http://globaleconomicanalysis.blogspot.com/…

Dear Mr. President, I read your New Era $3.6 Trillion Budget Proposal. I also listened to your speech Tuesday night. You made a great campaign speech. However, the campaign is over. You won. And the reason you won is you offered hope as well as a promise of change.

With all due respect Mr. President, Tim Geithner and Ben Bernanke are offering the same policies as President Bush and Secretary Paulson. Those policies are to bail out banks regardless of cost to taxpayers. Mr. President, it’s hard enough to overlook Geithner’s tax indiscretions. Mr. President, it is harder still. if not impossible, to ignore the fact that neither Geithner nor Bernanke saw this coming. Yet amazingly they are both cock sure of the solution. Even more amazing is the fact that solution changes every day.

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Grabbed from Mish’s Global Economic Trend Analysis blog:

Things are looking pretty bleak. There is bad news in housing, the stock market, commercial real estate, jobs, and wages . Unfortunately, no matter how bad things are, someone always comes along to propose a “solution” that is guaranteed to make the situation much worse. Please consider the following ideas.

Punish savers and make them spend money: Near-zero interest rates and even a tax on bank deposits are necessary to force those with cash to use it productively

Assuming interest rates are reduced to about 1 per cent today, it will make little difference to savers if they fall all the way to zero. To all intents and purposes, income from bank accounts will be reduced to nil.

The next logical step, although it may be politically controversial, would be to do the opposite of what the Tories suggest. Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings. This would create a negative risk-free interest rate, encouraging savers either to invest in property, shares and other productive assets – or simply to save less and consume more. In either case, the result would be more consumption and physical investment, less unemployment and faster recovery from the slump.

The Case for Bigger Government

Thirty years ago, Americans were told that government was part of the problem, not the solution. We bet on the magic of the marketplace, but the magic proved illusory. Every major part of the economy – health care, energy, transportation, food and finance – is deeply troubled. Now we are ready to invite government back in to help solve our problems, if the price is right and the strategies are convincing. By spending more through government and treating government as a partner rather than an enemy of the private sector, we can potentially save vast sums in the long run through a more efficient health-care system, safer climate, more competitive economy and more secure country.

A big difference between the U.S. and the rest of the rich world is that for the past 30 years or so, Americans consistently rejected “government solutions” to the problems of health, poverty, education and the environment.

What Hath Big Government Wrought?

• It was big government that brought us Fannie Mae and Freddie Mac.
• It was big government that sponsored the war in Vietnam and the war in Iraq.
• It was big government that gave us nightmare problems we face with Medicaid and Medicare.
• It was big government that gave us overlapping hundred billion dollar systems in the Army, Navy, and Air Force.
• It is big government that sponsored 10’s of thousands of pork barrel projects and bridges to nowhere.
• It is big government that gave us the Davis Bacon Act and the insanity pf prevailing wages.
• It was big government sponsorship of the rating agencies that created the “AAA” rated securities that went to zero.
• It was big government that took us off the gold standard and illegally confiscated citizen’s money.
• It was big government that allowed fractional reserve lending and theft by inflation this is the root cause of a shrinking middle class today.
• It was big government that created the Fed, and it was the Greenspan Fed that blew serial bubble after bubble culminating in the housing crash we are in today.

Big government either created or made worse every problem we have today. Yet Time Magazine and free lunch proponents like Krugman propose an even bigger government is necessary to fix the enormous problems of an already too big government.

I’d like to add that the idea that “Americans consistently rejected “government solutions” to the problems of health, poverty, education and the environment” is completely fallacious and ridiculous. Medicare, medicaid, the war on poverty, from little or no federal involvement to No Child Left Behind, huge federal college subsidies, the increase of scope and power of the EPA, etc. Just because Americans didn’t jump on board as quickly as other socialist / fascist States doesn’t mean such ideas were rejected.

http://www.twincities.com/…

Now that Hillary Rodham Clinton has conceded the Democratic contest, we are faced with the prospect of another round of boring, scripted party conventions.

The only sign of life is the alternative convention scheduled for September in St. Paul by Ron Paul. The losing candidate for the Republican nomination has hired a hall so he can put on a show for the libertarian wing of the party as the big GOP show goes on nearby.

This promises to be fun. But it would be more fun if the Republicans had simply given the Texas congressman a speaking role at the convention and thereby brought his supporters into the fold. John McCain certainly needs them in what promises to be a close election. But why doesn’t he want them?
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Richard Fisher, President of the Federal Reserve Bank of Dallas, spoke today in front the Commonwealth Club of California, the country’s oldest and largest public affairs forum. A transcript of what he said in entirety can be found on the Dallas Fed’s website, here. Cliff Notes on the other side of the jump.

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http://www.huffingtonpost.com/…

Republicans need to be Republicans. The greatest threat to classic Republicanism is not liberalism; it’s this new brand of libertarianism, which is social liberalism and economic conservatism, but it’s a heartless, callous, soulless type of economic conservatism because it says “look, we want to cut taxes and eliminate government. If it means that elderly people don’t get their Medicare drugs, so be it. If it means little kids go without education and healthcare, so be it.” Well, that might be a quote pure economic conservative message, but it’s not an American message. It doesn’t fly. People aren’t going to buy that, because that’s not the way we are as a people. That’s not historic Republicanism. Historic Republicanism does not hate government; it’s just there to be as little of it as there can be. But they also recognize that government has to be paid for.If you have a breakdown in the social structure of a community, it’s going to result in a more costly government … police on the streets, prison beds, court costs, alcohol abuse centers, domestic violence shelters, all are very expensive. What’s the answer to that? Cut them out? Well, the libertarians say “yes, we shouldn’t be funding that stuff.” But what you’ve done then is exacerbate a serious problem in your community. You can take the cops off the streets and just quit funding prison beds. Are your neighborhoods safer? Is it a better place to live? The net result is you have now a bigger problem than you had before.

I think this guy needs a lesson in libertarianism and for that matter Republicanism. Perhaps a few quotes from a man he espoused to be like, Ronald Reagen, would point him in the right direction. Or maybe he could have paid attention when in the debates with Ron Paul.

http://emac.blogs.foxbusiness.com/…

Time to listen to Texas Congressman Ron Paul, the lone voice of reason in Congress today who’s got to feel like he’s shouting into a field of cotton with his repeated warnings about the dangers of a collapsing dollar, while the administration goes AWOL on the problem.

The dollar just hit a record intraday low against the euro on reports that consumer confidence levels have dropped to levels not seen since the post-Watergate era. It is down 7% year to date against the Chinese renminbi, it’s weaker than the Japanese yen and the Canadian loonie.

The joke is the greenback is now only stronger than the Mexican pesos and the Zimbabwe dollar, an overstatement for dramatic effect, to be sure.But since hitting a peak in 2002, the dollar has lost about a quarter of its value against a trade weighted basket of currencies.

A weak dollar acts as an anvil around the neck of the US economy and consumers. Rising inflation is essentially a tax on consumers, so are rising energy prices, and that double whammy threatens to undermine the purchasing power of the rebate checks due out in May–backed by printing even more dollars.

A bellwether event of significant import to our nation’s finances happened this past January 1 with little notice. That’s the day the first baby boomer was allowed to retire. A new federal report wearily warns once again for the umpteenth time that the nation faces some $60t in Social Security and Medicare unfunded liabilities alone.

We’ve heard time and again conservatives say deficits don’t matter. To say that deficits don’t matter is like saying ketchup is a vegetable or trees cause pollution.

This article is almost too positive. If she’s so in agreement with Paul’s economic position or at least parts of it then why haven’t I seen more of him on her programs?