your many profound insights, as you are accustomed to on Seeking Alpha.

    Most of the regulars here, like those above, will not hesitate to pack your shit if when you post stupid shit in an attempt to show some sort of extraordinary revelation.

    Most people here see through that shit INSTANTLY, as you just discovered.

    31st August 2011 at 9:53 am

  83. michaelj007 says:

    @ Admin

    Great piece! I’m glad to see we still have some people in this society who are able to intelligently critique our leadership. What’s more refreshing is ability to sit right back and peer through the foggy looking glass of history to unravel the horribly distorted views of the “facts” we are spoon fed by the public education system. I’ll be 30 yrs old before year’s end, and I have yet to meet more than a handful of people in my age group that really grasp what’s going on within our nation and, once great, society today- and I find this to be incredibly disturbing. NO ONE MY AGE GIVES A FLYING FUCK! Go ahead and ask someone under 30 some pretty standard questions- How did Saddam Hussein rise to power in the first place? Where did the the “taliban” in Afghanistan get their weapons from? Who is Ben Bernanke? What is a dollar? Name 1 foreign president.- and the reactions range from a glazed over look to a “man, I don’t care about any of that stuff.” Its very unsettling. Ask them when the next iPhone is coming out, or name 10 songs on the top 40, or name 4 members of the Jersey Shore crew and they will snap out correct answer with the military tact and precision. Still, I’m hopeful. Hopeful that when things get bad enough, and they will, people will start paying attention and start demanding some REAL answers other than- where will the next Real World take place?

    1st September 2011 at 9:41 pm

  84. Administrator says:

    michaelj007

    Don’t you realize the season premiere of Jersey Shore is on? Plus Obama has a plan. Trust him. Has he ever led you astray before?

    1st September 2011 at 9:51 pm

  85. Andrew Baker says:

    Its a pleasure to engage in such a well reasoned discussion. On other sites, people just spend their time hurling swear words around and making uninformed characterizations about my educational background and political affiliations. Not here, I’m glad to see.

    1870 was five years after the end of the Civil War, which the writer seems to suggest was illegitimate because greenbacks were used to hold the Union together and end slavery. (Slavery is a good example of an over-regulated economy, wouldn’t you say?) What about the 1880s and 90s? Still a lot of “panic” and instability. That was the era of railroad barons and big banks oppressing farmers that spawned the Populist movement and William Jennings Bryan’s “cross of gold” speech. Some of the angry writers on this site sound a bit like the Populists of that era. Read about it and see for yourself.

    We are living today with the clear and present problems of a paper money system in the hands of very poorly regulated mega-banks and hedge funds. On that we probably agree. What I am suggesting, which may be hard to accept for the ideologically fervent hard money folks, is that the gold standard is not by itself a panacea for our problems. Things were tough back in the good old gold days.

    A 45 cent Taco Bell meal may sound good to one writer, but most of us would not be able to afford that 45 cent meal in a gold standard world, because we would be paying for food with scrip at the company store (Walmart) or bartering eggs and carrots with our neighbors, if we had any. The gold, just like paper money, rises to the top and gets socked away in the bank vaults of the rich. It doesn’t circulate well. A big difference between a gold economy and a paper economy is that there is a lot less money circulating among ordinary people in a gold economy. Houses may be priced at 3x some people’s income, but they also required a 20% down payment and a five year mortgage so very few could afford the payments. The people with the gold could not create longer term financial instruments because they could not back those larger and longer debts easily with gold.

    A well regulated economy is hard to create, in any era, under any administration – Democratic, Republican or otherwise. A regulatory framework, however, does not in itself kill jobs or stifle innovation. Don’t like my light bulb example? Try this one: the price of fossil fuel in the U.S. and Europe is exactly proportional to the energy efficiency of those two economic zones. In the U.S., gas costs half as much as Europe, and we are half as efficient. That is, it takes us twice as much fuel here to do the same things Europeans do — heat homes, travel etc. Artificially regulating that fuel price by taxing it up to $7 a gallon has spurred a revolution in efficiency, building technology and renewable energy. We import Venmar and Buderus furnaces from Germany because they are among the most efficient in the world. And for those who mourn the loss of those incandescent light bulb jobs (a bit sentimental for those who love the “creative destruction” of free market capitalism, don’t you think?), remember that Germany still has a strong manufacturing economy along with national health care, 4 week vacations, and unions that cooperate with industry to preserve jobs when the economy slows. We might learn something from their approach to a well regulated economy. We are now about 20 years behind as a result of our lack of political will in the energy policy area. Want to see an economy with really cheap fuel prices? Take a look at Iran or Venezuela. Gas is about 25 cents a gallon in Iran but there’s not much of it, even though it’s an oil producing nation.

    Regulations provide the predictability that business value. The theoretical alternative may a “free market” but the practical reality of that kind of freedom looks more like the thuggery and corruption that accompanied the end of communism and launching of capitalism in Russia during the 1990s, or the drug baron economy of Mexico …. or the Pinkerton private armies of the 1880s and 1890s, to return us to our own golden age — war in the coal fields, 14 hour work days etc..

    Those who associate regulation with Democratic administrations might pause and remember that it was during the Nixon era that the EPA was created, along with the Clean Air and Clean Water acts. Is anyone suggesting that unregulated businesses have a good track record managing public goods like air and water? And it was Nixon who took the US entirely off the gold standard.

    The global economy is a big messy and complicated thing. It’s not likely that a return to gold will happen on a global scale without a pretty major cataclysm that destroys most of the world’s major currencies (and likely a lot of other stuff and people too). Even less likely that a return to gold would be a good thing for a global trading system. But it could be a good experiment at a local or even regional level. There is no law stopping you or me from issuing our own currency. You could start a bank tomorrow and back your own currency with gold and begin building the world you envision. Get off the old posterior and grab those bootstraps! I bet if all of the people who spent the past few days swearing at me pooled your shekels together, you could actually do this, rather than just ranting at those you perceive to be threatening to douse the fire protecting the mouth of your ideological cave.

    Grab hold of the courage of your convictions! Joseph Smith did … remember those golden tablets? The Mormons are pulling off their own social experiment in Utah and even have a candidate running for Prez. Not bad for a pretty nutty little religion that was roundly hated by nearly everyone else in the 1840s. The gold bank could be your heroic beginning. Good luck!

    1st September 2011 at 11:15 pm

  86. Smokey says:

    Andrew Baker,

    Your time could have been far better spent taking a shit than composing that nonsense. The people here that bother to read it are very few in number, and the people who agree with it even fewer.

    Take your nonexistent writing skills back to Seeking Alpha, where there are some idiots who will buy your stupid shit.

    This is the wrong site to motherfuck gold.

    Please read for comprehension the response by LLPOH to your earlier post.

    1st September 2011 at 11:56 pm

  87. Colma Rising says:

    Andrew…

    If you insist on eating proverbial patties of stinking shit cakes and liking them, please do not chew with your mouth open.

    It’s barbaric.

    2nd September 2011 at 12:25 am

  88. AKAnon says:

    OK Colma, that warranted a thumbs up. Now don’t get a swelled head.

    2nd September 2011 at 1:05 am

  89. Colma Rising says:

    Thanks, AKAnon. No worries. Too tired for pride…

    Consider yourself removed from my Punk Book.

    2nd September 2011 at 1:32 am

  90. Colma Rising says:

    Mr. Baker…

    http://en.wikipedia.org/wiki/Coinage_Act_of_1873… “The Crime of 1873″ to the Populists.

    You ought not discard populism altogether. (Fire away, Novista)

    I consider myself a Neo-Populist.

    Hoarding gold, the Money Of Kings is one thing, but the demonetization of silver dealt a kick in the nuts to the circulation of real tender.

    You’re not seeing the big picture.

    Who in the fuck do you think put the Referendum and Direct Democracy in the California Constitution and just who did it serve? Clue in your latest spazfest.

    I want you to think about it. When you see that you’re in fact eating a figurative bowl of Poop Porridge disguised as economic pudding treats fed to you by sinister policy magicians, then Uncle Colma will teach you more.

    For now, I suggest a tall glass of water and an antiseptic rinse.

    2nd September 2011 at 1:52 am

  91. llpoh says:

    AB – What a stinking pile of shit. Conveniently ignoring Germany’s massive debt, aren’t you, dickhead?

    And your examples re petrol are also bullshit. The fact is Europe has a GDP approx 40 percent below what it would be if it were not such a regulated welfare state. Sure – let’s use a continent that is falling on its face as an example of how to succeed.

    No comment on the GDPs of European nations, I notice. Gee, a real bastion of efficiency.

    I repeat, what a pile of shit. I am just glad you didn’t use Somalia as an example – it would have been no less stupid.

    Do us all a favor and go buy a clue before you post again.

    2nd September 2011 at 4:24 am

  92. llpoh says:

    AB – let me restate – Europes GDP has suffered a 40 percent hit because of over-regulation (about 1 percent per year compounding over a lot of years now) and excessive welfare. Jam that argument up your ass.

    2nd September 2011 at 4:29 am

  93. cv51 says:

    Michaelj007, Those who are not paying attention will be ripe for picking by the political demagogs. They vote for the ” Hope and Change” candidates.

    AB: Your just trying to stir up some shit right? Your really not that f*&^%$ misguided?

    2nd September 2011 at 6:51 am

  94. Novista says:

    A Baker

    “There is no law stopping you or me from issuing our own currency.”

    Care to run that by the IRS, FBI, legal tender laws? How about that NORFED Liberty Dollar saga? Even quirkier was the case of the builder who decided to pay his sub-contractors in gold, until the U.S. decided legal tender wasn’t legal tender. In the first instance, it was asserted people would mistake those silver coins with legal tender.

    3rd September 2011 at 2:32 am

  95. Colma Rising says:

    Novista with the reality smack-down from down undah…

    3rd September 2011 at 3:08 am

  96. Novista says:

    Colma

    I quite agree with you about silver as real tender. The problem with that was the bimetallic standard as specified in the Constitution was a flaw that yielded, as always, to Gresham’s Law. That happened in Great Britain in the 1700s, where undervalued silver coinage left the country for better return in Europe, as a commodity metal. A mint ratio can’t correct against the market.

    Time and again, that problem raised its ugly head in early America. Sure, a fight against the Money Power of the eastern banks was justified. ‘Cross of gold’ nailed it.

    Where they went wrong in 1894 was naively believing bringing back the Lincoln income tax would help them. Even worse, they were led to believe a central bank would be a good thing. The whole history of banking in America, from the Bank of North America, to the Bank of the United States and the Second Bank of the United States always led to bankers gaming the system. You couldn’t begin to count the defaults of redeeming paper against gold.

    The “Creature from Jekyll Island” was the penultimate chapter in a years-long campaign of propaganda, with front organizations of ‘independent’ businessmen, co-opted newspapers and more, and the populists movement bought that pig in a poke.

    Both aspects of the populist agenda came to fruition in 1913, when Wilson signed off on the original tax legislation using the 16th amendment as an excuse, and of course the FRS on Dec. 23rd.

    They truly believed the income tax would limit the excesses of the rich and that the ordinary working man would have, as one would say now, a more level playing field — and that an independent authority would control the baniks. We see how that worked out.

    But! there’s always a plus. The banksters also co=opted the bookkeeping class, persuaded them they would become a respected class of accountants. And today we have an MBA hosting a site that lets us discuss this shit. It’s all good.

    3rd September 2011 at 6:33 am

  97. Andrew Baker says:

    Try this as an experiment — remove all references to shit, poop, fucking of any kind in your next post and then see if there is an argument remaining. If so, press “submit comment”. Psychoanalysts long ago documented the fascination with shit and the fascination with money. Don’t indulge them further.

    There are non-dollar currencies currently circulating in the U.S. Berkshares in Western Mass. is one. Ithaca Hours in western New York is another. They are legal tender.

    Western European economies may be operating at 40% less than their full capacity in some economic framework that hasn’t actually been implemented yet. But Germany does still have a manufacturing sector that looks pretty good compared to most other countries – that was my point. And one worth looking at. It requires an integrated set of policies and regulations to maintain a manufacturing sector — including decades of consistent investment in trade schools and apprentice programs that we have not done. The free market by itself doesn’t create and maintain that kind of expertise among a skilled working class. I know a lot of machinists in the U.S. but they are old now — the new generation didn’t come up to replace them because the jobs weren’t there, nor was the educational infrastructure. And now there are some good skilled jobs going begging because we haven’t trained people for them… now that the old paper dollar has dropped some in value. It’s a complicated world.

    GDP is a pretty crude measure of a nation’s real prosperity — in this country it includes the prison industrial complex, a massive defense economy, toxic waste dumps and a whole lot more unpleasant stuff. I’ll take a 4 week vacation over more prisons any day. And I’d willingly pay $7 for gas if the result were an invigorated domestic renewable energy tech boom, a 50% increase in energy efficiency like the Europeans have achieved, and far lower dependence on the massive imports of foreign oil that has led us into imperial over-reach, endless war and corruption of our own government by mega-corporations. Those higher gas taxes could be offset by lower payroll taxes and other measures. Those are a few examples of policy shifts that might lead us closer to a “well-regulated economy”. None of them involve gold.

    Now, would a gold-backed currency help, hinder or make no difference to those kinds of issues — oil dependence, loss of our manufacturing sector and good jobs, imperial over-reach and a bloated defense sector? Not sure. It seems clear to me that the world we live in needs more than just a return to the gold standard in order to function well. I await your well-reasoned arguments. That is why you value this site, no? You can swear at people on any chat line.

    Notice — no references to shit in the above! Caged primates fling their feces about. You are free men and women are you not?

    11th September 2011 at 9:58 pm

  98. LLPOH says:

    Go fuck yourself you cockgobbling pile of arrogant shit.

    11th September 2011 at 10:22 pm

  99. The most under reported news items for the week of September 4th , 2011 « SmartScarecrow says:

    [...] KEYNESIAN SOLUTIONS – AFTER TOTAL FAILURE – TRY, TRY AGAIN http://www.theburningplatform.com/?p=20378 US Government Asset Seizures on the Rise http://lewrockwell.com/orig11/black-s80.1.html Cops [...]

    26th March 2012 at 7:57 pm

  100. The most under reported news items for the week of September 4th , 2011 | The SmartScarecrow Show says:

    [...] KEYNESIAN SOLUTIONS – AFTER TOTAL FAILURE – TRY, TRY AGAIN http://www.theburningplatform.com/?p=20378 US Government Asset Seizures on the Rise http://lewrockwell.com/orig11/black-s80.1.html [...]

    29th April 2012 at 8:27 pm

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