– via Hyscience
Sarah Palin blasts Obama for defending the QE2 in her new post titled “Obama’s Clever Way to Punt the Tough Calls: Driving the Dollar Down”:
In his press conference on Monday, President Obama responded to critics of the Federal Reserve’s decision to start a new round of quantitative easing – a fancy term for printing money out of thin air. He claimed this move would drive up U.S. growth rates. He also warned that “the worst thing that could happen to the world economy, not just ours but the entire world’s economy is if we end up being stuck with no growth or very limited growth.”
The latter is certainly true. It would be a global disaster if the U.S. economy remained permanently stuck in the mud. But the same cannot be said of his claim that the Fed’s experiment in pump priming would automatically lead to increased economic growth. By the time this experiment is over, QE will make us queasy.
Will driving the dollar down in this way do anything to boost U.S. exports? The short answer is not really. A weaker dollar will temporarily boost exports by making our goods cheaper to sell; but inevitably other countries will respond in kind, triggering the kind of currency wars economists are warning us about. It’s precisely to prevent this scenario that World Bank President Robert Zoellick recently came out in favor of some new type of gold standard or “international reference point.”Will QE2 then at least boost domestic investment? No, again. As I explained in my speech in Phoenix, the reason banks aren’t lending and businesses aren’t investing isn’t because of insufficient access to credit. There’s plenty of money around, it’s just that no one’s willing to spend it. Big businesses especially have been hoarding cash. They’re not expanding or adding to their workforce because there’s just too much uncertainty created by a lot of big government experiments that aren’t working. It’s the President’s own policies that are creating this uncertainty.
And Peter Schiff notes that Palin is right in his video blog yesterday. Take note of the rising numbers for staples…as Glenn Beck predicted:
Oil this morning hit a two year high before closing negative on the day but some commodities managed to hold their gains, the CRB did hit a new high today, it is making, again, a string of successive new highs, new all time high for cotton, sugar hit a contract high, soy beans…soy beans were up over 50 cents a bushel closing at 13.29 a bushel. We actually have beans in the teens. I’ve never even seen this in my adult life, I think it was the rallying cry in the 1970’s bull market. It’s back and I think today was just a reversal Tuesday. Look at the bond market tho, look at the yield on the 30 year bond rising to 4.25 this is the highest yield on 30 year treasuries in six months. And as I mentioned before I think the bond market is slowly eroding, certainly at the longer end of the curve. The 10 year was weak today but I think all our longer term interest rates are moving up as Quantitative Easing is already backfiring on the federal reserve. It is producing higher, not lower, interest rates.
~~~The world is throwing a lot of criticism on the fed now for QE2. I think the harshest criticism is coming from Germany. Germany, which understands inflation quite well, called Ben Bernanke clueless. I’ve used that word too so maybe the Germans are paying attention to some of my writings. The Russian central bank was critical.
Obama was in India, I think he’s still there, and he made a speech in which he’s trying to defend the fed. And this is really kinda funny because first of all he said that he doesn’t want to comment on fed policy because he doesn’t want to compromise the independence of the fed, well, there isn’t any independence left to compromise. The irony of it is that normally when its the fed acting tough, you know removing the punch bowl, unpopular, raising interest rates, that’s when you don’t want to bash your central bank because you don’t want to create the impression that the government is putting pressure on the central bank to be too easy. Or to be easier. To not be be tougher. But when you have people asking Obama to criticize the central bank for being to easy! I mean that’s when he should be criticizing them because the federal reserve is acting really in concert with the government to facilitate government debt, to monetize government debt, that’s exactly when it should be criticized. I mean the whole thing is ridiculous.
But also Obama basically said that the fed has a mandate to grow the economy.
Well…where do you figure that out? Where did you get that mandate?
I mean there’s a dual mandate now for price stability and maximizing employment. But where is growing the economy? It’s not part of the mandate. And the fact is the fed can’t grow the economy. You don’t grow the economy by printing money but the fact that Obama A – thinks the fed has a mandate to grow the economy and B thinks they can grow the economy shows how clueless he really is. That the Germans were right.
He goes on to completely tear Bernanke a new one for his reasoning behind QE2…creating another stock market bubble. Plus he sends praise Ron Paul’s way. Paul is a nut, that’s for sure, but I can’t fault ALL of his idea’s and critique of the fed.
Instead of putting money into the economy more directly by cutting taxes our government is using the fed to print money out of thin air and making a bad situation worse.
It’s going to get pretty damn bad.
Let the ponzi scheming begin.
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SMORGASBORD: hi, YOU mention “give to legal citizens”.
NOW here I come again with this ” WHY NOT FIRST OF ALL CLOSE THE BORDERS”
THOSE ILLEGALS ARE STILL COMING AND CAN MAKE THEMSELF LEGALS THROUGH LOOPHOLES
IN THE SYSTEM ALREADY IN PLACE”; This is the number ONE PRIORITY,
DON’T ANYONE SEE IT?. bye
openid.aol.com/runnswim: may I point out about AMERICA’S ANCESTORS which create the wealth of AMERICA where SELF MADE MEN for sure, because they only use their brains and needs and
CREATIVITY to ACHIEVE the end product of wealth.
ALONG WITH HARD WORK Alone
You folks are wasting your time. No mater what evidence you produce, Larry is not capable of seeing facts or admitting he is wrong. He may not be a flaming moonbat, but he is a liberal and he has a lot of his own ego invested in his beliefs. You are rationally trying to get someone to see differently when they did not arrive rationally at their conclusions.
WE ALSO know that BILL GATES and some other very rich alike, will distribute their own money themself TO organisations in need that they choose,
not by giving it to THE GOVERNMENT, to do that charity.
SO why not trusthing the rest of AMERICANS to do their own charity of their choice?
instead of giving it to GOVERNMENT to distribute the wealth of the NATION.
@Larry,
I shouldn’t have said “ALL,” and it wasn’t meant as a personal assault. The point is that so many politicians and Hollywood elite are glaringly hypocritical when they make impassioned speeches about distributing the wealth but not living by example. Sure, Bill Gates is very philanthropic, but he can afford to be. But would he live on $100K a year to bring the destitute out of poverty? How many of our government officials would give up their government perks and voluntarily live under the same rules and conditions they want the rest of us to accept?
As for arguing “slogans” and such, surely you don’t demand statistics for every discussion, do you? Jesus used parables to emphasize the points he was trying to make, so why can’t we discuss principles without having to supply statistics? Do you not believe that large sections of our government have become bloated, inefficient, and unnecessary? Have you not lived in urban areas and heard people comment on how they’d love to get a government job so they could get great benefits and not have to work at a “real” job? I have lived most of my life in “blue collar” areas, and I’ve heard it easily hundreds of times. I’ve also spent a large portion of my career interviewing and hiring people for entry-level positions in food service and in technology, and have been appalled at the people who have willingly and happily told me that as long as they get their unemployment checks, they’re content to sit around and wait for their ideal job. That’s my first-hand experience at how safety-nets become handouts.
Regarding how you’ve benefitted from government spending programs: are you saying that private industry wouldn’t have resulted in the same progress and benefits? Government’s focus too often seems to be on results at any price, whereas private industry strives for efficiency. Besides, how much of government’s progress was built on top of individual and private enterprise foundations? There’s no doubt that government spending has produced results in many areas, but it’s naive to believe that the same results would not have come out of individuals and private industry. And given the bureaucractic and multiple administrative layers that excessively large government adds, do you not see the waste involved? There are very few things that government does that can not or are not already done by private industry at lower cost.
Our founders believed in a minimally-sized government that maximized and protected personal freedoms, and most conservatives today agree with that notion. The government we envision also removes the artificial barriers that prevent anyone willing and able to be industrious to build a better life for themselves, keep the greatest amount of the fruits of their labors for themselves, AND retain the right to give as much as they wish to charities of their own choosing. I don’t accept the defeatest notion that certain people are destined to remain in poverty despite their maximum efforts to escape said poverty. A great many individuals have escaped those very same conditions, and they will tell you that the key to escape is fostering the right attitude. People who believe they cannot improve their own lot do not work as hard (as a group) to improve their circumstances as those who believe they can. This country was built by people who had nothing but the shirts on their backs, yet they made their lives better. My grandfather was a dirt poor, illiterate migrant farmer from Italy who instilled in his children the importance of education and hard work. Those of his children who worked hard were successful, and the couple that didn’t just complained about how little they had.
I’m glad you are successful, but I think you overestimate the value that government added to your foundation. If you really believe that without government’s existence private industry would not have been able to provide the same foundation upon which your success was built, then maybe it IS pointless to discuss the issues of unnecessarily expansive government with you.
Jeff
JV, from past experience numbers won’t sway Larry either. He is very wedded to his liberal views.
@JV: Firstly, my “personal insult” remark was directed at Trooper and not you. He said that all liberals and progressives like to spend other people’s money and not their own.
With regard to the essence of your most recent post, above (#106):
Yes, of course. But we can’t have an intelligent discussion unless we have specific examples.
My favorite Jesus parable is the Good Samaritan, by the way. The one and only time where Jesus is asked, point blank, what must I do to be saved. He doesn’t say “believe in me” (that would be Paul — my least favorite New Testament guy); he says (using the Socratic method) be like the Samaritan (Samaritans being pretty much viewed as heretics, faith-wise; but this particular guy behaved much better than the guys who allegedly had the better faith (the Priest and the Levite) who ignored the suffering of the poor, wounded traveler by the side of the road. The Samaritan dressed the wound, loaded the traveler on his own donkey (or whatever), took him to an inn, and paid the innkeeper with his own money.
Now, individual charity is wonderful, but without comprehensive government programs, there will be huge cracks and a lot of deserving people will be left behind. I’m for universal health care, for sure. 45,000 people die in the USA each year because they don’t have health insurance. I view this as a national disgrace.
There will ALWAYS be people who rip off the system. Whatever system. People get so bent out of shape over individual examples of poor people bilking the system out of peanuts, but there is no outrage over the hundreds of billions of dollars in tax fraud by people at the top. I don’t fear being audited, because I don’t cheat on my taxes. I would add legions of IRS agents to have more audits and catch more tax cheats.
I don’t believe in punishing the deserving needy because of abuse by the undeserving needy. Again, however, without specific examples of specific programs, we can’t discuss it intelligently.
You raise unemployment checks. In the past 18 years, I’ve hired about 40 people for a small business which employees 10 people, including me. I only had to fire two people; this led to an increase in my unemployment assessments, but I thought it was fair, considering everything.
Here’s where I really disagree with you. Private industry virtually never invests in basic research. The molecular biology revolution which led to the cloning of the human genome grew out of Richard Nixon’s “War on Cancer.” Pharmaceutical companies invest relatively little in drug discovery, compared to what they spend on marketing and on developing drugs which are basically knock offs of existing drugs. Most true discovery-type research is government funded. When private industry invents something, it puts up road blocks to discourage competition. The NIH is a national treasure and defunding the NIH would be a national tragedy. Same thing for the NSF.
But the essential role of government in the success of entrepreneurs goes way beyond R&D. As I wrote before, government educates the workforce. Government originated and proved the value of the Internet. Government built the highway system and the air traffic control system. Government gives us clean air and clean water, public safety and parks, which makes our communities desirable places for our workforce to live. It goes on and on. The combined benefit of these is multiplicative, as one rises up the economic food chain. Those at the top owe much more of their success to government than do those at the bottom. Even in the case of a truly independent, “self-made man,” (e.g. let’s take an artist), he owes his livelihood to a critical mass of people with the financial resources to purchase his art, and they owe their resources to their educations and to all the other things which government does to create an environment in which they can earn a good enough income so that they have discretionary funds to buy art.
No, without government’s existence we would not have the foundation on which individuals can achieve their success.
– Larry Weisenthal/Huntington Beach, CA
Oh, crumbs. Made a boneheaded/absent-minded, scientific mistake. We’ve never “cloned” the human genome; what we did do was to sequence the human genome (#109, above).
– Larry Weisenthal/Huntington Beach, CA
@ilovebeeswarzone: #102
I don’t know how the political system works in Canada, but down here it is all about money and votes. The republicans want the illegals so that the businesses that donate to their reelection campaigns can have cheap labor. The democrats want the illegals so they can make them citizens so they will have more votes. The republicans caught on to that idea and don’t want the illegals voting for democrats, so they are for allowing illegals and giving them amnesty and making them citizens.
Down here politicians always wind up at the bottom or near bottom of every survey of the most respected occupations. They and the lawyers keep fighting for the least respected spot.
To be and stay a politician down here you have to throw away things like, “Do the right thing,” “Put the country first,” and “Ask not what your country can do for you; ask what you can do for your country” out the window and replace them with things like, “Me first,” “Where’s the money,” “Anything to get elected.”
@ilovebeeswarzone: #105
The rich don’t usually donate to organizations or start their own because they like to help people. They do it to keep from paying 70% in income taxes. If they earn enough, that is how much the government takes. The way the tax laws are written is that they can donate to tax exempt organizations or start their own. I am guessing they get a better break if they start their own organization or they would just donate to one.
Bill Gates got more in tax breaks than he paid to the United Nations, so he came out ahead on the deal.
@ Smorgasbord, #111:
Who currently has an income tax rate that’s anywhere close to 70%? The highest personal income tax rate is currently 35%, which applies to that portion of annual taxable earnings exceeding $357,700.
If the Bush tax cuts expire without any subsequent changes being made, the highest personal income tax rate will be 39.6% on that portion of annual taxable earnings exceeding $384,860.
@JVerive: #106
The government programs that Larry referred to that helped create wealth are just the opposite. Businesses creating wealth and needing more material, more workers, and expanding to other areas caused the need for roads, bridges, tunnels, etc. Without the capitalists creating more wealth there wouldn’t be a need for an Interstate system or other government projects because there wouldn’t be any expansion. They are the RESULT of wealth expansion. The government isn’t in the habit of building roads to places they hope will develop. The development has to be there first. Two exceptions are the road to nowhere and the bridge to nowhere.
@Smorgasbord: So tell me how private wealth expansion gave rise to the Internet. Tell me how it built schools in low income areas. Tell me how it discovered Taxol. etc.
And even where private sector development was the stimulus for something, e.g. the Interstate highway system, the presence of infrastructure (human and material), once put in place, made it possible for an exponential number of new businesses to arise and thrive.
– Larry Weisenthal/Huntington Beach, CA
Nobody is saying that tax monies haven’t resulted in beneficial discoveries, schools in poor areas, etc. The fact that government CAN collect taxed and spend them on beneficial programs, but whether government SHOULD do so, particularly at the federal level.
For example, the federal government may have a constitutional duty to ensure educational opportunities for all citizens, but that doesn’t mean that the federal goverment has to fund public education. Duties like these are handled more cost-effectively at the state level. The federal government can even mandate minimum requirements, but we could save a lot of money by cutting out the bureaucracy and administrative functions at the federal level. States could then let their citizens decide on the appropriate level of funding for public education. Education is just one example of the many areas in which the federal government injects excessive costs where they just aren’t necessary.
Of course I understand the reasons given for the federal government’s role in education, primarily that by pooling all tax revenues into one fund, regions with lower incomes (and therefore lower income tax revenues) can’t afford to spend as much per student as regions of greater affluence, but that is always going to be the case unless private schools are outlawed (good luck getting legislators to agree to send their students to public schools, where the unwashed masses and unsophisticated inner-city folks send THEIR children.)
If government control of revenue and spending was the solution, states like California, New York, and the Prarie State of Illinois (that I call home) should be gleaming examples of how things should be done. Instead, they are glaring examples of how things ought NOT be done.
Jeff
@JV: There’s primary and secondary education and there’s college, post-graduate, and professional education. I’ve been blessed with a large number of excellent University of California (Berkeley, UCLA, San Diego, and Irvine) science graduates, without whom I’d have been dead in the water, long ago. The University of California system is a shining example of what a partnership between state and federal (to the tune of more than 3 billion dollars a year) governments can do. Berkeley has had 66 affiliated Nobel laureates. The presence of major, federally-supported research universities, both public and private (e.g. Stanford; the “anchor” of Silicone Valley, also receives generous federal support), is an important component in the founding and successful operation of many of the nation’s businesses, both large and small. Few technology businesses could survive and thrive without a well educated workforce.
A large problem behind the current problems of California (beyond the recession) is the citizen legislative initiative process. Many of the most important spending decisions end up being made by the voters, and the voters do not always make good decisions.
– Larry Weisenthal/Huntington Beach, CA
@Greg: #112
The 70% came from someone I though knew that stuff, but was wrong. Thanks for correcting me.
@OpenID #116
But when the voters realize their mistakes they tend to correct them. Examples: The 2002 elections when many Republican’s jumped on the deficit spending band wagon. And of course the 2008 elections and their resultant “change” which was not the “change” the voters expected or were promised.
@openid.aol.com/runnswim: #114
“So tell me how private wealth expansion gave rise to the Internet.”
The Internet was created by the military. Al Gore was on the committee that created it, so, in one sense, he did create the Internet. The military knew that as computers were being use more and more that us having ours at one place was an easy target to destroy. They decided to have computers in different parts of the world and connect them all together so that if one or more were destroyed we could switch over to others. Later on it was incorporated into civilian use.
When you take the earth and draw lines connecting all of the computers it looks like a web, thus the term “World Wide Web” and the reason for the “www” at the start of each Internet address.
Wealth had nothing to do with the creation of the WWW. It was created to survive attacks.
“Tell me how it discovered Taxol.”
You remind me of my mom and ex wife. Whenever they knew they couldn’t win an argument they changed the subject. How does building infrastructure “discover” anything? A link to the subject would have been helpful.
“And even where private sector development was the stimulus for something, e.g. the Interstate highway system, the presence of infrastructure (human and material), once put in place, made it possible for an exponential number of new businesses to arise and thrive.”
As I mentioned earlier, the government doesn’t usually build infrastructure to a certain place just so it can be developed. The development usually comes first. Maybe you are thinking of things like this being done to attract businesses:
MidAmerica St. Louis Airport
http://chblog.ozarkattitude.com/2010/01/22/illinois-airport-featured-on-nbc-fleecing-of-america-2.aspx
A similar airport was built to relieve traffic at O’hare in Chicago. I couldn’t find a link to it. Maybe someone else can. The last story I saw on it many years ago told that not one plane has landed there and there was only one business there that had nothing to do with the airport. They just wanted the space.
@openid.aol.com/runnswim: #116
There you go changing the subject again.
@Smorgasbord: The technologies from which the Internet was developed came almost entirely out of federally-sponsored research and the Internet originated from connections between university labs and not the military. It wasn’t until mid-1975 that the internet was turned over to the military (completely supported by tax dollars), which managed it until 1983, when it started to be made available for more general use. The World Wide Web was developed by the European Organization for Nuclear Research (CERN) — did you not read Dan Brown’s “Angels and Demons? It was not “created to survive attacks.” You can easily read about all of this stuff on Wikipedia. “History of the Internet.” “History of the World Wide Web.”
You accuse me of “changing the subject” and give an example of an airport gone bad. I wasn’t trying to argue whether government-built infrastructures are original eggs or whether they are chickens which hatched out of the eggs. This distinction is not important to my argument that government infrastructure (from roads and the like to education) is essential in spawning and growing business and creating wealth and that the people at the top of the food chain owe a disproportionate amount of their personal success to this infrastructure and therefore should pay more to support it and “pay forward” with the development of new infrastructure.
With respect to your complaint in #120, I had made the absolutely correct point that most successful business owe their success to a workforce largely educated with public funds. JV then objected that the federal role in education was non-essential and could be better managed at the local level. While I was originally referring to public education in general, I reminded JV of the essential role of the federal government in the development and maintenance of the nation’s great research universities, including the great private universites.
With regard to Taxol, I did not explain that Taxol (and about half of the total anti-cancer drugs currently marketed by private pharmaceutical companies) came directly out of NIH research, which still plays a central role with respect to drug discovery infrastructure. http://www.cancer.gov/cancertopics/factsheet/nci/drugdiscovery The NCI has, for 50 years, maintained a massive screening program which has tested millions of putative anti-cancer drugs since the 1950s, many of them being natural products derived from materials collected and submitted from around the world, including soil samples, marine samples, leaves, tree bark (e.g. Taxol), and so forth. The NCI maintains a mammoth repository of such materials and has made a major effort to collect and preserve especially endangered plants, animals, and marine life. Once discovered at the NCI, development of these materials is then turned over to the private pharmaceutical industry, which symbiotically uses the various NCI labs for biological testing of compounds originating from or modified by the pharmaceutical companies themselves. It is in every way an important cancer drug discovery and development infrastructure. There are few people in the USA who have not had relatives or friends treated with one or more of these drugs.
– Larry Weisenthal/Huntington Beach, CA
@openid.aol.com/runnswim: #121
I’m going to leave the whole thing this way: You ain’t going to change my mind and I ain’t going to change yours, so lets please drop the subject. I’m sure others are tired of reading about things that have nothing to do with the original post and I am too.
Smorgasbord; hi, I know the richs do save on tax by giving to charity, It’s an old saying in CANADA ALSO, BUT IT REMAIN A GIFT FOR CHARITY, and they choose to do it
with smart way also as I found on GOOGLE LATELY, just choosing who will get it by
asking a free comment from AMERICANS TO WHO DO THEY THINK THEIR GIFTS SHOULD GO TO, I liked that way of doing ,because all AMERICA WAS COUNTED, AND THE MONEY COULD BE GIVEN TO EVERY WHERE IT’S NEEDED BEST.
BYE
Smorgasbord; hi, I know they save tax by giving to charity, but it’s still a gift no matter
the why to give, It must be appreciate as so, that’s my opinion, bye