Obamanomics

Obama unveils $3.83T budget with massive deficits
President Barack Obama sent Congress a $3.83 trillion budget on Monday that would pour more money into the fight against high unemployment, boost taxes on the wealthy and freeze spending for a wide swath of government programs.

The deficit for this year would surge to a record-breaking $1.56 trillion, topping last year’s then unprecedented $1.41 trillion gap. The deficit would remain above $1 trillion in 2011 although the president proposed to institute a three-year budget freeze on a variety of programs outside of the military and homeland security. (Read more from news.yahoo.com)

Obama vows to fight for jobs in retooled message
President Barack Obama tried to revive his battered agenda and rally despondent Democrats on Friday with a renewed emphasis on jobs. (Read more from news.yahoo.com)

This lies somewhere between idiocy and shameless pandering. The pandering is evidenced in the obscene something-for-everyone budget which attempts to buy votes by sprinkling money on every special interest you’ve ever heard of. The idiocy comes from running a deficit on one hand and from presuming to create jobs on the other. In fact, government does not have the power to create jobs, because government has nothing which it doesn’t take from its people. Government only has the power to redirect jobs. Efficient, private-sector jobs must be destroyed so that in-efficient, politically motivated, public-sector jobs might be created.

Institute for Justice Senior Attorney Steve Simpson on 1st Amendment Decision

This is a good, rational discussion of a heated issue. Mr. Simpson is right about constitutionality. I’m sorry the discussion never turned to root of the problem. Lobbying is an inevitable consequence of a gigantic government that massively redistributes wealth and regulates almost every aspect of our lives. There are 34,000 registered lobbyists in Washington DC. They compete over all the money filtering through our government. If you want less lobbying, advocate less government.

Goldman CEO Lloyd Blankfein Will Take A $100 Million Bonus This Year

Update: Goldman Sachs says this rumor is “speculative nonsense.”

The rumor at the World Economic Forum at Davos is that Lloyd Blankfein will get $100 million this year.

“This is Lloyd thumbing his nose at Obama,” a banker at one of Goldman’s rivals told The Times.

Goldman doesn’t report the exact pay of their top executives until the end of this month, but there is good reason to believe the $100 million number is accurate.

In 2007, Blankfein got a $67.9 million bonus. In 2009, Goldman’s profits topped 2007’s by $1.8 billion. (Read more from businessinsider.com)

If Goldman were a private company operating in the free market, this wouldn’t be an issue, but Goldman Sachs takes bailouts — overt and covert — with monies taken from the American people by force.

Many people now say the government should crack down on their compensation. I say maybe, but the line between government and business should not have been perverted in the first place. The best and only regulation that works is forcing irresponsible companies to face the consequences of their behavior.

Secret Banking Cabal Emerges From AIG Shadows

Jan. 29 (Bloomberg) — The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.

The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc., Merrill Lynch & Co., Societe Generale and Deutsche Bank AG, among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail. (Read more from bloomberg.com)

S&P fires warning shot at Japan

Standard & Poor’s Ratings Services today revised to negative from stable its outlook on the ‘AA’ long-term rating on Japan. . . . .

The outlook change reflects our view that the Japanese government’s diminishing economic policy flexibility may lead to a downgrade unless measures can be taken to stem fiscal and deflationary pressures.

At a forecasted 100% of GDP at fiscal year-end March 31, 2010, Japan’s net general government debt burden is among the highest for rated sovereigns.

. . . .

Japan enjoyed a highly productive, export-oriented economy for decades. Then an economic downturn in the mid-1990s, followed by the Asian Financial Crisis in 1997, shattered the bubble. The government responded by using massive stimulus spending and financial-system bailouts to maintain economic growth. Rather than jolting the economy into health, this lead to accumulating public budget deficits that were ultimately covered by government bonds, which resulted in surging government debt.

Sounds a lot like what we’re doing here.

I received this in an email from a friend, then found another occurrence of the storyhere.

‘Harmonization’ of Taxes

This is an emerging issue is the EU, and I’m sure some visionaries have the idea to ‘harmonize’ taxes all over the globe.

Basically, the exploiters (governments) don’t like exploited people (anyone who engages in voluntary trade) moving away from their taxes. This ‘harmonization’ bullshit is nothing but pressure applied to low-tax governments. They’re pressuring them to steal more from their exploited masses, so the bigger crooks don’t look as bad.

THE Irish economy will be devastated under EU plans to introduce a common tax base across Europe in the next two years, a top Brussels lawyer warned yesterday.

Sources in Brussels have indicated that the new European Commission is treating as a matter of high priority the ‘harmonisation’ of taxes across the 27-member bloc.

There are real fears the move would drive foreign businesses out of Ireland, exacerbating the country’s already fragile economy. (Read more from thefreelibrary.com)

The Move Your Money Campaign

Geithner addressed the campaign against too-big-to-fail banks during a recent interview with Politico. While Geithner said he understood the anger against bailed out banks and said that it was fair for bank customers to expect more, he did not explain why he thought that it was a bad idea.

Move Your Money is a project that seeks financial reform from the ground up. Account holders with money at bailed-out banks are encouraged to withdraw their money and deposit it into smaller, better-managed community banks and credit unions.

. . . .

Geithner’s comments about Move Your Money begin at 3:35.

This guy’s analysis is so wrong, and so insidious — blaming all the problems on liberty.

To learn more about the Move Your Money campaign, visit MoveYourMoney.info.

Greek Dairy Farmers & Coercion

Farmers threatened to block traffic on major roads in Greece on Monday to demand full payment of subsidies they are entitled to and better prices for their produce.

The farmers announced the planned protest Sunday after meeting with a minister in Greece’s government, which is trying to pull the country’s economy out of its worst debt crisis in decades. (AP) (Read more from ynetnews.com)

Learn to recognize coercion. This example is what Frederic Bastiat called “rent seeking.” Rather than rely on the voluntary exchange of goods and services, these farmers seek to acquire wealth by bending for forceful hand of government. They demand subsidies. Subsidies are monies taken from the public by force or threat of force and redistributed.

They make everyone poorer. By keeping the money in private hands, new industries would emerge; industries which produce things society voluntarily consumes. Instead, society is forced to buy over-priced milk.

Other countries are also hurt by this. Perhaps some poorer nation can produce very inexpensive milk. When government subsidizes local milk (or restricts trade via tariffs), the economies of foreign nations are hurt. This is wonderful for statists. Not only do they get to redistribute wealth from the public to the milk farmers, but now they have reason to take more wealth from the public and spend it on foreign aid, all the while proving their benevolence.

The FED Seeks Control, Not Profits.

This report is from Fortune. It says that the Federal Reserve System made $51 billion in 2009, and it returned over $46 billion to the government.

If you are a regular reader of my reports, you are well aware of this. I write articles on this at least once a year. Why? Because so few critics of the FED understand this. I keep getting questions on the forums about how the FED works.

The Federal Reserve System is not about making money at the expense of the government. It is about using a government-granted monopoly over money to regulate the economy to the benefit of a handful of large banks. This has always been its primary function.

The banking system is a cartel. The Federal Reserve System is the cartel’s protector and enforcer.

. . . .

Who owns the FED? Member banks. How much money did the FED make in profit? About $1.4 billion. That’s not bad on $51 billion of income. It’s about 2.7%. But it is a far cry from the standard criticism from anti-FED critics that the FED makes huge profits by creating money out of nothing.

For 2.7%, why does anyone care who owns the FED?

I have heard these anti-FED criticisms for 45 years. The FED is deservedly criticized, but not on this issue: profits.

The concern over a peripheral issue deflects serious criticism, namely, its control over the monetary base. It creates the economy’s boom-bust cycle. It never gets blamed for this by academic economists or the mainstream media.

The news release on what the FED paid to the Treasury is the first that I can remember in 45 years of monitoring the FED. It got a lot of coverage. (Read more from lewrockwell.com)

Behind The Real Size of the Bailout

This was a pretty widely reported story from motherjones.com:

The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see our chart here. Below, a guide to the pieces of the puzzle: (Read more from motherjones.com)