Ben Bernanke's Comments Cause Dollar To Slide

There's an old saying: "Loose lips sink ships!" They also sink the U.S. dollar.

Following up on yesterday's post on the dollar's slide in value versus the yen, this article was posted today:

(Reuters) - The dollar fell against most major currencies on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank could resort to more monetary stimulus if a sluggish U.S. economy weakens further.

...the yen soared against the euro and hit its highest level against the dollar since Japan's March earthquake as investors unwound risky trades funded with yen.

The dollar was last at 78.98 yen, up 0.3 percent, not far from its 78.481 four-month low hit on EBS earlier in the global session.

That brought warnings from top Japanese officials worried that a strengthening yen will hurt Japan's fragile economy, raising the possibility authorities could intervene to weaken the currency.

The problem is, there's no money for any kind of "stimulus." The last stimulus didn't do anything to revive the economy.

To read the full article, go here.

How's that hope & change working out for you?

"That clown just stole all of our cash!"

Today, I was watching the Adventures of Superman episode from 1953, "The Clown Who Cried" where an imposter "Rollo The Clown" robs a telethon (that the Daily Planet was putting on) of its cash receipts.

After the crook flees, Clark Kent (George Reeves) calls Inspector Henderson (Bob Shayne) and says, "That clown just stole all of our cash! He's armed and he's dangerous! Better send out an alarm!"

For some reason, that line made me think of another clown:



I guess it's because all of our cash was "stolen" through the stimulous/porkulous bills.

Mark Reed vs. Brad Sherman

The Mark Reed For Congress campaign has sent out this news release along with a video ad:

IS CONGRESSMAN BRAD SHERMAN RUNNING SCARED???

Los Angeles, CA -- Brad Sherman, U.S. Congressman in the 27th District of California, seems to be running scared from his opponent, Mark Reed, because Sherman still refuses to debate him. In fact, Sherman is now playing the word game and calling a candidate forum with the League of Women Voters a "debate" in order to try and hide his refusal to have an official public debate. Mr. Sherman, you should get your facts straight since the League of Women Voters states it is a forum, which is not a debate. Voters must wonder what Sherman is so afraid of by not wanting to publicly debate Mark Reed....could it be Sherman's record of rubber stamping the Obama-Pelosi agenda?

These organizations have invited Congressman Sherman and Mark Reed to debate. Sherman has refused all requests, stating these organizations are unacceptable to host a debate: American Legion, Veterans of Foreign Wars, Neighborhood Councils, Chambers of Commerce, Panorama City High School and Pierce Community College, to name a few.

Sherman must feel he has not one thing to gain by having an official public debate and allowing the electorate of the 27th District to make up its own mind. It is indeed a shame to see yet another incumbent believe they don't have to be accountable to the people they represent.

Mark Reed, who is a businessman, rancher and actor, is also one of only two Native Americans running for federal office during the 2010 mid-terms.

I responded to the Reed campaign as follows:

Good ad! While it is good to bring up the debate issue, in the long run, the voters won't really care about it. It is the economy, the economy and the economy.

Hit hard on the issues, Sherman has given you plenty of ammo for this!

Indeed, Brad Sherman's votes and positions on the stimulous (porkulous), Obamacare, cap-and-trade and other issues are perfect targets for the Reed campaign. Sherman is wrong on every issue. The Reed campaign needs to hit hard on these issues in the next two weeks. It is the issues that will sway traditional Democrat voters into voting for Reed on November 2.

Brad Sherman's Lousy Month

July has not been a good month for Rep. Brad Sherman. We are only a little more than half way through with the month!

It started out at a town hall meeting at a Jewish temple in which Sherman had GOP candidate Mark Reed bullied out of the meeting by rent-a-cop thugs and some rogue officers of the L.A.P.D.

Then, a YouTube video surfaced showing Sherman losing his cool while being questioned by a constituent.

And, finally, Sherman exposed his ignorance at another town hall meeting when he said he wasn't aware of the New Black Panthers voter intimidation matter from 2008. This received national news exposure, despite the "state-controlled-media's" silence on it. This story prompted talk show king Rush Limbaugh to call Sherman "hapless."

Despite registration numbers in the 27th Congressional District that favor the Democrats, Sherman seems to be pretty nervous over the upcoming election. Well, he should. He voted for the stimulous/porkulous bills, Obamacare and other Leftist pieces of legislation. Additionally, he also supports cap 'n trade.

Small wonder Sherman refuses to debate Reed. What a wienie!

Sherman should have more months like this.

Unemployment Now At 10.2%!

The unemployment figures out now out and it is bad news, just as expected:

The unemployment rate jumps to 10.2 percent as U.S. employers shed 190,000 jobs in October.

Wasn't the stimulous supposed to keep unemployment at 8%? It is clearly objective proof that the stimulous was a failure, just as many of us predicted.

While unemployment gets worse, Obama and the Democrats are trying to destroy our health care system.

How's that hope and change working out for you?

Unemployment Rises To 9.8%!

Unemployment inched closer to 10%.

Fox News.com is reporting:

The unemployment rate rose to 9.8 percent in September as employers cut far more jobs than expected, evidence that the longest recession since the 1930s is still inflicting widespread pain.

The official jobless rate stopped short of topping 10 percent only because the Labor Department doesn't count people who have given up looking for work or settled for part-time jobs.

More than a half-million unemployed people gave up looking for work last month. If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent, the highest on records dating from 1994.

So much for "hope and change." Wasn't the stimulous supposed to hold unemployment to 8%?

For the full story, go here.

Barack Hussein Obama -- hmmm, hmmm, hmmm!

Brad Sherman Must Be Scared

Rep. Brad Sherman, D-Woodland Hills, must be running scared in a normally "safe" Democrat district. He's got a fundraiser coming up next month. Mark Reed must be seen as a real threat to Sherman if he has to bring out the big guns.

Democrat fatcats will have the golden opportunity to meet former President Bill Clinton, who lied about his relations with Monica Lewinsky, at a "gala" fundraiser for Rep. Brad Sherman on Sunday, October 4, 2009.

The event will be held at the home of Linda and Syd Leibovitch in Hidden Hills, California. The event is two and a half hours long.

So if you agree with Brad Sherman that we should pay more for gasoline, not expand refining capabilities to meet energy needs, buy more jets for congressional junkets, support the porkulous bill, support cap-and-trade (the job-killer) and support the government takeover of almost 20% of the economy with Obamacare, then this is the event for you!

Unemployment Reaches Record Levels

"A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Barack Obama and the Democrats in congress lose theirs!"

Unemployment reached record levels in California and other states according to Bloomberg.com:

Sept. 18 (Bloomberg) -- Unemployment rose in 27 U.S. states in August, with California and Nevada reaching record levels of joblessness.

Rhode Island rounded out the list of states with the highest level of unemployment since data began in 1976, the Labor Department reported today in Washington. California’s unemployment rate reached 12.2 percent and Nevada’s climbed to 13.2 percent.

The job market is showing signs of stabilizing as reports indicate economic growth is resuming this quarter. Economists surveyed by Bloomberg News this month said the unemployment rate nationally will reach 10 percent this year, a reminder that consumers are unlikely to lead the recovery.

What was that President Obama said back earlier this year that unemployment will be held to 8% if his stimulous package is passed? Another Obama lie.

To read the full article, go here.

Unemployment Hits 9.7%

The Labor Department reports that unemployment has reached 9.7%.

According to Reuters:

U.S. employers cut a fewer-than-expected 216,000 jobs in August, while the unemployment rate rose to a 26-year high, the government said on Friday in a report showing a still fragile labor market.

The Labor Department said the unemployment rate rose to 9.7 percent after dipping to 9.4 percent in July and the decline in payrolls was the smallest in a year. The department revised job losses for June and July to show 49,000 more jobs lost than previously reported.

The Obama Administration said that if the stimulous package was passed (and rushed into passage, need I remind you), unemployment would be held at 8%. Well, it didn't happen.

Reuters also reports:

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs, the department said. Stubbornly high unemployment is wearing on consumer confidence and crimping domestic demand, pointing to an anemic recovery from the worst slump in 70 years. Consumer spending accounts for over two-thirds of U.S. economic activity.

I was laid off in November 2007, which was directly attributed to the mortgage meltdown (thanks to the Barney Frank, Christopher Dodd, Maxine Waters and others for the problems with Fannie Mae and Freddie Mac), so the December 2007 date is on the mark as far as I am concerned. Thankfully now, I have two jobs, although combined they don't pay as well as my lost job.

Will unemployment hit 10% during this month? We'll see.

To read the full article, go here.

Rep. Brad Sherman Takes Heat Over Porkulous

Congressman Brad Sherman, D-Sherman Oaks, caught a lot of heat last Sunday when he appeared at a Reseda townhall meeting, according to the Contra Costa Times.

He caught flak over his vote for the $800 billion stimulous/porkulous bill. He claimed that he voted against the Wall Street bailout.

That doesn't negate the fact that he voted to mortgage our future generations and saddle them with debt.

He also voted last Friday for the cap and trade (i.e., cap and tax) energy bill, which the Wall Street Journal calls the "biggest tax hike in history" if it passes the Senate. Note that nobody in the House bothered to read the bill (it wasn't available for reading, except for a 300-page amendment) before voting on it.

It is funny that it took a Northern California newspaper to report on Sherman's townhall meeting. Kudos to the Contra Costa Times!

To read the full article, go here.

Tea Party Media Bias

Tea Party Media Bias

by Armand Vaquer

The mainstream media did their best yesterday in trying to play to stereotypes in their coverage of the nationwide tea parties. They would focus on people with an emphasis on white males and their anti-government, anti-gun control and anti-illegal immigrant signs. Very rarely would they focus in on the reasons for the anger of the tea party participants: high taxes, bailouts, porkbarrel spending and socialistic progams of Obama and the Democrats.

One obnoxious twit, CNN reporter Susan Roesgen, decided to engage in a debate with a tea party attendee (in Chicago, I believe) instead of just asking why he was attending the tea party and what part of Obama's tax policies upset him. Instead of letting the man respond, she kept interrupting him and argued with him. Totally unprofessional! This infuriated the crowd and she cut off the interview. The video of this has been posted at many websites and YouTube. The audio of this has also been re-played by conservative talk shows.

Many of the liberal media networks took the opportunity to deride Fox News's coverage of the tea parties and mischaracterized (okay, I'll say it, they lied) them as being fronted by Fox, big business, talk radio and right-wing groups instead of honestly reporting that they were a grass roots effort by individuals around the country via Twitter, MySpace and other websites.

The liberal media also took the opportunity to engage in frat house "humor" during their broadcasts. CNN, MSNBC and other media outlets jumped on the opportunity to use the term "teabagging".

Teabagging refers to a sexual act involving part of the male genitalia and a second person's face or mouth. Again, totally unprofessional!

It was reported that at the Van Nuys, California rally last night, two ACORN members were arrested and removed for trying to disrupt the rally.

The media is showing again that journalism is basically dead and the media are just mouthpieces for the Obama Administration.

The political elites will be making a fatal mistake if they ignore these protests. The tea parties were well-attended and the anger is real.

Treasury Secretary Timothy Geithner Must Go!

Treasury Secretary Timothy Geithner Must Go!

by Armand Vaquer

Treasury Secretary Timothy Geithner must go. He has inspired no confidence (except, maybe, with Barack Obama) with the American people.

Before he became treasury secretary, Geithner was exposed as a tax cheat, a charge that prevented others from taking positions in the Obama Administration. They at least took the honorable route and withdrew their nominations.

In the words of Rep. Connie Mack, R-FL, "Well before Timothy Geithner became Secretary of the Treasury, he was working hand-in-hand with AIG and other financial institutions to provide them hundreds of billions of dollars of taxpayer money as one of the key architects of the financial sector bailout. I was outspoken against the bailouts then, and I’m even more outraged now."

Geithner lied about when he knew of the AIG bonuses. He was well aware of them at least by March 3 and authorized them. He claimed he found about them later.

The Treasury Dept. is a mess. He cannot even get assistant treasury officials appointed.

Thanks to Geithner, tax dollars are being wasted. Geithner was also a major architect of the stimulus plan that has saddled our country with debt that will be near-impossible to pay off.

Some have wondered if Geithner is either a bad liar or just an incompetent. In my view, he's both.

Now he's seeking even broader powers over other financial insitutions.

Geithner must go!

4,000 At Orlando "Tea Party"

About 4,000 people showed up for a "tea party" protest rally in Orlando, Florida yesterday.

The protestors are protesting the spending policies of the Obama Administration and the Democrat Congress.

From the Orlando Sentinel:

"We're really scared about what's happening in our country," said Debby Whisenand, 71, of Largo in Pinellas County. She waved a sign that read "The problem with socialism is that you eventually run out of other people's money" on one side, and "You can't blame Bush anymore" on the other.

"The goal was to get people united, to let people know that they aren't alone in their feelings on despair," Feroli said. "We want to speak out against the push toward socialization that we feel is taking place in our country."

For the full story, go here.

The Misdirected AIG Outrage

The Misdirected AIG Outrage

It is amusing to watch politicians in Washington beat their breasts in outrage over the retention bonuses paid at insurance giant AIG. These bonuses were exempted in the spendulous/stimulous/porkulous bill by Sen. Christopher Dodd. Now he's joined the chorus of "outrage" over the bonuses. They've known for months that these were in the works. This is just a deflection from the failures of the Obama Administration.

The Wall Street Journal notes that the outrage over AIG is misdirected and that the real outrage should be over what AIG did do with the bailout money they received.

The WSJ.com website editorialized today:

President Obama joined yesterday in the clamor of outrage at AIG for paying some $165 million in contractually obligated employee bonuses. He and the rest of the political class thus neatly deflected attention from the larger outrage, which is the five-month Beltway cover-up over who benefited most from the AIG bailout.

Taxpayers have already put up $173 billion, or more than a thousand times the amount of those bonuses, to fund the government's AIG "rescue." This federal takeover, never approved by AIG shareholders, uses the firm as a conduit to bail out other institutions. After months of government stonewalling, on Sunday night AIG officially acknowledged where most of the taxpayer funds have been going.

Since September 16, AIG has sent $120 billion in cash, collateral and other payouts to banks, municipal governments and other derivative counterparties around the world. This includes at least $20 billion to European banks. The list also includes American charity cases like Goldman Sachs, which received at least $13 billion. This comes after months of claims by Goldman that all of its AIG bets were adequately hedged and that it needed no "bailout." Why take $13 billion then? This needless cover-up is one reason Americans are getting angrier as they wonder if Washington is lying to them about these bailouts.

This is what people and politicians should be outraged about, not over some piddly bonuses.

To read the full WSJ editorial, go here.

Before they received their bailout, AIG was heavily into giving campaign contributions to our favorite politicians. Sen. Christopher Dodd was the top recipient:

Dodd, Chris (D-Conn): $280,238

To see the list of politicians and what they received from AIG, go here.

UPDATE:

Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG) bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.

The move represents somewhat of an about-face for the Senator.

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.

To read the full article, go here.

UPDATE (3/18/09): Senator Christopher Dodd finally admitted he was instrumental in allowing the AIG bonuses.

From the Stamford (CT) Advocate:

U.S. Sen. Christopher Dodd for the first time Wednesday acknowledged he was instrumental in creating legislation that cleared the way for disgraced executives at taxpayer-rescued AIG to walk away with more than $100 million in bonuses.

And the Connecticut Democrat had to explain the receipt of more than $100,000 in campaign donations in the last presidential cycle from AIG workers, vowing to return any tainted contributions from company executives.

But the campaign contributions issue will be dwarfed by whether Dodd eased the way for huge executive bonuses at AIG. In an interview Wednesday afternoon, the senator said he had hoped that an amendment he had drafted to limit executive pay under last year's Targeted Asset Relief Program would have ruled out hefty bonuses.

"I thought we covered that," Dodd said of the bonus issue. His amendment had passed the Senate but was later relaxed by the conference panel that works out differences between versions of legislation passed in the two chambers of Congress.

But later Wednesday, Dodd told CNN that he had agreed to change his amendment -- at the request of the Obama administration -- to ensure that previously enacted bonus contracts would be honored despite billions of dollars awarded to bailout beneficiaries.

"The alternative was losing the amendment entirely," he told the network. Administration officials feared that without the language the bailout measure would be deluged with lawsuits, Dodd said.

Deception Is The Core of Obama Plans

Charles Krauthammer nails President Obama again in his article, "Deception At Core of Obama Plans."

In it, Krauthammer notes:

The "day of reckoning" has now arrived. And because "it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament," Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.

Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

Maybe it's because he has no plan. He is either clueless or the biggest liar in Presidential history!

Krauthammer knows what's going on:

What's going on? "You never want a serious crisis to go to waste," said Chief of Staff Rahm Emanuel. "This crisis provides the opportunity for us to do things that you could not do before."

Things. Now we know what they are. The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions -- the sense of crisis bordering on fear-itself panic -- for enacting his "Big Bang" agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core. Health, education and energy -- worthy and weighty as they may be -- are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime.

Right-o. Obama is an idealogue steeped in socialism and Marxism. Many of us had him pegged months ago, but the drones who voted for him have yet to wake up. When they do, it just may be too late for this country.

At least Rahm Emanuel is honest in his comments. They are taking advantage of this bad economy and are using it to further their socialist aims. That's why they are using scare tactics to panic people into demanding fast action, not realizing that they are being deceived and the "fast action" is leading this country into socialism.

As Rush Limbaugh has been asking the Obama drones, Did you really vote for this?

To read Krauthammer's full article, go here.

GOP Senators Guilty of Earmarks

If the Republicans in congress hope to restore their reputations as being fiscally responsible stewards of our tax dollars, what follows will not help in those hopes.

Minority Leader Mitch McConnell is also one of the spenders. Is this setting a good example, Mitch?

These are the top 20 earmarks solicitors in the Senate, based on dollar amount of individual earmark requests in the omnibus spending bill:

1. Robert Byrd, D-W.Va. -- $122.80 million.

2. Richard Shelby, R-Ala. -- $114.48 million.

3. Kit Bond, R-Mo. -- $85.69 million.

4. Dianne Feinstein, D-Calif. -- $77.90 million.

5. Thad Cochran, R-Miss. -- $75.91 million.

6. Lisa Murkowski, R-Alaska -- $74 million.

7. Tom Harkin, D-Iowa -- $66.86 million.

8. James Inhofe, R-Okla. -- $53.13 million.

9. Mitch McConnell, R-Ky. -- $51.19 million.

10. Daniel Inouye, D-Hawaii -- $46.38 million.

11. Patty Murray, D-Wash. -- $39.22 million.

12. Byron Dorgan, D-N.D. -- $36.55 million.

13. Pat Leahy, D-Vt. -- $36.16 million.

14. Dick Durbin, D-Ill. -- $35.58 million.

15. Robert Casey, D-Pa. -- $27.17 million.

16. Harry Reid, D-Nev. -- $26.63 million.

17. Arlen Specter*, R-Pa. -- $25.32 million.

18. Herb Kohl, D-Wis. -- $23.83 million.

19. Charles Schumer, D-N.Y. -- $21.96 million.

20. Pete Domenici, R-N.M. (Retired) -- $19.56 million.


Source: Taxpayers for Common Sense. Republicans in bold text.

*Specter was one of three GOP turncoats who voted for the porkulus bill.

The Market Is Shorting Obama's 'Stimulus'

An acquaintance of mine co-wrote this piece for Real Clear Markets.com.

The Market Is Shorting Obama's 'Stimulus'
By George Bittlingmayer & Thomas W. Hazlett
February 20, 2009

President Barack Obama's "stimulus" plan invokes the 1930s fiscal strategy put forward by British economist John Maynard Keynes, who saw capitalism as pretty much spent. Having exhausted their store of innovative ideas, investors curled up. Workers lost jobs, spent less, and sent still other workers walking. Budget deficits – government spending without taxes to "pay as you go" - would pull unemployed workers off the street and arrest the downward spiral. Investors' "animal spirits" would be calmed, new capital risked, and economic vitality restored.

So the Obama theory – government spending is stimulus. If so, financial markets should feel the love. The U.S. budget is awash in red ink, and $800 billion more of it should easily move the needle on our economic prospects. Indeed it has – in the wrong direction. Financial markets don't want more government debt or a scramble for "shovel-ready" spending projects. They want the skeletons in the banking sector's closet exposed and expunged.


The Bush Economy went up in smoke in September-October 2008. The financial meltdown hit Wall Street, devastating bank equities and laying waste to America's 401-Ks. The Republican ticket, McCain-Palin, was a 50-50 bet on Sept. 15; by Oct. 15 it was a 5-1 long-shot. Voters saw the carnage: the Dow Jones Index lost 17% of its value from Sept. 2 through Nov. 3. In a flash, Americans lost years of toil, and Republicans the election. Decisively.

The election marked a turning point. Investors looked forward to the economic policies crafted by Democrats in Congress and the White House. More pointedly, they wanted decisive, well-crafted action on the banking crisis. Hence the Dow soared 6.5% Nov. 21 on news that Timothy Geithner, the highly-respected head of the New York Federal Reserve Bank, was Obama's pick for Treasury Secretary.

Yet, from Nov. 4, 2008 through Feb. 12, 2009, the DJI overall fell 18% -- a larger drop than during the Sept-Oct plunge. In January, when the Obama plan, promising far greater deficits than the two much smaller "emergency stimulus" plans signed by Pres. George W. Bush in 2008, was unveiled, the market tanked – the worst January performance in 113 years.

More pointedly, key political victories for the Team Obama spending plan have not been viewed as buying opportunities on Wall Street. A string of negative market reactions began with the December 18 announcement of a stimulus bill of $700 billion (Dow down 2.5%), continued with the January 7 announcement that the actual plan would be "on the high side" (-2.7%) and continued with last week's 61-36 Senate vote supporting the Administration's fiscal plan. The White House victory and the new bank bail-out plan announced the following day by Treasury Secretary Geithner were met with a 5% wipe-out in the DJI, and a decline in Treasury bond yields, indicating a "flight to quality."

There are many problems with Keynes' "stagnationist thesis," as Joseph Schumpeter called it, not the least of which is that it didn't test so well when applied by New Dealers. U.S. unemployment was perniciously high throughout the 1930s, peaking at 25% in 1933 but still over 17% in 1939.

Many claim that World War II brought us out of the Great Depression, but the lesson to be learned is still being debated. Federal budget deficits soared (reaching 26.5 % of GDP in 1942 as calculated by Harvard economist Robert Barro), providing Keynesians an argument for spending as stimulus. But WWII also brought a profound shift in the New Deal's regulatory policies. Attorney General Thurman Arnold's vigorous campaign to break-up "the bottlenecks of business" in major industries like steel, chemicals and electrical equipment was shuttered, and America's largest corporations enjoyed a respite from threats of dismemberment (Arnold was kicked upstairs to a judgeship). As Thomas K. McCraw writes in his superlative Schumpeter biography, "Under the life-and-death pressure of war mobilization… the Roosevelt Administration, which had been hostile toward alleged monopolies, now decided that big business must lead in the job that had to be done."

The only thing guaranteed by the spending stimulus is more national debt. One stroke of the presidential pen has now increased it by $800 billion. Democrats recently screamed about W-era profligacy. On July 28, 2008, Sen. Kent Conrad (D-ND), Chair of the Senate Budget Committee declared, "If they gave out Olympic medals for fiscal irresponsibility, President Bush would take the gold, silver and bronze. With his eight years in office, he will have had the five highest deficits ever recorded. And the highest of those deficits is now projected to come in 2009, as he leaves office."

Kent Conrad was right. The projected 2009 deficit then stood at $482 billion. In January it was forecast by the Congressional Budget Office at $1.2 trillion. Pres. Obama's new plan now ups that to $1.7 trillion. If W got the gold, the new Administration has landed the Platinum in just its qualifying heat.

If historic U.S. budget deficits are any indication, the economy is already "stimulated." The predicted 2009 federal deficit stood at 8.3% of GDP before Obama's package sent it to about 12%. This is a stunning level of debt, double the previous post WWII high when Reagan's 1983 budget deficit amounted to 6% of GDP. That time around, the 10.8% unemployment rate, the worst since the Great Depression, was soon reversed.

Keynesians claim that the Reagan boom was an outcome of just this deficit strategy; for sake of argument, let us assume the Keynesian position. Reagan's budget deficit, half the size of Obama's as a fraction of GDP, was able to pull the economy out of an unemployment trough deeper than the 7.6% hole we're in today.

How do economists know that, while a deficit amounting to 6% of GDP budget was sufficient to spur the economy back to health in 1983, it will take more than twice that federal borrowing to do the same now? They don't. Economic models are all over the place in their projections. Indeed, Prof. Barro's cutting edge analysis of fiscal policy finds no historical stimulus from peacetime deficits. Of course, we've never seen so massive a deficit – one that would bar the U.S. from membership in the European Union, on grounds that our government finances are a mess -- and so we lack empirical evidence to inform the precise experiment we're running today.

We do, however, know the accounting trends: our government faces massive new spending increases as Baby Boomers retire and their Social Security and Medicare bills come due. Market investors are wary of new spending, guaranteeing either future tax increases or inflation, as a run-up to the demographically guaranteed spending spiral. The quest for "shovel-ready" projects makes one think, Where's Senator Ted Stevens when we need him? In any event, this fiscal bridge to nowhere is not spurring markets.

Government deficits are nonetheless being sold as doctor's orders, an elixir that – while it looks ugly and tastes bitter – will propel us back to economic health. Yet the best forecast currently on the table is the one made by investors risking their own money. They are shorting the "stimulus."

George Bittlingmayer is the Wagnon Professor of Finance at the University of Kansas. Thomas Hazlett is Professor of Law & Economics at George Mason University.

Chimp Cartoon Racist?

A little flap has erupted over a political cartoon (above) referencing Travis the chimp, who was shot to death by police after seriously mauling a woman.

CNN.com reports:

A New York Post cartoon Wednesday drew fire from civil rights activist Al Sharpton and others who say the drawing invokes historically racist images in suggesting an ape wrote President Barack Obama's economic stimulus package.

Al Sharpton says he wonders whether the cartoon "is making a less-than-casual inference" to a form of racism.

The artist, Sean Delonas, called Sharpton's reaction "ridiculous," and the newspaper defended its decision to run his cartoon. But other African-American leaders joined Sharpton, who has been the butt of previous Delonas panels, in attacking what they called the cartoon's racial overtones.

"Sean Delonas' cartoon in today's New York Post is insensitive and offensive," National Urban League President Marc Morial said in a statement issued Wednesday afternoon. "Comparing President Obama and his effort to revive the economy in a manner that depicts violence and racist inferences is unacceptable."

The cartoon showed two police officers standing over the body of a chimpanzee they just shot, a reference to this week's mauling of a Connecticut woman by a pet chimp, which police killed after the attack.

I don't find the cartoon racist, but I do find it an insult to chimpanzees by inferring they wrote the stimulus bill. I think they are smarter than the idiots who did.

Welcome To The United Socialist States of America!

The Congress passed the porkulus spending bill (no surprise there).

From Bloomberg.com:

Feb. 13 (Bloomberg) -- The U.S. Congress gave final approval to President Barack Obama’s $787 billion economic stimulus package in hopes of wresting the economy out of recession through a mix of tax cuts and federal spending.

The Senate approved the package 60 to 38 with three Republicans joining Democrats in voting “yes.” Earlier today, the House passed the measure 246 to 183 with no Republicans in favor and seven Democrats opposed. The bill, Obama’s first major victory on Capitol Hill, now heads to his desk to be signed into law.

Could Start Trade War

From FoxNews.com:

Major partners, including the European Union and Canada, say the legislation favoring U.S. steel, iron and manufactured goods for government projects could undermine pledges by the leaders of major economies not to resort to perfectionism during the world economic downturn.

Requirements known as "Buy American" were softened as the bill progressed through Congress and after strong criticism from abroad. Senate and House negotiators agreed to a version that would require the government not to violate trade agreements when implementing the law.

The bill also allows the Obama administration and state governments to waive requirements to favor U.S. companies if they deem it in the U.S. public interest and if they publish a justification.

The dispute has put Obama in a difficult position. While campaigning last year, he raised questions whether U.S. trade agreements contained sufficient protection for labor and environmental standards. He has warned recently, however, about antagonizing trading partners and has made clear that passage of the overall stimulus bill is needed urgently to mend the U.S. economy.

Who Gets What?

For a complete listing, go to Who Gets What?

From FoxNews.com:

One thing about the president's $790 billion stimulus package is certain: It will jack up the federal debt.

Whether or not it succeeds in producing jobs and taming the recession, tomorrow's taxpayers will end up footing the bill.

Forecasters expect the 2009 deficit -- for the budget year that began last Oct 1 -- to hit $1.6 trillion including new stimulus and bank-bailout spending. That's about three times last year's shortfall.

The torrents of red ink are being fed by rising federal spending and falling tax revenues from hard-hit businesses and individuals.

The national debt -- the sum of all annual budget deficits -- stands at $10.7 trillion. Or about $36,000 for every man, woman and child in the U.S.

Interest payments alone on the national debt will near $500 billion this year. It's already the fourth-largest federal expenditure, after Medicare-Medicaid, Social Security and defense.

This will affect us all directly for years, as well as our children and possibly grandchildren, in higher taxes and probably reduced government services. It will also force continued government borrowing, increasingly from China, Japan, Britain, Saudi Arabia and other foreign creditors.

Besides that, ACORN and other leftist groups will receive billions of your tax dollars and the bill guts the Clinton-era welfare reforms.

Welcome to the United Socialist States of America!

Stop Porkulus: Contact Your Representatives Now!

Stop Porkulus: Contact Your Representatives Now!

Congress is about to vote on the porkulus/stimulus bill today. Very few, if any, members of Congress have read the final bill that came out of the Conference Committee (the one Republicans were blocked from participating in). The Democrats kept the bill from being posted online for people to read under the promised 48 hours, and it is a PDF file, which means that it can't be searched and it is essentially a picture of a document.

Don't rely upon the media, they aren't asking any probing questions (how can they since their tongues are on the floor?).

With interest and future spending, this monstrosity will end up costing taxpayers $1.5 trillion (that's trillion with a 'T').

Heritage.com reports:

The United States Congress is about to pass the largest single-year increase in domestic federal spending since World War II. Despite the fact that neither the Republicans in Congress, the media, nor the American people have been allowed to read the bill, the House plans to vote on the plan today. The Senate will quickly follow suit so that the bill will hit President Barack Obama’s desk by Monday. Even without the full benefit of digesting what is in this trillion dollar debt bill, over 200 economists have expressed their belief that this plan is destined to fail. And conservative economists that once supported the idea of a stimulus are now calling the current plan “An $800 Billion Mistake.” Even center left economists like President Bill Clinton’s budget director, Alice Rivlin have told Congress that the long-term spending items in the plan “should not be put together hastily and lumped in with the anti-recession package.”

This comes down to two Republican senators (Susan Collins is a lost cause): Arlen Specter and Olympia Snow. Senator Edward Kennedy is too ill to come to Washington from Florida to vote. If this bill is kept from getting 60 senate votes, it fails. Then something much better can be proposed.

Contact your congress member and senator today and tell them to vote against this rape of the taxpayer. Also, contact the offices of Senators Specter and Snow.

Contact Elected Officials at USA.Gov