Sunday, January 11, 2009

Out of Touch and Overstimulated

Can we please get one, just one, one politician in Washington who can actually hear what it is that they're saying so that they can realize how ridiculous it sounds and how ineffective their plan is going to be? Perhaps it is so hard for them to hear what they're saying because they all seem to have their head so far up their arse that it would be difficult to hear anything, really. (It would be very muffled.) OR, perhaps they've just morons. Either one is not exactly a glowing letter of recommendation, nor an affirmation of any degree of faith in them to do their jobs effectively. Yeah, hardly either one of those.

I shall begin with the plans for 'fixing' the economy as laid out by Barry Obama and his crew. First of all, remember that stimulus package that was approved last year and everyone got sent a nice check that they were supposed to go out and spend so that the economy would be 'stimulated'? That didn't work so well. In fact, it was less than stimulating at best. But now they're ready to throw more money into the economy in a similar fashion. Wait! Wait! Has anyone looked at WHY that didn't work before? Because if you're going to do the same thing again and hope for a different result, isn't that kind of implying that it was just bad timing? Oh, wait, that sounds silly! That's because it is silly to think that. But what's even sillier is not figuring out why it didn't work the first time before doing it again.

Then there's Barry's magical creation of millions of jobs plan! You may or may not recall (perhaps because you were too busy swooning at the sound of Barry's voice and the thrill of witnessing the next Messiah to actually hear anything he was actually saying) that while he was campaigning, Barry said he was going to create a million jobs. A. Million. As in 'one'. One million. (Actually, what he ended up saying was he would create OR save a million jobs. He finally had to clarify that when pressed on the issue by people who wouldn't let up or fall for that freakishly infectious smile that he flashes when he's cornered.) Then a couple of weeks ago that number climbed to three million jobs created or saved. NOW the number is at 4.1 million jobs created or saved with no, I mean NONE, no indication as to where that number comes from, how that will be achieved or when/if it can even be achieved. Creating and/or saving a million jobs is a pretty impressive thing to be able to claim that you can do. But then to up that number by 3.1 million jobs over a span of just a couple of weeks? That's amazing! He IS our Savior!! Ugh.

Now, Barry's camp has posted online their 14-page analysis of their wishful thinking as to how this could turn out. Or not. I share with you my favorite page, Page Four! Behold!


By looking at Page Four, you will notice that, by the year 2014, after dumping billions and billions of dollars into fixing this problem, the result is (wait for it) ....... exactly the same as if billions and billions of dollars had not been dumped into fixing this problem! Well, hey now, that's interesting. Yes, I realize that by putting the billions in there it would seem to alleviate what could be a really, really crappy 2010. But I also realize that I've been saying that a recession is a natural occurrence in a market on occasion. They do happen. (Depressions, by the way, seem to be the result of bad government and governing. Thus, if people know what they're doing and dealing with, when recession comes along, as it will, then it can be prevented from spiraling into a depression if proper management is applied. And if you didn't get it before, now do you see why I'm flippin' out?! Because the people in charge are clueless, that is correct. We'll all be in line at the barrel store by next Wednesday if they keep this up.) And a natural occurrence would seem, by definition, to come and go on its own, as illustrated by Barry's chart. So why is it that it is so important to put a bunch of money into something that's going to fix itself? I don't know. Maybe one of Barry's folks could tell me, because no one else has even brought this up. (Leave it to me, yeah, I know.)

Could. It could be really crappy. It could not be really crappy also. That's because they don't know. They really don't. They say so on my second favorite page, Page Three. "....It should be understood that all of the estimates presented in this memo are subject to significant margins of error. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity." (Translation: This COULD be how it turns out. This also could NOT be how it turns out. We'll have to wait and see.)

But it's not just Barry's team that isn't making a lot of sense, yet still plowing straight ahead without looking back. It's everywhere! As we look at the situation surround the TARP dealio. TARP (which should have stood for Tossing Aside Reasonable Processes) was the $750 billion that you and I oh-so-graciously loaned the government to infuse into the "cash-strapped" banks so that they could resume lending to people who were actually qualified to borrow the money that they needed in the first place. (The problem was that the banks weren't so keen on lending their money any more, having already loaned it out to people who could never pay it back (and didn't) and then losing their shirts. The United States Banking Industry, ladies and gentlemen! Try the veal! Tip your servers! They'll be here all week!)

The thing about the "loaning" of the first half of the $750 billion is that there wasn't any real way to track what the banks were doing with it. Correct. The government is doling out billions of dollars and has no way to see where it's going or what's been done with it. Nice. But NOW Barney Frank wants to add some "strings" to the second half of that $750 billion. "Strings" like banning some bonuses and "strings" like the relinquishing of private jets. (Some bonuses? Not all bonuses? What's the point then? Who, exactly, is it that needs a gazillion dollar bonus for the fledgling company? No one, that is correct. Onward. Onward to doom!) And according to the AP, "The new conditions also would include a better method for the government to track whether banks are using the money to boost lending." Barney Frank: "We will trust but verify." A "better method"? Shouldn't that be "A method", since they didn't have one before?! What is wrong with these people?

They're going to "trust but verify"? Oh, I see. Because trust has gotten them SO far up to this point, might as well keep going with it, yes? NO! Are they crazy?! They HAVE to put in there that there's no private planes and no bonuses. Why? Because if they didn't, they'd be flying around on their private planes rolling around naked in their piles of money that they received for their bonuses like some sort of porn laden Scrooge McDuck, that's why! How about instead of "trust but verify", you have the banks give you an itemized list of what they need the money for and then you actually read the document and then you dole out money where it is supposed to go on the behalf of the banks? How about that plan instead of your "trust but verify" disaster over there? No? Disaster instead? Disaster it is then.

Hey, wait a minute! No, that's not OK! And it's not OK for two reasons! One is that I'm not real big on disaster overall. And two because that's MY money! All of this money that's being tossed around by the boatload is taxpayer money! Yo! Taxpayer here!! And here's what no one seems to understand: Every dollar that you put into the economy to stimulate it is a dollar that has to come out of the economy! Wait. What?

YES! It comes OUT of the economy to go back INTO the economy. All of that money that's being tossed around? That money is borrowed. It's not magic money! It has to come from somewhere! Look at it like this: The money that is borrowed has to get paid back. You and I pay it back in the from of tax dollars that, had we not had to pay back that money, could have gone into the economy. But now those dollars don't go into the economy, they stay OUT of the economy by paying back the loan for the money that was borrowed. (OK, maybe don't look at it exactly like that, because that explanation still might be a little confusing, but trust me. We're getting screwed.)

But we're back to Square One here. Why didn't the first stimulus package work? Well, I'd have to guess that people who are concerned about losing their job, paying their bills, etc., are not going to go out and spend any money that is given to them and that keeps that money out of the economy. That would be my guess and if I'm right then I would expect the same thing to happen if another economic stimulus package was passed through. Only this time, since things are economically worse than before, I would expect the amount of cash infused back into the economy to be less than before, making it an even worse idea than before.

What's really unfortunate is that so many people have been living beyond their means for so long that it isn't really that feasible to just ride this thing out. When you don't have anything saved up to live on for just such an occasion, you're kind of screwed when you need cash. So I understand the want/need to fix this mess, but can someone please, for the love of God, please do something that makes sense? Show us your plan that you can explain what it does and why you think it will work. Show us your plan that has a system in place for accountability and consequences. Then do it and follow through. If you did it that way from the beginning, you might have only had to do this once!

::::sigh::::: Good luck, Barry. I certainly hope there are some Economics 101 books lying around the White House somewhere.

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