Where Is Obama Leading Us?

[Kathianne]

I don't for a minute think he's stupid, thus what he's doing has a purpose. What do you think the purpose is? I'm speaking economically here, not looking for images of going over cliffs and such. ;) Seems there must be a reason he's screwing with the underpinnings, so why?

Case in point:

http://www.nytimes.com/2009/05/04/business/economy/04debt.html?hpw


May 4, 2009
Worries Rise on the Size of U.S. Debt

By GRAHAM BOWLEY and JACK HEALY
The nation’s debt clock is ticking faster than ever — and Wall Street is getting worried.

As the Obama administration racks up an unprecedented spending bill for bank bailouts, Detroit rescues, health care overhauls and stimulus plans, the bond market is starting to push up the cost of trillions of dollars in borrowing for the government.

Last week, the yield on 10-year Treasury notes rose to its highest level since November, briefly touching 3.17 percent, a sign that investors are demanding larger returns on the masses of United States debt being issued to finance an economic recovery.

While that is still low by historical standards — it averaged about 5.7 percent in the late 1990s, as deficits turned to surpluses under President Bill Clinton — investors are starting to wonder whether the United States is headed for a new era of rising market interest rates as the government borrows, borrows and borrows some more.

Already, in the first six months of this fiscal year, the federal deficit is running at $956.8 billion, or nearly one seventh of gross domestic product — levels not seen since World War II, according to Wrightson ICAP, a research firm.

Debt held by the public is projected by the Congressional Budget Office to rise from 41 percent of gross domestic product in 2008 to 51 percent in 2009 and to a peak of around 54 percent in 2011 before declining again in the following years. For all of 2009, the administration probably needs to borrow about $2 trillion.

The rising tab has prompted warnings from the Treasury that the Congressionally mandated debt ceiling of $12.1 trillion will most likely be breached in the second half of this year....

The trouble is that government borrowing risks crowding out private investment, driving up interest rates and potentially slowing a recovery still trying to take hold. That is why the Federal Reserve announced an extraordinary policy this year to buy back existing long-term debt — $300 billion over six months — to drive down yields. The strategy worked for a while, but now the impact of that decision appears to be wearing off as long-term interest rates tick up again....

Then came a not so good auction on Thursday:

http://www.cnbc.com/id/30630622


Taking A Pause

A weak 30-year auction added to the downward pressure on stocks in the early afternoon Thursday. The Treasury sold $14 billion in 30-year bonds to yield 4.288 percent, a stunning move above the pre auction yield of 4.19 percent. Treasurys had been selling off after the latest weekly jobless claims report showed a slowing in new claims. The 10-year's yield rose as high as 3.30 percent after the auction....

Rates Rising

Rates on long dated Treasurys have been creeping higher, and on Thursday, rates on both the 10-year and 30-year crossed above key levels traders have been watching.

"Bottom line, it is certainly a negative event — the fact we are behind 4.25, which is a psychological level for the 30-year, and the fact we're behind (3.25) in the 10-year as well. 3.25 (on the 10-year) is a the bench mark level. It needs to be paid attention to," said David Ader, head of interest rate strategy at RBC. "To me, it means we need to go to the next trigger to really determine things and that could be the nonfarm payrolls."

"Yields are where they are not because of these 'green shoots' and not because of the stock market but because of supply," said Ader. "The economy still is quite dicey ... maybe we're turning out too many Treasurys for the market to sate itself on." The 30-year auction was the final of three auctions this week.

Some believe the spike in yields reflects the view that the economy is improving and that the flight-to-safety move into Treasurys is being reversed. Corporate bonds, equities and other investments have become more attractive.

Ader says, however, it is a confusing time for the market, and it is a good time to rely on technicals. "Let's say 3.25 proves to be an important technical area and that means the next target is the 3.50 area. Will the improvement in credit spreads which have been coming down, mortgages have been coming down — would that continue?" he said. He said a backup in rates would be a problem for the Fed, the economy and for the improvement in the credit markets....

[April15]

The purpose is to return the nation to a stable economy, one that will not have flim-flam as it's basis.

[Jeff]

The purpose is to return the nation to a stable economy, one that will not have flim-flam as it's basis.

Damn he sure is doing a great job with it, there definitely won't be no flim or flam about it , we will just be broke

[Joe Steel]

Out of the dark night and into a bright new day.

[April15]

Damn he sure is doing a great job with it, there definitely won't be no flim or flam about it , we will just be broke
Don't even tell me you got a great income at this time!

[REDWHITEBLUE2]

I don't for a minute think he's stupid, thus what he's doing has a purpose. What do you think the purpose is? I'm speaking economically here, not looking for images of going over cliffs and such. ;) Seems there must be a reason he's screwing with the underpinnings, so why?

Case in point:

http://www.nytimes.com/2009/05/04/business/economy/04debt.html?hpw



Then came a not so good auction on Thursday:

http://www.cnbc.com/id/30630622

Where Is Obama Leading Us? To HELL VIA the Socialist Route

[Agnapostate]

Kathianne's preferred answer is "into a socialist economy," despite its inaccuracy. Liberal democratic capitalism has a unique ability to stabilize the economy due to its utilization of welfare to maintain the physical efficiency of the workforce and consequent ability to maintain the "psychological efficiency" of the workforce by appeasing worker militancy. Obama's economic policies will thus ensure that capitalism will have a lengthy tenure, and those of similar ideology will ensure that capitalism is maintained throughout our lifetimes and beyond.

EDIT: And so it begins...


Where Is Obama Leading Us? To HELL VIA the Socialist Route

See, here we go! :clap:

[Jeff]

Don't even tell me you got a great income at this time!

As a matter of fact yes I do, if we keep going down hill as a country I may not for long, but yes living in the south I live comfortable

[Joe Steel]

Kathianne's preferred answer is "into a socialist economy," despite its inaccuracy. Liberal democratic capitalism has a unique ability to stabilize the economy due to its utilization of welfare to maintain the physical efficiency of the workforce and consequent ability to maintain the "psychological efficiency" of the workforce by appeasing worker militancy. Obama's economic policies will thus ensure that capitalism will have a lengthy tenure, and those of similar ideology will ensure that capitalism is maintained throughout our lifetimes and beyond.

Obama comes not to bury capitalism but to save it.

[April15]

As a matter of fact yes I do, if we keep going down hill as a country I may not for long, but yes living in the south I live comfortableEnjoy it! I used to but things started to go south, no insult intended, a couple of years ago. I do think the housing market is settled down as I have at least got calls for estimates, which is more than I had a year ago. I do construction.

[avatar4321]

The purpose is to return the nation to a stable economy, one that will not have flim-flam as it's basis.

The economy is, by definition, unstable because it depends on the actions of the individual, not on the actions of the government.

The most stable economy is one that is flexible. And that is only accomplished by leaving it do its own thing. Governments attempts to create a "stable" economy will only create an illusion for naive people and cause a huge backlash down the line.

That's why freedom is important.

[avatar4321]

Out of the dark night and into a bright new day.

If you think the past 8 years were a dark night, you need to take off the sun glasses.

[avatar4321]

Obama comes not to bury capitalism but to save it.

You can't save capitalism by nationalizing everything and avoiding consequences for decisions.

[glockmail]

I don't for a minute think he's stupid, thus what he's doing has a purpose.

First of all, I reject the premise. I think he's a puppet controlled by George Soros, who's goal is destruction of the last vestige of capitalism.

[Jeff]

Enjoy it! I used to but things started to go south, no insult intended, a couple of years ago. I do think the housing market is settled down as I have at least got calls for estimates, which is more than I had a year ago. I do construction.

Hate to hear it April, I hope things pick up for ya.

[April15]

Hate to hear it April, I hope things pick up for ya.Thanks!

[Agnapostate]

The economy is, by definition, unstable because it depends on the actions of the individual, not on the actions of the government.

The most stable economy is one that is flexible. And that is only accomplished by leaving it do its own thing. Governments attempts to create a "stable" economy will only create an illusion for naive people and cause a huge backlash down the line.

That's why freedom is important.

That's most inaccurate. As I've noted several times, the government acts as a necessary stabilizing agent in a capitalist economy. The empirical literature supports this view. For instance, we could refer to Yu's A new perspective on the role of the government in economic development: Coordination under uncertainty. As noted by the abstract:


This paper argues that the government possesses certain unique features that allow it to restrict competition, and provide stable and reliable conditions under which firms organise, compete, cooperate and exchange. The coordinating perspective is employed to re-examine the arguments for industrial policies regarding private investment decisions, market competition, diffusion of technologies and tariff protection on infant industries. This paper concludes that dynamic private enterprises assisted by government coordination policies explains the rapid economic growths in post-war Japan and the Asian newly industrialising economies.

Later elaboration is provided by this, for instance:


[The government] possesses some unique features that distinguish it from the firm. Such features allows the government to regulate competition, reduce uncertainty and provide a relatively stable exchange environment. Specifically, in the area of industrial policy, the government can help private enterprises tackle uncertainty in the following ways: first, locating the focal point by initiating projects; providing assurance and guarantees to the large investment project; and facilitating the exchange of information; second, reducing excessive competition by granting exclusive rights; and third, facilitating learning and diffusion of technologies, and assisting infant industry firms to build up competence. The history of developmental success indicates that the market and the state are not opposed forms of social organisation, but interactively linked (Rodrik, 1997, p. 437). In the prospering and dynamic nations, public-private coordination tends to prevail. Dynamic private enterprises assisted by government coordination explain the successful economic performances in the post-war Japan and the Asian newly industrialising economies. It is their governments' consistent and coordinated attentiveness to the economic problems that differentiates the entrepreneurial states (Yu, 1997) from the predatory states (Boaz and Polak, 1997).

What's unfortunate is that the majority of rightists are genuinely uninterested in empirical analysis; they'll occasionally cherrypick articles and studies supportive of their preconceived ideological conclusions and thus act out their confirmation bias, but will rarely engage in sustained and thorough analysis of these issues.


You can't save capitalism by nationalizing everything and avoiding consequences for decisions.

"Nationalizing"? This can't legitimately constitute nationalization, though I'm of the opinion that nationalization and decentralization and establishment of workplace democracy would result in a maximization of industry efficiency.


First of all, I reject the premise. I think he's a puppet controlled by George Soros, who's goal is destruction of the last vestige of capitalism.

And where do our beloved elders of Zion fit into this nefarious scheme? :eek:

[Kathianne]

The purpose is to return the nation to a stable economy, one that will not have flim-flam as it's basis.

Such as printing money at an incredible rate? All signs are of a flood of inflation coming your way-that should be great.

Such as jacking around of bankruptcy laws, which holds the promise of a fear of investing in the future?

Such as threatening the source of private charity donations, leaving only the government as a source of help? Tell me again the story of Walmart-once they get rid of all the small businesses.

I'm really sorry you've not been able to run a successful business unless all the economic conditions worked out your way in the country, your county, your state. Real sorry about your healthy issues and whatever else has gone wrong with your personal self. But to ignore the threats that are already looming towards the next 3 generations or more is idiocy.

[Agnapostate]

Mention of Wal-Mart seems an inadvisable strategy, considering their adverse economic impact on local communities.

[Kathianne]

Mention of Wal-Mart seems an inadvisable strategy, considering their adverse economic impact on local communities.

Which was my point. When there is only one recourse for people-big government, watch out.

[Agnapostate]

Which was my point. When there is only one recourse for people-big government, watch out.

Yeah, it seemed kind of cryptic. Speaking in a very broad sense not entirely specific to this topic, "big government" seems excessively attacked on anti-authoritarian grounds simply when it's utilized as a means to some end; the end itself is often ignored. For instance, when the state occasionally acts as a foe (rather than an ally), of excessive corporate power, this may lead to an ultimate end that results in a reduction of authoritarianism.

[Kathianne]

Yeah, it seemed kind of cryptic. Speaking in a very broad sense not entirely specific to this topic, "big government" seems excessively attacked on anti-authoritarian grounds simply when it's utilized as a means to some end; the end itself is often ignored. For instance, when the state occasionally acts as a foe (rather than an ally), of excessive corporate power, this may lead to an ultimate end that results in a reduction of authoritarianism.

Like they have with the banks and automakers? I don't think so...

[Agnapostate]

Like they have with the banks and automakers? I don't think so...

Not at the moment, no, but it could potentially be done. The internal firm structure of these institutions is currently governed through authoritarianism. As Chomsky has astutely noted, the internal structure of most corporations would be accurately labeled fascism if applied to a nation-state. Moreover, the consolidation of control of the means of production into the hands of a select few allows those select few to drastically alter the external conditions of masses of people, thus permitting them to obtain manipulative and coercive influence over them. It's through this arrangement that wage labor can be utilized en masse.

If nationalization of the means of production were to be peacefully implemented (as could potentially be done, since the financial class is still reeling and would not heavily resist), and subsequent decentralization of managerial control were to follow, these industries could instead be managed through workplace democracy as guaranteed through the public realm, thereby promoting both increased efficiency and the extension of democracy into the economic realm.

[Kathianne]

Not at the moment, no, but it could potentially be done. The internal firm structure of these institutions is currently governed through authoritarianism. As Chomsky has astutely noted, the internal structure of most corporations would be accurately labeled fascism if applied to a nation-state. Moreover, the consolidation of control of the means of production into the hands of a select few allows those select few to drastically alter the external conditions of masses of people, thus permitting them to obtain manipulative and coercive influence over them. It's through this arrangement that wage labor can be utilized en masse.

If nationalization of the means of production were to be peacefully implemented (as could potentially be done, since the financial class is still reeling and would not heavily resist), and subsequent decentralization of managerial control were to follow, these industries could instead be managed through workplace democracy as guaranteed through the public realm, thereby promoting both increased efficiency and the extension of democracy into the economic realm.

Agna, for all your propensity towards $5 words, I do think you are intelligent, which is why I'm confused by your often turning towards Chomsky, the lite left hero?

[Agnapostate]

Agna, for all your propensity towards $5 words, I do think you are intelligent, which is why I'm confused by your often turning towards Chomsky, the lite left hero?

"Often"? Chomsky's had relatively little influence on what I've come to believe; his primary focus is on what he regards as the "imperialist" nature of U.S. foreign policy, and has been so for more than forty years. Conversely, my major interest has been in domestic political theory and economy.

I honestly just regard myself (and Chomsky), as a consistent libertarian. I don't merely oppose state and governmental authoritarianism; I oppose the same authoritarianism that develops in a capitalist economy. I'd recommend reading Section B.4 (http://www.infoshop.org/faq/secB4.html) of An Anarchist FAQ, titled How does capitalism affect liberty?, if you ever have the time or opportunity.