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  1.    #1  
    The last 8 years have been amongst the most monumentally catastrophic in American history.

    More changed faster and in a negative way during these last eight years, than in any other period that I can recall.

    Institutions -- historically strong institutions that survived The Great Depression -- have collapsed, or are in throes of collapsing -- in unprecedented numbers.

    The face of america: its economy, its culture, its confidence, and its outlook have been more negatively transformed in these last eight years than perhaps any other.

    Most of this has been the product of junior’s calamitous rule -- but some is also the unfortunate result of inevitable cultural and technological trends that have inexorably lead to the wrecking of bedrock foundations of our country -- things like newspapers whose life model has been eviscerated by the internet.

    Perhaps you will join me in offering a few words of lamentation for what has been lost these last 8 years:


    Homes as an investment toward the American dream, homes as a store of value, as a walled mattress into which a family could save for their retirement, their future. The model on which towns and communities stabilized, grew, flourished -- in which neighbors shared in the common values of sacrifice and work, has been torn asunder -- perhaps not to return for a generation.

    Newspapers, magazines -- more have gone bankrupt and stopped publishing during the last few months than perhaps any period in america’s history. Already stressed by the migration of their readers to free internet accessing of their product, they have also been devastated by the loss of what had always been their cash cow: classified ads, to Craigslist. Now they are losing what had been the final pillar of their survival: large commercial display ads. As big advertisers like car companies and retailers themselves get into trouble or go bankrupt, they are cutting way back on the newspaper advertizing. They cannot borrow to survive this period -- and many took on extraordinary debt as leverage during the prosperous times as part of greedy shortsighted takeovers, and now cannot repay those debts.

    But even the great NY Times, and the (less great) Washington Post are in trouble.

    Most will not be successful in transitioning to internet only enterprises.

    A very sad thing, indeed.

    Commercial television -- dramatic series most particularly. The loss of advertising from big companies, the loss of audience to the fractured universe of cable shows and the internet -- and the fact that the mega-companies that own these networks are themselves separately in trouble, and that dramatic series like LOST have comparatively little potential for big rerun earnings -- means that there may never again be a series produced like LOST.

    This background underlies NBC’s decision to jettison an entire hour of its weeknight primetime programming for a Leno talkshow.

    Network news -- never especially profitable, networks invested in their news operations because of a sense of corporate responsibility and for prestige.

    Covering the news is expensive -- especially war coverage, international reporting, and investigative journalism. Aside from BARYE, most of their audience is aging meta-musal sipping elderly, whose demographics yield poor ad rates. This combined with the economic distress of their big corporate overlords, has lead to irresistible pressure on these news operations. Background staff, camera crews, and reporters are all being cut.

    Sadly, this important institution (that I’ve often railed against) is teetering.

    Banking -- it has historically been the foundation of capitalism -- most especially american capitalism.

    Because of the non-regulation and greed of junior’s rule, banks everywhere -- most particularly the largest of them -- “invested” in can’t lose schemes tied to real estate.

    Home mortgages, apartment developments, shopping malls -- these all were seen as mechanisms through which they could leverage big profits to fund their huge bonuses.

    The largest and most influential of them are now insolvent and worse.

    They now cannot afford to lend, and the suspension of their credit is freezing both the national and the world’s economy.

    No matter when this crisis ends, banks and lending have been unalterably transformed -- never again (well at least for a while) will right wing conservative ideologues be able to argue that the only thing preventing unlimited prosperity, is capitalism unbridled.

    Investment banking -- the convergence of money, brains, and greed. These were the freewheeling gunslingers that provided the expertise, money, and grease that enabled more than a decade of hostile take overs, mergers, and private buyouts. They were the brainiacs that enabled brilliant business moves like the various merger, buyouts, and private equity deals that have destroyed Chrysler, or the insanely smart purchase of Nextel by Sprint -- a $35 billion dollar deal so intelligent that they themselves have written off $30 billions dollars of it as worthless.

    Investment banks -- all of them -- have either gone bankrupt and liquidated, or have dissolved, remaking themselves into semi-conventional pseudo depositor receiving, banks. American capitalism will be tremendously changed by their absence in the long run -- though very likely for the better.

    Hedge funds -- Even before the Bernie Madeoff (sp) affair, these rich people's private secret club to mint money through speculation, manipulation of markets, and dodging of taxes were under stress as the result of their horrific performance. Many had invested in the same can’t fail schemes using leverage as the banks and investment houses -- playing willfully in the securitized mortgage / derivative markets. During the bubble these hedge funds, their managing partners, and their clients, made BILLIONS.

    As thing began to go south, those clients began to remove their “investments”. Many of these funds have in turn been forced to liquidate, unable to survive the depletion of their capital or their sullied reputations.

    Then Bernie Madeoff happened.

    Rich people. They are not all the same. Yes most want to become richer. But some are fat, some are thin, some are black, some are white, some liberal, some conservative...

    Rich people are united by one singular thing: what they have in common is the absolute terror of not being rich anymore. (BARYE can understand this).

    Bernie Madeoff has ripped the scab off this fear. Nothing has gained the attention of rich folk more than the possibility that that respectable well spoken hedge fund manager who has promised them outsized returns might well be stealing their illgotten millions.

    These are folks who have often railed against government interference and over-regulation -- but are now wondering why the SEC slept idly as $80 BILLION dollars disappeared. These people watch in shock as they listen to stories of millionaires losing their homes, having to take jobs as Walmart greeters and hamburger cashiers.

    Congress, no longer owned entirely by rich, and intent on reversing junior’s laissez faire non-regulatory environment -- is liable to strengthen hedge fund oversight, and close the thieving tax loopholes that were a part of their success in the first place. The evaporation of these hedge funds will not be missed.


    Shopping Malls -- these have sprouted like Kudzu across the countryside. Farms, factories, amusement parks -- all of been remade into shopping malls. There seemed to the banks that financed them and the developers that built them, an endless appetite for shopping, for stores, for retail space.

    Never did any of them calculate that the universe of consumers had limits -- that at some point no matter the economic climate, that there would come a time when the quantity of stores, and the supply of retail locations would out distance the populations of shoppers. That at some point like a blind Ponzi scheme, new locations would inexorably devour the business of existing locations.

    And then the economy collapsed...

    There are thousands of shopping malls about to become parking lots, warehouses, and homeless shelters across this country. The banks that own these loans are about to take another humongous bath in writing down these unrecoverable commercial loan debts.


    The Big Three car companies -- for decades these were rolling behemoths -- more powerful than their workers, than their suppliers, than the governments that danced to their tune.

    What was good for GM literally was good for the american economy for decades. GM and its fellow behemoths manipulated congressional oversight to ensure the enactment of rules that favored its profits over the national interest.

    Pollution, safety, miles per gallon etc. advancements, were repeatedly stymied by the oversized influence Detroit had in congress.

    Detroit has in truth been in decline for years -- but it could never have been expected to withstand the triple whammies of 1st: the hedge fund manipulated oil price false “crisis”, 2nd: the national depression which has crushed incomes and consumer confidence -- curing any appetite for a gigantic optional purchase such as a car, and 3rd: (and most importantly) the meltdown of credit -- which has made it next to impossible for near anyone to get a loan to finance the purchase of a car.

    By any measure this is a catastrophe for these companies. The have unimaginable fixed costs in facilities, labor contracts, and debt obligations (to name but some of it). When their income falls as precipitously as it it has over the last year, there is next to nothing that can be done to save them.

    I fear it may well be impossible to keep any of them from going bankrupt.

    What will emerge when the dust clears will be a very very damaged nation, and a much much smaller shadow of what the industry had once been.

    Because I understand some of what awaits the country if (and likely when) they fail, I tremble at contemplating the implications for america. It is for that reason that I will miss them.


    Perhaps others can add to this list -- as perhaps I will as well ...


    (This was written btw, without research or consulting any external source.)
    Last edited by BARYE; 03/08/2009 at 10:45 AM.
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  2. #2  
    And your government and legislature is even in a worse state of denial. Obama, joe, Nancy, Harry, Barney and their friends, what a group to party with. Incidentally, Barye, when was the last time a person on welfare create a self-sustaining job? When was the last time government created a self-sustaining job?
  3.    #3  
    Quote Originally Posted by bclinger View Post
    And your government and legislature is even in a worse state of denial. Obama, joe, Nancy, Harry, Barney and their friends, what a group to party with. Incidentally, Barye, when was the last time a person on welfare create a self-sustaining job? When was the last time government created a self-sustaining job?
    Ben -- you're right if you are saying that no economy can long depend on the government for job creation.

    The exception though, comes in periods like what we have now -- where the financial/economic structure has experienced a systemic meltdown -- a meltdown that is self reinforcing.

    A meltdown where companies can't borrow so they cut back on investment, and cut back on their workers because they are making and selling fewer widgets -- which in turn means there are fewer people who can afford to buy those widgets.

    The crisis I described in fearful detail in the Mortgages, securitization, and the end of the American dream thread has largely played out, unfortunately.

    What would you propose be done to help the nation and the world recover ??
    Last edited by BARYE; 03/08/2009 at 01:31 PM.
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  4. #4  
    Jethro?
  5.    #5  
    Quote Originally Posted by berdinkerdickle View Post
    Jethro?
    too obscure for BARYE -- what is the reference ??
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  6. #6  
    My suggestion - cut corporate taxes - that gives incentive to companies to grw. I work for a company that employees approximately 130 people. The company has been very successful. Company expenses are up, taxes, et cetera. Expansion has slowed down and steps taken to ease the drain of the slow-down. If expenses were reduced (taxes), hiring would begin for the forthcoming expansion. Really easy.

    We cannot tax our way out of this mess.
  7. #7  
    Quote Originally Posted by bclinger View Post
    My suggestion - cut corporate taxes - that gives incentive to companies to grow. I work for a company that employees approximately 130 people. The company has been very successful. Company expenses are up, taxes, et cetera. Expansion has slowed down and steps taken to ease the drain of the slow-down. If expenses were reduced (taxes), hiring would begin for the forthcoming expansion. Really easy.

    We cannot tax our way out of this mess.
    I'm actually pretty ignorant politically.
    All I know is when Clinton was in office, my friends and I had work. If he was sweeping messes under the carpet, or sewing patches on bigger, long range issues, I wouldn't know. Shame on me for not knowing enough to understand.
    A lot of my friends are in 'production' industries. Isn't 'giving incentive to companies to grow' been the program for the last party.
    Most my friends watched their company grow right out of this country.
    So from my purely shortsighted, uninformed, ignorant of the inner workings of government, I just see what has/hasn't put food on my table.

    Please don't see me as a pessimist.
    But the Widget Corp has already moved their Widget Production over seas. How huge a tax break or financial incentive would it need to be to offset the unimaginable cost of moving and setting up production again over here in the US.
  8. #8  
    Quote Originally Posted by BARYE View Post
    too obscure for BARYE -- what is the reference ??
    Oh man! that just shows how ignorant I am politically.
    I meant to say Jed.
    The names remind me of 'The Beverly Hillbillies'

    I'm sorry,
    I will bow out now.
  9.    #9  
    Quote Originally Posted by berdinkerdickle View Post
    Oh man! that just shows how ignorant I am politically.
    I meant to say Jed.
    The names remind me of 'The Beverly Hillbillies'

    I'm sorry,
    I will bow out now.
    I used to love the Beverly Hillbillies !! -- it was one of my favorite stay home from school, afternoon rerun, secret pleasures.

    Daisy May was one hot babe -- fit, blond, innocent, and seductive -- she no doubt had a very formative influence on many young males of her era (along with that Genie: Barbara Eden ...)
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  10. #10  
    Quote Originally Posted by BARYE View Post
    ...............Perhaps others can add to this list -- as perhaps I will as well ...


    (This was written btw, without research or consulting any external source.)
    Well, one observation is that the cost of capital has more than doubled in the last year. The cost of capital for parts of the health care industry went up another twenty percent in the week after President Obama announced his budget.
    Up the next election, my citizens; always the next election.
  11. #11  
    Quote Originally Posted by bclinger View Post
    My suggestion - cut corporate taxes - that gives incentive to companies to grw. I work for a company that employees approximately 130 people. The company has been very successful. Company expenses are up, taxes, et cetera. Expansion has slowed down and steps taken to ease the drain of the slow-down. If expenses were reduced (taxes), hiring would begin for the forthcoming expansion. Really easy.

    We cannot tax our way out of this mess.
    I tend to agree with your proposal. However, I would point out that it is a re-cycled Republican idea. The recent election not only made lowering business taxes impossible but made it likely that they will be increased. Since we already have the highest business taxes in the world, we must be striking for number one.

    Like everyone else, I might as well use this crisis to put forward my other favorite policy. Let's reduce the payroll tax. I suggest that 15% percent tax on the first dollar of a new job is a disincentive to the creation of that job. Because other countries do not have that tax, it is an incentive to create any new job someplace else.

    How then will we pay for social security, unemployment compensation, workman's compensation, and medicare? I propose that we remove the cap so that all compensation is taxed but all at a lower rate. Yes, this is an income redistribution proposal, and yes, it does shift the burden from the poor to the rich. What might be worse, but I think not, is that it shifts the burden from the least productive to the most productive.

    I will save the rest of my argument until I sse whether this proposal can garner any interest at all.
    Up the next election, my citizens; always the next election.
  12. #12  
    Quote Originally Posted by berdinkerdickle View Post
    I'm actually pretty ignorant politically.
    All I know is when Clinton was in office, my friends and I had work. If he was sweeping messes under the carpet, or sewing patches on bigger, long range issues, I wouldn't know. Shame on me for not knowing enough to understand.
    A lot of my friends are in 'production' industries. Isn't 'giving incentive to companies to grow' been the program for the last party.
    Most my friends watched their company grow right out of this country.
    So from my purely shortsighted, uninformed, ignorant of the inner workings of government, I just see what has/hasn't put food on my table.

    Please don't see me as a pessimist.
    But the Widget Corp has already moved their Widget Production over seas. How huge a tax break or financial incentive would it need to be to offset the unimaginable cost of moving and setting up production again over here in the US.
    Rather than worrying about bringing any jobs back, let's worry about making sure that the next job created is created here.

    In a world of cheap transportation, low tariffs, open borders, and falling communication cost, the biggest determinate of where to create a job is how it will be taxed. Stop taxing jobs and tax consumption.
    Up the next election, my citizens; always the next election.
  13. #13  
    Quote Originally Posted by berdinkerdickle View Post
    Please don't see me as a pessimist.
    But the Widget Corp has already moved their Widget Production over seas. How huge a tax break or financial incentive would it need to be to offset the unimaginable cost of moving and setting up production again over here in the US.

    Quote Originally Posted by whmurray View Post
    Rather than worrying about bringing any jobs back, let's worry about making sure that the next job created is created here.
    Now I know my post there wasn't so obscure, that someone would think I thought there was any chance of bringing those widget companies back.

    But, I see your point.
    If you make it less of a financial burden for companies to function, they stay here.

    But the consumer buys the cheaper widget made overseas. So the American Operated widget company can't compete with the American Owned widget corp Operating overseas.
  14. #14  
    The majority of publicly listed US corporations do not pay Federal taxes. Try reading some annual reports before citing what the tax rates are. They're not paying.
  15. #15  
    detective,
    who are you replying to?
  16. #16  
    Quote Originally Posted by berdinkerdickle View Post
    Now I know my post there wasn't so obscure, that someone would think I thought there was any chance of bringing those widget companies back.

    But, I see your point.
    If you make it less of a financial burden for companies to function, they stay here.

    But the consumer buys the cheaper widget made overseas. So the American Operated widget company can't compete with the American Owned widget corp Operating overseas.
    Careful. The consumer buys the cheaper widget, full stop. The overseas widget might be cheaper if the overseas labor was as productive as ours, if their cost of capital was the same, and their cost of government lower.

    I liked the assertion that only half of American Corporations "pay taxes." That assertion makes the same mistake as those who say the "poor do not pay taxes." Hey guys, While for the people here, the income tax may be the big tax, it is not the only tax. Buffet's secretary pays a higher percentage of her income in tax than does Mr. Buffet, mostly because of the payroll tax. Even those corporations that will not pay income tax this year, will pay big time in payroll taxes. It is these taxes that are driving jobs off shore.

    But the real cost of government is not the taxes we pay but what the government spends currently and commits to spend in the future. The government takes money from us three ways. They tax us; potentially the most equitable way. They borrow from us (or China). When the first two fail, they inflate the currency.

    The mistake that the Democrats make is believing that revenue follows rates and that the cost is the same as the revenues. Spreading the cost of government equitably across the demographics and across time while not breaking the economy is an incredibly difficult problem, even if we could agree on what constitutes equity. That is probably why we get it wrong most of the time.
    Last edited by whmurray; 03/09/2009 at 05:59 PM.
    Up the next election, my citizens; always the next election.
  17. #17  
    Quote Originally Posted by detective View Post
    The majority of publicly listed US corporations do not pay Federal taxes. Try reading some annual reports before citing what the tax rates are. They're not paying.
    Careful. Perhaps only half pay federal income taxes in a given year, but all pay the payroll taxes. It is these taxes that are driving jobs "off shore." Even those who are not paying incomse taxes in a given year are subject to them. They may be doing uneconomic things to avoid taxes. (For example, the tax system encourages banks to alternate between profitable years and loss years.)

    The Democrats put too much emphasis on the rates of personal income tax as a means of income redistribution and not nearly enough on what they tax. We tax jobs, profits, savings, and investment. That is to say, we tax things that we say we want. The Europeans tax what they do not want, i.e., they tax consumption of foreign energy.
    Up the next election, my citizens; always the next election.
  18.    #18  
    Quote Originally Posted by whmurray View Post
    Careful. The consumer buys the cheaper widget, full stop. The overseas widget might be cheaper if the overseas labor was as productive as ours, if their cost of capital was the same, and their cost of government lower.

    I liked the assertion that only half of American Corporations "pay taxes." That assertion makes the same mistake as those who say the "poor do not pay taxes." Hey guys, While for the people here, the income tax may be the big tax, it is not the only tax. Buffet's secretary pays a higher percentage of her income in tax than does Mr. Buffet, mostly because of the payroll tax. Even those corporations that will not pay income tax this year, will pay big time in payroll taxes. It is these taxes that are driving jobs off shore.

    But the real cost of government is not the taxes we pay but what the government spends currently and commits to spend in the future. The government takes money from us three ways. They tax us; potentially the most equitable way. They borrow from us (or China). When the first two fail, they inflate the currency.

    The mistake that the Democrats make is believing that revenue follows rates and that the cost is the same as the revenues. Spreading the cost of government equitably across the demographics and across time while not breaking the economy is an incredibly difficult problem, even if we could agree on what constitutes equity. That is probably why we get it wrong most of the time.
    always good to have your voice whmurray, though we are fairly far apart, it seems, on this.

    This is stuff I can't support with citation now, but I think it accurate to say that taxation is almost never a critical factor in motivating american companies to transfer their jobs to overseas.

    When makes the temptation to transfer jobs irresistible, is competition from foreign based companies that pay lower wages -- usually VERY much lower wages to their workers -- and far, FAR lower benefits.

    Sometimes american companies -- especially during junior’s years -- transferred their jobs overseas to low wage places like China “proactively” to enhance their profitability -- even in the absence of genuine foreign competition.

    Having their widgets produced in China meant not paying for their worker’s health care, not paying unemployment compensation, not paying into pensions, not being worried about overtime, not being worried about an aging, unionized work force, not being concerned with conditions that endangered their workers, not being worried about layoffs, not being worried about paying out matching Social Security contributions.

    That these companies were then given additional tax benefits by junior that treated their overseas operations, production and profit in an tax advantaged way, was only icing on the cake.

    Why would they not transfer jobs -- given that the only incremental penalty for not being US based was the minor cost of transport ??

    Over the last 8 years more and more of every job has been outsourced overseas. Now when you phone tech support or a call center, the probability is very high that the answer will made by an Indian who asks you to call him Tom.

    The primary factors driving jobs overseas have NOTHING to do with taxes -- as was earlier pointed out, almost no large corporation pays almost anything in taxes. Its the costs associated with treating people well, with providing them with health care, with pensions -- these are the prohibitive expenses.

    FWIW, European corporations treat their workers far more generously than do ours, and have done so for years.
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  19. #19  
    Quote Originally Posted by BARYE View Post
    always good to have your voice whmurray, though we are fairly far apart, it seems, on this.

    This is stuff I can't support with citation now, but I think it accurate to say that taxation is almost never a critical factor in motivating american companies to transfer their jobs to overseas.

    When makes the temptation to transfer jobs irresistible, is competition from foreign based companies that pay lower wages -- usually VERY much lower wages to their workers -- and far, FAR lower benefits.

    Sometimes american companies -- especially during junior’s years -- transferred their jobs overseas to low wage places like China “proactively” to enhance their profitability -- even in the absence of genuine foreign competition.

    Having their widgets produced in China meant not paying for their worker’s health care, not paying unemployment compensation, not paying into pensions, not being worried about overtime, not being worried about an aging, unionized work force, not being concerned with conditions that endangered their workers, not being worried about layoffs, not being worried about paying out matching Social Security contributions.

    That these companies were then given additional tax benefits by junior that treated their overseas operations, production and profit in an tax advantaged way, was only icing on the cake.

    Why would they not transfer jobs -- given that the only incremental penalty for not being US based was the minor cost of transport ??

    Over the last 8 years more and more of every job has been outsourced overseas. Now when you phone tech support or a call center, the probability is very high that the answer will made by an Indian who asks you to call him Tom.

    The primary factors driving jobs overseas have NOTHING to do with taxes -- as was earlier pointed out, almost no large corporation pays almost anything in taxes. Its the costs associated with treating people well, with providing them with health care, with pensions -- these are the prohibitive expenses.

    FWIW, European corporations treat their workers far more generously than do ours, and have done so for years.
    Good points, very well taken. I may have to re-think my position. Nonetheless, I persist in believing that what we tax and the cost of government are more important than the tax rates.
    Up the next election, my citizens; always the next election.
  20. #20  
    The distribution company I work for pays taxes.

    Quote Originally Posted by detective View Post
    The majority of publicly listed US corporations do not pay Federal taxes. Try reading some annual reports before citing what the tax rates are. They're not paying.

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