Random Thoughts

Once again, these are from notes I made and they never made it to a post….so I thought I would share them with my readers and get their input.

1–Being said of the Obama admin–they will leave the patriot act in place and put education on the back burner for now.

2–When did poker become a sport?  I missed that memo.

3–When did a car chase in Montana become national news–yet another missed memo, no doubt.

4–After all the socialist, communist, Marxist statement made by Republicans, a special instructor should be appointed to give remedial PoliSci 101 to them when they are in session.

5–Why did McCain lose?  I have been asked by several people and my standard answer is–He is BALD!  Americans have not elected a bald president since Ike.

6–Today it is called a financial rescue, tomorrow it will be called, “why daddy went to prison”.  Idea is thanks to Keith Olbermann.

7–Taxpayer is being treated like a mushroom–they are kept in the dark and fed sh!t.

8–Joe the Plumber skips a personal appearance to work on his new book….thinking….the book is destined to become like that fruit cake from Aunt Sally….save it for next year and give it as a gift.

9–Sarah Palin could get as much as $11 million for a book deal.  Goes to show that even a mental midget can find success as a writer.

10-My last note–Rush Limbaugh on his radio show has blamed Obama for the recession now in progress.  And Obama has not even been sworn in–pretty much indicate where Rush will be for the next 4 years, at least.

That is all for now…if you see something you want to comment on, please knock yourself out.

Auto Industry Bailout?

With some Republicans now behaving, well, like Republicans, the Democrats are poised to take full political possession of the controversial $700 billion bailout of financial institutions and its aftermath.

The current issue is whether this lame-duck Congress will rescue the remaining three U. S. automakers with more billions instead of letting them go into bankruptcy like a million American families will this year. Will American Express be next in line for a handout?

The Big Three’s appeal came as Republican Gov. Mark Sanford of South Carolina warned that because of the rush of Congress “to do something” in October, “the American taxpayer is being gamed.”

“The bailout was an incredibly bad idea in the first place,” Sanford said, and “it’s being made worse by loose rules and oversight that are putting taxpayers on the hook for billions more.”

There are loud advocates with strong arguments on both sides.

Proponents of a bailout say that the industry is a victim of the global financial crisis. Wall Street has been bailed out, so why not Detroit?

They say millions of jobs could be lost and more than $100 billion in wages sliced out of an already-fragile U.S. economy.

On the other side are those who feel just as strongly that the automakers’ problems are their own doing, born of bad business decisions, uncompetitive labor agreements and vehicles that Americans have decided are second-rate.

They say a bailout will only postpone the inevitable, and that the failure of one or more of the companies is necessary if the economy is to work properly.

It is funny in a way, funny as amusing, not as Ha-Ha, that Repubs are so hard against this move.  Could it be that they are thinking that since the people in Michigan did not vote for them anyway–then screw ’em.

Beyond that, in my lifetime, about 30 years ago, I believe that the industry got a bailout amd promise to do better and to retooling to meet the new demand.  They crapped on all that once they got the money, so why should we believe them now?

I have not yet made up my mind to get behind the bailout.  I will continue my research and post as it is cllear what is to be done.

Execs Forgo Bonuses

How nice, I am really impressed (btw that was hard sarcasm).

Top bankers at Goldman Sachs are not going to take their bonuses this year while rivals at UBS may have to wait up to three years to receive theirs, as major banks respond to the growing backlash over pay.

The move by seven senior executives at Goldman to forgo their annual payouts could put pressure on other US financial firms to ensure their top staff do not receive bonuses this year.

Their counterparts at UBS, who have already made it clear they will not take bonuses for 2008, are also introducing a pay plan that would prevent bonuses being paid for three years.

The bonus will be based on a malus system. A maximum of one third of the bonus will be paid out and the rest put in an escrow account and will be paid out on future performance. For instance, if UBS makes a loss in subsequent years, the bonus will not be awarded and the cash balance reduced.

In other words these leaches will get their money.  This is just a move to shut the critics up.  The execs have NO intention of losing their money.

The seven executives from Goldman Sachs who are turning down their bonuses are Lloyd Blankfein, the chairman, who received $68.5m last year, Jon Winkelreid and Gary Cohn, co-presidents who received $67.5m each, David Vinar, the finance director, who received $57.5m, and Michael Sherwood, Michael Evans and John Weinberg, whose pay is not disclosed.

The bank has entered the last fortnight of its financial year and will announce bonuses to staff next month. So far this year it has set aside $11.4bn which is a third less than last year

I say keep an eye on these guys….bet they will get their blood money in the long run…..this is not gonna stop them from making bad decision in the future, knowing their money will ALWAYS be there no matter how screwed their management is.

Is Coal Based Power In Trouble?

An environmental review board has shot down the EPA approval of a new coal plant, stating that the Environment Protection Agency needs to come up with nationwide standards for dealing with carbon dioxide. The decision will cause lengthy and stricter rules, making the investment in expensive coal plants substantially riskier.

Therefore, the money will go into alternative energy, like solar or wind energy. The Environmental Appeals Boards’ decision to send the coal plans back to EPA with instructions to come up with standards was not a legal victory exactly, but the result is practically the same. Basically, the agency’s regional office has to at least consider whether to regulate carbon dioxide emissions, before it gives a green light to build the plant located in Utah.

Furthermore, the Board’s decision will delay the building of coal-fired power plants across the country, long enough for the Obama administration to determine its policy on coal, according to David Bookbinder, chief climate counsel for the Sierra Club, the one which made the petition to the Board in the first place.

This is the latest setback for coal plants, which emit far more carbon dioxide than any other natural gases or other power plants. Last year, Kansas state regulators denied a permit to a coal plant on the grounds of its carbon dioxide emissions. However, there are some voices that say the Clean Air Act is not well structured to regulate greenhouse gases. Anyway, it could still be used to regulate greenhouse gases while the new climate legislation appears.

Here It Comes–A New Word

And that word is NEO-DEFLATIONISM!

The dogma of balanced budgets marked the domination of financial interests in the 1920s. The domination of finance in the modern world and its ideology known as “neo-liberalism” has been evident since the 1970s. We might as well call it neo-deflationism, for the ideology of finance capital always involves policies deflating the level of mass demand.

Today a global food crisis coexists with unprecedented financial collapse and a recession which may well turn into a depression. The roots of this conjuncture of triple crisis lie in the deregulatory market oriented, expenditure-deflating policies of the dominant neo-liberal regime, implemented for over a quarter century. What is the connection between the different crises? The economic dogmas of finance capital, when they shape public policy, always produce highly deleterious effects on the real economy. Faced with agricultural recession and unemployment, finance ministers in every country in 1929, all deflationists to the core, pressed through with repeated rounds of expenditure reduction to achieve balanced budgets, thus raising unemployment further, reducing production and pushing the world into depression. Britain’s ability to maintain long-term external lending to the industrializing world had depended heavily on its appropriating India’s large export earnings, and this ability to lend collapsed as the earnings declined sharply, marking the demise of the Gold Standard. Keynes’s argument that the theory underlying deflationism was wrong since it assumed full employment, and expansionary policies should be followed in the actual situation of unemployment, went unheeded until a great deal of damage had been done.

The ascendancy of finance capital from the 1970s has seen exactly the same misguided expenditure deflating policies with the same incorrect theory being peddled by the Fund and Bank, that public investment ‘crowds out’ private investment, which assumes full employment – with much less excuse for such intellectual infantilism seven decades after the General Theory, than there was in 1929. States have shown an insensate obsession with inflation targeting regardless of unemployment and have undertaken repeated Fund-guided cuts in public spending, thus lowering the level of economic activity in the material output sphere. The destructive impact was strengthened by additional measures taken to practice monetary austerity, reduce the ratio of fiscal deficit to GDP, put caps on wages, retrench labor from enterprises, devalue currencies, and open up developing economies to free trade and capital flows. The GDP growth rate of developing economies halved between the 1970s and 1990s. India saw cutbacks in investment, public spending and credit to small producers after 1991: the textile industry was plunged in crisis, and the food grains output growth rate fell from the pre-reform 2.8 percent to 1.7 percent in the 1990s. In the last eight years it has gone below one percent even after factoring in last year’s record harvest. Per capita grain output is declining faster than ever before.

And that is the name we shall call it.  Name that tune.

We Need Demand, Not Liquidity

Governments in advanced countries have still not recognized this onset of a crash. They have proceeded on the assumption that the injection of liquidity into the system is all that is needed. It was thought initially that this injection could be achieved through the government purchase of “toxic” securities, but widespread opposition to that scheme has now made most governments accept the idea of injection of liquidity in lieu of equity, i.e. through the part-nationalization of financial institutions.

But injection of liquidity, even in this manner, is not enough. Credit will not start flowing simply because banks can access more liquidity. There has to be adequate demand for credit for viable projects by solvent and worthwhile borrowers. And this is not happening. First, the injection of liquidity does not improve the solvency of firms saddled with “toxic” securities, so that the risk associated with lending to them remains prohibitively high. And secondly, quite apart from this, the anticipation of a Depression makes borrowers chary of borrowing and lenders chary of lending.

This anticipation in turn derives from several factors: first, the bursting of one bubble is not necessarily succeeded by the immediate formation of another, so that some recession of a more or less prolonged duration is in any case inevitable. Secondly, the very scale of the current financial crisis is such as to entail an anticipation of a prolonged recession. And thirdly, since the recession has already started, the prospects of crisis-prevention now through the usual monetary instruments (including liquidity injection) appear distinctly dim. The scenario, in which tendencies towards increased liquidity preference on the part of private individuals and institutions and a downward slide in the real economy mutually reinforce one another, has already started unfolding itself and will continue for a prolonged period, unless governments now act to inject demand into the economy directly, apart from injecting liquidity. Until this happens on a large enough scale the Depression will persist.

Headed For The Glue Factory?

Wild horses have been living in the West for centuries, but their ever-growing numbers have led to many being fenced in. A recent government review of the cost of corralling them now has their admirers frantic that a slaughter is imminent.

The U.S. Bureau of Land Management (BLM) says slaughter remains a possibility for some of the more than 30,000 wild horses and burros being cared for in government-run pens.

A Government Accountability Office report issued last week lent support to the agency’s assertion in June that the costs of caring for the animals have skyrocketed. The GAO said the agency should consider euthanizing some horses or selling them, likely to a slaughterhouse, as an alternative to keeping them in long-term holding pens for their entire lives.

Meanwhile, the cost to care for the animals for life rose from $7 million in 2000 to $21 million in 2007.

Critics accuse the agency of mismanaging the horse program and say the roundup is only made necessary because the BLM favors cattle ranching over wild animals in the competition for water and graze land.

After being passed up for adoption three times, horses are sent to long-term holding pens where they may live to as old as 25, far longer than they would in the wild, BLM spokeswoman Celia Boddington says.

“As horses get older, they are extremely challenging if not impossible to gentle,” she says.

In the wild, the horses reproduce at a rate high enough to double the herd in four or five years, the BLM says. With drought conditions in parts of the West, the agency says it cannot allow the herds to grow unchecked.

With the economy going into the crapper, I would say that even fewer horses will be adopted, which in return will increase the number that will be put down.  Horses are like the working class, it is a lose-lose scenario.