Amazing - CNN actually admitting gubmint intervention in economy is bad

[Porsche-O-Phile]

For one, I'm surprised (and a bit refreshed) to see this bit of correct analysis on their normally "tax-and-spend", liberal-leaning site. At least this guy gets it. Government and the FED are idiots and obviously have no flippin' clue how to fix the economy. Taxing the heck out of people to fund the poorest & most fiscally irresponsible ain't gonna' do it.



http://www.cnn.com/2008/US/01/17/beck.housingcrisis/index.html


Glenn Beck: Warning signs missed on economy

By Glenn Beck
CNN

Below is a commentary from Glenn Beck, who anchors "Glenn Beck" on Headline News nightly at 7 and 9 ET.

Glenn Beck says politicians don't have the answers to the housing crisis.



NEW YORK (CNN) -- Longtime viewers of my television program know that I've been banging the recession drum for a while now, but the truth is that an economy as large and complex as ours doesn't just collapse overnight. It happens slowly and methodically, with plenty of warning signs along the way.

Think about it as a series of waves heading toward the beach, with each one representing a different area of trouble. There's one for slowing consumer spending (American Express said that spending among its affluent clients slowed for the first time since 2001); one for inflation (wholesale and consumer prices recently posted their largest increases in 26 and 17 years, respectively); and one for the continuing credit crunch (Citigroup recently announced its fourth-quarter loss was the largest in its 196-year history).

But while those waves are the latest to form, we need to pay more attention to the wave that started it all: housing. In theory, looking closely at the housing market in some parts of the country could help predict what's in store for the rest of us. And if that's true, then buckle up.

If you look beyond the headlines, you'll find a couple of unnerving trends. The first began back in the housing collapse that followed the savings and loan crisis of the late '80s and early '90s. People with homes worth less than their mortgages simply stopped paying, put their keys into an envelope, mailed them back to the bank and just walked away. It's called "jingle mail," because when the banks receive the envelopes, all they hear are the jingling keys.

But trust me, lenders would much rather have an empty house than a trashed one. Unfortunately, they're starting to get both. Some homeowners, distraught over an imminent foreclosure, are destroying their homes before abandoning them. One Oregon man went so far as to lock three live pigs inside his house last year, making it unlivable, let alone sellable. You can think of it as a "reverse housewarming gift" to his bank. Unfortunately, such behavior is leaving banks across the country stuck with empty, trashed homes, along with mortgages that will never be repaid.

The result of it all -- the next wave to crash, if you will -- is that many lenders and banks will not be able to survive. We're already seeing the start of that with the fire-sale acquisition of Countrywide, the nation's largest lender, along with the historic loss just posted by the nation's largest bank, Citigroup.

So, the question that most people are now asking is: How do we stop things from getting worse? It's obvious: We should just listen to the politicians! After all, combining an impending recession with an impending election means that every candidate is also suddenly an award-winning economist.

Unfortunately, these "economists" all seem to believe that government intervention is the answer. From tax rebates to rescue funds to extra state aid, it seems that every politician believes that handouts will trigger prosperity.

[this next part exemplifies one of the reasons I seriously hope the nation isn't collectively stupid enough to elect Hillary Clinton to the W.H.]

While there are plenty of ludicrous ideas to highlight, one of my favorites was pitched by Hillary Clinton during the recent Democratic debate in Nevada:

"I want to see money in the pockets of people who are having trouble paying their energy bills. That stimulates the economy. ... And then, if we need additional stimulation, we should look at tax rebates for middle-class and working families, not for the wealthy who have already done very well under George Bush."

Now, I'm not a former first lady, but I am a thinker, so let me ask the obvious question: Exactly how does helping a low-income family stay warm stimulate the economy? Are they going to suddenly run out and buy an exotic vacation where they'll spend their days brainstorming ways to employ hundreds of people? Of course not. But whenever politicians see an opportunity to promote government handouts, they jump at it.

If you want to talk about heating assistance for low-income families, fine. I'm actually not a black-hearted monster, I want everyone to have heat. But that's an energy issue, not an economic stimulus one.

And instead of tax rebates, which are like economic crack because they result in a temporary high followed by an even lower low, how about we put some lasting trust back into the system by slashing government spending and finally sending the signal to businesses that taxes won't be going through the roof next year?

After all, no business owner -- including small-business owners like me -- are going to start expanding if they believe that our tax rates are about to skyrocket. That's why we've got to take away that uncertainty, cut corporate tax rates -- which are the second-highest in the developed world -- and watch as American businesses once again bail us out by creating thousands of jobs that pump billions of tax dollars back into Washington.

Or, of course, we could just give heating oil subsidies to the poor. That would probably work just as well.

[the]

The best thing to do would be nothing, let things bottom out, naturally and as quickly as possible. The sooner bottom and equilibrium are reached, the sooner things will recover.

[legion]

We can't have this! We need to have the American people believing that the government can fix any problem!!! This keeps them willing to keep paying taxes. If they knew how much of that money was really wasted, we might have a revolt. Thank God we have disarmed the people in the biggest cities...

[frogger]

Somebody actually listens to Glen Beck?

[MichiganMat]

Monday morning QB'ing by the GOP's 12th most relevant pundit.

Yawn.

[hytem]

The only thing worse than "tax and spend" is "tax cut and spend" --what we have right now, thanks to those "conservative" Republicans.
Clinton is talking about tax cuts for the middle class--not higher taxes. Sorry the facts had to get in the way of your opinions.

[WI wide body]

[QUOTE=Porsche-O-Phile; Taxing the heck out of people to fund the poorest & most fiscally irresponsible ain't gonna' do it.

P-O-P, most of the time you actually make sense and I enjoy most of your comments. But man, unless I'm reading this one wrong, you are so far out in left field that the most steroid enhanced MLB player could not reach you!

Do you honestly think that our welfare programs (which are basically useless and counter-productive) are the cause of all of our nation's myriad fiasco's?

We could completely eliminate EVERY social welfare program that is on the books and it would not make even a ripple in the ocean that is our nation's fuked up situations. Please tell me that you were misquoted...or something!

[Rick Lee]

Excellent column. Worst thing about this economic news is the pandering it brings out of politicians. What in the world will $600, $800 or even $1600 do for someone who can't pay their mortgage? Make them go out and buy more stuff they don't need?

[WI wide body]

Originally Posted by hytem

The only thing worse than "tax and spend" is "tax cut and spend" .

Now that's a great line that should be stapled on the forehead of every member of Congress...and maybe injected into every member of Team Bush via a 12 gauge shotgun. If any fool really believes that the current GOP is anything even resembling "conservative" they should seek help immediately.

[WI wide body]

Originally Posted by Rick Lee

Excellent column. Worst thing about this economic news is the pandering it brings out of politicians. What in the world will $600, $800 or even $1600 do for someone who can't pay their mortgage? Make them go out and buy more stuff they don't need?

I understand and agree with what you say but you (and Beck) appear to be mis-reading or ignoring President Bush's proposal. He is not really trying to help someone pay their mortgage or get their life back on track...it appears to me that he is proposing the infusion as a one time quick (hopefully) stimulus for the economy. Or am I wrong about that?

[onewhippedpuppy]

Originally Posted by hytem

The only thing worse than "tax and spend" is "tax cut and spend" --what we have right now, thanks to those "conservative" Republicans.
Clinton is talking about tax cuts for the middle class--not higher taxes. Sorry the facts had to get in the way of your opinions.

So where do you propose that Hillary will come up with the money she has promised for health care (for the poor), a college fund (for the poor), and tax refunds (for the poor). Oh yeah, she's going to raise the taxes on the "rich". The "rich", which according to her plan, was everyone making over something like $90k. Anyone with half a brain that works for a living should be TERRIFIED of Hillary, or any of the frontrunner Dem candidates.

So let's say you give a tax refund to the poor and middle class, and increase taxes on the rich and the evil big businesses. What will be their response? I'm sure a $1000 tax refund will go a long way towards comforting those that lose their jobs. I've never gone to work for a poor person, don't bite the hand that feeds you.

[the]

Originally Posted by Rick Lee

Excellent column. Worst thing about this economic news is the pandering it brings out of politicians. What in the world will $600, $800 or even $1600 do for someone who can't pay their mortgage?

That'd buy MichiganMat a sweet new set of wheels and tires for his truck!

[rammstein]

$600 buys you a van/apartment.

[the]

down by the river.

[jyl]

I haven't thought this through -

But seems to me the root causes of the economy's current downturn are, well, I will overlook some, but they include things like (1) falling house prices which reduces consumer wealth and spending, (2) threatened insolvency of financial institutions which tightens credit, (3) high oil prices generally pressuring consumers and businesses spending.

(I know everyone has a long list of the structural long-term problems with the economy - I'm talking here about the immediate causes for today's downturn.)

Well, $180BN in tax rebates can be a one-time help for problem (1) - won't help house prices, but briefly boosts consumer spending.

But couldn't $180BN, if spent differently, make a lasting difference to problems (2) and (3)?

For example, we might want to temporarily relax capital ratio requirements for US banks to encourage them to relax credit. Or temporarily help the bond insurance industry survive the current crisis.

Ultimately it may be necessary to do something like the Resolution Trust Corp, which wound up the insolvent savings & loans industry that caused the financial crisis in the 1990s recession.

Or, we could mandate a immediate and major increase in US auto fuel economy (CAFE) standards, which would sharply cut US oil consumption and probably cut oil prices. The US auto industry would need financial support to make the adjustment and avoid bankruptcy, similar to the loans that saved Chrysler 20-some years ago.

For any of these things, $180BN in ready govt capital - as loans and guarantees, so at least some chance of getting it back (much like how Chrysler repaid its loans) - would go a long way. And it could be money much better-spent than handing out $600 checks and getting a one-quarter boost to consumer spending.

Handing out tax rebate checks is the fastest and easiest thing to do. A little squabbling about who is eligible, then start mailing. But I am not at all convinced it is the best thing to do.

[Rick Lee]

Originally Posted by WI wide body

I understand and agree with what you say but you (and Beck) appear to be mis-reading or ignoring President Bush's proposal. He is not really trying to help someone pay their mortgage or get their life back on track...it appears to me that he is proposing the infusion as a one time quick (hopefully) stimulus for the economy. Or am I wrong about that?

I'm not misreading it. Bush is no less gulity of pandering than are the Congressional Dems. He's just trying to get out in front of the issue. Any president, other than a Pres. Ron Paul, would do the same. Of course, I'm happy to take a little bit back of what the gov't. has already stolen from me and would otherwise piss away/redistribute. But "stimulus packages" are always the wrong thing. Cut taxes, especially corporate taxes, and watch federal receipts go up and companies hire more people.

[WI wide body]

Originally Posted by Rick Lee

I'm not misreading it. Bush is no less gulity of pandering than are the Congressional Dems. He's just trying to get out in front of the issue. Any president, other than a Pres. Ron Paul, would do the same. Of course, I'm happy to take a little bit back of what the gov't. has already stolen from me and would otherwise piss away/redistribute. But "stimulus packages" are always the wrong thing. Cut taxes, especially corporate taxes, and watch federal receipts go up and companies hire more people.

Again, you seem to miss the point. Bush says he is not do this to fix any social or personal issues.

It's simply a one-time deal to jump-start the economy. Please explain if this sentence is incorrect?

[Rick Lee]

I had the press conf. on tv today, but was "working" and not really paying attention. I guess if he said it was to jump start the economy, then that's an admission of problems. I really don't care how he explains it. It wasn't his idea and he's coming late to the party. He's just trying to get out in front of the Dems and figures, with his approval ratings, he doesn't have much to lose and few Americans are gonna have a problem with getting some money back from the gov't. My guess is this is Bush's attempt to somehow co-opt Congress into making his tax cuts permanent before he leaves office. Not sure of the whole strategy, but I'm pretty sure that's what he wants more than anything.

[GDSOB]

Originally Posted by rammstein

$600 buys you a van/apartment.

or flat screen tv, booze, cigs & lotto tix...

[RoninLB]

1/3 of workers don't pay taxes now. That's 2/3 of the Dem voters.


how about some redistribution for the 2/3 ala Hillary. The buget increase can be paid for by raising taxes.