Friday, February 27, 2009

Era of Responsibility?

I'm sorry but I'm having a hard time concentrating on anything other than this budget travesty. We'll get back to medicine soon enough. But, my God. What just happened this week? President Obama just got done spending over a trillion dollars of money he doesn't even have yet.

But the thing that pisses me off is the faintly scolding tone to his rhetoric. We hear about how now is the time to rectify past sins, now is when we will atone for the profligate ways of the "rich" over the past 10 years. Listen to his words:
"There's nothing wrong with making money," Obama's budget document said, "but there is something wrong when we allow the playing field to be tilted so far in the favor of so few."

Now what exactly does this mean? What is the implication here? That the unequal distribution of wealth in the United States exists because of nefarious, unfair tax codes? Really? In all seriousness? You mean the disappearance of the American middle class has nothing to do with de-industrialization and the failure of our nation to come up with some sort of transitional paradigm that would replace those steady, well-paying blue-collar factory jobs that got shipped off to Mexico or Asia? That all we have to do is take more chunks of money from those lucky enough to find themselves in the upper echelon of earning potential and everything will be just fine?

President Obama, despite all his avowed intellect and perspicacity, is making an irrational leap of induction that goes something like this: since we have entered a down cycle unlike anything we have seen in this country since the 1930's, capitalism must be fundamentally flawed and the solution is now to transition as quickly as possible to a nanny state and an unabashed redistributionist tax policy. The crisis we face is presented in overly simplistic, either/or terms-- either you are an avaricious, selfish champion of the sort of capitalism practiced by Americans for a hundred years and obviously led to our current dire straits or you now see the light and realize that only the federal governement can protect you, only the federal government can judiciously decide how we allocate our capital. For all of Obama's supposed "nuance" and "pragmatism", this sort of presentation isn't nuanced or complicated at all; it's pure propaganda for a leftist state.

Read through his opening remarks on the 2009 budget. After breezily running through examples of the intransigence of individuals left to their own devices he says, "at this particular moment, government must lead the way", as if there are no other options. You screwed up America. Now Daddy is here to put us all on the right path. Daddy will figure it all out, don't you worry. And the brazenness with which he brandishes his Big Government entreaties is utterly shocking.
We need to put tired
ideologies aside, and ask not whether our Government
is too big or too small, or whether it is the
problem or the solution, but whether it is working
for the American people. Where it does not, we
will stop spending taxpayer dollars; where it has
proven to be effective, we will invest. This is the
approach, for example, we have begun in allocating
funds to education, health care, and national

Again, he disengenuously presents himself as Pragmatist (i.e. "whether it is working..."), and then follows it up with actions that are ideologic rather than truly pragmatic. Read the second two sentences in the above blockquote again. The implication is that this regime will spend and spend and keep spending and later on, when the results trickle in, maybe they'll stop throwing around tax payer coin on those things that didn't work out so well, come what may. That's astounding. He's saying, "we're going to throw billions of your money around, some of it may stick, some may be wasted, we'll just have to see", and calling himself a pragmatist while he does it. What the hell, it's your money anyway, he seems to be saying. It's false and misleading and if you disagree with him, then you'll be held accountable for the impending "catastrophe" (which apparently is avoidable only if you fall into line with the Plan).

Listen, I'm not a Sean Hannity/Rush Limbaugh-esque conservative. I hate those guys. I'm not old enough or curious enough to know how a Conservative is "supposed" to act and think. All I can do is interpret the events of my life and form political opinions based on some sort of fusion of subjective and objective data. That's how I function. The Bush Presidency was an unqualified disaster on many fronts and certainly bears a large share of responsibility for our current state of affairs. I'm not advocating for The Republican Party. My stance on most social issues leans rather leftward. The neo-cons and the flapping jaws on FoxNews who have seized the mantle of "Conservative Gatekeeper" have alienated so many younger, upwardly mobile people from my generation who, from a fiscal standpoint, would seem to represent the future of the GOP, but are turned off by a party now fronted by Rush Limbaugh and Sarah Palin and Ann Coulter. It's sad, really.

With wealth comes great responsibility. Obama is correct on that count. Society falls apart if life degenerates into a relentless, Hobbesian battle for the spoils between competing individuals and factions. We need schools and safety net health care and adequate roads and a strong national defense and our federal government is best suited to provide them. But why is it that this administration equates a man's obligation to society with how much he gives to the federal government. It's a "New Era of Responsibility", he says. By giving more, the rich will finally fufill their responsibilities. Why is this the only option? Why would anyone in their right mind think that the federal government is best suited to efficiently and cost effectively solve all the problems of mankind? Where in history is this evident?

What about the "rich" man who is a doctor in the community and provides free care to all the late night ER admits that end up on his service. Or the local attorney who gives thousands of dollars to the public library for the creation of a new children's reading room? Or the bank vice president who endows the local symphony? How will charity and local endowments be affected by this new tax code? You want to arbitrarily define "obligation" as 40% of what I earn, fine; but let me at least direct 10 percent of that to a charity or needy cause of my choice. Sending more to fund this wasteful morass in Washington DC is simply imtolerable.

You see, this isn't just a tax hike. What's happening now is epochal. It's societal reconfiguration. It could potentially change us on an ontologic level for generations, in terms of how we define success and obligation and our relationship to the at-large society. I know, that sounds like outlandish hyperbole. But listen to the content of the words coming out of Washington. Insidiously (and I say insidious because our President was elected under the guise of being the 'pragmatic centrist'), this brand new Administration has launched an all-out assault on the very form of capitalism that allowed this country to ascend to its heights of power, wealth, influence, and innovation. We're going all in with Keynesian economics. There's no turning back after this budget. Time will tell if it's justified.


shadowfax said...

Um, for "epochal" change, it's really not so much, because in most cases, the tax rates are simply going back to where they were in the Clinton era. Seriously. For all the hyperventilating about the "record increases" and "redistribution," what is basically happening is that the Bush tax cuts are being allowed to expire or rescinded (in the case of the estate tax). It is true that the disallowance of certain deductions for high-income filers goes further than was the case under Clinton, but the taxes proposed by Obama are nothing new, and are far, far less than were in existence at the beginning of the Reagan era.

I've always believes that government fiscal policy should be rooted in the simple statement that government must be paid for. You can have a big or small government, and that's a fair debate, but whatever size you have, there must be a tax base that will eventually pay for it. Obama's so-far modest tax increases will go a small way towards repairing the huge structural deficit run up by Bush. Further increase in taxes and decreases in spending will be needed to bring the budget back in balance, as it was in the beginning of the Bush administration. Obama has set a cautious goal of getting halfway there in four years. Maybe he can do it -- I have my doubts.

But really, take a deep breath and relax with the whole "death of capitalism" theme. We've seen much higher tax rates over the last fifty years, titled much more against the rich (think highest marginal rates over 70%), and not only did capitalism survive, the GDP grew like gangbusters.

Jeffrey Parks MD FACS said...

It goes beyond taxes Shadowfax; you know that. He wants to restructure this country. No more oil. No more coal. Wind power and electric cars. Free college. Universal health care. And we're commiting to this government-led paradigm without concrete plans. And that's maybe the idea; commit so hard to an "idea" that no future administration, republican or otherwise, will be able to do much about it. It's more than the taxes. I'll pay another 10-15 grand a year. I'll live. (My local charities may see a hit, however). But this country will be a vastly different place in ten years and I think the audacity of Pres Obama to do so much so soon is rather startling. BTW those 70% tax rates were a joke. Read about it. No one actually paid 70%; so many loopholes/tax shelters etc.

Death of capitalism is maybe a little over the top but there will be real life repercussions to this bill. Small business owners (private practice physicians) will hire less, defer renovations, take fewer chances. You'll see....

joegrind said...

I tend to follow the middle of the road politically, and don't necessarily believe that I need to first reckon 'what's in it for me'. With all the talk of BIG government from the Right, government grew exponentially high compared to services rendered. Yes, I suppose the DHS has kept us safe, and Sadaam has been removed...these are all good things. You say no more oil as if that is a bad thing. The steps putting in place now, are meant to wean our dependence of oil, which WILL eventually run out. I see absolutely nothing wrong with allowing everyone to get a free education, as long as it's good quality. Small businesses as you state may hire less, but they will also be saving on health care. Why is it a good thing for health care to be beyond the reach of over 48 million people? If your local charities take a hit from you, so be it. I will continue to give what I have out of benevolence. For the all the rhetoric from the right, I have yet to hear any other solution but tax-cuts. This was done in 2001, this contributed to the current crisis.

Anonymous said...

Too bad I can't leave my practice to my child in the form of a trust. Why is my child going to have to pay 55% to inherit my practice, when he has had to work so hard to get here in the first place?

Anonymous said...

Also, as far as oil goes. There is enough oil under Sakhalin Island to fuel the entire world for 40yrs. It will be online within 3-4yrs. Now, should we take a Manhattan project style effort and look for more efficient ways to power things. Most definitely. However, taxing oil to fund special interests is abhorrent. Next time you buy carbon credits to offset your travel, follow the money; it is probably going to your rich "green" banker.

Anonymous said...

Too many special interests with snouts in the trough for any of Obama's nonsense to take root.

Sometimes I think that without illegal immigrants USA would be screwed. Too many average joes (including doctors) have inflated expectations of what they are worth.

Plenty being spent already. Emphasis should be on getting quality. Budget neutral reform- don't mock it if you don't want to pay more tax!

HMS said...

It’s never a popular thing to raise tax, especially among the well-off from whom you can almost certainly count on a strong objection. With the economy in such a sorry state, unemployment rate sky-high and the nation heavily in red and still involved in two costly wars (not to mention other pressing domestic needs), the tax increase is out of necessity if not desperation. It is also out of necessity (rather than a matter of unpopularity or right or wrong) to move aggressively to stimulate the economy back to life, even at the cost of stepping further in red. The alternative is far worse than we probably realize: Japan’s decade-long slump is a prime example of failed economic stimulation.

Obama is steering us toward a generally right direction involving changes that we have never had before. With private interest groups pulling us from both within and without the political structure, no one knows how the healthcare reform, education reform, green energy and other initiatives will eventually play out. In contrast to his predecessors, though, this administration stresses accountability above all else in hope of placing politicians (POUS included) and whoever also involved in the reform on the spotlight and their actions under public scrutiny. This is an excellent move given the great unknown in front of us and the drastic actions we are taking.

If we liken credit to blood volume, with credits frozen, banks faltered and industries shaken, think of the country as hemorrhaging and on verge of hypovolumic shock, organ damage and DIC. Exaggeration? Just check out recent news articles.

Anonymous said...

How to step on the brake, reverse direction and lead your country back to the right track after more than eight years of mismanagement?

The contest and the race is ON.

Anonymous said...

You ever play Baseball Buckeye?? These are just the teaser off speed pitches to set up that split finger down and away when the counts full...Just wait till they take that cap off FICA taxes...I mean why should rich guys only pay Social Security taxes on the first $106,800??? Most people don't make 1/2 that much...And as a Surgeon in Private Practice, you know the real rate is 15.3%...

Anonymous said...

Like the man said, it's NOT about tax, Frank.

There is nothing wrong with being financially well-off. Surgeons earn their wealth fair and square.

Resident Anesthesiologist Guy (RAG) said...

We're seeing the true side of this man. Uncontested, leftist, pro-government, anti-capitalism nut. I liked him once, a long time ago. I saw what he was becoming once Hillary was out of the way. Now I'm scared as hell that I'll have too much "responsibility" to actually take care of my true responsibility - my family. Not greedy welfare babies and handout happy hippies.

Anonymous said...

Hum? D'OH!

HudsonMD said...

i agree drackman. Obama wants to remove the cap on FICA taxes and make it unlimited. As a small business owner that is an additinal 13% you are getting taxed on. Additionally decreasing the write-off for mortgage interest and increasing our tax rates!!! You are talking about paying an additinal 20-30% in taxes!!! Everyone needs to decrease their taxable income. One great idea is a DB retirement plan for your small business.

joegrind said...
This comment has been removed by the author.
joegrind said...

more and more....the comments are sounding similar to the 'radical right' that was touting Obama as a Muslim, terrorist and socialist...The US wasn't socialist under Clinton when the tax was @ 39%....nor were we socialist under Reagan when the CG tax was @ 20+ %.

MiamiMed said...

The Japanese spent over $3 trillion on stimulation platensimycin. They also lowered interest rates to essentially $0 like we have now. Perhaps artificially low interest rates and government stimulation act to make the economy function a bit like a bipolar. The initial stimulation overdrives the economy, leading to housing prices outrunning incomes, inflation in healthcare, education, etc... When the thing is over-run, and the depression hits, the sluggish economy tries to drug itself into more stimulation with more rate cuts and stimulation, but we're never going to get that manic feeling back by raising taxes and spending money on random crap.

HMS said...

Much of Asia runs on a saving-based mentality, while much of North America and Western Europe, with the concept of "credits," run on a spending-based mentality. This is one of many factors that will affect the way regional economies will recover once the crazy storm abates. Hopefully we won't need to spend up to $3 trillion and hopefully the "random crap" (healthcare, education, clean energy, among others) will turn out to be sound and profitable investments 20 years down the road.

Oops, sorry for veering off the intended topic.

Anonymous said...

"It was once said that the moral test of Government is how that Government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped," ~ Hubert H. Humphrey

It's not quite a poem but simply a quote. It nevertheless reminds me of our worthy callings in spite of the what we do and in spite of the odds against us.

Anonymous said...

From global economy's stand point, we are literally facing the challenge of a lifetime.

Swift action is a must-have, and so are trust and gov accountability. It has everything to do with actions and reactions and nothing to do with ideology or cold-war mentality.

Anonymous said...

Buckeye Always look at your source:
In this case the WSJ

This is the reality if the estate tax:

Year Exclusion
Amount Max/Top
tax rate
2001 $675,000 55%
2002 $1 million 50%
2003 $1 million 49%
2004 $1.5 million 48%
2005 $1.5 million 47%
2006 $2 million 46%
2007 $2 million 45%
2008 $2 million 45%
2009 $3.5 million 45%
2010 repealed 0%
2011 $1 million 55%

Notice how presently your first 3.5 million will not get taxed one penny (granted down to one million in 2011). We might quibble about the minimum but the fact is it is 7 figures.
Otherwise shadowfax is correct, most of those taxes are simply a reinstitution of Clinton era taxes. Heck, I don't want to pay anymore tax either. I also don't want to go through a depression. You want payment in chicken's from you patient's? I don't know if Obama will help the middle class blue collar american manufactering workers. I do know Bush didn't give a $hit about them. I am not a big fan of the present stimulus, but frankly I would rather have it go to the middle/working class then last fall's 350 billion dollar no strings attached to the financial industy. By the way 20 billion of that went to wall street bonuses. Thanks Mr. Paulson. Credit is still tight. Wall Street didn't even bother to use KY on us. Obama is trying to pull off a mini-New Deal, maybe it will work, maybe it won't. I give it better odds than Hoover's example of doing the opposite however. I hope the republicans do come up with a viable alternative to what they now have. Bush was not a fiscal conservative, he was more fiscally "liberal" than Clinton. This is in the setting of massive tax cuts. You wonder why our deficit has mushroomed? When the republican party starts having true fiscal conservatives and follows the constitution with respect to religion (ie. separation of church and state), that is the day I will listen to them again. It took a decade to get us into this mess. It will take more than a few months to get out of it. Maybe Obama will not get us out of this mess. I give Obama better odds than McCain with his financial wizard, Phil Graham. In case you didn't know, ole Phil is the architect of the destruction of the Glass-Steagall act which likely would have prevented our present financial meltdown. Give it time.

Anonymous said...

Be discreet and get a life, Frank.

Jeffrey Parks MD FACS said...

Anon 12:55 AM-
I agree with some of your points. What I don't like is the false logic employed by these two juxtaposed sentences:
"Heck, I don't want to pay anymore tax either. I also don't want to go through a depression."

Theere's a gap in the logic in thinking that raising taxes on the "rich" is the only way to stave off a depression. You've been brainwashed. There's no compelling economic sense behind it. It's akin to Conservative talking heads decrying the 'moral breakdown" of America just because two gay guys who love each other want to get married. It's pure propagandistic drivel. I mean, why not sequester 80% of income from the upper 2% if redistribution is the only way to avoid Depression II?

On the other hand, there is no legitimate opposition party in this country right now. The antics of this past weekends CPAC (conservative pol action committee) conference in DC were embarassing. As long as Ann Coulter and Rush Limbaugh (in his Johnny Cash black barely buttoned button-down shirt and chest hairs splayed) continue to be the featured keynote speakers at Conservative "revival meetings", then the GOP will continue its sad slide into irrelevance....

The Happy Hospitalist said...

When ever you tax something, you get less of it.

For every trillion dollars you tax out of the economy, that's 1 trillion dollars less you spend on the economy.

Anonymous said...

"the false logic employed by these two juxtaposed sentences:
"Heck, I don't want to pay anymore tax either. I also don't want to go through a depression."

Anon 12:55 here
NOT false logic at all. I will say it again, all Obama is doing in general is rolling back the taxes to the Clinton era. Remember those days? Budget surplus, US companies raking in profit, increasing stock market, oh yeah and a stained blue dress :). If Bush had tried to control spending, decrease the deficit, etc, etc, that would be another story. He did none of the above. In hindsight (which I agree is 20/20), this was a tax cut that should have never happened. Raising taxes on us is not going to stave off a depression. A stimulus may...or may not. Did you see the news today, ANOTHER 30 BILLION TO AIG. You want to be angry at somebody, be angry at the unethical slimey wall street crowd (see me response to your HENRY post), be angry at mortgage brokers who gave out loans to peole who clearly couldn't afford them (and the people who took out the loans), be angry at bank executives who gave themselves 20 billion in TARP money as bonuses, being angry at outright theives Madoff, be angry at both democratic and republican congressman who took bank lobby money that gutted depression laws, be angry at Phil Gramm who personally wrote the destruction of the Glass-Steagall act, be angry at George Bush who presided over this international disaster.c People should be in jail and there ill-gotten wealth taken, but it won't hapen. Hell Madoff is sitting under "house arrest" in a multi-million dollar penthouse. Maybe the stimulus will be a disaster, we will find out. But what is going on is not a "epochal" change.

Jeffrey Parks MD FACS said...

It's not the same thing Anon 7:18. He's rolling back the taxes AND increasing the capital gains taxes (you know, taxing income derived from investments of money that was already taxed when you first got it). And he's doing it for different reasons: level the playing field, time for the rich to pitch in a little more, etc, at a time when the country can ill afford for the upper middle class to stop spending/comsuming in response to higher tax brackets.

But you're right about the bailouts. And my point from some other post was that--- why was it that the first thing the public money went to was private companies who screwed up? Why is it that AIG and GM and Wall St got first crack at the federal coffers? But now that we need universal health care and cleaner energy and the emergence of a 'green' economy, the funding for those things (worthy, noble aspirations) will depend on people like me and thousands of other HENRY's breaking their backs. Where is the 70 billion dollar check to prop up a national health care safety net like the one AIG got within 12 hours of requesting it? It's all absurd and twisted the way this social re-engineering has been tied into the "capitalist crisis" and is getting paid for by people like me rather than the perpetrators of this financial mess. Why was the government so quick to shovel over a trillion dollars of public money into the cesspool of failing brokerage houses and banks and car manufacturers? The answer to that question might make us, as a country, a little uncomfortable; teleologically and existentially-speaking, the implication of our actions the past three months is a little harrowing.

The Happy Hospitalist said...

This is what happens when government spends your money. Government spends money based on political capital and nothing else. To believe otherwise would be naive.

Anonymous said...

Anonymous #737.2B (LOL) says:

You know, in Germany the same traffic violation is fined in proportional to one's wealth. (Rumor has it that some billionaires have been billed 50K Euro per tick!) $500 simply doesn't mean the same thing to people with different levels of income.

Germany has recently declined financial aid to specific neighboring countries. For better or worse, aids should be specific, weighted and (if possible) WITH conditions (quite unlike Bush's $158B ESA). EU has pledged $3,17 trillion worth of aid to needy countries or organizations, but they seems to give it gingerly.

Happy Hopitalist, you don't suppose gov should print money out of thin air, do you? Of course taxing ppl is one of gov's functions (and one of our PAINS).

Bush's ESA-08 vs. Obama's ARRA-09

joegrind said...

This "Era of Responsibility" topic has certainly pushed some buttons. Nobody likes to pay taxes, I guess in Utopia, all the roads, schools and hospitals will be efficient enough to pay for themselves. Until, however, we get to this so called land of Utopia, taxes are inevitable. Maybe a flat-tax (I shudder) where someone making $2mill. per year is paying the same 20% tax rate as someone making $30K a year would be best? Why not, he slaved more in his office so let him keep more of his hard-earned money. Or better yet, no taxes, but we each pay for the services we use, we pave our little sections of only for the street lights we approach etc. Fair?
History lesson: in 2000 CG tax was 20% Income was 39.6%. Through 2001-2006 these rates were adjusted to 15% and 35% respectively ( Still not convinced those tax cuts help put us where we are? Read the last 3 paragraphs form the US Treas. All these tax increases were in effect 10 years ago. 10 years ago. wrt the HENRYs post, we are all going to be taxed later down the road...but we will also be bleeding less...paying less on healthcare, less on energy, less on education. These are investments for your children and grandchildren. You wouldn't treat a gsw with a bandaid correct? First step in treatment of said gsw: stop the bleeding.

Anonymous said...

Hear hear!

note: GSW (gun shot wound)

The Happy Hospitalist said...

anon 822,

Um. Where have you been? They are printing money out of thin air. That's why we are so screwed.

Spending it with only the Chinese to back it. What do you suppose happens when the trillions of dollars the Chinese are holding in foreign reserves become worthless do to the inability of the US government to support the dollar. They may decide to cash in their chips and go home.

The fact that neither democrats nor republicans can control their ability to spend my money is a testament to the inability of government to act for the collective good. If governments, were in fact able to spend money efficiently, poverty, crime, illiteracy and all others social evils would have long ago disappeared.

Spending is based on political capital, not moral. One need only look at the financial crimes of the century currently exploiting the American tax payer to know that it doesn't matter which party is in control, my money is theirs to waste on their political friends

Anonymous said...

Anon 12:55 here:
Joegrind beat me to the punch here, but he is correct. You need to look at your sources buckeye. WSJ or whoever made that slide has an axe to grind (to be fair so does You've read enough science papers to know you have to take stats in context.

Jeffrey Parks MD FACS said...

joegrind, my friend, if you were sitting across from me I would be tempted to splash your face with a cup of cold water, to awaken you from your slumbers. You suffer from the delusion that our federal government is this benign, beneficent entity that will always do what is best for its citizens. Would that it were so!

Your posts seem to imply that you think increasing the government's bounty via taxation will necessarily mean that it will use those funds more wisely and more efficiently. Your premise is: give the government more money because it's an investment in our children/grandchildren etc etc. It sounds nice. But surely you are not naive enough to think that that's what actually happens in the real world?

You see, here's the thing. The money has ALWAYS been there. (See the bailout of banks/automotive industry et al). When there's enough pressure (i.e. special interests/lobbying) things get done. AIG needs 100 billion? Sure thing! Here you go! FannieMae and FreddieMac are on the verge of collapse? Take the federal checkbook! It's yours!

But healthcare and green energy reform? Bill me later.

What's happening is the Obama administration is using the fear and uncertainty of a capitalist down cycle as a distraction, allowing him to piggyback societal re-engineering onto the federal spending orgy. The difference is that he's not paying for it. I am. And I will continue to do so for as long as I live. And if you think tax cuts led to our current economic crisis then the 2009 Gullibility Award is yours to keep. The money has always been available. Don't kid yourself. Three years ago we could have declared a "Health Care Crisis" and called for 100billion to help construct hundreds of new publicly-funded safety net hospitals across the country to serve those without insurance. But we didn't. The American public probably wouldn't have supported it anyway, so we're all to blame. But giving the Washington pols more money now doesn't fix a damn thing. (Unless your idea of overhaul involves publicly funded tattoo-removal parlors and high speed trains from LA to Las Vegas). It's an act of spurious credulity, willful suspension of disbelief. It's an act driven by vague, hopeful ideology....

And the first thing you do for a GSW is not "stop the bleeding", FYI. Airway, Breathing, Circulation (ABC's).

Anonymous said...

With respect, Sir, save your cup of cold water.

Please read each other's comment in context, rather than out of context and with grain of salt, if you must. Otherwise, we will keep on pecking each other rhetorically over words or phrases while ignoring the larger picture.

From medical and non-medial alike Joegrind's "stop the bleeding" means maintain vitals and is the "C" part of A.B.C. equation, isn't it? The analogy means get the credit flow going again before the economy irreversibly withers away.

Sorry if this comes out sounding like stepping on people's toes.

The Happy Hospitalist said...

It seems to me like the government is doing a terrible job of getting credit to flow again, inspite of their trillions of dollars of free money?

Why do you think that is?

Anonymous said...

Allow me to bounce you back with another question:

Where will this “don’t trust the Fed” mentality lead us?

The credit sewage has backed up for more than a year and Obama has been in office for a little more than a month. The worse of credit turmoil and domino effect is yet to come.

The Happy Hospitalist said...

I don't trust that the fed can fix it. It will fix itself in due time. Like all things economic always do. Like all business cycles. The current raping of the tax payer will only delay what what will happen anyway. The bankruptcy of bad businesses.

What makes you think that the government has more power than 300 million people do to efficiently allocate capital?

I think it was Ayn Rand who said that all depressions are caused by government intervention.

There's going to be lots of pain no matter how much money the government spends. But the pain will be worse for far longer the more we delay the inevitable

joegrind said...

No one is advocating growing Government beyond the giant it is right now (doubling in size over the last 8 years mind you). But I refuse to believe that the situation this country is in at the moment is a 'capitalist down cycle'...we all watch CNBC too. The 650K that joined the unemployment line in January beg to differ. This is a global problem verging on depression. All my previous comments were to try to enlighten you on the proposed increases in taxes. These increases are for the most part the sunsetting of previous tax cuts enacte by the previous administration. It does not mean the end of capitalism. Capitalism was alive and well in the Clinton years. Since you would rather us not invest in the future, what would be the best solution? Cut payroll taxes? People have to be employed to get a payroll. I agree with you, Government has never been anything but inefficient. Can such capital giants as Microsoft or Google take us out of this 'capital downcycle)? Or maybe you believe as was said in September that '..the fundamentals of our economy is sound' Because the previous Government put us in this predicament, should we shun Government for all future generations? Not everything Government touches becomes necrotic. The 4% tax increase is what is being asked. Everyone is being asked to tighten their belts...including Government (pay freezes etc). Offer a solution and move on from the name-calling that the Party of No is subscribing to. Will tax-cuts free up the credit market? Maybe it will bring world peace as well. I didn't hear an outcry when the medicare payouts were kept as physician reimbursements would be cut as the previous 3 budgets proposed.
This is not a 'capitalist downcycle' when bad decisions only hurt the decision maker. Did all the newly unemployed invest in hedgefunds or buy million-dollar mansions?
I hear the same rhetoric on Fox everyday, switch the channel every now and then.

The Happy Hospitalist said...

You say it's not an economic cycle. How do you know? It very well could be the 60-70 year economic cycle known as the "K Wave"

joegrind said...

Whether it is a cycle or not..does that mean doing nothing whatsoever, allow 60% of the economy to fail and will bounce back on its own. If you subscribe to the 'K-wave Theory' look at what 'profound changes' were enacted to take the economy out of the winter depression. But no, I do not believe in this theory...cycles and harmonious motion can be found in anything my opinion.

Anonymous said...

Recent news and fell-off-the-chart numbers do suggest that we are way off the usual cycles.

The Happy Hospitalist said...

if recessions were avoidable, we do we have them every 10 years? Should we have not, by no figured out some magical government plan to avoid them?

And if they aren't avoidable, then why do we always find it necessary to do something about them.

Perhaps the reason we keep having recessions is the government intervention in the first place.

The Happy Hospitalist said...

anon 1:30. Perhaps we are falling off the cliff on the way down, because we climbed up the cliff to high.

We aren't falling into a hole. We are falling back to median.

The faster they rise, the quicker they fall.
The economy is doing exactly what it's supposed to do. Deflate the excess.

HMS said...

The fear is that with so many bad numbers and amber lights going crazy, we will end up in an economic slump (ie depression) for years, if not a whole decade.

Theoretically, the economy will eventually recover. The uncertainty lies in the "how" and "at what cost" parts.

joegrind said...

Yes.. evil Government. If it wasn't for that pesky government-mandated sterile pratice thingy or annoying vaccine programs, the ills of society at the time would have only kept the 0.05% that were immune alive....this would lead to a global population of 100 million...and then yes...we wouldn't have global warming, overpopulation...we probably wouldn't even need healthcare...survival of the fittest, baby.

HMS said...

It'd be more than unfortunate if the economy finally recovers but only after a majority of private or gov entities gone out banana. That --- a long and unrecoverable depression --- is something we cannot afford to have. Historically last time that happened it took a World War (WWII) to rebuild and restart the whole thing. Ideally what we hope to do is using healthcare + edu + clean energy + etc as a dual-purpose medium (invest + unclog the credit) to jump start the credit flow before the infrastructure collapses.

joegrind said... the risk of being taken too literally last post in its entirety is sarcastic.
(gsw= we all know our ABCs)

Anonymous said...

That, of course, will take a lot of effort and investment (using tax revenue and money that gov doesn't actually have). That's why accountability is on top of the list in dire time like this.

Anonymous said...

Since many of us are in health care or science, here is a news article that you'll probably find interesting. Whether it will work or not, i find it in sharp contrast to last administration's attitude and approach.

How can we better spend the annual expenditure of $2.5 trillion on health care? It's a necessary but worthy contest. (NY Times article)

Anonymous said...

Thanks goodness, the CPR [seems to] work.

“Bernanke, Obama, Geithner and Summers were intelligent enough to know that the right-wing crowd was crazy to say, ‘Let the banks go bankrupt,’ and confident enough to ignore the left-wing ‘Nationalize the banks’ crowd”....

joegrind said...

@Anon. 12:35
wow...this thread is 5 months old....feels more like a year. I believe most of the posters here have retreated to the woods (a la 'Goin Galt) or are busily looking for Obama's birth certificate....or more likely stocking up on guns as they fear that this is just the calm before the storm. Until then, I'll continue to buy these stock market deals (up 49% since March 9) and look for real estate to invest in.

Anonymous said...

Re: joegrind

You bet.

"Be cautious when others are greedy; be greedy when others are cautious," - Warren Buffett

Anonymous said...

Investment aside, i find this a golden opportunity to observe how folks react to crisis.


to banking
to auto
to energy
to health care
to education
to SS/welfare
to agriculture
to transportation

[not to mention defense and aerospace] all need some sort of bailout or reform/overhaul.

The crisis is far from over for Americans.

Anonymous said...

TARP seems to work! Thus far, that is.

Looking back, what an [insane] roller coaster ride that has been. Meanwhile, the new administration is chipping away the old establishment through various reforms. Cautiously optimistic.