To swat or not to swat; that is the question.

Does PETA know the difference between an insect and an animal?

PETA is a joke.

Now they’re upset at President Barack Obama for swatting a fly during an interview Tuesday. If only someone would only swat PETA.

During an interview with CNBC’s John Harwood in the East Room of the White House the other day, Obama was defending his administration’s intervention approach to the financial crisis.

But a pesky fly kept buzzing about, distracting him.

The president paused in the middle of his answer, stared down the fly that had landed on his left hand and gave it a fatal slap.

“I got the sucker,” the president boasted after fatally slapping the critter on the back of his hand.

I was impressed by President Obama’s fly swatting hand speed when he smashed a pesky fly during an interview last week.  However,  the at PETA says that you can no longer refer to our President as someone who wouldn’t hurt a fly.

PETA’s primary response has been to send a Katcha humane bug catcher to the White House. PETA sells this humane bug catcher for $8.

With this wonder of technology, you simply plunk the clear pyramid part over the critter, then carefully slide the card under the bug you want to release back into the wild.

Yeah.  Right.

How absurd.

PETA discredits themselves and loses credibility.

Houseflies are a major disease carrier with an unswatted lifespan of about 2-3 weeks and therefore, keeping them out of our homes is part of any healthy lifestyle. our chances of squishing ants and tiny microbes as we walk around.

PETA is a joke.

Insert your own jokes here.

Madame Tussaud’s already has a wax statue of Obama, complete with flyswatter in hand. The only thing missing is the halo.

Regarding the Katcha humane bug catcher, will PETA consider making one big enough to fit Joe Biden in it?

It wasn’t a mere fly; it  was a new biological war weapon from Al-Qaeda. There was a one in a million chance of disarming it correctly and somehow, Obama fluked it.

Obama swatted a fly…Clinton opened HIS!

Breaking news: A fly autopsy has been completed and the fly was found to have a terminal disease. Mr. Obama showed compassion by humanly helping the fly end its pain.

Quote of the Day:
There is no cure for birth and death save to enjoy the interval.
–George Santayana

The fastest way to get on your feet is to get off your seat! Quit relying upon the government and taxpayers to provide for you and start taking responsibility for your own life.  How bad is it? The economy is so bad that CEOs are now playing miniature golf.  Is the bailout of AIG, GMC Chrysler, and the banks the “trickle up” economics that Obama promised?

If all the newspapers go under, what will we use in the bottom of the birdcage?  How come NBC news has a horde of reporters available to report negative stories but asks the public to supply the positive stories that they report on the nightly news.? Anti-violence protestors calling for violence against those that don’t agree with them! Something wrong with that isn’t it?

Quote of the Day:
It takes a steady hand to carry a full cup.
–Anonymous

An op-ed from the New York Times subtitled, “The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.”

deSantis’ resignation letter offers a little perspective on some misplaced outrage (I’m just as guilty as the next blogger, journalist, concerned citizen) going on and how badly the public relations aspect of the ongoing bailouts is being handled by both the government and the firms receiving taxpayer money.

Of course if no taxpayer money was involved in any of this, there’d be no need for “good” PR or concern about who gets hurt and who doesn’t. We have a free market capitalist system until things go south, which makes it not quite a free market capitalist system. Hmm.

From the link:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

After a hiatus from political blogging, I’m back.

While I want to maintain the title and spirit of It’s Only Politics, and while everything in the real world is political,  I want my blog here at WordPress.com to focus more on governing and issues, and to also explore other current events and issues outside of the world of American politics.

After my responses and blogs to the November election, I wanted to clear my head of political spin, let Bush finish his term, and have an open mind about Obama and his administration.

Bush admittedly made more than his share of mistakes and misjudgments.  Bush did keep our nation safe from another terrorist attack and for the most part during his administration, the post 911 economy was strong.

However, since 2007, both the Bush administration and both political parties in Congress are responsible for allowing the economy to sink so low. Unemployment has become a most significant problem. My heart and prayers go out to Americans without a job and need a job.

I believe that Bush is an honorable man with good intentions.  Bush made both good decisions and incorrect decisions in his tenure.  His critics say he is dumb or stupid.  I disagree.  Bush is inarticulate and has fair communication skills. 

While both Bush and both political parties of Congress are to blame for the messes our country are in, blaming Bush and playing the blame game contributes nothing and solves nothing.

But the George W. Bush administration is about over and while Barack Obama inherits real problems that will continue for months and years, it is time to look forward.  I look forward with a variety of optimistic and realistic thoughts and emotions.

Goodbye George W. Bush and hello to Barack H. Obama.  Hello to the new Congress and out new state and local officials.

I do not have faith in our federal government’s ability to solve problems.  However, if the American people are allowed to govern ourselves, there are avenues of optimism.

I’m of the opinion that these bailouts at best are temporary, band aid types of fixes. They help certain people keep jobs for the short term. In the long term, bailouts probably will do more harm than good, as our children and grandchildren will pay the price.

To begin to realistically change and improve the economy, the USA needs to abandon any free trade that is not also fair trade.  We need neither extreme of too much regulation or no regulations by the government on American business.  We need some common sense regulations that enhance employment, sound business practices and principles, and bring back textile and factory jobs back to the United States.

I want to say goodbye to the haters, whether they be haters of the Clintons, haters of President Bush, or haters of President-Elect Obama.

But that is not being realistic.  We will always have these immature haters.  We are blessed to live in a nation with freedom of speech.

But hatred and hate-speech solves nothing.  Anger can stir ideas for solutions, but not hate.

It takes higher-order thinking skills of analysis, empathy, and synthesis along with effective communication skills for real solutions to emerge.

So far, unlike  conservative haters, I am a conservative who also is a pragmatist and who is country first. Other words, I am open-minded about Obama and I want Barack to succeed for our country’s sake.

I do not like everything about Obama and I disagree with him on certain issues highlighted during the presidential campaign.  His connections to Chicago politics are a genuine concern.

However, I am encouraged by what I perceive of Obama trying to govern from the center.  It seems more grumblings and complaints about Obama, his appointments, and announced decisions have come from the liberal left in congress.

I am not giving the spineless Republicans in Congress any credit.  The are so spineless, they do not even show up and attend certain Obama appointee hearings, like the hearing for Hillary Clinton for secretary of state.

Where is the Republican leadership to articulate the down sides of the bailout? Mostly, they have been spinelessly silent or just going along with the bailouts.

In my humble opinion, both democrats and republicans in Congress are pathetically incompetent.  But I hope and pray that they prove me wrong.

Barack Hussein Obama possesses excellent communication skills which he will use to attempt to inspire Americans.  A lot and perhaps too much is expected from Obama, but much was promised during the presidential campaign.  These high expectations were brought on by both the Obama campaign and his cheerleaders in the mainstream media.

Millions of Americans are travelling to Washington, DC, this weekend to celebrate the inauguration of our 44th President of the United States.

Obama will be recognized as the first African-American or black president while in fact his father was black and his mother was white, which makes him mixed, or half and half.

So Obama’s historical inauguration will be a site and an event to behold.  Kids of mixed and dark color will no longer believe it is impossible for them to grow up and be president.

While Obama’s skin color is notable due to being a historical first, it will be Barack’s ideas, ideals, inspiration, character, but ultimately his policies and decisions that will really matter.

I pray for our government leaders daily.  I pray that God will protect Obama from harm and that He will guide Barack to make wise decisions which benefit all Americans. 

May God bless America.

Quote of the Day:
It is better to suffer wrong than to do it, and happier to be sometimes cheated than not to trust
–Samuel Johnson

Here’s a link to a video I received in an email from TheStreet.com.

This is a perfect example of how misinformation spreads throughout the public.  People will take what is said in videos like these and accept it as the truth because “TheStreet.com (or other media outlet) said so.”

Basically, all it says is “deflation is bad because it occured during the Great Depression.”

Notice though, that deflation is reported in falling consumer prices, or the CPI.  This number includes the costs of food and energy, which are falling right now.  Normally, when the Government reports inflation, they use core inflation, which excludes food and energy prices.

This is very convenient, isn’t it?  They pick and choose what numbers they want to report.  The government always tries to show inflation as low as possible, and now is showing big, bad deflation as high as they can.

Why does the government do this?  Because they need inflation to operate.  Inflation broken down to the simplest term is “adding to the overall supply of money.”  Rather than taxing the population, they just print the money they need instead.  This is why inflation is sometimes referred to as the “hidden tax.”

As you add more money to the overall supply, each dollar is worth less, which means our dollars buy less goods.  They need to report inflation as low as possible so we don’t realize how much the purchasing power of our dollar is declining.  Also, many foreign governments hold billions of dollars in reserve.  The last thing they want to hear is that their holdings are declining in value.

The only entity that does not benefit from the deflation we are experiencing is the government.  That is why we are conditioned to think it is bad.  Under normal circumstances, they need inflation to fund their programs.  Currently, we are in a special situation, where the government is just printing trillions of dollars right and left.  We might have short term deflation due to the decline in food and energy prices, but we are going to have massive inflation because of the massive amounts of new dollars entering our system.

The lesson of this video is that we always can’t take things for face value.  We need to learn about our financial system and what the numbers and stats the government and financial institutions use mean.  If we really understood, we would see through the lies and propaganda, and see how the actions of our government are going to destroy our standard of living.  As Henry Ford said,

“It is well enough that the people of this nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution tomorrow morning.”

Nuclear power plants smaller than a garden shed and able to power 20,000 homes will be on sale within five years, say scientists at Los Alamos, the US government laboratory which developed the first atomic bomb.

The miniature reactors will be factory-sealed, contain no weapons-grade material, have no moving parts and will be nearly impossible to steal because they will be encased in concrete and buried underground.

The US government has licensed the technology to Hyperion, a New Mexico-based company which said last week that it has taken its first firm orders and plans to start mass production within five years.

Complete Story

Save the Car Companies?

With the nation’s automotive industry hemorrhaging cash, congressional leaders called on the Bush administration yesterday to offer government assistance to the car companies as part of the Treasury Department’s $700 billion emergency rescue program.

The call came one day after General Motors, the nation’s largest auto manufacturer, announced another multibillion dollar loss for the third quarter and said it was running out of money fast. Ford, the second-biggest car company, also reported heavy losses. Unless the government steps in, analysts warned, GM could face bankruptcy, endangering the livelihoods of about 100,000 North American autoworkers and hundreds of thousands of others whose jobs depend on the industry.

In a letter to Treasury Secretary Henry M. Paulson Jr., House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.) asked Paulson to “review the feasibility . . . of providing temporary assistance to the automobile industry during the current financial crisis.”

Complete Article

Osama Video Alert for Obama?

Osama Bin Laden is set to release a video threat to Barack Obama, fanatics have warned. The al-Qaeda chief’s first message in months could come when Mr. Obama names his first Cabinet.

Full Story

Quote of the Day:
Restlessness and discontent are the first necessities of progress.
–Thomas Alva Edison

Derivative Dribble

Breaks down derivatives, credit default swaps, etc. in relatively plain language.  Tip o’ the cap to Megan McArdle @ The Atlantic.

Getting close to that time in a plant’s life where he needs to slow down.  Revel in the simpler things of life.  The freedom of not being slave to human kind.  I have been investing wisely, so I’m confident I can retire a bit early.

Wait a minute!  My retirement fund has lost 45% of its value.  What the hell!!  This is a goddam conspiracy.  The humans have totally ruined my plant futures investment portfolio.  Crap, I have to keep supplying oxygen to these freaks for another 10 years.  Fuck ‘em all.

Just like Forrest Gump and Jenny….Obama and ACORN are like “peas and carrots”.  

Many people have raised the flag about Obama’s work for ACORN including the training he provided for members of ACORN.

Well, hopefully, Americans are aware of the voter fraud that has been rampant already across the country due to ACORN’s illegal and sleazy attempts to register voters that don’t exist!

Not to mention the fact that ACORN is very much behind the financial crisis that we find ourselves in today.

Obama continues to cover up and lie about his active work for ACORN and about his role and support of the policies that fueled the subprime lending practices.

In this post, I will lay out the facts regarding ACORN’s role in the financial crisis, the rampant voter fraud perpetuated by ACORN, and Obama’s clear ties to ACORN.

On the Financial Crisis and ACORN, from Ace of Spades:

Ed Morrissey errs when he says “don’t get too focused on ACORN, the problem is Fannie and Freddie.” Yes, it was Fannie and Freddie guaranteeing all these horrible mortgages that allowed banks, or so they thought, to take these risks.

But ACORN, the Congressional Black Caucus, Barney Frank, Chris Dodd, and Barack Hussein Obama all worked together to build the bomb. Separating ACORN from Fannie is like saying Al Qaeda could never support Shiite extremists.

This was an inside-outside operation from the getgo — ACORN providing external “grassroots” demands for these mortgages, the government empowering them to do so, ACORN pressuring banks to make the loans, government sponsored entities Fannie and Freddie removing the risk (or so it was thought) from the loans.

They all worked together on this. They’re all on each other’s speed dials. ACORN forges up fraudulent voter registrations to help Democrats steal elections; Democrats propose giving 20% of all revenues (not profits, revenues) from the bailout to ACORN, etc.

And ACORN is guilty of rampant voter fraud in many states across the country.  From New York Post:

Yesterday, Nevada officials raided ACORN’s Las Vegas office after election authorities accused the group of submitting multiple voter registrations with fake and duplicate names. Among the bogus monikers: names of former Dallas Cowboys players.

* Lake County, Ind., election officials this month rejected thousands of registration forms ACORN had turned in from its drives this summer. On a conference call yesterday, GOP officials noted that up to 11,000 of the applications were no good – tying up election officials and jeopardizing the voting rights of untold victims whose identities may have been stolen.

In what seems to be ACORN’s standard operating procedure, vote canvassers had pulled names and addresses from phone books and forged signatures.According to a local paper (the Northwest Indiana and Illionois Times), “Large numbers of voter registration forms bore signatures all in the same apparent handwriting style” and “apparently the organization’s canvassers broke rules to meet ACORN-set voter registration quotas to get paid.” The fake registrants include dead people and underage kids.

* Milwaukee, Wisc., officials last month discovered at least seven felons employed as voter-registration workers for ACORN and another affiliated group.(State law bans felons from such work.) They also uncovered a raft of problematic voter-registration cards. The state GOP accuses the group of trying to get dead, imprisoned or imaginary people on the voter rolls. Fraud has plagued ACORN’s Milwaukee chapter since the last election cycle.

* In Florida, in Orange County alone, ACORN workers turned in multiple, copycat forms for six separate voters over the summer. The Miami Herald reports: “One individual had 21 duplicate applications.”

Election officials had flagged ACORN’s negligent practices months ago. But it may be too late: In Orange, Broward and Miami-Dade counties, ACORN has signed up 135,000 new voters, nearly 60 percent of them registered as Democrats – a fifth of all new voters in that region.

* In Ohio, large numbers of homeless people got free van and bus rides to register.Shelby Holliday, a reporter for Palestra.net, filmed ACORN shuttling in some prospects. She told me she spoke with one homeless woman who said ACORN “told her who to vote for if she wanted a ‘better life,’ and told her not to worry about jury duty (one of the reasons this homeless woman didn’t want to register) because the government probably wouldn’t be able to track her down. She was registering with a temporary address.”

Just who, again, is ACORN and why should I care?  From RealClearPolitics.com:

ACORN stands for the Association of Community Organizations for Reform Now, a busy hive of left-wing agitation and “direct action” that claims chapters in 50 cities and 100,000 dues-paying members. ACORN is where Sixties leftovers who couldn’t get tenure at universities wound up…..

…..ACORN does many things under the umbrella of “community organizing.” They agitate for higher minimum wages, attempt to thwart school reform, try to unionize welfare workers (that is, those welfare recipients who are obliged to work in exchange for benefits) and organize voter registration efforts (always for Democrats, of course). Because they are on the side of righteousness and justice, they aren’t especially fastidious about their methods. In 2006, for example, ACORN registered 1,800 new voters in Washington. The only trouble was, with the exception of six, all of the names submitted were fake. The secretary of state called it the “worst case of election fraud in our state’s history.”

……Their philosophy seems to be that everyone deserves the right to vote, whether legal or illegal, living or dead.

What are Obama’s ties to ACORN and his part in the sleaziness?

First from RealClearPolitics:

ACORN attracted Barack Obama in his youthful community organizing days. Madeline Talbott hired him to train her staff — the very people who would later descend on Chicago’s banks as CRA shakedown artists. The Democratic nominee later funneled money to the group through the Woods Fund, on whose board he sat, and through the Chicago Annenberg Challenge, ditto. Obama was not just sympathetic — he was an ACORN fellow traveler.

I might add that Obama’s funneling of money happened while working alongside domestic terrorist Bill Ayers….about whom Obama lies about the extent of their relationship.

Again, from New York Post:

SYSTEMIC corruption of our election process continues. Barack Obama and his old friends at ACORN and Project Vote are leading the way. This radical revolution is taking place in your backyard. And as I’ve reported before, this voter-fraud racket is on your dime.

On Monday, the two groups announced the wrap-up of a 21-state voter-registration drive targeting low-income people and minorities in such battleground states as Ohio, Pennyslvania, Colorado, Florida, New Mexico and Wisconsin.

What’s wrong with that? For starters, these two groups are militantly partisan outfits purporting to engage in nonpartisan activity. And their campaign comes amid an avalanche of fresh voter-fraud allegations involving ACORN in many of those same states.

ACORN has helped register over 1.27 million people nationwide. It gets 40 percent of its revenues from the taxpayers, with the rest coming from left-wing heavyweights like billionaire George Soros and the Democracy Alliance.

Lefty lawyer Sandy Newman founded Project Vote, a 501(c)(3) organization, to register voters in welfare offices and unemployment lines with the explicit goal of turning back the Reagan revolution.

The two groups are inextricably linked – and at their nexus is Barack Obama. Despite his denials of any association with the group, Obama’s political DNA is encoded with the ACORN agenda.

As I’ve noted previously (“ACORN: O’s Ugly Ally,” June 26), Obama trained ACORN members in Chicago. In turn, ACORN volunteers worked on his Illinois campaigns and ACORN’s PAC endorsed him in this year’s Democratic primaries back in February.

And Newman hired Obama in 1992 to lead Project Vote efforts in Illinois.The effort’s motto: “It’s a Power Thing.” Today, the Obama campaign’s “Vote for Change” registration drive is running in parallel with ACORN/Project Vote, targetting the same sorts of people.

It’s an all-out scramble to scrape up every last unregistered voter sympathetic to Obama’s big-government vision. “Our volume,” Obama campaign manager David Plouffe bragged of the voter-registration program, “is going to be enormous.”

For those of you who continue to defend Obama and his radical ties, please read and research ACORN and Obama’s ties to it…..you don’t have to take my word for it….and remember that ACORN is a taxpayer-funded organization.  

Is ACORN the type of group you want spending your money to cheat, fuel racism, and pressure businesses with social engineering?  Mark my words….if Obama is elected with a majority Democrat Congress, you can bet that more groups like ACORN will do the bidding of Obama and Democrats ON YOUR DIME!  They tried it in the first bailout proposal….trying to give ACORN and groups like it a piece of the bail out pie!

The list of questionable people that Obama chooses to work with, be mentored by, and places in his campaign is long.  

If Obama is elected, don’t for one minute fool yourself to believe that his choices for his administration and for whom he chooses to funnel money will be any less racist, radical, anti-American and corrupt!!!!!!

The global banking crisis has hit financiers and big money bankers hard. They have seen their investments and share prices plummet in response to the credit crisis and the rock-bottom confidence in the money markets in general. Even their bonus-encrusted executive posts have been in jeopardy.

Thank Gord for the bail out package then.

I spoke to one of my banking contacts in the City this morning. He said-

“Of course, this year’s bonus won’t be as good as in previous years. This will hit our family finances hard. We will have to scrimp and save where we can and we’ll have to cut back on the luxuries that we have been used to. But with the bail-out announced today, at least I can tell the wife and kids that the new Bentley and the Caribbean villa are safe.”

Martin Masse writes:
In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”
If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favor the free market, agree with him.
Indeed, analysts at the Heritage and Cato Institute, and commentators in The Wall Street Journal and on this very page, have made declarations in favor of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001.
“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder.
At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments.
So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets?
The rationale for intervening always seems to center on the fear of reliving the Great Depression. If we let too many institutions fail because of insolvency, we are being told, there is a risk of a general collapse of financial markets, with the subsequent drying up of credit and the catastrophic effects this would have on all sectors of production. This opinion, shared by Ben Bernanke, Henry Paulson and most of the right-wing political and financial establishments, is based on Milton Friedman’s thesis that the Fed aggravated the Depression by not pumping enough money into the financial system following the market crash of 1929.
It sounds libertarian enough. The misguided policies of the Fed, a government creature, and bad government regulation are held responsible for the crisis. The need to respond to this emergency and keep markets running overrides concerns about taxing and inflating the money supply. This is supposed to contrast with the left-wing Keynesian approach, whose solutions are strangely very similar despite a different view of the causes.
But there is another approach that  doesn’t compromise with free-market principles and coherently explains why we constantly get into these bubble situations followed by a crash. It is centered on Marx’s Proposal Number Five: government control of capital.
For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.
Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.
As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With “liquidities” in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels.
During that manic phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years.
Now, what should be done when that pyramidal scheme starts crashing to the floor, because of a series of cascading failures or concern from the central bank that inflation is getting out of control? It’s obvious that credit will shrink, because everyone will want to get out of risky businesses, to call back loans and to put their money in safe places. Malinvestments have to be liquidated; prices have to come down to realistic levels; and resources stuck in unproductive uses have to be freed and moved to sectors that have real demand. Only then will capital again become available for productive investments.
Friedmanites, who have no conception of malinvestments and never raise any issue with the boom, also cannot understand why it inevitably leads to a crash.
They only see the drying up of credit and blame the Fed for not injecting massive enough amounts of liquidities to prevent it.
But central banks and governments cannot transform unprofitable investments into profitable ones. They cannot force institutions to increase lending when they are so exposed. This is why calls for throwing more money at the problem are so totally misguided. Injections of liquidities started more than a year ago and have had no effect in preventing the situation from getting worse. Such measures can only delay the market correction and turn what should be a quick recession into a prolonged one.
Friedman — who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances — was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools.
As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. … To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about …”
The confusion of Chicago school economics on monetary issues is so profound as to lead its adherents today to support the largest government grab of private capital in world history. By adding their voices to those on the left, these confused free-marketeers are not helping to “save capitalism”, but contributing to its destruction.

Bailout marks Karl Marx’s comeback – FP Comment

Simile of the Day:

He spoke with the wisdom that can only come from experience, like a guy who went blind because he looked at a solar eclipse without one of those boxes with a pinhole in it and now goes around the country speaking at high schools about the dangers of looking at a solar eclipse without one of those boxes with a pinhole in it.

Quote of the Day:
Start every day off with a smile and get it over with.
–W. C. Fields
 

September 22, 2008 – The U.S. bank meltdown has shaken world markets over the last few months. According to John Waggoner, USA Today investment columnist and author of Bailout, “In March of 2008, the world markets woke up with one of the ugliest hangovers in history.” Bear Stearns, the fifth largest U.S. investment bank, was sold in March for $10 dollars a share (compared to its 2007 high of $172) to JP Morgan Chase. By September, AIG had declared bankruptcy and received $85 billion in loans from the government; Lehman Brothers was sold to British bank Barclays; and Merrill Lynch merged with Bank of America.

As the Bush administration pressures Congress to pass a $700 billion bailout plan this week, the likelihood of the bailout costing shareholders and taxpayers millions of dollars is leaving many wondering what caused the meltdown and how they can protect their investments in the deteriorating economic environment.

In the new book BAILOUT: What the Rescue of Bear Stearns and the Credit Crisis Mean for Your Investments (Wiley; September 2008; $24.95; 978-0-470-40125-5; Hardcover), Waggoner not only explains how the meltdown happened, but more importantly, he advises individuals how they can protect their investments from the fallout of future corporate disasters.

Waggoner compares the entire meltdown in the housing and mortgage markets to a vast period of national intoxication. He delves into the separate ingredients that resulted in the mania that created the real-estate bubble and how that bubble burst when foreclosures, most originating from loans requiring little more than a signature and a credit check, exploded in 2007. Waggoner recounts how Bear Stearns, known as leader in mortgage-backed securities, was not brought down by its losses but by rumors that it did not have enough cash. Despite some $18 billion, Bear’s business partners fled to competitors, paralyzing the firm. In order to prevent the subprime contagion from spreading to the rest of the banking system, the Federal Reserve stepped in to broker a shotgun wedding to J.P. Morgan Chase. Waggoner also explores the recent government rescue of Fannie Mae and Freddie Mac.

If Bear Stearns can collapse, are any companies truly safe? While investors may be tempted to stuff their savings under a mattress, Waggoner argues that this would be a grave mistake. Even if the country slides into the next Great Depression, individuals must invest their savings to beat inflation. On the other hand, “…putting all your money into one type of investment because you’re worried about a market crash is often the single best way to lose money.” Waggoner demonstrates how to diversify stock holdings to increase the margin of safety and incorporate bonds to offset any periods of deflation. Waggoner offers practical advice that enables readers to take advantage of good economic times and stave off financial ruin during downturns.

Waggoner points out “…sooner or later—and we certainly hope sooner—the economy will recover, earnings and personal income will rise, and life will be good again. And—you can count on this—somewhere in the next recovery will be the seeds on the next new financial mania. Don’t fall for it.”

BAILOUT provides the lifeline needed to help navigate readers through the economic crisis so that their investments remain intact when the current volatile market recedes.

ABOUT THE AUTHOR
John Waggoner (Washington, D.C.) is a personal finance reporter for USA Today, where he has worked since 1989, covering mutual funds, stocks, bonds, and the economy. Waggoner also writes a weekly column, “Investing,” for USA Today. He is a regular contributor to The Nightly Business Report on PBS. Waggoner is the author of Money Madness: Strange Schemes and Extraordinary Manias on and off Wall Street and co-author of The Busy Family’s Guide to Money. He has previously served as a senior editor at The Independent Investor and Donaghue’s Money Fund Report, now IBC Money Fund Report.

Al Qaeda still alive and well

It is a known fact that the financial crisis going on in the United States has upset scores and scores of people across the nation.  Home buyers, to investors, to banks, and government agencies are all feeling the wrath of our economic situation.  Not to mention how it’s affecting the typical American citizen who has no substantial stake in it all, but is feeling it indirectly.  Other nations and international groups are being impacted as well.  But could the terrorist organization al Qaeda also be upset over it as well?

Well why not?  This economic crisis isn’t just in the U.S. alone, it’s a global situation that’s being felt by many. Al Qaeda could be feeling an indirect affect just like thousands of other people.  In addition to that, recent reports of al Qaeda and terror attacks have been showing up more often than normal in the nation.  The “Great financial crisis of 2008″ has been severe enough to become the number one topic on the campaign trail between Barack Obama and John McCain, but recent events say al Qaeda and terrorism may try to regain their number one status of being the most important issue of the 2008 election.

Coming off the heels of the worst economic disaster in years, al Qaeda has been linked to the bombing of the U.S. Embassy in Yemen and a deadly blast at a Pakistani religious school.  Not to mention the new al Qaeda video that was released in response to the seventh anniversary of the terror attacks of September 11, where senior al Qaeda leader Mustafa Abu al-Yazidd has called for sympathizers in Pakistan, which could be reason for an attack there today.  Although al Qaeda has not claimed responsibility, it would not be a stretch to believe that the organization was responsible for the hotel bombing that killed over three dozen people and injured hundreds more.

Not for nothin’, but al Qaeda probably didn’t have any ulterior motives as far as getting the United States focus back on terrorism, but they shouldn’t get lost in the shuffle either.  Its easy to see why the credit crisis on Wall Street, gas, wars and housing crisis have all become huge topics in the campaign.  But recent events show that al Qaeda is still out to get us and finding those responsible for terror attacks against the United States should still be a top priority.