It's Just Overwhelming - Where's the bailout for the average American?

So-called "trickle down" worked pretty well in the 1980's (3.50 / 4)

Things were worse in 1981/1981 ... interest rates were in the teens, I saw bank CD's for sale at 18.6% in May 1980, and it hit 21.8% in Dec 1980

For a single period the unemployment rate peaked at around 13%.  Certainly it was 10% and 11% for extended periods into 1981.

Reagan cut the top marginal tax rates from 78% to 35%, and promoted plenty of deregulation.  IIRC, there were various targeted ITC programs which help spur specific industries, like commercial real estate (then dropped with the TRA of 1986.)

Together with Paul Volker, they tamed inflation and strengthened the dollar too.

That seemed to work, and the economy became invigorated.  These supply-side policies created a PERMANENT incentive for people and businesses to work hard because they reaped the rewards.

I see Obama doing none of this, just spending $$$ and creating deficits and controlling GM, the health care industry, banks, and increasing taxes (proposed) with cap-and-trade and health premium increases and penalties.

Spending IS NOT STIMULUS.

---

by: bostonshepherd @ Fri Oct 16, 2009 at 17:24:45 PM CDT

And our way worked better (6.00 / 6)

Whether you consider the New Deal or Clinton's term with the longest sustained growth all in all we're better off.  I've thought for a long time that trickle-down/supply-side was kind of like communism as theories go.  Both can be made to look good on paper and both may even appear to work in the short term, but in the long term both almost inevitably collapse on themselves.

---

by: Christopher @ Fri Oct 16, 2009 at 18:05:58 PM CDT

[ Parent ]

Anarchy! (0.00 / 0)

What? "...in the long term both almost inevitably collapse on themselves."  Then what do you propose?

The economic history of the United States plainly refutes and disproves your comments.  Our economy -- call it what you will -- has created more wealth than any other system in the history of mankind.

Free-market capitalism.

---

by: bostonshepherd @ Sat Oct 17, 2009 at 10:15:07 AM CDT

[ Parent ]

It has... (6.00 / 2)

...but you don't REALLY think that happened entirely on it's own, do you?!  Free market capitalism is fine in principle, but that too must be regulated, and let's face it both supply-siders and New Dealers play favorites.  The question is which set of favorites is more in line with our values and constitutes the greatest good for the greatest number.

---

by: Christopher @ Sat Oct 17, 2009 at 10:20:48 AM CDT

[ Parent ]

Related reading. (5.50 / 2)

Supply Side R.I.P.

Supply-siders stopped being serious economists (if they ever were) when tax cuts became the solution to all problems.

"It is not because things are difficult that we do not dare, it is because we do not dare that things are difficult." - Seneca (5 BC - 65 AD)

---

by: Mr Lynne @ Sat Oct 17, 2009 at 14:13:07 PM CDT

[ Parent ]

Reagan ran large for his time deficits (5.50 / 2)

And engaged in heavy military spending.  It was stimulus, just focused on the military-industrial complex.  

"Perseverance is a great element of success. If you knock long enough and loud enough at the gate, you are sure to wake up somebody." -Longfellow

---

by: Bean in the 'Burbs @ Sat Oct 17, 2009 at 02:39:54 AM CDT

[ Parent ]

Partly true (6.00 / 1)

Yes, budget deficits were run during the Reagan + Bush 41 years, and a lot was spent on national defense.  But it's Congress who sets the budget, not the Executive branch, so Tip O'Neil is as responsible as Reagan.

Furthermore, the increase in employment was widespread across all sectors of the economy, not just at Raytheon, Lockheed, etc., as you suggest.  You can't re-employ millions just at defense contractors.

The Reagan difference: across the board tax cuts, especially reducing in the cap-gains rate.  This spurred investment and new business creation.  I was there, and saw it with my own eyes.  I was one of those business creators.  

Spending is not stimulus.  When the spending stops, it stops.  "Stimulus" is policy which creates PERMANENT growth without having to feed it government tax dollars, like Obama's "stimulus" which is just spending, government largess.

Another benefit of Reagan: his national defense policies, so bitterly resisted by Democrats, caused the financial collapse of the Soviet Union.  

Don't forget he started the Democrat-maligned-"Star Wars" SDI program which today is a reality.  The Soviets simply couldn't keep up.  (Thank you Ronald Reagan, Margaret Thacther, Lech Wolesa, Pope John Paul and all the other western leaders who refused to play ball with Communism.  Ted Kennedy and John Kerry are NOT included on this list.)

Much of Clinton's budget surpluses were from the so-called "Peace Dividend" made possible by Reagan and Bush 41

---

by: bostonshepherd @ Sat Oct 17, 2009 at 10:11:22 AM CDT

[ Parent ]

Thank you also - (6.00 / 1)

MIKHAIL GORBACHEV! (though I must admit a USSR with Gorbachev at the helm seems better in a lot of ways than what has come after)  Gorachev was the reformer of a new generation who had bold ideas to modernize his country.

I have no doubt that Reagan, like every post-WWII President of both parties, did what he could to make things difficult for the Soviet system, but he should not receive outsized credit, especially since SDI had/has several issues.

Typical GOP talking points - defense spending was on Congress!  RIGHT!  The Senate was GOP and Reagan was immensely popular.  The National Debt went from one trillion to four trillion in the course of 12 years after taking the previous 200 to get to the first trillion.  Clinton presented the first balanced budget since Nixon.  If Reagan had presented a balanced budget to Congress then Congress unbalanced it you might have a point, but even then there is still the values side of that equation.  Tax cuts?  As I recall REAGAN signed the largest tax increase in 1982.  There was fine growth until the bubble burst in 1987.  Clinton's stimulus passed in 1993 without a single GOP vote ushering in the longest sustained growth in our history, maybe not as great short term, but as they say slow and steady wins the race.  Your comment above contains quite a bit of revisionist history.  GOP Presidents do OK when things are going well, but it seems Democrats must always clean up the mess.

---

by: Christopher @ Sat Oct 17, 2009 at 10:34:29 AM CDT

[ Parent ]

History (6.00 / 5)

It seems like you're having a problem with causation here. First of all, it's pretty clear that Reagan's national defense policies were only one part of the fall of the Soviet Union. The latter's collapse had much more to do with the unsustainable nature of the communist system itself, not to mention the internal tensions that had been growing within Soviet politics even when obtaining the presidency was still just a glimmer in Reagan's eye. I would hope that a presumably committed anti-communist such as yourself would realize and accept this.

I do agree that reducing taxes can (and in the 1980s did) help spur business growth, but it is important to realize the limitations of this argument for today's politics. First of all, Reagan's tax policies reduced the top marginal rate from somewhere around 75% to around 40%. There is simply not as much of a top rate to cut now as before. Cutting taxes from, say the current 35% rate to 25% may have some beneficial effects, but it will likely have less of an effect that the 75% --> 40% rate cuts did. Secondly, such tax cuts would also cause (and, with Reagan, DID cause) further massive deficits of the sort you are concerned about. Third, there's still a problem with private spending not being to the level necessary to sustain the American economy. If taxes are cut but much of that money goes into savings rather than spending (which is likely), all we did is balloon the deficit without improving economic growth.

Finally, you make the following argument in a comment above:

The economic history of the United States plainly refutes and disproves your comments.  Our economy -- call it what you will -- has created more wealth than any other system in the history of mankind.

Free-market capitalism.

This is true, but if you really paid attention to American history you'd realize that the sharpest economic growth has occurred in the framework established by FDR's New Deal. The government intervention in the economy established by the New Dela system (fostering business growth but also regulating it, and ensuring a greater amount of economic security for all Americans) made possible the great growth in America's economy in the middle- to late-twentieth century.

---

by: Hoyapaul @ Sat Oct 17, 2009 at 10:49:54 AM CDT

[ Parent ]

The point of stimulus... (6.00 / 2)

... isn't to be permanent.  You wonderfully show how it's a failure at being something that it's not intended to be anyway (straw man).  It's intented to pick up the slack on overall private spending during a downturn so that the overall spending (public and private) downturn doesn't turn into a spiral more difficult to recover from.

"It is not because things are difficult that we do not dare, it is because we do not dare that things are difficult." - Seneca (5 BC - 65 AD)

---

by: Mr Lynne @ Sat Oct 17, 2009 at 14:15:14 PM CDT

[ Parent ]

Spending is stimulus (5.00 / 3)

You keep repeating things like "Spending is not stimulus.  When the spending stops, it stops.".  Yet that's provably false.  Demonstrated false time after time.  You're just plain wrong by 180 degrees, and everything you say that follows from that is therefore not worth engaging.

Please come back to reality.

---

by: Cos @ Sat Oct 17, 2009 at 15:46:40 PM CDT

[ Parent ]

Just so you know... (6.00 / 5)

Spending IS NOT STIMULUS.

This makes no sense whatsoever.

Of course spending is stimulus -- indeed, it's the definition of stimulus. Spending, of course, can be private spending or public spending. But either way you need spending to have the economy operate, and whether it comes from private sources or the government, it is still injecting money into the economy.

The debate is not about whether spending is stimulus, but rather about which spending (public or private) more efficiently gets money into the economy under the current economic circumstances (thereby "stimulating" the economy).

---

by: Hoyapaul @ Sat Oct 17, 2009 at 10:10:48 AM CDT

[ Parent ]

I think that he means long-term job creation (6.00 / 1)

in regard to the stimulus spending.  The largesse saved many public jobs (teachers, fire and police, etc.) for this year and maybe next year; but that money has not gone to spur private jobs.  What are the teachers, firemen et. al. going to do next year when the "stimulus" runs out?  The gravy train is coming to the last station on the federal handout line.  Never having worked a day in their lives (or very little)politicians are the very last people who know how to create real jobs.

---

by: Edgarthearmenian @ Sat Oct 17, 2009 at 13:09:41 PM CDT

[ Parent ]

trickle down economics did not work in the 1980s (6.00 / 3)

it set us up for the first recession in the early 80s, and it was the exact same policy, on steroids, that led to this economic catastrophe. You want both short term and long term stimulation? You invest in infrastructure and grow jobs. Those are far more stimulating, and a far bigger bang for your buck, than tax cuts for the rich, who already have surplus money that they don't spend. If you need economic stimulus, you need that money spent -- giving it to people who already have a surplus isn't the best way to get it spent.  

---
My thoughts are mine and mine alone. They should not be considered representative of any other organization, group or person - save me.

~Ryan.

---

by: Ryepower12 @ Sat Oct 17, 2009 at 13:44:07 PM CDT

[ Parent ]

Trickle down made sense... (6.00 / 5)

... in the 18th century when excess wealth had limited avenues to 'flow'.  Such flow almost had no choice but to stimulate the local economy.  Now, however (and in the 80s mind you) there are so many avenues for such money to flow where there is no good local economic benefit it's ridiculous.

"It is not because things are difficult that we do not dare, it is because we do not dare that things are difficult." - Seneca (5 BC - 65 AD)

---

by: Mr Lynne @ Sat Oct 17, 2009 at 14:18:01 PM CDT

[ Parent ]

correction -- "in the early 90s" not 80s (0.00 / 0)

---
My thoughts are mine and mine alone. They should not be considered representative of any other organization, group or person - save me.

~Ryan.

---

by: Ryepower12 @ Sat Oct 17, 2009 at 16:56:59 PM CDT

[ Parent ]

Democrats were for the bailout (6.00 / 1)

But the Democrats in Congress were very much for the bailout. It was the Republicans who provided most of the opposition. At the time, Democratic activists like Josh Marshall of Talking Points Memo were hopeful that they could hang the first failure of the bailout bill around the necks of the Republicans and gain at the polls because of it. Even here on BMG opinion was divided and cautiously in favor as long as an additional bailout was engineered for people in general. That took the form of long extensions on unemployment, stimulus spending etc.

The publicly disclosed thinking behind the bailout is that government should be demonstrative, and appearance will lead reality. So by saving the banks, government would create confidence in the economy and everybody would lend, borrow, spend etc.

I have doubts about this actually working, but it's hardly an unusual thought at the high level in both parties. For their part, high Democratic officials routinely discount or deny the expressed will of the people through the courts and so on. What is slightly different is that they would do this on behalf of the ultra-rich banking elite, but that's what they did.  

---

by: Seascraper @ Fri Oct 16, 2009 at 17:34:29 PM CDT

The Economic Recovery Act of 2008 (6.00 / 3)

http://clerk.house.gov/evs/200...

FINAL VOTE RESULTS FOR ROLL CALL 681
(Democrats in roman; Republicans in italic; Independents underlined)

  H R 1424      YEA-AND-NAY      3-Oct-2008      1:22 PM
QUESTION:  On Motion to Concur in Senate Amendments
BILL TITLE: Emergency Economic Stabilization Act of 2008

                 Yeas Nays PRES NV
Democratic        172   63    
Republican         91  108    
Independent        
TOTALS            263 171    

Hmmmm.  171 Republicans in the House voted for the bailout.  Are ya sure its just a Democrat thing?  I think not!

"The world was made for people who aren't cursed with self-awareness." ~Annie Savoy, Bull Durham

---

by: Justice4All @ Fri Oct 16, 2009 at 19:47:31 PM CDT

[ Parent ]

Dude how bad is your math (0.00 / 0)

Looking no further than your own post, not 171 but only 91 R's - well below 50% - voted Yea.  Almost 3/4 of D's went for it.  In election terms thats Lose, Blowout respectively.

the government can give you nothing
that it doesn't take away, first

---

by: demolisher @ Sat Oct 17, 2009 at 14:12:29 PM CDT

[ Parent ]

Dude - how bad is your scope? (0.00 / 0)

You're right, I screwed up...but the bailout doesn't pass without the Republicans.  46% of the Republicans voted for the bailout.  (well below 50%? are you sure?)

"The world was made for people who aren't cursed with self-awareness." ~Annie Savoy, Bull Durham

---

by: Justice4All @ Sat Oct 17, 2009 at 19:01:41 PM CDT

[ Parent ]

An elite bill (0.00 / 0)

The Rs were more solidly against the first vote. When the bailout failed the market crashed and either they got scared or they got bought off for the second vote.

Whenever you see a bill like the bailout passed over significant popular opposition, you know it's a bill to benefit the inner elite.  

---

by: Seascraper @ Sun Oct 18, 2009 at 20:36:20 PM CDT

[ Parent ]

Thank you J4A (6.00 / 4)

I couldn't agree more...

But given how little has been done for the average citizen, (and comparably - it is piss-little) can someone explain how this is any different than the "trickle down" theory of Reaganomics? God help us.  

If (and that's a big IF) trickle down economics did work in our society, it will not work any more, not in today's climate, where greed is an acceptable and admired personality trait, where the Republican Party and it's followers support and defend that mentality, will fight, lie, and cheat to maintain it.  It will also not work in today's society because these "too large to fail" busniness,and other large corporations have achieved far too much power to direct and control our government to make decision that benefit them in way that they can maintain the status quo, while doing little to demand that the profits received trickle down to the workers who are the heart and soul of the company.  

With that said, this means little to Main St America...

Although there have been some signs of recovery, (the Dow hit 10,000 yesterday) for many people

it happened on the same day that retail sales fell less than expected, but they still fell. This new "expectations" game that Wall Street plays allows them to continue with this false rally, inspite of continued difficulties for the middle class and the poor.  And while this false display of an improving economy displays itself,  it gives permission for oil prices to continue to rise, since apparently we can afford higher oil prices now.  It's a huge lie, at some point it will all crash down again, it will happen fairly soon, (probably when Christmas spending proves incredibly dissapointing), and it will be a lasting crash.  That is my prediction, based on observation and common sense.

It really is frightening.

WE NEED A PUBLIC OPTION

---

by: liveandletlive @ Fri Oct 16, 2009 at 19:17:52 PM CDT

It's amazing (6.00 / 6)

that we have to fight for and demand that the government  do something about corporate profits and tax cuts not trickling down to the workers.  If greed wasn't a problem, these billion dollar profits would be trickling down, we wouldn't even have to ask.  Instead what we get are layoffs, wage and benefit cuts, so they can maintain the profits.
I think there should be no more corporate bailouts.  I was against them in the first place. As I said months ago, I am ready to crash and burn so these "too large to fail" companies will fail.  That is the only way they will lose the power they have, and the only way we can get back to a reasonable, sustainable, and "good for all of America" economy.    

WE NEED A PUBLIC OPTION

---

by: liveandletlive @ Fri Oct 16, 2009 at 19:38:56 PM CDT

[ Parent ]

Good for All of America (6.00 / 4)

Sadly - this is a value that has gone by the wayside, liveandletlive.  The notion of the "common good" is gone, and it's been replaced by "gimme boyz" on Wall Street and DC.  Remember how "welfare moms" were so openly disparaged not so long ago?  Now we have "Welfare Wall Street", and no one is even batting an eye.  What the hell is wrong with us?  

"The world was made for people who aren't cursed with self-awareness." ~Annie Savoy, Bull Durham

---

by: Justice4All @ Fri Oct 16, 2009 at 19:51:34 PM CDT

[ Parent ]

It's more like... (6.00 / 1)

what's wrong with this picture.  There is plenty of outrage. Except our collective voices are not heard, and the widespread difficulties of Main St America are continually swept under the rug.  It's just going to have to play out. It already is.  Retail sales are down, they will continue to drop. As oil prices increase and inflation continues, there will be even less spending. Profit motivated business will continue to lay off, cut wages and benefits. The journey down will continue. It is so clear really.

America's middle class is at the edge of the cliff.  We are about to be pushed over.  This has nothing to do with Barack Obama, or the Democratic majority.  It is the final result of the 8 years this country endured of the Bush Administration and the Republican Party's failed policies. Unbelievably, people still listen to and support those failed policies.  

The only way we could possibly turn this around would be for the Democrats to stop being so bipartisanyish and just get the damn job done.  Put in strong regulations that force large profitable companies to share profits generously with all employees, not just CEO's. Put in strict regulations on Wall Street to ensure transparency without a single loophole they can use to scam the system.  Health care reform with a robust public option, damn the market place insurance companies.  They will fail, but this will open the door to lower costs so new, fresh, honest market place insurers can begin to grow.

At this point, after failed attempts at fixing the current broken system, crash and burn seems to be where we are headed, and possibly the only answer.

WE NEED A PUBLIC OPTION

---

by: liveandletlive @ Fri Oct 16, 2009 at 21:54:33 PM CDT

[ Parent ]

Well, main stream media has some responsibility here, too (6.00 / 4)

If 24 teabaggers have a moronic shouting match, TV trucks congregate like black flies at a picnic in July...if 1000 workers from across the spectrum of union and non-union march, coverage is minimal ... to no coverage...If the "barge" is going to be turned, then coverage and public opinion also need to be educated....part of why I love Ernie's one-horse, independent campaign to hold Howie Carr accountable for being an emotionally sbusive, sloppy "fake journalist" and bully.

Deborah Sirotkin Butler
AmberPaw dot @aol.com

"Failure to plan is planning to fail."
Proverb

---

by: AmberPaw @ Sat Oct 17, 2009 at 07:39:57 AM CDT

[ Parent ]

I agree (6.00 / 1)

the media could play a huge role in helping to share the reality of the recovery.  They are prone to spin, obviously, and often simply repeat what Wall Street is saying.  As in... the economy is improving because
while consumer spending fell, it fell less than expected, so therefore things are looking up!  Who are the arbiters who determine the expectations in the first place.  They can continually make things look good just by contantly raising or lowering expectations. It seems to happen a lot.

They do it for unemployment too.

The government reported this morning that while the national unemployment rate jumped from 8.5 percent to 8.9 percent, employers shed fewer jobs last month than expected -- companies cut 539,000 jobs last month instead of the 620,000 analysts were projecting. The news provided a boost to Wall Street: The Dow Jones industrial average closed up some 165 points.

The dow gained 165 points because we lost jobs, that is the non-spin version.  

When the media does report on consumer difficulties, it is usually brief, but often ends with touting the rising stock market as the ultimate sign that we are in a recovery. So therefore, any complaints about the reality of the situation are fought back with proof positive economic recovery based on the stock market.

It's nothing more than spin and a lie, it's completely absurd.

WE NEED A PUBLIC OPTION

---

by: liveandletlive @ Sat Oct 17, 2009 at 17:10:35 PM CDT

[ Parent ]

Why should this "play out?" (6.00 / 2)

Given that the U.S. owns much of these banks...why are they still foreclosing on our family, friends and neighbors?  Why should the market forces prevail ONLY on the average citizen?  

This isn't just the result of 8 years of Republicans in the White House - this is a corruption by special interests at every level of our government, with the exception of the judiciary. If it's just the Republicans, then why are reform efforts being hijacked?  We just had a posting about Congressman Frank's reform bill being watered down to make it more palpable for the banks.

If we're going to just let it "crash and burn", liveandletlive, then we should have done that already and never mind this bailout.  We could have saved a ton of money.  

"The world was made for people who aren't cursed with self-awareness." ~Annie Savoy, Bull Durham

---

by: Justice4All @ Sat Oct 17, 2009 at 08:18:18 AM CDT

[ Parent ]

"Why?" is a really good question (0.00 / 0)

I too do not appreciate Barney Frank helping to water down the reform bill. (by the way, didn't they pass that, and was it watered down?)
I agree the corruption is at every level of the government, including Democrats.  I still blame the Bush years for laying the groundwork for increasing corruption, as well as for allowing corporations to grow in money and power.

Reform is being hijacked because the Democrats are not stepping up to the plate to force the reforms that are needed.  It's seems they may not at all.  If that's the case, then crash and burn will happen, whether we want it too or not.  There is no more to take from the middle class.  It's the middle class that drives the economy.  Yet still, companies like National Grid, our health insurers, our state and local taxes on the middle class continue to rise to try to squeeze a just a little more from us.  There is no more left.  If the government doesn't do something beneficial pretty soon, other than bailing out the wealthy and well connected, we are going to crash.  It's not a matter of choice.  It will just happen.


WE NEED A PUBLIC OPTION

---

by: liveandletlive @ Sat Oct 17, 2009 at 17:38:39 PM CDT

[ Parent ]

"Hope and Change" was the Madison Ave slogan... (6.00 / 1)

The politicians changed, the government didn't.  We got taken again.

I am just a poor boy and my story's seldom told

I've squandered my resistance for a pocketful of mumbles, such are promises

All lies and jest, still the man hears what he wants to hear
And disregards the rest, hmmmm

-Paul Simon, Art Garfunkel

---

by: Weare Mann @ Sun Oct 18, 2009 at 16:56:18 PM CDT

[ Parent ]

Break them up while we're at it. (6.00 / 1)

There were a few places on this thread I could have inserted this comment.  We think "too big to fail" and automatically focus on the fail side of that equation.  Why not focus on the too big side and rather than preventing the companies from failing, prevent them getting too big to begin with?  Several years ago AT&T (affectionately known as MaBell) was forced by the government to break up.  Let's use our anti-trust laws aggressively, modify them to apply to this sector if necessary, and force the break up of these financial megaliths.

---

by: Christopher @ Sat Oct 17, 2009 at 10:41:15 AM CDT

[ Parent ]

It's interesting that Greenspan... (0.00 / 0)

... is thinking that these institutions need to shrink.  The question is how do you do that.  Of course the answer is regulation, and we all know how the Reaganites will react to that.

Yglesias:

It really does seem like if even Alan Greenspan is coming around to the view that we shouldn't allow financial institutions to grow to such enormous sizes that we really shouldn't allow financial institutions to grow to such enormous sizes. What's a lot less clear to me is what you can actually do, in practical terms, moving forward. ...

This, I think, is one of the main reasons you hear more about breaking banks up from people talking to newspapers than you do from policymakers. What, exactly, are Ben Bernanke and Tim Geithner supposed to do at this point?

Which is why, I think, the idea of enhanced capital ratios and special fees is actually a pretty good idea. Greenspan says "I don't think merely raising the fees or capital on large institutions or taxing them is enough." He thinks we need to actually break them up. But raising fees and capital requirements can be a way of doing this. The point would be to make the fees and requirements onerous enough that the managers of large financial institutions find it worthwhile to start finding ways to spin things off and shrink. ...

"It is not because things are difficult that we do not dare, it is because we do not dare that things are difficult." - Seneca (5 BC - 65 AD)

---

by: Mr Lynne @ Sat Oct 17, 2009 at 14:25:09 PM CDT

[ Parent ]

The average American is simply (6.00 / 2)

not too big to fail.  It's all about influence.  Whether you are a middle class homeowner facing foreclosure or a family with a mentally retarded child, you have little political influence.  And our system won't respond to you.  If there happen to be enough of you that the politicians do take notice, they will do the minimum necessary to maintain the perception that they care.  (Just look at the problems facing the public health care option, which is overwhelmingly supported by voters.  It is opposed by people with real political influence, and is therefore unlikely to be adopted.)

On the other hand, if you are a wealthy corporation with executives that contribute mightily to political campaigns of both parties, you will be labled "too big to fail" should you ever get in financial trouble; and you'll get bailed out with few questions asked.

---

by: Dave from Hvad @ Sat Oct 17, 2009 at 09:01:38 AM CDT

Call me Easu. (0.00 / 0)

What started out as a country of, by and for the people has been sold.  Corporate entities, unable to vote themselves, are allowed to buy the elected representatives of the people.  These procured individuals are voted back to office time and time again.  Who does the voting?  Me, you. We sold out.

We vote for the vague promise of hope and change.  We expect that one party is different from the other.  They prove us wrong.  Once they come to power they blindly follow the instructions of their lobbyist masters.  

What can be done?  If we look at Pittsburgh and the other peaceful demonstrations we see that the government meets them with violence through militarized police.  What of a national referendum?  One that bars non-natural entities such as corporations, unions, pacs from transferring money or gifts to politician or their families?  

Perhaps it is too late.

---

by: Howland Lew Natick @ Sat Oct 17, 2009 at 11:00:22 AM CDT

[ Parent ]

Trickle-down (5.50 / 2)

But given how little has been done for the average citizen, (and comparably - it is piss-little) can someone explain how this is any different than the "trickle down" theory of Reaganomics?  God help us.

Sure, because if we take a reality-based view we realize it's nothing like Reaganomics. The trickle-down theory posited that if we only reduce regulation and taxation of business and the wealthy, it would have a trickle-down effect that would benefit American workers more broadly. The evidence showed (and most economics would agree) that the trickle-down theory was fundamentally flawed.

The bank bailout in this case had nothing to do with a generalized theory about money trickling down from the rich to everyone else through some sort of magic. It was about targeting money to the one part of the financial sector that, if it failed, would cause not just another Great Depression but an utterly catastrophic (and world-wide) economic collapse. Just as Republicans (specifically, President Hoover) screwed up in the period following the 1929 stock market collapse by just letting banks fail (i.e. by not "bailing out" this vital sector), they are screwing up now by suggesting that the bank bailout was unnecessary. Only this time, liberals such as yourself are joining in with the criticism.

I think what we can't forget is just how close we came to massive economic collapse this past year. If we didn't have these bank bailouts, the fear and uncertainty in the market would have escalated to epic proportions. What we need now, certainly, is a commitment to much stronger financial regulations to ensure that this doesn't happen again. Also key is a strong commitment to the poor and the middle class during these difficult economic times. I'd agree that, so far, much more has to be done on these issues than has been done so far.

But that doesn't justify a full-scale attack on the bank bailouts (and calling it, of all things, "Reaganomics"), which were a necessary step. Full scale economic collapse helps nobody, rich or poor alike.

---

by: Hoyapaul @ Sat Oct 17, 2009 at 10:32:32 AM CDT

I disagree (6.00 / 1)

Here's the biggest reason: We handed these industries a great, big, giant wad of cash -- and demanded almost nothing in return for it. We bailed out Goldman Sachs, but not two of its biggest competitors. We bailed out AIG specifically because they would have taken Goldman Sachs with it. In that way, you can only say this bailout is worse than Raeganomics; it contributed most to one company on behalf of that one company's many friends in government.

The government was right to bail out the financial sector, but not without strict new regulations. It was right to make sure companies like Goldman Sachs and many of the banks didn't go under, but it shouldn't have contributed to the "too big to fail" problem, actually making that problem worse. Any company "too big to fail" needs to be broken up into many, much smaller companies. Period.

While a full-scale economic collapse in the banking collapse wouldn't have "helped" anyone, we haven't helped the middle class of this country to this day. It's bleeding and in triage and has actually been that way for several decades now, with only minor glimmers of hope during the Clinton years (to put it optimistically). The design of the bailouts, without helping the middle class (say, making those banks use the money for liquidity to spur more spending, instead of saving it like many of them did, or, even worse, using it to gobble one another up... which several of them also did), was just another example of this country creating policy that vastly favors the rich over the poor... and everyone else. And, yes, when you make your biggest effort at turning the economy around be throwing money at millionaires many times over, it is a form of "trickle down economics," even though the entire financial sector essentially just moves money around, not creating anything, not really growing many sustainable jobs. At the very, very, very least, this country should cap bonuses the financial sector is allowed to dish out, at least if they took money from us, to something reasonable like 10-20% of their yearly salaries. And no companies that owe the government money should be allowed to give bonuses, period, until they've paid the country back -- if that goes against some contract language, screw them, change the law and tell them to go F themselves. If a company doesn't like it, let them go under.

---
My thoughts are mine and mine alone. They should not be considered representative of any other organization, group or person - save me.

~Ryan.

---

by: Ryepower12 @ Sat Oct 17, 2009 at 13:57:53 PM CDT

[ Parent ]

Actually.... (0.00 / 0)

... the original trickle-down theory wasn't a regulatory theory... it was a stratification theory.  The theory goes that policies that enhance the position of only the wealthy do not constitute bad economic policy because such wealth inevitably flows down hill anyway.  The regulatory angle is just one aspect that the Reaganites (the main angle being tax policy) to implementing the theory.

"It is not because things are difficult that we do not dare, it is because we do not dare that things are difficult." - Seneca (5 BC - 65 AD)

---

by: Mr Lynne @ Sat Oct 17, 2009 at 14:28:50 PM CDT

[ Parent ]

For clarification (6.00 / 2)

I am not opposed to the bailout in theory. I took economics in college - I get how this works, and I get what it was supposed to do.  What I am offended by is the "asleep at the switch" Treasury and Fed allowing millions of tax dollars to be used to pay bonuses to the very a-holes that got us into this mess.  From NPR:

http://www.npr.org/templates/s...

Neil Barofsky told the House Oversight and Government Reform Committee that the Treasury Department paid little attention to the executive compensation structure at AIG.

"Our audit concludes that this was a failure," Barofsky testified, saying the Treasury Department abdicated its oversight role to the Federal Reserve. Barofsky said that move turned out to be a mistake "as reflected perhaps most clearly by the fact that its agreement with AIG included no provisions relating to executive compensation."

 How do these supposedly brilliant people "not understand" the compensation system at AIG?  How did they not check executive comp?  The AIG execs must have been laughing all the way to the bank.

You know what else offends me?  It's the reform of the system...that isn't going to do a whole hell of a lot.  Despite the drumbeat for real reform...the financial markets are winning in Congress.

Legislation by Representative Barney Frank to tighten derivatives regulation contains an exemption that may let most financial firms escape new collateral and disclosure rules, the head of the Commodity Futures Trading Commission said.

Read more at: http://www.huffingtonpost.com/...

And Hoyapaul....when you've lost your job....and your house...and your government is bailing out the banks...and they're getting bonuses....and you're not getting any help...isn't it really just your own private "great depression?" Even if it's not the "Great Depression" - it might as well be.  

"The world was made for people who aren't cursed with self-awareness." ~Annie Savoy, Bull Durham

---

by: Justice4All @ Sat Oct 17, 2009 at 19:17:44 PM CDT

[ Parent ]

Buncha cowardly congresspeople. (6.00 / 2)

They know what's wrong and what's right but incumbency is more important. The influence of Big Money on politics has grown steadily in the last generation, distorting and corrupting our supposed democratic system.

---

by: hubspoke @ Sat Oct 17, 2009 at 16:56:33 PM CDT

Evergreen (6.00 / 1)

What a nausiating article in the Globe today.  Talk about good money after bad.  A guy (Deval) who I was so high on is seriously testing my loyalty.

---

by: cater68 @ Sat Oct 17, 2009 at 20:17:55 PM CDT

We the people unemployed (me, especially) can pursue gainful empoyment in the private sector. (0.00 / 0)

I agree with Justice4All in viewing recent economic developments as being "trickle down from the top" rather than "bottom-up" development (the latter sounding more sensible, even sensuous). From my MetroWest to MetroBoston, within my scant means of commuting, I have seen people tricked, not treated, by bureaucracies. It's been a shameful year this year with the Department of Commerce's U.S. Census Bureau grossly overpublicizing their scant job opportunities for temporary (decennial) and permanent (year-in, year-out openings). The United States Census Bureau would have saved so much money this year by not bothering to hold a bunch of bogus "objective written exam" testing sessions. Since Nakia D. Adams and her gang of misanthropes in their 4 Copley Place, Suite 301 mini-colony brazenly brandish their gall of denying employment to test-takers who pass (and even ACE) their objective exam, they should just expressly own up that they better appoint their new-hires solely on the basis of their degenerate personality-profiling, rather than claiming any preservation of 1883' s Pendleton Civil Service Reform Act. Well, even our public libraries don't even extend hiring quotas for men in their gender-imbalanced composition. Way too few men are there hired as pagers or staffers in our public libraries, and it's not that we men don't take (or ace) the written objective exams "offered" for such positions. Nowadays, a good deal of library staff are volunteers. The end of 2004 Framingham Public Library pager position offered was a paid position. Considering that government does not secure employment (even with TODAY's U.S. Army) based on the substance of an applicant's prior performance of job duties, thorough submission of paperwork, and full intent to work upon sworn (or prior-sworn) duty, Americans without work will be in a stronger position to pursue private sector work that pays a salaried income, such as engineering jobs with CSX. Although Walmart steadily beats our United States Postal Service in quantity of people hired, no retail-pharmacy can be counted on to fulfill Americans' needs for jobs which keep our USA competitive above China and other nations. Many a Walmart has had its stores manned by people who have not yet secured full citizenship papers, or who have not developed our all-American confidence of demanding living wages and health insurance. Regrettably, the USPS, beginning last year, had to stop gainfully employing many Americans. Here in Massachusetts, the Massachusetts Bay Transportation Association had to cut down on due pensions for its long-commited American workforce.
I don't want some smarty-pants opportunist GOPolitburo or independent candidate (Christy Mihos, or other) to gloat over our current debacle. I care more about myself, fired USPS workers who used to handle and deliver my mail (sweet-hearty missives, or otherwise), and underemployed coffee-servers than any elected official. That being said, our incumbent Commonwealth governor decidedly chose our Massachusetts over Washington, D.C. when all the hype-drums pounded last year, and even when those hype-drums have given way to the dysfunctional snares of YouTube ranters (many of whom don't even have real names, or actual content-loaded accounts to show for). Deval Patrick chose to balance our Bay State budget on time, rather than snatch up a cabinet post. The Boston Herald had ragged on Bain-head and 2002-2006 Governor Mitt Romney for fleeing our Commonwealth to pursue his own (later proven abortive) bid to be our 44th U.S. president (even as early as 2004, were it possible). Obama's own 2008 Birthday Bash in 60 State Street with its pricey 4 or 5K lunch plates had been a timely and effective event for the well-heeled, but Obama's upcoming 2009 Boston Friday appearance might have been better planned to be a people-drawer rather than a cash drawer.  So President Obama and Governor Patrick won't be having a mega-venue Joyce Meyer+Joel Osteed kind of thingy.

---

by: Ramuel M. Raagas @ Sun Oct 18, 2009 at 23:19:30 PM CDT

Excellent Diary and Discussion (0.00 / 0)

I learned a lot. Thanks to you all.  

---

by: Judy Meredith @ Mon Oct 19, 2009 at 05:01:29 AM CDT