I have problem with these rich people stoking their campaigns with their own money. It makes me sick. It is an unfair advantage over “regular” folk. Bloomberg did it. Hillary did it. Now, Carly is doing it. This isn’t right.
Carly Fiorina’s $2.5 million loan to her U.S. Senate campaign has given the former Hewlett-Packard CEO a considerable financial edge over her Republican rivals.
In all, Fiorina’s campaign had $2.75 million in the bank to begin the year, according to a federal disclosure report delivered Friday. She is one of three Republicans vying for the right to challenge California Democratic Sen. Barbara Boxer, who is seeking a fourth term. (more…)
We have all seen those financial reports where the “expert” is standing in his office while his co-workers are busily working behind him as he waxes on about stocks. Well, it turns out that one dude was watching girlie pics on his computer in the background. It is really kind of funny.
More on the budget and deficits. On Monday I discussed deficit peacocks (folks who talk about balancing the budget but vote for big ticket budget items). On Tuesday, I showed you a graph on budget deficits dating back to 1931. Today I’d like to talk a little bit about the recession and why we needed the stimulus package. I’m going to use an example that Paul Krugman uses in his book, The Return of Depression Economics. The example was originally used in an article entitled, “Monetary Theory and the Great Capitol Hill Babysitting Co-Op Crisis,” by Joan and Richard Sweeney.
Over last two years, I wrote and read a lot about economics. I’m a lot smarter than I was then but I’m still no economics professor. What happens in a recession? Now, as I understand it, a lot of things happen in a recession. The end result is the loss of jobs. Let’s use this babysitting co-op as an example – let’s say approximately 150 couples get together and decide that they will babysit for each other when necessary. They come up with a system so that everything is fair for everyone. They will use coupons. Each coupon is worth one hour of babysitting. The only other thing that I think is important is that couples that join the co-op are given a certain number of coupons and every couple that leaves the co-op must turn in the coupons. Therefore, the currency is stable.
Several couples in this co-op turned out to be extremely frugal and somewhat homebodies. They wanted to accumulate coupons. This led to couples that went out relatively frequently, depleting their coupon supply. They looked for opportunities to babysit but with several couples staying at home, these opportunities were hard to find. This led more and more couples to stay home to accumulate coupons rather than dwindling their supply. As coupons become more and more scarce, and babysitting opportunities became extremely rare, the babysitting co-op was now experiencing a recession.
The problem in the system, the recession, was caused by the imbalance between too much supply (people wanting to babysit) and not enough demand (nobody wanting to go out). How do you fix this problem? The co-op could pass a law and require that couples go out a certain number of times per month. This would cause people to spend their coupons. It would also prevent people from hoarding coupons. That would be one solution. The other solution would be to increase the supply. With couples having an increased supply of coupons, there was no reason to hoard. More couples started to go out and the crisis was resolved.
So, back to the real world. The Obama administration was facing a recession that some thought could turn into a depression if there wasn’t quick action. The Federal Reserve had already infused cash into the system. The Bush administration injected a small amount of cash right before he left office. Think of it as a mini stimulus plan. So Barack Obama and his economic advisers faced rising unemployment, increased foreclosure rates on home mortgages and a GDP that was falling or stagnant. They decided on a stimulus package. The question is how big should the stimulus package have been? Bush signed a $152 billion rebate plan (Economic Stimulus Act of 2008). There’s very little evidence that that did anything. Our GDP is worth somewhere over $14.2 trillion. Bush’s stimulus plan was somewhere around 1% of the Gross Domestic Product. Economists were saying somewhere between three and five percent was necessary truly to stimulate the economy and turn around this recession. The Democrats and the Obama administration settled on $800 billion for political reasons. They really could not get Congress to authorize more money. Remember, we just bailed out the banks. We just bought up toxic assets. The U.S. Treasury was hemorrhaging money. This does not include money that the U.S. Treasury directly infused into our economy (and foreign markets).
The bottom line is that you have to spend your way out of a recession. Once the recession has passed, then we can concentrate on balancing the budget. You can’t balance the budget then stimulate the economy because there would be no economy to stimulate. One of the reasons that the Great Depression lasted so long was because deficit hawks hounded President Roosevelt after it looked like the economy was turning around. He tried to balance the budget too soon and this prolonged the recession/depression. In the State of the Union, you could hear Barack Obama walk the tightrope between fiscal responsibility and the necessity of spending money until the recession is officially over.
Notice that President Obama said almost exactly the same thing while answering questions from Republicans last Friday.
Please click on photo to see the enlarged version (or click here). Stare at the graph for a minute. It should become clear that neither Republicans nor Democrats have the phrase “balanced budget” in their vocabulary. Reagan didn’t balance anything. He increased spending every year. Isn’t it nice to see a graph that simply lays out the truth?
In the devastating January 12 earthquake, he lost the meager home he had sitting on a hillside in Calebasse.
“I can’t stand that they were suffering here,” Laurentus said. “I had confidence in the Americans. I trusted them.”
So Thursday night, when Silsby came with a bus, he placed his girls, Soraya, 4, and Leila, 5, on two seats towards the front. He didn’t pack any of their things, he said. Not even their teddy bear. The American woman had bags filled with clothes, toys and snacks. (more…)
So I was talking with my brother and somehow we got on the topic of movies. I challenged him to tell me the movies he considers the five funniest of all time.
Here’s the opening scene from Blazing Saddles. (BTW, I don’t think that I typed my brother’s preferences in order.) What do you think? What would you add or subtract?
Mitch McConnell is asked why seven of the Republicans who co-sponsored the Conrad-Gregg fiscal commission turned around and voted against it. McConnell says he now wants a spending reduction commission because heaven forbid we can’t have them considering any tax hikes for the rich. Leave it to Republicans to take a bad idea and make it worse.
KING: Well, let’s talk about your side of the equation. Robert Gibbs just complained about it and the president mentioned it in his Saturday radio address. He says there was a proposal. It was sponsored by one Democrat and one Republican. It would create a commission that would spend a few months studying how can we cut federal spending, maybe even propose tax increases; find some way to reduce the federal budget deficit. Now, it then failed last week on a vote in the Senate. And here’s the president’s complaint.
(BEGIN VIDEO CLIP)
OBAMA: This past week, 53 Democrats and Republicans voted for this commission in the Senate, but it failed when seven Republicans who had cosponsored this idea in the first place suddenly decided to vote against it.
(END VIDEO CLIP)
KING: Now, we want to show on our screen the seven Republicans who were cosponsors but then withdrew their cosponsorship and voted against it: the Republican Sam Brownback of Kansas, Mike Crapo of Idaho, John Ensign of Nevada, Kay Bailey Hutchison of Texas, James Inhofe of Oklahoma, John McCain of Arizona, Robert Bennett of Utah.
If this was such a good idea that they would cosponsor it — this is what comes up, Senator McConnell, in my travels all the time. People say, why do they always just play politics in Washington? Is this just politics, as the president says, or if it was the same proposal six months ago when they cosponsored it, what was wrong with it last week when a Democratic president wanted it?
MCCONNELL: Well, what was wrong with it last year? I mean, I discussed this very issue with the president right after he came to office, and with his chief of staff, never could get a commitment out of him.
In the meantime, we’ve seen a year, now, in which we’ve been on a spending binge. They passed a budget that doubled the national debt in five years and tripled it in 10.
There’s a lot of skepticism now about whether — and the president endorses this commission a couple of days before the vote. Where was he a year ago when we were talking to him about it?
KING: But why should that…
(CROSSTALK)
KING: Why should that matter? Why should that matter?
(CROSSTALK)
KING: Because I want to go back to your point. I’m sorry for interrupting. I want to go back to your point.
Why should that matter? Yes, the president endorsed it because of political pressure, without a doubt. Democratic senators went to the White House and said, we will not vote to increase the debt ceiling unless you help us out here.
But if it was a good idea, why should — let’s say the president’s playing politics. But if it’s a good idea, why not vote for it? Because you were here several months ago and you said it was a great idea. [Read more →]
I like the topic of the deficits since everybody seems to be in agreement but nothing seems to get done. Okay that statement was sort of right. Both Democrats and Republicans have stated over the years that we need to bring down the deficit. Democrats did what they said they were going to do. Republicans, not so much. Yet, when George Bush was in the White House and the Republicans controlled both houses of Congress, there was no attempt to control the exploding deficit. As a matter fact, to justify tax cuts for the wealthy that were never going to pay for themselves, Bush told us that there was more than enough money for his tax cuts. Neither the war in Iraq nor the war in Afghanistan were paid for. The Bush administration borrowed money for both wars through the supplemental process instead of through the budgetary process in order to avoid more attention.
Now the deficit guys (cleverly described as “deficit peacocks,” since they’re really not hawks) are out in force. They have America worried about how to pay for all of this red ink. Remember when President Clinton handed over the keys to the White House to President Bush? He handed Bush a budget surplus that was projected to be approximately $800 billion per year from 2009 to 2012. Instead, it looks as if we’re spending $1.2 trillion more than we’re taking in during this same time frame. What happened? About 33% of this $2 trillion deficit (the difference between $800 billion in the black and $1.2 trillion in the red) comes from George Bush’s tax cuts and his Medicare prescription benefit. About 20% of the deficit comes from Obama’s extension of Bush policies like the war in Iraq and tax cuts for households making less than $250,000. Only 7% comes from the stimulus bill passed in February 2009. The downturn in the business cycle accounts for approximately 37%.
So the next time a deficit peacock begins to tell you that Obama is ruining the country by driving up higher and higher deficits, you should remind him how we got these deficits. While you’re browbeating this deficit peacock with knowledge, remind him that it appears that Democrats figured out a way to balance the budget while Republicans (Reagan, Bush, Bush) figured out a way to increase the deficit. Republicans do not equal fiscal responsibility.
Errington C. Thompson, MD, is a surgeon, scholar, full-time sports fan and part-time political activist. He is active in a number of community projects and initiatives. Through medicine, he strives to improve the physical health of all he treats...
I have problem with these rich people stoking their campaigns with their own money. It makes me sick. It is an unfair advantage over “regular” folk. Bloomberg did it. Hillary did it. Now, Carly is doing it. This isn’t right.
