Friday, February 13, 2009
The Chinese Want To Cash In Their Chips
And buy up some distressed real estate. Who can blame them? Their dollars will be massively devalued shortly. Maybe they'll buy up some of our failing banks too (Bank of China anyone?)
Sunday, February 08, 2009
Why The Stimulus Bill Won't Work
If the $800 billion stimulus bill passes, which is still debatable, it will have minimum impact at best. Why? Because unlike the 1930's when government spending would go into the pockets of American workers and American companies to build American infrastructure, any stimulus that is initiated by the US government today will almost immediately exit the country and end up in the hands of a foreign country.
For example, think about the Blue Ridge Parkway which was built during the Great Depression as a way of stimulating the economy. American companies were paid to build it, and Americans were paid to do the labor. The money that went to companies was used to purchase equipment and materials. These items were almost certainly manufactured by other American companies. Thus the stimulus money created jobs on the Parkway, and in the equipment manufacturing plant in Detroit, the shovel factory in Atlanta, etc. Those business hired people who got paid and thus kept the stimulus going. Workers purchased goods with their earned money that was almost certainly American made. Thus the stimulus flowed throughout the entire economy.
Now consider what will happen today. A stimulus package to build a bridge. It will be awarded to a foreign national company who will use it to create a few jobs in the US to build the bridge but the bulk of the money will exit the American economy and go back to the home country. The materials will be purchased from the Japanese and the Chinese and maybe the Koreans.
The workers will take their money and buy a Japanese car, or maybe a nice HDTV from China, etc.. Thus their money will help sustain a retail job in the US and then exit the American economy and stimulate the Chinese Japanese Or Korean economy.
Because America produces next to nothing in this country, we cannot spend our way out of this mess like we did in the 1930's.
What the American economy needs is incentive to produce things in this country that will be desired by other Americans and people in other countries. Not more products produced by American companies in China (like Apple's iPod) but true quality, American products produced by American workers
Wow...that almost sounds like a union advertisement. Maybe they were right after all.
For example, think about the Blue Ridge Parkway which was built during the Great Depression as a way of stimulating the economy. American companies were paid to build it, and Americans were paid to do the labor. The money that went to companies was used to purchase equipment and materials. These items were almost certainly manufactured by other American companies. Thus the stimulus money created jobs on the Parkway, and in the equipment manufacturing plant in Detroit, the shovel factory in Atlanta, etc. Those business hired people who got paid and thus kept the stimulus going. Workers purchased goods with their earned money that was almost certainly American made. Thus the stimulus flowed throughout the entire economy.
Now consider what will happen today. A stimulus package to build a bridge. It will be awarded to a foreign national company who will use it to create a few jobs in the US to build the bridge but the bulk of the money will exit the American economy and go back to the home country. The materials will be purchased from the Japanese and the Chinese and maybe the Koreans.
The workers will take their money and buy a Japanese car, or maybe a nice HDTV from China, etc.. Thus their money will help sustain a retail job in the US and then exit the American economy and stimulate the Chinese Japanese Or Korean economy.
Because America produces next to nothing in this country, we cannot spend our way out of this mess like we did in the 1930's.
What the American economy needs is incentive to produce things in this country that will be desired by other Americans and people in other countries. Not more products produced by American companies in China (like Apple's iPod) but true quality, American products produced by American workers
Wow...that almost sounds like a union advertisement. Maybe they were right after all.
Friday, February 06, 2009
Pelosi Says "We Don't Need Republican Support" For The Stimulus Bill
So I assume she's fine with the Democrats taking the blame when it doesn't work? Meanwhile, the public seems to be siding more and more with the Republicans, as support for the bill has slipped 12% in the last 3 weeks. Now only 51% think it's a good idea.
This is a huge gamble for the Democrats that's likely to be a loser. If the economy gets better, they win and the Republicans look stupid. If the economy gets worse, they'll have a tough time making the case that it would have worked if we had just thrown a few more Trillion $'s down the drain.
This is a huge gamble for the Democrats that's likely to be a loser. If the economy gets better, they win and the Republicans look stupid. If the economy gets worse, they'll have a tough time making the case that it would have worked if we had just thrown a few more Trillion $'s down the drain.
Unemployment skyrockets & the DOW jumps too?
Seriously. Do you need any more evidence that the government is
manipulating the DJIA and S&P 500 stock prices? Every time bad news
comes out, both indexes shoot higher. And why not? The Kremlin
controls the rest of the economy as well.
manipulating the DJIA and S&P 500 stock prices? Every time bad news
comes out, both indexes shoot higher. And why not? The Kremlin
controls the rest of the economy as well.
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