I skimmed over the basics of both stimulus bills.
The Republicans, besides being big babies and withholding support because Nancy Pelosi pissed in their cherrios, have offered a revised plan.
It is more of the same.
Stimulate the business' and the trickle down effects will get to the people. Right? Wrong.
Trickle down economics don't work.
Electrolux is located in Webster City, Iowa. Not too far from me. They are cutting 85 jobs. Not because the products aren't selling but because they are moving their vacuum cleaner division to Mexico.
The main headquarters will still be in the United States, so they can take advantage of the tax breaks.
The Democrats plan is to put people to work.
More people working means more spending. More spending means more demand for supplies. Means more people working. Sounds like a good cycle.
Now I may not be a brain surgeon but I have stayed in a Holiday Inn once or twice.
This just makes sense.
Giving big tax breaks to greedy business' so they can restructure and move part of the company out of this country to make products targeted to SELL THOSE SAME PRODUCTS to the people they just layed off. Now where are those people going to get the money? They no longer have jobs.
As long as human greed exists trickle down economics will not work.
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Comments: 118
I keep hearing the Democrats say this but they have yet to say just how they plan to do this. I've heard a lot of talk but that's all its been is talk.
Can I say puke without this getting flagged? ;)
Lynn you can say puke and if this gets flagged so be it. So right trickle down doesnt work. Look at it like this.
Your nephew comes to you and says he needs $500 and he will pay you back Friday. He doesnt.
A month later the same nephew wants another $500 and he promises to pay you back Friday. He doesnt.
Another month and he wants another $500 and promises to pay you back Friday.
How many times would a reasonable person loan the same money with the same broken promise?
Not for 35 years like the Republicans want us to do.
So I should go by Dr. Lori F
$1 billion for Amtrak, which hasn't turned a profit in 40 years?
$2 billion for child-care subsidies--how is that creating jobs?
$50 million for the National Endowment of the Arts?
$650 million for digital TV conversion coupons?
$600 million for new government cars?
$54 billion for Economic Development Office and Small Business Administration programs that the OMB or GAO have already said are ineffective?
Give me a break.
The Dems have been better with the economy since Nixon (who acted like a Dem with the economy compared to today's crazed greedy minded Republicans).
But some people will stick with Republicans ideas no matter what. Greed sounds just right and holy in that certain Protestant sort of way.
They just want to say there is nothing about jobs in there.
(I guess updated bridges, schools and technology doesn't bring any jobs).
About Daycares. That is very valid. If both my kids go to daycare a full week I pay $235 a week. Do the math.
PJS:)
The Republican idea of bipartisanship has always been nothing but "Dems understanding and doing things the Republican way".
It's always only a one way street for the Republicans.
And they are really advertising it loud this time.
Shannon exactly.
"About Daycares. That is very valid. If both my kids go to daycare a full week I pay $235 a week. Do the math."
How does someone else paying for your day care create jobs for the economy? I see how it helps you, and I'm all for helping those in need. But this is supposed to be a bill to stimulate the economy. It doesn't do that!
"I don't think Obama has a magic wand to get the Republicans to stop their stunts. The Republican idea of bipartisanship has always been nothing but 'Dems understanding and doing things the Republican way'. It's always only a one way street for the Republicans. And they are really advertising it loud this time."
Nancy Pelosi and House Democrats wrote this bill with zero GOP input and did not allow GOP amendments. How is that Republican partisanship?
"AC I think Shannon is smart enough to read the bill for herself. I dont buy into all of YOUR hype. Shannon exactly."
Hype?
This is from a Wall Street Journal analysis of the stimulus bill:
"In selling the plan, President Obama has said this bill will make 'dramatic investments to revive our flagging economy.' Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There's another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities."
"Add the roughly $20 billion for business tax cuts, and by our estimate only $90 billion out of $825 billion, or about 12 cents of every $1, is for something that can plausibly be considered a growth stimulus."
As long as 'republicans' are 'republicans'....this country is going no where, -- I tell you 'no where'!!!
Make this about job creation and not pet projects; live up to the campaign promise. He can do it, but he has to be willing to take on BOTH parties, not just the GOP.
1- child care centers hire people who care for children
2- affordable day care frees up people so they can go to work
Thats what I meant AC.
If it's a subsidy, isn't it then going to people who need help paying for day care they already use? That's the implication, right?
But just for the sake of argument, let's say you're right. That's $2 billion out of almost $900 billion. What about the rest?
They were invited upfront. They sulked and didn't get involved. Now they sulk some more and cry about it. Stunts.
Look, I'm not taking a shot at Obama here. The congress is the problem--BOTH PARTIES. If this is truly the greatest economic disaster since the great depression, why is the bulk of the bill focused on earmarks and non-stimulative projects instead of job creation?
That's pretty much what the president said. So then why do such projects make up such a small part of the package?
You really believe that, don't you? It's that type of partisanship that is part of the problem.
It's not rocket science. The Republicans have tried and failed and tried and failed. Their ideas are old, ineffective and archaic. That's why I always put cans back on the shelf where I am at in the store if I reconsider a grocery purchase. Somebody has to put it back. And that's somebody who will be paid to put it back. I, personally, have stimulated the economy because that person will spend his money (which he earned putting my can back). If everyone put their cans back where they got them after changing their mind...they would eliminate the coveted can-putter-backer position. Do you think they'd drop prices? HA! Nope. They'd make more profit and invest in yet more annoying commercials.
Regards,
Doyle I <~~~~~
Any thoughts on all the fluff in the bill, or is this just a rant about Republicans, who had no part in writing the bill?
Are you happy with the bill as written? Do you think it is stimulative?
It's a tad easier to believe because it's true. The so-called bi-partisan effort broke down as hoped for by the GOP. They wanted to give more and more tax breaks which would counter the economic impact being sought by the Obama Administration and it's clearly been rejected by the public. So, instead of working with the Administration, the obstruction found the light of day...and it was 100% Republican. It's a political version of a foot stamping temper tantrum. Shocker, eh?
Suppose that you add a sports complex to this bill.
This sports complex is going to be built in Fort Dodge Iowa.
By getting your funding approved you get your sports complex.
You put people to work.
You buy supplies from local business'.
The citizens of Fort Dodge Iowa are taxpayers so in essense they are paying for something they will use through their tax dollars.
Pork got a bad rap.
Nahh. That was a rant. I feel better now and then to rant about the pathetic, anti-American, vile party of political obstructionism. But at least I don't hide it and pretend to be impartial, eh? It's part of my charm. :o)
"The so-called bi-partisan effort broke down as hoped for by the GOP."
How do you know what they were hoping for? If they weren't allowed to present amendments and weren't included in the writing of the bill, where's the bipartisanship?
"...and it's clearly been rejected by the public."
Both Gallup and Rasmussen are reporting that most of the public doesn't like the bill as written.
"Pork got a bad rap."
Some, but not all. Some of it is well deserved. I would have no problem with the type of pork you described if it was a heavy component of this bill. But it's not. That's the problem. I support infrastructure projects because they produce tangible results, put people to work, and tend to last for a long time. But as the WSJ noted, such projects make up less than 5% of this plan.
What the President and both parties should be doing is getting rid of the crap in the bill and using every dollar to put people to work. Right now that is not happening, and it is the fault of all involved.
"Nahh. That was a rant."
I can appreciate that.
"I feel better now and then to rant about the pathetic, anti-American, vile party of political obstructionism."
It's not nice to talk about Democrats that way.
"Hopefully there is something worthwhile in the bill."
There is. Unfortunately, it's only a small percentage of the spending in the bill.
Both Gallup and Rasmussen are reporting that most of the public doesn't like the bill as written.
I was referring to GOP economic ideas.
"It's not nice to talk about Democrats that way."
I know. Lying is wrong.
AC, I have the text of the bill on my desk at home, awaiting my review (Thanks to Mrs. Doyle). I'll look into it. In the meantime. What SPECIFIC fluff do you object to?
No doubt. But this particular bill is being pitched as a stimulus bill, leading one to believe that the components of the bill will be stimulative. It's not just an exercise in spending money on what differing people hold to be worthwhile.
"perhaps they could put in a line item to start a few more wars. I bet the GOP would sign on then."
Spanish-American War: William McKinley, Republican
WWI: Woodrow Wilson, Democrat
WWII: Franklin Roosevelt, Democrat
Korea: Harry Truman, Democrat
Vietnam: John F. Kennedy, Democrat
Grenada: Ronald Reagan, Republican
Panama: George Bush, Republican
Persian Gulf War: George Bush, Republican
Somalia: Bill Clinton, Democrat (although the humanitarian mission began under George Bush)
Balkans: Bill Clinton, Democrat
Afghanistan: George W. Bush, Republican
Iraq: George W. Bush, Republican
Total for Democrats: 6
Total for Republicans: 6
Those damned GOP war mongers!
That's interesting, because Gallup and Rasmussen are also reporting that a majority of the public thinks tax cuts are preferable to government spending.
"What SPECIFIC fluff do you object to?"
Anything that doesn't create jobs. Way too many to list here, but reading through the bill you'll get an idea.
This thing has some merit, but it needs some reworking. Republicans asking for funding for their pet projects are just as guilty as the Dems doing it. As Lori pointed out above, not all pet projects are bad.
Given that we are told this is the worst economic crisis since the great depression and that a stimulus bill that gets people working is what is needed, is it too much to ask that it be structured so that it does what it's supposed to?
Why are we giving Amtrak a billion dollars? It hasn't turned a profit in 40 years. Any private company would be allowed to go out of business.
What is the provision of $650 million for digital TV conversion coupons going to do to stimulate the economy?
Why are we giving $600 million to automakers for new government cars when we say they need to completely revamp the way they do business? Aren't they being rewarded here?
Why $54 billion for Economic Development Office and Small Business Administration programs that the OMB or GAO have already said are ineffective? If they're ineffective, why are we continuing to fund them? Do ineffective programs stimulate the economy? If they do, why did candidate Obama promise to get rid of these kinds of wasteful programs?
Instead, Democrats want to spend money we don't have on projects we don't need. Think about it, almost $100 million for smoking cessation? Didn't the Dems just pass the expanded SCHIP bill claiming they would make up the additional revenue needed through an increased tax on cigarettes? How do they intend to pay for SCHIP if everyone quits smoking?
Sure there are worthwile expenditures in the proposed spending bill, and those are the expenditures that Democrats want Americans to focus on. But as the saying goes, one bad apple can spoil a bunch, and it is those bad apples that are causing the delays in passing this legislation. $250 million tax break for the movie industry? How much did Brad Pitt make on his last movie... I forgot?
If Democrats were to simply focus on job creation, rather than stuffing this bill with reckless spending projects, it would have been passed already.
http://www.earmarks.omb.gov/2008-appropriations-by-agency/summary.html
"If President Obama really wants this bill to stimulate the economy, he'll tell members of both parties to cut the crap and use every dime for job creation."
What exactly do you mean there? What is spending on job creation? You seem to have a different idea in mind.
The GOP has their list of what they see as pork, and it's not holding much water:
http://angrybear.blogspot.com/2009/02/gop-senators-pick-their-pork.html
"AC you got the Vietnam War wrong. That war started before Kennedy. I believe it started around 1958 by Eisenhower."
Actually, we were not at war yet in Vietnam. We had a very small advisory presence in 1959 (less than 100), as we do today in a host of countries. That presence continued to grow under Kennedy starting in 1961 (jumping to 3,000 Special Forces soldiers with equipment for combat), with Johnson formally introducing combat troops to save the South Vietnamese government in 1965.
"AC W., do you define the pork the same as I would? I would define pork as spending that doesn't stand on it's own merits but rather is only there to gain favor of constituents."
Yes, in the strictest sense of the term.
"Earmarks does not equal pork."
There is a lot of confusion about the definitions of the two terms, and they are often used interchangeably, whether you agree with using them interchangeably or not.
"What exactly do you mean there? What is spending on job creation? You seem to have a different idea in mind."
Projects that put people to work. Mr. Obama has promised this bill would feature a strong focus on infrastructure jobs. I'm all for that. But according to the WSJ analysis, such jobs make up less than 5% of the bill. How about less money for the programs already deemed ineffective, and more road projects?
How about taking the $650 million for digital tv conversion coupons and using it for a bridge or two?
You know, I was actually in favor of the $200 million for resodding the national mall that Republicans demanded be dropped. I was in favor of it because it would take people to do the resodding, using materials bought from businesses. It may have been short term, but for the short term at least some people would be employed by the resodding project.
Likewise, anything that acts as a transfer payment rather than a spending item will behave like a tax cut.
And spending on vehicles isn't to "reward" car companies (and there's more than just the "big three"), it's to acquire cars. And is there a better time than now to do that? It creates jobs in the industry, and it helps the car companies get past this economic period with less need for a loan.
So I guess you can take your argument up with the GOP.
BTW, where is this WSJ analysis?
"So unless you're saying tax breaks aren't stimulative...."
I'm not saying that, but now you have to be careful when you start saying things like "acts like a tax break." Is it a tax break? Or is it like a tax break? What is the real net effect? Do we know? Are we speculating about the impact? For families in a tight money situation, are we providing temporary relief by taking money from other taxpayers (which they would otherwise spend) or by printing money (will could lead to inflation)?
"And is there a better time than now to do that? It creates jobs in the industry, and it helps the car companies get past this economic period with less need for a loan."
But aren't we already loaning them money? Failed business practices led to the mess they are in, right? So what are we doing to change those business practices? Should we be doing anything to change those business practices? What does the government know about running car companies? Or banks? This is not a simple matter, and I'm not trying to paint it as one. Government intervention can be dangerous if done recklessly, and all indications are that that is precisely what is happening with this "stimulus" bill.
"AC W., I've heard the opposite complaint from the GOP than what you give. I've heard them arguing against infrastructure spending because it takes so long, especially for roads and bridges."
I look at it like this: hire contracting companies to repair roads, bridges, etc. They will tap into the labor pool, putting people to work. Private contracting companies can get moving pretty quickly if you show them the money, so to speak. Infrastructure projects take months, if not years, to complete. That keeps people employed. If we're going to be spending the money, that seems a good place to start. Of course, I'm sure there are other job creation possibilities, but we were promised millions of jobs from new infrastructure projects. That won't happen with this bill.
"So I guess you can take your argument up with the GOP."
I argue with whomever I disagree with with. Sometimes I even change my mind.
"BTW, where is this WSJ analysis?"
http://online.wsj.com/article/SB123310466514522309.html
Tim, always appreciate your input.
NOT tax cuts for Exxon Mobile.
""What SPECIFIC fluff do you object to?"
Anything that doesn't create jobs. Way too many to list here, but reading through the bill you'll get an idea. "
Sheesh. Way to show specificity! So you have SOOOO many you couldn't possibly share an example or two? It's not like I asked you to retype the text of the bill. [ *Damn text comments. Please....picture me rolling my eyes here, ok? It's give my comment more ooompf. Thank you.* ]
"Why are we giving Amtrak a billion dollars? It hasn't turned a profit in 40 years. Any private company would be allowed to go out of business. "
You mean like the big three auto makers, so poorly run that they ran not only their own companies but the entire industry right into the ditch? Or the securities people who profited for decades on highly speculative investments to garner a lucrative return but can not fail thanks to the taxpayers they've been praying on as customers being forced to pick up the tab for their failures? Hmmm? Like them? How about the $18 billion Booshie gave to the airline industry? JP Morgan Chase was handed money to buy out Bear Stearns and then Washington Mutual....$30 Billion....Fannie Mae and Freddie Mac....$200 Billion....AIG, $150 Billion....$700 Billion proposed by Bush for Wall Street....$247.5 Billion for Citigroup.....$17.4 Billion for Chrysler/GM. Amtrak is infrastructure. At least there is something to show for it...not like buying and selling home loans on interest speculation.
"What is the provision of $650 million for digital TV conversion coupons going to do to stimulate the economy? "
Provide construction of the boxes...none are available here in LA....not to mention many cost more than the $40. What do you suppose happens to advertising revenues if people cannot watch tv? Sales?
"Why are we giving $600 million to automakers for new government cars when we say they need to completely revamp the way they do business? Aren't they being rewarded here? "
Excellent question and a good point. Providing almost an incentive for poor performance. Of course this goes back decades...and the American Auto Industry is considered necessary for defense as well as a major employer. Over 10% unemployment in Michigan alone while they're open, the benefits with oversight seem obvious.
"Why $54 billion for Economic Development Office and Small Business Administration programs that the OMB or GAO have already said are ineffective? If they're ineffective, why are we continuing to fund them?"
I'm not familiar with the details of this one, but I can say that a program that is not efficient does not mean it is not needed. Perhaps the purpose is to make them effective.
"AC you got the Vietnam War wrong. That war started before Kennedy. I believe it started around 1958 by Eisenhower."
VERY good! I've grown weary of correcting people. It started even before American involvement but US involvement began under Eisenhower, when he first sent military advisors (Read: Green Berets) over in 1957. I realize that there are internet sources that claim 1955 but my recollection was 1957. It's a moot point...it certainly was Eisenhower. Escalation was on Kennedy though...having inherited the war and the Bay of Pigs...
"Actually, we were not at war yet in Vietnam. "
We we ever or was it always a police action?
"There is a lot of confusion about the definitions of the two terms, and they are often used interchangeably, whether you agree with using them interchangeably or not. "
There's a clearcut difference. Just because some use them wrong doesn't make the correct usage less important.
No question, it acts just like a tax break. Why wouldn't it? And the money is coming from deficit spending. It's not coming from taxpayers who would otherwise spend it. That's the idea behind stimulating the economy. The idea is to run deficits temporarily to get out of the recession. Taxing now to pay for stimulus wouldn't be very effective for obvious reasons, like using dirt taken from a hole to fill in that same hole...
Also, inflation is not an issue right now. As long as we have a deflationary period like we do now, a loose monetary policy cannot cause inflation. That's monetary policy though, which involve printing money, and is not the same fiscal policy (which is what the stimulus involves). In fiscal policy matter, you borrow money, not print money. The typical concern with fiscal policy that runs deficits is that the borrowing crowds out investment. But again, we have businesses downsizing rather than expanding. Consumer demand is falling along with demand for investment. I don't believe crowding out is an issue right now, not until we get out of this recession.
And this has nothing to do with government running business (car companies, banks). It isn't. A loan or investment doesn't put the government in charge of the decisions. Nationalizing them would. And some people would argue that we should have nationalized the banks and then de-nationalized them later as has been done in Europe. The idea is that the banks were too big to fail (cause too much harm to other intertwined entities if they fail), so doing nothing wasn't an option, but that just bailing them out would cause moral hazard of allowing them to continue after "failing", and nationalizing allowed the government to clean house and avoid either of the other two scenarios.
"NOT tax cuts for Exxon Mobile."
How do you know that? That wasn't the question asked by Gallup or Rasmussen. They just asked about tax cuts. And what about shareholders of Exxon Mobile? Would they want to see the company get a tax cut?
"So you have SOOOO many you couldn't possibly share an example or two?"
Actually, I did, and you restated them later in your comment.
"You mean like the big three auto makers, so poorly run that they ran not only their own companies but the entire industry right into the ditch?"
Yep. I was opposed to the auto industry bailout.
"Or the securities people who profited for decades on highly speculative investments to garner a lucrative return but can not fail thanks to the taxpayers they've been praying on as customers being forced to pick up the tab for their failures?"
Yep. I was opposed to bailing out the financial industry too.
"Amtrak is infrastructure."
The tracks are infrastructure. Not the company.
I bet it will be, though.
"And this has nothing to do with government running business (car companies, banks)."
It doesn't? Then why is Congress demanding business plans from the car companies? Are they not going to scrutinize them and then "make suggestions" for improvement?
As for the WSJ piece, I just flat out disagree with it. It's just a snarky, partisan, unrealistic look at the stimulus. It has nothing on which to base it's claims that those spending items would not be stimulative.
Regarding infrastructure, I think some people (GOP?) want things that that hire a bunch of people for a few years and then stop. They argue against projects that take a longer time. The projects that create green jobs were criticized for that reason, and they were saying that in terms of their value as a quick stimulus boost, the green infrastructure added little value. While I'm sure there's projects that can be completed quickly, I'm also sure there's plenty of projects that take much longer. Anything but the smallest bridge would probably be long term. Entirely new construction would probably take just as long, things like subways, new roadways, new buildings. But I recall there was a lot of work gonna be done on federal buildings (weatherizing for better efficiency I think?).
But I'm in no position to say whether there's more infrastructure improvements that should be added (or removed). I mean, I don't have specific information on a bridge or something that I know needs work and won't be getting it or something like that.
"It's just a snarky, partisan, unrealistic look at the stimulus."
I'm sure they would disagree with your opinion, but you are certainly entitled to it.
"The government wants to see business plans as a prerequisite to bailing them out."
And it was reported today that President Obama will set limits on CEO pay for companies receiving bailout money. Personally, if I, as a taxpayer, am paying their salaries, then I (or my elected representatives) want to dictate that salary. But we're on a slippery slope. "Give us your business plans, and we'll tell you how to adjust them (even though we don't know the first thing about running a car manufacturing business)." "Here's how much money you can make." "Okay, we're investing in you, and we're going to tell you how to spend it."
Where does it end? Where do you draw the line? The potential for abuse is staggering.
"And inflation won't be an issue...."
Right. Because it's never been before....
You read it, and you don't think it's sarcastic? Does it ever explain any reasoning to it's assertions? I see none. And when it says only $90B of it can plausibly be considered a growth stimulus, you know they are talking about their asses. They should let the economists, ones who actually do more than just make baseless assertions, analyze the plans.
On pay limits, I believe that's just the government setting conditions on the bailout. The business is free to take it or leave it. Without those conditions, we get the outrageous bonuses and such that we saw from AIG.
Government isn't dictating business plans. In asking for a business plan, the government is just acting as a good investor asking why should we bother investing, show us how you'll use this bailout money to rebound rather than using it just to postpone your death a little longer.
I don't know exactly what you mean about drawing the line and potential for abuse. The government isn't trying to take over private business, if that's what you mean. But when they are forced to intervene and taxpayer money is on the line, we definitely should get a say in it. And the intervention is only temporary. Once we can get out, we will.
No.
"They should let the economists, ones who actually do more than just make baseless assertions, analyze the plans."
How do you know that the person writing the editorial has no background in economics? Or that the editorial board doesn't employ an economic adviser? Or are you makiing a baseless assertion?
Let's see: You said, "The government wants to see business plans as a prerequisite to bailing them out." And you said, "On pay limits, I believe that's just the government setting conditions on the bailout."
Sounds like the government's making some decisions. Do you believe for one second that the government wants to see business plans, but intends to then NOT get involved when they see things in the plan that they don't agree with?
"The business is free to take it or leave it."
Personally, if I were the head of one of these companies, I'd leave it before I'd let the government dictate to me how to run the business. Let the company close up shop and watch the unemployment numbers rise....
By setting conditions, the government is dictating to the firms how they are going to run their businesses. That is making decisions for them my friend.
"Government isn't dictating business plans."
So even if they think the plan is crap, they're not going to say anything? They're not going to then tell the business, "change this" and "change that?" Please.
"The government isn't trying to take over private business...."
By making decisions about how and when they spend money, they ARE taking over private business.
"But when they are forced to intervene...."
Who's forcing them?
"And the intervention is only temporary."
Sure it is. The federal government is very good at starting projects / programs, but has a poor track record of ending them.
I think the government needs to nationalize the banking system and get control over some of the shenanigans that are going on for possible a long time.
I think America is not going to get better until average Americans start to have some faith that they are being treated fairly, or until the start to starve and demand to be treated better.
When you look at the system we have it is broken on almost every level, but those with money just do not care. Their power come from their money, but not because they earned it, because they stole it for the most part - many of them.
When Americans can see for themselves that good peolpe are in office and running companies things will fall right back into line and things will hum ... but likely what we will be faced with is more facades, more lies, more marketing scams, more image making, and more right wing attacks with the same old slogans.
American have to make it clear that we will not accept the same old system that we pay to fix that comes right back and stomps on our necks.
I know that because I have a three digit IQ. What about the shareholders? Yes, they'd like tax cuts to go with the World Record profits. So?
"Actually, I did, and you restated them later in your comment. "
I comment as I go. I'll concede you did.
"Yep. I was opposed to the auto industry bailout. "
Fair enough. But what is the answer? From massive unemployment to even more? How does THAT help? Also...it's a hit on National Security since the US automotive industry is considered part of our own necessary industries. I'm thinking salary caps at the top and oversight at a minimum. But without substantive change...it will be akin to throwing good money after bad.
"The tracks are infrastructure. Not the company. "
One maintains and uses the other.
"I bet it will be, though. "
It's practically unavoidable.
""Give us your business plans, and we'll tell you how to adjust them (even though we don't know the first thing about running a car manufacturing business)." "
Apparently, neither do they.
"On pay limits, I believe that's just the government setting conditions on the bailout. The business is free to take it or leave it. Without those conditions, we get the outrageous bonuses and such that we saw from AIG."
EXACTLY! You want outrageous bonuses and salaries in the free market...dig in and get them. But when John Q. Taxpayer pays your bills....I think there's a inherent right in adding strings to their pocket book. Do it on your own. You want MY money? Here's how it's gonna be!
"Personally, if I were the head of one of these companies, I'd leave it before I'd let the government dictate to me how to run the business. "
That explains, with all due respect, why you're not a CEO. Declining a multi-billion dollar bailout and letting the company go belly-up isn't such a good business plan.
"Let the company close up shop and watch the unemployment numbers rise.... "
Ahhhh! I see. Turn the screws on the taxpayer and threaten them. Give us billions of your money or we'll F up the economy. I see. Bend over, taxpayer. This will only hurt a little bit.
"By making decisions about how and when they spend money, they ARE taking over private business. "
True. As far as it goes. But it's a question of them spending THEIR money and them spending OUR money. People spending MY money will be hearing from me about when, where, why and how. Don't like it? Spend your own money!
" think the government needs to nationalize the banking system and get control over some of the shenanigans that are going on for possible a long time."
Not to mention the privately owned Federal Reserve Bank!
"...but those with money just do not care. "
And that supercilious, sneering contempt and disregard so well displayed by our last vile Criminal-in-Chief is becoming more and more arrogant and obvious.
"...not because they earned it, because they stole it for the most part - many of them."
Absolutely. Legalized theft.
"I know that because I have a three digit IQ."
Oh, well then, I guess that settles it. A three digit IQ allows you to discern what everyone in America wants. Wait a minute. I have a three digit IQ as well, yet I'm not all knowing. Do you have superpowers that the rest of us mere mortals don't possess?
"What about the shareholders? Yes, they'd like tax cuts to go with the World Record profits. So?"
So, don't their voices count? Or is it only yours that matters?
"From massive unemployment to even more?"
Businesses succeed and fail all the time. It's part of the business cycle. If a company cannot perform in a manner that ensures a profit, it should be allowed to fail, no matter how many people are put out of work. Doing that makes that particular business sector more efficient and weeds out the companies that can't compete. The economy will recover. It always has. That's why it's a cycle--there are good times and bad. Propping up a failing business is certainly not the answer.
"One maintains and uses the other."
And there will be another rail company waiting in line to take Amtrak's place. There's no good reason to allow a failing enterprise to continue at taxpayer expense.
"Apparently, neither do they."
Which is why they should be allowed to fail.
"Declining a multi-billion dollar bailout and letting the company go belly-up isn't such a good business plan."
And accepting money to prop up a failing enterprise is? It only delays the inevitable.
"Turn the screws on the taxpayer and threaten them."
What about the taxpayers footing the bill for the bailouts? Don't they get a voice in this? Or is it only the taxpayers working for a given company?
How can you possibly know this unless we've ALL starved to death?
My husband and I are not having a problem paying our mortgage :::knock on wood:::, but it kills me to see empty houses. To see neighbors lose jobs and have to sell their homes. Now we have neighborhoods filled with homes for sale but no one can get a loan to buy. What do we do now? Wouldn't it be better to have the homeowners stay and pay (at a reduced rate)? Not all homeowners borrowed beyond their means. many of the people who have found themselves in this mess have lost their well-paid jobs.
"How do you know that the person writing the editorial has no background in economics? Or that the editorial board doesn't employ an economic adviser? Or are you makiing a baseless assertion?"
Because anyone with a basic understanding of economics could see that the article doesn't pass the common sense test. As I said, they subscribe to the narrow ideological belief that only business tax cuts and a few infrastructure tasks are actually stimulative, or only 90 billion of the 825 billion. The rest just cease to exist in the economy, or so they think. What nonsense. And it even fails to identify the large amounts of infrastructure spending that occurs under other sections of the bill, which they would have saw if they delved deeper into it.
Most respected, non-partisan economists would tell you that the other spending items that this article deems useless are actually mostly spending items that have a much higher economic multiplier effect than tax cuts, and more immediate stimulus effect than long-term infrastructure spending.
This author seems to think "demand" doesn't exist, and that only supply-side business tax cuts and directly created government jobs result in job creation... and even then, they are even wrong in thinking that the other spending items don't create government jobs. For example, spending sections on homeland security, FBI salary budget, wildfire control, and state and local law enforcement are all spending items that almost exclusively go to creating thousands of jobs (thousands of police, fire fighters, FBI, etc.). So it's not very informative if it totally ignores most of the government jobs that would be created as well as ignoring all the consumer demand it creates which fuels private job growth.
This article just preaches to the choir of ideologues who like to hear their own beliefs reaffirmed. This stuff is fairly common on the WSJ opinion page, actually.
On the bailout, I've explained it pretty clearly I think, and you're still dancing around it. The companies want money from the government to bail them out of their situations. The government has to be convinced that this is a good idea and in the interests of the people, just like a bank looks at the business plans of a start-up company and then accepts or rejects the loan request. The government is rejecting the loan request if the business plans include paying huge sums of bonuses to mismanaging managers when finances are already dire.
You already said you support the government exercising this type of discretion when using taxpayer money. Now you're going back on that moment of non-partisan common sense and rewording it to make to fit the ideological bandwagon that you momentarily strayed from. That is, you now turn it into the "big bad government" overreaching, making business decisions, right down the scary slippery slope we go!
"Personally, if I were the head of one of these companies, I'd leave it before I'd let the government dictate to me how to run the business. Let the company close up shop and watch the unemployment numbers rise...."
Yeah, right... Like they care what the business does as long as they are receiving their multimillion salaries... The shareholders on the other hand might care. The truth is that both parties have something to gain, just like a bank loaning to a business.
"The federal government is very good at starting projects / programs, but has a poor track record of ending them."
More ideological bitterness. We've bailout out banks in the past and then got out. So there is a great track record. I know you think the evil government wants to control the banks forever, but can we stick to reality for this discussion?
Yes. Thanks for noticing. Incidentally, they only seem super to those that do not possess them.
"So, don't their voices count?"
Of course. But what's best for the nation has priority over the people sharing in world record profits trying to get more money off the tax-payer's teat. Take Joe, the tax-cheating liar for example. His voice counts. He might like a few billion dollars to start his own plumbing business and hire plumbers, thereby stimulating the economy. Just because he shouldn't get it doesn't mean his voice doesn't count. It means we're still (semi-)sane!
"Businesses succeed and fail all the time. It's part of the business cycle."
Thanks for the lesson in economics. However, this isn't a business we're talking about. It's an entire industry that has been deemed vital to our national security.
"The economy will recover. It always has. "
There is a logically inconsistent fallacy in this and I'm surprised to hear you actually say it. Seriously, you've argued quite well and reasonably...but this has to be your weakest statement yet. My granddaughter will always fit in her pink pajamas. She always has. See how it fails? Economies have failed. Governments have failed. To assume because this economy has not failed it never will is a sign of poor reasoning.
"Propping up a failing business is certainly not the answer. "
True. Which is why oversight is required and, once again, we're talking about more than a business here...we're talking about the entire industry. And the propping up is more for the overall stimulus to the economy and less for saving any one business.
"There's no good reason to allow a failing enterprise to continue at taxpayer expense. "
I disagree.
"And accepting money to prop up a failing enterprise is? It only delays the inevitable. "
Does it? You seem to forget my super powers and logic which you have subtly criticized and here we see you making predicitons for the future outcome as an argument
to support your opinions. The Government has had success in corporate bailouts in the past. Case in point from the Nixon Administration:
The year is 1970 and our government (We the people) gave $676.3 million in loan guarantees...statutory commitments to pay back a loan's principal and interest to a lender in case the borrower defaults to Penn Central RR and some other failing railroads. Penn Central had appealed claiming its continued existence was vital to national security but that claim was not accepted. Five years later, in 1976, Uncle Sam consolidated the still struggling Penn Central with five other railroad companies that were also failing to form Consolidated Rail, or Conrail. In all, we, the people, spent $19.7 billion, including over $7 billion for the initial investment, to keep Conrail operating.
So what was the result? Well, as it happens, in 1981, Conrail began to earn a profit. The government sold Conrail 6 years later for $3.1 billion. In addition to the sale price, the Treasury received a $579 million dividend from Conrail.
All those jobs were saved, people who lived, had families and spent money in our economy in a 17 year period. The rails and their employees continued to operate and the devastating effects of high unemployment which DOES have a trickle down effect to the extent that decreased spending and high unemployment will make other businesses fail and go under, increasing the unemployed and decreasing even further the feasibility of other businesses...a virulent, downward spiral.
And Lockheed, in 1971. They were bailed out too! And Lockheed during the Vietnam War really was a national security concern. After the bailout...in 1977, Lockheed had paid off its loans. Although it had an unfair business advantage in the form of guaranteed loans, its dependency on them finally came to an end. In their case, the government earned about $112.22 million in loan fees!
Which reminds me...why so much cocern on the costs of the stimulus package and never word one being mentioned about what we can expect in the form of a return on our investments? Why the negative nelly doom and gloom, let 'em all fail because bailouts cannot work, when we know this is not necessarily true? You are making predictions of results strictly to reinforce your preconceived ideas...whereas I am saying they may or may not work. Maybe you have some precognitive super power yourself! If so...please E-mail me the winning CA state lottery numbers. :o)
"What about the taxpayers footing the bill for the bailouts? Don't they get a voice in this? Or is it only the taxpayers working for a given company? "
Once again you fail to consider the full ramifications of allowing entire industries to fail and the effects of that on ALL taxpaying citizens.
"How can you possibly know this unless we've ALL starved to death?"
Sandy...I love you!
"Maybe we all need to suck it up and do what's best for the country as a whole and stop only supporting what affects us personally, because surprise!! My neighbor losing their home DOES affect me personally (and you and everyone)."
"Any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee..." ~ John Donne, Meditation 17 - Devotions upon Emergent Occasions
Thank you E.M.....I couldn't possibly agree more.
Regards,
Doyle I <~~~~~
I'm getting the same impression, Tim. Anyone who cites "The economy will recover. It always has. " as an argument seems to have reached the bottom of the debate barrel with the scraps of logic left down there that were to putrid for consumption in the debate.
Regards,
Doyle I <~~~~~
"Companies want to make the biggest profit possible to keep their shareholders happy and their executives paid at astronomical salaries."
Isn't that why they're in business?
"AC W., you're last reply to me was just a childish temper tantrum."
No, Tim, I don't throw tantrums. There were valid questions asked and valid points made.
"Why are trying to fight me rather than having a discussion?"
I'm not trying to fight you, unless you perceive my failure to adopt your point of view "fighting."
"Because anyone with a basic understanding of economics could see that the article doesn't pass the common sense test."
So all economists agree? Really? Because I don't think they do. And your statement remains baseless, unless you have some personal knowledge about the makeup of the WSJ editorial board or the consultants they employ. You can take that as fighting if you wish, or even a tantrum, but I will call you on a speculative statement.
"Most respected, non-partisan economists...."
There's no such thing; every human is influenced by his or her own prejudices / ideological leanings.
"...just like a bank looks at the business plans of a start-up company and then accepts or rejects the loan request."
The difference here is that the government ISN'T going to reject the loan request. The President and the members of Congress are too afraid of the political fallout if these companies fail.
"...you support the government exercising this type of discretion when using taxpayer money."
In one specific instance only: the salary of the top guy in the company. That's it. No further.
"I know you think the evil government wants to control the banks forever, but can we stick to reality for this discussion?"
It's not that I think the government WANTS to control the banks forever, but once you embark on this path you set a precedent that is open to interpretation by whomever is in charge at the moment. We say we'll get out when the economy gets better, but how do we quantify better? Surely different politicians will have different measures of economic health for the nation and for the companies involved. There's no end in sight.
"Yes. Thanks for noticing."
There goes your credibility.
"But what's best for the nation has priority over the people sharing in world record profits trying to get more money off the tax-payer's teat."
Ah yes, the good of the many at the expense of whomever. How socialist of you.
"It's an entire industry that has been deemed vital to our national security."
Ah, but not every business in the entire industry will go belly up. The ones that survive will do so because they are more efficient and effective. The ones that do not did not deserve to be in business in the first place. In the end, a better industry.
"My granddaughter will always fit in her pink pajamas."
Is she never going to grow? Gain weight? You can't make that statement with certainty.
"Economies have failed. Governments have failed."
Not ours. Capitalism is self correcting.
"Which is why oversight is required...."
But you're still propping it up, oversight or not. Or did you mean dictating how to run the business, which is not really the same as oversight?
"Once again you fail to consider the full ramifications of allowing entire industries to fail and the effects of that on ALL taxpaying citizens."
But we know the entire industry will not fail, just the businesses that can't hack it.
> This isn't time for fairness, Bruce.
It's always time for fairness EM, as well as incentivizing people to
be responsible.
AC, the idea that any good comes from blind pursuit of profit
in a vacuum is just as bankrupt as soviet communism, and
it has led us to the same place, only we owe trillions and they
never did.
So basically you're saying that nothing can be proven, therefore everybody can say whatever they want no matter how little sense it makes and nobody can effectively challenge their logic? This kind of metaphysical reasoning is absolutely useless. It's a cop out. I'm sure you can find people who think the earth is flat, but that doesn't mean that you can now defend that belief with impunity.
Come on now, are you saying you agree with the author that only 90 billion of the stimulus can plausibly be considered as having a stimulatory effect? So the child care credits we discussed before, for example, just cease to exist one they go into families hands? It doesn't act as tax cuts nor as an incentive to childcare services? Because remember, the $90 billion that was deemed as the only plausible stimulative was business tax cuts and a few select infrastructure items.
So which is it? Can common sense prevail, or are you gonna side with the article and hide behind some metaphysical argument? Or if the latter, do you at least have some reasoning as to why you think the article is correct? For example, how do childcare credits do nothing to stimulate the economy? I've explained why they do stimulate. Do you have a refutation or you just gonna stake everything on this article because you like what it says even if you don't understand why?