Daveparts
06-27-2009, 07:06 AM
Life in Oz
By David Glenn Cox
Earlier this week President Obama told reporters that he didn’t think another stimulus bill would be necessary at this time. Yesterday Warren Buffett said that he thought another round of stimulus would be necessary. I think that they are both wrong.
Obama is wrong; the economy needs stimulus but not like the stimulus bill that was passed earlier this year. Warren Buffett says so many things that sooner or later he is bound to be right. For the past year he has been advocating that everyone return to the stock market because it’s all right now. Buffett, a smiling, jovial, laid-back fellow who is sometimes called the Wizard of Omaha is merely doing his job, trying to keep the Munchkins happy. Buffett makes his money when the market goes up so what kind of wizard would encourage the Munchkins to stay away?
Buffett is the warm, kindly, old man of capitalism. During the Nazi regime in Germany, Hitler was too stoic for many public events. You couldn’t picture Hitler opening Octoberfest or an Easter parade. Goebbels was too shrill, Himmler too severe. And Hess? Hess was just crazy. So those jobs all fell to Hermann Goering; he was the smiling, laughing face of a cruel administration, but to the German public he was known affectionately as Uncle Hermann.
This wizard, Buffett, like his famous predecessor in Oz, has for us neither heart nor brain nor courage, and he doesn’t even know the way back to Kansas. He is just our own kindly, lovable old Uncle Herman. He appears on all the financial channels, and the correspondents all fawn over him and take every word as divine gospel. However, the stimulus that Buffett desires is only to make the stock market rise. Like Obama’s stimulus, he is looking to again feed the wrong end of the horse.
In this country there is an insanity run amok brought on by twenty-five years of laissez faire capitalism. They really believe this wizard has powers and if we pump enough capital into the top it will trickle down to us all. They implore us to see the green shoots in the economy and the media reports them as facts beyond dispute. Yesterday it was reported, “U.S. Economy: Goods Orders Unexpectedly Jumped in May.” Inside the shouts, hosannas and hoopla the largest gains in durable goods orders were from military spending and the purchase of airliners. Airliners that won’t be delivered for up to three years.
It’s all part of the green shoots game; they forecast orders to be down from 3.9% to 1% and then, saints be praised, orders are up 1.8%! You see, it’s working! It’s trickling down! Except that the lowest area of durable goods orders were in retail sales. It’s easy to jockey the numbers around with a few five hundred million-dollar jet aircraft orders, but the reality is that someone has dropped a house on this economy.
There were an estimated 1.8 million foreclosures in the first six months of this year. Imagine every person in San Antonio, Texas foreclosed upon in the first six months and before the end of the year every person in San Jose will follow them. A population greater than size of New York City will be homeless and out in the road. Green shoots? Green shoots, really?
“The durable-goods figures reinforce a trend of improvement that spurred the Organization for Economic Cooperation and Development to lift its growth forecast for the world’s most developed nations for the first time in two years. The Federal Reserve today signaled the worst of the slump is over.”
New home sales were revised down to 342,000 from 344,000 compared with 770,000 two years ago. Green shoots? Existing home prices fell another 17%, or $9,000 per home, in the last thirty days. Interest rates are again climbing despite the Federal Reserve lending to the banks at .25%. Adding to the difficulties in getting a mortgage is the difficulty in getting an appraisal on a property. With home prices falling like a ball off a table, who can now judge fair value?
Meanwhile, back in Oz DC, the Congress debates healthcare reform, but outside the walls of the Emerald City the state of California is dismantling public healthcare services for the poor and needy. We lambasted George Bush for ignoring the suffering of a single city, yet we have the most populous state in the union in deep, deep financial trouble and the entire federal government refuses to see the witch with smoke pouring from her broom saying, “You’re next! And your little dog, too!” How can we reform healthcare while we let California slide off into the ocean?
The true unemployment numbers are near 20%; the numbers of for-real job offerings are declining. We need a stimulus but we need a WPA stimulus, a stimulus that reaches working peoples and puts money into their hands. I don’t care if it is in the form of kazoo bands or flower gardening or painting fireplugs. This economy is atrophying and the time for resuscitation is now! Because if we allow it to die we must then start again from scratch, which would be a long and painful process.
During World War Two the government raised cash with War Bond sales; let's do it again with reconstruction bonds. Through the TVA the government put thousands to work building dams and bringing electricity to the poorest region in the country; let's have a TVA for alternative energy. Let’s build wind farms where acceptable and solar plants in the South and Southwest. Then let the coal barons compete with subsidized, clean renewable energy.
During the renaissance the city-state of Venice became the wealthiest state in all Europe. Her merchants and artisans turned out cloth and tapestries, metal work and pottery. The lure of the Venetian name brought the best artists from across Europe because they wanted their products to be from Venice. This was where the market was; this was where the best came from, and the artists and merchants grew rich because Venice had no taxes on its people. In all the land they had only one tax that paid all of the society's bills. A simple tax that taxed all imports and exports equally.
When we propose a tax on imports we are called xenophobic, and when we propose a tax on exports we are called anti-American. So how about a tax on both? If we don’t put our people back to work we will die as a nation, just as surely as Dorothy would have died in the witch's castle without intervention. We must put our financial house in order and rectify our trade agreements because we cannot continue to lose. We cannot continue to have billions more go out than come back; you don’t need to be a genius to figure that out.
Already our debt load forces us to snivel and tiptoe around the communist Chinese. They grow stronger while we grow weaker, and none dare call the free traders what they are, Free Traitors.
Our economy is in free-fall; the combined states' budget deficits will reach $181 billion, two-year forecasts are for $225 billion. That is $81 billion dollars more than is allocated to all the states and municipalities in the President's stimulus package.
New Hampshire plans to sell off state parks. Florida and Georgia will cut assistance for the elderly. Illinois plans to cut assistance to foster parents by 50% to a draconian $196 dollars a month. Dozens of states are raising sin taxes on liquor and tobacco and raising licensing taxes on plumbers, electricians, and barbers. Almost every state in the union is laying off policemen, firemen, teachers and public health employees, and are forcing other employees to take pay cuts and unpaid furloughs.
So it is the height of folly to pretend that we can fix health care in this country by stuffing in new straw or buffing our metal shiny again when we are lost in a world of make believe and don’t even know the way home. One thing is certain, we must throw the bucket of water on the witches of Wall Street and make the wizards work for us to rebuild this country with the hearts, brains and courage that we already have.
This government, our government, has but one choice left, just one question to answer: will it wake from its slumber in Oz? Or will it wait until the populace is using the yellow brick paving stones as weapons to tear down the walls of the Emerald City?
By David Glenn Cox
Earlier this week President Obama told reporters that he didn’t think another stimulus bill would be necessary at this time. Yesterday Warren Buffett said that he thought another round of stimulus would be necessary. I think that they are both wrong.
Obama is wrong; the economy needs stimulus but not like the stimulus bill that was passed earlier this year. Warren Buffett says so many things that sooner or later he is bound to be right. For the past year he has been advocating that everyone return to the stock market because it’s all right now. Buffett, a smiling, jovial, laid-back fellow who is sometimes called the Wizard of Omaha is merely doing his job, trying to keep the Munchkins happy. Buffett makes his money when the market goes up so what kind of wizard would encourage the Munchkins to stay away?
Buffett is the warm, kindly, old man of capitalism. During the Nazi regime in Germany, Hitler was too stoic for many public events. You couldn’t picture Hitler opening Octoberfest or an Easter parade. Goebbels was too shrill, Himmler too severe. And Hess? Hess was just crazy. So those jobs all fell to Hermann Goering; he was the smiling, laughing face of a cruel administration, but to the German public he was known affectionately as Uncle Hermann.
This wizard, Buffett, like his famous predecessor in Oz, has for us neither heart nor brain nor courage, and he doesn’t even know the way back to Kansas. He is just our own kindly, lovable old Uncle Herman. He appears on all the financial channels, and the correspondents all fawn over him and take every word as divine gospel. However, the stimulus that Buffett desires is only to make the stock market rise. Like Obama’s stimulus, he is looking to again feed the wrong end of the horse.
In this country there is an insanity run amok brought on by twenty-five years of laissez faire capitalism. They really believe this wizard has powers and if we pump enough capital into the top it will trickle down to us all. They implore us to see the green shoots in the economy and the media reports them as facts beyond dispute. Yesterday it was reported, “U.S. Economy: Goods Orders Unexpectedly Jumped in May.” Inside the shouts, hosannas and hoopla the largest gains in durable goods orders were from military spending and the purchase of airliners. Airliners that won’t be delivered for up to three years.
It’s all part of the green shoots game; they forecast orders to be down from 3.9% to 1% and then, saints be praised, orders are up 1.8%! You see, it’s working! It’s trickling down! Except that the lowest area of durable goods orders were in retail sales. It’s easy to jockey the numbers around with a few five hundred million-dollar jet aircraft orders, but the reality is that someone has dropped a house on this economy.
There were an estimated 1.8 million foreclosures in the first six months of this year. Imagine every person in San Antonio, Texas foreclosed upon in the first six months and before the end of the year every person in San Jose will follow them. A population greater than size of New York City will be homeless and out in the road. Green shoots? Green shoots, really?
“The durable-goods figures reinforce a trend of improvement that spurred the Organization for Economic Cooperation and Development to lift its growth forecast for the world’s most developed nations for the first time in two years. The Federal Reserve today signaled the worst of the slump is over.”
New home sales were revised down to 342,000 from 344,000 compared with 770,000 two years ago. Green shoots? Existing home prices fell another 17%, or $9,000 per home, in the last thirty days. Interest rates are again climbing despite the Federal Reserve lending to the banks at .25%. Adding to the difficulties in getting a mortgage is the difficulty in getting an appraisal on a property. With home prices falling like a ball off a table, who can now judge fair value?
Meanwhile, back in Oz DC, the Congress debates healthcare reform, but outside the walls of the Emerald City the state of California is dismantling public healthcare services for the poor and needy. We lambasted George Bush for ignoring the suffering of a single city, yet we have the most populous state in the union in deep, deep financial trouble and the entire federal government refuses to see the witch with smoke pouring from her broom saying, “You’re next! And your little dog, too!” How can we reform healthcare while we let California slide off into the ocean?
The true unemployment numbers are near 20%; the numbers of for-real job offerings are declining. We need a stimulus but we need a WPA stimulus, a stimulus that reaches working peoples and puts money into their hands. I don’t care if it is in the form of kazoo bands or flower gardening or painting fireplugs. This economy is atrophying and the time for resuscitation is now! Because if we allow it to die we must then start again from scratch, which would be a long and painful process.
During World War Two the government raised cash with War Bond sales; let's do it again with reconstruction bonds. Through the TVA the government put thousands to work building dams and bringing electricity to the poorest region in the country; let's have a TVA for alternative energy. Let’s build wind farms where acceptable and solar plants in the South and Southwest. Then let the coal barons compete with subsidized, clean renewable energy.
During the renaissance the city-state of Venice became the wealthiest state in all Europe. Her merchants and artisans turned out cloth and tapestries, metal work and pottery. The lure of the Venetian name brought the best artists from across Europe because they wanted their products to be from Venice. This was where the market was; this was where the best came from, and the artists and merchants grew rich because Venice had no taxes on its people. In all the land they had only one tax that paid all of the society's bills. A simple tax that taxed all imports and exports equally.
When we propose a tax on imports we are called xenophobic, and when we propose a tax on exports we are called anti-American. So how about a tax on both? If we don’t put our people back to work we will die as a nation, just as surely as Dorothy would have died in the witch's castle without intervention. We must put our financial house in order and rectify our trade agreements because we cannot continue to lose. We cannot continue to have billions more go out than come back; you don’t need to be a genius to figure that out.
Already our debt load forces us to snivel and tiptoe around the communist Chinese. They grow stronger while we grow weaker, and none dare call the free traders what they are, Free Traitors.
Our economy is in free-fall; the combined states' budget deficits will reach $181 billion, two-year forecasts are for $225 billion. That is $81 billion dollars more than is allocated to all the states and municipalities in the President's stimulus package.
New Hampshire plans to sell off state parks. Florida and Georgia will cut assistance for the elderly. Illinois plans to cut assistance to foster parents by 50% to a draconian $196 dollars a month. Dozens of states are raising sin taxes on liquor and tobacco and raising licensing taxes on plumbers, electricians, and barbers. Almost every state in the union is laying off policemen, firemen, teachers and public health employees, and are forcing other employees to take pay cuts and unpaid furloughs.
So it is the height of folly to pretend that we can fix health care in this country by stuffing in new straw or buffing our metal shiny again when we are lost in a world of make believe and don’t even know the way home. One thing is certain, we must throw the bucket of water on the witches of Wall Street and make the wizards work for us to rebuild this country with the hearts, brains and courage that we already have.
This government, our government, has but one choice left, just one question to answer: will it wake from its slumber in Oz? Or will it wait until the populace is using the yellow brick paving stones as weapons to tear down the walls of the Emerald City?