Recovery From Bush’s Great Recession Still A Long Way Off

Job loss graph
Source: Calculated Risk blog.

Just in case anyone is ready to celebrate the January jobs report, here’s a reminder that 8.3 percent unemployment (with real unemployment still running at 15 percent) is bad news despite the positive trend.

You can see from the above graph why the Congressional Budget Office (CBO) estimates it is going to take a decade (i.e until 2018) to come back from the crash caused by the Bush administration’s economic malfeasance, especially given the current Washington obsession with austerity instead of economic recovery. We can count on Republicans doing everything they can think of to stall the economy, while Dems claim to be powerless to do much to help the middle class. Remember, consumers are the real “job creators” and consumer confidence declined in January.

More info:
CBO Report Shows Dangers to Economic Growth from Austerity
Bernanke Testifies, ‘We’re Obviously Not Satisfied With Where We Are’ In The Economy

  1. #1 by brewski on February 6, 2012 - 3:21 am

    The CBO did not say in your link:

    it is going to take a decade (i.e until 2018) to come back from the crash caused by the Bush administration’s economic malfeasance

    The CBO did say in your link:

    the resulting larger deficits would reduce private investment in productive capital and result in real GDP that would fall increasingly below the level in CBO’s baseline projections.

    You might want to be a bit more careful about misquoting your own links.

  2. #2 by Richard Warnick on February 6, 2012 - 9:08 am

    I referenced the CBO report without quoting from it. Here’s the exact quote:

    CBO expects that the economy will continue to recover slowly, with real GDP growing by 2.0 percent this year and 1.1 percent next year (as measured by the change from the fourth quarter of the previous calendar year). CBO expects economic activity to quicken after 2013 but to remain below the economy’s potential until 2018.

    In CBO’s forecast, the unemployment rate remains above 8 percent both this year and next, a consequence of continued weakness in demand for goods and services. As economic growth picks up after 2013, the unemployment rate will gradually decline to around 7 percent by the end of 2015, before dropping to near 5½ percent by the end of 2017.

    According to the Calculated Risk graph, we still need to reduce unemployment by 4 percent to get back to where we were before Bush crashed the economy. The recovery trend shown on the graph seems to agree with the CBO estimate that it won’t happen until 2018 at the earliest.

  3. #3 by brewski on February 6, 2012 - 10:30 am

    The CBO didn’t say that Bush crashed the economy. Neither does the OECD.

    The CBO does say that larger deficits will reduce private investment and lower GDP.

  4. #4 by brewski on February 6, 2012 - 10:51 am

    These ‘faults and cracks’ are the incentives built into capital regulations (such as Basel I and II) and tax rates, that led to a too-low cost of capital and to arbitrage opportunities for traders that were levered up many times to generate strong fee and profit growth, while longer- run risks were transferred to someone else.
    The too low cost of capital in the regulated banking sector, high-return arbitrage activities and SEC rule changes in 2004 that allowed investment banks much more scope to expand leverage sharply, meant that these high-risk businesses became much bigger than they would have been with a higher cost of capital and better regulation. That is, systemically important (‘too big to fail’) financial firms emerged, as a direct consequence of policy, with excess leverage and lots of concentrated risk on their books.

    OECD

    So you only see what you want to see. You only see the regulatory failure. You are unable to see and don’t want to see the deeper causes. You also don’t want to see that regulations sometimes have unintended consequences that increase instability rather than reduce it. Sometimes when you squeeze a banana the gooey stuff pops out someplace else. You also don’t want to see that lots of people not named Bush had a very large role in fucking things up. But that doesn’t fit neatly into your narrative and into your world view. So you ignore it. You don’t address it. You just put your hands over your ears and scream “I can’t hear you I can’t hear you!”

    I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing.

    Barney Frank – 2003

    As for timing, it was the 1990’s when the following happened and Clinton was President:

    Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was “clearly a mistake.”

    Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming,” Kirk says. “Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves.”

    – PBS Frontline

    So you could say it was the Clinton Administration which caused the crash since it was his administration which stopped the regulations of derivatives.

    But this doesn’t fit into your preconceived conclusions. So it is easier for you to just ignore it.

  5. #5 by Richard Warnick on February 6, 2012 - 11:05 am

    I never claimed or implied that the CBO said Bush crashed the economy. But they ought to have said it.

    I’m tired of the parade of right-wing Republican politicians who seem to have forgotten that Bush was ever in the White House, and are trying to stick Obama with the blame for the economy. But this is not Obama’s Great Recession, it’s Bush’s.

    Sure, there were plenty of contributing causes. But you are asking me to deal in nuances when people like Willard (“Mitt”) Romney are going around saying it’s all Obama’s fault.

  6. #6 by brewski on February 6, 2012 - 11:39 am

    Nothing I said even mentioned or implied Obama.

    And nothing I said is a “nuance”.

    The items I listed are the first items mentioned by the OECD when explaining the crisis. First items, as in Primary.

    And the timeframe and people involved definitely included the Clinton era and Administration.

    Did you even read what I posted? You never even acknowledge any of my points.

    You said:

    the Congressional Budget Office (CBO) estimates it is going to take a decade (i.e until 2018) to come back from the crash caused by the Bush administration’s economic malfeasance,

    Apparently what you meant to say was:

    the Congressional Budget Office (CBO) estimates it is going to take a decade (i.e until 2018) to come back from the crash, which I believe was caused solely by the Bush administration’s economic malfeasance despite all the evidence pointing to the Fed, Clinton, Frank, Rubin, Summers, Levitt, which I am choosing to ignore since it doesn’t fit into my world view.

  7. #7 by Richard Warnick on February 6, 2012 - 12:42 pm

    brewski–

    Not everything is about you or what you have said. I’m concerned about responding to right-wing propaganda in general.

    Definition of nuance: “A subtle difference in or shade of meaning.”

  8. #8 by brewski on February 6, 2012 - 12:51 pm

    I wouldn’t call the Primary Cause a subtle difference in or shade of meaning.

  9. #9 by Shane on February 6, 2012 - 12:52 pm

    Not everything is about you or what you have said. I’m concerned about responding to right-wing propaganda in general.

    This your first time in these forums stranger?

  10. #10 by Richard Warnick on February 6, 2012 - 1:31 pm

    brewski–

    I know you haven’t forgotten Bush’s “Ownership Society” or the out-of-control securitization of mortgages and credit default swaps, because I have reminded you. There’s your primary cause.

  11. #11 by brewski on February 6, 2012 - 1:49 pm

    Ownership society was not a new policy. It is the same underlying philosophy of home ownership subsidies that brought us Fannie, Freddie, GNMA, FHLBB, FHA, VHA, CRA, mortgage deduction, property tax deduction, etc. They are all subsidies for debt and buying a home. But if Bush does it you hate it. But if Barney Frank does it you love it. The only thing consistent in your thinking is your venom for all things and all people conservative and if lefties do the same thing then they are heroes.

    No, those were knock-on causes. As the OECD pointed out, the primary cause was the excess liquidity. That is not some nuance.

    So, what were the roots of this crisis? One way of answering that question is in terms of a metaphor – an overflowing dam.
    The water behind the dam was a global liquidity bubble – or easy access to cheap borrowing. This resulted from low interest rates in key economies like Japan and the United States and what amounted to huge support for US finances from China. This idea of a supply of easy money might seem rather abstract, but it had a real impact on everyday life. For example, low inflation helped by the huge supply of goods coming out of Asia, low US interest rates and Asian investment in US Treasury securities made mortgages cheap, encouraging buyers to get into the market, fuelling a bubble in house prices. Other assets, like shares, also rose to levels that were going to be hard to sustain over the long term.

    OECD

    I guess we should trust someone with no understanding of the most basic principles of money, banking, micro or macro economics over actual experts. Sort of like ignoring scientists.

    That is why you are Sarah Palin.

  12. #12 by Richard Warnick on February 6, 2012 - 2:19 pm

    brewski–

    You love to levy accusations against me, but that’s not what it’s about.

    We both know that the Bush administration was characterized by economic malfeasance. Bush was the first President since Herbert Hoover to actually have a national net job loss. Bush presided over flat wages, fewer and fewer people with health insurance, and more and more Americans sinking below the poverty line. GDP was declining by the time Bush left office.

    The only thing propping up the Bush economy was the “Ownership Society” housing bubble and the house of cards that was mortgage securitization and credit-default swaps. Unfortunately for him, it came crashing down before he left Washington.

    I’m in favor of remembering what happened. But to listen to Speaker Boehner, Willard (“Mitt”) Romney and the rest of the GOP, you would think President Obama is the author of our misfortunes –instead of the guy trying to pick of the pieces after right-wing ideology crashed and burned.

  13. #13 by brewski on February 6, 2012 - 2:59 pm

    But to listen to Speaker Boehner, Willard (“Mitt”) Romney and the rest of the GOP

    Actually, they say all the time that Obama didn’t cause it. They say that over and over again. But they say Obama has done a shit job dealing with it as evidenced by the lame recovery as your chart above demonstrates. So your chart above doesn’t imply that Obama caused it. But it does imply that Obama has done a crap job of dealing with it.

    ARRA. which had 0.6% of infrastructure spending, is Exhibit A of his failure.

    We both know that the Bush administration was characterized by economic malfeasance. Bush was the first President since Herbert Hoover to actually have a national net job loss. Bush presided over flat wages, fewer and fewer people with health insurance, and more and more Americans sinking below the poverty line. GDP was declining by the time Bush left office.

    The only thing propping up the Bush economy was the “Ownership Society” housing bubble and the house of cards that was mortgage securitization and credit-default swaps. Unfortunately for him, it came crashing down before he left Washington.

    None of this suggests that this was the cause.

    Did Clinton Cause the crash of 2000 and the recession which started at the end of his term? Did the malfeasance of Rubin et al Cause the irrational exuberance and the crash?

    Do you know what the word cause means?

  14. #14 by Richard Warnick on February 6, 2012 - 3:14 pm

    When did the GOP leadership say that Bush was responsible for the wrecked economy? They don’t do nuance– they blame Obama all the time, while doing whatever they can to stall the recovery. Why was the ARRA so weak? Republicans demanded it consist mostly of tax cuts — then refused to vote for it anyway.

    House Speaker John Boehner and members of his Republican leadership team scoffed at the positive jobs data this morning, suggesting that despite new signals that the economy is improving, the president’s economic agenda has failed and the country would be better off if the GOP’s policies are implemented.

    GOP blames ‘Obama economy’ in call to extend federal pay freeze

    In GOP response, Daniels blames Obama for economy

    Michael Reagan: Blame Obama for the Wrecked Economy

  15. #15 by brewski on February 6, 2012 - 3:30 pm

    When did the GOP leadership say that Bush was responsible for the wrecked economy?

    They didn’t.

    they blame Obama all the time,

    They blame Obama for the shit job of dealing with the crisis and making it worse.

    You are playing word games.

  16. #16 by Richard Warnick on February 6, 2012 - 4:59 pm

    How is President Obama making the economy worse? There is no evidence for that contention.

    He could have done better by ignoring the Republican saboteurs and listening to Paul Krugman, but that’s water under the bridge.

    In the last election, the Republicans promised “jobs-jobs-jobs” and that they would save Medicare. When they won, they insisted on mass layoffs from the public sector and abolishing Medicare. Why should we trust them?

  17. #17 by brewski on February 6, 2012 - 6:47 pm

    1. ARRA had 0.6% spending on infrastructure
    2. ACA discourages employers from hiring people
    3. Not reforming the tax code to keep up with the rest of the planet is an error of inaction and drives away capital and jobs

    It’s all water under the bridge. Do you give the same excuse for everything that W did?

  18. #18 by Shane on February 6, 2012 - 6:53 pm

    So W did many things that in brewski world encourage hiring. And had the worst jobs record in… yeah pretty much as long as anyone cares about. Obama is doing things that in brewski world discourage hiring and make the crisis worse. Yet employment is going up despite the republican anti-jobs efforts.

    What color is the sky in brewski land? We don’t know, but it comes out of a horses rear end and then the sky falls on the sparrows…

  19. #19 by cav on February 6, 2012 - 7:21 pm

    I’m beginning to wonder if the Barney Frank quote brewski is so fond of, isn’t taken out of context, or even Barney speculating on how the opposition would have it.

  20. #20 by Ronald D. Hunt on February 6, 2012 - 8:31 pm

    Obama certainly should have pushed harder for a larger stimulus bill, and pushed harder to get it without so many poor designed tax cuts in it. His own economic team said they needed $1.8 trillion in it, but clearly congress simply wasn’t in a position to pass such a thing.

    Really Obama’s failure was to sell the watered down ARRA as being better then it was, he should have called it the starting point rather then the solution.

    The only major part of the ACA that will effect employment in a large way that is implemented at this point is the small business health benefit tax credits, and FYI that has helped alot of small businesses.

  21. #21 by brewski on February 6, 2012 - 8:56 pm

    Cav,
    To answer your question about Frank. He was consistently off the mark with the GSE’s, so that remark was entirely in character with his long running position.

    These two entities …are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.

    I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They’re not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.


    So he was wrong, always wrong.

    RDH,
    Larger than 0.6%? Yeah, I think that would have been a good idea. The other 99.4% sure as hell better have been worth it.

    There were exactly zero “tax cuts” in it as anyone understand those words to mean in English. There were one time rebates and green energy tax incentives and all kinds of targeted goodies to his bundlers. But there were no “tax cuts”. None.

    As for ACA, ever hear of the downward sloping demand curve?

  22. #22 by brewski on February 6, 2012 - 9:24 pm

    From those right-wingers in the EU:

    A high tax burden on labour, especially on vulnerable groups, combined with low indirect and consumption taxation may indicate a need for rethinking the structure of a tax system. Economic literature points to the importance that tax composition plays for economic growth and suggests a ranking of the main categories of taxes with regards to growth, with taxes on immovable property being the least distortive to growth, followed by consumption taxes (including environmentally-related taxes) and, finally, income taxes (on personal and corporate income) being the most harmful.
    As already stated by the 2011 AGS, shifting taxes away from labour should be a priority for most Member States in order to stimulate demand for labour and create jobs.

    http://ec.europa.eu/europe2020/pdf/ags2012_annex4_en.pdf

    From that right-winger Al Gore:
    http://www.theclimatehub.com/al-gore-on-carbon-tax

    So Al Gore is on my side. The EU is on my side. Every economics textbook written in the history of mankind is on my side. The global trend of what Canada and the rest of the planet are doing are on my side.

    The sky is blue.

  23. #23 by Ronald D. Hunt on February 6, 2012 - 9:44 pm

    “Larger than 0.6%? Yeah, I think that would have been a good idea. The other 99.4% sure as hell better have been worth it.”

    The State aid was worth the cost, it saved a lot of teachers jobs and other public worker positions.

    “There were exactly zero “tax cuts” in it as anyone understand those words to mean in English. There were one time rebates and green energy tax incentives and all kinds of targeted goodies to his bundlers. But there were no “tax cuts”. None.”

    Deductions/credits whatever, regardless of the name it caused people to pay less taxes. A rather poor means of stimulus really.

    “As for ACA, ever hear of the downward sloping demand curve? “

    What implemented policy in the ACA causes this, I want specifics.

    “shifting taxes away from labour should be a priority for most Member States in order to stimulate demand for labour and create jobs.”

    Tax reform is more complicated that just the tax system, you need replacement policy for what the tax system does.

    I am not real big on the carbon tax as proposed by Al gore. The second order effects of this form of tax hurt demand.

    A Cap and dividend system would be alright but that doesn’t really help government revenue in any big way, It would help to move us towards alternative energy however while minimizing the second order effects of a “carbon” tax.

    “The global trend of what Canada and the rest of the planet are doing are on my side.”

    Ohh good so you support single payer, nationalized resource extraction industries, expanded social security, trade tariffs, and direct government subsidy of industry(instead of via tax system) now?

    You know the policies of the rest of the planet!

  24. #24 by cav on February 6, 2012 - 11:08 pm

    I’m really tired of arguing, but it seems Freddy and Fannie were sucked in, or slip-streamed because their market share was plummeting, thanks to the exuberance of those much less scrupulous – given the slaying of regulations, essentially making such exuberance so very very lucrative. So, at the time, Fred ‘n Fran probably weren’t facing crisis per se. But by jumping on the bandwagon, their participation not only lent an air of legitimacy, It also added heft, which really swung the catastrophe into overdrive.

    Since Barney and others missed (failed to really foresee), or fully apprehend, much less control the cascading ‘shit-pile’, I do not think his observations were as causative as you sometimes seem to suggest. What is one to do in the face of such overwhelming greed and idiocy?

    Had he only set his thinning hair ablaze!

  25. #25 by Ronald D. Hunt on February 7, 2012 - 2:32 am

    it was illegal for Fannie and Freddie to operate outside of fixed rate fixed term mortgage origination and derivatives until 2007, actually the whole thing with them started as an idiotic attempt to privatize them starting back in 2003, Bush was given the authority to change their operating rules at the same time in 2003, which allowed him to implement the changes in 2007 that lead to their massive loses.

    When the market first dumped out, Euro…. the chumps stopped buying the mortgage derivatives, but the banks still held a giant pile of them, The Bush rule change was intended to clean out much of the banks derivatives but their was a limit to the amount of them that Fannie and Freddie could absorb.

    And their was a second problem, The banks had bought credit default swaps on the majority of those derivatives, basically insurance. Prior to 1999 this was illegal via the nature of glass steagall. Basically meaning that they held insurance on mortgages they no longer held, It would be like if you bought life insurance on the guy next door(which is illegal).

    Fannie and Freddie where part of the bailouts which is a problem, The lending/derivatives prior to 2007 that they where directly involved in however had nothing todo with the crisis itself.

    I guess the biggest problem I have with the Fannie and Freddie adding exuberance/legitimacy argument is that all evidence directly contravenes that the market crash would have not happened or would have been less severe without them. In fact without them the crash would likely have been worse as much of the lending they would have otherwise been involved in would have been done via the same banks that invented all of the garbage that create the crash.

  26. #26 by cav on February 7, 2012 - 7:37 am

    Thanks. I stand somewhat corrected. What I really know, from a boots on the ground perspective, is, if the sale of my building had gone through, things for me and my family would be much much different today. But, alas…

    And needless to repeat: IANAE – just being schooled as we go back and forth.

  27. #27 by cav on February 7, 2012 - 7:50 am

    And of course, it’s so much speculation at this point, but maybe, had Fred n Fanny not been aboard, the call to nationalize the other perps might have had a better hearing.

    That…I’d like to have seen.

    Now, having grown their power to such an extent they can strip-mine Europe, our every short-hair seems to be owned by them.

  28. #28 by brewski on February 7, 2012 - 12:22 pm

    The State aid was worth the cost, it saved a lot of teachers jobs and other public worker positions.

    Which the states could have paid for themselves and happened to go mostly to states which voted for Obama. So was really just a political payback.

    Deductions/credits whatever, regardless of the name it caused people to pay less taxes.

    Tax expenditures are not tax cuts. Calling them tax cuts which are really subsidies for your bundlers and telling Republicans that they got what they wanted is just a lie.

    A rather poor means of stimulus really.

    A poor man’s bribe.

    What implemented policy in the ACA causes this, I want specifics.

    Specifically, if you raise the cost of employing people, you will get less employment.

    Tax reform is more complicated that just the tax system, you need replacement policy for what the tax system does.

    What replacement policy is needed to simplify and rationalize the tax code? I asked you this a few days ago when you brought this up and go no answer. Replacement bribes to your bundlers?

    I am not real big on the carbon tax as proposed by Al gore. The second order effects of this form of tax hurt demand.

    So you would rather tax jobs than pollution?

    Ohh good so you support single payer,

    Yes I have said so many times.

    nationalized resource extraction industries

    Canada has plenty of private natural resource companies. How is that nationalized oil company thing working out for Mexico?

    expanded social security

    I’d say rationalized and simplified would be a good start and one that is not a Ponzi scheme.

    trade tariffs

    The world is moving towards free-er trade, not less. You must be thinking of some other planet.

    and direct government subsidy of industry(instead of via tax system) now?

    You mean just like Solyndra? Nice recommendation.

  29. #29 by Ronald D. Hunt on February 7, 2012 - 1:04 pm

    “Which the states could have paid for themselves and happened to go mostly to states which voted for Obama. So was really just a political payback.”

    Money was given out based on state population, and many red states refused the money. States have a problem with raising taxes, the politics at the state level would generally let things burn as opposed to fetching a few buckets of water.

    “A poor man’s bribe.”

    The correct “term” is Bipartisanship!!!!

    “Specifically, if you raise the cost of employing people, you will get less employment.”

    No costs will be risen here until 2014, and for many employers these costs will go down from where they currently are. Tho It sounds like you don’t even know what is in the bill!

    “What replacement policy is needed to simplify and rationalize the tax code? I asked you this a few days ago when you brought this up and go no answer. Replacement bribes to your bundlers?”

    $450 billion for health care,
    $107 billion for 401k related deductions
    $100 billion for the mortgage deduction
    god only knows how much for child tax credits, EITC, etc.

    “Canada has plenty of private natural resource companies.”

    Well short of, they might be “private” but the government owns a good chunk of them. Britain is similar in this regard.

    Norway, France, and Germany are Nationalized systems

    And pretty much all of them except Norway pay these dollars back in their industries in the form of direct subsides. Norway puts the dollars into a national sovereign wealth fund, many middle east Nations do this as well.

    “The world is moving towards free-er trade, not less. You must be thinking of some other planet.”

    See. Europe, lots of tariffs. China to, lots of tariffs. In fact China has been selectively increasing tariffs in certain area’s to force businesses to move factories to china that sell goods in china(wong…. err John deer for example).

    “You mean just like Solyndra? Nice recommendation. “

    You have picked out 1 from hundreds of otherwise successful examples. I love seeing the large windmill blades drive down the highway on their special extra long semi trucks, or the soon to be released Tesla model S, IN has a large billion dollar lithium battery plant going in soon.

    You can’t have a winner every time, and their is no way to know every last loser that will rise and fall over time.

    Their is a reason Germany controls well over 90% of the worlds supply of silicon platers, and has a huge and growing solar cell industry, among other things. It is because they subsidize it all directly.

  30. #30 by brewski on February 7, 2012 - 1:40 pm

    So what you want is for the favorite companies of Nancy Pelosi and Barney frank to get direct subsidies from the government. And then these “leaders” will get sweetheart mortgages, more campaign contributions, more bundlers. So what you are advocating is cronyism, bribery and corruption. How did those state owned industries work out for the UK? How was British Leland? How is nationalized oil working out for Mexico? So you want more state control of all aspects of the economy. You know, less decision making by, you know, us people. So we should just trust the elites that they will make decisions which are in our best interests. You think the US Federal government can do a better job finding and managing oil companies that they can? If you want more tax revenue from them then you can increase the taxes/royalties on them, but you just said you are against that. So change your mind? As for ACA, insurance costs already have been increased due to ACA and will continue to increase. I will bet you than they don’t go down after 2014.

    New report finds medical costs to rise 8.5 percent in 2012
    By Julian Pecquet – 05/18/11 09:52 AM ET
    U.S. employers can expect an 8.5 percent increase in their medical costs next year due in some part to the healthcare reform law, the consulting firm PwC said in a report Wednesday.

    The widely read annual report on cost trends points to three main drivers of healthcare costs, two of which are exacerbated by the new law.

    The Hill referring to a PriceWaterhouseCoopers study

  31. #31 by cav on February 7, 2012 - 2:42 pm

    Bush proved that all you have to do is muddy the waters and walk away.

  32. #32 by Ronald D. Hunt on February 7, 2012 - 3:45 pm

    Medical inflation was high before, in the range of the high 6-7% area. Ohh and expect it to be very low this year, the medical lose ratio requirements have kicked in!

    “So what you are advocating is cronyism, bribery and corruption.”

    Your saying Germany is filled with cronyism, bribery, and corruption? Or France?, Or Norway?

    The only Nation that pretends international trade has anything to do with free market is the USA, and we are getting our asses kicked because of that.

    Would a free market be nice, sure in a perfect world. But sadly no other Nation is going to play by the “rules” whatever you perceive them to be when they can tilt the playing field in their favor.

    Plugging your ears and screaming “lalalala” isn’t going to change this. We most certainly can use policy to work towards this however.

    When China charges us a 45% tariff on import tractors we should charge them a 45% tariff on import tractors.

    When Germany subsidizes Silicon wafers to the extent that they control 90% of the global market share, we should respond in kind.

    Korea, Japan, and Taiwan have been known for flooding the market with below cost memory to put foreign competitors out of business. Even with multiple WTO complaints and actions the effect on the market is substantial.

    The libertarian line of dump the deductions/credits etc and go with a flat tax without any replacement policy is the fast track to trashing the economy.

    “Bush proved that all you have to do is muddy the waters and walk away. “

    Sadly a very effective argument style =(

  33. #33 by brewski on February 7, 2012 - 6:39 pm

    So our tax policy now somehow compensates for not having nationalized Exxon? How is that working?

    Our tax policy now makes up for our trade policy? How is that working?

    I am talking about simplifying for the sake of simplifying and you throw in totally unrelated objections.

    Since Larry likes sports analogies so much. The Patriots lost the Super Bowl because of the Dodgers hitting.

  34. #34 by cav on February 7, 2012 - 6:56 pm

    The Patriots lost the Super Bowl? Who knew? Who really cared?

    A poll conducted today (Tuesday) revealed 99% of the American population couldn’t remember who won the SB.

  35. #35 by brewski on February 7, 2012 - 8:21 pm

    Pretty funny that RDH gives Europe as an example of import tariffs since the original purpose of it was to create a common market. Now it has 27 member states with no tariffs!!!

  36. #36 by Larry Bergan on February 7, 2012 - 8:56 pm

    A poll conducted today (Tuesday) revealed 99% of the American population couldn’t remember who won the SB.

    Maybe there is hope for the country after all.

    You should have been as repelled as I was to be watching C-span recently and hear Jeff Sessions’s smarmy explanation of how Obama added two trillion dollars to the deficit without noting he wasn’t the president when the banks got their trillion.

    As I recall, Obama voted for the banks to get the money, and he was getting a lot of money from them to run for president, but after a couple of comments the bankers didn’t like and topped by his very strong statements about putting people in jail that has changed.

    Who’s getting the banks money this time? Why if it isn’t Romney. Who knew.

  37. #37 by brewski on February 7, 2012 - 10:18 pm

    People see that law enforcement is missing when it comes to the banks and Wall Street. So simply restoring the criminal justice system would be progress. It used to be that if you ran a fraud, if you cheated people, if you lied on your income tax and falsified statistics, then you would be sent to jail. But the Obama administration has appointed Eric Holder to represent Wall Street. He has not thrown any bankers in jail, recognizing that they are the major campaign contributors of the party, after all.

    He [Joe Lieberman] evidently gave Obama expert advice about how to raise funds from the financial class by delivering his liberal constituency to his Wall Street campaign contributors. So the problem is not that President Obama is well meaning but inept – an idealist who just can’t fight the vested interests and insiders. He’s thrown in his lot with them. In fact, he really seems to believe the right-wing, pro-Wall Street ideology – that the economy can’t function without a financial system that guarantees “savers” (the top 1%) against loss, even when the bottom 99% have to pay more and more.

    And on a personal level, Mr. Obama knows that his fund raising comes mainly from Wall Street, and the only way to get this money is to sell out his constituency. You’ve got to give him enough credit to recognize this obvious fact.

    The upshot is that we now have a political nightmare. Yet Mr. Obama still seems to be the best that the Democrats can offer!

    As matters stand, Goldman Sachs has been able to buy the right to name who is going to be Treasury Secretary. They selected Geithner, who gave them $29 billion from A.I.G. just before he was appointed. It’s like that all down the line – in both parties. Every Democratic congressional committee chairman has to pay to the Party a $150,000 to buy the chairmanship. This means that the campaign donors get to determine who gets committee chairmanships. This is oligarchy, not democracy. So the system is geared to favor whoever can grab the most money. Wall Street does it by financial siphoning and asset stripping. Politicians do it by getting money from the beneficiaries – the 1%.

    There is no way to clean up the mess that the Democratic Party has become since politics moved into Wall Street’s pockets. The Republicans also have become a party of lobbyists. So it looks like there is no solution within the existent system.

    Michael Hudson

    And:
    http://www.opensecrets.org/pres12/

    http://www.thefiscaltimes.com/Articles/2011/10/20/WP-Obama-Still-Minting-Money-on-Wall-St.aspx#page1

    http://www.politico.com/news/stories/1111/67770.html

  38. #38 by Ronald D. Hunt on February 7, 2012 - 10:28 pm

    Brewski,

    Google learn to use it.

    http://ec.europa.eu/taxation_customs/customs/customs_duties/tariff_aspects/index_en.htm

    Europe has plenty of tariffs, they merely have ended them between the member nations for the most part. AKA they still apply to imports from America!!!!!

    “So our tax policy now somehow compensates for not having nationalized Exxon? How is that working?”

    No, but then again their is corruption here beyond the tax system. Being what Bush did to the minerals management agency and the BLM.

  39. #39 by cav on February 7, 2012 - 10:54 pm

    Sometimes it seems as though cause and effect are reversed; the money doesn’t disappear because of the chaos, the chaos is engineered to make the money disappear.

    See; The Big Shitpile

  40. #40 by brewski on February 7, 2012 - 11:01 pm

    27 countries have agreed to have no tariffs among each other and you use that as a case FOR tariffs?

  41. #41 by Ronald D. Hunt on February 7, 2012 - 11:27 pm

    When we are included in that list I will give a damn, until then we are just stupidly putting ourselves at an international disadvantage by not responding in kind.

  42. #42 by brewski on February 7, 2012 - 11:30 pm

    OK Mr. Smoot Hawley

  43. #43 by Ronald D. Hunt on February 8, 2012 - 1:50 am

    Suggesting that we should tariff China and Europe as they tariff us is a might bit different from what that Act did.

    And the situation is more complex now, China is engaged in active currency manipulation, Trade “partners” are engaging in market dumping tactics to kill competitors, VAT taxes are often used as backdoor tariffs by increasing the rate on goods that have their value added abroad.

    We are not playing in a fair game, Yes working towards free trade is a fine goal. But if we simply give everyone access to our market without getting the same access to their markets in return then we are simply being taken advantage of.

    And what makes you think anyone is going to give us equal standing in trade if we have already given them what they want. Have ever thought that maybe if we tariff-ed China and Europe as they do to us that they might come around and be more amenable to real free trade agreements, as opposed to our current abusive relationship?

    Maybe if John deer had to pay a 45% import tariff to send tractors to the United states like they had to when shipping trackers to China they might not have opted to move their factories to China from the United States.

  44. #44 by cav on February 8, 2012 - 8:24 am

    And what makes you think anyone is going to give us equal standing in trade if we have already given them what they want.

    brewski

    Such a common sense question, it really makes one wonder why Obama never was affected by it.

  45. #45 by brewski on February 8, 2012 - 10:14 am

    I still don’t understand how simplifying our tax code to move it up from being the 69th in the world is going to hurt our tractor sales in China.

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