What school of economics teaches this logic?

In his book “Capitalism and Freedom” (1962) Milton Friedman (1912-2006) advocated minimizing the role of government in a free market as a means of creating political and social freedom. Friedman was perhaps our country’s leading economist. Here’s an excerpt from a 1979 interview with Phil Donahue:

Those basic principals of sound economics stand in sharp contrast to the big government in store for us today. It pains me to see how far we as a nation are straying from the basic philosophy of capitalism. I hope we see the error in our ways before it’s too late.

According to this AP article, here’s how the economic stimulus plan will affect Americans. Worth a read.

“Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.”

So said White House Chief of Staff Rahm Emanuel in November, and Democrats in Congress took his advice by creating the 647-page, $825 billion House legislation that was sold as an economic “stimulus”. But when Democrats finally released the details, we better understood Rahm’s point. It managed to spend money on just about every pent-up Democratic proposal of the last 40 years.

Just scratching the surface exposed $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects, even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

House Republicans and even some Democrats argued that the Democrat appropriations bill disguised as a stimulus bill was heavily laden with pork and pet projects that had little to do with stimulus or job creation and demanded they be trimmed. Some were, although an outraged Nancy Pelosi wanted them added back in when the Senate came to bat. And so the Bill moved on to the Senate which, with the help of three RINOs (Sens. Susan Collins, Maine, Arlen Specter, Pennsylvania and Olympia Snowe, Maine), passed their version. Now dems in both bodies will feign due diligence before presumably reaching a compromise.

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From James along with the lyrics. Go ahead, sing along…

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Got this from several readers and it clears all the smoke and mirrors Congress has put up to divert blame and responsibility for this mess from the real culprits - them.

“Mortgage backed securities are like boxes of chocolates. Crooks on Wall Street stole a few chocolates from the boxes and replaced them with turds. Their criminal buddies at Standard & Poor rated the boxes ‘AAA investment grade’ chocolates and they were sold to investors all over the world. Eventually, somebody bit into a turd and discovered the crime. Then nobody trusted American chocolates anymore.

Hank Paulson thought it would be good if American taxpayers bought up all the boxes of chocolate turds for $700 billion and held them until a market for turds developed. Meanwhile, Hank’s buddies, the Wall Street crooks who stole all the good chocolates, aren’t being investigated, arrested, or even indicted.

It’s like Mama always says: ‘Sniff the chocolates first, Forrest’”.

To add insult to injury, Fannie Mae has the cajones to be a double dipper. They asked for “expect” another $16 Billion to keep them afloat! (Freddie wants another $35 Billion!) Shouldn’t they both have already been flushed?

There’s no shortage of news about Bernie Madoff’s astounding Ponzi scheme through which he (allegedly) bilked a great many investors and charitable foundations out of billions of dollars. The fact that he is out on reduced bail and has used that freedom to send millions in jewelry to his children and write checks for a few billion more to friends and family is even more astounding. But what amazes me is how Congressional leaders are posturing about it. They’re appalled, they say. Something must be done, they promise. But wait. Isn’t that the pot calling the kettle black?

For those few of you unfamiliar with how the Ponzi scheme works, it’s where a shyster takes in money from marks investors to “invest” for them, pockets it, produces spurious reports illustrating the stellar performance of the “fund’s” portfolio, gets more investors and uses some of the newly invested money to pay a few of the earlier investors, then continues the practice until he has a ton of money in his pocket. The portfolio, of course, is essentially worthless and he has all the money squirreled away in off shore accounts. Then he moves to an island somewhere in the Pacific or to a country without an extradition treaty with the U.S. and lives large. The trick is to keep the investors believing their investments are earning astounding returns while he collects more and more money from new investors. You’ve probably heard of Ponzi schemes, but Madoff’s may be one of the largest such frauds (ahem…alleged frauds) in history.

Or is it? Isn’t that exactly how our government has been operating our Social Security system?

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The money you give won’t just save a life, it’ll save a lifestyle.

My favorite illustrator, John Cox, came up with this illustration last year that echoes, I think, public sentiment, especially during these trying economic times. Many believe we are abandoning our nation’s manufacturing roots in favor of becoming a country that makes nothing and buys everything from abroad but likes to think we’ll be dominant in the development of technology (with any related manufacturing, of course, being outsourced offshore.) Whew! Long sentence!

I think we’re deluding ourselves. We could regain our dominance in manufacturing if we simply uncoupled ourselves from labor unions. Why can’t we compete in auto manufacturing, even against Japanese auto makers who manufacture cars right here in the U.S.A.? Because the Japanese car makers are exempt from our trade unions (and aren’t financially hamstrung trying to support a bottom heavy legacy pension plan, but that’s another issue for another day). Hardly a level playing field, is it. But what are we doing about it? Nothing.

Anyway, I thought John’s illustration was particularly poignant at this time of year when we’re concerned about our economy and vanishing manufacturing roots. Fisher-Price, Mattel - many of this country’s major toy manufacturers - have outsourced the manufacturing of their toys to China, and quality and safety have suffered. Not too many years ago, Americans wouldn’t have accepted poor quality. But we’ve become a nation of “sheeple,” too fat and lazy to do anything about it. I hope we rediscover our cajones before it’s too late.

Hard to believe people would “trade in” some of their Christmas gifts but, every year, many do just that. I find it somehow sad. Oh, I understand exchanging a size medium for a size large, but trading a gift that a friend or relative put thought into selecting seems, well, just wrong.

Yet the lines at department store gift return counters remain long as people trade in toasters for barbecues and barbecues for toasters. But what will they tell Aunt Tilly when she asks why they never wear that lovely wool sweater she gave them? You know, the one with the reindeer on the front?

Remember your Shakespeare? “What a wicked web we weave…”

Did you avail yourselves of the big “day after Christmas” sales? If you did, retailers thank you! They’re hoping your combined efforts will help them make their annual nuts and carry them through the coming year. But at least one big service company is worried and that doesn’t bode well for any of us…

It’s true. Our sagging economy affects everyone, even Santa, spotted this weekend shopping for bargains to fill his sleigh. Times are tough and many of us are having to cut back this year on Christmas giving.

According to a recent poll, consumers have tightened their belts this Christmas. “Approximately two-thirds of people around the country said they were spending less this holiday season,” said Lee M. Miringoff with Marist College.

The Marist poll found 41 percent of people making less than $50,000 planned to cut back a great deal. 24 percent of those with incomes of more than $50,000 said they’d spend less. Only 18 percent of the 1,003 adults surveyed said they wouldn’t change their spending habits. When it comes to being more frugal this year, 73 percent of women said they’d altered their spending habits, compared with 61 percent of men.

We’re all in the same boat this year. But tough times bring us closer together and help us remember what Christmas is really all about.

I’m getting a little tired of listening to Wall Street and the Big Three U.S. auto makers complaining about how tough they’ve got it. They’re getting loans and bailout bucks while the rest of us are getting passed the check. Frankly, I wouldn’t mind having a piece of that gilded retirement/health benefit plan the auto workers enjoy, especially sense we’ll be paying for a chunk of it.

Listen…Hear that? It’s the whine of the Fat Cats’ Big Machine sucking money out of our wallets to cover their losses. I don’t know about you, but I’m tired of hearing it. And I’ve got lots of old shoes.

From Jamie at Perr-Bear…

Click through all Twelve Days and compare the costs in 2008 vs 2007. It’s entertaining with some great photos!

And then there’s this from cranium…

Tell me again… When will all these holiday bailouts start working?