Quotations Between September 4-September 15, 2009
To Accompany the September 15, 2009 edition of Tidbits
http://www.trinity.edu/rjensen/tidbits/2009/tidbits090915.htm

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Do we forecast? You bet. Do we have confidence in our forecasts? Never! Confidence about a non-linear chaotic system can only come in degrees, and even those degrees of confidence are guesses. Not all hope is lost. There are times when it seems our ability to predict is better than others. Thus we need to take advantage of it if we see it. Trading ranges, pivot points, support and resistance, and the like can help, and do help the trader.
Michael Covel, Trading Black Swans, September 2009 --- http://www.michaelcovel.com/pdfs/swan.pdf

Arithmetic for Aaron
Forwarded by Dick Haar

I guess I must be on the wrong page.....
A vehicle at 15 mpg and 12,000 miles per year uses 800 gallons a year of gasoline.
A vehicle at 25 mpg and 12,000 miles per year uses 480 gallons a year.
So, the average clunker transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles so that's 224 million gallons / year.
That equates to a bit over 5 million barrels of oil.
5 million barrels of oil is about 25% of one days US consumption.
And, 5 million barrels of oil costs about \$350 million dollars at \$75/bbl.
So, we all contributed to spending \$3 billion of "our" money, to save \$350 million.
Oh yes, we did put some people temporarily to work building new inventory.
But when that inventory piles up for lack of buyers it will be a new story.
A story about  another good-deal round of Cash for Clunkers next summer.
And the summer after that!
And the summer after that!
Until there are no pre-owned cars in America!
What about the poor who can't afford a new car?
They can walk the talk!

Wait until you see the cash for appliances deal late this year!

The Entitlement That Keeps on Taking (like all entitlements)
The Quietest Trillion:  Congratulations! You're about to own \$100 billion a year in student loans
The furor over President Obama's trillion-dollar restructuring of American health care has left his other trillion-dollar plan starved for attention. That's how much the federal balance sheet will expand over the next decade if Mr. Obama can convince Congress to approve his pending takeover of the student-loan market. The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans. The remaining 20% of the market that is now completely private will likely shrink further as lenders try to comply with regulations Congress created last year. Starting next summer, taxpayers will have to put up roughly \$100 billion per year to lend to students.

Three-quarters of teachers in Britain's schools believe they should warn pupils about the dangers of patriotism - which some regard as a form of 'brainwashing', researchers have found.
Jensen Comment
My patriotism links are at http://www.trinity.edu/rjensen/music.htm#Inspirational

 Thank You America (slide show) --- Click Here Video:  Return of a fallen marine to New Braunfels, Texas ---

Charlie Sheen, like his father, is bound and determined to get the truth out about how Bush and Cheney and Israel  engineered our going to war in Iraq by deliberately killing over 3,000 Americans in NYC and hundreds of employees in the Pentagon. The Sheen family is relentlessly pursuing the tabloid truth?
"Truther" actor Charlie Sheen says President Obama needs to investigate fully the actions and conspiracies he believes resulted in the 9/11 attack on the United States.
WND, September 11, 2009 --- http://www.wnd.com/index.php?fa=PAGE.view&pageId=109349
Jensen Comment
This is important shocking media material for MSNBC to pursue with lingering Olbermann-style hate! Will we ever get Bush and Cheney executed for their high war crimes? Let's hope they don't die of natural causes before Charlie is called to The Hague to provide evidence!
9/11 Conspiracy Theories --- http://en.wikipedia.org/wiki/9/11_conspiracy_theories

The Tariff That Will Come Back to Haunt Our National Debt Cost and Inflation
We need happy Chinese to roll over their investment in our soaring National Debt

The White House leaked word late Friday evening that the U.S. will impose heavy tariffs on imported Chinese tires used by millions of low-income Americans. We wonder if President Obama understands the political forces he's unleashing with this blatant protectionism . . . Eleven Senators, including Sherrod Brown (D., Ohio) and Debbie Stabenow (D., Mich.), sent a letter to President Obama in July advocating the 55% tariff on Chinese tires. "We firmly believe that providing this specific measure of relief would send a powerful message to the American people that you intend to keep your promise to enforce trade laws fully," they wrote. Then there are companies that face competition from lower-cost Chinese imports and want to push their antitrade agenda forward. Take the Committee to Support U.S. Trade Laws, which lobbed a pro-tariff letter into the White House this month. The umbrella group includes the American Furniture Manufacturers Committee for Legal Trade; the California Fresh Garlic Producers Association; the U.S. Beekeepers; the Florida Fruit & Vegetable Association; and the Flower Growers of Puget Sound. "This case is being watched closely to see whether Section 421 is an effective law or a dead issue,"committee executive director David A. Hartquist wrote to Mr. Obama.
"A Protectionist Wave:  Obama invites a rush of similar claims with his tariffs on Chinese tires," The Wall Street Journal, September 12, 2009 --- Click Here

Dear Premier Jiabao --- http://en.wikipedia.org/wiki/Wen_Jiabao
We are imposing a 50% tariff on all imported goods from China because you've failed to impose carbon emission limits to levels that the United States is imposing in on all manufacturing plants. I'm sorry about this, but a clause in the Cap and Trade legislation to help our labor unions and create more jobs in the U.S. gives me no choice in the matter.
Senator Boxer

We are not turning over 50% of our investment in the \$12 trillion U.S. National Debt and will no longer support the  spendthrift U.S. Congress that is building up the annual Federal government spending
deficit by over \$2 trillion per year. We will cease bidding on new issues of Treasury Bonds used to finance your overspending. Please take your import tariffs plus your spending deficits and shove them where the "sun don't shine Barbie Doll."
Wen

Toyota closure could erase 40,000 jobs in California
Toyota's decision to close its 25-year-old California factory where UAW workers build Corolla cars and Tacoma pickups has delivered a seismic, Detroit-like jolt to the once-invincible Silicon Valley economy. The Japanese automaker's first plant closing in North America will add to California's swelling unemployment rolls, and perhaps, help the Golden State better empathize with the industry that it has persistently challenged with regulatory requirements. The closure also will eliminate Toyota's only UAW-represented workforce. ;California has now lost 580,000 manufacturing jobs - a quarter of its total - since 2001.

Larry Summers:  "High unemployment for years"
The president’s chief economic adviser warned Friday that the nation’s unemployment rate could stay “unacceptably high” for years to come — a situation that would seriously complicate Barack Obama’s ability to convince Americans that he’s beating back the recession. “The level of unemployment is unacceptably high,” National Economic Council Director Larry Summers said Friday. “And will, by all forecasts, remain unacceptably high for a number of years.”
Politico, September 12, 2009 --- http://www.politico.com/news/stories/0909/27052.html
Jensen Comment
Small businesses provide most of the new jobs in towns across America, but Summers fails to propose anything but misery for small business owners.

President Obama's plan to speak to America's schoolchildren next Tuesday has some Republicans in an uproar. "As the father of four children, I am absolutely appalled that taxpayer dollars are being used to spread President Obama's socialist ideology," thunders Jim Greer, chairman of Florida's Republican Party, in a press release. "President Obama has turned to American's children to spread his liberal lies, indoctrinating American's [sic] youngest children before they have a chance to decide for themselves." Columnists who spy a conspiracy behind every Democrat are also spreading alarm.This is overwrought, to say the least. According to the Education Department's Web site, Mr. Obama "will challenge students to work hard, set educational goals, and take responsibility for their learning"—hardly the stuff of the Communist Manifesto or even the Democratic Party platform. America's children are not so vulnerable that we need to slap an NC-17 rating on Presidential speeches. Given how many minority children struggle in school, a pep talk from the first African-American President could even do some good.
"A Teachable Moment"  Obama isn't 'indoctrinating' kids," The Wall Street Journal, September 4, 2009 --- Click Here

US fury as Israel defies settlement freeze call
Israeli plans to authorise the construction of hundreds of houses in the occupied West Bank sparked furious protests from American and Palestinian officials yesterday. In a nod to US requests to suspend all building work at Jewish settlements, Binyamin Netanyahu, the Prime Minister, is offering a freeze on construction at a later date — a peace gambit that did little to mollify those involved in the negotiations leading to a new Middle East peace process. President Obama had hoped to start formal talks between Palestinians and Israel later this month. “We regret the reports of Israel’s plans to approve additional settlement construction,” Robert Gibbs, the White House spokesman, said. “As the President has said before, the United States does not accept the legitimacy of continued settlement expansion and we urge it to stop.”
Sheera Frenkel, London Times, September 5, 2009 --- http://www.timesonline.co.uk/tol/news/world/middle_east/article6822540.ece

Israeli Strategy on the West Bank
So until there is a permanent status agreement, only Jewish settlement activity can be enough of an incentive to make the Arabs, like Sadat, hurry up and seek peace, because their losses will multiply the longer they wait. We know from the Gaza example that the Arabs' goal was not to remove Israel from precious land, but to uproot Jews and fight them from the land they left. It is better, then, to keep with the peace-building construction in communities beyond our borders, and only when we see genuine signs of a culture of peace and good neighborliness next door to talk about evacuation - with due consideration to the new reality on the ground, which will change all the more if the Arabs don't rush toward an agreement.
Raphael Israeli, Professor of Islamic, Middle Eastern and Chinese history at the Hebrew University of Jerusalem.  Ha'aretz, 9/6/09

Hillary movie puts campaign finance limits at risk
The Supreme Court appears poised to wipe away limits on campaign spending by corporations and labor unions in time for next year's congressional elections in a case that began as a dispute over a movie about Hillary Rodham Clinton. The justices return to the bench Wednesday , nearly a month early , to consider whether to overrule two earlier decisions that restrict how and when corporations and unions can take part in federal campaigns. Laws that impose similar limits in 24 states also are threatened. The court first heard arguments in March in the case of whether "Hillary: The Movie," a scathingly critical look at Clinton's presidential ambitions, could be regulated as a campaign ad. The emphasis has shifted away from the 90-minute film. Now the justices could decide whether corporations and unions should be treated differently from individuals when it comes to campaign spending. Restrictions on corporations have been around for more than 100 years; limits on unions date from the 1940s.

How to buy and pay for fake cancer death diagnosis Gadhafi style
Sir John Scarlett, the head of MI6, has admitted to Prime Minister Gordon Brown that he knew Libyan strongman Moammar Gadhafi paid "substantial fees" for three cancer specialists to "predict an early death" for the Lockerbie bomber, according to a report from Joseph Farah's G2 Bulletin. Their verdict has plunged the crisis between London and Washington even further into what is described as a "diplomatic quagmire." It also has threatened the cooperation between the Secret Intelligence Service and the CIA.
Joseph Farah, "Libya 'bought' al-Megrahi's diagnosis Fees for doctors' opinions 'being kept secret'," WorldNetDaily, September 7, 2009 ---
http://www.wnd.com/index.php?fa=PAGE.view&pageId=109139

Bill Cosby speaks bluntly about black people and education
Bill Cosby spoke about his feelings regarding black people and education in his recent rant called We Cannot Blame the White People Any Longer. Cosby is probably the only person who could get away with talking the way he does because he is well respected among people of all races. “People marched and were hit in the face with rocks to get an education, and now we've got these knuckleheads walking around,” he says. “They're standing on the corner and they can't speak English. I can't even talk the way these people talk….You can't be a doctor with that kind of crap coming out of your mouth. In fact you will never get any kind of job making a decent living.”

But change comes hard. Mr. Bennett has come under fire from local superintendents, unions and education-school leaders who fear, among other things, that merit pay will unravel a seniority system that rewards longevity not quality of instruction. Meanwhile, a group of state legislative Democrats, cajoled into action by urban school leaders, earlier this year tried to pass a bill to curtail the future growth of charter schools in the state. It was a tough fight that ended in a close victory for reformers and that ultimately highlighted the increasing strength of the reform movement. The measure passed both houses of the legislature but was shelved in late-session negotiations after Mr. Duncan warned that he will be handing out about \$5 billion this year to states that show "a deep-seated commitment to education reform," which he partly defines as an embrace of charters. The fight also underscored the bipartisan push for reform. Mr. Bennett and Gov. Mitch Daniels, both Republicans, routinely praised the Obama administration for challenging teachers unions on merit pay and charters, and for helping shape the debate in Indiana.
Matthew Tully, "Indianapolis Tests Out Education Reform A confluence of factors favors school choice—for now," The Wall Street Journal, September 4, 2009 --- Click Here

Just how many illegal aliens are in the United States?
The federal government continues to tell us that there are 12 million illegal aliens currently living in the United States. However, the actual number in undoubtedly four to five times higher. The way the feds arrive at their numbers is as absurd as their assertion that we can maintain law and order without actually defending our borders. In 1986, President Ronald Reagan granted amnesty to the nation’s illegal alien population. At the time, we were told that population totaled between two to three million. However, amnesty was actually granted to more than five million who had crossed our borders illegally.
Manchester Examiner, August 27, 2009 ---
http://www.examiner.com/x-5919-Norfolk-Crime-Examiner~y2009m8d27-Just-how-many-illegal-aliens-are-in-the-United-States

Catching On To Florida's Economic Ponzi Scheme
The rest of America sold corn, cotton, iron or coal. Florida sold itself. When you retired you were going to where there was no snow to shovel, where you could pick oranges off trees growing in your backyard, and flowers bloomed in winter. Taxes were low; living was high. Florida was Eden on the cheap. It was bound to catch up with us. Gary Mormino, a distinguished historian of Florida, says our whole economy is more or less a big Ponzi scheme. The state funds its roads and schools by bringing in new investors — that is, new residents — to pay sales taxes and property taxes. When nobody can afford a condo in Boca, when tourists stop coming even for a week at Disney World, the Ponzi scheme collapses.
Diane Roberts, NPR, September 6, 2009 --- http://www.npr.org/templates/story/story.php?storyId=112554154

Which brings us to perhaps the most reliable economic indicator: The McDonald’s Index. McDonald’s restaurant global profits have climbed every month during the recession. That’s because McDonald’s is offering more quality choices for cheaper prices. Starbucks has had to close 1,000 stores in America because McDonald’s has been drinking their Frappuccino. Actually, maybe when the dust settles on this recession we’ll find that we haven’t become poorer, but rather just smarter.
Rachel Marsden, "The Underwear Index And Other Signs You’re Going Broke," Townhall, September 7, 2009 --- Click Here

Pity the unemployed, but especially pity the teenage unemployed. According to today’s job report, the overall unemployment rate (the percentage of people in the labor force not working but looking for work) in August rose to 9.7 percent, its highest level in 26 years. The teenage unemployment rate, however, is at 25.5 percent, its highest level since the Bureau of Labor Statistics began keeping track of such data in 1948.
Catherine Rampel, "Oh What a Time to Be Young!" The New York Times, September 4, 2009 ---
http://economix.blogs.nytimes.com/2009/09/04/oh-what-a-time-to-be-young/

Those really expensive 18 (nearly empty) flights per week at Murtha Airport
In 20 years, Mr. Murtha has successfully doled out more than \$150 million of federal payments to what is now being called the airport for no one. I took a trip to southwestern Pennsylvania to explore how this small town received so much money and whether the John Murtha Airport is a legitimate federal investment . . . The airport has an \$8.5 million, taxpayer-funded radar system that has never been used. The runway was paved with reinforced concrete at a cost of more than \$17 million. The latest investment was \$800,000 from the \$787 billion American Recovery and Reinvestment Act to repave half of the secondary runway. (Never mind that the first one is hardly ever in use.)  Airport Director Scott Voelker admitted in an interview that having a never-used unmanned radar system is "dumber than dirt." But he says the airport is necessary and blames its current shortcomings on the economy. "To get more passengers, we need more flights. To get more flights, we need more passengers," he says. Mr. Voelker believes the "economy has dictated to the airlines to cut back on flights." In other words: The airport was not built in response to passenger or airline needs.
Tyler Grimm, "John Murtha's Airport for No One:  A monument to earmarks in Johnstown, Pa.," The Wall Street Journal, September 3, 2009 --- http://online.wsj.com/article/SB10001424052970204409904574350801854137702.html?mod=djemEditorialPage

Dirty Down Under
Enlarge An exhaust stack rises through the steam of the Loy Yang B power station in the Latrobe Valley, 150km east of Melbourne. Australians have overtaken Americans as the world's biggest individual producers of carbon dioxide, which is blamed for global warming, a risk consultancy says.
PhysOrg
, September 11, 2009 --- http://www.physorg.com/news171889925.html

New Miss Universe duties: Blowing up condoms Pageant beauties told to fill sex devices with water to 'promote AIDS awareness'
Chelsea Schilling, WorldNetDaily, September 2, 2009 --- http://www.wnd.com/index.php?fa=PAGE.view&pageId=108765

Mikhail Gorbachev has attacked Vladimir Putin for rolling back democracy in Russia and failing to fight corruption. In an interview with The Times, published today, he criticised Mr Putin over Russia’s failure to convict the killers of prominent Kremlin critics such as the journalist Anna Politkovskaya and the dissident spy Alexander Litvinenko. Mr Gorbachev accused Europe and America of a failure to understand Russia since he started his glasnost and perestroika reforms of the Soviet Union almost a quarter of a century ago. He said that the West seemed more interesting in keeping Russia “on its knees”. He had warm...
Tony Halpin, "Mikhail Gorbachev attacks Putin on corruption," London Times, September 5, 2009 --- Click Here

Inevitably, the American mainstream media - ABC, NBC, CBS, the New York Times, the Washington Post, Time, Newsweek, et al - must be held to account for sitting on the sidelines as this major story kept building without them, went viral on YouTube, and then became so large that a key appointee of President Obama was forced to step down.  . . . But with their (decision to ignore the Jones story, they may have actually done Mr. Obama far more harm than good: Who vetted this guy? How did he get past the FBI? What did he say, and how did he answer the infamous seven-page questionnaire that all Obama appointees were required to fill out? Inquiring Freedom of Information Act minds want to know. For most people in this country, the resignation was the first they had heard of Van Jones. For this sin of journalistic omission, there's institutional media blame. Bias is too tame a word for the utter shamelessness on display: Only Republican scandals - real and imagined - matter.
"Couric should look in mirror," Washington Times, September 7, 2009 ---
http://www.washingtontimes.com/news/2009/sep/07/breitbart-couric-should-look-in-mirror/
Van Jones --- http://en.wikipedia.org/wiki/Van_Jones

The British-designed vessel travels at almost 100mph, carries a retractable heavy machine gun and would not look out of place in a 007 film. With a maximum speed of 85 knots (97mph) and carrying a .50 calibre machine gun hidden under the deck, the boat will be able to overhaul “go-fast” drug smuggling boats in the Caribbean and pirate ships off the coast of Somalia.
"James Bond-style 100mph Navy interceptor to take to the seas," London Telegraph, September 7, 2009 --- Click Here

Israeli and Russian security sources have questioned The Kremlin's official explanation, instead arguing that the (Arctic Sea) ship was carrying S-300 missiles, Russia's most advanced anti-aircraft weapon, while undergoing repairs in the Russian port of Kaliningrad, a notorious Baltic smuggling base. According to reports, Mossad is said to have briefed the Russian government that the shipment had been sold by former military officers linked to the black market, and Russia then dispatched a naval rescue mission. Those who believe Mossad was involved point to a visit to Moscow by Shimon Peres, Israel's president, the day after the Arctic Sea was recovered. “Once the news of the hijack broke, the game was up for the arms dealers. The Russians had to act," said a former Russian army officer. "That’s why I don’t rule out Mossad being behind the hijacking. It stopped the shipment and gave the Kremlin a way out so that it can now claim it mounted a brilliant rescue mission.” As well as Russia facing potential embarrassment, had the missiles reached Iran, it would have significantly strengthened the Islamic republic's air defences. Israeli defence sources told the newspaper that in the event of an attack on Iran's nuclear installations, S-300 missiles would increase Israeli casualties by 50 per cent.
"Arctic Sea ghost ship 'was carrying weapons to Iran'," London Telegraph, September 7, 2009 --- Click Here

BP has announced the discovery of yet another huge oil field in the Gulf of Mexico. At the same time, communist Russia is ready to work with Cuba to begin drilling 50 miles offshore Key West in the Gulf, and China is negotiating with Canada for the right to develop the vast oil resources in Alberta. Still, the Obama administration has remained resolute in opposing U.S. offshore drilling, Jerome Corsi's Red Alert reports.
"Everyone drills for oil off Florida – except U.S. Will Obama continue American dependence on foreign supply?" WorldNetDaily, September 6, 2009 --- http://www.wnd.com/index.php?fa=PAGE.view&pageId=109125

Windmills Are Killing Our Birds:  One standard for oil companies, another for green energy sources
A July 2008 study of the wind farm at Altamont Pass, Calif., estimated that its turbines kill an average of 80 golden eagles per year. The study, funded by the Alameda County Community Development Agency, also estimated that about 10,000 birds—nearly all protected by the migratory bird act—are being whacked every year at Altamont. Altamont's turbines, located about 30 miles east of Oakland, Calif., kill more than 100 times as many birds as Exxon's tanks, and they do so every year. But the Altamont Pass wind farm does not face the same threat of prosecution, even though the bird kills at Altamont have been repeatedly documented by biologists since the mid-1990s.

Robert Bryce, The Wall Street Journal, September 7, 2009 --- Click Here

Investors banking on an economic recovery clamored on Tuesday to buy crude oil, metals and other investments that could benefit once global commerce revs up again. At the same time, they shunned the dollar, sending it lower against other major currencies . . . Gold prices surged above \$1,000 an ounce before falling back slightly, crude oil rose above \$71 a barrel, and prices of raw industrial materials used in factories and foundries, such as copper, gained ground. Prices of commodities generally soar when inflation is on a high boil and investors want to defend themselves against a weaker dollar. But the latest figures from the government show consumer prices are not rising quickly, personal incomes are nearly flat and an enormous amount of slack still lingers in the economy.
Jack Healy, "Dollar Declines as Commodities Surge," The New York Times, September 8, 2009 ---

"More Bad News," by John Stossel, ABC News, September 3, 2009 ---

Here's a headline in today's Washington Post:

Federal Government Needs Massive Hiring Binge, Study Finds

Really?  The massively bloated federal government, which already employs more than 1.8 million people, needs to “binge”?  Amazing.

Who did the study? "The Partnership for Public Service." Ah, a “think-tank” devoted to recruiting public sector workers finds that the government needs “a massive hiring binge.” Naturally.

The numbers also reflect the Obama administration's intent to take on several enormous challenges, including the repair of the financial sector, fighting two wars, and addressing climate change.  "It has to win the war for talent in order to win the multiple wars it's fighting for the American people," said Max Stier, president and chief executive of the Partnership for Public Service, the think tank that conducted the survey of 35 federal agencies, representing nearly 99 percent of the federal workforce...The study estimates that the federal government will need to hire nearly 600,000 people for all positions over President Obama's four years -- increasing the current workforce by nearly one-third.

And who disagrees with the study's finding? Why, no one, judging from the Post! They apparently had trouble finding anyone to disagree.  It seems to be obvious that what the federal government really needs to do during a recession is to engage in a “war for talent” with the private sector in order to stick 600,000 more workers into the unaccountable public sector.

Sometimes I think I live in an alternate universe.

"The Michigan Example:  How government investment in business failed to create jobs. The Wall Street Journal, September 4, 2009 --- Click Here

For the past 14 years, Lansing politicians have offered \$3.3 billion in tax credits through the Michigan Economic Development Corporation and spent another \$1.6 billion in outlays to create and retain jobs. The subsidies have ranged from tax breaks for Hollywood, to money for new industrial plants, to millions for TV ads starring Jeff Daniels and Tim Allen talking about business and tourism in the state.

It's one of the largest experiments in smokestack chasing in American history, but one thing it hasn't done is create jobs. An exhaustive new 100-page study by the Mackinac Center for Public Policy, a Michigan think tank, has reviewed where all the money has gone and what came of it. The study finds that for every 100 jobs that were promised with these tax credits over 14 years, only 29 arrived. Dare we call this cash for clunkers?

Economist Michael Hicks, a business school professor at Ball State, calculated the rate of return on the corporate tax credits. He found that for every \$1 million in tax credits awarded, there were 95 lost manufacturing jobs in the counties where the companies were located—a result that is "strongly statistically significant." There was no gain in personal income in these counties. Perhaps more jobs would have been lost without the credits, but what is undeniably clear is that the businesses that got the government loot were not magnets for other employers.

Many of these handout programs were started in 1995 by former Republican Governor John Engler, who we criticized at the time in "A Governor's Gimmick." They have since been expanded 18 times under current Governor Jennifer Granholm. Two of the most celebrated initiatives were the Michigan 21st Century Jobs Fund and the Broadband Development Authority. Ms. Granholm's vision was that these grants and credits would create 500,000 jobs and \$440 billion in new investment by 2010.

Liberals cheered this "progressive" alternative to tax cutting. But the jobs lured to Michigan were so few that the programs were killed in 2007. The broadband program's legacy was \$14.5 million of bad loans eaten by taxpayers. Then State Senate Majority Leader Ken Sikkema, an original supporter of the telecom program, called it "one of the biggest flops in state government."

An even bigger flop might be the Michigan Film Office. The program provides movie producers a 42% tax credit for rolling the cameras in Michigan. But because the credits are "refundable," they are mostly cash subsidies to the film industry to make movies. The Michigan Senate Fiscal Agency recently found that "if a film production company spent \$10.0 million in Michigan, the State will gain less than \$700,000 in income and sales tax revenues but will pay out about \$4 million to the production company." So in a state with the highest unemployment rate in the nation at 15%, taxpayers last year gave out \$48 million in subsidies to Hollywood millionaires.

Why doesn't this kind of industrial policy work? One reason is that the subsidies have to be financed by somebody, which means raising taxes more broadly on the rest of the state. The subsidized businesses may bring a few jobs, but the overall employment and investment impact is miniscule at best.

In Michigan these programs were responsible for 0.25% of all new jobs created in the last decade, according to the study. Meanwhile, in 2007 Michigan raised business taxes by \$1.4 billion on other firms to pay for many of Ms. Granholm's favored companies. Despite all the giveaways, Michigan was recently ranked as having the third most antibusiness climate among states, in a survey of executives by CEO magazine. If Michigan had simply cut taxes for every business, as Mr. Engler did in the 1990s when the state briefly led the nation in new jobs, it's a good bet unemployment would be lower.

When Ms. Granholm gave her state of the state address earlier this year, she crowed about the similarities between the Michigan and Obama Administration strategies of using tax subsidies to aid favored businesses. "President Obama's priorities are nearly identical to ours," she declared, and we can only hope the results won't be.

Continued in article

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Let me get this straight.
We're about to get a health care plan shoved down our throats that is Written by a committee whose head says he doesn't understand it, Passed by a Congress that hasn't read it but exempts themselves from it, signed by a president that also hasn't read it, With funding administered by a treasury chief who was caught not paying his Taxes, overseen by a surgeon general who is obese, and financed by a Country that's nearly broke.
What could possibly go wrong?

IS THIS A GREAT COUNTRY OR WHAT!

Forwarded by Maureen

"The Tragedy of the Commons" was an influential article written by Garrett Hardin and first published in the journal Science in 1968. The article describes a dilemma in which multiple individuals acting independently and solely and rationally consulting their own self-interest will ultimately destroy a shared limited resource even when it is clear that it is not in anyone's long term interest for this to happen. Central to Hardin's article is an example, a hypothetical and simplified situation from medieval land tenure in Europe, of herders sharing a common parcel of land (the commons), on which they are each entitled to let their cows graze. In Hardin's example, it is in each herder's interest to put the next (and succeeding) cows he acquires onto the land, even if the carrying capacity of the commons is exceeded and it is damaged for all as a result. The herder receives all of the benefits from an additional cow, while the damage to the commons is shared by the entire group. If all herders make this individually rational economic decision, the commons will be destroyed to the detriment of all.
http://en.wikipedia.org/wiki/Tragedy_of_the_commons
Jensen Comment
The theme of the article cuts both ways as far as economics is concerned. Resources that are free (water in a river) or heavily subsidized (food stamps and health care) will be "over grazed" on the commons. Capitalist ownership of parts of the river leads to self destructive monopolies or pollution that ultimately destroys unrestrained capitalist ownership of the commons. Governments, therefore, have to move in to regulate/control resources having externalities --- otherwise rivers dry up downstream or become hopelessly polluted and non-sustaining. Similarly when government provides an overabundance of food stamps and free health care these become demanded to excess. Without pricing controls other forms of rationing must take place. The extent of rationing depends upon the wealth of the government and border controls. For example, Norway and Kuwait, with their vast oil exports, can afford more free health care than Chile and Mexico and Canada. Capitalism is a form of rationing (with pricing mechanisms) that has some advantages (motivates people to work arduously and creatively for a living) and drawbacks (tendencies toward monopoly abuses and self destruction and inability to price destructive externalities). Also nations that have nearly free food and health care will be inundated with people around the world who are starving and diseased. Smaller and less-populated nations like Norway and Kuwait have greater ability to control border crossings than nations with vast borders and many more people inside inviting relatives and friends and even needy strangers to sneak across borders.

"Our Tragedy of the Commons," by Star Parker, Townhall, September 7, 2009 ---
http://townhall.com/columnists/StarParker/2009/09/07/our_tragedy_of_the_commons

An essay that appeared in Science magazine back in the 1960's explains clearly and concisely the self-destructive path we're on in our country today.

The essay, "The Tragedy of the Commons", showed how individuals, rationally pursuing their self-interest, could unintentionally destroy their own common existence.

A simple problem is put forth: A common grazing field is available to a community of herders. Everyone brings his or her cows there. Because there is no clear ownership, the only incentive each herder has is to bring all of his cows to graze and consume as much as possible.

With everyone doing it, and no one having any incentive to consider the implications of their behavior beyond consuming as much as possible, the final result is obvious. The field is destroyed.

Only when there is ownership and private property do individuals working in their own self-interest also make everyone else better off. When it's yours and you have responsibility for it, you think about tomorrow and how to make best of use of resources.

Today's equivalent of the common field is what we call the public sector -- government. And our grazers are politicians and interest groups.

Whereas a businessman will be out of business in short order if he delivers a poor product or mismanages his firm, politicians just graze in the public pasture doling out other peoples' resources.

There was a lot of flowery talk recently about Senator Kennedy on occasion of his passing.

Kennedy was a man born into wealth who spent a life in politics growing government. What was the personal consequence to him of what he did in politics? By personal consequence, I mean on his bank account, his survival. None.

He could convince poor people that he was working for their interest by fighting against school choice while everyone in his family attends private schools.

Or he could declare, as he did, that everyone has a "right" to health care. The personal costs of this to average Americans in the way of massive new intrusion of government into their lives and in major new taxes to pay for it all had absolutely no personal consequence to Kennedy. Does anybody think he ever sat in an HMO waiting room?

Continued in article

"The President's Tort Two-Step Special-interests and the health-care status," by Kimberly Strassel, The Wall Street Journal, September 11, 2009 --- Click Here

Tort reform is a policy no-brainer. Experts on left and right agree that defensive medicine—ordering tests and procedures solely to protect against Joe Lawyer—adds enormously to health costs. The estimated dollar benefits of reform range from a conservative \$65 billion a year to perhaps \$200 billion. In context, Mr. Obama's plan would cost about \$100 billion annually. That the president won't embrace even modest change that would do so much, so quickly, to lower costs, has left Americans suspicious of his real ambitions.

It's also a political no-brainer. Americans are on board. Polls routinely show that between 70% and 80% of Americans believe the country suffers from excess litigation. The entire health community is on board. Republicans and swing-state Democrats are on board. State and local governments, which have struggled to clean up their own civil-justice systems, are on board. In a debate defined by flash points, this is a rare area of agreement.

The only folks not on board are a handful of powerful trial lawyers, and a handful of politicians who receive a generous cut of those lawyers' contingency fees. The legal industry was the top contributor to the Democratic Party in the 2008 cycle, stumping up \$47 million. The bill is now due, and Democrats are dutifully making a health-care down payment.

During the markup of a bill in the Senate Health Committee, Republicans offered 11 tort amendments that varied in degree from mere pilot projects to measures to ensure more rural obstetricians. On a party line vote, Democrats killed every one. Rhode Island senator and lawyer Sheldon Whitehouse went so far as to speechify on the virtues of his tort friends. He did not, of course, mention the nearly \$900,000 they have given him since 2005, including campaign contributions from national tort powerhouses like Baron & Budd and Motley Rice.

Even Senate Finance Chair Max Baucus, of bipartisan bent, has bowed to legal powers. The past two years, Mr. Baucus has teamed up with Wyoming Republican Mike Enzi to offer legislation for modest health-care tort reform in states. That Enzi-Baucus proposal had been part of the bipartisan health-care talks. When Mr. Baucus released his draft health legislation this weekend, he'd stripped out his own legal reforms. The Montanan is already in the doghouse with party liberals, and decided not to further irk leadership's Dick Durbin (\$3.6 million in lawyer contributions), the Senate's patron saint of the trial bar.

Over in the House the discussion isn't about tort reform, but about tort opportunities. During the House Ways & Means markup of a health bill, Texas Democrat Lloyd Doggett (\$1.5 million from lawyers) introduced language to allow freelance lawyers to sue any outfit (say, McDonald's) that might contribute to Medicare costs. Only after Blue Dogs freaked out did the idea get dropped, though the trial bar has standing orders that Democrats make another run at it in any House-Senate conference.

It says everything that Mr. Obama wouldn't plump for reform as part of legislation. The president knows the Senate would never have passed it in any event. Yet even proposing it was too much for the White House's legal lobby. Mr. Obama is instead directing his secretary of health and human services to move forward on test projects. That would be Kathleen Sebelius, who spent eight years as the head of the Kansas Trial Lawyers Association.

The issue has assumed such importance that even some Democrats acknowledge the harm. With bracing honesty, former DNC chair Howard Dean recently acknowledged his party "did not want to take on the trial lawyers." Former Democratic Sen. Bill Bradley, in a New York Times piece, suggested a "grand bipartisan compromise" in which Democrats got universal coverage in return for offering legal reform. The White House yawned, and moved on.

It isn't clear if Republicans would or should take that deal, but we won't know since it won't be offered. The tort-reform issue has instead clarified this presidency. Namely, that the bipartisan president is in fact very partisan, that the new-politics president still takes orders from the old Democratic lobby.

"Labor Unions on Health Care: Their True Motives," by James Sherk, Human Events, September 7, 2009 ---
http://www.humanevents.com/article.php?id=33431

Unions across the country are campaigning hard for Obamacare over Labor Day weekend. The AFL-CIO has made creating a government run “public plan” their top priority. Yet polls show that most Americans strongly oppose this. So why have the self-proclaimed advocates for America’s workers made government-run health care their top priority?

Union leaders say they are fighting to win “win secure, high-quality health care for all” against greedy and self-interested corporate defenders of the status quo. Many union activists sincerely believe this. But altruism does not explain why the labor movement is spending tens of millions of dollars on this campaign.

Organized labor is campaigning for government-run health care for the same reason that the private insurance industry is campaigning against it -- it is very much in their self interest. The union movement will gain billions of dollars if Obamacare passes.

The most obvious payout is the taxpayer bailout for union health plans. Many union-negotiated retiree health plans cannot pay their scheduled benefits. Rather than reducing benefits, the bill passes those costs onto taxpayers to the tune of \$10 billion. But that is small potatoes compared to what the bill will do for union membership.

As it stands now, the union movement in America is withering. In the mid-1970s, a quarter of all workers belonged to unions. Now just one in eight workers do. In countries such as Canada, union membership remains high: Almost a third of Canadians belong to a union. What has happened to the house of labor in America?

In a word: competition. The higher costs that unions bring put the companies they organize at a competitive disadvantage. As deregulation and free trade have made the economy more competitive, unionized companies haven’t been able to keep up. The airlines. The steel industry. General Motors. Unionized companies shed jobs whenever they face competition.

Union membership has stayed high in just one area of the economy: the public sector. Almost 40 percent of government employees belong to unions. The government has no competitors. And it doesn’t go bankrupt. No matter how high unions raise costs, the government can always raise taxes to pay for them.

Canada’s bigger government explains why so many more Canadians belong to unions. Canada has nationalized health care, so competition doesn’t exist in their health care sector. The taxpayers cover all the costs. As a result 60 percent of Canadian health care workers and a stunning 80 percent of nurses belong to unions -- more than quadruple the levels in America.

If Congress passes a “public plan,” most employers will drop their health benefits and force their workers onto the government plan. A public plan means government-run health care for almost all Americans. That would make the health care system a prime target for union organizers. Unions would quickly bring in millions of new dues-paying members.

It’s no accident that the strongest supporter of the public plan is the Service Employees International Union (SEIU). Purple-shirted SEIU activists have filled Town Hall meetings across the country to counter the angry opposition of ordinary citizens. Why? The SEIU represents nurses and other health care workers.

If the government runs health care, then the SEIU’s membership rolls will swell. If union rates among nurses in America rose to Canadian levels, then the SEIU would bring in over a billion dollars a year in new mandatory dues. Newly organized technicians and other medical support staff would add even more to that total. The Labor movement has a huge financial stake in the government dominating health care.

How to pay for this health care reform is another question. Taxes would have to rise to cover the cost, but no one wants to pay them. Many economists believe that taxing the value of employer-provided health plans would make the most economic sense. But most union members have health coverage, and their plans provide above average benefits. Many -- like those at GM until recently -- have gold plated benefits. So taxes on health benefits would fall heavily on union members.

Senate Democrats briefly considered this. When they did, the union movement made it clear that their commitment to “high-quality health care for all” didn’t mean their member’s taxes should go up to pay for it. Just the opposite. They threatened to scuttle health care reform if Congress taxed existing health benefits.

When you read about unions campaigning for health care reform, remember they aren’t doing so out of an altruistic pursuit of the common good. Most labor activists do believe that health care reform would benefit most Americans. But the billion-dollar payday they will collect if it passes helps motivate their impassioned efforts.

For starters, \$1 trillion of extra debt-financed spending would cause the government to pay about \$300 billion of extra interest in the next decade. Moreover, the CBO's method of estimating the cost of such a program doesn't recognize the incentives it creates for households and firms to change their behavior. The House health-care bill gives a large subsidy to millions of families with incomes up to three times the poverty level (i.e., up to \$66,000 now for a family of four) if they buy their insurance through one of the newly created "insurance exchanges," but not if they get their insurance from their employer. The CBO's cost estimate understates the number who would receive the subsidy because it ignores the incentive for many firms to drop employer-provided coverage. It also ignores the strong incentive that individuals would have to reduce reportable cash incomes to qualify for higher subsidy rates. The total cost of ObamaCare over the next decade likely would be closer to \$2 trillion than to \$1 trillion.
Martin Feldstein, "ObamaCare's Crippling Deficits The higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standard," The Wall Street Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage

Video:  ABC's John Stossel Destroys/Pulverizes/Crushes Obama's anti-American 'Health Care' Plan

Making Sense of Health Care Reform (from the AccountingWeb on September 1, 2009) ---
http://www.accountingweb.com/topic/tax/making-sense-health-care-reform

President Obama's Budget for 2010 --- http://www.whitehouse.gov/omb/

Video:  Jack Webb on Health Care and America ---
http://pubsecrets.wordpress.com/2009/09/05/just-the-facts-barack/

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

Burning Platform Part 1

The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.
David M. Walker, Former Chief Accountant of the United States --- http://www.financialsense.com/editorials/quinn/2009/0218.html
Also see his dire warnings on CBS Sixty Minutes on the unbooked national debt for entitlements (See below)

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

IOUSA (the most frightening movie in American history) --- (see a 30-minute version of the documentary at www.iousathemovie.com )

Ten Trillion and Counting (a full-length PBS Frontline video) --- http://www.pbs.org/wgbh/pages/frontline/tentrillion/view/
All of the federal government's efforts to stem the tide of the financial meltdown have added hundreds of billions of dollars to an already staggering national debt, a sum that is expected to double over the next 10 years to more than \$23 trillion. In Ten Trillion and Counting, FRONTLINE traces the politics behind this mounting debt and investigates what some say is a looming crisis that makes the current financial situation pale in comparison.

Spending Deficits and Unfunded Entitlements
There are two economic disasters facing the United States. One is the problem of annual spending deficits now approaching trillions of dollars. The far worse problem, however, is unfunded entitlements now approaching \$100 trillion. David Walker's mission in life is to warn us about both time bombs.

David Walker, former head of the Government Accountability Office, appeared on the program of the 2009 American Accounting Association Annual Meetings in New York City. He as also appeared previously in those annual meetings.

"Warning: The Deficits Are Coming! The former head of the Government Accountability Office is on a crusade to alert taxpayers to their true obligations," by John Fund, The Wall Street Journal, September 4, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574392620693542630.html?mod=djemEditorialPage

David Walker sounds like a modern-day Paul Revere as he warns about the country's perilous future. "We suffer from a fiscal cancer," he tells a meeting of the National Taxpayers Union, the nation's oldest anti-tax lobby. "Our off balance sheet obligations associated with Social Security and Medicare put us in a \$56 trillion financial hole—and that's before the recession was officially declared last year. America now owes more than Americans are worth—and the gap is growing!"

His audience sits in rapt attention. A few years ago these antitax activists would have been polite but a tad restless listening to the former head of the Government Accountability Office, the nation's auditor-in-chief. Higher taxes is what hikes their blood pressure the most, but the profligate spending of the Bush and Obama administrations has put them in a mood to listen to this green-eyeshade Cassandra. "He's so unlike most politicians," says Sharron Angle, a former state legislator from Nevada, "his message is clear, detailed and with no varnish."

Mr. Walker, a 57-year-old accountant, didn't set out to be a fiscal truth-teller. He rose to be a partner and global managing director of Arthur Anderson, before being named assistant secretary of labor for pensions and benefits during the Reagan administration. Under the first President Bush, he served as a trustee for Social Security and Medicare, an experience that convinced him both programs are looming train wrecks that could bankrupt the country. In 1998 he was appointed by President Bill Clinton to head the GAO, where he spent the next decade issuing reports trying to stem waste, fraud and abuse in government.

Despite many successes, he was able to make only limited progress in reforming Washington's tangled bookkeeping. When he arrived he was told the Pentagon was nearly a decade away from having a clean audit, or clear evidence that its financial statements were accurate. When he left in 2008, he was told the Pentagon was still a decade away from that goal. "If the federal government was a private corporation, its stock would plummet and shareholders would bring in new management and directors," he said as he retired from the GAO.

Although he found the work fulfilling, Mr. Walker said he decided to leave last year with a third of his 15-year term left because "there are practical limits on what one can—and cannot—do in that job." He became president and CEO of the Peter G. Peterson Foundation, a group seeking to educate the public and policy makers on the need for fiscal prudence. Although it accepts private donations, its own future is secure given that Mr. Peterson, a former head of the Blackstone private equity firm and secretary of commerce under Richard Nixon, has endowed it with a \$1 billion gift.

We met to hash over current events in his tastefully appointed office just off of New York's Fifth Avenue. Mr. Walker, a lean man with an unflappable demeanor, welcomed me with the observation that he's never been in more demand as a speaker "but it's only because everyone is so worried for our future."

His group calls itself strictly nonpartisan and nonideological, and that seems to limit how tough and specific it can be. Last year, it released a documentary "I.O.U.S.A.," that followed Mr. Walker as he toured the country on his fiscal "wake up" tour. The solutions the film proposes for the debt crisis are either glib or gray: The country should save more, reduce oil consumption, hold politicians accountable and get more value from health-care spending.

But in its diagnosis of the problem the film scores a bull's-eye. Among the fiscal hawks featured in the film is Rep. Ron Paul, who memorably tells Alan Greenspan that if doctors had the same success rate in meeting his goals as the Fed has had, patients would be dead all over America.

Mr. Walker's own speeches are vivid and clear. "We have four deficits: a budget deficit, a savings deficit, a value-of-the-dollar deficit and a leadership deficit," he tells one group. "We are treating the symptoms of those deficits, but not the disease."

Mr. Walker identifies the disease as having a basic cause: "Washington is totally out of touch and out of control," he sighs. "There is political courage there, but there is far more political careerism and people dodging real solutions." He identifies entrenched incumbency as a real obstacle to change. "Members of Congress ensure they have gerrymandered seats where they pick the voters rather than the voters picking them and then they pass out money to special interests who then make sure they have so much money that no one can easily challenge them," he laments. He believes gerrymandering should be curbed and term limits imposed if for no other reason than to inject some new blood into the system. On campaign finance, he supports a narrow constitutional amendment that would bar congressional candidates from accepting contributions from people who can't vote for them: "If people can't vote in a district not their own, should we allow them to spend unlimited money on behalf of someone across the country?"

Recognizing those reforms aren't "imminent," Mr. Walker wants Congress to create a "fiscal future commission" that would hold hearings all over America to move towards a consensus on reform. It would then present Congress with a "grand bargain" on entitlement and budget-control reforms. Its recommendations would be guaranteed a vote in Congress and be subject to only limited amendments. I note that critics have called such a commission an end-run around the normal legislative process. He demurred, saying that Congress would still have to approve any recommendations in an up-or-down vote—much like the successful base-closing commission created by GOP Rep. Dick Armey in the 1980s.

What kind of reforms would Mr. Walker hope the commission would endorse? He suggests giving presidents the power to make line-item cuts in budgets that would then require a majority vote in Congress to override. He would also want private-sector accounting standards extended to pensions, health programs and environmental costs. "Social Security reform is a layup, much easier than Medicare," he told me. He believes gradual increases in the retirement age, a modest change in cost-of-living payments and raising the cap on income subject to payroll taxes would solve its long-term problems.

Medicare is a much bigger challenge, exacerbated by the addition of a drug entitlement component in 2003, pushed through a Republican Congress by the Bush administration. "The true costs of that were hidden from both Congress and the people," Mr. Walker says sternly. "The real liability is some \$8 trillion."

That brings us to the issue of taxes. Wouldn't any "grand bargain" involve significant tax increases that would only hurt the ability of the economy to grow? "Taxes are going up, for reasons of math, demographics and the fact that elements of the population that want more government are more politically active," he insists. "The key will be to have tax reform that simplifies the system and keeps marginal rates as low as possible. The longer people resist addressing both sides of the fiscal equation the deeper the hole will get."

I steer towards the fiscal direction of the Obama administration. He says his stimulus bill was sold as something it wasn't: "A number of people had agendas other than stimulus, and they shaped the package."

As for health care, Mr. Walker says he had hopes for comprehensive health-care reform earlier this year and met with most of the major players to fashion a compromise. "President Obama got the sequence wrong by advocating expanding coverage before we've proven our ability to control costs," he says. "If we don't get our fiscal house in order, but create new obligations we'll have a Thelma and Louise moment where we go over the cliff." Mr. Walker's preferred solution is a plan that combines universal coverage for all Americans with an overall limit on the federal government's annual health expenditures. His description reminds me of the unicorn—a marvelous creature we all wish existed but is not likely to ever be seen on this earth.

As I prepare to go, Mr. Walker returns to the theme of economic education. Poor schools often produce young people with few tools to help them realize the extent of the fiscal trap their generation is going to fall into.

One way the Peterson Foundation wants to change that is to bring big numbers down to earth so people can comprehend them. "Our \$56 trillion in unfunded obligations amount to \$483,000 per household. That's 10 times the median household income—so it's as if everyone had a second or third mortgage on a house equal to 10 times their income but no house they can lay claim to." As for this year's likely deficit of \$1.8 trillion, Mr. Walker suggests its size be conveyed thusly: "A deficit that large is \$3.4 million a minute, \$200 million an hour, \$5 billion a day," he says. That does indeed put things into perspective.

Despite an occasional detour into support for government intervention, Mr. Walker remains the Jeffersonian he grew up as in his native Virginia. "I view the Constitution with deep respect," he told me. "My ancestors and those of my wife fought and died in the Revolution, and I care a lot about returning us to the principles of the Founding Fathers."

He notes that today the role of the federal government has grown such that last year less than 40% of it related to the key roles the Founders envisioned for it: defense, foreign policy, the courts and other basic functions. "What happened to the Founders' intent that all roles not expressly reserved to the federal government belong to the states, and ultimately the people?" he asks. "I'm pleased the recent town halls show people are waking up and realizing it's time to pay attention to first principles."

With that we parted, as he had to get back to work. Today's Paul Revere is hard at work on a book due out in January from Random House that will be called, "Come Back America."

From Bob Jensen's threads on entitlements --- http://www.trinity.edu/rjensen/Entitlements.htm

Burning Platform Part 2

The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.
David M. Walker, Former Chief Accountant of the United States --- http://www.financialsense.com/editorials/quinn/2009/0218.html
Also see his dire warnings on CBS Sixty Minutes on the unbooked national debt for entitlements (See below)

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

IOUSA (the most frightening movie in American history) --- (see a 30-minute version of the documentary at www.iousathemovie.com ).
A Must Read for All Americans

The most important article for the world to read now is the following interview with a former Andersen Partner and former Chief Accountant of the United States:
"Debt Crusader David Walker sounds the alarm for America's financial future," Journal of Accountancy, March 2009 --- http://www.journalofaccountancy.com/Issues/2009/Mar/DebtCrusader.htm

David Walker is a man on a mission. As U.S. comptroller general, he used the bully pulpit to fuel a campaign of town hall meetings highlighting the country’s ballooning federal deficit. The Fiscal Wake-Up Tour and the publicity it generated begat the documentary I.O.U.S.A. Walker hopes the film will do for fiscal irresponsibility what Al Gore’s An Inconvenient Truth did for global warming—mobilize new citizen activists and pressure politicians to act.

A year ago, Walker stepped away from the five-plus remaining years on his term as comptroller general and head of the Government Accountability Office. He had been recruited by billionaire Pete Peterson, a co-founder of the private- equity fund The Blackstone Group, to become president and CEO of Peterson’s foundation. The Peter G. Peterson Foundation, a nonprofit to which Peterson has pledged \$1 billion, focuses on issues such as the deficit, savings levels, entitlement benefits, health care costs, and the nation’s tax system.

Walker talked with the JofA recently about the deficit and the financial crisis. What follow are excerpts from that conversation.

JofA: What did you hope to accomplish when you set out on your speaking tour and got involved with the documentary I.O.U.S.A., and what progress has been made on those goals?

Walker: I have been to over 42 states, giving speeches, participating in town hall meetings, meeting with business community leaders, local television and radio stations, and editorial boards with the objective of trying to state the facts and speak the truth about the deteriorating financial condition of the United States government and the need for us to start making some tough choices on budget controls, tax policy, entitlement reform and spending constraints. And the good news is that people get it. The American people are a lot smarter than many people give them credit for—especially elected officials

Well, a lot has happened since we started the Fiscal Wake-Up Tour. Two significant events would be the 60 Minutes piece, which ran twice in 2007, and that led to the commercial documentary I.O.U.S.A. (see a 30-minute version of the documentary at www.iousathemovie.com ). So there’s a lot more visibility on our issue, and I think that’s encouraging. The other thing that has happened is the recent market meltdown and bailouts of some very venerable institutions in the financial services industry have served to bring things home to America. The concept of “too big to fail” is just not reality anymore, and when you take on too much debt and you don’t have adequate cash flow, some very bad things can happen.

Here’s the key. The factors that led to the mortgage-based subprime crisis exist for the federal government’s finances. Therefore, we must take steps to avoid a super subprime crisis, which frankly would have much more disastrous effects not only domestically but around the world.

JofA:
How does the economic crisis affect your message and the outlook for the kind of wide-scale changes you think need to be made?

Walker:
What’s critical is that we take advantage of the teachable moment associated with the market meltdown and the failure of some of the most prominent financial institutions in the country to help the American people know that nobody can live beyond his means forever. And that goes for government, too.

We have a new president, and therefore we have an opportunity to press the reset button, and I hope President Obama will do two things: That he will assure Americans that he will do what it takes to turn the economy around. I think it is critically important that he also focus on the future and be able to put a mechanism in place like a fiscal future commission so that once we turn the corner on the economy, we have a set of recommendations Congress and the president would be able to consider about budget controls, tax reform, entitlement reform—things that are clear and compelling that we need to act on.

Individuals need to understand that the government has overpromised and under-delivered for far too long. It is going to have to engage in some dramatic and fundamental reform of existing entitlement programs, spending policies and tax policies. The government will be there to provide a safety net through Social Security, a foundation of retirement security, and it will be there to help those that are in need. In general, most individuals are going to have to assume more responsibility for their own financial future, and the earlier they understand that the better off they are going to be. They need to have a financial plan, a budget, make prudent use of debt, save, invest their savings for specified purposes and, very importantly, preserve their savings for the intended purpose, including retirement income.

I believe the government policies are going to have to encourage people to work longer by increasing the eligibility ages for many government programs. So if people want to retire at an earlier age, they are going to have to plan, save, invest and preserve those savings for retirement purposes.

JofA:
You’ve called the current U.S. health care system unsustainable. How can the system be fixed without negatively affecting the care Americans need?

Walker:
Our current health care system is not really a system. It’s an amalgamation of a bunch of different things that have occurred over the years, and it’s unacceptable and unsustainable. We spend twice per capita what any other country on the Earth does. We have the highest uninsured population of any industrialized nation. We have below average health care outcomes. So the value of the equation just does not compute.

We are going to need to do two things on health care. We are going to need to take some steps quickly to reduce the rate of increase in health care cost. We are also going to have to better target taxpayer subsidies and tax preferences for health care.

We are also going to end up needing to move toward trying to achieve comprehensive health care reform that accomplishes four key goals. First: achieve universal coverage for basic and essential health care—based on broad-based societal needs, not unlimited individual wants—that’s affordable and sustainable over time and that avoids taxpayer-funded heroic measures. Secondly, the federal government has to have a budget for health care. We are the only nation on Earth dumb enough to write a blank check for health care. It could bankrupt the country. We have to have constraints. Thirdly, we need national evidence-based practice standards for the practice of medicine and for the issuance of prescription drugs to improve consistency, enhance quality, reduce costs and dramatically reduce litigation risks. And last, but certainly not least, we have to require personal responsibility and accountability for our own health and wellness in a whole range of areas including obesity.

JofA:
What drives you?

Walker: My family has been in this country since the 1680s, and I have ancestors who fought and died in the American Revolution. So I care very deeply about this country, and I am a big history buff. I believe you need to study history in order to learn from it in order not to make some of the same mistakes that others have made in the past.

Secondly, I am only the second person in my direct Walker line to graduate from college. My dad was the first. Therefore, I am somewhat of an example of what someone can accomplish in this great country if you get an education, if you have a positive attitude, if you work hard, if you have good morals and ethical values.

My personal mission in life is to be able to make a difference, to try and make a difference in the lives of others, to try and help make sure our country stays strong, that the American dream stays alive, and that the future will be better for my children and my grandchildren.

Question
What former Andersen partner, who watched the Andersen accounting firm implode alongside its client Enron, has been traveling for years around the United States warning that the United States economy will implode unless we totally come to our senses?
Hints:
David Walker is was the top accountant, Controller General, of the United States Government.
He was a featured plenary speaker a few years back at an annual meeting of the American Accounting Association.
See his "State of the Profession of Accountancy" piece in the October 2005 edition of the Journal of Accountancy.
Also see http://www.aicpa.org/pubs/jofa/jul2006/walker.htm

Videos About Off-Balance-Sheet Financing to an Unimaginable Degree
Truth in Accounting or Lack Thereof in the Federal Government (Former Congressman Chocola) --- http://www.youtube.com/watch?v=NWTCnMioaY0
Part 2 (unfunded liabilities of \$100 trillion plus) --- http://www.youtube.com/watch?v=1Edia5pBJxE
Part 3 (this is a non-partisan problem being ignored in election promises) --- http://www.youtube.com/watch?v=lG5WFGEIU0E

Watch the Video of the non-sustainability of the U.S. economy (CBS Sixty Minutes TV Show Video) ---
Also see "US Government Immorality Will Lead to Bankruptcy" in the CBS interview with David Walker --- http://www.youtube.com/watch?v=OS2fI2p9iVs
Also at Dirty Little Secret About Universal Health Care (David Walker) --- http://www.youtube.com/watch?v=KGpY2hw7ao8

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

IOUSA (the most frightening movie in American history) --- (see a 30-minute version of the documentary at www.iousathemovie.com )

"The Politics of Personality," by David R. Stokes, Townhall, September 6, 2009 ---
http://townhall.com/columnists/DavidRStokes/2009/09/06/the_politics_of_personality

Thomas Cronin, currently the McHugh Professor of American Institutions and Leadership at Colorado College, wrote an essay nearly 40 years ago entitled “Superman: Our Textbook President.” He had studied college political science textbooks for the previous 15 years and found a trend in the discussion of the U.S. presidency, “by symbolizing the past and future greatness of America and radiating inspirational confidence, a president can pull the nation together while directing us toward the fulfillment of the American dream.”

It was an era when the idea of an energetic executive was transcendent in America. Eisenhower was old and irrelevant, so the thinking went, and John F. Kennedy came along promising a robust exploration and occupation of the future. He said things like: “a chief executive who is praised primarily for what he did not do, the disasters he prevented, the bills he vetoed,” would simply not be enough for the big-bad challenges of the future.

Continued in article

PJ O’Rourke’s Parliament of Whores ---

"They Left Fannie Mae, but We Got the Legal Bills," by Grechen Morgenson, The New York Times, September 5, 2009 ---

PRECISELY one year ago, we lucky taxpayers took over Fannie Mae and Freddie Mac, the mortgage finance giants that contributed mightily to the wild and crazy home-loan-boom-turned-bust. In that rescue operation, the Treasury agreed to pony up as much as \$200 billion to keep Fannie in the black, coughing up cash whenever its liabilities exceed its assets. According to the company’s most recent quarterly financial statement, the Treasury will, by Sept. 30, have handed over \$45 billion to shore up the company’s net worth.

It is still unclear what the ultimate cost of this bailout will be. But thanks to inquiries by Representative Alan Grayson, a Florida Democrat, we do know of another, simply outrageous cost. As a result of the Fannie takeover, taxpayers are paying millions of dollars in legal defense bills for three top former executives, including Franklin D. Raines, who left the company in late 2004 under accusations of accounting improprieties. From Sept. 6, 2008, to July 21, these legal payments totaled \$6.3 million.

With all the turmoil of the financial crisis, you may have forgotten about the book-cooking that went on at Fannie Mae. Government inquiries found that between 1998 and 2004, senior executives at Fannie manipulated its results to hit earnings targets and generate \$115 million in bonus compensation. Fannie had to restate its financial results by \$6.3 billion.

Almost two years later, in 2006, Fannie’s regulator concluded an investigation of the accounting with a scathing report. “The conduct of Mr. Raines, chief financial officer J. Timothy Howard, and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability, and integrity,” it said.

That year, the government sued Mr. Raines, Mr. Howard and Leanne Spencer, Fannie’s former controller, seeking \$100 million in fines and \$115 million in restitution from bonuses the government contended were not earned. Without admitting wrongdoing, Mr. Raines, Mr. Howard and Ms. Spencer paid \$31.4 million in 2008 to settle the litigation.

When these top executives left Fannie, the company was obligated to cover the legal costs associated with shareholder suits brought against them in the wake of the accounting scandal.

Now those costs are ours. Between Sept. 6, 2008, and July 21, we taxpayers spent \$2.43 million to defend Mr. Raines, \$1.35 million for Mr. Howard, and \$2.52 million to defend Ms. Spencer.

“I cannot see the justification of people who led these organizations into insolvency getting a free ride,” Mr. Grayson said. “It goes right to the heart of what people find most disturbing in this situation — the absolute lack of justice.”

Lawyers for the three executives did not returns calls seeking comment.

An additional \$16.8 million was paid in the period to cover legal expenses of workers at the Office of Federal Housing Enterprise Oversight, Fannie’s former regulator. These costs are associated with defending the regulator in litigation against former Fannie executives.

This tally of taxpayer legal costs took several months for Mr. Grayson to extract. On June 4, after Congressional hearings on the current and future status of Fannie and Freddie, he requested the information from the Federal Housing Finance Agency, now their regulator. He got its response on Aug. 26.

A spokeswoman for the agency said it would not comment for this article.

THE lawyers’ billable hours, meanwhile, keep piling up. As the F.H.F.A. explained to Mr. Grayson, the \$6.3 million in costs generated by 10 months of legal defense work for Mr. Raines, Mr. Howard and Ms. Spencer includes not a single deposition for any of them. Instead, those bills covered 33 depositions of “other parties” relating to the shareholder suits and requiring the presence of the three executives’ counsel.

One of Mr. Grayson’s questions about these payments remains unanswered — whether placing Fannie Mae into receivership, rather than conservatorship, would have negated the agreement to cover the former executives’ legal costs. Choosing conservatorship allowed Fannie to stabilize and meant that it was going to continue to operate, not wind down immediately.

But, Mr. Grayson pointed out: “If these companies had gone into receivership instead of conservatorship, the trustee in bankruptcy or the receiver would have been free, legally, to reject these contracts that called for indemnification. Raines, Howard and Spencer would have had to pay their own fees.”

When asked about this, Fannie’s regulator, the F.H.F.A., waffled. “Whether these costs could have been avoided would depend on the facts and circumstances surrounding any receivership,” it said. “It is possible that receiverships could have reduced the costs of the litigation, but by no means certain.”

Mr. Grayson said he intended to find out whether there are any legal options under the conservatorship to stop paying for the defense of the Fannie Mae three. “When did Uncle Sam become Uncle Sap?” he said. “In a situation where billions of losses have already occurred, is it really asking too much that people pay their own legal fees?”

While the \$6.3 million paid to defend Mr. Raines, Mr. Howard and Ms. Spencer is a pittance compared with other bills coming due in the bailout binge, it is still disturbing for these costs to be covered by those who had nothing to do with the problems and certainly did not benefit from them. The money may be small, but the episode’s message looms large: those who presided over this debacle aren’t being held accountable.

“It is wrong in a very deep sense,” Mr. Grayson said. “The essence of our society is that people who do good things are rewarded and people who do bad things are punished.

Where is the punishment for Raines, Howard and Spencer? There is none.”

Continued in article

I Saw Maxine Kissing Franklin Raines --- http://www.youtube.com/watch?v=vbZnLxdCWkA
Before Franklin Raines resigned as CEO of Fannie Mae and paid over a million dollar fine for accounting fraud to pad his bonus, he was the darling of the liberal members of Congress. Frank Raines was creatively managing earnings to the penny just enough to get his enormous bonus. The auditing firm of KPMG was accordingly fired from its biggest corporate client in history --- http://www.trinity.edu/rjensen/Theory01.htm#Manipulation

Video on the efforts of some members of Congress seeking to cover up accounting fraud at Fannie Mae ---

Mortgage Fraud Increasing
Despite the attention paid to mortgage fraud committed by borrowers and lenders since declines in the real estate values and the subprime loan crisis triggered severe problems in the banking industry, the number of Federal Bureau of Investigation’s (FBI) investigations of mortgage fraud and associated financial crimes is increasing. “The FBI has experienced and continues to experience an exponential rise in mortgage fraud investigations,” John Pistole, Deputy Director, told the Senate Judiciary Committee in April.
AccountingWeb, August 18, 2009 --- http://www.accountingweb.com/topic/mortgage-loan-fraud-increasing
Jensen Comment
I think mortgage fraud will continue to rise as long as remote third parties like Fannie Mae, Freddie Mac, and FHA continue to buy up mortgages negotiated by banks and mortgage companies basking in moral hazard. The biggest hazards are fraudulent real estate appraisals and lies about income in mortgage applications. We need to bring back George Bailey (James Stewart) in It's a Wonderful Life --- http://en.wikipedia.org/wiki/It%27s_a_Wonderful_Life
The banks that negotiate the mortgages should have to hang on to those mortgages.

Barney's Rubble --- http://www.trinity.edu/rjensen/2008Bailout.htm#Rubble

The Disastrous Bailout --- http://www.trinity.edu/rjensen/2008Bailout.htm

Do audiences take Michael Moore seriously?
So audiences are attracted to and entertained by Moore--but what is the political effect of his star quality? In Capitalism, after cogently diagnosing the collusion of Wall Street and Congress in cooking this mess, he ends not by urging tough legislation but by calling for community activism and labor-union muscle. The problem is that movies, even Michael Moore movies, aren't an efficient method for rousing a constituency. Fahrenheit 9/11 didn't do half the damage to George W. Bush that the Swift Boat smears did to John Kerry. Sicko couldn't change lawmakers' minds on health care; a few shouters at town-hall meetings did. No question that millions of people will see this film. Then they'll most likely remember Moore and forget about the bailout. Hey, folks, that's entertainment!
Richard Corliss, "The Entertainers." Time Magazine, October 5, 2009, pp. 67-68 --- http://www.time.com/time/magazine/article/0,9171,1925990-2,00.html

"Marching with Michael Moore:  After a rally, union toughs get a sneak peak of Capitalism: A Love Story," by Sean Higgins, Reason Magazine, September 21, 2009 --- http://www.reason.com/news/show/136194.html

First, Moore is a radical ideologue before he is a partisan Democrat. His film hammers congressional Democrats pretty hard for leading the effort to pass the Wall Street bailouts last year. Moore fudges a little on this, portraying the opposition that sank the initial House vote on the bailout as comprised exclusively of progressive Democrats. In fact, it was mostly Republican opposition that killed it. (That opposition crumbled after the markets subsequently tanked.)

Still, DVD copies of Capitalism: A Love Story are not likely to be passed around at Christmastime by House Speaker Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.), Senate Budget Committee chairman Kent Conrad (D-N.D.), or even House Financial Services Committee chairman Barney Frank (D-Mass.). All of them are portrayed as either dupes or water carriers for Wall Street scoundrels.

Senate Banking Committee chairman Chris Dodd (D-Conn.) gets a particularly serious shellacking. The film dwells at length on his being a "friend of Angelo," i.e., Angelo Mozilo, the former Countywide Financial CEO who made below-market loans to the politically well-connected.

After the premiere one union activist asked Moore about the fact that two other people he criticizes in the film, National Economic Council chairman Larry Summers and Treasury Secretary Timothy Geithner, are in Obama's administration now. Moore responded by saying that he imagined Obama had—figuratively speaking—hired bank robbers to advise him on keeping the bank from getting robbed.

"That's my hope," Moore declared.

The line got a laugh but it points to the fact that conservative tea party activists aren't the only ones upset with Washington. With the Democrats in charge of Congress and the White House, elements of the left are now beginning to hold them responsible for the state of the economy and the promises they have made. While they all still hate George W. Bush, the days when that was enough to unify the left are fading.

The film's second unexpected direction is to go beyond just shaking a finger at Wall Street and Washington. Moore doesn't simply call for new regulations. Instead, he explicitly states that "Capitalism is evil and you cannot regulate evil." Something must replace it.

He doesn't exactly say what should come next, but he does lay some pretty heavy hints. Towards the end of film he interviews Sen. Bernie Sanders (I-Vt.), the Senate's only (avowed) socialist. As far as Moore is concerned, Sanders' ideas "sound like America."

While many liberals have mocked conservatives for claiming that the left's agenda is socialist, Moore's response is, "Yeah, so?"

"I hope this film really gets a dialogue going," one AFL-CIO member told me after the film. That it might.

Another one of my favorite truth seekers is Walter Williams at George Mason University ---
http://en.wikipedia.org/wiki/Walter_E._Williams
A Black Economics Professor Who Anticipates Not Admiring Michael Moore's Latest Film
"Lying Propaganda," by Walter E. Williams, Townhall, September 23, 2009 --- http://townhall.com/columnists/WalterEWilliams/2009/09/23/lying_propaganda

Capitalism from From Adam Smith to Hayek to Von Mises (Austrian School) to Keynes to Michael Moore

Capitalism --- http://en.wikipedia.org/wiki/Capitalism

Fredrich Hayek --- http://en.wikipedia.org/wiki/Friedrich_Hayek

Austrian School --- http://en.wikipedia.org/wiki/Austrian_School

Keynesianism and neoliberalism --- http://en.wikipedia.org/wiki/Capitalism#Keynesianism_and_neoliberalism

College Dropout Michael Moore's "Capitalism is Evil" --- http://en.wikipedia.org/wiki/Michael_Moore

"How Did Economists Get It So Wrong?" by Paul Krugman (liberal Keynesian and Nobel Prize winner), The New York Times, September 2, 2009 --- http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?ref=business

It’s hard to believe now, but not long ago economists were congratulating themselves over the success of their field. Those successes — or so they believed — were both theoretical and practical, leading to a golden era for the profession. On the theoretical side, they thought that they had resolved their internal disputes. Thus, in a 2008 paper titled “The State of Macro” (that is, macroeconomics, the study of big-picture issues like recessions), Olivier Blanchard of M.I.T., now the chief economist at the International Monetary Fund, declared that “the state of macro is good.” The battles of yesteryear, he said, were over, and there had been a “broad convergence of vision.” And in the real world, economists believed they had things under control: the “central problem of depression-prevention has been solved,” declared Robert Lucas of the University of Chicago in his 2003 presidential address to the American Economic Association. In 2004, Ben Bernanke, a former Princeton professor who is now the chairman of the Federal Reserve Board, celebrated the Great Moderation in economic performance over the previous two decades, which he attributed in part to improved economic policy making.

Last year, everything came apart.

Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists came to believe that markets were inherently stable — indeed, that stocks and other assets were always priced just right. There was nothing in the prevailing models suggesting the possibility of the kind of collapse that happened last year. Meanwhile, macroeconomists were divided in their views. But the main division was between those who insisted that free-market economies never go astray and those who believed that economies may stray now and then but that any major deviations from the path of prosperity could and would be corrected by the all-powerful Fed. Neither side was prepared to cope with an economy that went off the rails despite the Fed’s best efforts.

And in the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. Lucas says the Obama administration’s stimulus plans are “schlock economics,” and his Chicago colleague John Cochrane says they’re based on discredited “fairy tales.” In response, Brad DeLong of the University of California, Berkeley, writes of the “intellectual collapse” of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten.

What happened to the economics profession? And where does it go from here?

As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.

Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets — that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation.

It’s much harder to say where the economics profession goes from here. But what’s almost certain is that economists will have to learn to live with messiness. That is, they will have to acknowledge the importance of irrational and often unpredictable behavior, face up to the often idiosyncratic imperfections of markets and accept that an elegant economic “theory of everything” is a long way off. In practical terms, this will translate into more cautious policy advice — and a reduced willingness to dismantle economic safeguards in the faith that markets will solve all problems.

II. FROM SMITH TO KEYNES AND BACK

The birth of economics as a discipline is usually credited to Adam Smith, who published “The Wealth of Nations” in 1776. Over the next 160 years an extensive body of economic theory was developed, whose central message was: Trust the market. Yes, economists admitted that there were cases in which markets might fail, of which the most important was the case of “externalities” — costs that people impose on others without paying the price, like traffic congestion or pollution. But the basic presumption of “neoclassical” economics (named after the late-19th-century theorists who elaborated on the concepts of their “classical” predecessors) was that we should have faith in the market system.

This faith was, however, shattered by the Great Depression. Actually, even in the face of total collapse some economists insisted that whatever happens in a market economy must be right: “Depressions are not simply evils,” declared Joseph Schumpeter in 1934 — 1934! They are, he added, “forms of something which has to be done.” But many, and eventually most, economists turned to the insights of John Maynard Keynes for both an explanation of what had happened and a solution to future depressions.

Keynes did not, despite what you may have heard, want the government to run the economy. He described his analysis in his 1936 masterwork, “The General Theory of Employment, Interest and Money,” as “moderately conservative in its implications.” He wanted to fix capitalism, not replace it. But he did challenge the notion that free-market economies can function without a minder, expressing particular contempt for financial markets, which he viewed as being dominated by short-term speculation with little regard for fundamentals. And he called for active government intervention — printing more money and, if necessary, spending heavily on public works — to fight unemployment during slumps.

It’s important to understand that Keynes did much more than make bold assertions. “The General Theory” is a work of profound, deep analysis — analysis that persuaded the best young economists of the day. Yet the story of economics over the past half century is, to a large degree, the story of a retreat from Keynesianism and a return to neoclassicism. The neoclassical revival was initially led by Milton Friedman of the University of Chicago, who asserted as early as 1953 that neoclassical economics works well enough as a description of the way the economy actually functions to be “both extremely fruitful and deserving of much confidence.” But what about depressions?

Friedman’s counterattack against Keynes began with the doctrine known as monetarism. Monetarists didn’t disagree in principle with the idea that a market economy needs deliberate stabilization. “We are all Keynesians now,” Friedman once said, although he later claimed he was quoted out of context. Monetarists asserted, however, that a very limited, circumscribed form of government intervention — namely, instructing central banks to keep the nation’s money supply, the sum of cash in circulation and bank deposits, growing on a steady path — is all that’s required to prevent depressions. Famously, Friedman and his collaborator, Anna Schwartz, argued that if the Federal Reserve had done its job properly, the Great Depression would not have happened. Later, Friedman made a compelling case against any deliberate effort by government to push unemployment below its “natural” level (currently thought to be about 4.8 percent in the United States): excessively expansionary policies, he predicted, would lead to a combination of inflation and high unemployment — a prediction that was borne out by the stagflation of the 1970s, which greatly advanced the credibility of the anti-Keynesian movement.

Eventually, however, the anti-Keynesian counterrevolution went far beyond Friedman’s position, which came to seem relatively moderate compared with what his successors were saying. Among financial economists, Keynes’s disparaging vision of financial markets as a “casino” was replaced by “efficient market” theory, which asserted that financial markets always get asset prices right given the available information. Meanwhile, many macroeconomists completely rejected Keynes’s framework for understanding economic slumps. Some returned to the view of Schumpeter and other apologists for the Great Depression, viewing recessions as a good thing, part of the economy’s adjustment to change. And even those not willing to go that far argued that any attempt to fight an economic slump would do more harm than good.

Not all macroeconomists were willing to go down this road: many became self-described New Keynesians, who continued to believe in an active role for the government. Yet even they mostly accepted the notion that investors and consumers are rational and that markets generally get it right.

Of course, there were exceptions to these trends: a few economists challenged the assumption of rational behavior, questioned the belief that financial markets can be trusted and pointed to the long history of financial crises that had devastating economic consequences. But they were swimming against the tide, unable to make much headway against a pervasive and, in retrospect, foolish complacency.

III. PANGLOSSIAN FINANCE

In the 1930s, financial markets, for obvious reasons, didn’t get much respect. Keynes compared them to “those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those that he thinks likeliest to catch the fancy of the other competitors.”

And Keynes considered it a very bad idea to let such markets, in which speculators spent their time chasing one another’s tails, dictate important business decisions: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”

By 1970 or so, however, the study of financial markets seemed to have been taken over by Voltaire’s Dr. Pangloss, who insisted that we live in the best of all possible worlds. Discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse. The field was dominated by the “efficient-market hypothesis,” promulgated by Eugene Fama of the University of Chicago, which claims that financial markets price assets precisely at their intrinsic worth given all publicly available information. (The price of a company’s stock, for example, always accurately reflects the company’s value given the information available on the company’s earnings, its business prospects and so on.) And by the 1980s, finance economists, notably Michael Jensen of the Harvard Business School, were arguing that because financial markets always get prices right, the best thing corporate chieftains can do, not just for themselves but for the sake of the economy, is to maximize their stock prices. In other words, finance economists believed that we should put the capital development of the nation in the hands of what Keynes had called a “casino.”

Continued in article

Here is Paul Krugman from his blog trying to deny that he was a persistent advocate for the housing bubble and below that are quotes from him just prior to the bubble taking off.
Mark Thornton, "Krugman Did Cause the Housing Bubble," Von Mises Blog, June 17, 2009 --- http://blog.mises.org/archives/010153.asp
Jensen Comment
My worry about Krugman is that he advocates more and more spending without much concern about deficits, interest buildup of the National Debt, and long-term entitlements that, in my viewpoint, will bring down the United States under any economic system. He mostly advocates spend, spend, spend!

"On the road to socialism. "Bureaucracy", von Mises,1944," by Lee Carey, June 18, 2009 ---

Today, in their writings, we can today find an articulate defense of capitalism and a rapier attack on socialism and collectivism in general. Both economists offer an alternative to Galbraith, and to a current leading proponent of Keynesian economics, New York Times columnist Paul Krugman.

Here are several quotes from Mises’s "Bureaucracy", first published in 1944, but holding relevance for today.

“The characteristic feature of present-day policies is the trend toward a substitution of government control for free enterprise. Powerful political parties and pressure groups are fervently asking for public control of all economic activities, for thorough government planning, and for the nationalization of business. They aim at full government control of education and at the socialization of the medical profession. There is no sphere of human activity that they would not be prepared to subordinate to regimentation by the authorities. In their eyes, state control is the panacea for all ills.” (p. 4)

“America is faced with a phenomenon that the framers of the Constitution did not foresee and could not foresee: the voluntary abandonment of congressional rights. Congress has in many instances surrendered the function of legislation to government agencies and commissions, and it has relaxed its budgetary control through the allocation of large appropriations for expenditures, which the Administration has to determine in detail.” (p. 5)

“Today the fashionable philosophy of Statolatry has obfuscated the issue [of tyrants versus popular government]. The political conflicts are no longer seen as struggles between groups of men. They are considered a war between two principles, the good and the bad. The good is embodies in the great god State, the materialization of the eternal idea of morality, and the bad is the ‘rugged individualism’ of selfish men. In this antagonism the State is always right and the individual always wrong. The State is the representative of the commonweal, of justice, civilization, and superior wisdom. The individual is a poor wretch, a vicious fool.” (p. 76)

“The fading of the critical sense is a serious menace to the preservation of our civilization. It makes it easy for quacks to fool people. It is remarkable that the educated strata are more gullible than the less educated. The most enthusiastic supporters of Marxism, Nazism, and Fascism are the intellectuals, not the boors. (p. 108)

“The main propaganda trick of the supporters of the allegedly ‘progressive’ policy of government control is to blame capitalism for all that is unsatisfactory in present day conditions and to extol the blessings which socialism has in store for mankind. They have never attempted to prove their fallacious dogmas or still less to refute the objections raised by the economists. All they did was to call their adversaries names and to cast suspicion upon their motives. And, unfortunately, the average citizen cannot see through these stratagems.” (p. 111)

[The Middle Way] “The most detrimental outcome of the average citizen’s repugnance to a serious concern with economic problems is his readiness to back a program of compromise. He looks upon the conflict between capitalism and socialism as if it were a quarrel between two groups – labor and capital – each of which claims for itself the whole of the matter at issue. As he himself is not prepared to appraise the merits of the arguments advanced by each of the parties, he thinks it would be a fair solution to end the dispute by an amicable arrangement: each claimant should have a part of his claim. Thus the program of government interference with business acquired its prestige. There should be neither full capitalism nor full socialism, but something in between, a middle way.” (pp.117-118)

And, as Hayek explains elsewhere, the middle way is only a byway on the highway to more socialism.

"The Keynesians Were Wrong Again:  We won't see a return to growth without incentives for job-creating investment," by Peter Ferrara, The Wall Street Journal, September 11, 2009 --- Click Here

From the beginning, our representatives in Washington have approached this economic downturn with old-fashioned, Keynesian economics. Keynesianism—named after the British economist John Maynard Keynes—is the theory that you fight an economic downturn by pumping money into the economy to "encourage demand" and "create jobs." The result of our recent Keynesian stimulus bills? The longest recession since World War II—21 months and counting—with no clear end in sight. Borrowing close to a trillion dollars out of the private economy to increase government spending by close to a trillion dollars does nothing to increase incentives for investment and entrepreneurship.

The record speaks for itself: In February 2008, President George W. Bush cut a deal with congressional Democrats to pass a \$152 billion Keynesian stimulus bill based on countering the recession with increased deficits. The centerpiece was a tax rebate of up to \$600 per person, which had no significant effect on economic incentives, as reductions in tax rates do.

Learning nothing from this Keynesian failure, which he vigorously supported from the U.S. Senate, President Barack Obama came back in February 2009 to support a \$787 billion, purely Keynesian stimulus bill.

Even the tax-cut portion of that bill, which Mr. Obama is still wildly touting to the public, was purely Keynesian. The centerpiece was a \$400-per-worker tax credit, which, again, has no significant effect on economic incentives. While Mr. Obama is proclaiming that this delivered on his campaign promise to cut taxes for 95% of Americans, the tax credit disappears after next year.

The Obama administration is claiming success, not because of recovery, but because of the slowdown in economic decline. Last month, just 216,000 jobs were lost, and the economy declined by only 1% in the second quarter. Based on his rhetoric, Mr. Obama expects credit for anyone who still has a job.

The fallacies of Keynesian economics were exposed decades ago by Friedrich Hayek and Milton Friedman. Keynesian thinking was then discredited in practice in the 1970s, when the Keynesians could neither explain nor cure the double-digit inflation, interest rates, and unemployment that resulted from their policies. Ronald Reagan's decision to dump Keynesianism in favor of supply-side policies—which emphasize incentives for investment—produced a 25-year economic boom. That boom ended as the Bush administration abandoned every component of Reaganomics one by one, culminating in Treasury Secretary Henry Paulson's throwback Keynesian stimulus in early 2008.

Mr. Obama showed up in early 2009 with the dismissive certitude that none of this history ever happened, and suddenly national economic policy was back in the 1930s. Instead of the change voters thought they were getting, Mr. Obama quintupled down on Mr. Bush's 2008 Keynesianism.

The result is the continuation of the economic policy disaster we have suffered since the end of 2007. Mr. Obama promised that his stimulus would prevent unemployment from climbing over 8%. It jumped to 9.7% last month. Some 14.9 million Americans are unemployed, another 9.1 million are stuck in part-time jobs and can't find full-time work, and another 2.3 million looked for work in the past year and never found it. That's a total of 26.3 million unemployed or underemployed, for a total jobless rate of 16.8%. Personal income is also down \$427 billion from its peak in May 2008.

Rejecting Keynesianism in favor of fiscal restraint, France and Germany saw economic growth return in the second quarter this year. India, Brazil and even communist China are enjoying growth as well. Canada enjoyed job growth last month.

U.S. economic recovery and a permanent reduction in unemployment will only come from private, job-creating investment. Nothing in the Obama economic recovery program, or in the Bush 2008 program, helps with that.

Producing long-term economic growth will require a fundamental change in economic policies—lower, not higher, tax rates; reliable, low-cost energy supplies, not higher energy costs through cap and trade; and not unreliable alternative energy surviving only on costly taxpayer subsidies.

Unfortunately, Mr. Obama seems to be wedded to his political talking points, and his ideological blinders seem to be permanently affixed. So don't expect any policy changes. Expect an eventual return to 1970s-style economic results instead.

The Von Mises Institute takes on the NYT's Floyd Norris (and indirectly Paul Krugman)
A few years ago on these pages, I harshly criticized an article urging New Yorkers to "eat local," and went so far as to dub the young lady's column, "The worst economics article ever." I am here to report that her record has been smashed. Floyd Norris's recent New York Times article on the greenback is hands down the worst economics article I have ever read. Not only is it jam-packed full of false history, but it uses the falsehoods to justify monstrous crimes, both in the past and present.
Robert P. Murphy, "Fiat Money: How Else You Gonna Kill 600,000 Americans," Ludwig von Von Mises Institute, September 11, 2009 --- http://mises.org/story/3701

Video:  Eugene F. Fama: Economist --- http://www.dimensional.com/famafrench/2009/09/post.html
Fama/French Blog --- http://www.dimensional.com/famafrench/2009/09/post.html

"Michael Moore takes on capitalism," by Richard Coriss, Fortune, September 7, 2009 --- http://money.cnn.com/2009/09/04/magazines/fortune/michael_moore_capitalism_review.fortune/

If anyone has profited from the free-enterprise system in the past 20 years, it's Michael Moore. Since 1989, when his "Roger & Me" pioneered the docu-comedy form of nonfiction film, Moore's movies, TV shows and best-selling books have given him an eight-figure net worth.

And in all of these, he is the improbable star: a heavyset fellow with a doofus grin, alternately laughing and badgering but always at the center of his own attention. Why, there he is, at the end of his new movie, "Capitalism: A Love Story," wrapping the New York Stock Exchange building in yellow tape that reads: CRIME SCENE.

The writer-director-propagandist has earned every penny and Euro of his boodle. Moore's last three filmed diatribes -- "Bowling for Columbine," "Fahrenheit 9/11" and "Sicko" --h ave amassed more than \$300 million in theaters worldwide, and loads more on DVD; and "Fahrenheit" is, by a long stretch, the top-grossing documentary of all time.

Now, there's no reason a popular entertainer, even one whose subjects are the gun lobby, the march to war in Iraq and the health-care industry, should live like a monk. It's just a little ironic that the man who made his career attacking corporate America should be a pretty big business himself.

Moore is doing well abroad; his last three films have made nearly half their total income in foreign countries. So it's fitting "Capitalism: A Love Story" had its world premiere Sunday at the Venice Film Festival. This follows the Cannes debuts, with headline-making, mostly rapturous receptions, of "Columbine," "Fahrenheit" and "Sicko."

Why does has working-class guy from Flint, Mich., won the hearts of Europeans? Perhaps because his movies indulge the continental view of America: that we're gun-crazy, we invade countries that haven't attacked us and we think medical coverage is a profit-making scam, not a citizen's basic right. Europe is a peaceful civilization that knows its place and cares for its people. We're armed, dangerous and stupid.

That's not quite Moore's view. He has a dewy respect for the underclass; each of his films has testimony from working men and women who burst into tears or soar into rage describing injustices done them. To Moore, it's the bureaucratic-industrial complex -- the combined might of the West Wing, Wall street and Wal-Mart -- that's evil.

That view was never clearer than in his broadly entertaining, ceaselessly provocative, wildly ambitious new film. Not satisfied with outlining and condemning the housing and banking crises of the past year, it expands the story of the financial collapse into an epic of malfeasance: capital crimes on a national scale.

Home are foreclosed on people who could meet their old mortgage payments but not the new, ballooned ones. (One family does get \$1,000 for cleaning out the house they've just been evicted from.) Corporations take out policies on their workers, then pocket tax-free "dead peasants" insurance by the carload while the victims' families get nothing. Two judges in Pennsylvania close down a state detention center, then sentence children to long terms in a private facility that kicks back millions to the judges.

By now, a Michael Moore film is its own genre: a vigorous vaudeville of working-class sob stories, snippets of right-wing power players saying ugly things, longer interviews with experts on the Left, funny old film clips and, at the climax, Moore engaging in some form of populist grandstanding.

This time, he goes to the headquarters of the former AIG, a multibillion-dollar recipient of government largesse, and attempts to make a citizen's arrest of its chief executives. He also asks Wall Streeters for advice on healing the nation. One man's quick reply: "Don't make any more movies."

"Capitalism" has lots of statistics, like the Rasmussen poll that showed only a slight majority of young adults prefer capitalism to socialism. But this is a lecture from a charismatic comedian of a professor; he makes his points with gag movie references and quick visual puns.

In "Capitalism," when the narrator of a 1950s instructional film about ancient Rome's use of gladiatorial games "to keep the idle citizens entertained," he tosses in a shot from American Idol. (Idle, Idol.) Running a clip from the 1977 "Jesus of Nazareth," Moore puts new words in the Messiah's mouth so that Jesus now tells a supplicant, "I am sorry, I cannot heal your preexisting condition."

Look, if you want fair and balanced, go to Fox News. But Moore does give a little time to those on the other side. As a carpenter hammers pasteboard over the facade of a foreclosed home, he observes, "If people pay their bills, they don't get thrown out." Wall Street Journal editorial board member Stephen Moore gets about a minute to explain why capitalism is great and democracy isn't.

Sometimes Moore lavishes attention on adversaries just because they're so much fun. Peter Zalewski, founder of Condo Vultures, which buys up defaulted homes on the quick and cheap, tells the filmmaker, "What's the difference between me and a real vulture? I say that's simple: I don't vomit on myself."

Toward the end, Moore shows the jubilation in Chicago's Grant Park the night Barack Obama was voted President. Two days before that election, Moore said of Obama, "The Republicans aren't kidding when they say he's the 'most liberal' member of the Senate. ... He is our best possible chance to step back from the edge of the cliff."

Since Jan. 20, a part of the right may be calling Obama a Communist, but not many liberals are calling him liberal. The movie seems to be setting up the disappointment many on the Left have felt over the awarding of more billions to giant banks and corporations, among other things, since Jan. 20. And Moore does note that Goldman Sachs gave more than \$1 million to Obama's campaign.

But he doesn't go after this Democratic President as he surely would have if John McCain had been elected. Instead, he argues for participatory democracy: do-it-yourself do-gooding, through community activism and union organizing. That's an optimistic and evasive answer to the financial problem.

Surely what spun out of control because of government indulgence and indolence needs to be repaired by government regulation and ingenuity. Squatting in your repossessed home won't get the trillions back. In "Capitalism: A Love Story," Moore has cogently and passionately diagnosed the disease. But for a cure, instead of emergency surgery, he prescribes Happy Meals.

An Economics Professor Who Anticipates Not Admiring Michael Moore's Latest Film
"Lying Propaganda," by Walter E. Williams, Townhall, September 23, 2009 --- http://townhall.com/columnists/WalterEWilliams/2009/09/23/lying_propaganda

Michael Moore's new film, "Capitalism: A Love Story" will be released next month. I've neither seen nor read reviews of the film, except for a short piece in the London Telegraph (9/6/09) titled "Michael Moore film calls capitalism evil." Aware of Michael Moore's previous films, I know that it will be at best a misleading story about capitalism. So let's do some defensive mental preparation, not about the film but what is and what is not capitalism.

Capitalism is an economic system characterized by private ownership and control over the means of production. The distribution of goods and services and their prices are mainly determined by competition in a free market. Under such a system the primary job of government is to protect private property, enforce contracts and ensure rule of law.

There has never been a pure free market capitalistic system just as there has never been a pure communist or socialist system, where there is government ownership of the means of production and each individual has equal access to society's resources. However, we can rank economies as to whether they are closer to capitalism or closer to communism or socialism. If one ranked countries according to whether they were closer to the capitalistic end of the spectrum or the socialistic or communistic end, then ranked countries according to per capita GDP and finally rank countries according to Freedom House's "Map of Freedom in the World," he would find a pattern that is by no means a coincidence. The people in those countries closer to the capitalist end of the economic spectrum have far greater income and enjoy greater human rights protections than those toward the socialist and communist end.

According to the London Telegraph article, Moore's film features priests who say capitalism is anti-Christian by failing to protect the poor. This is pure nonsense and revealed as such by asking, "If you're an unborn spirit, condemned by God to a life of poverty but allowed to choose the country in which to be poor, would you choose a country near the communist end of the economic spectrum or the capitalist end?" If you chose the United States, you'd find that according to the government surveys, the typical "poor" American has cable or satellite TV, two color TVs, and a DVD player or VCR. He has air conditioning, a car, a microwave, a refrigerator, a stove, and a clothes washer and dryer, and whether he has health insurance or not, he is able to obtain medical care when needed. Try to find that in Cuba, Russia, China or North Korea. If we buy into the nonsense of Moore's priests, the world's poor people are incredibly stupid. Whether fleeing legally or illegally, their destination country is likely to be closer to capitalism than their departure country.

Most of our country's serious problems can be laid at the feet of Congress and the White House and not at capitalism. Take the financial crisis. One-third of the \$15 trillion of mortgages in existence in 2008 are owned, or securitized by Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing and the Veterans Administration. Banks didn't mind making risky loans and Wall Street buyers didn't mind buying these repackaged loans because they assumed that they would be guaranteed by the federal government: read bailout by taxpayers. Under a capitalist system, financial institutions would not have been intimidated or encouraged into making risky loans and neither would they have been bailed out if they did so.

Social Security, Medicare and its coverage of prescription drugs have an unfunded liability that exceeds \$100 trillion. When those roosters come home to roost, they will make the financial meltdown we've been though look like child's play.

Not withstanding all of the demagoguery, it is capitalism not socialism is that made us a great country and its socialism that will be our undoing.

"The Fed Can't Monitor 'Systemic Risk' That's like asking a thief to police himself," by Peter J. Wallison, The Wall Street Journal, September 8, 2009 ---
http://online.wsj.com/article/SB10001424052970203440104574400842635317778.html

Using the financial crisis as a pretext, the Obama administration is determined to enact massive financial regulatory reforms this year. But the centerpiece of its proposal—putting the Fed in charge of regulating or monitoring systemic risk—is a serious error.

The problem is the Fed itself can create systemic risk. Many scholars, for example, have argued that by keeping interest rates too low for too long the Fed created the housing bubble that gave us the current mortgage meltdown, financial crisis and recession.

Regardless of whether one believes this analysis, it is not difficult to see that a Fed focused on preventing deflation in the wake of the dot-com bubble's collapse in the early 2000s might ignore the sharp rise in housing prices that later gave us a bubble.

There is also the so-called Greenspan put. That's a term that refers to investors taking greater risks than they otherwise would because they believed the Fed would protect them by flooding the financial system with liquidity in the event of a downturn. If there really was a Greenspan put, it has now been supplanted by a "Bernanke put."

These puts may or may not be real, but there is no doubt that the Fed has the power to create incentives for greater risk taking. In other words, simply by doing its job to stabilize the economy, the Fed can create the risk-taking mindset that many blame for the current crisis.

And finally, there are those—including some at the Fed itself—who argue that the Fed does not have, and will never have, sufficient information to recognize a real bubble. As a result, the Fed is just as likely to stifle economic growth as it is to sit idly by while a serious asset bubble develops.

All of this means just one thing: If we are to have a mechanism to prevent systemic risk it should be independent of the Fed. That is probably one reason why creating a systemic-risk council made up of all of the federal government's financial regulatory agencies, including the Fed, has the support of Senate Banking Committee Chairman Christ Dodd (D., Conn.) and others on the committee.

The current administration isn't the only one that has been willing to hand too much power to the Fed. The idea that the Fed should have some responsibility to detect systemic risk originated with the Bush Treasury Department's "Blueprint for a Modern Financial Regulatory Structure," issued in March 2008. In that plan, the regulation of bank holding companies would be transferred from the Fed to the comptroller of the currency and the Federal Deposit Insurance Corporation. The Fed would be charged with detecting the development of systemic risk in the economy.

The idea was that the Fed's authority would be pared back in those areas where it is actually supervising specific financial institutions but expanded where its responsibilities dealt with the economy as a whole. This is a plausible idea. There is every reason to remove from the Fed's plate the supervision of specific financial institutions as well as the regulation of businesses such as mortgage brokers. As a matter of government organization, it makes a tidy package for the Fed to handle issues that affect the economy as a whole.

But piling yet more responsibilities on the Fed raises the question of whether we are serious about discovering incipient systemic risk. If we are, then an agency outside of the Fed should be tasked with that responsibility. Tasking the Fed with that responsibility would bury it among many other inconsistent roles and give the agency incentives to ignore warning signals that an independent body would be likely to spot.

Unlike balancing its current competing assignments—price stability and promoting full employment—detecting systemic risk would require the Fed to see the subtle flaws in its own policies. Errors that are small at first could grow into major problems. It is simply too much to expect any human institution to step outside of itself and see the error of its ways when it can plausibly ignore those errors in the short run. If we are going to have a systemic-risk monitor, it should be an independent council of regulators.

It is one thing to set a thief to catch a thief—as President Franklin Delano Roosevelt is said to have done when he put Joe Kennedy in charge of the newly created Securities and Exchange Commission in the 1930s. But to set a thief to catch himself is quite a different matter.

The Lie:  The insurance industry abides by state laws by not rescinding insurance coverage even when there is no fraud on the part of the patient in information provided to the insurance company.
This is actually a blatant lie that Bill Moyers documented quite well ---
http://www.pbs.org/moyers/journal/07312009/watch.html

"How can Obama Top a Great Speech," by Joan Walsh, Salon, September 10, 2010 --- http://www.salon.com/opinion/walsh/politics/2009/09/10/healthcare_speech/index.html
Dear Ms Walsh, President Obama can top his great speech by filling in details of truthful estimates of Obamacare costs and how he plans to finance these added costs of wider coverage of health issues and more people covered. Thus far his sweeping claims of cost savings sound like snake oil --- http://www.ibdeditorials.com/IBDArticles.aspx?id=337473135318879&type=right

Let me get this straight.
We're about to get a health care plan shoved down our throats that is Written by a committee whose head says he doesn't understand it, Passed by a Congress that hasn't read it but exempts themselves from it, signed by a president that also hasn't read it, With funding administered by a treasury chief who was caught not paying his Taxes, overseen by a surgeon general who is obese, and financed by a Country that's nearly broke.
What could possibly go wrong?

IS THIS A GREAT COUNTRY OR WHAT!

Forwarded by Maureen

Bob Jensen's threads on Obamacare Lies ---
http://www.trinity.edu/rjensen/Health.htm