# 012 April 22, 2009
By: Allen Wells
"We hang the petty thieves and appoint the great ones to public office." –Aesop
The more I read about our current national economic situation and what is being done to correct all our problems in the hallowed halls of Congress, on Capitol Hill and at the Federal Reserve and theTreasury Department, I am becoming more and more confused! Can someone (anyone) help me understand? Please?
Here are some examples of issues that are contributing to my confusion.
The Obama Administration is now vowing to cut taxes, so (with cameras and press conference in hand) the President has asked cabinet officials to cut $100 million from their budgets. How will they do this? Buying office supplies in bulk and teleconferencing when possible! On the other hand, (with no cameras and press conferences) the administration handed out an additional $ 5.5 Billion to GM and Chrysler… I wonder if they are going to start buying their office supplies in bulk? Oh yeah, the federal budget deficit in March alone was $192 Billion!
It’s no surprise that most Americans agree the auto unions have been a driving force in crippling the U.S. auto industry with their ridiculous wage and benefits demands. Given the current state of the industry, within 5 years we may not even have a home grown auto manufacturer left. On the other hand, with the help of the media, liberals and “friends in government,” union organizers have mounted a committed and vicious attack on Wal-Mart – promising to unionize the entire company at all costs…. If they are successful, I wonder if we will even have a Wal-Mart in 20 years? By the way, 1 out of every 8 retail dollars spent worldwide are spent at Wal-Mart!
The USG told us consumer prices dropped in March and that regardless of the fact the U.S. Treasury is pumping record levels of money into the economy inflation is not a factor. In fact the government states they it is concerned about “deflation”. I have to ask the question, with the exception of our 401k’s and our home values, what prices have you seen go down? By the USG’s own admission, if you remove gasoline (which went down marginally) and heating oil (which is down because many businesses are cutting back on costs, including heating), consumer prices increased 1.3% in March. If our government was capable of being honest, I’m sure this number would be higher… much higher. By the way, did gasoline prices go down where you shop, and what is 1.3% a month compounded annually?
Banks are claiming record profits, with far more income than expected. Many are rushing to try and pay back the TARP loans. The government won’t let them. But wait, every day I read in the media how great the banks are doing and how much money they made in the first three months of the year. If this is the truth, then why can’t they pay the government back and go on with their business? Either the numbers are not real and the banks really are not so profitable (which means still bordering on the verge of failure), or the Federal Government never meant for the loans to be paid back because they want to maintain the ownership positions they’ve taken in the banks – which is tantamount to a backdoor nationalization of the banks… sneaky, sneaky.
When George Bush (II) was President, the federal deficit hit record levels and he was assailed on all sides by media and politicians alike as a fiend and a demon who was singlehandedly ruining America as we know it. President Obama has initiated programs that will bring the federal deficit to $2 Trillion this year and at least that much in 2010 and 2011. Even so, not one complaint about this deficit trickles out of the democratic congress or the media. Without being partisan I ask, why was less debt (still too much) so bad under President Bush and more debt ok under President Obama?
The Financial Accounting Standards Board (FASB) changed the rules last month on market- to- market transactions last month, allowing banks (in a nutshell) to value bad assets at whatever value they choose to value them, therefore concealing losses to the general public. On the other hand, lenders, banks and federal prosecutors are going after real estate appraisers for “overvaluing” properties for the sake of mortgage financing… my question is this; how are the two different?
I have a lot more questions… but at the risk of going on and on and on I will stop here. Do you have questions (or answers)? If so, reply with a comment here on the blog. I did make a change in the format, so you do not have to have a Google account to post a comment, all you need is a name! I would love to hear your thoughts, questions and ideas.
"A little government and a little luck are necessary in life; but only a fool trusts either of them." –P.J. O'Rourke
I thought you might just have some answers…
With regards,
Allen
Information contained herein is deemed reliable but not guaranteed.
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