President Obama's First Press Conference

I am stunned, absolutely stunned, after 8 years of complete nonsense, President Obama's first press conference to the American Public is a refreshing change in both tone and content.

"I took a trip to Elkhart, Indiana today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7% to 15.3%. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who've lost them have no idea what to do or who to turn to. They can't pay their bills and they've stopped spending money. And because they've stopped spending money, more businesses have been forced to lay off more workers. Local TV stations have started running public service announcements that tell people where to find food banks, even as the food banks don't have enough to meet the demand.

As we speak, similar scenes are playing out in cities and towns across the country. Last Monday, more than 1,000 men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine. And if there's anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don't know where their next paycheck is coming from."

"The plan is not perfect," the president said, addressing the nation from the East Room of the White House. "No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans."

I think political analyst, Rachel Maddow, host of MSNBC's "The Rachel Maddow Show", made a very interesting observation, when she indicated that President Obama was presenting the issue and the situation of what's happening to everyday Americans to Washington, this is different than President Obama trying to explain Washington to the American Public - which is what former President Bush often did.

If anyone doubts the serious and real crisis we are looking at with regards to the economy, this chart says it all:

The Green Line represents 2008/2009 Job Losses, these are ACTUAL job losses. The shocking pace of unemployment rates compared to the unemployment rates in the past should wake up any left in denial.

The only question is HOW long will this recession last if we don't act soon. The longer we wait, the longer and more painful this recession will be.

The Republican GOP Party is demonstrating how pathetically inadequate they are to the whole crisis resolution. They have become a party of whiners ("Nancy Pelosi is being mean to us") and obstructionists. I have no idea what these guys are smoking, how stupid are they, that they don't see that the American Public gets the fact that the GOP are the problem. Yet they are high-fiving each other that none of the House Republicans voted for the Stimulus Bill.

It's absolutely stunning, how the Republican Party honestly does not know how to govern, all they know how to do is complain. They certainly have the ability to feign hurt and outrage down pat. They remind me of soccer players who fall down and look agonized to get a flag or penalty on the other team. The GOP just loves "working the refs". I am completely offended that my tax payers are going toward the salary of these useless morons. Personally I am a fairly generous and forgiving person, but nothing tests my patience than pure stupidity and incompetence.

Have a look at these poll numbers by Gallup:

President Barack Obama continues to have high approval ratings, compared to Congress. But what's interesting is that the Republicans in Congress has the biggest disapproval rate, even greater than the Democrats.

There is a great quote from Thomas Pain, that Lee Iaoccoca repeated in a long ago commercial:

"Lead, Follow, or Get out of the way"

The Republican Party should really consider that advice...

The Republican Party - Party of the Stupids

On This Week with George Stephanopoulos, we got a preview of the future leadership of the Republican Party, and it provided a great little gem of an interview with Michael Steele, which showcased just how much the Republican Party is becoming the party of the Stupid People.

Trying to sound outraged and morally superior, the hypocritcal Republican "suddenly we have become the party of fiscal responsibility" Michael Steele has this to say about Pell Grants:

STEELE: How does -- how does -- I mean, I'm all for Pell Grants, but how does a Pell Grant, increasing funding for Pell Grant get me a job when I just lost mine?

Yes Mr. Steele, please go on and tell us why you think having stupid and uneducated people in America is good for our economy. And while we are at it, explain to me why having a proper and real solution to address Health Care and Health issues is such a bad thing? Why is it that they can't get it throught their tiny little skulls, that having a healthy and educated workforce is GOOD for the economy.

Then Steele goes on to argue that jobs created by the Government aren't really jobs.

STEPHANOPOULOS: So a job doesn't count if it's a government job?

(CROSSTALK)

STEELE: Hold on. No, let me -- let me -- let me finish. That is a contract. It ends at a certain point, George. You know that. These road projects that we're talking about have an end point.

As a small-business owner, I'm looking to grow my business, expand my business. I want to reach further. I want to be international. I want to be national. It's a whole different perspective on how you create a job versus how you create work. And I'm -- either way, the bottom line is...

STEPHANOPOULOS: I guess I don't really understand that distinction.

STEELE: Well, the difference -- the distinction is this. If a government -- if you've got a government contract that is a fixed period of time, it goes away. The work may go away. That's -- there's no guarantee that that -- that there's going to be more work when you're done in that job.

STEPHANOPOULOS: Yes, but we've seen millions and millions of jobs going away in the private sector just in the last year.

STEELE: But they come -- yes, they -- and they come back, though, George. That's the point. When they go -- they've gone away before, and they come back.

I love how Steele doesn't get how dumb he sounds saying that. Exactly how are these jobs going to come back or get created when there is no demand? Exactly how do they not get that something needs to get the economy re-started. The only way to compensate in place of private spending, is for Government to step up - UNTIL the economy can get back on its feet.

But then again, these are the morons who still think that having emission standards is a terrible thing, and who fought against efficiency standards since the last Oil crisis, which meant that the US was NOT prepared this past summer to handle the high oil prices.

As I watch the Stimulus debate and posturing by the Republican party, I honestly don't know why I continue to be astounded by their stupidity and their idiotic talking points. Really, can't they ever come up with intelligent and productive ideas? Why are they always such a bunch of small minded hypocrites?

I can't put it any better than Jon Stewart, on just how ridiculous the Republican Party is and will be for foreseeable future!

The Daily Show With Jon StewartM - Th 11p / 10c

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Why won't "Trickle Down" Economics Die?

I was watching "Meet the Press" this morning, and the first topic of the show was, of course, about the economy and Obama's stimulus package. David Gregory had a round table discussion with former Congressman David Bonior of Michigan; editorial page editor of The Wall Street Journal, Paul Gigot; chief Washington correspondent for CNBC and New York Times political writer John Harwood; Vanity Fair contributing editor Bethany McLean; and chief economist of Moody's economy.com Mark Zandi.

It was clear that Obama is already on the offensive, marketing his plan, and getting the public acclimated to this stimulus plan. The show didn't offer anything new in terms of analysis. The entire discussion can be summed up as follows:

1. We need to do this, otherwise the economy will be in bigger trouble
2. We need to do something, but we should do something else, like tax cuts
3. How will we pay for this ~ followed by requisite ringing of hands

MR. GREGORY: And what about--Paul, what about the idea of tax cuts as being as stimulative as infrastructure spending?
MR. GIGOT: Well, I think they're much more stimulative if they're the right tax cuts.
MR. GREGORY: Mm-hmm.
MR. GIGOT: I mean, we have a capital strike going on right now. Nobody wants to take any risks, nobody wants to make any investments. Part of it's the uncertainty about the damage that Congress might do, but part of it is also the fact that everybody's frozen. You need the incentives to invest, particularly in the private sector.
MR. GREGORY: Right.
MR. GIGOT: I think a, a tax cut, a big corporate rate tax cut, for example, or an across the board tax cut would be a lot more stimulative than this public spending, which has to come from somewhere.

At what point will Conservatives wake up and smell the coffee - "Trickle Down" Economics is DEAD. The last 20 years of deficit spending and tax cuts under Republican Presidents do nothing but hamper the Government's ability to intervene in Economic downturns, and in fact do more to harm to the economy, causing false bubbles, uncontrollable greed, and recessions.

There continues to be this debate on what spurs the economy. It's a basic fundamental principle that the economy grows as a result of consumption and spending. Capital investments facilitate growth, but capital investments are worthless, if there is no growth or profit to be had.

We need to recognize that the key to growing the economy, is growing DEMAND. Demand for goods and services will continue to exist and grow, as long as people have real income keeping pace. Once Income falls or declines, so does the DEMAND, hence production also slows, continuing a spiral contracting of the economy.

So I don't care how much of a tax cut incentive the government gives, unless there is demand and organic market growth potential for the business, there won't be a need for that capital.

Tax cuts have one small benefit, in that they provide instant relief, and add income for consumption. However, most economists recognize that the dollar return on investments for tax cuts are less than the cost of the tax cuts themselves. It's also clear that Obama will need some tax cuts, to gain Republican support for his plan.

MR. GREGORY: Mark Zandi, as an economist, what's your big question about it?
MR. MARK ZANDI: Is it big enough? Is $750 billion, a trillion dollars enough? The economy is in great trouble. We lost 500,000 jobs in December, 2.6 million jobs in 2008. That's the most since 1945.
MR. GREGORY: Mm-hmm.
MR. ZANDI: Unemployment's 7.2 percent. So is 750 billion, a trillion going to be enough to jump-start the economy, to get the private sector back in the game?

MR. GREGORY: The issue of impact, Mark Zandi, speaks to some of the risk of how long it takes. This is how The New York Times reported it Saturday: "The risk is that Obama and the Congress will weigh down their effort with measures that cost many billions of dollars but may not have much impact on economic activity. Tax breaks, for example, usually produce less than $1" worth "of stimulus for every dollar they cost, economists say. Spending on public construction projects, like highways and bridges, produces the most economic activity--but there's a limit to how many projects are `shovel-ready,' and even those take time to generate jobs and ripple through the economy."

MR. ZANDI: But we, but we have no choice. We really don't. I mean, if we don't do something like this, a stimulus package, a foreclosure mitigation plan, the economy is going to slide away. Unemployment is going to rise into the double digits and we're going to lose tax revenues as a result and the deficit's going to be even larger than otherwise.
MR. GIGOT: But, Mark, don't you think that monetary policy is very powerful here? I mean, Christina Romer, who's the president's economic adviser now, she has written in 1994 that fiscal actions have relatively small effects. The big bang for the buck is monetary policy.
MR. ZANDI: In normal times I would agree with you, Paul, but this--the link between the Fed and the economy runs through the financial system. The financial system is literally broken. There--if--you can provide as much cash as you want; but you don't get credit, you don't get it done.

MR. GIGOT: I mean, if you're borrowing it for aircraft carriers like Reagan did to win the Cold War, you get a big payoff down the road. If you're doing it for tax cuts that really stimulate and drive private investment, and in two or three years' time bring the economy back, great. But if it goes to pork, if it goes to green jobs that may sound good in the short term but may not have a market response or a market for them, then it's a waste.

What still gets me is the ridiculous Republican Talking points that Paul Gigot continues to expound, that Monetary Policy is the answer, and that Tax Cuts (to the wealthy and Corporations) are more effective than any fiscal policy. The real gem was the Paul's glowing and inaccurate description of the benefits of Reagonomics. The fact that the WSJ editorial board seems to only regurgitate Republican ideas and principles, renders the paper virtually worthless, except as a birdcage liner.

Overall, my opinion is that I think Obama has shown his political savviness, in the fact that he already recognizes that most economists believe that the stimulus plan will have to be much bigger, hence it's much easier to start with something smaller and let it grow, as opposed to put something too big on the table that will have Republicans balking. What's ironic, is that after 8 years of deficit spending under a Republican President and a Republican controlled Congress, we suddenly have Republicans growing a conscious about the size of the deficit.

Who will buy US Debt?

Today, Obama announced his economic Stimulus plan "American Recovery and Reinvestment," the name of his proposed $750 billion stimulus package at George Mason University.

"Throughout America’s history, there have been some years that simply rolled into the next without much notice or fanfare. Then there are the years that come along once in a generation – the kind that mark a clean break from a troubled past, and set a new course for our nation. This is one of those years. We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.

I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world. In short, a bad situation could become dramatically worse...."

What's interesting is that earlier this week, the International Herald Tribune reported that China is losing it's taste for US Debt.

China has bought more than $1 trillion in American debt, but as the global downturn has intensified, Beijing is starting to keep more of its money at home - a shift that could pose some challenges to the U.S. government in the near future but eventually may even produce salutary effects on the world economy.

But now, Beijing is seeking to pay for its own $600 billion economic stimulus - just as tax revenue falls sharply as the Chinese economy slows. Regulators have ordered banks to lend more money to small and midsize enterprises, many of which are struggling with slower exports, and Chinese bankers say they are being instructed to lend more to local governments to allow them to build new roads and other projects as part of the stimulus program.

Given the ambitious stimulus plan that Obama has in mind, it will be interesting to see how the Treasury will raise the capital, with demand decreasing for US Debt. In addition, what will be the effect of rising interest rates on capital investments for the private sector and for consumers?