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vincentML -> RE: Marxist Victory (5/26/2010 9:10:28 AM)
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Mercnbeth: Must not be so easy. Nothing you posted indicted that the President is doing anything different than what was done in the past, and it is long past Monday. If he really wanted a Reagan or Bush Presidency he should have checked his resources. Unlike Reagan he has a two front war already going - Reagan 'rescued' med students to generate 'political capital'. Reagan and Bush also had in common a 'Prime Rate' with room to maneuver down - also NOT in the goodies bag waiting for Obama when he took office.
The Prime Rate hit its all time high in December 1980 at 21.50% one month before Reagan took office. The 1970s were a decade of "stagflation." The Dow never rose above 1000. Chairman Volker reduced the Prime to 14.50 (by targeting the Fed Rate) by August 1982 and the great bull market began in earnest.
Today, the Fed's Overnight Funds rate is essentially 0% but the Prime is at 3.25%. Despite a spread of approx 300 basis points companies complain they are unable to borrow funds from the Banks. So, is that Obama's fault? Not hardly. Are the Banks taking essentially free money and investing it for their own portfolios instead of lending it? Quite possibly.
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He may have had the same game plan and run the same plays as those two before him but the field conditions were different, and to date - he hasn't shown any ability to adjust; although many of his supporters have done so. As a result you see people rationalizing acceptance for the same actions they used to condemn under Reagan and Bush. The ongoing support of the wars is particularly telling.
I deplore the ongoing support of the wars and the apparent spreading of Special Ops into Somalia and Yemen, but then I don't have the Intell. As for Obama not showing any ability to adjust, let's judge it by your own metrics - results. When O took office the GDP was -6% year over year. Today it is +3.2% How can you deny the success of fiscal and monetary policy?
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There is, or at least was, another option other than Hoover. Cuts and freeze spending upon arrival at the White House.
So, you are saying that in the midst of the most severe credit seizure in the last 80 years the Fed and the Treasury should have taken more liquidity away from the private sector? That hardly sounds practical, Merc.
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Run the Health Care option after putting the economy on a firm path of turn around.
And you propose putting the economy on a firm path by removing liquidity. When has that worked, Merc?
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I wonder how much of the lack of business growth and hiring is due to the general state of the economy and how much is directed to trying to figure out the impact of the Health Care on businesses? I know that many of the big companies allocated huge reserves as a direct result. It's no longer reported in the financial news but I'm sure it's still be discussed and business plans are being implemented based upon the regulatory and financial impact.
Are you saying that big companies were not putting aside resources to pay for health care before the new legislation? In fact, aren't the new reserves allocated ahead as much as up to ten years to get an upfront tax advantage?
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Behind every loan program there are hedges of insurance protection based upon actuarial tables. As they do in Vegas - Run the 'game' long enough - the 'house' wins. The 'house' in lending is insurance. In the middle of the game - the rules were changes. The financial institutions were pressured (some insiders would say required, still others would say 'extorted'.) into changing their lending guidelines to let in more people to the home ownership 'party'. There was increased demand - appraised value jumped; and short term 'universal' happiness ensued. However the fundamental actuarial tables didn't account for this government intervention. As a result it was like a casino taking the '0' and '00' off the roulette table and keeping the payouts the same.
Can't agree. The rating agencies were in bed with the lenders and gave many liars' evaluations. My own home was appraised at nosebleed levels. It was a joke. Furthermore, the ratings on Mortgage Backed Securities bundles were also supremely phony. I do agree that both Political Parties share the blame for the subprime mortgage mess. Did the current Fed Chairman or his predecessor jump up on the table and scream for a halt? No. Did investment bankers quickly adapt to take advantage of the new game at obscene levels of leverage? Yes.
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More 'good intent', more happy Banker executives making bonus plans used to fund PACs, more happy constituents in bigger houses; what could go wrong?
George W: Ownership America. Ya think he was just naive? No excuse here for Barney Frank either.
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Truth is there is no cooperation between business and government which may be the heart of the problem. Look no further than the adversarial tone of every business brought into Washington from the auto manufactures, to bankers, to oil executives. There isn't a goal to correct the problem. The goal is to blame - stimulate the constituency and get them to believe that they ARE doing something! Well - how's that working for either side, let alone the last consideration for collateral damage, the average US citizen?
One example would be that Congress has allowed the home builders to write down losses on depreciation through the last five years.
Iquote:
know that with every bill and regulation contemplated by Washington businesses often spend more money trying to avoid the consequence then they would incur in tax and/or fee. Contributory is the true 'global opportunity' to outsource and relocate key assets outside the US with little or no consequence. I sit on one board of a small company (<500 employees) who will relocate their servicing center to the Philippines in 2011 instead of being subject to the trends coming out of the Obama Administration. The backbreaking 'straw' happened to be Health Care - which is ironic because they are in the insurance business and provide 'free' health-care to all employees. The 'shell' will be in the US - but the revenue stream, productivity, and employment is moving off shore.
When the ultimate vote to move came up the CEO went around the table and asked each member to make an argument FOR staying in the face of an adversarial Government regulatory conditions. The business is located in CA so his consideration was not only nationally, but State and local as well. Not a public company, I doubt it will rise to the level of a newspaper story in LA, but trusting your integrity what argument, outside of some false sense of one-sided patriotism, would you provide for staying? Even in that regard - if its the 'duty' for American business to put America first shouldn't be incumbent upon the American government to have the same attitude with American business?
Why shouldn't the present business environment in the US be represented as 'adversarial' to business?
The "present" environment may be adversarial because Capital has earned the emnity of the workers/citizens/voters. However, American business has benefited mightily and continues to benefit from tax breaks and outright subsidies. You only need to take a look at the Agriculture subsidies and oil royalty waivers for confirmation. I suppose if you locate "key assets" off shore you will not have to pay for health care and payroll taxes. Are you not masking a naked economic move by complaining about adversarial climate? Don't be surprised if you awaken one day and find that Congress has levied a tax upon the income of "off-shore" businesses. Your company might be making a mistake.
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