Quote of the day
posted at 10:02 pm on October 12, 2008 by Allahpundit
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“With no desire to exaggerate, this might be considered the financial pre-conditions of a depression.”
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You are tooo cute…
401k are government created accounts for the workers.
401K are Government created accounts…. where ever did you get your education? Did you make it past the 12th grade?
Your kool-aid view of taxes again paints you as an extreme individual that can not think for himself.
My view becomes very clear when someone reaches into my wallet.
Palease, embarrassment is my freedom to do as I want.
And you give Socialist a good name. Such a good commie you are. My embarrassment is my choice, as is spell checking, and reading comprehension.
I am actually an investor and stock trader I understand risking capital.
I’m sure my investments are doing better than yours. Let me know who and where you place your money so I can avoid any loss of my money.
I’m sure your career in investment will last about, 3… 2…
Kini on October 13, 2008 at 5:00 AM
you have no idea where I come from.
Neither do I care.
You write like Representative John Lewis (D – GA).
I happen to be a conservative. A CONSERVATIVE!
You got to be kidding? You say I’m embarrassing myself?
Where are you working? If working at all.
Kini on October 13, 2008 at 5:19 AM
I get really flustered by these debates on what we should do. I can tell you one thing we cannot do, that is just let the market self-correct. That is exactly how we got the Great Depression last time our banks screwed us this badly.
Don’t get me wrong, I fully understand the concept of making people be responsible for their actions. I also fully understand not wanting our government to become the owner of the banks. I hate socialism too.
The problem is that it does not serve anybody well to go into a depression for decades in order to teach an object lesson. That is the economic equivalent of a radical Muslim killing a woman for talking to an infidel. It is taking an ideology so far that you become fanatical and self-defeating.
While I do not agree with how the problem is being approached, we MUST try to avoid a depression if we can. A depression will not hurt just the responsible parties, it will hurt everyone. Even the people that have been responsible will get hurt. SO please just stop acting like radical nuts and understand one thing…
The government has a role to play here because they are the only ones that can. If they don’t we are done. While it might not be ideal we need to concentrate on efforts to propose solutions that keep our banks private and help the consumer rather than the corporations. The only way we will avoid a depression is if we can keep people spending money and trusting that it will all work out. If the cash continues to tighten then we will get either a deep recession or a full-blown depression.
Hawthorne on October 13, 2008 at 5:22 AM
I live in the Detroit are and have watched the downward spiral of the auto companies. There are a lot of reasons for this, but the stock market is the primary reason.
The board of any public corporation is elected by the stockholders. These stockholders have only one goal, to make a profit on their stock. Ideally this profit is realized long term. That allows the companies to grow in a stable way and make use of the cash influx of a stock issue.
When stock is turned around very quickly it becomes a negative for the company. If there is large sell-off because of a drop in stock value the companies become cash strapped because they have to come up with the money to buy back their stock. This loss of liquidity has put many companies under.
There are two times in our history where the stock market ceased to become an investment in the long term growth of a company and became a vehicle for fast profit to investors. Both of these periods have ended in horrible conditions as the banks played fast and loose with their investments and led to a run on the market. The first was the Great Depression, the second is now.
The profit is the only consideration thinking that is forced on the boards of our corporations is there because of demand for high returns by the stockholders. It is our own greed that causes our jobs to be sent overseas.
I think three rules would go a very long way toward fixing the problems in the market and jobs here in America.
Outlaw leveraged transactions. All stock must be purchased immediately with cash on hand.
All securities and stocks must be held for at least 30 days (or longer) before it can be sold without a penalty. This will remove the “get rich quick” impetus of the market and turn it more toward stable long term investment.
The tax rate on any company operating in America is directly proportional to the number of Americans they employ. A company with 100% American employees will not pay any taxes at all on money earned in the United States. A company that has no American employees will pay a ceiling of say 80% on their profits.
They want to take our money out of the country, but there is not any real reason our economy should be the vehicle to fund growth outside of America while we get fleeced.
Hawthorne on October 13, 2008 at 5:43 AM
That is not how the Great Depression happened.
The Great Depression happened because of several blunders the government imposed after the credit markets failed.
1. Herbert Hover raised taxes after the Stock Market crashed, see Revenue Act of 1932, the problem escalated.
2. Socialist – FRD may had had our nation’s welfare at heart, the solution were wrong. But I don’t want to go back to prove it.
Bottom line: The Free Market Won. Socialism Failed
Kini on October 13, 2008 at 5:49 AM
BS. I haven’t bought a GM, FORD or Chrysler because they produce crap. CRAP.
I owned a 67 Chevy Malibu back in the 70″s and it was CHERRY.
But since then, the whole Auto industry has gone down hill from the unions, environmentalist, and Ralph Nader. My last GMA TranSport that broke down in Yonkers NY along the Saw Mill River Parkway gave me that reality when the dealership refused to work on my car.
The Board is also the reason why CEO’s get Million Dollar Parachutes. So, I am in agreement with you.
Interesting…. and I think I agree, in principal.
Kini on October 13, 2008 at 6:07 AM
Hawthorne,
You are a glittering jewel of ignorance.
So the excessive union contracts that paid above market wages, force inflexible work practices, and huge pensions had nothing to do with it.
The stock market acts in ways that expose unrealistic business practices. You are blaming the little boy for pointing out that the auto company emperors had no clothes.
So you propose the sort of policies that led to the Great Depression. Brilliant! /sarc
Spoken like a true Detroit union thug. Ignore the greed of unions and blame the companies for looking for other sources of labor when union labor become uncompetitive and a threat to the survival of the company.
Better to regulate the credit for leveraged transactions.
Otherwise, investors can use the securities as collateral for loans outside US control to get the same result as a leveraged purchase through a US brokerage. As you have accomplished is moving Wall Street jobs overseas. Is that a bad thing?
Destroy liquidity for securities in the midst of a credit/liquidity crisis. And this will help make stocks more stable by setting their value close to zero. Brilliant! /sarc
So companies show have increased barriers to invest in the US. Thanks for cleaning off the Smoot-Hawley tarrifs that led to the Great Depression, along with union laws and other minimum wage restrictions that led employers to fire workers as their only legal alternative to market conditions leading into the Great Depression.
If your silly ideas were implemented, lots of companies would take their money out of the US as fast as they could. You obviously have not thought through the implications of your proposals. I can see that you are not used to being taken seriously. You have incorrect and harmful ideas about things you offer opinions, without a clue.
Right_of_Attila on October 13, 2008 at 6:20 AM
On second thought…. NAW!
If that were the case…. nobudy wood in invest here!
Kini on October 13, 2008 at 6:28 AM
I do not want to see a depression. Anyone who thinks that Americans will set back and debate the political philosophy of doing nothing vs not doing something if and when we enter a depression is just fooling themselves.
Living in a fairy tale world.
Not looking at reality.
Americans are not crazy about NAFTA right now because they think it means that big bad companies go to Mexico and Canada and employ illiterate children in the place of American workers. True? No, but that is what a lot of people think.
And if we sit back and debate whether the government should get involved via bank stocks or whatever while the world economy goes into a global seizure, people will blame the government for not doing more to protect them. You can call it what you want, but that is what will happen.
Terrye on October 13, 2008 at 7:05 AM
I know people will say it does not matter what ignorant people think, that what is wrong is wrong and socialism is socialism or whatever.
But thinking that it does not matter what people think is exactly what put Obama in the lead. And he is a lot closer to a real honest to God socialist than anyone we have seen in the White House since FDR. If the government does not put something into place now to stop an honest to God meltdown and he becomes president, he will do whatever he damn well pleases because he will say it is a national emergency.
Terrye on October 13, 2008 at 7:10 AM
If Obama, as president raises taxes the way FDR did. If Obama as president starts regulating everything in sight the FDR did.
The chances of this recession turning into a depression near unity.
MarkTheGreat on October 13, 2008 at 7:20 AM
The biggest thing clusterf—ing the automotive industry is the giant yoke of pensions and retirement benefits hung around its neck by the United Auto Workers. For decades, GM rolled over to crazy union demands for added benefits. That, in turn, caused Ford and Chrysler to do the same.
Now it’s time to pay the piper. I think something like $2,500 of the price of any domestic car goes directly to UAW pensions/benefits. For a Honda, it’s like $1,000.
On the subject of government intervention and the great depression… Even most conservatives, post Andrew Jackson, believe that the government plays an important role in monetary policy. That’s why almost all banks in the United States operate under a federal charter, and why the Fed has so much power. Government policy (both in terms of tariff policy and monetary policy) played a HUGE role both in causing and prolonging the great depression. One hopes we’ve learned since then…. and part of learning is making sure we do not elect Obama as President and place Obama, Biden, Harry Reid, and Nancy Pelosi in unfettered command of the entire country!
Outlander on October 13, 2008 at 7:37 AM
You are damn right. Divided government right now should be a MAJOR selling point for McCain. Conservatives should be making this argument big-time in public as much as possible, and the McCain campaign immediately should start tying Obama directly to Harry Reid and Nancy Pelosi (who have lower approval ratings than Bush!).
The sales pitch: Electing Obama President means that Obama, the most liberal Senator, will be able to work with Pelosi and Reid to enact far-left wing legislation. There will be no check on their liberal inklings. And may we remind the American people that Bill Clinton made the same middle class tax cut pledge Obama did, and then turned around and ushered in the largest tax increase in modern American history in his first year in office? The world economy and our national security are both in too much peril to trust to a far left “community organizer” and his far left pals in Congress.
Outlander on October 13, 2008 at 7:47 AM
I’m sorry, unseen, but your posts on this thread are very reminiscent of Das Kapital.
OldEnglish on October 13, 2008 at 7:51 AM
Terrye,
He won’t have to declare a national emergency. He will have a rubber stamp Senate and House to fast track his wishes.
Thanks Johnny Mac, if you can’t beat a Marxist Chicago street thug you desreve to lose.
God help us.
mountainmanbob on October 13, 2008 at 8:51 AM
sorry, deserve
mountainmanbob on October 13, 2008 at 8:51 AM
Leave it to the DOOM AND GLOOM DEMS….
I prefer to say
With no desire to exaggerate, this might NOT be considered the financial pre-conditions of a depression.
CynicalOptimist on October 13, 2008 at 10:28 AM
1) “Outsourcing” is just a derogatory label for trade.
2) Unions are the monopolies that are causing the big manufacturers to go under. Let them. Car makers not infected by unionization will take their place.
3) The drop in housing prices is not in itself deflation (though they could be related). Deflation kills investment, so we should try to prevent it. Just remember to turn the spigot off once the threat passes.
4) Spending does not cause economic growth. For the same income, the more invested, the more the economy grows. However, people may be more willing to work to spend than to invest, and the aggregate willingness to work also affects economic growth.
Count to 10 on October 13, 2008 at 12:15 PM
Right_of_Attila on October 13, 2008 at 6:20 AM
It may not be a silly idea, but I find it a foolish assumption that Hawthorne is a union thug
One might not want to jump to the conclusion that Hawthorne has not thought his ideas through
I cannot deduce from Hawthorne’s comments that he is not used to being taken seriously.
I do not find ideas harmful. I find all ideas useful. It is implementation that can be harmful
I missed the clue that explained why Hawthorne, the union thug, does not have a clue. Perhaps because I missed the proof that Hawthorne is a union thug
Re: the conclusion that
I thought they already did.
Large corporations point the boat to maximize short term profits. That is why the crash happened
Interestingly the U.S. bailout, having preceded the current international bailout, caused a huge flow of money into U.S. Treasuries as money holders outside the U.S. cleaned out their banks, thus forcing the European bailout. Sometimes the backwash of the corporate boat brings flotsam and jetsam to your shores
‘flotsam and jetsam’ both words originated in 17th-century sailing terminology. Flotsam literally meant “wreckage or cargo that remains afloat after a ship has sunk.” Jetsam meant “goods thrown overboard from a ship in danger of sinking in order to give it more buoyancy
entagor on October 13, 2008 at 1:57 PM
I am in agreement that unions have done a fantastic job of killing the golden goose in the auto industry. The downturn of the American auto industry revolves around several important factors, and yes, the unions have been a very damaging part of it. But that is not the entire story.
People act as though outsourcing our jobs is trade (as one of our previous commentators states). Since when have our jobs become the centerpiece of trade? I always believed trade is about selling a product. Currently trade is not a positive for America. We have a trade deficit measured in many billions of dollars. That does not represent our wealth working for us. It represents our wealth being drained off to other countries.
People love to talk about responsibility here. They love to point out how we must live inside our means. But they completely ignore the massive outflow of our cash to other countries as though this is a sensible and balanced trade policy. It is not. It is a way to have America fund the growth of other nations. It is international welfare, and it is fueled by companies that are misleading about labor costs.
It is important that we stop oversimplifying the causes of our economic troubles. They take a very large number of forms. It is not just the banks, or greedy companies, or greedy stockholders, or greedy consumers, it is all of them. To point at one part of it without acknowledging the rest is to be purely blind and ignorant.
I hate the bailouts. I hate that we have to do this over our own laxness and stupidity. But there is one point that is inescapable. The taxpayers are the ones that are bailing out the country. They are the only ones that will bear the burden in the end. Therefore they are the only part of this equation that has a right to be aided by the bailout. It is their money.
I am not proposing that we help the companies that did wrong any more than necessary to avoid a depression. But I am proposing that we help them by helping the American people. They are the ones paying, and they are the only ones that deserve the help.
Hawthorne on October 13, 2008 at 2:28 PM
Many ideas seem crazy at first until you actually think them through. But one thing is absolutely certain, you haven’t thought mine through at all. If you did then you might be able to concede that there is some thought in them even if they seem radical. I am perfectly willing to explain this to you if you like. But this is not the proper forum for that.
Hawthorne on October 13, 2008 at 2:49 PM
Perhaps what you are missing is that the most of the best economies all through history have not been examples of pure socialism or free markets. The best economies have elements of both. The US has a mix. The interstate road network is not privately owned. Government has a role supporting and encouraging the markets to be as free and fair as possible.
lexhamfox on October 13, 2008 at 5:32 PM
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