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26/03: SAY WHAT!?!

Category: The Economy
Posted by: A Waco Farmer
This morning I caught a Steve Inskeep interview with Kent Conrad, chairman of the Senate Budget Committee and so-called budget hawk. The South Dakota Democrat spent five minutes explaining how to be a fiscal conservative while helping the president actualize New Deal 3.0

That was good for a laugh, but then things went from funny to alarming with the following exchange.

When reminded that "some Republicans have used the word bankruptcy," Conrad assured us that the opposition was just engaging in lose rhetoric.

"You know it's really not that much of a possibility," asserted Conrad, "because governments can print money."

More Conrad:

"We know the history. Governments can inflate their way out of debt, but that has consequences, doesn't it? So when our Republican friends use that word [bankruptcy], it's not reality. What is a real threat is a precipitous decline in the value of the dollar and the threat that would pose to the economic security of the country."


That's great. Don't worry about bankruptcy. We can always hyper-inflate and all be millionaires before that would happen.

Don't worry about NOT being able to swim, the fall will probably kill you first.
Category: The Economy
Posted by: A Waco Farmer
Nobel prize-winning economist and NYT columnist, Paul Krugman, pronounces The Geithner Plan economic "hocus pocus" and dead on arrival.

Why is this good news?

For all his erudition and acclaim, Krugman is too often a pompous and grandiloquent fool. And history, possessing a keen sense of irony, tends to seek out the most bombastic and definitive statements for singular embarrassment.

In short, Krugman is salivating at the possibility of a failure so huge that the only solution is complete government control (and I suspect he would also relish a turn running Treasury). But a successful private-public partnership does not further his agenda for nationalized banking and a planned economy.

This is not the first time Krugman has let his preferences get in the way of his judgment. He possesses a track record for pronouncements of doom that turned out to be nothing more than wishful thinking.

Krugman on the SURGE in Iraq (September 2007):

The smart money, then, knows that the surge has failed, that the war is lost, and that Iraq is going the way of Yugoslavia. And I suspect that most people in the Bush administration — maybe even Mr. Bush himself — know this, too.

The Financial Crisis is Barack Obama's Iraq. Just as President Bush understood that Iraq (once engaged) was the one potential threat that could fundamentally alter American hegemony in the world, President Obama needs to understand that the potential Financial Meltdown possesses the same destructive capacity.

Just as the surge had to work to save us all, the Geithner Plan has the same scent of absolute necessity (and desperation).

I hope the "Krug" is just as wrong now as he was then.
Category: The Economy
Posted by: an okie gardener
Story, link from Drudge.

March 8 (Bloomberg) -- Republican lawmakers said Congress should stop providing General Motors Corp. with federal aid and let the company file for bankruptcy if necessary.

“The best thing that could probably happen to General Motors, in my view, is they go into Chapter 11,” Senator John McCain said on the “Fox News Sunday” program today.

Of course, going into Chapter 11 does not mean ultimate failure. But, in the present political climate, it seems that we are assuming the Federal Government will decide whether or not the automaker fails or succeeds. That is not a good assumption for the long-term health of the economy.

The first family car I remember was the De Soto that my dad had before he married mom. Don't see too many on the road today.

If I remember correctly, the first car I can remember my maternal grandparents driving was a Studebaker. I don't know when I've seen one on the road.

The pastor during my boyhood drove an American Motors Rambler. I did see one the other day.

Until I was a young man, I saw several International Harvestor pick-ups in daily use, and the occasional IH Scout. I am not sure our younger readers even know what a Scout is.

American business has operated in a Darwinian world. In such an environment some species will become extinct. Others will prosper. In a government-controlled economy, the peasants drive Trabants.