Saturday, November 06, 2010

Payback's a Bitch

Now that the elections are over, the Congress and the President can get back to business. Or can they? The honeymoon is over and we are starting divorce proceedings. The Democrats, with the health care bill, snuck up on the Republicans and hit them over the head with a shovel. Now, the shovel is gone and Obama says he will work any way he can, with the Republicans to get us out of this mess.

Obama had to have known the repercussions when he forced the health care legislation through. In essence, he told the Republicans to go fly a kite; we don’t need your votes or your input.

So what happens during Obama’s next two years of office? Figure that, the Republicans will act like a mad crazed foreclosed home owner; concrete in the toilets, sell the appliances and trash the house. Forcing this health care bill through Congress in this manner was the wrong way to go. I would chalk his mistake up to pompous arrogance (let the GOP eat cake).

Revenge for the Republicans’ will be sweet. Obama will have his health care plan (without financing) and a non functional Congress. This could be a good thing. The economy is a mess and there is no political solution.

Tax revenues are decreasing as government expenditures are rising. More Social Security, Food Stamps, Unemployment, Health Care, Bank Failures, Freddie Crapola, Fannie Caca and the list goes on. Reality is right around the corner, along with Deck Chairs, Icebergs and Lifeboats.

The Republicans and Democrats in Congress are kind of like a husband and wife. There is a lot each of them might want to do, but if they’re not equal partners, there is no marriage. President Obama will figure it out; no new Democratic legislation unless he signs every bill the Republicans pass. How likely is that? It's a little like the wife catching the husband kissing the neighbor's wife. He's going to pay for that kiss a million times over.

Copyright 2010 All rights reserved


AIM said...

Right Jim. With the Repubs and Independents included... Congress is now out of the stimulus and bailout business. There will be a nice gridlock (better that idiots do nothing than take foolish actions, like our Congress has been doing). It's up to the Fed for that now and they will fail too. All the cover ups, lies and false statistics (and media back up) will begin to show. The unraveling is going to really speed up now.

When things start to fall in the economy due to reality rearing its ugly head, watch the flight back to the USD and treasuries occur. The USD will strengthen.

Tyrone said...

Speaking of "payback",...

Calif borrows $40M a day to pay unemployment
The Los Angeles Times reports that the state owes $8.6 billion already, and will have to come up with a $362-million payment to Washington by the end of next September.

Jim in San Marcos said...

Hi Tyrone

I read that too. The 362 million is just the interest on the borrowed money. I can hear those shovels just digging away and they are not about to stop. How deep can they go?

Tyrone said...

The 362 million is just the interest on the borrowed money. I can hear those shovels just digging away and they are not about to stop.

I was wondering about the small payment being made. $362M is SMALL. LOL
Banana Republic, here we come.

Rob in Ns said...

I was just on Market Ticker looks like Denneger has joined the inflationists. As for the post election hangover I'm guessing it doesn't matter anymore what happens. The traintracks have been torn up and all that's left to do is decide which seat to sit in for crash. It doesn't really matter which party one voted for. Same thing is going to happen here in Canada the coming election will decide nothing.

Joseph Oppenheim said...

The Los Angeles Times reports that the state owes $8.6 billion already<<<<<

If you want someone to blame for the massive debt Schwarzenegger left for CA, it is Congressman Darrell Issa.

It was he who engineered the recall of previous governor, Gray Davis and the candidacy and initial election of Schwarzenegger who created more debt than Davis, plus at a worse time.

Anonymous said...

Wrong Oppenheimer. Calif's situation comes from decades of Democrat legislators who were spendthrifts and financially challenged fools. You need to look back for 3 decades to see why Calif is where it is at today. Fiscal and fiduciary irresponsibility and ignorance of our elected officials.

Joseph Oppenheim said...

Calif's situation comes from decades of Democrat legislators <<<<<

Sorry, but facts don't bear that out. For the nutjobs who think CA taxes are high, they rank as moderate.

Great minds are attracted to where there are great universities, etc. Try Apple, Google, Genentech, Intel, Cisco, Amgen, Qualcomm, etc, etc.

Finally, with the passage of Prop 25, a simple majority is now all that is needed to pass a budget. It has been Republican legislators who have refused to pay the bills.

And, yes, that is what most Californians want, greatness and paying for it.

BTW, I am an Independent, as registered, non-partisan.

Fortunately CA didn't go the way of the Tea Bag nutjobs in other states.

The greatest public university system on the planet, UC, costs money. Washington Monthly, one of the better college rating journals rates national universities...1) UC San Diego, 2)UC Berkeley, 3) UCLA 4) Stanford, 5) U. of Texas - Austin, 6) UC Davis.

Notice, no mention of Ivy League schools at the very top. They are high, but not near CA's best.

Edmund Brown, Sr. was the last CA governor to start a UC campus until Gray Davis began UC Merced. Reagan began the collapse of the finest K-12 system in the US.

Schwarzenegger did some good things, but didn't want to pay for them. And, Issa, effectively, put him there.

Jim in San Marcos said...

Hi Joseph

The state of California is broke. What Anon was refering to was the last 30 years of passing the bill into the future. It's due now with the retirement of all of the public service workers.

The Republicans in the legislature have tried to contain the ridiculous spending that is going on with little success. We are being nickled and dimed to death.

Your quote "And, yes, that is what most Californians want, greatness and paying for it." Is not going to set well with most readers. Half of the state won't even pay taxes this year, they are either too "poor" or are unemployed.

Joseph Oppenheim said...

What Anon was refering to was the last 30 years of passing the bill into the future.<<<<

Again, you are absolutely wrong. He/she was blaming Democrats.

He/she wrote: "Calif's situation comes from decades of Democrat legislators"

I do agree with you that most of your readers apparently don't like greatness and paying for it.

In case you wonder why I occasionally check on this site, it is because I do think it represents the way a lot of people think, fortunately not like most Californians, and I do want to understand all kinds of thinking.

Jim in San Marcos said...

Hi Joseph

Instead of Democrats, how about calling them "Damn" Liberals? They paid for it with cash they didn't have and saddled the California taxpayers with debts that they cannot possibly pay in the future.

Anonymous said...

Why not take it back to the real basic common denominator: government legislators and leaders borrowing and spending like crazy and passing the debt off to future generations because of the insane credit mentality created by fiat money, central banking, fractionalized reserve lending. Borrow your way out of trouble and debt. Brilliant!

98% of economists in this country should have their diplomas and certificates revoked and should be banned from being government advisors. Modern day economics is the USA belongs in the toilet bowl. Let's get back to reality and common sense. A teenager managing his checkbook and his lawnmowing business could run circles around Bernanke, Geithner, Summers and the rest of those bums and put us in a better economic condition.

The government is controlled by financial interests. If that isn't stopped we are doomed. Our education system's area of economics isn't filled with Keynesianism and all that other monetarist false data and crap for nothing. End of story.

Anonymous said...

Take it back to the REAL common denominator;;;; the Bernankes, Summers, Rubins, Geithners, banks, multi-national companies are all unwitting pawns in a game of debt run by the large private capital pools;;;; or the power elite;;;; or the international bankers;;; or whatever you want to call them.

Everyone in debt and paying interest. Then they pull the capital create deflation people can't pay their debts and then transfer all the assets to their balance sheet.

Jim in San Marcos said...

Hi Anon 5:51

There is no power elite group running the show. The whole financial system worked well since the last depression and now it doesn't. The government is trying to "fix it" and it is pissing everyone off. Most of the problem was created by them in the first place.

If our paper money turns worthless on a world wide level, the rich and the poor will both have a hell of a time trying to buy a six pack of beer.

A financial disaster is not a planned event. The Titanic hitting an iceberg was not a planned event.

If we were to compare this financial debacle to the Titanic, we are still afloat launching the lifeboats. There is no doubt about what is happening, its just not very believable. This can't be happening!------ And of course Bernanke agrees, it can't be happening--its all in our imagination.

Anonymous said...

Anyone who doesn't see that there is a big power play in motion is in a trance.
I challenge anyone on this blog to listen to this free education series of videos and then come up with any logical argument that this power play isn't going on.

Jim in San Marcos said...

Hi Anon 6:17

I can't change your beliefs. The web site you listed is trolling for recruits\followers. I don't buy a word of it.

There is no way to blame this entire financial mess on some plan that the super elites are executing. What we are witnessing is the screw up of the century, and it's going to knock your socks off!

The CIA gets blamed for all the crap that goes wrong in the Middle East and anything that goes wrong here is blamed on the Taliban.

The concept I find most plausible is the fact that when things are going wrong for the individual, it is far easier to blame forces that are very abstract in nature. When you talk about "the bankers," and "the government," these aren't things you can point to. They are abstractions that exist in the mind. The great thing about this sort of thinking, is that when you pick an imaginary foe, he is there to blame and take responsibility for what has gone wrong on a personal level.

What is happening is real, to give it some sort of planned design of the super elite is rather absurd. It took a lot of different people to make this wild ass mess, and that mess is going to get a hell of a lot bigger real quick.

Of course Obama will save us. The real question is "Save us from what?"

Tom in MA said...


You can't blame a few current politicians for all CA's problems. It takes decades to run a state into the ground, with the voters turning a blind eye, selling their votes for grants and entitlements. We have the same problem in MA. We actually have a fairly low tax burden because we still have a lot of profitable industry in the Boston area, but it won't last. The future is NY: corruption, high taxes, poverty and decay. In 30 years Mountain View could look like Endicott, NY, the polluted eyesore where IBM started the computer industry.

As an educated person, the educational system disturbs me. It seems like a big elitist club, even at the lowliest community colleges, more concerned with money and influence than with learning. And the public schools are a joke. No wonder so many Americans don't believe in science.

That'll probably change if a good education doesn't guarantee a good paying job any longer, as seems to be the case.

I don't mean to sound extreme, I'm just saying the whole thing, good and bad, is going to fall apart if a lot of people don't start acting responsibly.

Joseph Oppenheim said...

You can't blame a few current politicians for all CA's problems<<<<<<

1. All I am saying is you can definitely effectively blame Darrell Issa for the FACT that CA's current budget deficit/debt situation being worse than the previous governor's one and at precisely the wrong time.

2. I don't buy into the extreme negativity you see.

As for the current situation in the US, the Great Recession can be boiled down to consumer greed and a financial industry greed and fraud involving the packaging of the mortgage debt and affecting the world's financial system with phony baloney so-called AAA bond-like products.

But, the recession, never a depression, is OVER and has been for over a year, and the economy is growing, albeit slowly.

The high unemployment is a natural hangover from such a highly leveraged boom of housing construction and housing-related businesses. And, off-shoring of jobs will continue - it is a natural evening out of the global workforce and really a healthy thing for the world.

Yes, we could slip back into recession or even depression, and the risk is certainly higher with the Tea Party insanity which is currently infecting our government.

We have a golden opportunity for new investment - infrastructure, alternative energy, and education reform to build for the long term. But, I do admit that currently, so many are blind to the opportunity and could delay the recovery.

Back to CA, I just don't worry about it. The Tea Party stuff didn't infect CA with the last election, plus passage of Prop 25 was a very important step. Short term, there could be problems because some Congressional nutjobs might want to have CA default. CA is the 8th or so largest economy, and like nations, should be allowed to carry over a deficit, if spent on the right things, unlike most or all other states.

Yes, we need to set in motion a plan to reduce government debt, but still not forgo the extremely favorable interest rates for real investment - which pays back more than it costs. Private debt has been wiped out by the trillions and people are saving for the first time in a long time. So, gov't borrowing in the short term is not a problem. It still is in great demand.

Jim in San Marcos said...

Hi Joseph

When I first started writing this column in 2006, my main point was that no one would see we were in a depression for several years until after the fact.

The Great Depression started in 1926 with the Florida hurricane. We look back at it and think 1929 for the Great Depression. Thats wrong, but people didn't perceive that there was a depression until 1933. So maybe I am a year or two off, on my timing, but I think not. We have arrived and it is real. Where to from here? That is the real question!

AIM said...

Take away unemployment compensation, take away food stamps, take away revised accounting rules for banks, take away the non-revaluation of assets, and take away any other government prop up activities or coverups and what have you got?


Anonymous said...

This little 6 minute video is quite poignant. Makes you step back and realize that we really are living in the middle of a 3 ring circus. The lunatics have taken over the asylum. Anyone who doesn't think we are in a depression or sees good times ahead is on medication.

Congress and The Fed might as well just drop a nuke on the USA, put us out of our misery, and get it over with.

Mad As H*** said...

I am working the bread line again tonight at our church Food Pantry.
When my wife took over the Pantry in 2006 we fed about 40 to 50 people a month. Last month it was 560. Every week the line gets longer and longer.

The government, however,is sending us some great stuff to hand out--- Tyson chicken, premium pulled pork, farm raised breaded catfish; and the cheese--- it's to die for! We're talking 100% milk cheese; not that stuff they sell at your grocery store that has all that soybean oil in it. I priced a similar sized block of the same type cheese at a specialty store and it was $17.00.
One week we got in a shipment of USDA Prime fillet mignons wrapped in bacon. One old guy came back a couple of weeks later and told me that was the best hamburger he ever ate.

"Let them eat cake"