mediapro

Why I Think Paul Krugman Is Wrong

So, to whom do you intrust our country?

Arthur Laffer, Jude Wanniski, Dick Cheney, Don Rumsfeld?

They did a fine job of running this country into the ground.


On Mar 23 12:59 PM Steve in Greensboro wrote:

> Generally, you can't go too far wrong assuming whatever Paul Krugman
> says is complete garbage. The same is true of Brad DeLong.
>
> But what to do when these two disagree? It is a puzzlement.

The Next American Revolution: Main Street vs. Wall Street

Kudos to the author of the following, a direct reflection of our Canadian author's point and food fort thought:

The Speech I Wish Obama Could Give

Fellow Citizens:

My administration came to office with a mandate for bold action at a time when our most powerful economic institutions had clearly failed us. They crippled our economy; burdened governments with debilitating debts; corrupted our political institutions; and threatened the destruction of the natural environment on which our very lives depend.

The failure can be traced directly to an elitist economic ideology that says if government favors the financial interests of the rich to the disregard of all else, everyone will benefit and the nation will prosper. A thirty-year experiment with trickle-down economics that favored the interests of Wall Street speculators over the hardworking people and businesses of Main Street has proved it doesn't work.

We have no more time or resources to devote to fixing a system based on false values and a discredited ideology. We must now come together to create the institutions of a new economy based on a values-based pragmatism that recognizes a simple truth: If the world is to work for any of us, it must work for all of us.

Corrective action begins with recognition that our economic crisis is, at its core, a moral crisis. Our economic institutions and rules, even the indicators by which we measure economic performance, consistently place financial values ahead of life values.

We have been measuring economic performance against GDP, or gross domestic product, which essentially measures the rate at which money and resources are flowing through the economy. Let us henceforth measure economic performance by the indicators of what we really want: the health and well-being of our children, families, communities, and the natural environment.

Like a healthy ecosystem, a healthy twenty-first-century economy must have strong local roots and maximize the beneficial capture, storage, sharing, and use of local energy, water, and mineral resources. That is what we must seek to achieve, community by community, all across this nation, by unleashing the creative energies of our people and our local governments, businesses, and civic organizations.

Previous administrations favored Wall Street, but the policies of this administration henceforth will favor the people and businesses of Main Street—people who are working to rebuild our local communities, restore the middle class, and bring our natural environment back to health.

We will strive for local and national food independence by rebuilding our local food systems based on family farms and environmentally friendly farming methods that rebuild the soil, maximize yields per acre, minimize the use of toxic chemicals, and create opportunities for the many young people who are returning to the land.

We will strive for energy independence by supporting local entrepreneurs who are creating local businesses to retrofit our buildings and develop and apply renewable-energy technologies.

It is a basic principle of market theory that trade relations between nations should be balanced. So-called free trade agreements have hollowed out our national industrial capacity, mortgaged our future to foreign creditors, and created global financial instability. We will take steps to assure that our future trade relations are balanced and fair as we engage in the difficult but essential work of learning to live within our own means.

We will rebuild our national infrastructure around a model of walkable, bicycle-friendly communities with efficient public transportation to conserve energy, nurture the relationships of community, and recover our farm and forest lands.

A strong middle-class society is an American ideal. Our past embodiment of that ideal made us the envy of the world. We will act to restore that ideal by rebalancing the distribution of wealth. Necessary and appropriate steps will be taken to assure access by every person to quality health care, education, and other essential services, and to restore progressive taxation, as well as progressive wage and benefit rules, to protect working people.

We will seek to create a true ownership society in which all people have the opportunity to own their homes and to have an ownership stake in the enterprise on which their livelihood depends. Our economic policies will favor responsible local ownership of local enterprises by people who have a stake in the health of their local communities and economies. The possibilities include locally owned family businesses, cooperatives, and the many other forms of community- or worker-owned enterprises.

We will act to render Wall Street's casino-like operations unprofitable. We will impose a transactions tax, require responsible capital ratios, and impose a surcharge on short-term capital gains. We will make it illegal for people and corporations to sell or insure assets that they do not own or in which they do not have a direct material interest.

To meet the financial needs of the new twenty-first-century Main Street economy, we will reverse the process of mergers and acquisitions that created the current concentration of banking power. We will restore the previous system of federally regulated community banks that are locally owned and managed and that fulfill the classic textbook banking function of serving as financial intermediaries between local people looking to secure a modest interest return on their savings and local people who need a loan to buy a home or finance a business.

And last, but not least, we will implement an orderly process of monetary reform. Most people believe that our government creates money. That is a fiction. Private banks create virtually all the money in circulation when they issue a loan at interest. The money is created by making a simple accounting entry with a few computer keystrokes. That is all money really is, an accounting entry.

My administration will act immediately to begin an orderly transition from our present system of bank-issued debt money to a system by which money is issued by the federal government. We will use the government-issued money to fund economic-stimulus projects that build the physical and social infrastructure of a twenty-first-century economy, being careful to remain consistent with our commitment to contain inflation.

To this end I have instructed the treasury secretary to take immediate action to assume control of the Federal Reserve and begin a process of monetizing the federal debt. He will have a mandate to stabilize the money supply, contain housing and stock market bubbles, discourage speculation, and assure the availability of credit on fair and affordable terms to eligible Main Street borrowers.

By recommitting ourselves to the founding ideals of this great nation, focusing on our possibilities, and liberating ourselves from failed ideas and institutions, together we can create a stronger, better nation. We can secure a fulfilling life for every person and honor the premise of the Declaration of Independence that every individual is endowed with an unalienable right to life, liberty, and the pursuit of happiness.

No government on its own can resolve the problems facing our nation, but together we can and will resolve them. I call on every American to join with me in rebuilding our nation by acting to strengthen our families, our communities, and our natural environment; to secure the future of our children; and to restore our leadership position and reputation in the community of nations.

This is an abridged excerpt from David Korten's new book, "Agenda for a New Economy: From Phantom Wealth to Real Wealth," to be published by Berrett-Koehler, Feb 2009. This extract forms part of the YES! series, "Path to a New Economy." An earlier version of this chapter first appeared as part of David's article in Tikkun, Nov/Dec 2008. David Korten is the author of the international bestseller "When Corporations Rule the World and The Great Turning: From Empire to Earth Community." He is co-founder and board chair of YES! Magazine, and a board member of the Business Alliance for Local Living Economies

Buy and Hold is Dead

I guess that it's the fun of the game motivating stock pickers with the latest "system".

The audacity of the human mind to assume that there is a foolproof, part-time, or any other system to time entrance in and out of stocks can easily be proved wrong with just a bit of effort through historical analysis.

I still keep Burton Malkiel's words in my head. "A Random Walk Down Wall Street" doesn't guess at how the market works. It demonstrates the futility of trying to read squiggly lines, heads and shoulders, or any other green eye shade mumbo-jumbo. Technical analysis is as laughable as the Laffer Curve.

It demonstrates the only investment strategy that has a long-term chance in a market so unfathomable that even the smartest cookies throughout history eventually got crushed --- a balanced portfolio, dollar-cost averaging, and a risk spread across various investment vehicles.

Keep ignoring the dependability and sustainability of a balanced portfolio filled with broad (ETF or Mutual) indexes of stocks, laddered bonds, real estate, and maybe even a little precious metal at your own peril.

I know that this advice won't resonate on a site fueled by financial testosterone-laden geniouses, but it doesn't hurt to remind the occassional reader who might actually be fooled into thinking that someone like this author and his ditto-heads has something new to offer.

Cramer Grilled on Jon Stewart

It's so nice to hear from the newly converted who now realize, after seeing a record deficit created off a surplus after eight years of the final chapter of supply-side Friedmanomics, to now become a reflective, reasonable wisdm spouter.

OK. Let's compare these undefined and unproven effective policies (after a whopping seven weeks of implmentation) against the backdrop of some very well-defined, proved ineffective policies of the past thirty years, apparently with which the author is perfectly comfortable.

Unfortunately, we have been "staying the course" for at least the past THIRTY years.

The introduction, ascendency and idolatry of Milton Friedman's brand of shock economics has done more to destroy the world's economy than any econmic theory in our lifetime. This is not just Reaganomics /Bushanomics, but the pitting of haves/have nots in a global play orchestrated through Milton's disciples within the IMF, World Bank, and governing neo-conservative world view since at least 1975.

Cutting taxes on the wealthy and re-distributing middle class income up to those captains of industry combined with wholesale deregulation and nary a veto over the past six years of spending bills full of Republican pork projects, and conveniently leaving the $1 Trillion dollars of Iraq war spending off the books while the national debt ballooned from around $5 Trillion to $10.6 Trillion at last peek is an ingenious spin on what constitutes supply side stimulus, if not outright delusion.

Count the change left in your pockets, unless of course you are one of the few who benefitted from this latest episode of Shock Economics so popular with necons. I'll just ask you the same question Reagan used to ask: "Are you better off now than you were four years ago?"

If you're in the same boat as the rest of us, our "staying the course" has undeniably run the lot of us aground. If you have benefitted, then you're one of the lucky 2% that control 80% of America's wealth, completely comfortable that you'll ride out the storm until the next lunatic can covince most of the people all of the time into something completely counter to their own self interest.

On Mar 13 09:22 AM Neil459 wrote:

> smlcap, the democrats hold a lot of responsibility for this mess.
> Remember they have been in charge of congress for over two years.
> Remember transparency, now its transparency next time. Remember
> no pork, now its no pork next time. In September 2003, Frank, then
> the ranking Democrat on the Financial Services Committee, opposed
> a Bush administration proposal for transferring oversight of Fannie
> Mae and Freddie Mac from Congress.
>
> If you think with the new president its going to get better, then
> history says you are sadly wrong. When will you ideologues get it,
> power corrupts, without a media watchdog power corrupts absolutely.
> The new president has no watchdog and will be as or more corrupt
> than his predecessor.
>
>
>

The Benefits of This Recession

Unfortunately, we have been "staying the course" for at least the past thirty years.

The introduction, ascendency and idolatry of Milton Friedman's brand of shock economics has done more to destroy the world's economy than any econmic theory in our lifetime. This is not just Reaganomics /Bushanomics, but the pitting of haves/have nots in a global play orchestrated through Milton's disciples within the IMF, World Bank, and governing neo-conservative world view since at least 1975.

Cutting taxes on the wealthy and re-distributing middle class income up to those captains of industry combined with narry a veto on the past six years of spending bills full of Republican pork projects, and conveniently leaving the $1 Trillion dollars of Iraq war spending off the books while the national debt ballooned from around $5 Trillion to $10.6 Trillion at last peek is an ingenious spin on what constitutes supply side stimulus, if not outright delusion.

Count the change left in your pockets, unless of course you are one of the few who benefitted from this latest episode of Shock Economics so popular with necons. I'll just ask you the same question Reagan used to ask: "Are you better off now than you were four years ago?"

If you're in the same boat as the rest of us, our "staying the course" has undeniably run the lot of us aground. If you have benefitted, then you're one of the lucky 2% that control 80% of America's wealth, completely comfortable that you'll ride out the storm until the next lunatic can covince most of the people all of the time into something completely counter to their own self interest.


On Feb 27 12:24 PM Eokram wrote:

> I completely agree. When George H. W. Bush told everyone to "stay
> the course," and that the economic downturn was a natural part of
> the ups and downs of the economy, he was not re-elected for a second
> term. Politicians (both Dem and Repub) learned this lesson - that
> if there is even a little recession, the American people shout "It's
> the economy stupid" and fire you.

Pres. Obama: Counterfeiter-in-Chief?

This will be tough for you to understand, but sending money down the rathole in Iraq and Afghanistan is the least of our worries.

Check true or false to the following. Maybe you'll at least think about the consequences of war:

1. More than 4000 mostly young American lives were lost in a war we have yet to define.

2. An untold number of Iraqi lives have been lost from relentless shelling of an urban population.

3. By year three of this war even the most fervent war supporter saw the coalition of the willing dwindle to a precious few.

4. For the next two generations we will be paying the bills as grateful Americans to the more than 100,000 war veterans who were damaged by this war.

Since you pegged the reason for going to war as the last one that Bush could dreamup -- unseating Saddam -- I'll ask you:

Were the Khmer Rouge terrorists? Was Idi Amin a madman? Pick your dictator and let the wars rage. If you really want to know the source for Hussein's weaponry and WMD, go back to the 1980-1984 period of U.S. support for Iraq against Iran and you will find numerous reports of extensive weapons sales, chemical stockpiles and even photos of Donald Rumsfeld making nice-nice with this hated dictator who killed his own people.


If you can't learn the lessons from recent history, you my friend will repeat them.


On Mar 26 01:05 PM milkchaser wrote:

> The cost of the war in Iraq and the cost of the "stimulus package"
> are comparable. But the stimulus package will be spent in less time.
> The war in Iraq arguably enhanced national security. The stimulus
> package was predominately a payoff to various Democratic constituencies.
> I doubt that either the war or excessive Federal gov't spending will
> result in economic growth, but at least the war accomplished something:
> it's hard to argue that the world would be safer if Saddam were still
> above ground and breathing.
>
> Besides which, Bush is gone. It's all on Obama now.

The White House vs. Rick Santelli

Those who like Santelli's, Cabrera's, and that stupid guy with the glasses that looks like an overweight chicken (what's his name?) all subscribe to the dangerous Chicago School and Uncle Miltie Friedman's failed supply side gambit that we have been playing for the past thirty years.

Remember the Laffer Curve?

It claimed that if income tax rates were cut, investment and production would be so stimulated that a fall in tax rates would increase tax revenue and balance the budget. When the budget was most emphatically not balanced, and deficits instead got worse, the supply-siders threw Laffer overboard as the scapegoat, claiming that Laffer was an extremist, and the only propounder of his famous curve.

If your memory is fuzzy on the path we've travelled since 1980, let me remind you:

Flash back to the neo-con's answer to 1970's stagflation and Milton Friedman's Shock Economics Theory he plied so well in South America for right wing fascists.

Roll tape a bit forward to the Gipper. Cut taxes, spend on defense out the wazoo, run record deficits, de-regulate markets and watch Uncle Milties' magic work.

While every right wing neo-con tape loop is buzzing with out-of-control GSEs, we all seem to conveniently ignore how all of this silly and frightening theoretical economic approach played out around the world through the likes of the IMF, World Bank, Halliburton, and their ilk.

Look at any country where this supply-side, trickle down, deregulated gambit has played and look at how eeiry is the similarity between those countries and this one:

1. The top 1% control 40% of all financial wealth in the U.S. The top 20% another 52%, leaving the rest of us (80%) America's financial wealth at a whopping 8%.

2. In terms of inherited wealth only 1.6% inherit more than $100,000. 91.9% receive nothing. Yet the "death tax" was/is the highest priority on the ultra-conservative agenda.

Now for some sobering reminders:

Under Clinton we enjoyed a $287 Billion SURPLUS that's now an ever-growing DEFICIT that at last peek was nearing $1.4 Trillion and national debt that has grown from $5.7 Trillion to $10.2 Trillion in just seven years.

Under Reagan the deficit increased to, at that time, a whopping $200 Billion from $50 Billion under Carter.

It wasn't because Clinton was an economic genious. He simply returned out-of-control revenue reduction (tax cuts) back to the Reagan rates and chose folks who shared his philosophy of government and its role. I'll put my money in the hands of the guys that believe that it's the government's job to invest in the 80% of us that need practical ways to grow our own wealth (smart energy policy, infrastructure development, education).

As for the free market to right the ship by itself "over time", I have a few tickets on the Good Ship Lollipop for those knuckle dragging leftovers that can't seem to get it through their heads that they lost the last two national elections trying to teeter on the same tired platform that got us into this mess.

Cramer's Stop Trading! What Do Cramer and Rush Limbaugh Have in Common? (1/29/09)

Apparently, you've been listening a little too much to Limbaugh. To correct your revisionist history why not take a few moments to review what got us into the mess we are experiencing:

Flash back to the neo-con's answer to 1970's stagflation and Milton Friedman's Shock Economics Theory he plied so well in South America for right wing fascists.

Roll tape a bit forward to the Gipper. Cut taxes, spend on defense out the wazoo, run record deficits, de-regulate markets and watch Uncle Milties' magic work.

While every right wing neo-con tape loop is buzzing with out-of-control GSEs, we all seem to conveniently ignore how all of this silly and frightening theoretical economic approach played out around the world through the likes of the IMF, World Bank, Halliburton, and their ilk.

Look at any country where this supply-side, trickle down, deregulated gambit has played and look at how eeiry is the similarity between those countries and this one:

1. The top 1% control 40% of all financial wealth in the U.S. The top 20% another 52%, leaving the rest of us (80%) America's financial wealth at a whopping 8%.

2. In terms of inherited wealth only 1.6% inherit moe than $100,000. 91.9% receive nothing. Yet the "death tax" is the highest priority on the ultra-conservative agenda.

Now for some sobering reminders:

Under Clinton we enjoyed a $287 Billion SURPLUS that's now an ever-growing DEFICIT that at last peek was nearing $1.4 Trillion and national debt that has grown from $5.7 Trillion to $10.2 Trillion in just seven years.

It wasn't because Clinton was an economic genious. He simply returned out-of-control revenue reduction (tax cuts) back to the Reagan rates and chose folks who shared his philosophy of government and its role. I'll put my money in the hands of the guys that believe that it's the government's job to invest in the 80% of us that need practical ways to grow our own wealth (smart energy policy, infrastructure development, education).

As for trusting in the markets to right the ship....?



On Jan 31 05:03 AM Pipeliner wrote:

> Remember how Regan got us out of a big mess? It was a ten percent
> invester tax credit. Obamas' plan won't work any better then it worked
> in East Germany.

'U.S. Banking System Is Effectively Insolvent' - Soros

And we have James Baker to thank for orchestrating the takeover of the U.S. electoral process which led to the culmination of Friedmanomics' wacky trickle-down (gimme all your money and I'll decide what to do with it) scheme.

Why should one listen to someone who led the coup d'etat?


On Apr 08 02:15 PM dcb wrote:

> How Washington can prevent 'zombie banks'
>
> By James Baker
>
> Published: March 2 2009 02:00 | Last updated: March 2 2009 02:00
>
>
> Beginning in 1990, Japan suffered a collapse in real estate and stock
> market prices that pushed major banks into insolvency. Rather than
> follow America's tough recommendation - and close or recapitalise
> these banks - Japan took an easier approach. It kept banks marginally
> functional through explicit or implicit guarantees and piecemeal
> government bail-outs. The resulting "zombie banks" - neither alive
> nor dead - could not support economic growth.
>
> A period of feeble economic performance called Japan's "lost decade"
> resulted.
>
> Unfortunately, the US may be repeating Japan's mistake by viewing
> our current banking crisis as one of liquidity and not solvency.
> Most proposals advanced thus far assume that, once confidence in
> financial markets is restored, banks will recover.
>
> But if their assumption is wrong, we risk perpetuating US zombie
> banks and suffering a lost American decade.
>
> Evidence - a mountain of toxic assets, housing market declines, a
> sharp economic recession, rising unemployment and increasing taxpayer
> exposure through guarantees, loans, and infusion of capital - strongly
> suggests that some American banks face a solvency problem and not
> merely a liquidity one.
>
> We should act decisively. First, we need to understand the scope
> of the problem. The Treasury department - working with the Federal
> Reserve - must swiftly analyse the solvency of big US banks. Treasury
> secretary Timothy Geithner's proposed "stress tests" may work. Any
> analyses, however, should include worst-case scenarios. We can hope
> for the best but should be prepared for the worst.
>
> Next, we should divide the banks into three groups: the healthy,
> the hopeless and the needy. Leave the healthy alone and quickly close
> the hopeless. The needy should be reorganised and recapitalised,
> preferably through private investment or debt-to-equity swaps but,
> if necessary, through public funds. It is time for triage.
>
> To prevent a bank run, all depositors of recapitalised banks should
> be fully guaranteed, even if their deposit exceeds the Federal Deposit
> Insurance Corporation maximum of $250,000 (€197,000, £175,000). But
> bank boards of directors and senior management should be replaced
> and, unfortunately, shareholders will lose their investment. Optimally,
> bondholders would be wiped out, too. But the risk of a crash in the
> bond market means that bondholders may receive only a haircut. All
> of this is harsh, but required if we are ultimately to return market
> discipline to our financial sector.
>
> This is not a call for nationalisation but rather for a temporary
> injection of public funds to clean up problem banks and return them
> to private ownership as soon as possible. As president Ronald Reagan's
> secretary of the Treasury, I abhor the idea of government ownership
> - either partial or full - even if only temporary. Unfortunately,
> we may have no choice. But we must be very careful. The government
> should hold equity no longer than necessary to restructure the banks,
> resume normal lending and recoup at least a portion of taxpayer investment.
>
>
> After replacing bank management with new private managers, the government
> should have no say in banks' day-to-day operations.
>
> The FDIC can assist. Just this year, it has placed over a dozen American
> banks - admittedly all small - into receivership. We might also consider
> setting up something akin to the Resolution Trust Corporation, created
> in 1989 to liquidate the assets of failed savings and loans. The
> RTC eventually disposed of nearly $400bn in assets of more than 700
> insolvent thrifts.
>
> To avoid bank runs and contain market disruption, the Treasury should
> announce its decisions at one time. Washington will also need to
> co-ordinate its actions with other major capitals, especially in
> western Europe and east Asia. At best, this will encourage other
> countries to take similar steps with their own banking systems. At
> a minimum, other governments can prepare for the financial turmoil
> associated with the announcement.
>
> This approach is not pretty or easy. It will cost a lot of money,
> with the lion's share coming from US taxpayers, at least in the short
> to medium term. But the alternative - a piecemeal pumping of more
> public money into insolvent banks in the vague hope that things will
> improve down the road - could truly be historic folly.
>
> Eventually our banks and economy will start to recover. When they
> do, we would be wise to avoid another Japanese mistake - raising
> taxes. To counter mounting debt created by government stimulus packages,
> Japan increased taxes in 1997. Consumption dropped and the country's
> economy collapsed.
>
> Our ad hoc approach to the banking crisis has helped financial institutions
> conceal losses, favoured shareholders over taxpayers, and protected
> senior bank managers from the consequences of their mistakes. Worst
> of all, it has crippled our credit system just at a time when the
> US and the world need to see it healthy.
>
> Many are to blame for the current situation. But we have no time
> for finger-pointing or partisan posturing. This crisis demands a
> pragmatic, comprehensive plan. We simply cannot continue to muddle
> through it with a Band-Aid approach.
>
> During the 1990s, American officials routinely urged their Japanese
> counterparts to kill their zombie banks before they could do more
> damage to Japan's economy. Today, it would be irresponsible if we
> did not heed our own advice.
>
> James A. Baker III was chief of staff and Treasury secretary for
> President Ronald Reagan and secretary of State for President George
> H.W. Bush
>
> Copyright The Financial Times Limited 2009

Congress' Handling of AIG Bonuses Is Shameful

Gentle author and posters.

I realize that this site is populated by the fabulously wealthy, but please look at what prompted the arguments from "realty chk", "responsibility" and "leftfield" before standing on the sanctity-of-contracts soapbox.

What made Tom Brokaw's "Greatest Generation" great was living through the devastation of unprecedented greed and plunder of our national treasure by the robber barons of the late 1800's, the monopolists, and finally an eeirily similar derivatives and leveraging gambit by no other than JP Morgan and Company and declaring through their sweat and WW II sacrifice -- never again.

Though some decry Social Security, the GI Bill and other depression/WW II era investments in our shared responsibility, it was this shared sacrifice IMHO that created our wealth as a nation.

What have we come to when one man for his labor makes 300, 400, 600 times the person who actually makes the goods or delivers the services upon which a company depends? The justifiable reaction to a $750,000 retention bonus as reward for having the ability to unwind a highly leveraged, wink-wink scam has an apt methaphor -- obscenity.

The path that we have traveled since the innocent post-war days should leave any of us ashamed that our country has come so dangerously close to the wastebin of history. The steady, yet persistently rising gap between the haves and have-nots; our ridiculous belief that by re-distributing middle class wealth up to the most priveleged under the Friedman/Laffer economic model; and passing along the risk until it reaches the greatest fool has made fools of us all.

Standing on the sanctity of contracts, citing the Federalists papers, and pity for the person who can obviously afford to give back $750 K and not feel much pain pales in comparison to the guy one paycheck from poverty. What is understandable is the rage and outrage from the rest of us who might be fortunate to make that amount of money in a productive lifetime.

Until we have a shared sense of outrage at our lack of concern for these innocents in this latest greed-fueled gambit, we will continue down a road that thankfully few honest, genuine people travel.

Obama Makes Sense

SO.

What were you paying attention to as your were watching the budget deficit rise from a surplus to a record deficit in eight short years?

It amazes me that there are still apologists for supply side hypotheses.

Let's compare these undefined and unproven effective policies (after a whopping eight weeks of implmentation) against the backdrop of some very well-defined, proved ineffective policies of the past thirty years, apparently with which the poster is perfectly comfortable.

The introduction, ascendency and idolatry of Milton Friedman's brand of shock economics has done more to destroy the world's economy than any econmic hypothesis in our lifetime. This is not just Reaganomics /Bushanomics, but the pitting of haves/have nots in a global play orchestrated through Milton's disciples within the IMF, World Bank, and governing neo-conservative world view since at least 1975.

Cutting taxes on the wealthy and re-distributing middle class income up to those captains of industry combined with wholesale deregulation and nary a veto over the past six years of spending bills full of Republican pork projects, and conveniently leaving the $1 Trillion dollars of Iraq war spending off the books while the national debt ballooned from around $5 Trillion to $10.6 Trillion at last peek is an ingenious spin on what constitutes supply side stimulus, if not outright delusion.

Count the change left in your pockets, unless of course you are one of the few who benefitted from this latest episode of Shock Economics so popular with necons. I'll just ask you the same question Reagan used to ask: "Are you better off now than you were four years ago?"

If you're in the same boat as the rest of us, our "staying the course" has undeniably run the lot of us aground. If you have benefitted, then you're one of the lucky 2% that control 80% of America's wealth, completely comfortable that you'll ride out the storm until the next lunatic can covince most of the people all of the time into something completely counter to their own self interest.


On Mar 13 12:58 PM Paul in Texas wrote:

> The national debt he is helping to create can only be passed on to
> his successors and to the next generation and maybe even to the one
> after that, unless he bankrupts the country. I agree with Steve
> in Greenboro: "Pay attention to what he does, not what he says".

Trying to Understand Airline Executive Compensation

I've logged more air miles and flown more carriers than I care to remember. United (UA) used to be my California carrier of choice for my frequent bucket trips between the north and south until the early 90's. Began to notice that the "stews" weren't so affable and the reliability of the carrier wasn't as precise. That perception went deeper throughout the company. Phone clerks to pilots to flight attendants to baggage handlers -- it was pretty apparent that this line was in decline. The rats would have left the ship long before the last ridiculous salary increase after the latest money-losing year had there been any place to go. And that damn pension and seniority system!

Recently, I decided to use the last of my remaining frequent flyer miles only to find that I was about 7,000 short. No problem. I'll just transfer over a few of my wife's miles. Sure, there would be a transfer fee, but well worth using up the remaining miles. Imagine my shock to learn that miles already earned -- even a transfer between family related accounts -- would need to be "repurchased". That little transaction would be $210 for the miles + a $35 processing fee + a 7.5% excise tax.

Thank you for being a loyal member of United's Frequent Flyer Program.

The problem isn't executive compensation. It's the isolation experienced by these executive darlings (probably from spending too much time in an unpressurized, poorly ventilated bucket that they call an airline seat) that makes them think they still set the rules.

I would gladly flush my remaining miles down the same toilet that United is swirling through right now, but they would probably charge me a "processing fee".

Buy and Hold is Dead

Thanks for the clarification, but as other posters have pointed out, "buy and hold" is a slippery term (1 minute, and hour, a lifetime?)

I don't think that you missed the point of my post. There's a difference between those who think that they are bright enough to pick individual stocks (trading or investing) and Malkiel's point that no individual can ever have sufficient information (how bad is that airplane engine anyway?) to correctly predict the movement of individual companies.

I'm sure as an investment professional that you understand the historical evidence presented by Malkiel. His and my point is that the safest route for anyone is to invest in broad index portfolios (the Wilshire 5000 ), bonds, real estate if possible, and, yes, to balance these portfolios over time.

Even Malkiel recognized that his advice runs counter to human nature, so he allows for those who wish to use real dollars as "play money"; at least don't fall into the technical analysis trap. Use due dillegence and fundamental analysis if you must.


On Apr 06 04:01 PM [e-mail] wrote:

> II am sorry Media, but you need to go deeper than that! You do
> not fly on a plane that has been experiencing some engine problems
> just because there is a low probability of any plane crashing!
>
>
> But as long as you are balanced and re-balancing you are not buying
> and holding!

G20 Summary: Goodbye Tax Havens?

This is good news, and none too soon.

It took a world financial crisis to expose the fabulously wealthy tax cheats, but one step in the right direction.

And "fireball's" privacy justification is just a smokescreen for a long-overdue lifting of the veil that has allowed Bush's "base" to escape from shared responsibility.

AIG: Time to Put Away the Pitchfork and Focus on the Real Problems

I guess you probably realized that writing a column under such a headline would provoke response.

On one point I agree.

"It is not that we should turn a blind eye and forgive the guilty and the negligence on Wall Street, but instead should focus more of our energy on the solutions to our problems, beginning with identifying and admitting its root causes."

Yet, it is the "flip" comment you used about the "flipper" in Nevada that skirts the real cause of the problem. Remember when there was no Citigroup (it was Citibank.)? Remember when AIG had no AIGFP (it was illegal for insurance to be in the investment banking and derivatives business)?

The repeal of Glass-Steagall and Phil Gramm's literal eleventh-hour insertion of an amendment to the repeal that eliminated oversite of derivatives markets which was the most significant blow to a rational financial products market.

But I submit that if we are to go at the larger problems, we must admit and change the dangerous path that we have been following for at least the past thorty years, if not since WW II.

The problem with our economic contstruct is that we are not doing enough to right the wrongs of a failed, simplistic, silly policy direction that we have suffered through for at least the past thirty years.

The introduction, ascendency and idolatry of Milton Friedman's brand of shock economics has done more to destroy the world's economy than any economic hypothesis in our lifetime. This is not just Reaganomics /Bushanomics, but the pitting of haves/have nots in a global play orchestrated through Milton's disciples within the IMF, World Bank, and governing neo-conservative world view since at least 1975.

Cutting taxes on the wealthy and re-distributing middle class income up to those captains of industry combined with wholesale deregulation and record deficits under Reagan, Bush I and Bush II, and conveniently leaving the $1 Trillion dollars of Iraq war spending off the books while the national debt ballooned from around $5 Trillion to $10.6 Trillion at last peek is an ingenious spin on what constitutes supply side stimulus, if not outright delusion.

Count the change left in your pockets, unless of course you are one of the few who benefitted from this latest episode of Shock Economics so popular with necons. I'll just ask you the same question Reagan used to ask: "Are you better off now than you were four years ago?"

If you're in the same boat as the rest of us, our "staying the course" has undeniably run the lot of us aground. If you have benefitted, then you're one of the lucky 2% that control 80% of America's wealth, completely comfortable that you'll ride out the storm until the next lunatic can covince most of the people all of the time into something completely counter to their own self interest.