Employers Diss Obama Job Plan

Wow, this is just embarrassing. A raspberry from businesses, the object of Obama’s tender ministrations. And the reason? Basically, too little demand, something that tax cuts won’t remedy.

From the New York Times:

The dismal state of the economy is the main reason many companies are reluctant to hire workers, and few executives are saying that President Obama’s jobs plan — while welcome — will change their minds any time soon.

That sentiment was echoed across numerous industries by executives in companies big and small on Friday….[M]any employers dismissed the notion that any particular tax break or incentive would be persuasive. Instead, they said they tended to hire more workers or expand when the economy improved.

Companies are focused on jittery consumer confidence, an unstable stock market, perceived obstacles to business expansion like government regulation and, above all, swings in demand for their products.

“You still need to have the business need to hire,” said Jeffery Braverman, owner of Nutsonline, an e-commerce company in Cranford, N.J., that sells nuts and dried fruit. While a $4,000 credit could offset the cost of the company’s lowest-cost health insurance plan, he said, it would not spur him to hire someone. “Business demand is what drives hiring,” he said.

This is why, as yours truly and others have said, we need more debt restructurings and writedowns to get the debt overhang resolved faster, and fiscal deficits to offset the deflationary effects. Monetary policy is not an adequate substitute, as we have seen, and barely stimulative stimulus programs, like inadequate doses of medicine, destroy faith in the remedy when the flaw is in how it is being administered.

Even if the Republicans do serve up one of their more extreme candidates as their presidential nominee, the economy’s certain-to-be-lousy-if-not-even-more-Godawful performance next may well seal his fate. It’s hard to get your base to turn out when you look so dedicated to doing the wrong thing.

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  1. TheTrader


    Forgive my negligence, but how exactly “more debt restructurings and writedowns to get the debt overhang resolved faster” would help here?

    1. Tao Jonesing

      Let me try.

      Debts that can’t be repaid won’t be. The sooner we force the banks to accept their losses, the sooner we can start growing again. Continuing to “extend and pretend” is at best treading water, but, as we’re seeing, the banks can’t tread water fast enough or long enough to stay afloat. So, unless we deal with those losses right away, we’re going to continue seeing periodic credit crises with increasing frequency (the current one is occuring 3 years after the last, the next will be in two, then one, then so on). The only way to save the current system is to make the people who caused all the problems eat their losses so the rest of us can move on.

      Personally, I don’t see growth in our future, even if we wipe out all the debts (even those that can still be repaid). And I don’t really want to save the current system. Still, I’d like to see a debt jubilee to relieve the suffering of innocents that we’re seeing today.

      1. robert in london

        The problem I have with jubilee is that all the profligate wastrels whose lack of fiscal discipline (spending more than making) created this mountain of debt, get out of jail free. What about the honest, hard working people who have been forced to eat their seed corn during this Depression? The guy with the boats and jet skis and too many cars and too much house and the restaurant meal habit – he will be just fine. And the guy who never lived beyond his means and spent his savings just to survive? Yeah, what a fool he was.

        1. Molly

          If making sure the people at fault get punished is your only hangup, then perhaps realize that the people MOST at fault are making money hand over fist off of our desperate conditions. Someone being ‘off the hook’ for consumer debt is no big deal, seeing as how Corporate planned obsolescence guarantees that the junk they went into debt for quit working long ago. Guess they’re even. Let’s move on.

        2. wunsacon

          That’s precisely why I argue for equal payments to every legal resident without regard to “need”.

          Without issuing debt, print and distribute $10,000 to every legal resident, no matter whether they “need” a bailout or not. So, you don’t have debt? Take that $10k and buy some stocks or remodel your kitchen or take a vacation. Are you in debt? Pay off $10k. (If that’s not enough, declare bankruptcy and you’ll at least start off with $10k to your name afterwards.) Are you so wealthy that $10k doesn’t mean a thing to you? Well, rather than everyone debate the right cut-off and rather than employ a department of workers to decide questions re need, we’ll give you the money anyway. If you like, donate it or pay some of it back in taxes and save or spend it.

          1. F. Beard

            I’m with you except I would continue the bailout checks till all US private debt before the start date is paid off. Also, I would ban any further so-called “credit” creation and meter the bailout checks so as to just replace existing credit as it was paid off. That would keep the money supply constant and prevent the banks from blowing more bubbles.

        3. Jane Doe

          You are making the conservative moral individual argument rather than the economic argument. You are also making the resentful middle class, “the Jones may get something I don’t get,” argument rather than an economic one.

          Concepts like cramdown, bankruptcy- are economics- Not moral arguments. They are based in the area that debt that’s tie up in not just paying the debt, but covering fees, interest and other costs – eventually harms the economy because its money that is not going toward other economic activity.

          This problem, of applying moral arguments to individuals, while ignoring the economic issues of the system is one of the reasons that the problems we face persist. It creates a distraction that the more disciplined interests of the banks are able to use to prevent reform.

        4. F. Beard

          What about the honest, hard working people who have been forced to eat their seed corn during this Depression? robert in london

          A universal and sufficiently large equal bailout would fix EVERYONE including savers as wunsacon said.

          Furthermore, the bailout could be metered out over time to just replace existing credit (new credit creation would be banned) as it was paid off thus precluding a serious price inflation risk.

          Modern banking cheats both borrowers and savers so a universal bailout is more just than just debt forgiveness.

        5. Yves Smith Post author

          Straw man. There is a HUGE difference between debt restructurings and writedowns, and a “debt jubilee”.

          Ever heard of Chapter 11, or bankruptcies in general? Those are court administered restructuring processes. Most creditors and private parties prefer to restructure out of court (it’s cheaper and faster) but that isn’t always workable.

          Restructuring debt is normal lender behavior. What is abnormal is that it isn’t happening on a lot of dodgy debt. And that in turn is due to the fact that the lenders did such a colossal bad job of lending that they CAN’T afford to take the losses, they’d be exposed as undercapitalized or insolvent. But even more heinous, these undercapitlaized (at best) players are still paying their executives outsized compensation rather than restoring their balance sheets. This never would have happened in the old days of Wall Street partnerships.

          And an IMF study of 124 banking crises showed that “extend and pretend” produces worse outcomes than recognizing the losses. The economy fares worse, and the banks dig their holes deeper, so the ultimate resolution costs are higher.

          1. sgt_doom

            Back in the ’80s, I and many others found work at audit firms and legal firms (IT and programming stuff in my case) in pursuit of putting away the bad guys involved in the S&L meltdown (over 1,000 banksters went to jail, BTW).

            No jobs this time around as financial fraud was decriminalized, thanks to several bills Clinton signed, along with the Private Securities Litigation Reform Act unanimously passed by the House back in 1996.

            This time the bad guys won’t go to jail — so how about the guillotine????

          2. Crazy Horse

            Just a heads up, Yves,

            You need to change the settings on the Recent Items section of the web site. The orange text is so transparent as to be nearly invisible, and the black text is very pale.

            Only happens in that one area, the rest of the site rendition is fine. For instance the orange text directly below the submit comment box that I’m viewing as I write is perfectly normal.

          3. alex

            sgt_doom says: “No jobs this time around as financial fraud was decriminalized”

            Not entirely. See William K. Black, who’s more of an authority on it that anyone. The problem is that the crimes aren’t being prosecuted.

            You have a good idea though. Considering all the work for prosecutors, investigators and people like yourself, prosecution of financial crimes committed could be good job stimulus. With the amount of financial crime in the last decade, we could probably employ half the country ferreting it all out.

          4. Pwelder

            Was a bit surprised to find on Counterparties a link to a discussion by Raghu Rajan in which he takes a be-careful-what-you-wish-for tone wrt proposals of inflation jolts and debt writedowns as constructive for the economy. Here’s the link:


            He was early and right about the mortgage festivities, and so on his good days he’s an above-average economist.

            His point here seems to be that we wouldn’t even be thinking about things with such ugly potential side effects unless we were really desperate.

        6. Not So Fast

          The solution to the profligate is simple:

          Take everything they bought on debt back and sell it in a fire sale. Sure, we’ll forgive your debt, moocher, now give us back everything and go away.

          House? Go rent!
          Car? Ever heard of a bus?
          Jet-skis and motor home? Someone who could actually have afforded these will get one HELL of a deal soon!
          Overliving your wage? Time for a wake-up call!
          Bank still couldn’t get solvent after fire sales? Raise capital or get shut down!

          AND wipe their credit out for 10 years minimum. Absolutely NO credit, secured or not.

          There, the debt washout can commence, and the abusers can learn a lesson.

          Doesn’t take an economics PhonyD to use some simple common sense, and do the right thing, now, does it? Indeed, I’ve come to agree with Yves that the actual act of getting a PhonyD in economics wipes out ones capacity for common sense.

          1. F. Beard

            Not so fast, Not So Fast,

            The government enforced counterfeiting cartel, the banking system, compels people to borrow or else be priced out of the market by those who do borrow. Try saving, for instance, to buy a house.

            And now savers, who for one reason or another resisted going into debt, want revenge on their fellow victims, the borrowers?

            Both borrowers and savers should unite and demand a universal bailout of both.

      2. terry

        Nice argument but that debt forgiveness sh** is something that has been touted before. Ain’t going to happen.It will just cause the players in the financial sector to be more damn reckless, run up more debt on top of fraudulent financial practices in hopes that DEBT FORGIVENESS would be enacted to bail out the system.
        We are going to get hit with anther calamity soon. In the derivative markets. It is going to go all down hill. Socialism looks pretty good to me right now.

    2. chris

      the debt over hang is not resolving on its own. writing down the debt means the debt is resolved, the debt would be gone. Therefore it would be a quicker resolution.

  2. Phil Perspective

    I’m just surprised the NYT found a business owner that had a clue. Often times, papers will interview business owners complaining about regulatory uncertainty and other nonsense. Also, if you haven’t heard, Obama’s jobs plan received the kiss of death today. Pete Peterson came out for it.

  3. R Foreman

    No economic demand.. it is the bitch.

    I bet Obama is shitting his pants right now and hoping his term ends before violence spills out into the streets.

    “.. but, but, but you TOLD me if we just threw enough money at the pig then it would excrete more dollars!!”

    Time to hang some bankers for domestic terrorism and high treason against the state. At some point this will dawn on these pea-brains in DC, and when it does it’ll be duck and cover time.

      1. R Foreman

        Good point. We should have never elected some of these psychopaths into office. Indebting people who have no ability to pay is a sure prescription for failure and social upheaval.

        When the priveleged are crushed in their own machinery it’ll be sad on the one hand but just on the other.

        I just hope we don’t see too many assassinations and mercenary killings of prominent individuals. Better get those RFID implants while you can so you have some kind of fighting chance.

  4. Chris Rogers


    Given Obama is a ‘busted flush’ and the current crop of Republican Presidential nominees are to a man, and women, worse that the previous Republican President, would it not be a good idea for the Democrats, or at least the sane element within the Democrats, to run someone against Obama for the Democratic nomination?

    Either that, or at least get a third challenger onto the ticket via a ‘grass roots’ movement – hopefully not a Tea Party advocate.

    America requires urgent surgery and not Bandaids and platitudes – currently neither the Republicans or Democrats offer this – it may also be a good idea to move the seat of Federal Government away from Washington, which to put it bluntly has become a cesspool best avoided if you wish to get anything thing done.

    1. Jeff Goldstein

      I strongly agree we should have a charasmatic progressive run as a third party candidate. There must be one out there. Perhaps in this political climate someone like Howard Dean would try again. After all americans are fed up with both parties and I do not see why a third party candidate is not being discussed.

        1. Jeff Goldstein

          Are you a blatant anti-semite or am I missing something. If this an attempt at humor it is not funny.

          1. F. Beard

            I apologize for offending. I’m half way through 1984 and Emmanuel Goldstein (so far) is presented as a hero, the enemy of Big Brother.

          2. Jeff Goldstein

            It’s totally cool. I realized afterward it might be something like that. Someone who is so in synch with my view of the Financial Armegedon, thrust upon us had to be one of the good guys.

          3. F. Beard

            Someone who is so in synch with my view of the Financial Armegedon, … Jeff Goldstein

            Most of my economic ideas come from the Torah – the ban on usury between fellow countrymen, debt forgiveness, that profits are good but should not be taken, restitution for theft, that the poor should not be oppressed, etc, etc, etc.

      1. neo-realist

        The 3rd party Pyrrhic candidate with no MSM support or money will end up handing the election to the republican–Our democracy can’t afford it, particularly a Rick Perry.

        The larger efforts should go not to de-electing Obama to make a point and cutting our throats with a reactionary, but to electing more progressives in the down ticket races (Congressional and Gubernatorial ones) to push for more systemic change–elect more Pete DeFazio’s and Bernie Sanders.

        1. President Irrelevant

          Here we go again with football/election season. ‘If it wasn’t for Nader we woulda shoulda..’

      2. anonymous

        The US-American concept of a third party as top-down is so frustating. You can’t start a party by running for the highest office in the country, you need to start at the bottom.

    2. Clonal Antibody

      Anybody, who is at all likely to rock the status quo will be marginalized by the MSM and declared unelectable. To determine who will stand up to the financial powers, you just have to look at their records.

      As long as the people of the US continue to buy into the vision presented by the MSM and the TV industry, there will be no change. One has only to look at Kucinich, and how he was sidelined by the MSM. He is a much better orator than Obama. He has a history of standing up to the banks. Also, he had Michael Hudson as his economic adviser in the 2008 campaign.

      Kucinich 2003 speech – Prayer for America

      Kucinich 2008 Dem Convention speech – Wake Up America

      Kucinich and the Banks

      Anybody who has ever seen and heard Kucinich can vouch that he can our orate Obama. But because he has a history of standing against the banking industry, he was marginalized both in 2004 and again in 2008.

      So I do not hold hope for any candidate that is likely to act in the best interests of the American people as opposed to acting in the best interest of “Wall Street”

      1. doom

        Kucinich also admits in private that the legislature has been highly effective in neutralizing reform, and that he has very little hope for change within the existing rigged system.

        1. solo

          Quite so! The “liberal” strategy of the “lesser evil” manages to serve up evil, every time. And then the liberals moan about their disappointment even as they gear up for (you guessed it) the next “lesser evil.” –Ralph Nader has patiently explained the political “duopoly” in play, but the American public is, by and large, immune to honest appraisal of their “exceptional” American system. No wonder Nader signed off his life’s work with his bittersweet fantasy-book, “Only The Super-Rich Can Save Us” . . . .

    3. terry

      Whites,jews blacks etc in washington are on the take and will always be. This is nothing new.
      The cocaine cowboy era ended in Florida in the mid 80’s and guess what happened to all those night clubs and restaurants that catered to them? They went bust. Just the way the housing bubble popped.

    4. Jeff Goldstein

      Any one of the the three. I think a woman like Elizabeth Warren would be perfect. Ater all Obama left her without a job at the agency she created. I daresay there would be no lack of motivation. Perhaps we can convince her that we need her more in Wahington than Massachusets. You want I should write to her first.

  5. LA Crystal

    I’m sure you are technically correct regarding the economic substantive benefits in President Obama’s plan. And, I’ve said what the quoted business people are saying all along. The same quote has even been made in media once in a while, though usually not prominently (if at all) in the mainstream/TV media.

    That said, I’ve also been reading that at least some part of the stall, and possibly a large part, is consumer confidence. So even if there was just a symbolic message in President Obama’s rhetoric, the points he made could inspire a little more hope and confidence – in the little people.

    Besides, what the business person is also saying is that the direct tax incentive won’t inspire him to hire anyone, but if consumers do spend more than they have been (if there is a change in sentiment), then that demand would, or might, create the business need to hire. The CBO says that the payroll tax cut, extending unemployment benefits, and (I think even) the transfers to states for teachers, etc. all have ‘bang for buck’ much more than the corporate tax breaks.

    Finally, as has been said all too often – realistically what does anyone think would get enough Republican votes in Congress to pass? Labeling stimulus as tax cuts in any way he can is the easiest path.

    Pres. Obama needed to engage the public and if they were watching most (non-cynical political junkies) probably did feel better. He does have that talent, despite his weaknesses and the fact that he waited too long to do it. As we might remember, he has been pretty busy aside from the shortened vacation. :)

    1. gs_runsthiscountry

      “That said, I’ve also been reading that at least some part of the stall, and possibly a large part, is consumer confidence. So even if there was just a symbolic message in President Obama’s rhetoric, the points he made could inspire a little more hope and confidence – in the little people.”


      I have had the consumer confidence conversation a few times over the last 3 years, many times in debate, as many dismiss this data for a multitude of reasons.

      While i have not read that here at this blog, other prominent blogs seem to go out of their way to dismiss the accuracy or relevance of Consumer confidence data, Conference board, Michigan or otherwise.

      Make no mistake about it, CEO’s take CC data seriously. There isn’t a person that will tighten the purse strings faster than a CEO/CFO that sees a negative slope in CC data or eyebrows perked at the first sign of a drop off.

    2. lambert strether

      Putting the con in confidence! Amazing argument:

      So even if there was just a symbolic message in President Obama’s rhetoric, the points he made could inspire a little more hope and confidence – in the little people.

      I guess in a financialized, rentier-driven economy where everything is bullshit, a world-class bullshit artist like Obama could be expected to make a difference — why, as much as half a point off the DISemployment rate!

      * * *

      What would restore confidence? Banksters in orange jumpsuits doing the perp walk.

    3. attempter

      So even if there was just a symbolic message in President Obama’s rhetoric, the points he made could inspire a little more hope and confidence – in the little people.

      The Obama hacks aren’t usually this brazen in admitting it’s all fraud and lies.

      Though they have been pretty open in expressing this contempt for the “little people”.

    4. Patricia

      Because the people, being little, only need a little more hope and confidence. And being little, they only need little houses and little meals and little clothes. Which altogether add up to requiring merely a little wage.

      No wonder Obama acts as he does! It’s all about size. All this time I’ve been supposing that his cameras were deliberately angled slightly below him, while actually they were carried by little people who weren’t tall enough to be eye-to-eye with his “royal high largeness”.

      Pshaw! Hoocoudda evernode.

  6. Richard Kline

    The individual in this article, and the focus on the negative response to the talking point in the article, is in _small business_. Bama Obama didn’t clutch at the ‘tax cuts’ proferred by his Rubinite/Clintonista cabal of devisors to help small businesses ‘hire.’ Barack Obama hasn’t done jackshit for small business EVER. The taxcuts, if any are passed, you may be sure will NOT be contingent upon new hires for the most part. They will be ‘tax relief’ for large corporations, to help them with ‘the strain of operating in a poor retail environment. The same _large_ corporations who are raking in record profits by gaming the system, stealing the benefit money they had been paying their workers, and playing the financial markets. Barak’s initiative is really just a give-away to the rich; the only thing given to the middling is the rhetoric; the poor get the bill in the form of eliminated services (to pay for those gifts of money to the rich through ‘offsets.’)

    Oh, and since the proposals of his media-op have tanked already, he’s pulled ‘mortgage mods’ out of his bag of tricks. Like the pittance, designed-to-fail first go round he had at that. I don’t believe Obama has the slightest intention of _actual_ mods, i.e. principal reductions. Any mods that creep out of any such program will be simple schedule stretch-outs designed to make the debt slaves pay the holders of MBSs in full, since it is the latter set Obama works for; when he works, which is seldom. Oh, and any mortgage mod action won’t even get onto the books sooner than Spring, 2012, and likely not even then. No help from that for the current economy; just more HOPE.

    The system is a crime. What does that make the Systemitizer-in-Chief? This man has taken all the worst wholecloth of Bill Clinton’s kiss-the-rich robes and woven the most odious, wealth-loving policy program we’ve seen since the 19th century; he’s truly awful in proposal, policy, and act. If he’d just pose out on the Lawn holding a lantern, he’d look completely natural, and that’s a sad, sad thing to contemplate. Not the least surprise. Historically, the first generation of ethnic outgroup politicians to make it to or near to the top are either grossly corrupt or contemptible lackeys to the powers that be (the exception being a handful of genuine reformers on the margin as concessions such as Thurgood Marshall). One doesn’t get reformers in power until the second generation comes through. Powell, Rice, Obama, Thomas . . . yep, cemented into that profile, with Holder, and a few others who should be called out filling out the back row of the group portrait. I didn’t say ‘stupid;’ some of these are able, as historically, but deeply corrupt to the system all. The Democratic Party deserves to have to haul this pile since they’re the ones who trucked it in in the first place. But the country won’t be better for (next) Summer of Discontent.

    1. run75441

      Hi Richard:

      While mostly I would agree with you on the lack of assistance to small businesses by Obama, I can say in the case of the ACA there are and already were provisions to assist small businesses with subsidies.

      As far as My Lai Collin Powell, google Powell, My Lai, and Kovic to read on his contributions in Vietnam and in covering up My Lai. There is more to this man than meets the eye. http://www.consortiumnews.com/2000/121700a.html

      USMC Sgt E-5 68-71

  7. Hugh

    1. The Obama jobs program is not much of a jobs program. There is only about $130 billion in new spending in it. We have 14 million unemployed. 25 million un- and under employed. And 29.4 million disemployed. I figure that $130 billion would create about a million jobs but it’s only good for 12 months or so and that won’t even keep up with increases in the labor force due to population growth over that period.

    2. Seeing as Obama wants the costs of his program taken out of other parts of the budget via the Cat Food II Commission, you may see some forward cost shifting but basically it comes out close to a wash so while Obama is creating those million jobs with this program we will lose a million elsewhere due to budget cutting.

    3. Business gets at least $70 billion in tax cuts even if they don’t make a single hire. So their incentive to hire out of this program is zero.

    4. The extension of unemployment insurance only keeps things as they are. It doesn’t create any new jobs. It just keeps old jobs from being lost.

    5. Cutting the employee side of the payroll tax is worth $170 billion but, as we saw in the original payroll tax cut from the December tax deal last year, that was sopped up by commodities speculation that drove up the cost of gasoline and groceries. It created no jobs. I don’t see things playing out differently this time around.

    6. This is all a campaign ploy. I mean Obama had more than 2 1/2 years to get exercised about jobs and he waited until the 2012 election cycle had begun to come up with his jobs plan. It’s not meant to work. It’s meant to score political points. Obama expects most of this plan to be shot down by Republicans, at which point Obama will blame them for blocking his “eager and sincere” efforts to create jobs.

    On another topic, I saw mention of Warren, Feingold, Sanders, and Dean as possible challengers to Obama. With all due respect, there are no Democrats (Republicans or independents) on the national scene who deserve either your respect or your vote. Warren in her farewell letter talked about how she stood side by side with Obama. Feingold has already endorsed Obama. Sanders isn’t a Democrat and is one of the most cowardly serial cavers on the Hill. Dean lied so often and so much during the healthcare debate I stopped listening to him.

    The problem we have in our country is that our elites (Establishment) are out to loot us. Backing Establishment liberals like those mentioned above is just going to give pretty much the same policies as Obama but just with a different face attached to them.

    It is also misguided to think that if we could just replace Obama that the country’s situation would improve. You have to look at the two equally corporatist parties that control the Congress. The House theoretically could be replaced at the next election, but only 1/3 of the Senate can be. So even if there was a mass movement for which there is no evidence whatsoever, it would take 4 to 6 years to gain complete control of the legislative and executive branches. And that doesn’t even begin to touch on an extremist right wing Supreme Court and a deeply conservative judiciary. Put simply, we need to be more aware of just how very stacked the deck is against us. It is incredibly so.

    1. lambert strether

      And the 99ers are written off entirely, since unemployment extension applies only to those who are still getting unemployment.

      So we now have an official underclass of unpersons who are basically told to go die. Of course, we’ve always had that, but they used to be black. Now it could be anyone. Thanks, “progressives”!

      1. Clonal Antibody


        Don’t you think it is time for the Congressional Progressive Caucus to abandon the Democratic Party?

        What would happen if say half of them threatened to leave, and run either as independents (a la Sanders) or join the Green Party? They would have name recognition, and it is doubtful that the Democratic Party establishment would be able to successfully defeat them in their Congressional Districts. I am partly basing it on the comment posted in response to my comment about Kucinich.

        Kucinich probably will not have a district to run from, in 2012. So he is ripe for opting out of the party. Will many others follow him?

    2. alex

      “Warren in her farewell letter talked about how she stood side by side with Obama. Feingold has already endorsed Obama. Sanders isn’t a Democrat and is one of the most cowardly serial cavers on the Hill. Dean lied so often and so much during the healthcare debate I stopped listening to him.”

      What, no saints in politics? Say it ain’t so. What we need is someone like FDR who was always pure of heart and never played political games.

      As flawed as Warren, Feingold, Sanders and Dean may be, I’d take any one of them over Obummer.

      1. Hugh

        “As flawed as Warren, Feingold, Sanders and Dean may be, I’d take any one of them over Obummer”

        Yes, because opting for the lesser of two evils has worked out so well for us. Oh wait, it’s what gave us Obama. Our Establishment is given over to looting. So as long as you are willing to vote for Establishment candidates, all you are doing is choosing whom you wish to be the face of that looting. I am sure you will say “Wait, these are the good guys. They aren’t looters.” But what this misses is that however good you think they sound, they support and are members of the same elite Establishment which is looting us.

        The key realization here is that a vote for any Republican or any Democrat is a vote for the looters. Everything else is atmospherics.

  8. Dan B

    A post from last week discussed the ‘Seneca Effect’ and how it is rooted in an inability/refusal to comprehend that we’re reaching the limits to growth, primarily brought on by a peak in worldwide oil production. The dominant paradigm, pace Kuhn, cannot solve problems, hence a pathetic/corrupt Obama and the Republican “candidates”, who words of scorn and lamentation cannot begin to define.

  9. F. Beard

    The irony is that the thieving Republicans (who generally understand economics better than Democrats) will probably do what Obama should do and send bailout checks to the entire population ala GW Bush’s stimulus checks.

    But I reckon that Democrats shudder at the thought of just giving money to the population. How could they be trusted to spend it well?

    1. Jim Haygood

      Precisely. Your average citizen probably labors under the delusion that B of A and Citibank exist to lend money to him. It would never occur to such unsophistos to lend their hard-earned nickels back to banks, on sweetheart terms, in their hour of distress.

      Fortunately our betters have overridden the narrow-gauge, deficient judgment of fearful little people, who think only in the obsolete, reductive terms of safety and solvency. Why, they’ve hardly advanced from the parochial mindset of the 18th century French peasantry, who hoarded nuggets of gold in their woolen socks, not trusting the visionary financial innovations of John Law!

      Don’t they know that Ben Bernanke and the Fed board possess PhDs in economics from the best schools?

    2. neo-realist

      “The irony is that the thieving Republicans (who generally understand economics better than Democrats)”

      You mean simpletons like Milton Friedman and Alan Greenspan understand economics better than Joe Stieglitz or Paul Krugman?????

      The people who believe tax cuts and total deregulation and lack of oversight cure everything including Cancer know economics better than democratically inclined economists.

      We’re suffering primarily from the culmination of thieving republican economics now.

      1. F. Beard

        We’re suffering primarily from the culmination of thieving republican economics now. neo-realist

        Agreed but Bush’s stimulus checks, as much as I loath the man, were a brilliant idea both economically and politically. Of course, they were too few. We need much more than stimulus; we need a general bailout.

        I predict a “Nixon goes to China” moment when the Republicans do what the Democrats are afraid to do.

        1. Pining for Iraq

          Stimulus checks? Were those what those were? I remember paying about 5x times that in taxes. It was nice however, bought some clothes, food, paid some bills and then it was gone.

  10. lambert strether

    “Confidence,” so far as I understand it, means guaranteed profit, and that can only mean certainty that the game is rigged. The rentier overclass knows this; that’s what successful rent-seeking is all about!

    What’s amazing is that the Times stenographer, and Bernanke, seem to think that everybody thinks like a rentier. The collective elite mind is apparently completely closed, an example of perfected self-reflection. Historically, elites like that come to bad ends (although that does not necessarily result in a more just or humane society).

  11. Norman

    Funny how movies have a way of becoming reality. Blazing Saddles comes to mind. Someone mentioned Warren/Sanders or . . . . . . . anyway, perhaps out of the ashes, a Phoenix will rise. What ever happens, hope the infrastructure wont be destroyed like Iraq, Libya. A clean sweep of the Financial/Political Complex is needed. A Military Coup?

  12. Mike M

    Wait, wait, all the Republicans and a lot of pundits tell me that it’s all about regulations and taxes. Eliminate both, and we’ll all be living in MacMansions on the beach. Oh, and lets not forget that ponzi scheme called Social Security. That’s really screwing things up.
    Hey, I’m no fan of Obama, but, do you really think he’s going to lose to, well, even, …..Romney? The same voting block that REALLY can’t stand Obama (south of the Mason Dixon Christan conservative whites) would never vote for a Mormon.

    Anyway, all of these arguments are so off base. Technology has killed and is killing jobs
    at such a rapid pace, and all the smart
    people are flaling about trying to point
    fingers of blame and propose grand solutions. Take the Post office, as one example. And we have to pay those pensions for the next thirty years, after it goes bankrupt. Look at most any industry, and less and less bodies are needed to produce. How about this blog? It’s
    helping to destroy the labor intensive print medium slowly but surely. How do we stop all that?

    1. alex

      “How do we stop all that?”

      Smash the automated looms! Contact n.lud@nottingham.org

      But a few years ago we had low unemployment. Do you think that a sudden burst of technological change is what caused the Lesser Depression? What about the Great Depression. Technology was much less sophisticated then, yet we had unemployment that was several times what we have today. How do you explain that?

      1. Mike M

        Well, another good reason not to be fixated on a world that existed nearly a century ago when most people lived on farms and personal computers, the internet, and massive container cargo ships were beyond fantasy.

        1. alex

          “another good reason not to be fixated on a world that existed nearly a century ago”

          Actually the Luddites were closer to two centuries ago, and you’re the one who appears to be fixated on their concerns about technology destroying jobs. Two centuries ago I might have agreed, but two centuries which have included long periods of high employment have demonstrated that technology per se is not the problem. Makes a decent scapegoat though.

      2. Mike M

        btw, unemployment was low in the last decade because there was a giant asset bubble blown up around housing that employed millions in construction, sales, and finance. That’s gone until the next housing bubble. Don’t hold your breath.

        1. Rayguns Recessions

          Unemployment was lower due to changes in measurement. Transient periods of unemployment and violent increases in housing costs, the last 10 years signal the end of the American empire.
          We aren’t getting raises, job security is gone as is collective bargaining for all but a few.

        2. alex

          “unemployment was low in the last decade because there was a giant asset bubble blown up around housing”

          And the 90’s? when technological change was greater. Nor have you addressed my point about the Great Depression.

          1. Bazing

            You have a good point – unemployment is equal to what it was in 1934. The 90s saw more earnings by the wealthiest.

    2. F. Beard

      How do we stop all that? Mike M

      The problem is not outsourcing or automation. The problem is that business has used the workers’ own stolen purchasing power (via the counterfeiting cartel, the banking system) to outsource and automate their jobs away.

      The problem is not lack of work but ill-distributed income and wealth.

      Solution? Abolish the banking cartel and bailout the entire population, including savers, equally. The bailout should be metered to just replace existing credit as it is paid off and should continue till ALL private credit is paid off.

      1. Mike M

        I have no clue what you’re talking about. I do agree that banking,as it exists today, is evil and parasitic, but how would your credit clearing fix things? Will the march of technology and the profit motive be abolished inyour new world, too? Would you gather all the educated and middle class in the cities and burbs and send them to re-education camps in the country? This has been attempted a few times before, you know.

        1. F. Beard

          I have no clue what you’re talking about. I do agree that banking,as it exists today, is evil and parasitic, Mike M

          Then let’s abolish the banking cartel and compensate both savers and borrowers (everyone) since the cartel has cheated both.

          but how would your credit clearing fix things? MikeM

          The economists I respect say we are in a “household balance sheet recession”. Then let’s fix those balance sheets. All it takes is money.

          Will the march of technology and the profit motive be abolished inyour new world, too? MikeM

          Hopefully not but with the abolition of the counterfeiting cartel those profits would be much more broadly shared.

          Would you gather all the educated and middle class in the cities and burbs and send them to re-education camps in the country? This has been attempted a few times before, you know. MikeM

          Oh, so the only alternative to fascism is bloody Communism?

          1. Mike M

            I don’t mean this to be a cheap shot, but you make me think of those stern, humorless people in bad beards who rallied against the czar a century ago. There’s, you know, a certain edge. And, we all know how that one turned out.

          2. F. Beard

            There’s, you know, a certain edge. MikeM

            Do a Google on “banking quotes” and you’ll see that the usury and counterfeiting cartel has created a great deal of edginess throughout history among some of the most famous people who have ever lived.

            And, we all know how that one turned out. MikeM

            It needn’t. A universal bailout would fix the banks too. It really wouldn’t hurt anyone if the bailout was properly metered and combined with a ban on further credit creation.

            The curious thing about banking is that it damages EVERYONE including the banks. So how about we unite and fix the problem?

      2. linrom

        “The problem is not lack of work but ill-distributed income and wealth”

        This is the end game that few understand. Let’s see what happens when tax and sales taxes continue to steadily decline?

    3. Paul Jurczak

      Mike, you are absolutely right about crucial importance of addressing an issue of increasing productivity in order to create a system, which is stable in a long term. Debt jubilee will have a temporary effect until the next bubble or two coupled with financial “innovation” bring the system back to the brink of a disaster.

      We have to think in terms of the future centuries away, not a decade or two. The progress of technology will eliminate need for human employment in almost all manufacturing and service sectors, except of a niche where humans themselves are the “product”. Classic capitalist model breaks down in these scenarios.

  13. alex

    Yves Smith: “Wow, this is just embarrassing. A raspberry from businesses, the object of Obama’s tender ministrations. And the reason? Basically, too little demand, something that tax cuts won’t remedy”

    A raspberry for the _Republican_ side of Obama’s plan (tax cuts), and straight from business people (including the US Chamber of Commerce!). In other words, Obama might do better, both practically and politically, by pretending to be a Democrat instead of pretending to be a Republican.

  14. Susan the other

    My favorite short story is by Alice Munro entitled “Vandals.” It is a story of immorality, denial and neglect.

  15. Chris

    You’re always spot on Yves. Just one small quibble. What Obama is “dedicated to doing” is certainly the wrong thing for us, but it’s the right thing for his personal future and will ensure him a spot among the uber-rich when he loses in 2012. Indeed, it almost seems like he wants to lose and won’t care if he does. His presidency is the vanity of an empty suited social climber and he already got what he wanted.

    Obama is a fraud.

    1. terry

      I don’t think Obama is a fraud. It is that everyone has created a narrative that says the president has to get you hired so you can spend money. So he and his administration concocted a plan, like it or shove it, to get dome people working.
      Criticize all you want but what the f*** do you really think we’re suppose to do? Create another bubble?
      You and I don’t own these companies baby! They do as they will. This is free will, free market economy America. Wall Street is valued ten times greater than our GDP.WTF. Want to talk about fraud? Talk abut that.

  16. Bin Ladens Impressive Victory

    After the towers fell, the moment was seized since deregulation had been cast in place and the Oracle said a lil’ fraud is ok. Tom Donilon spent 1999 to 2005 working as Executive Vice President for Law and Policy at Fannie Mae, the federally-chartered mortgage finance company, as a registered lobbyist from 1999 through 2005. Gutting regulation. Apparently his work was so highly regarded he was appointed by Obama to the position of National Security Advisor. It would be easy to say that the economy was destroyed to pay for the security state, but that might be a tad too conspratorial for main stream analysis.

    1. Waving the Flag

      The hysteria and looting of the housing bubble, which raped a healthy number in the middle class, is something that happened here, and was done by ‘Muricans. Obama said it was innovation by crafty business men, I’d say it was another terror attack. Greenwald:

      “This is not to say that either the conduct of war, or the prevailing attitude towards it, has become less bloodthirsty or more chivalrous. On the contrary, war hysteria is continuous and universal in all countries, and such acts as raping, looting, the slaughter of children, the reduction of whole populations to slavery, and reprisals against prisoners which extend even to boiling and burying alive, are looked upon as normal, and, when they are committed by one’s own side and not by the enemy, meritorious.”

  17. gerold k.b. weber

    What is needed is a higher share of income for labour enabling people to buy the goods produced for them, and by them.

    Economist Robert J. Gordon concludes that the weakness of labour accounts for 3 million missing jobs, whereas the other more than 7 million missing can be traced back to a kind of ‘hangover’ after the housing bubble collapse. But the housing bubble was inflated by the credit bubble. And the credit bubble arose from high income inequality, loose capital not recyled into the real economy via real investment or capitalist consumption, and people needing loans to spend.

    Therefore I appeal for a consideration of this fundamental analysis in solution proposals.

    Debt restructurings and fiscal deficits may help correct existing income and wealth imbalances somewhat, but this policies don’t get down enough at the root of the trouble.
    More to the point are far higher taxes on the super rich and corporations hoarding money, as well as a rollback of ‘casino capitalism’ with its creation of virtual riches, which later become real through bank bailouts.

  18. McDonalds Versus Obama

    Absence of compulsion to or toward one thing or another, is indifference. As if the adminstration was compelled to draft a speech to a problem that they’d prefer to ignore. On the opening night of football no less, for those who use their digiscreens. After years of higher unemployment we have another compelling examble of clueless, epic failure.

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