Sigh. Here we go again. First it was our capitalist society deemed gone as Newsweek magazine declared, "We're socialists now." This time - it's the death of supply-side economics, according to Newsweek Senior Editor Daniel Gross.
To sum it up, Gross declared tax cuts obsolete, a theory that only works on paper, in a time when employers come and go and institutions aren't stable like they once were. For his "Money Culture" column, in an article headlined "Tax Cuts Won't Work" posted on Feb. 13, Gross made that point using a Harvard professor, thought to have a secure job, as an example.
"Back in the day, and in many of the past episodes of postwar recession, the typical American worker resembled a Harvard professor-not in brains or wit, to be sure, but in the shape of her economic life," Gross wrote. "Many-not all, but a lot-enjoyed long, relatively secure job tenures, steady incomes, and generous employer-provided health and retirement benefits. But the economy has changed significantly in recent decades. And the circumstances that might prod our professor to start spending those tax cuts immediately might not apply to everybody else. The typical worker-white-collar, blue-collar, no-collar-doesn't have anything like tenure or a guaranteed job."
Everything is wonderful and peachy-keen in Obamaland if you rely on the reporting on the front page of The New York Times. Just ask CNBC's Jim Cramer. On his Feb. 12 program the "Mad Money" host dealt with the $789 billion stimulus package.
"Now if you were to believe what's in the papers, holy cow - except for the funny papers - you would think this package was wonderful," Cramer said he said of the reported agreement congressional leaders had reached on ironing out the package's details.
Cramer was referring to a front-page article by Richard W. Stevenson in the Feb. 12 Times, which gave a glowing account of this as a victory in the early stages of the Obama administration.
"Look at the front page of The New York Times today," Cramer said. "I love this one, ‘Measuring a Victory,' by this guy, Stevenson. He's a famous guy, you know? He's not Robert Louis Stevenson, he's Richard W. Stevenson. He writes - it's like a comedy routine - ‘It is a quick sweet victory for the new president and potentially a historic one.' Who edits this B.S.?"
"This economy requires support from the government, a check from the government in some form or fashion in the trillions as opposed to the hundreds of billions," Gross said to Bloomberg TV on February 5. "And I think President Obama was right - there is a potential catastrophe if Washington continues to focus on $100 or $200 billion. We need something in the trillions."
Gross' proposed amount includes a bailout for the banks, in addition to the stimulus to jumpstart the overall economy.
Don't like the notion of Wall Street employees receiving bonuses? Shoot the messenger - as Adam Green at The Huffington Post has done.
In a Feb. 2 post on The Huffington Post, Green said it was bad form for CNBC "Street Signs" host Erin Burnett to even think about considering the other side of the anti-Wall Street bonus argument, since some Wall Street banks received TARP funds, courtesy of the taxpayer.
"There are, though - well, how should we say this - the taxpayer money is not being used to pay the bonuses," Burnett explained on NBC's Feb. 1 "Meet the Press." "I think people could understand if you work for a company - right? If the three of us worked for a company, your guests, and I lost $10 billion but Steve [Forbes] over there, he made a billion dollars. So overall the company actually loses money, but Steve went and did his very darndest for that company and he made money. So should he be paid for his work? That's essentially what we're talking about here."
With all the populist sentiment generated from the economic slowdown by politicians, CNBC "Mad Money" host Jim Cramer is seeing eerie similarities with the comments of President Barack Obama and the words of a communist revolutionary.
Cramer, appearing on MSNBC's Feb. 2 "Morning Joe," drew comparisons between remarks between the first head of the Soviet Union, Vladimir Lenin, and Obama. Obama criticized Wall Street's moneymaking on Jan. 30, when he said there would be a time "for them to make profits, and there will be time for them to get bonuses. Now's not that time. And that's a message that I intend to send directly to them."
Cramer said that was similar to Lenin's writings. "Let me tell you something, we heard Lenin," Cramer said. "There was a little snippet last week that was, ‘Now is not the time for profits.' Look - in Lenin's book, ‘What Is to Be Done?' is simple text of what I always though was for the communists, it was remarkable to hear very similar language from ‘What Is to Be Done?' which is we have no place for profits."
I was going through the comments tonight at my Pajamas Media column about the Geithner nomination that went up earlier today, and came across this at Comment 39 from "Mike M":
The deduction he took for the summer camp as a day care expense is EXPRESSLY PROHIBITED IN THE IRS CODE! That’s out and out tax fraud. Even Leona Helmsly (sic) is jealous in her grave ....
It turns out that there is a lot more to the Geithner story. It has been sitting right there in details that were made public last week, but were mostly ignored by the Washington press. While the amounts involved aren't anywhere near as large as those relating to Geithner's self-employment taxes from 2001 through 2004 on his earnings at the International Monetary Fund -- taxes he didn't pay until audited by the IRS (2003 and 2004) or until just before his nomination was announced (2001 and 2002) -- they are nonetheless revealing, infuriating, and disturbing. They make the claims of "honest mistakes" that his defenders up to and including Barack Obama continue to employ look much, much weaker (paragraph image is from Pages 3 and 4 of the relevant report stored here as a PDF; a larger JPEG image is here):
The failure of American media to properly vet the political beliefs of Barack Obama during the just concluded presidential campaign was on full display Sunday when the president-elect made clear just how much of a socialist he really is, and did so with nary a challenge from "Meet the Press" moderator Tom Brokaw.
Makes you wonder what the results might have been on November 4 if the press had done its job in exposing Obama's radical economic beliefs rather than attacking Joe the Plumber for suggesting he had them, and how much differently his appearance on "Meet the Press" would have gone Sunday if the moderator wasn't completely on board with these left-leaning philosophies.
Such is important when considering Obama's comments previously reported by NewsBusters here and here as well as a truly telling statement by the president-elect that working for your own financial benefit is "not good for anybody" (video available here):
It's a good thing Barack Obama was elected. Otherwise, the nation's glum Thanksgiving mood might have been downright funereal. At least, that's the impression the New York Times gives in its decidedly downbeat article about the holiday.
"In Lean Times, Comfort in a Bountiful Meal" tells the story of people from coast to coast virtually weeping into their turkey and cranberry sauce. Whether it's a Los Angeles illustrator whose work has fallen 50%, a youngish Ohio husband and wife who've both lost their jobs, or even an equities trader on the Upper West Side who can't bear to open his personal investment statements, the prevailing mood is blue.
With one bright exception: at least we have Obama.
Neil Cavuto and Ben Stein had quite an argument about bailouts on FNC's "Cavuto on Business" Saturday morning that nicely covered the issues people on both sides of this contentious debate will likely be discussing around dinner tables this Thanksgiving, though hopefully with less screaming:
In today's "You've Got to be Kidding Me" moment, the San Francisco Chronicle advocated that folks who owe more on their mortgages than their homes are worth should stop making payments so they can qualify for a government bailout.
I'm not kidding.
Disgustingly titled "Are You an Idiot to Keep Paying Your Mortgage," the article actually instructed readers upside-down in their real estate the ins and outs of how they can transfer responsibility for their own investment mistakes to others (emphasis added throughout, picture courtesy The Economist):
In the name of gender equality, the Today show plumped this morning for government regulation forcing health care insurers to charge men and women the same for individual policies even though women cost insurers more because of greater use of services. Hasn't the financial crisis taught the MSM anything about the danger of government meddling in markets? No.
Insurers wind up paying out more in claims under women's policies than men's. Under the circumstances, charging women the same as men would make as much sense as FedEx charging a flat shipping fee no matter how big the box. But that didn't stop NBC medical editor Nancy Snyderman and Today weekend co-host Amy Robach from decrying the unfairness of it all this morning. Their solution? More government, of course. They want legislation to force insurers to charge the sexes the same.
I'm guessing that Paul Krugman and David Brooks don't hang out that much together. So when both turn up on the New York Times op-ed page this morning with columns calling for massive government spending, I'm assuming they came to their conclusions independently. My working hypothesis: if Krugman and Brooks agree on something this important, they must be wrong.
Here's Krugman's prescription, which comes in response to news that consumer spending has dropped sharply [emphasis added throughout]:
[W]hat the economy needs now is something to take the place of retrenching consumers. That means a major fiscal stimulus. And this time the stimulus should take the form of actual government spending rather than rebate checks that consumers probably wouldn’t spend.
Let’s hope, then, that Congress gets to work on a package to rescue the economy as soon as the election is behind us.
Sometimes former CEOs have a reason to be downbeat when they make predictions.
Former Chairman and CEO of Citigroup Sanford Weill told CBS's "The Early Show" Oct. 28 that unemployment would hit 9 percent and that Wall Street CEOs "didn't deserve bonuses this year." It went something like this:
Well, I think we've set in motion a whole series of events that is going to make the economy really, really bad over the short term. I think we are going to see the biggest drop that we've seen in GDP. I think we are going to see unemployment go up to about 9 percent.
Weill said that a year from now things would be a lot better, but still was critical of the Federal Reserve for not acting sooner:
Imagine that a week before a presidential election, a radio interview surfaced in which the Republican candidate had called for, say, the abolition of Social Security. Now imagine the broadcast networks' reaction to that nugget: "We interrupt regularly-scheduled programming for this Breaking News," followed by 24/7 coverage with talking heads pondering the devastating impact on America's seniors, the overall economy, the future of Western civilization, etc. Nobel laureate Paul Krugman would be booked from now till election day, offering his pained pronouncements.
But how do those same networks react when a radio interview [YouTube after the jump] surfaces of Barack Obama in a call for the redistribution of wealth, in which he laments the Supreme Court's insufficient radicalism in pursuing redistribution and refers to the civil rights movement's failure to develop a better strategy to bring about wealth redistribution as a "tragedy?
I suppose that mocking Republican candidates is an essential element of a Washington Post editorial writer's job description. Even so, it was jarring to hear the snide comments of WaPo editorialist Jonathan Capehart [seen right in file photo] about Sarah Palin read on the air today. Not merely did he mock her shopping habits, Capehart came very close to accusing Palin of . . . "child abuse."
Mika Brzezinski, at the Morning Joe helm with Joe Scarborough off on assignment today, led the show with the Politico report that the Republican National Committee has spent more than $150 thousand on clothes and accessories for Sarah Palin and family. Also aired was a clip of Palin describing the duties of the vice-president to a third-grader, the accuracy of which has been questioned.
It may not have been "huge" when CNBC's Joe Kernen said it but the dude has been on practically every news station by now.
Kernen told chief Washington correspondent John Harwood that the "Joe the plumber" story "would be huge" and even a "bombshell," in any other election year. Kernen said voters "don't care" because they are buying into Sen. Obama's assertion that the Bush tax policies have led to the financial crisis.
"Obviously not everyone out there knows how to connect the dots between the [financial crisis] and tax policy. For some reason the Bush tax policies are being cited by Obama as the reason that we're in this position right now, again and again and again," said "Squawk Box" co-host Kernen Oct. 16.
The Dow dropped 5,585 points since its high a year ago, banks have been afraid to lend and the government bought billions in toxic mortgage-backed securities. So CBS's "The Early Show" went to some top finance experts to explain what was happening to viewers, right? Nope, they went to kids, Oct. 10.
Weatherman Dave Price talked to fifth graders in Arlington, Va., about the credit crisis, exclaiming, "You wouldn't believe how much they know, sometimes we ought to listen to them and their solutions."
"What one thing does your mom waste money on?" Price asked one student.
"Mmm, smokes, I guess," a fifth grade girl from Glebe Elementary School replied.
In a September 19 "Good Morning America" preview of a report scheduled to appear on the same day's edition of ABC's "20/20," chief investigative reporter Brian Ross took a few jabs at the rich who had fallen.
Ross called it "the end of a shameful chapter of American history," and although top executives on Wall Street had been hit hard in a way "they never thought was possible ... it's hardly the soup kitchen."
There was also much indignation in the report over the assets of Richard S. Fuld Jr., chairman and chief executive officer of now fallen Lehman Brothers Inc., and Alan Schwartz, the CEO of now "busted" Bear Stearns.
On a day when markets are in turmoil, you might think that the role of an American president, current or aspiring, would be to assure his fellow citizens—and the world—that our economy is fundamentally strong.
That's what John McCain did. In contrast, Barack Obama suggested that the American economy is fundamentally weak. WaPo's Jonathan Capehart has declared Obama the winner of the exchange, for doing a better job in channeling the country's anxiety.
Click on image for video of McCain and Obama addressing the state of the economy on the stump today, and Capehart's commentary.
Thanks to Sarah Palin, the culture war has become a civil war—on the left. Mika Brzezinski bravely opened a new front in the conflict during today's "Morning Joe," repeatedly going after two female MSMers for suggesting Palin is taking the working-mom thing too far.
And, mirabile dictu, Mika even admitted to sensing MSM unfairness to Republicans.
"This is an argument Joe and I have about fairness and whether or not there are some sort of underlying unfairness when it comes to Republicans. And I just, you know, I feel it here," Brzezinski said referring to a Wall Street Journal op-ed by Katty Kay and Claire Shipman. Full text and commentary after the jump. View video here.
Just one paragraph tucked toward the end of a column. But Judith Warner's words offer a revealing insight into how liberals view economics and the world at large. In the lefty mindset, making it isn't a matter of doing or making something of value. It comes down instead to contriving to get a piece of the action, a share of the wealth that some undefined other has created in some undescribed way.
The gist of Warner's column, Compassion Deficit Disorder, is that Americans have become increasingly cranky and suspicious of how others are gaming the system. She cites Michael Savage's accusations that the reported outbreaks of autism, asthma ADHD are false epidemics, the result of doctors and parents conniving to produce false diagnoses that yield increased services or welfare. Warner also points to high school students applying to college who dream up minority status of one sort or other to work affirmative-action levers to their benefit.
CBS's "The Early Show," reported August 7 that a new stronger strain of the West Nile virus could spread across the country with help from the neglected pools found in foreclosed homes in California.
"Apparently ... as more and more homes are passing into foreclosure and there are many, and many of those homes have backdoor pools, these are being neglected," Dr. Alton Baron of Roosevelt Hospital Center told co-host Maggie Rodriguez. "They're not being maintained and this can become a ripe feeding ground and breeding ground for these mosquito populations."
Baron added that the new strain of the virus "invades the brain and spinal cord" and listed other horrific symptoms including nausea, vomiting, fever, chills, rashes, disorientation, severe muscle weakness, fatigue or even paralysis.
Mosquitoes, which breed in stagnant water, pass on West Nile to animals and humans when they feed off fowl that have the virus in their blood.
Foreclosures in the state of California may have hit a record high, but there are signs of a change-signs "The Early Show" ignored.
If you believe that there's a 50-50 chance that your take-home pay will be cut by almost one-fifth beginning in as little as five months from now, would that belief affect your current spending habits?
Of course it would. But that idea apparently never occurred to the Associated Press's Mark Jewell.
In the course of a 950-word article Monday about how the rich are getting more stingy, he focused on how "the economic slump" and "downturn" are affecting their spending, while ignoring the massive tax hits high-income earners will likely be forced to absorb (illustrated in detail below the fold) if Barack Obama wins the presidency and Democrats retain control of Congress.
Earlier this month, former senator and John McCain economic advisor Phil Gramm was widely excoriated for his remarks about America being a "nation of whiners," discouraged by negative media reports fueling fears of recession.
As my colleague Nathan Burchfiel noted, the context of Gramm's remarks were the media's role in accentuating the negative in economic news and hence ginning up the public's economic fears and complaints.
Of course, the media has done little to prove Gramm wrong. Take, for instance MSNBC.com's "My Miserable Summer" series, which, among other things, takes tales of woe from readers and publishes them on the Web site (h/t NewsBusters tipster Jeff Williams).
A night after ABC anchor Charles Gibson hit full panic mode by leading with how “markets are gyrating, inflation is rising, banks are closing” and suggesting money is only safe “under the mattress,” on Wednesday night he actually began with how “Wall Street posts its best day in months. Financial stocks rise. The price of oil falls.” But he couldn't be completely upbeat as he proceeded to note that “consumer prices also rose sharply.”
Katie Couric, however, was one hundred percent negative. After teasing Wednesday's CBS Evening News by asserting “the economic vise tightens,” Couric intoned over a matching graphic (see above):
Good evening, everyone. We wish we didn't sound like a broken record, but once again tonight there is troubling economic news. Americans are getting it from all sides. From inflation. Today the government reported the second-biggest monthly increase since 1982. To the mortgage mess where a tight market has sent prices tumbling 29 percent in one year in southern California. And the banking crisis. The FBI is now investigating the failed bank IndyMac for fraud. We have a team of correspondents covering these economic developments tonight...
In the wake of former Sen. Phil Gramm's statements earlier this week about this being a nation full of whiners, the good folks at ABC's "Good Morning America" brought on a consumer psychologist Sunday to discuss whether or not the McCain advisor had a point.
Shockingly, not only did Kit Yarrow tell host Kate Snow that "the way consumers feel about things is very emotional," but also these "emotions are trumping reality" thereby creating a snowball which makes the economy worse.
Yarrow not only believes that things are "not as bad as consumers feel like it is," but also that the media are at fault because "everything is described as a crisis."
What follows is a partial transcript of this rather shocking and refreshing exchange (video available here, photo courtesy ABCNews.com):
Thursday’s "Good Morning America" used the Fourth of July holiday to exaggerate the effects that food prices are having on consumers. In its "Hitting Home" segment, reporter Sharyn Alfonsi reported on the price increases of certain Fourth of July barbecue staples, claiming that "Americans are gonna eat 110 million pounds hot dogs and that could take a big bite out of their wallets."
With Starbucks’ announcement that it will closing 600 of its locations nationwide, the network morning shows on Wednesday heralded this news as another sign of a bad economy. ABC’s Bianna Golodryga on "Good Morning America" lamented that "Americans are struggling just to pay for a cup of Starbucks coffee." NBC’s Matt Lauer’s clever headline: "Trouble brewing -- Starbucks announces its closing 600 stores in the next year. Is the demand for $4 lattes dying in a tough economy?"
But CBS’s "The Early Show" took the puns and the "doom and gloom" to a new level. Host Maggie Rodriguez teased the headline news: "Starbucks shutting its doors on hundreds of stores. Tough economic times or just a grande letdown?" Correspondent Ben Tracy, in his report on the closings, quipped, "The economic slowdown has been a real grind for Starbucks' profits. After filling up their gas tanks, some coffee lovers don't have enough left to fill up their cups."
On Monday’s CBS "Early Show," co-host Harry Smith talked to economic analyst Mark Zandi about the state of the economy and asked: "Oil's up, gasoline's up, food prices up, stocks, way, way, way, way down. Home owner -- home values are down. Is there an end in sight to all of this bad news?" Zandi replied: "You just made me depressed. No. It's just bad news. It really is...It's just a really tough time for many Americans."
Later, Smith commented on how all the bad economic news seems to contribute to bad economic events: "It just seems like we're in this cumulative cycle that, you know, once one threshold of bad news gets reached, we reach to yet another one." That comment sparked this exchange with Zandi:
ZANDI: Yeah, it's a self re-enforcing negative cycle. You know, that's what happens during recessions, and that's what we're in the middle of right now.
SMITH: Whoa, is this a recession?
ZANDI: You know that -- that's a debate among economists and policy makers. But in the minds of the average American household I think there's no debate, this is a recession. I mean they're worth less today than they were a year ago, they're purchasing power is lower. I mean, for most people that's the definition of recession. So, economists can debate it but I think most people think this is a recession.