News Did the 2008 Financial Crisis Mark the End of Free-Market Economics?

[mheslep]

Yes, you're right. But it's an opportunity for whom? Who is profitting from this crisis?

I've just started reading "The Shock Doctrine: The Rise of Disaster Capitalism ," by Naomi Klein.

From Amazon.com reviews:

From Amazon.com reviews:

...The Shock Doctrine, and the film by the same name, uses a number of specious rhetorical techniques, such as slippery slope, post hoc ergo proptor hoc reasoning, and blatant pathetic appeals. The film mimics the style of conspiracy theorist films (see "Spare Change")
...
Klein apparently wants some kind of mixed system of free market economics with socialist policies and guarantees. This describes France, where the unemployment rate has been consistently around 8-12% for the last 10 years (double the U.S. rate), young people are basically barred from the workforce, ethnic discontent and violence is rising (lots of burning cars and riots), and productivity is falling. And yes, France has plenty of corruption.

The text is at best anecdotal and polemical. When one finally gets through the 400 pages, they may quickly recall G.K. Chesterton's remark:

"The reformer is always right about what is wrong, but seldom right about what is right."...

"

 

[OrbitalPower]

Interesting that the author doesn't name these supposed fallacies - and in France, if you're unemployed, at least you're not starving to death and can still easily have access to healthcare, unlike in the states, which is becoming more and more a speculative economy as well.

 

[OrbitalPower]

""The reformer is always right about what is wrong, but seldom right about what is right."

An apt quote, applicable mostly to American Libertarian "reformers," confederates, etc.

 

[lisab]

Regarding "Shock Doctrine"...

Yes, the book isn't without its faults. I recognized that early into it. But a careful reader - I would imagine anyone here - would be able to separate the author's choice of writing style from the point she's trying to make.

The reveiwer you posted, mheslep, appears to be reading an awful lot into the book that so far, I don't see. Frankly, that review comes across as a bit Francophobic.

The book makes some good observations about how our government - specifically the congress - was stunned into submission when it agreed to invade Iraq.

I'm hoping that the same "shock and awe" tactics won't work now, with regard to the $700 billion bailout with no oversight allowed.

 

[jal]

My Two cents.
The problem started some 40 years ago when they started to give credit cards to students and giving out student loans.
It created a mentality that it was okay to spend money that belonged to someone else even if you could not pay it back.
As a result, The next shoe to drop will be credit cards that cannot be paid back.
---------
As far as the bail out...
A few questions?
Those who have money are in a position to start buying out those low value assets.
Where does someone keep 8B dollars to be able to buy a bank?
Where does someone keep billions of dollars to do a buyback of the shares of their company?
What would make you happier to see ... a Check made out to a bank holding subprime papers or a check made out to a billionaire holding subprime papers?
Does the FBI have permanent highly paid specialized accountants on its payroll or did it get the recommendations of someone to hire “my accountant and his firm” to do the digging?
Etc. ….. ….. ….

 

[quadraphonics]

Accounting is what allows us to see how money is flowing into and out of these big institutions though.

Indeed it does. That still doesn't make it a financial regulation. That we have a better idea of where the money is has nothing to do with whether the activities of the businesses in question are a good idea or not.

Banks are only required to hold 10% of their assets on hand. To protect against runs and panics we have the Federal Reserve system.

We have a number of mechanisms that work in concert to prevent banks runs. One is the Federal Reserve, which can adjust liquidity to prevent them. Another important one is the FDIC, which insures deposits. And another is the liquidity requirements for banks, which guarantees they have at least a minimal amount of capital on hand (and so also limits the degree of leverage such banks can pursue).

It doesn't seem to have helped much though. The institutions still crashed and are now being investigated for fraud.

Given that SOX was not designed to prevent any such crisis (i.e., one driven by overleveraging, and not fraud per se), I don't see that as much of a criticism. Similarly, just because people still die in car crashes doesn't mean that the laws against speeding aren't working, or aren't a good idea.

 

[Ivan Seeking]

As for who supported this, let's be clear: The architect has been serving as McCain's financial advisor. Clinton had just been impeached and was trying to get through legislation that would serve poor black communities. And even then, the vote was mostly down party lines.
http://www.senate.gov/legislative/L...ote_cfm.cfm?congress=106&session=1&vote=00105

The Clinton White House threatened to veto the bill if CRA provisions were substantially weakened, in response to heavy pressure from the Congressional Black Caucus and the Reverend Jesse Jackson, whose Operation PUSH has made extensive use of CRA in its campaigns to pressure corporations and banks for more opportunities for black businessmen. But eventually the White House caved into Gramm, accepting his amendments so long as the program remained formally in place...

http://piggington.com/clinton_republicans_agree_to_deregulation_of_us_financial_system

Alphabetical by Senator Name
Abraham (R-MI), Yea
Akaka (D-HI), Nay
Allard (R-CO), Yea
Ashcroft (R-MO), Yea
Baucus (D-MT), Nay
Bayh (D-IN), Nay
Bennett (R-UT), Yea
Biden (D-DE), Nay
Bingaman (D-NM), Nay
Bond (R-MO), Yea
Boxer (D-CA), Nay
Breaux (D-LA), Nay
Brownback (R-KS), Yea
Bryan (D-NV), Nay
Bunning (R-KY), Yea
Burns (R-MT), Yea
Byrd (D-WV), Nay
Campbell (R-CO), Yea
Chafee, J. (R-RI), Yea
Cleland (D-GA), Nay
Cochran (R-MS), Yea
Collins (R-ME), Yea
Conrad (D-ND), Nay
Coverdell (R-GA), Yea
Craig (R-ID), Yea
Crapo (R-ID), Yea
Daschle (D-SD), Nay
DeWine (R-OH), Yea
Dodd (D-CT), Nay
Domenici (R-NM), Yea
Dorgan (D-ND), Nay
Durbin (D-IL), Nay
Edwards (D-NC), Nay
Enzi (R-WY), Yea
Feingold (D-WI), Nay
Feinstein (D-CA), Nay
Fitzgerald (R-IL), Present
Frist (R-TN), Yea
Gorton (R-WA), Yea
Graham (D-FL), Nay
Gramm (R-TX), Yea
Grams (R-MN), Yea
Grassley (R-IA), Yea
Gregg (R-NH), Yea
Hagel (R-NE), Yea
Harkin (D-IA), Nay
Hatch (R-UT), Yea
Helms (R-NC), Yea
Hollings (D-SC), Yea
Hutchinson (R-AR), Yea
Hutchison (R-TX), Yea
Inhofe (R-OK), Not Voting
Inouye (D-HI), Nay
Jeffords (R-VT), Yea
Johnson (D-SD), Nay
Kennedy (D-MA), Nay
Kerrey (D-NE), Nay
Kerry (D-MA), Nay
Kohl (D-WI), Nay
Kyl (R-AZ), Yea
Landrieu (D-LA), Nay
Lautenberg (D-NJ), Nay
Leahy (D-VT), Nay
Levin (D-MI), Nay
Lieberman (D-CT), Nay
Lincoln (D-AR), Nay
Lott (R-MS), Yea
Lugar (R-IN), Yea
Mack (R-FL), Yea
McCain (R-AZ), Yea
McConnell (R-KY), Yea
Mikulski (D-MD), Nay
Moynihan (D-NY), Nay
Murkowski (R-AK), Yea
Murray (D-WA), Nay
Nickles (R-OK), Yea
Reed (D-RI), Nay
Reid (D-NV), Nay
Robb (D-VA), Nay
Roberts (R-KS), Yea
Rockefeller (D-WV), Nay
Roth (R-DE), Yea
Santorum (R-PA), Yea
Sarbanes (D-MD), Nay
Schumer (D-NY), Nay
Sessions (R-AL), Yea
Shelby (R-AL), Yea
Smith (R-NH), Yea
Smith (R-OR), Yea
Snowe (R-ME), Yea
Specter (R-PA), Yea
Stevens (R-AK), Yea
Thomas (R-WY), Yea
Thompson (R-TN), Yea
Thurmond (R-SC), Yea
Torricelli (D-NJ), Nay
Voinovich (R-OH), Yea
Warner (R-VA), Yea
Wellstone (D-MN), Nay
Wyden (D-OR), Nay

 

[LowlyPion]

The book makes some good observations about how our government - specifically the congress - was stunned into submission when it agreed to invade Iraq.

I'm hoping that the same "shock and awe" tactics won't work now, with regard to the $700 billion bailout with no oversight allowed.

Indeed this is likewise being marketed to the public similarly.

The bailout won't cost the money put at risk. The US could even make a profit.

Yeah and Iraq was supposed to turn around its oil production and the US would get "paid" for liberating it too.

 

[Ivan Seeking]

The bailout won't cost the money put at risk. The US could even make a profit.

Obviously! That's why we have a crisis in the first place.

With the S&L fiasco, I think we made about 0.25/1.00.

 

[mheslep]

As for who supported this, let's be clear: The architect has been serving as McCain's financial advisor. Clinton had just been impeached and was trying to get through legislation that would serve poor black communities. And even then, the vote was mostly down party lines.
http://www.senate.gov/legislative/L...ote_cfm.cfm?congress=106&session=1&vote=00105

http://piggington.com/clinton_republicans_agree_to_deregulation_of_us_financial_system

'This' is the Gramm-Leach-Bliley bill? Aside from the CRA, how does this have any significant impact on, or connection to the current problem with subprime mortgages bundled as securities? That is, can you point out how, if GLB had never happened, that Fannie/Freddie would not buy garbage mortgages from a Countrywide, bundle them and then hold or sell them on the market?

 

[Greg Bernhardt]

This just is: JPM buys WM

 

[Gokul43201]

'This' is the Gramm-Leach-Bliley bill? Aside from the CRA, how does this have any significant impact on, or connection to the current problem with subprime mortgages bundled as securities?

Not sure if we're all talking about the same bill, but here you go ... from the wiki: Commodity Futures Modernization Act of 2000

The Commodity Futures Modernization Act of 2000 has received criticism for the so-called "Enron Loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by Enron Lobbyists working with senator Phil Gramm[3] seeking a deregulated atmosphere for their new experiment, "Enron On-line".

Several Democratic Legislators introduced legislation to close the loophole from 2000-2006[4][5], but were unsuccessful.

In September 2007, Senator Carl Levin (D-MI) introduced Senate Bill S.2058 to specifically close the "Enron Loophole" [6] This bill was later attached to H.R. 6124, the Food, Conservation, and Energy Act of 2008, aka "The 2008 Farm Bill". President Bush vetoed the bill, but was overridden by both the House and Senate, and on June 18th, 2008 the bill was enacted into law.[7].
...
The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like mortgage backed securities, necessitated the government bailout of insurer A.I.G.

 

[OmCheeto]

This just is: JPM buys WM

What? My double mortgage payments to WM over the last 3 years didn't bail them out?

I hope they don't cancel my maxed out credit card. I'd be lost without paying $300 a month for my excesses over the last 4 years.

and btw, does anyone know the address of JPM? The bill is due in 6 days...

 

[WhoWee]

Consider this...during the investigation into the S & L crisis, investigators discovered the pension funds were in BIG trouble...more than the S & L's. They stopped the investigation.

However, it was also discovered that savings accounts, CD's and money market deposits were at a relatively strong level. So, what did the Fed do? They slashed interest rates and drove all our savings into the stock market. The DOW was around $4,500 (where it belongs) at the time. Now our savings are at an all time low.

As a result, the pensions and institutions were bailed out when they sold their risky investments and "shared" them with (really the same people who will ultimately derive benefits from the pension funds...novel idea...sell the bad paper back to the owners?).

It was also around this time that derivates trading became popular. The SEC chairman testified this week that our troubled banks hold about $183 TRILLION DOLLARS worth of this paper at present...that's a scary number...given the trading isn't regulated (much).

Now we're all watching helplessly as our elected leaders try to figure out what to do with our troubled system. I find it hard to believe that anyone could have a problem with John McCain (or anyone) not wanting to rush into an uninformed decision of this magnitude!

Here's the problem...let's say they decide to infuse $1 TRILLION DOLLARS into the Fed and put into place lots of regulations and even figure out where to find the funds.

The next topic is tax cuts...capital gains tax cuts...everybody wants them. The only thing propping up the market is high taxes on capital gains...it's cheaper to let it ride. If tax cuts are passed...there will be a big sell off.

The market needs to correct itself. The P/E ratios are astronomical. I'll give an example. An earnings multiple of 50 to 100 has become acceptable in certain industries...such as fast food chains. The example is easy...if a pizza shop with $20,000 worth of equipment/assets located in a leased storefront generates $30,000 in income annually (for 10 years) and has lease options extending for another 40 years...what is the market value of the pizza shop?

In the real world...2 to 3 times earnings with little attention paid to the value of equipment = $75,000 to $100,000 with owner financing (maybe).

However, if that same shop was a publicly traded company...the same shop would be valued at ($30,000 x (50 to 100)) = $1,500,000 to $3,000,000. Are you laughing or crying? Don't believe me...go do some research.

If the Fed tries to stop the correction with another bailout...we WILL be done...as a country.

The Fed has far too much power...they CAUSED most of these problems...how can they be trusted?

 

[mheslep]

Not sure if we're all talking about the same bill, but here you go ... from the wiki: Commodity Futures Modernization Act of 2000

Different bills though Gramm also sponsored CFM.
S.900 Gramm Leach Bliley, 1999 (referenced in IvanS's link initially)
http://www.govtrack.us/congress/bill.xpd?bill=s106-900

H.R. 5660 Commodity Futures Modernization Act of 2000
http://www.govtrack.us/congress/bill.xpd?bill=h106-5660

Now, I wouldn't defend/promote either of the bills for the energy or commodities issues they directly concern; I've only scanned them. I do contend they had little do w/ the subprime mortgage collapse. Derivatives may be a problem, but they are not THE problem. Problems w/ CDS are mainly from the bogus mortages on which they are based.

 

[mheslep]

...what is the market value of the pizza shop?

In the real world...2 to 3 times earnings with little attention paid to the value of equipment

7 times earnings is the usual valuation in smaller, mature companies.

 

[russ_watters]

Obviously! That's why we have a crisis in the first place.

With the S&L fiasco, I think we made about 0.25/1.00.

Difference? The S&L investments were federally insured. So the government had to pay face value for assets worth only a fraction of it. In this situation, it's reversed. The government is free to set the price of the bailout.

 

[russ_watters]

Interesting that the author doesn't name these supposed fallacies - and in France, if you're unemployed, at least you're not starving to death and can still easily have access to healthcare, unlike in the states, which is becoming more and more a speculative economy as well.

Speaking of fallacies, you threw out to big ones: There is no starvation problem in the US and the unemployed still receive a great deal of medical care.

 

[russ_watters]

No, Clinton had nothing to do with it.

Well... you might say that if by that you meant Clinton did nothing about it, since Bin Laden had quite an active career during the Clinton Presidency, including the first bombing of the WTC and the run-up to the second, among many other things.

But yeah, I know that's not what you mean. You mean regardless of whatever came before, a President is completely responsible if an incident happens on a date when he's President, regardless of how long the incident was in the works. That's a rediculously simplistic statement you've made.

 

[WhoWee]

I agree, a 7 times multiple is a usual valuation of a small mature company...IF management is part of the deal and/or there are more/better assets...in the case of a pizza shop...the "earnings" are the owners paycheck. I don't believe anyone would pay $200,000 for $20,000 in assets and a $30,000 paycheck. Maybe an unfair example?

However, 7 times still makes the point of an over-priced stock market. Some high flying fast foods have soared to 200 to 300 times...based on unrealistic future growth...which requires the company to grow faster than it should and borrow as much as possible and pay too much for locations.

To continue my comparison, the pizza shop owner with a $2,000 per month rent obligation and otherwise debt free...who earns $30,000 per year (on revenues of $150k to $200,000/year) working the business himself, would be INSANE to open a second unit with a $4,000+ per month rent and $2,500 in new debt service (to gross $300,000/yr?)...and have to hire someone to run (which?) one of the shops in order to make an additional...$30,000(maybe?) per year.

Chains do this routinely...to please the market craving for growth...their occupancy cost is often times $20,000+ per month on gross revenues (and investment) of $1.5 and operating income of 8%. One of the favorite strategies of the major chains is to do sale/leasebacks to create "earnings" and put older debt free properties (with lower occupancy costs) at risk.

Most of the larger chains that have failed...didn't fail because people didn't like their food/concept. They failed because they tried to expand too quickly and borrowed more than they could service...most of the time they made these decisions to support or increase their market value.

 

[Art]

I agree, a 7 times multiple is a usual valuation of a small mature company...IF management is part of the deal and/or there are more/better assets...in the case of a pizza shop...the "earnings" are the owners paycheck. I don't believe anyone would pay $200,000 for $20,000 in assets and a $30,000 paycheck. Maybe an unfair example?

However, 7 times still makes the point of an over-priced stock market. Some high flying fast foods have soared to 200 to 300 times...based on unrealistic future growth...which requires the company to grow faster than it should and borrow as much as possible and pay too much for locations.

To continue my comparison, the pizza shop owner with a $2,000 per month rent obligation and otherwise debt free...who earns $30,000 per year (on revenues of $150k to $200,000/year) working the business himself, would be INSANE to open a second unit with a $4,000+ per month rent and $2,500 in new debt service (to gross $300,000/yr?)...and have to hire someone to run (which?) one of the shops in order to make an additional...$30,000(maybe?) per year.

Chains do this routinely...to please the market craving for growth...their occupancy cost is often times $20,000+ per month on gross revenues (and investment) of $1.5 and operating income of 8%. One of the favorite strategies of the major chains is to do sale/leasebacks to create "earnings" and put older debt free properties (with lower occupancy costs) at risk.

Most of the larger chains that have failed...didn't fail because people didn't like their food/concept. They failed because they tried to expand too quickly and borrowed more than they could service...most of the time they made these decisions to support or increase their market value.

You should look up the history of Starbucks. If you have a good product and good marketing combined with first rate management skills there is no reason why you cannot achieve exponential and profitable growth thus justifying those early high PE multiples. A company's share price is based on the sum of it's theoretical gross profits in the future not how much it is making today.

 

[WhoWee]

I was talking about restaurant chains.

However, Starbucks is a classic example of market forces driving ridiculous growth. The EARLY high PE's is what I'm talking about...unsustainable expectations.

Starbucks needs to sell a LOT of coffee to justify their higher occupancy costs. They have stores across the street from one another in some places. Other locations (travel plazas) are the only choice for customers. The jury is still out on Starbucks...my guess...lots of locations will be available soon...or they'll need to do a complete make-over/re-positioning of the concept. Why you ask?

First, McDonald's and Dunkin Donuts have both taken a new approach to store layout/design and coffee sales...this will soon begin to cut into Starbucks sales...not everyone can afford $3+ coffee with gas at $4. Next, this is a concept that had a local market niche and took off nationally on the coat-tails of a popular TV show (Friends). Unfortunately, just like the bars and (old) coffee shops they pulled customers from...Starbucks is no longer the "IN THING"...all fads pass...Friends has been off the air for several years. Third, lots of copy cats (and upgraded concepts like Caribou)...the site competition is pushing prices higher.

One last concern...WHEN the premium real estate devalues under their stores...nobody will want the under-performing locations.

Starbucks is a time-bomb.

 

[LowlyPion]

I was talking about restaurant chains.

However, Starbucks is a classic example of market forces driving ridiculous growth. The EARLY high PE's is what I'm talking about...unsustainable expectations.

Starbucks needs to sell a LOT of coffee to justify their higher occupancy costs. They have stores across the street from one another in some places. Other locations (travel plazas) are the only choice for customers. The jury is still out on Starbucks...my guess...lots of locations will be available soon...or they'll need to do a complete make-over/re-positioning of the concept. Why you ask?

First, McDonald's and Dunkin Donuts have both taken a new approach to store layout/design and coffee sales...this will soon begin to cut into Starbucks sales...not everyone can afford $3+ coffee with gas at $4. Next, this is a concept that had a local market niche and took off nationally on the coat-tails of a popular TV show (Friends). Unfortunately, just like the bars and (old) coffee shops they pulled customers from...Starbucks is no longer the "IN THING"...all fads pass...Friends has been off the air for several years. Third, lots of copy cats (and upgraded concepts like Caribou)...the site competition is pushing prices higher.

One last concern...WHEN the premium real estate devalues under their stores...nobody will want the under-performing locations.

Starbucks is a time-bomb.

If you think underlying real estate is problematic, then you should really be worried for Sears Holdings. They have recently bounced off their original trading support this summer and if real estate continues its slide you can look for further haircuts. They are real estate and retail. Ouch.

But that's not to pick on SHLD any more than the dozens of companies that will be recognizing losses due to declining property values.

 

[WhoWee]

Forget about the "bailout"...the Fed caused the problem...now we have to pay...the market is over-priced and lots of people will lose a lot of equity...all givens...move on.

Here's the real (BIG) ticking time bomb...read what Warren Buffet told his shareholders...go to...

http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/story.aspx?guid={B9E54A5D-4796-4D0D-AC9E-D9124B59D436}

The SEC chairman testified this week on the topic as well...he's very concerned about the absence of regulation...considers $62 to $183 TRILLION to be at risk.

 

[Art]

I was talking about restaurant chains.

However, Starbucks is a classic example of market forces driving ridiculous growth. The EARLY high PE's is what I'm talking about...unsustainable expectations.

Starbucks needs to sell a LOT of coffee to justify their higher occupancy costs. They have stores across the street from one another in some places. Other locations (travel plazas) are the only choice for customers. The jury is still out on Starbucks...my guess...lots of locations will be available soon...or they'll need to do a complete make-over/re-positioning of the concept. Why you ask?

First, McDonald's and Dunkin Donuts have both taken a new approach to store layout/design and coffee sales...this will soon begin to cut into Starbucks sales...not everyone can afford $3+ coffee with gas at $4. Next, this is a concept that had a local market niche and took off nationally on the coat-tails of a popular TV show (Friends). Unfortunately, just like the bars and (old) coffee shops they pulled customers from...Starbucks is no longer the "IN THING"...all fads pass...Friends has been off the air for several years. Third, lots of copy cats (and upgraded concepts like Caribou)...the site competition is pushing prices higher.

One last concern...WHEN the premium real estate devalues under their stores...nobody will want the under-performing locations.

Starbucks is a time-bomb.

Starbucks shares were $0.69 ea in 1992; even after this years market correction they are $15.00 ea with a TTM EPS of $0.63. Looks to me like it has justified it's early high P/E ratio.

The fact it may not exist one day doesn't diminish the very healthy returns many investors have already made. If one restricted oneself to only investing in companies that will last forever then one simply wouldn't ever invest in any company as they all fall by the wayside eventually. That's why buying shares is a better gamble than backing horses; with shares you can switch which horse you have your money on in the middle of the race.

BTW Starbucks went international years ago. They even have outlets in China and as Starbucks rents a lot of the space it occupies it is likely lower real estate values will benefit Starbucks as they should see lower rents.

 

[WhoWee]

I agree, Starbucks had it's run...now it's too risky. Don't be surprised if earnings drop to $.10 and shares drop to $3 or $4 by the end of next year.

Here's another perspective on the company...by disgruntled investors...

http://starbucksgossip.typepad.com/_/2007/05/starbucks_share.html

I'm a little cynical. I'm a retired industry executive and I've seen a lot.

 

[Ivan Seeking]

Difference? The S&L investments were federally insured. So the government had to pay face value for assets worth only a fraction of it. In this situation, it's reversed. The government is free to set the price of the bailout.

That has nothing to do with the point. The point is that if we are poised to make so much money by buying this paper, then why is the financial system collapsing under its weight? We should recapture some value, but how much is anyone's guess.


Here's a good one: According to CBS, McCain's solution is to... deregulate.

I wasn't aware of that aspect of his proposal, but so it is reported.

 

[LowlyPion]

That has nothing to do with the point. The point is that if we are poised to make so much money by buying this paper, then why is the financial system collapsing under its weight? We should recapture some value, but how much is anyone's guess.


Here's a good one: According to CBS, McCain's solution is to... deregulate.

I wasn't aware of that aspect of his proposal, but so it is reported.

He's probably also signed up for lowering the capital gains tax too as part of this bail out. All those Country Club Republicans selling shares in the market downturn must be running up quite a tax bill and need the relief.

 

[WhoWee]

IS Obama for America? Is he really what we need right now?

I think he makes people feel good...he does have a celebrity quality...he's a like-able guy. I'd play basketball or golf with him.

However, his rhetoric doesn't hold water and given his previous comments about sitting down with anyone...the Russians, Iranians, Koreans, Chinese...ever the Europeans will eat him alive. Remember what happened when Kennedy met with Kruschev and showed weakness...we're lucky we survived those 13 days that October.

Barak Hussein Obama knows all of the right buzz words and tells everyone what they want to hear...but let's face it...not only can't he deliver his programs NOW (given the "bailout") as he stated 2 days ago...but he won't be able to "phase it in" either...the funding was NEVER available...just more undeliverable promises.

The only reason he's still in the race is the PRESS won't let him lose. Wolf Blitzer made me so angry with his leading questions (of Obama) yesterday, I wrote to CNN and told them they need to start reporting the news...not creating it...shame on CNN.

Obama needs to quit playing games and telling us what we want to hear and level with us...tell us what he can really hope to do...then he deserves my vote.

Right now, I say Yes to McCain and No No No-Bama...sorry.

 

[LowlyPion]

The only reason he's still in the race is the PRESS won't let him lose. Wolf Blitzer made me so angry with his leading questions (of Obama) yesterday, I wrote to CNN and told them they need to start reporting the news...not creating it...shame on CNN.

The same could be said for the Fox News 24/7 propaganda channel for McCain and Palin. When Palin makes a total fool of herself they talk about how unfairly people are picking on her. They talked about what a brilliant strategy McCain had pulled off in disrupting the bailout so he could come into pull things together. Apparently without realizing what a fool the man made of himself demonstrating his power to divide more than any BS thought that he had any bipartisan skills to bring the country together and lead.

I'm thinking you haven't sent any letters to Fox complaining about their absurdly biased treatment of the entire race.

 

[OrbitalPower]

Latest Bill O'Reilly meltdown on the radio factor:

hDou01X5d28[/youtube] Threatens ...is is how many on Fox News apparently debate.

 

[WhoWee]

Actually, I don't watch Fox...mostly Headline News and CNN when the entertainment show comes on...Soledad O'Brien and Carol Costello are far worse than Wolf. Both women try to slant news stories...not just the election...they're always pushing their own opinions/agenda...whatever they may be.

Regarding the "Palin interview"...CNN/HN has probably aired her nonsense about Alaska being close to Russia about 60 times in the past 2 days...it's ridiculous.

 

[WhoWee]

Obama just can't bring himself to admit his additional spending isn't possible. Unfortunately, the public still believes he'll magically deliver.

Who doesn't want free health care and lower taxes and free education? It all sounds great...but in the real world SOMEONE has to pay...or are we just going to borrow a few Trillion from the Chinese?

For the first time in my life, I'm really worried about the future. I don't trust Obama!

 

[Art]

Obama just can't bring himself to admit his additional spending isn't possible. Unfortunately, the public still believes he'll magically deliver.

Who doesn't want free health care and lower taxes and free education? It all sounds great...but in the real world SOMEONE has to pay...or are we just going to borrow a few Trillion from the Chinese?

For the first time in my life, I'm really worried about the future. I don't trust Obama!

In the debate Obama when asked about the repercussions of the $700 billion bail out said it would limit what he could do as president. He then said this coupled with falling tax revenues would mean he would have to prioritise his goals and proceeded to list those he believed to be the most important but as he rightly pointed out he couldn't be precise in relation to exactly which of his plans would be cut or reduced as he doesn't yet know what the budget will look like.

 

[WhoWee]

Let me get this straight...Obama would have his hands tied on spending because of the bailout. But, he would cut taxes for 95% of all taxpayers...which will add to falling tax revenues. Then, he will spend as much as he can on the things that are most important to him? But, he won't be able to figure that out until he has the (control of the) cash in his hands.

Did I understand completely?

I'll bet if GM would give me their checkbook I could make the workers happy.

 

[Art]

Let me get this straight...Obama would have his hands tied on spending because of the bailout. But, he would cut taxes for 95% of all taxpayers...which will add to falling tax revenues. Then, he will spend as much as he can on the things that are most important to him? But, he won't be able to figure that out until he has the (control of the) cash in his hands.

Did I understand completely?
.

It seems not.

Obama did not say he would cut taxes for 95% of US citizens. What he said was they would, 'not pay a dime more'

He will increase tax revenue by eliminating the rich man's rebate handed out by Bush.

He will save money on some programs such as Iraq through reduced military spending there and by asking Iraq to pay some of the security costs from their own $79 billion surplus. (Personally IMO Homeland security is another area which has seen spending explode uncontrollably and so is ripe for a little rationalization and thus saved tax dollars)

He has also hinted strongly at closing some of the tax loopholes which allow large corporations to get away with paying little or no tax. He will then redistribute the money saved to his priority programs at home and not as you say 'by spending as much as he can', but as much as each program needs or as much as the kitty allows; whichever is the lesser.

See it's simple really.

Unless of course you believe the current administration is already spending tax dollars so wisely no improvements are possible??

 

[WhoWee]

Is that another misleading statement by a politician

OR

Is Obama trying to wiggle out from under another un-deliverable promise?No difference in my book between Obama's latest "takebacks" and the Bush I's "read my lips"

 

[Art]

Is that another misleading statement by a politician

OR

Is Obama trying to wiggle out from under another un-deliverable promise?No difference in my book between Obama's latest "takebacks" and the Bush I's "read my lips"

You've lost me. What misleading statement? If you mean the one about, '95% not paying a dime more', then you are the only one I know of who was mislead as his words were pretty unambiguous to most folk (maybe all minus one) .

How you translate what he said as being a promise to cut taxes for 95% of the people is beyond me

I'm curious, if a shopkeeper for example told you there was no charge for something would you then feel cheated because he didn't give you any money as well as the freebie??

 

[edward]

Is that another misleading statement by a politician

OR

Is Obama trying to wiggle out from under another un-deliverable promise?


No difference in my book between Obama's latest "takebacks" and the Bush I's "read my lips"

You seem to be forgetting the topic of the thread. Within recent weeks everything has changed because of the bailout. I doubt that any politician can now deliver on financial promises.

Will McCain pay for anything by decreasing taxes for the wealthy??

 

[WhoWee]

Take a walk to the nearest street corner or coffee shop or any local McDonald's and talk to the "average person" on main street.

Actually, start with retirees of steel mills or auto plants who lost pensions or benefits (or the employees) at any McDonald's (I live in Ohio...a key battleground state)...they (lifelong Democrats) are still counting on their $1,000 check from Obama and they ALL believe that 95% of all taxpayers will receive a tax cut.

I didn't misinterpret anything...I know exactly what he said and I know exactly how the "average person" interpreted his statements...so does he.

Obama can't deliver on his promises and won't admit it...he STILL maintains that he'll spend as much as he can.

 

[LowlyPion]

Latest Bill O'Reilly meltdown on the radio factor:

Threatens to beat up senators, threatens to stock them, and threatens to break someone's finger.

This is how many on Fox News apparently debate.

Sounds like Barney Frank and Chris Dodd are off the Christmas Card List.

 

[Art]

Take a walk to the nearest street corner or coffee shop or any local McDonald's and talk to the "average person" on main street.

Actually, start with retirees of steel mills or auto plants who lost pensions or benefits (or the employees) at any McDonald's (I live in Ohio...a key battleground state)...they (lifelong Democrats) are still counting on their $1,000 check from Obama and they ALL believe that 95% of all taxpayers will receive a tax cut.

I didn't misinterpret anything...I know exactly what he said and I know exactly how the "average person" interpreted his statements...so does he.

Obama can't deliver on his promises and won't admit it...he STILL maintains that he'll spend as much as he can.

And I'm sure all of those people you mention will receive their cheque as promised as they all are in the categories being targeted for relief by Obama.

All married couples making up to $90K p.a. will receive the $1000 and nobody making under $250,000 will see their taxes increase. So what's changed??

 

[WhoWee]

How can Obama POSSIBLY give everyone a check for $1,000?

 

[mheslep]

...Obama did not say he would cut taxes for 95% of US citizens. What he said was they would, 'not pay a dime more'

OBAMA: ...What I’ve called for is a tax cut for 95 percent of working families, 95 percent...
OBAMA: My definition — here’s what I can tell the American people: 95 percent of you will get a tax cut. And if you make less than $250,000, less than a quarter-million dollars a year, then you will not see one dime’s worth of tax increase.

http://www.clipsandcomment.com/2008/09/26/full-transcript-first-presidential-debatebarack-obama-john-mccainoxford-ms-september-26-2008/

 

[edward]

How can Obama POSSIBLY give everyone a check for $1,000?

The same way Bush passed out money for his economic stimulous package. And from the same source that McCain will get his $2,500 per person $5,000 per family medical benifit, borrow it!

 

[WhoWee]

Again...how can possibly allow ANYONE to borrow money foolishly...Bush's $600 most likely benefited China and the oil countries...a lot of people went to WalMart and bought gas.

As for the McCain proposal...I think we'll have to actually pay for our own health insurance to get the tax credit...I could be wrong?

 

[Evo]

My health insurance costs close to $6,000 annually, luckily my employer pays for most of it. Under McCain I would be screwed if I lost that. And taxing me on that? Is he nuts? Sure, rich people won't be affected, normal Americans will.

Also, do you remember Obama mentioning that the war in Iraq is costing $10 billion a month? “If we’re spending $10 billion a month in Iraq, that’s $10 billion a month we don’t have to deal with our problems here at home,” "in Iraq, where we’re spending $10 billion a month while Iraq has a surplus of nearly $80 billion.”

http://www.msnbc.msn.com/id/26906271/

If McCain intends to keep blowing $10 billion a month on the war according to him.

 

[mheslep]

The same way Bush passed out money for his economic stimulous package. And from the same source that McCain will get his $2,500 per person $5,000 per family medical benifit, borrow it!

That is revenue ~ neutral with the current employer based deduction.

 

[mheslep]

My health insurance costs close to $6,000 annually, luckily my employer pays for most of it. Under McCain I would be screwed if I lost that.

Why? Wouldnt you expect your employer to pay you the $6k as salary?

 

[WhoWee]

My family plan costs just over $14,000 per year and unfortunately I pay 100%. I really want a tax break.

Just a little personal story...when I broke my wrist 2 years ago, I had to wait in line about 3 hours at the emergency room behind about 17 or 18 people that had no insurance (state benefit cards they told me). We all talked for a long time and they said they had colds, coughs and fevers...no accidents among them. It turns out they don't go to a doctors office...they go to the emergency room for faster service.

They weren't required to pay a deductible for treatment or for prescriptions...but I did. I also paid a deductible for x-rays and the follow up treatments. My out of pocket was at least $500 for the incident...WITH insurance. They paid NOTHING to use the ER for colds and coughs...PLUS free Tylenol and cold medicines.

How fair is that? Should everyone have access to affordable health care...YES THEY SHOULD...but it has to be fair.

As for the war in Iraq...we need to charge the businesses who've rushed into make their millions for security...GE and Siemans got a $7 B contract this week. The Iraqi government also needs to either step up and take control or also pay our expenses...the new leadership wouldn't even be in power if we didn't put them into power...they need to pay for us to protect them.

As for the average Iraqi citizen...oh well...better that you borrow money to pay us than for us to borrow money to protect you.

Again, enough is enough and fair is fair. We don't have any money. If we insist on being the world's policeman...then someone needs to pay for our expenses. Otherwise, we need to stay home and police our own borders.