UPDATED: "The first thing we do, let's kill all the economists"
Submitted by advisor on Wed, 03/11/2009 - 12:05am.
Globalization, free trade, and those that formulated it succeeded beyond all hopes in just a few short decades of industrializing developing nations, expanding trade, opening hermetically seals nations to outsiders and binding them to global institutions, and adding hundreds of millions to the middle class. More than democracy, more than science, more than winning WWII, more than world leadership, this is our greatest, (albeit unintentional) gift to the world. After all it is a gift paid for at the cost of our entire industrial base. Paid for in installments with each new Free Trade Zone, GATT Round, and Duty Elimination.
Each suicidal trade initiative propelled forward by an unbeatable coalition of:
- Rich seeking more riches by moving production offshore
- Wholly owned senators and congressman from both parties
- Slack jawed simpletons, trailer trash and Walmart shoppers in the circular firing squad
We were promised morning in America, but what we got is this:
- 1991: $0 US trade deficit
- 2007: $700 Billion US trade deficit
- 2008: $650 Billion US trade deficit
A $1,350,000,000,000 trade deficit for the last 2 years.
As the white goods industry prepares to follow brown goods to oblivion, let us thank the practitioners of the Economic Arts, people who have never turned a bolt or developed a product, never trained a machinist or built a coordinated cross functional team, who are unaware of the fragile network of suppliers and sub-tier suppliers which evolved with the industry they supported and became extinct when their host industry died. Though lacking even a glimmer of understanding how industry really functions, Economists nonetheless felt with great confidence that they could reduce the economy to a few formulas to predict our future. Reduce our economy?.......bullseye. Predict the future?.....not so much. We would have been better served with tea leaves and chicken bones.
You have been lied to, and you have been lead down a path with no exit. To answer one of the comments below, the news is bad because the news is bad.
It is high time to raise the gates, to raise the duty and save the industry.
Note: this editor never supported free trade but was certainly benefited by it.
After writing this story, we tripped over this article in Business Week.
UPDATE: Foreign Policy Magazine: "The Worst is Yet to Come": suggested by reader:
UPDATE: New York Times: Ivory Tower Unswayeed By Crashing Economy
It is high time to raise the gates, to raise the duty and save the industry.
Note: this editor never supported free trade but was certainly benefited by it.
After writing this story, we tripped over this article in Business Week.
UPDATE: Foreign Policy Magazine: "The Worst is Yet to Come": suggested by reader:
UPDATE: New York Times: Ivory Tower Unswayeed By Crashing Economy
UPDATE: New York Times Magazine: September 2, 2009: How Did Economists Get It So Wrong?
It all had to end someday !!!
The biggest reason for the present economic travail is simply greed ... Banks, Credit Institutions, & Mortgage Companies had saturated the market to the point where the only way to generate more business was to inflate the value of homes, products, and alike ... then use the inflated value to justify collateralization for lending purposes ... in essence this practice was risky and became riskier as the practice expanded until, like the proverbial balloon, it burst.
The biggest problem with the Bush Administration was modifying the bankruptcy laws early on in his tenure which no longer allowed credit customers to walk away scott-free from debts, so the credit companies took an ill-advised solace in that and rationalized that their lending was less risky than it looked @ face value !!!
Then came the CountryWide debacle occurred and the Bush Administration did nothing definitive !!! Had they simply shut down the mortgage industry by temporarily sealing adjustable interest rate mortgages and foreclosures for a "cooling off period" while they had the chance to get a handle on the crisis, this all might have been identified well before September 15th when the crisis hit the fan in earnest opening the floodgates which created what we have been living with for the past six (6) months !!!
To my mind, the only way to solve this crisis is to restore credit to pre-crisis levels, eliminate interest and penalties since then, and not allow the increase in credit lines until they are reduced by @ least 1/3 ... only then will we slowly restore credit ... the lifeline of American business ... the rest of the world will follow !!! Bail-outs are hand-outs ... you never expect to get back that money you put into the beggar's hat, so anyone who got a bail-out will not feel it encumbent to repay that debt in a timely fashion ...
Just one man's opinion !!!
Bankruptcy Laws
I believe it was now VP Joe Biden that rewrote the backruptcy laws. Bush screwed a lot up too.
Experts
I think you need to really look at the bankruptcy rewrite. That or ask an attorney. All of your assumptions given are inaccurate as sometimes happens on blogs.Oldjarhead..not to be picky but please review your spelling. I know you get worked up but please.
Its funny watching debate.
Its funny watching (the) debate. Do I blame the press? Sure, to some extent. They prop up crooks by spinning bad policy into some kind of good light because it fits with there personal political beliefs. They do not think and report critically with a calculator. I love the spin today, the free market system has failed, and we need regulation. . bla bla bla. What we need is to enforce the law. Accounting is not "creative". Math is math, and when you cook the books to represent profits and earnings that are not there to get a bonus, that is called fraud. It is a CRIME. It is already a crime. It has always been a crime. We don’t need more regulation, we need the crooks in congress to try a little enforcement not only of the people in the private sector committing this fraud, but those among there own ranks that are active participants in it. Free markets work fine. However, the engine is not pure greed. It has to have a moral foundation. To me, our founding fathers based the measure of government against two extremes. On one side, Anarchy and on the other Monarchy. It was not a measure of would it be better if republicans or democrats were the monarchy. They knew that “monarchy” is always repressive and corrupt. And that is the root cause of the whole issue, excessive power is already in federal hands and we are seeing the result of the greed and corruption that comes with it. It is time to re-read our constitution and get back to our core principles if we want a return to prosperity. We have been drifting away from those core principles for many, many years now. And that I do lay much blame for squarely in the hands of the "progressive politically correct press". THAT is not the same kind of reporting you get from a FREE press that reports the news as apposed to attempting to shape it. In the USSR it was called "Pravda" . .basicly the "states voice".
Oldjarhead Needs a Lesson
Concerning accounting. It appears that you have not been exposed to board room or creative accounting.
Here is a sample:
Three men on a rainy evening can find only one hotel room. The clerk feels so bad he tells them they can share the room for $10.00 each. There are two beds and a sofa. After a while he feels so bad he gives the bell boy $5.00 and tells him to go give them the discount. The bell boy thinks "how can I split the $5.00 evenly" ? He decides to get five singles and gives each one $1.00. That means they each paid $9.00 or $27.00 total. It leaves the bell boy with $2.00 for a grand total of $29.00. What happened to the other $1.00 jarhead ? That is creative accounting. Not the two + two that you know of. Case closed.
In your example it went to
In your example it went to the clerk at the desk, making him and the bell boy thieves for stealing company money. Each should be fired and prosecuted, not for the amount stolen, but for the principle, demonstrating that thievery will not be tolerated. Not hard to me. Nothing gray about this stuff in a "moral" free market. Replace greed with math and pride in your work and in yourself, meaning I have too much pride to lower myself to the position of "thief" in order to grab that $ in your example, and things work pretty good. I know a lot of small business owners that do indeed think this way. People I can trust and respect. Just saying it's time we stop asking mommy to make others play fair, and stand up as a people and demand it. Lie to me and steal my retirement and I will be coming for you. That should be without question, and the only reason it is not is because folks tolerate it. In my business at least . . I won’t only fire a thief, I will have them arrested, period. Matter of absolute policy.
Right now congress has too much power, and they are owned, bought and paid for by the people in the private sector that are as corrupt as they are. WE need to take back the power and put some folks in the real jails with the real gangsters. Not hard, all you have to do is speak up, show up and demand nothing less. If they don’t do it, tar and feathers still work. After all, we number a few hundred million . .they are less than 600 . . .(-; I am all for reminding this government of that fact and that they are hired by us, not rulers over us. Corrupt power with a “D” or an “R” gets no protection and no loyalty, it is still corrupt power and that should be removed. Wall street’s melt down does not happen with out a corrupt fed protecting them. That corrupt fed is only around if we allow it . . so in that regard, we deserve what we have. We are voting party lines, not our core constitutional values. We can make them even more powerful, or we can start taking power back for ourselves. Not hard to predict which one will lead to more consolidated corruption.
Oldjarhead You Think Like a Ground Pounder !!!!
You cannot assume where the money went. You listen to R. Lee Ermey too much. Remember, he is an "honorary" Gunny by the way. My point is a good majority of people in these positions can make the books look like what they want. The math looks funny, sometimes it looks good, sometimes it is confusing. You really don't know where the dollar went and all of your huffing and puffing in writing can't find it. My other comment is about your comparison of our press to Pravda. Quite a stretch since Pravda suppresses information. You just don't like our press telling it like it is? This free country is not the Marine Corp.You cannot be the judge and jury. All or any of our assumptions are just that, assumptions made by honest and hard working people. Some, like you want to use street justice. I hate to break it to you but you can show up and speak up. None of that is ever going to change. The reason we know so much more is the Freedom of Information Act and the press using it to inform people. You can have Pravda. Now, go find that dollar with the right evidence. All in fun.
Ahhh Great
Top notch assessment Bob but not that easy and no two politicians can agree on anything anymore.I am cynical on politicians. They each have an extreme plan and then want to spoil that by compromising away most of the good for earmarks.
Let's blame it on Bush -
Let's blame it on Bush - that should work for the next four years to explain why the economy continues to crash. Obviously it's his fault that the stock market fell over 30% since election day. I agree, the media is too negative. There was a local job fair today in our area where there were 150 job openings. What did the media say? "Believe it or not someone is actually still hiring". I am making more money now than I was 4 years ago, am very thankful that I recieved the Bush tax cuts, and am not in the "Super Wealthy (over $250,000)" bracket that is getting a tax increase that Mr. Stallion wants. However, because of the constant negative I hear every day I have reduced my spending. I realize this is probably hurting the places I usually shop at but I am saving my money. Everyone I talk to is saying the same thing and "believe it or not" the fundamentals of the economy in our area are strong. 2008 was our best year ever. Who know what 2009 will bring? Let's stop blaming Bush and find a way to fix this mess that many areas are in.
Bush the No Blame Guy.
Steady Selling.You sound honest and pragmatic.By the way my taxes will rise as a result of Obama's plan.One thing about tax cuts for the super rich. They have taken that money and invested it overseas. I've seen it , I hear about it,I lived it. These sharks are not our grandfather's leaders. They will take their money and not leave any for a middle class correction. Get with it , the sharks are not as honest as you are SS.Where has the media caused the exporting of jobs to China ? To Mexico ? To any country where squaller is what these folks live in.Just so they can send us cheap products. Everyone should read up on Henry Ford.Bush allowed the deficit to get out of control. No bid contracts ,rebuilding a country who does not care for us. Cutting taxes for the rich and let's be clear ,the cut was at the dividend segment where the exporting of jobs increases the dividend.Bush scared the hell out of the people by being a one issue president and keeping us thankful the terrorists did not invade America. He and his staff are in large part to blame for the deficit and the loss of value of our money. That causes credit crunches . You can only print so much money. I don't really know if any one administration can pull us out of the quicksand. I would let everyone go bankrupt( GM ,Citibank ,AIG ,etc ) and maybe we have to start over. But that hundreds bucks you have will value down to ten dollars. Just watch.
Screw the economists, let's kill the media!
An article was written in Foreign Policy magazine asking why the economists didn't forsee this crisis and outlining the reasons why. You can read it for yourself, but the gist is that maybe we can't blame them for not doing their jobs because the basic economic formulas have changed.Forget the economists, lets kill the media. Everyday, I open the newspaper and read how crappy the world is. When I get in the car, I hear about how crappy the world is. I get to work and talk to people who tell me about how crappy the world is. So by the time I get home and watch the news, I already know that its crappy, but I want to listen to Katie tell me how much crappier it got while I was at work.So, how can we be positive when the media is only talking about negative things. Magazines, newspapers, radio and television stations are closing all over the country because advertisiers don't want to spend money advertising in the very media that is spreading all the doom and gloom. I think it makes sense.I agree that things are bad and that they could get worse, but do we have to dwell so much on it, in so much detail, every minute of every day. Isn't there anything nice to talk about.
Media to Blame ?????
Are you kidding me ? The media has not invented the news. They report and probably comment on it with a little spin both ways. Did the media create the mortgage mess ? Did the media create Bernie Madoff ? Did the media create companies gutted by self serving financial spin experts lowering stock prices after they pick the bone dry. Did the media cause all the layoffs ? If you do not like a free press go live in China or Russia. Better yet watch reruns of Mr.. Roger's neighborhood for God sakes alive. Talk about the dumbing down of America. Go bury your head and after we fix what is wrong you can take your head out of the sand and take credit for fixing it.There's more. Did the press create or cause GM and other large organizations to mismanage their fudiciary responsibility and then pay salaries of over $14 million. Did the press create the bailout and welfare for AIG as they continue to take expensive trips and pay bonuses ? You would prefer not to know that ?Yep ,blame those evil doers the press. Squash their freedoms and only report on the green grass that is growing.
I guess we all know your
I guess we all know your take on the matter. We don't blame the press for making up the news, we blame the press for making too much of it. Yes, these problems can basically be summed down to one word "greed". My point was that you can't blame the economists because just like you, they didn't see this coming and certainly couldn't forecast the result of years of corporate mismanagement. But you can ask the press to dial it down.Why would you do that? So that the people who are still working may still feel a little safer spending their money which would certainly help all of you in the packaged goods industry with the millions of dollars of product sitting waiting to be sold to someone brave enough to buy it.The media has a direct part in the creation of the mood of the people. My point was that they have done their jobs so well it's starting to affect them too!
More
Amster..First of all I am not in the packaged goods industry you genious. Secondly , I saw it coming , so did the economists and Bush suggested not to publicize negative press. Much like "don't let them see our dead troops come home, someone may wake up to the fact we did another stupid thing as leaders".I would much rather face the music as opposed to having someone spend money they will eventually not be able to pay back. This concept appears beyond you though. Like Paulson who said "gee , I am only one person trying to do my best". So he gives all the money to the banks and they sit on it. Improve balance sheets and hand out bonuses for a job well done. We get what we deserve. We are a bunch of sheep.Think Cheney is being affected by the economy ? We have rebuilt roads ,schools and churches in Iraq. They won't pay us back, they will kick us out and won't be a democracy for long.. Can't we rebuild our own cities ? Too easy huh ?Naw, just give more tax breaks to the super wealthy. That should fix it right ?
What ?????
Earth to Amster. You have got to be kidding. At what point is there too much bad news ? Too much good news ? The mess we are in is because of constraints placed on people by the Bush regime,yes regime to only put a Bush spin on things. Such as "Mission Accomplished" , "the economy is well", "we have created several million new jobs" .Yes for $8.00 per hour. When jobs were going to China he said "people will have to be trained in other skills" Again ,what !!!What new skills ? No manufacturing here , no middle class.Come back from Oz , plant your feet firmly on the ground. People are not stupid. Lollipop good news will not create consumer confidence. You are in the appliance industry so I am pretty sure you are intelligent. Step back and look what has happened. Then watch the movie "W" It shows us clearly what kind of people Bush employed. I for one don't want that situation again be it democrats or republicans,
What?????
Earth to Stallion. Since when does employment in the appliance industry indicate intelligence. Actually, I agree with most of what you say, except for the part about Oliver Stone movies being representative of anything other than fantasy.
Cohiba Mucho Grande
I was attempting to be nice. On Oliver Stone... I think in this instance he actually thought that Bush was used by his people.I will enjoy a Cohiba this evening in your honor !!!!
Oliver Stone
Thanks, I'll light one up myself. I enjoy your comments almost as much as I do those from Alex!! Although sometimes I feel a little sorry for the poor blokes on the receiving end of the blistering replies that you sometimes write. Oh well, since we're all anonymous, I guess no one's ego can get too badly bruised. Keep it up. And, can I suggest Grey Goose on ice to go with that smoke.
Grey Goose it is
My favorite vodka. Keep up the good comments. Your work is probably as good as well. Alex can't hold a candle to us, way too liberal. Do you like my new style accounting by the way ? Think Oldjarhead will get it ?
Accounting
Stallion. The bellboy should have kept the whole $5 bucks, which will probably only be worth $3 bucks pretty soon anyway after the dollar devalues. But, no I don't think jarhead figured out that under your math the room rented for $ 30, and then was discounted to $ 25, with $ 3 going to the three guys renting the room and $ 2 to the bellboy. Jarhead is probably still trying to figure out why the guy on the couch had to pay an equal share.