The President just finished his jobs speech and I can report with high confidence that it won’t move the needle. In my article last week, “Unemployment Will Remain High Because Obama Will Do All The Wrong Things” I said that Obama would:
I suspect that President Obama in his speech this week will come up with the same remedies that his Administration has been proposing before, but repackaged to make it sound like bold new remedies. More tax breaks for employers, more “focused” spending on infrastructure, job training programs, and green jobs.
And that is exactly what he is proposing in his American Jobs bill that he announced tonight. He proposes to extend the payroll tax cut (50%) for another year, give more tax incentives to businesses hiring workers or raising workers’ wages, and spend massively on infrastructure. He didn’t exactly say “how much” spending, but reports are saying $447 billion. An outline of the bill can be found here. It is a piece of liberal trash and I urge you to read it, but not on a full stomach.
He made it sound exciting as if they were really doing something but not really. It all sounds very familiar. He proposes a lot of tax incentives or spending for specific classes of workers: companies hiring veterans, hiring workers jobless for more than 6 months, summer jobs next year for disadvantages kids, hiring more teachers, continue tax breaks for “average working famlies”, some kind of incentive or penalty for corporations hiring workers in America, not abroad, and a mortgage refi incentives.
The President certainly made all the new spending sound exciting. We’re going to have first class airports (a snub at the Chinese), great bridges and roads, first class schools. We’re going to be a powerhouse based on all this useless spending. Look, I know there are lots of potholes on the roads, but are trucks having a problem getting goods to us?
How to pay for it? He noted the new budget deal cuts $10 trillion in the next ten years, plus another $1 trillion next year in cuts determined by the Congressional “Super Committee.” He said we need to pass it right away but not let it add to the deficit. He proposed “cuts” in Medicare, Medicaid (“reform our health care system to strengthen Medicare”) but he didn’t offer anything beyond that except that “we’ve got to work together.” He also proposed tax hikes for the wealthy and corporations. First of all he said even Warren Buffet agrees he should pay more taxes. Then he said we need to reduce corporate taxes and then he said we need to get rid of corporate tax loopholes. I don’t know how you can lower taxes by raising taxes.
This is the Japanese approach to economic recovery. They spent trillions and have a first class wasteful infrastructure and a stagnant economy. The idea that you can spend more and cut the budget is a fantasy. My guess is that they will have some CBO or OMB study saying it’s feasible, but the “cuts” will all be back-ended – if they are real at all.
He made a big pitch for the role of government in the economy and how, starting with Lincoln, the partnership of government and business made America great. “Where would we be without our colleges?” he asked. Ask Harvard or Stanford, maybe they know. To the Tea Partiers in the audience he asked, “Do we dismantle government and say you are on your own? That’s not what America is. Yes we are a country of rugged individualism but we are also all connected as a people.”
This is one of the things I really dislike about the guy. He trivializes the opposition. It’s one of those “well, everyone knows …” kind of put downs, well, on you if you read this blog. It’s like “economist’s say …” as an answer to you wack jobs who don’t buy Keynesian economics.
This speech is another liberal fantasy by President Obama. He is clueless and apparently desperate because he cannot come up with anything that works. I wonder what he would say to the question, “why hasn’t the $830 billion Recovery Act spending worked to create jobs as you said it would?” You are witnessing first hand the further destruction of our economy because this new spending will add debt upon debt to no economic gain. And to be clear, it is the failure of Keynesian economics on a grand scale.
I thought it was $106 billion in infrastructure and the rest found in these magic tax cuts (reducing portion pay from workers to 3.1% from 4.2%) and tax hikes on job creators. Wrong?
He’s also looking to make it illegal for employers to discriminate against job applicants who are currently unemployed. What’s the point? All this will do is open the floodgate for more he said/she said lawsuits.
personally, i like the yo yo about corporate taxes…brilliant! where else could you get lower loopholes with higher taxes? or was that higher loopholes and lower taxes? hey michelle, what in hell is a corporation, anyway?
http://www.youtube.com/watch?v=2YcgACl1Sr8
Mr Jeff, You have to watch this!
[...] Read full article… [...]
engage a little fantasy . Daily capitalist voted Blog of the decade(feasible) . Obama has a severe sore throat. Both houses of congress vote to have the editor of the blog of the decade present his suggested solutions to the current financial situation and present obervations and possible solutions to the current political realities. What do you say??
Bryson, as a regular reader of the Daily Capitalist, I am shocked that you missed this article .
I thought the “new budget deal” that was recently passed was supposed to reduce the deficit, not pay for more handouts.
The only positive thing I can say is that was a well crafted speech. I hope the gullible public doesn’t fall for the smoke and mirrors.
I have been hearing all this talk about jobs and I have one question.
Why has the House not tried to pass any bills to help end this unemployement problem?
Most bills start in the House and then go to the Senate, since the House is controled by the Republicans they could have worked on this problem and started solving the jobs problem but they have not offered one major solution, only complaints. Does the House want to fix the problem or just get rid of a President. Someone has to step up and try to fix this problem. So far the only one charged with offering a plan, be it right or wrong, is the President. We all need to stop complaining and work on the problem.
They’ll just make things worse. It’s not that kind of “fix.” J
[...] “dumber than rocks” Geithner is running around with pom-poms and cheering Barack Obamas Japanese plan. Remember that “deficit super-commision”, by the way? No, not the first bipartisan one, [...]
@Jerry;”Why has the House not tried to pass any bills to help end this unemployement problem?”…Government does NOT create jobs. Government may be able to influence job creation via more relaxed regulations, taxes and form filing…but without the reductions of corporate taxes, red tape hoops (read regulations), fees and so forth..America will be at a stand still.
I would love to meet his speech writer. I’m sure it must be a bit difficult to conjure up positive and negative wording within the same sentence…meaning the President said absolutely nothing at all. If anything, those whom follow him with bated breath understood it completely. Obama’s position according to his speech is desirable to his goal of destroying America from within. This is widely understood by the 24% of the public whom believe he is doing a bang up job. The rest of the public is on to him…listening with a keen ear only to hear Charlie Brown’s teacher, “blah, blah, blah, blah, blah”. 2012 just cannot come fast enough!
It would be best if that money was used to pay a small portion of the national debt. We don’t need more teachers, more policemen, more government employees we need a lot less of them, and we don’t need more free money. What we need are better more honest school administrators along with competent teachers, police chiefs and staff, and more competent less corrupt government administrators and employees. But the thing we need the most is profitable competitive small businesses that contribute to the GDP, that are self sustaining independent and free of as much regulation and taxation as possible and that are not too big to fail. We also need to stop all those money draining wars that are killing or disabling our young women and men. They are only benefiting corrupt contractors, politicians, businessmen, corporations and oil companies overseas. We need to explore for more oil, natural gas, coal, and any other source of energy here in our country so we can spend that money here in the United States instead of paying it out to our enemies. We need to get rid of a large number of wasteful government organizations like FEMA, people who live in hazardous areas must buy full protection insurance from insurance companies, and stop relying on freebees. Cities that contain hazardous areas should also buy insurance from insurance companies and stop relying on the federal government. We need to let go of the US Post Office and stop giving it free money, interest loans that they can rely on and then default on. We need to stop bailing out corrupt incompetent companies and banks, and let them fall so that new more competent businesses can grow. We need to stop all that gestapo type homeland security that is intruding in every aspect of our lives, they are becoming the terrorists. We as individuals must stop relying on the government to bail us out from our stupid greedy careless investments, reckless stupid spending, lack of interest in self education, and lack of planning. We want the government to protect us, support us, educate us, and nurture us like children. Politicians are more than willing to do it, but at what cost? The overspending has got to stop, the borrowing has got to stop, the overindulgence has got to stop, we need a restrained balanced budget free of debt. Neither The Declaration of Independence nor the Constitution of the United States guarantee wealth to any American, they don’t guarantee anyone success, do not guarantee anyone bailouts, don’t guarantee any free money, doesn’t even guarantee anyone a good education. It definitely does not guarantee prisoners comfort, weight rooms, phones, televisions and certainly not their freedom. For crying out loud, they are people who when free to act by their country’s given right made a decision of their own free will to break the law and as a result they give up their right to freedom and comforts because they made themselves a danger to citizens who do deserve their basic rights. Yet some prisoners live better than some hard working, independent, law-abiding citizens who must pay for the prisoner comfort. Again we need to redo the entire criminal justice system, it has become a self servant to the employees, administrators, corrupt contractors, businessmen, politicians, layers, and anyone else that can stick their little greasy little hands into it and come out with a sweaty wad of money. We need to redo or completely overhaul our taxation system, not only federal but state wide, so that we pay the minimal of taxes but yet our fair share for the bare essentials and eliminate all loopholes. A tax system that is based on simplicity, without all those ands ifs ors or buts. Then we need to safeguard the system so that politicians and special interest groups don’t corrupt it again, reinstituting the ands ifs ors or buts. The Declaration of Independence and the Constitution only guarantee our basic rights and freedom, other than that, we are responsible for our own actions yet politicians and special interest groups have stretched these rights to the point of tearing up and crumbling these incredibly valuable documents. You decide where you want to live, you decide how much effort you put into getting an education. There are enough free education courses on the internet that anyone who wants an education can get one for free, and more sites keep popping up regularly. No you cannot get the diploma or accredited degree but there are absolutely too many idiots running around with an accredited degree and high school diploma to make businesses aware that not all ” accredited educated people” are equal. Just look at how many college and high school graduates are getting bailed out of the bad mortgages they got themselves into, that should tell you something about their competency, lack of self reliance and self restrain. Of course I don’t need to mention all the “educated CEO’s” and investors who have driven corporations to the ground. You might think that they are smart because they made themselves super rich, but that is not intelligence. Intelligence is when you come up to a difficult challenge and you tackle it to make it work without cheating without quick false fixes, when you don’t give up and resort to saving your skin and making yourself rich at the expense of everyone else. When you can take a complex problem and convert it to simplicity, that is intelligence. Then there are the politicians, but you already know more than enough about their incompetence. If the government spent a few billion dollars to create good high school and college software courses and a way to test and accredit the learning levels, then kids wouldn’t have to waste their time learning little to nothing from incompetent teachers. What use are pretty schools and classrooms with good roofs when the teaching staff is so incompetent and constantly complaining about the number of students, the conditions, their pay, their pay raises, and always making excuses for why so many kids are dropping out of school not getting good scores. Producing graduates that cannot balance a simple checking account, that cannot read and understand a contract, that cannot plan and restrain their expenses to their means. The only people who benefit from these fancy little schools are the wealthy contractors that build them and the crooked school administrators and politicians that make deals with them. I could probably go on like this forever, but you should have gotten the point by now. If you didn’t, the point is this, we American Citizen better get our act together and accept responsibility for our own actions or lack thereof. Stop electing politicians that offer free lunches, that tell us what want to hear, and we have to live within our means. The truth has always been hard to hear often offensive but in these hard times when our entire future and the future of our nation is at stake we better perk up our ears and open our eyes not only to the realities of the nation but to the realities of the word in which we live. Get off of unemployment start a yard cleaning business or work at anything available, get a continuous education that constantly upgrade our skills, downgrade our life style to whatever is necessary for us to get a clean fresh start and stop borrowing money that we cannot pay back. Understand that it is not only America anymore but the world and many people in many countries are willing to work and do the same or better job for ten percent of what we make and that is not going to change for a long time. Corporate greed and corrupt politicians will continue to take jobs to those counties, regardless of how much we cry and complain. If we don’t get a grip on ourselves first, the politicians, banks and corporations are going to continue in their usual ways until this great country is in total ruin, and without remedy.
Anyone who would like to get an understanding of John Maynard Keynes and his system of economics needs to read “Keynes at Harvard”. The whole book is amazing. Chapter 10 sums it up very well and is only 13 pages long (3 of these pages are references). This book is available on the internet, just google or (I prefer) yahoo “Keynes at Harvard”.
Good reference, thanks. Also, Hazlitt’s Failure of the New Economics: An Analysis of the Keynesian Fallacies.
AS WITH ALL IDEAS:
Correct or endorse.
Score Card:
$8.5 Trillion the amount spent to save banks that put us in recession.
$447 Billion to be spent to pull us out of recession.
Them…..$8,500,000,000,000 ( Proof amount is correct read
“A Real Jaw Dropper at The Federal Reserve” US SENATOR SANDERS)
US……..$ 447,000,000,000
You need to get new advisers.
As Mohammed Yunus (Banker to the Poor) says,”As with all new ideas; correct,enhance,or endorse”
As always may God continue to bless America,
A Solution that cost Nothing:
Word of the lawsuits by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, came as a surprise to the market and weighed on bank shares. The lawsuits could add billions of dollars to the banks’ potential legal costs at perhaps the worst possible time for the industry.
The FHFA plans to accuse major banks, including Bank of America Corp and JPMorgan Chase & Co, of selling bonds backed by mortgages that should have never been packaged into securities, said the sources, who are familiar with the matter. Neither source was authorized to speak on the record. A spokeswoman for the FHFA declined to comment.
FHFA and various investors have alleged that banks, while packaging residential home loans into securities sold to investors, failed to conduct adequate due diligence, and hid or misstated the quality of the underlying loans and underwriting as well as borrowers’ ability to make payments.
As more borrowers fell behind or went into foreclosure, the value of securities backed by their loans fell, causing losses for investors.
Losses stemming from the precipitous deterioration in subprime and other mortgages pushed the government to take over Fannie Mae and Freddie Mac on September 7, 2008. Since then, taxpayers have spent more than $140 billion to keep the firms afloat.
CAPITAL WEAKNESS
Major banks already face potential payouts of tens of billions of dollars to settle regulatory charges of abusive mortgage lending and foreclosure practices, and other investor lawsuits over mortgage debt losses.
THE “INVISIBLE HAND” can work a deal:All banks are to sell their mortgage assets to Bank of America so they can be “rescued as too big to fail” and Bank of America would be thrown into receivership by the FDIC.FDIC will sell all assets ( minus loans) and pay $7.00per share for all BAC shares thereby OWNING THE BANK and all its branches.The renamed bank will be called “THE FEDERAL BANK OF THE UNITED STATES OF AMERICA”. It will be funded by the US TREASURY with $51 Trillion dollars as allowed already by law.
(read the US Mint to deposit 51 newly minted Platinum $1 trillion coins which by law they would have to turn over the profits from such coins to the US TREASURY).And just like the State Bank of North Dakota,we the people may just have solved “the housing crises.
SOLUTION TO HOUSING CRISIS AND CREATION OF MILLIONS OF JOBS IMMEDIATELY AT NO COST to the taxpayers with long term lower cost mortgages made by our own bank (read Federal Bank of the USA) at a term of 36 yrs @ 4%(read low payments).EVEN THOSE UNDERWATER,EVEN THOSE LIVING IN THAT HOME WHO ARE TAXPAYERS THAT WISH TO REMAIN!!!;.Create 2 million jobs with commercial loans to business at terms of first year payments interest only then at 6% for 36 years.You get the loan based on job creation and asset value of the construction.Create another million jobs with new home loans.Terms 5% down,then 4% for 36 years. We saved the auto industry,why not save the housing industry? Let S&P save their rating for the banks.Let the taxpayers get loans because they paid taxes ,therefore;they are credit worthy. TAXPAYERS paying interest for TAXPAYERS.The $51 trillion will not be spent!!IT WILL BE A ZERO BALANCE AS ONLY THAT PORTION USED WILL BE AN ASSET.AN ASSET THEY WILL BE BASED ON THE FULL CREDIT AND TRUST OF THE AMERICAN TAXPAYER. It will be on the balance sheet as $51 trillion mortgage assets.This asset will double every 18 years….1 X 18 = 102 trillion,2 X 18 =204 trillion..good-bye taxes.
And as for Freddie and Fannie as a reward for finally stepping up and doing the right thing,their shares will be sold as a new issue for $15 a share.They will SERVICE FOR THE LOANS and being paid 1% that comes to $510 billion over 18 years.
May God continue to bless America
justaluckyfool.blogspot.com
JIM LEHRER: …” a lot of people who believe… the key to this from the very beginning was not the financial system… it was the housing problem.
JIM LEHRER: … until that is fixed, can the rest be fixed?
HENRY PAULSON:… when you look at how long it’s taken for these excesses to build up and for these home prices to appreciate to suddenly say, “Maybe government could push some button and make it all go away and solve the problem.”…
HENRY PAULSON:… Well, I have always said that at the heart of the problem is the housing correction. And until the biggest part of the price decline in houses is behind us, we will have stresses in the financial markets and in the economy.” (excerpt from FOX interview.2009.)
The government should step up to help the taxpayers and EVERY HOMEOWNER..Fix the housing market ; jobs will be created; deficits will be reduced.The problem is that the banks have to get the loans to real value,but they cannot do it.Millions of loans need fixing and the amount of money needed is astronomical!Bank of America alone has 4 million of them.
TARP AND TALP were for more than $8 trillion dollars and the banks used that as chump change from their own personal cookie gar.
A Real Jaw Dropper at the Federal Reserve a blog by US SENATOR BERNIE SANDERS.
The Fed was forced to divulge … emergency loans that until now were totally kept from public to make our financial institutions more responsive to the needs of ordinary Americans and small businesses.
What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country
The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college. Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis (I read criminal fraud) they started never happened.
What this disclosure tells us, among many other things, is that despite this huge taxpayer bailout, the Fed did not make the appropriate demands on these institutions necessary to rebuild our economy and protect the needs of ordinary Americans.
The four largest banks in this country (Bank of America, JP Morgan Chase, Wells Fargo, and Citigroup) issue half of all mortgages in this country. We now know that these banks received hundreds of billions from the Fed. How many Americans could have remained in their homes, if the Fed required these bailed-out banks to reduce mortgage payments as a condition of receiving these secret loans?
We have begun to lift the veil of secrecy at one of most important agencies in our government. What we are seeing is the incredible power of a small number of people who have incredible conflicts of interest getting incredible help from the taxpayers of this country while ignoring the needs of the people.
What have we learned so far from the disclosure of more than 21,000 transactions? We have learned that the $700 billion Wall Street bailout signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are Goldman Sachs, which received nearly $600 billion; Morgan Stanley, which received nearly $2 trillion; Citigroup, which received $1.8 trillion; Bear Stearns, which received nearly $1 trillion, and Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.
Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse — which were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities.
Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.”
ADD IT UP:OVER $8 TRILLION !
CALL IT QE3. OR CALL IT PROVIDENCE,We can solve the problem..
Money lent to the auto industry paid off;NOW DO IT FOR HOUSING.Jobs were created and GDP was increased,this was a real win/win.So where does that differ from the $8 trillions plus given to the banks?This money is not to be given to the foxes that are in the hen house.The banks have proven their greed and have proven to be untrustworthy.
THE SOLUTION:
THE FEDERAL BANK OF THE UNITED STATES OF AMERICA .
Federal Bank USA will purchase ALL residential and commercial loans.The American people will be the lenders and no longer will they be the victims of greed.No longer will they allow the banks that they have entrusted with their money to use that money to make profits for themselves .Profits will be made by the people,of the people, for the people.
Taxpayers bailout for Taxpayers by Taxpayers paying compounded interest to Taxpayers.
These loans would provide trillions of dollars as TAXPAYER PROFIT! Bye-bye NATIONAL DEBT.
State Banks are taxpayer owned and are for taxpayers to make and retain any profit.The Federal Reserve Bank as it stands now is a bank that is owned (shareholders) by other banks.This is the greatest banker fraud of all,and we know how Freddie and Fannie turned out.(We will get to them later).And because the Federal Reserve Bank is the bankers bank,they are using taxpayers dollars to HELP THEIR BANKS more than to help people.When the banks made federal guaranteed loans,the FEDS guaranteed the loans with taxpayer dollars.
You have to read “North Dakota’s economic “miracle” blog by Ellen Brown
State Bank of NDhad a ROE to taxpayers was 19% this year.
May God continue to bless America,so that one Nation can continue to insure the general welfare.
justaluckyfool.wordpress.com
PLEASE CORRECT,ENHANCE,EDIT,OR ENDORSE
AFTER READING :
War–The Fiscal Stimulus of Last Resort Ellen Brown
Please note my changes.
Of $60 billion waste on defense spending….
There are some other calculations in the same study . . . . If we had spent that $60 billion (Change to Federal Bank USA loan )on clean energy, we would have created (directly or indirectly) 330,000 more jobs. If we’d spent it on healthcare, we’d have created 480,000 more jobs. And if we’d spent it on education, we’d have created 1.05 million more jobs.
Let’s say we want to create 29 million jobs in 10 years. That’s 2.9 million each year. Here’s one way to do it. Take $100 billion from the Department of Defense and move it into education (change to loans from Federal Bank of USA). That creates 1.75 million jobs per year. Take another $50 billion and move it into healthcare spending. There’s an additional 400,000 jobs. Take another $100 billion and move it into clean energy. There’s another 550,000 jobs. (change to that’s all from loans)”And take another $62 billion and turn it into tax cuts, generating an additional 200,000 jobs.(This change would be stated as ,No tax cuts needed as INCOME TAX WOULD BE SIMPLIFIED AS 10% of income over $100,000 up to $250,000,and the 15% up to $1,500,000 and 20% thereafter.No income tax for taxpayers earning $100,000 or less per year because THE FEDERAL BANK OF USA is earning trillions for the taxpayers FOR THE GENERAL WELFARE !
justaluckyfool.wordpress.com
Why Bank of America ?
Because BAC is not as powerful as JP and Citi and those two may be willing to give up BAC if given with them a deal of no felony charges.Plus BAC bought it’s own poison i.e.,Countrywide.
If Federal Reserve were to issue NEW RESERVE to be 20%
that would put BC in receivership,of course they would allow JP and Citi to sell their toxic’s to BAC so they would be able to stay afloat (Or better yet have their guys GIVE them BAC assets so they can be at 20% reserve
with what they will have on their books.Their foxes can do whatever they want as long as they are guarding the hen house.
justaluckyfool
Because reality and national politics parted company years ago, no one on the national stage is held accountable for the chasm between what they say when the camera lights are on and the “real” world in which we’ve all got to make a living. Obama’s job’s plan is a win-win for him and his liberal wrecking crew. If it’s passed (it won’t be), then public sector unions get another reprieve from the reality the rest of us have been dealing with, and if it isn’t passed, O gets 14 months of re-election gold, attributing all of the economic horribles to the rejection of his plan. I was not thrilled with O’s election (although I admit to thinking he was going to be a better choice than the Hillary alternative), but none of us could have been prepared for the poisonous and divisive approach the president has taken to governing this great country. His comportment better fits someone battling for a position on a city council, rather than a sitting president who ostensibly represents the interests of all Americans.