How much wealth has vaporized?

On Thursday The Big Picture had some excerpts from the January newsletter of GMO, a global investment firm. The comments were written by Jeremy Grantham, the chairman of GMO’s board, and are absolutely fascinating, if not easily quoted on a blog like this.

The excerpts at The Big Picture were run under the title Grantham assigned the first section of his newsletter, “Greed + Incompetence + A Belief in Market Efficiency = Disaster,” and they are worth a moment of your time. If you want to worry about the people Obama has picked to pilot the boat during this storm, check it out.

But the the part that really stunned me was Grantham’s discussion about the scale of the economic disaster, especially when it comes to write-downs and private debt. Keep reading for more.

From GMO Quarterly Letter (PDF.)

But let us look for a minute at the extent of the loss in perceived wealth that is the main shock to our economic system. If in real terms we assume write-downs of 50% in U.S. equities, 35% in U.S. housing, and 35% to 40% in commercial real estate, we will have had a total loss of about $20 trillion of perceived wealth from a peak total of about $50 trillion. This relates to a GDP of about $13 trillion, the annual value of all U.S. produced goods and services. These write-downs not only mean that we perceive ourselves as shockingly poorer, they also dramatically increase our real debt ratios. Prudent debt issuance is based on two factors: income and collateral. Like a good old-fashioned mortgage issuer, we want the debt we issue to be no more than 80% of the conservative asset value, and lower would be better. We also want the income of the borrower to be sufficient to pay the interest with a safety margin and, ideally, to be enough to amortize the principal slowly. On this basis, the National Private Asset Base (to coin a phrase) of $50 trillion supported about $25 trillion of private debt, corporate and individual. Given that almost half of us have small or no mortgages, this 50% ratio seems dangerously high. But now the asset values have fallen back to $30 trillion, whereas the debt remains at $25 trillion, give or take the miserly $1 trillion we have written down so far. If we would like the same asset coverage of 50% that we had a year ago, we could support only $15 trillion or so of total debt. The remaining $10 trillion of debt would have been stranded as the tide went out!

Grantham goes on to argue that “somewhere between $10 and $15 trillion of debt will have to disappear.”

While these are sobering, if astounding, numbers, Grantham does point out that a lot of this is related to the perception of wealth and the emotional confidence John Maynard Keynes termed “animal spirits.” In other words, he points out, your house is still your house, even if your mental concept of how much it is worth is drastically different. And dollars are worth more!

Still, I wonder if folks are getting a clear picture of how much wealth has vaporized. This article in The Oregonian yesterday gives an idea how reluctant some are to admit the severity of the economic situation:

Nobel Prize winner Paul Krugman gave a far more dire economic forecast in Portland last week than Oregon experts continue to present.

Krugman, a Princeton University economics professor and columnist for The New York Times, predicts — at a minimum — several years of a depressed economy. He calls the recession’s resemblance to the Great Depression “extremely frightening” and finds new signs of collapsing global trade shocking.

That vision starkly contradicts the opinions of Oregon economists, who generally predict the economy will bottom out this year and begin recovery in 2010. The discrepancy is partly philosophical, but could also reflect pressures on local economists to avoid presenting nightmare scenarios.

Frankly, I’ve been wondering if Krugman was being a little too gloomy at times, but perhaps not, given the new realities.

To bounce back to Grantham a moment, he offers four possibilities for reducing private debt, and I’ll simply paraphrase the hell out of it, with apologies to economists everywhere. We could have gigantic write-downs, we can do what Japan did and try to let the passage of time reduce private debt as we slowly work our way forward, or we can have massive inflation that will devalue the debt. The fourth, and worst possibility, would be to start another bubble in another market sector, ala Greenspan, if I understand Grantham’s thinking here. Grantham does not think there’s a sector to do it in anyhow, so it may be a moot point.

There appear to be no palatable options. But as I try to get my puny little non-economist brain around all of this, the best way to go might be to insist on massive write-downs combined with a nationalization of the banks. Right now we seem to have the worst of all worlds, with zombie banks continuing to paralyze the economy. This disaster is already going to cost the taxpayers a king’s ransom, so we might as well get on with it so we can start building back a sane financial system.

Comments

  1. 1

    Politically Incorrect spews:

    Just goes to show you that you can’t loan money to people who can’t pay it back.

  2. 3

    Mr. Cynical spews:

    The Seattle Times has already taken down the story about the State Retirement Fund losing $15.6 BILLION since 9/30/07. They were already UNDERFUNDED by $5.1 BILLION @ 6/30/07 AND WORST OF ALL…there own Actuarial Projections actually assumed a POSITIVE 8% Return.
    What a disaster…courtesy of the Washington State Democrat Party.

  3. 4

    diamondshards spews:

    @3 – Guess that’s why state employee unions want lifelong employment contracts – with the Dem budget deficit, they won’t be able to retire.

    PI @ 1 got it exactly right. Loaning money to people who can’t pay it back was bad policy. Now we ALL pay…..

  4. 5

    Mr. Cynical spews:

    diamondshards–
    Yup, our Public Servants have really managed to cut a FAT HOG at the taxpayers expense.

    PS to you KLOWNS–
    There is no State obligation really…it’s going to be up to the TAXPAYERS to absorb this unbelievable Democrat debacle. The worst disaster since Mt. St. Helens…buried by our 2 “going bankrupt” fishwrappers.

    Gregoire giving all those raises and adding all those new State Employees has made this situation much worse.

    Time to lay-off 20,000…today.
    And rollback salaries and benefits.
    However, State Employees and WEA control Gregoire and the state government.

    Time for a Civil War.

  5. 7

    Mr. Cynical spews:

    The SLEEZE coming out of these Obama appointments makes you want to take another shower.
    These KLOWNS are unbelievable.
    Watch for Obama’s popularity to continue to drop among moderates who foolishly believed Obama would raise the bar for honesty & integrity in Government.

  6. 8

    spews:

    @7
    Watch for Obama’s popularity to continue to drop among moderates who foolishly believed Obama would raise the bar for honesty & integrity in Government.

    There isn’t a person on this planet less qualified than you to know how moderates think.

  7. 9

    Rujax! spews:

    These clowns really have no shame, sense of history, perspective, common sense or anything else.

    They fucking wrecked the country and really, the world economy (I love Putin sticking it to Bush and Wall Street) and now are moronically blaming it on us.

    Typical rethuglicant…the party of no responsibility or accountability.

  8. 10

    Rujax! spews:

    I REALLY like David Neiwert…always have…

    (from “Crooks and Liars”)

    Memo to Conservatives: You failed and are now irrelevant.

    OK, I expect you’ll ignore this memo like our previous ones. Nate Silver is right: Republicans are caught in a death spiral, and it’s going to be awhile yet before they hit bottom.

    Nowhere is it more self-evident than in the broad acknowledgment this week that the GOP is being led by a bilious radio talk-show host, and the ongoing fact that its most popular politician is a wingnutty, malinformed Alaska governor.

    The unanimous refusal of House Republicans to vote in favor of Obama’s stimulus plan may have given the Malkinites a stiffy, but all it really demonstrated was the utter impotence of Conservatives to have any say in how we proceed with fixing the economy.

    And there’s one real reason for that: They broke it. Their philosophy of governance, especially their feverish laissez-faire demolition of regulatory oversight, and their obscene enrich-the-rich approach to taxation, were the two overarching reasons for our current economic debacle. Of course they still want to blame minority lending for the plunge, but no one with serious money is bothering to listen any longer, because they know what the story is. And so do most Americans.

    So Rush Limbaugh can pen all the worthless split-the-baby-in-two proposals for economic stimulus he likes, and House Republicans can toss out all the tax-cut-heavy alternatives they like. And no one will take them seriously, because we’ve heard these proposals before — for the past eight years, in fact. They’ve been nothing but a recipe for failure and disaster. Why would anyone want to take that course now?

    What’s worse for Republicans is that not only have they not yet figured out how irrelevant they’ve become, they are even further from understanding the reasons for their irrelevance. They’re in deep denial about the direct relationship between their philosophy and the current economic debacle, and even more so the extent to which the public is finding their pugnacious, vicious, attacking style of politics increasingly repellent.

    So Neil Cavuto is right when he defends Limbaugh by saying that of course, ideologically speaking, conservatives will naturally as a matter of principle oppose Obama’s policies. We understand that Limbaugh and other conservatives believes that Obama’s policies will fail and will vote and speak accordingly.

    But he completely overlooks the problem with Limbaugh when he openly hopes Obama will fail: It’s one thing to believe a policy will fail and oppose it accordingly. It’s quite another to openly hope for it.

    Most liberals, by way of contrast, believed George W. Bush would fail, and many predicted it; but it’s hard to find any of them, particularly leading Democrats, who were out there saying that they hoped he — and by extension, the nation — would fail after 9/11 because his policies were “fascist.” They opposed these policies in principle. Anyone who openly hoped for our military failure in Iraq, for instance, was in a tiny minority; but there were millions of us who opposed the war because we believed it was not only wrongheaded but doomed to fail. And we were proved right.

    In fact, all this shouting is just cover for Republicans’ greatest and deepest fear: That Obama in fact will succeed. That progressive “socialism” (as they call it) actually will make people’s lives better, heal the economy, and get the nation back on its feet. That the nation’s working people will finally get a clear view of which side is on their side. That the public will finally see that not only is Conservatism an abject failure, it’s a fraud.

    In the end, they are such deeply invested ideologues that they would rather see the nation fail than see that reality reach fruition.

  9. 11

    Marvin Stamn spews:

    Don’t worry about the wealth…
     
    With obama and his change he is picking tax deadbeats to work in his administration so they will be forced to pay their fair share.
     
    If obama calls you, the first thing on your mind should be did I pay my taxes?

  10. 12

    Marvin Stamn spews:

    8. Lee spews:
    There isn’t a person on this planet less qualified than you to know how moderates think.

      
    Let’s not forget your words…
      
    Because this is a partisan blog that takes on Republicans. He would be disgusted by the Democrat and what he did, but he wouldn’t write about it here.
    http://www.horsesass.org/?p=5675#comment-847043

      
    So unless you lied again, no one on this blog can be considered moderate. The left-wingnuts on this blog won’t even write about it it here.
      
    Say… are you going to pay up on the bet or are you no better than mark?

  11. 13

    Daniel spews:

    Mr Cynical should consider a future in comedy. Fire 20,000 people? Roll back pay? Great idea. I suppose those 20,000 State funded workers would come from where? Policemen? Firemen? The courts?

    In fact, let’s just blindly fire the first 20,000 people who look at us the wrong way. Then at least we would be fair.

    The real problem boils down to accountability, which apparently Mr Cynical has also suffered a lack of or he would not even suggest outlandish ideas like that. Unfortunately it is like teaching a dog how to pee outside after years of letting it loose in the house. Decisive action is needed, certainly, start teaching that thing how to do its business immediately and stop it from going inside the house. Just throwing the dog out in the cold is not the solution though. Carefully watching him and figuring out the best way to get him to do what he was supposed to do from the day you brought him home is what he needs. You can teach any dog how to relieve himself outside with time and patience. Please continue to spew your radical ideas to those who realize that this country was not built on the idea of unmeasured insanity. A little insanity yes, but they didn’t reach for their guns immediately.

  12. 14

    Mr. Cynical spews:

    Daniel–
    Blah Blah Blah.
    Gregoire hired thousands of new state employees and gave raises which made the Pension problem even worse. That’s a fact.
    Gregoire should have laid off people a year ago when the writing was on the wall. Instead she added people and made it worse!

    Don’t you think it’s actually time for action Daniel. Gregoire has done NOTHING that is meaningful…according to Gary Locke and Locke’s former Budget Director (hardly Republicans)

    Wake UP Daniel.
    Yer gal is incompetent and afraid to take the necessary action. Had she done so a couple years ago, our situation would not be nearly as bad.
    Instead, she INCREASED SPENDIONG BY $8 BILLION in the face of a recession you KLOWN!!
    Are you soooooo paralyzed and numbskulled that you cannot differentiate Motion and Action???
    Gregoire loves to talk and form committees, task forces & Blah Blah Groups.
    Just look at how much time and money has been waste on the Alaskan Way Viaduct??

    We need ACTION T-O-D-A-Y!!
    It will keep getting worse and worse.
    This is 100% Gregoire’s disaster.
    Her lack of leadership and action is appalling.

    You are way too partisan blind to ever criticize her….but she is where the buck stops.

    This all did not happen by some accident.
    DECISIONS were made to invest & spend.
    BAD DECISIONS. So who would you hold accountable for Gregoire’s bad decisions and inaction??

  13. 15

    busdrivermike spews:

    Well, we could let people pay down debts with their own money that is being held hostage in their 401(k)’s and other pension trusts.

    It is slowly swirling the bowl with the economy anyway, and if people paid down their debt, it would free their incomes to purchase products, and make them feel safer about making new durable goods purchases. Last time I checked, this was a consumer based economy, so any idea that gets money circulating again is worth talking about.

    And now, you guys can get back to bitching at each other.

    Have any of you Republicans figured out that everything us dumbass liberals have predicted about Bush policies, has now come true? You guys really are pathetic.

  14. 16

    busdrivermike spews:

    And BTW, the main engine of this economic disaster is the deregulation of the banking system by the Republican Party.

    You can blame, blame, blame all you want, but it rings so hollow it is laughable. The evidence is so clear that Republican financial policies drove this economy into a ditch, just like all us dumbass educated liberals predicted.

    Yeah, the pension system is hurting, due to the absolute immolation of Wall Street due to the de-regulation of the financial system brought to us by the Republican Party.

    Your argument, Mr Cynical, is based on ergo prompter hoc reasoning. Because of this, so it must be because of that. You sir, are an idiot.

  15. 17

    spews:

    @12
    So unless you lied again, no one on this blog can be considered moderate.

    Incorrect. You see, you mistakenly believe that the divide between the parties right now is primarily one of liberal vs. conservative. That’s not entirely the case. The divide is also one of moderate vs. extremist – especially when it comes to things like foreign policy and civil liberties.

    Believing that Obama’s Presidency has been scandalous so far is not a conservative opinion, it’s an extremist one. Not just liberals can see that it’s a ridiculous thing to believe, moderates can as well.

    Jump, Marvin, jump!!

  16. 19

    spews:

    @14
    This is 100% Gregoire’s disaster.

    That is 100% the dumbest thing said in this comment thread (and Marvin’s even here right now).

  17. 20

    Roger Rabbit spews:

    @3 I would rather be in the Washington State retirement system than any private pension you can name. My check arrived yesterday like clockwire, just as it always has. My Social Security check comes in every month like the ticking of a fine Swiss watch, too.

    So tell me this, Cynical Klown: If government is so bad, why does it work so well, and if private enterprise is so good, why isn’t it working at all?

  18. 21

    Daniel spews:

    Once again, you have missed the mark with your cynicism Mr Cynical. Direct your criticism at something that helps us now rather than complain about the past. You attempt to attack my defense of someone I failed to defend. Meanwhile you’ve caused me to waste more thought on this than is healthy. I leave you to your misappropriated action.

  19. 22

    ByeByeGOP spews:

    Well despite constant lies, deflection and misdirection by the GOP shills – the country is too smart to be tricked. On Nov 4, America BITCH – SLAPPED the entire GOP over this issue. It cost the GOP the White House, 29 House Seats, 9 US Senate Seats, 7 Governorships and 9 big-city mayor seats. So America is clearly not interested in the horseshit spewed by right wing idiots. Bush had 8 years to ruin the country. I am confident we Democrats will restore it (despite efforts by the GOP). We handed Bush a surplus when he stole the White House – we’ll build one again. And the right – as much as it hopes we and America fail, will be shown as the idiots, traitors, cowards and fools they really are.

  20. 23

    Stupes' own Stupidity spews:

    LMAO @ the fool called Stamn!!!

    Didn’t you read the Dave Neiwert piece quoted by Rujax?

    It fits you to a tee.

    Failed, irrelevant!

    Your kind is standing in the way but it makes no difference. We’ll blow right past you.

    Eat our dust fool!

  21. 24

    Roger Rabbit spews:

    See, here’s the thing. People deluded themselves about what they own. They got too hung up with shifting market values. Even cash has a fluctuating value.

    In fact, cash is one of the least tangible of all assets, when you stop to think about it, because it produces no income and the government can lower its market value at will by printing more of it, which our government does on a regular basis that’s as predictable as winter flooding in western Washington.

    Warren Buffett doesn’t buy stock, he buys companies. Stock gets you control, if you own enough of it, which you can use to hire yourself as the CEO and write your own compensation package, or at least get seats on the board of directors and a say in how the company is run. For the rest of us, the only thing stock ownership gets us is whatever dividends the board feels like paying, which usually is little or none. Most people buy stock in hopes of realizing capital gains, which is another way of saying they hope some bigger fool than them will pay even more than they did for a stock that pays no dividends.

    Now let’s take real estate. At least you can use it for something — to live in, or run a business in. But real estate appreciates slowly, usually not faster than inflation, and depreciates as it ages and comes with big expenses such as taxes, maintenance, and repairs. Folks, houses are places to live, not investments. I thought I’d better tell you that, in case no else did.

    We all like to know what we’re worth in monetary terms, and converting assets to monetary values can be useful for certain practical purposes, especially in the case of assets you might want to use for collateral. But this is a tricky business, more black art than mathematical science, and because it is, most people overvalue their assets. There are a lot of subtle ways this happens, one of the more common ones being that most people assign a dollar value to their homes or vehicles that reflects the highest price paid by any buyer in the market at any time. Only one seller sells at that price, and everyone else sells for less. Even average value in normal times is not a reliable gauge of what an asset can be sold for at the time it needs to be sold, as millions of Americans are discovering. The safest way to count your net worth is to assign your assets their “quick sale” value in a weak market. This conservative valuation is probably closer to the truth than anything else, but is rarely used. Most asset valuation reflects more wishful thinking than is healthy.

    The safest accounting of all is to count only the immediately spendable cash in your possession and write off everything else in your ledgers. A person who owns nothing and owes nothing can’t go bankrupt, just as a person who doesn’t work can’t lose his job.

    Take me, for example. The value I assign to my stock portfolio is zero, because shares are not money, or even IOUs. The only thing I count is the dividends as they come in. The advantage of this is that my portfolio can’t go down. Under my accounting system, my market loss over the last 2 years is zero, which means I’m doing better than any other investor in the country!

    My burrow isn’t worth anything, either. I can’t spend it. I won’t borrow against it, because there are no benefits to going into debt. Debt is a one-way street; only getting out of debt is beneficial, it doesn’t work the other way around. All my burrow is good for is living in and paying taxes on. So I live in it, pay taxes on it, and count it as a zero-worth asset that produces negative cash flow. Consequently, my burrow hasn’t lost any value, either.

    What it boils down to is that I own nothing, owe nothing, don’t work, and have what I need. These days, in this economic environment, that seems to make me one rich fucking bunny, at least compared to a lot of you stupid humans who thought you could get rich by reading your brokerage statements and clicking on Zillow every evening, only to wake up one day to find your balance sheets underwater. I don’t feel this recession at all; for me, reading about it is an academic exercise.

  22. 25

    Marvin Stamn spews:

    18. Lee spews:
    @12
    Oh, and I’m not clear on why I have to pay you on a bet I didn’t lose.

      
    I’ll wait till your high wears off. Even you aren’t stupid enough to honestly believe you didn’t lose the bet.
      
    Let me ask you this… Name the right-wing group that interrupted speeches at the dnc like codepink did at the rnc?
     
    Keep copying me, I like it. Those that can, do. Those that can’t, copy.

  23. 26

    Roger Rabbit spews:

    @5 “Yup, our Public Servants have really managed to cut a FAT HOG at the taxpayers expense.”

    It seems appropriate to remind folks at this juncture that the Public Servants who were cutting the FAT HOG at the taxpayers expense were REPUBLICANS until 10 days ago, and 99.99% of the hog was eaten more than 10 days ago.

  24. 27

    Roger Rabbit spews:

    @5 (continued) “Time for a Civil War.”

    You overslept. We’ve already had the Civil War. Your side lost.

  25. 28

    Roger Rabbit spews:

    @13 For starters, let’s lay off the Department of Natural Resources seasonal firefighters, and let eastern Washington burn.

  26. 29

    Roger Rabbit spews:

    @15 They’re much worse than pathetic, they’re traitors. They sold our country for a pittance to China, India, and Mexico.

  27. 30

    Roger Rabbit spews:

    Salmonella Recalls

    So many food product recalls were announced this morning you’ll have to read the article in the Seattle Times to figure out what’s safe to eat, and what isn’t. Alternatively, don’t eat anything.

  28. 31

    spews:

    @25
    I’ll wait till your high wears off. Even you aren’t stupid enough to honestly believe you didn’t lose the bet.

    Let me ask you this… Name the right-wing group that interrupted speeches at the dnc like codepink did at the rnc?

    That wasn’t the bet, Einstein. Go back and look up the old posts. The bet was how many people of the same party would cause trouble at the respective conventions. If you recall, there were protests from Republicans during McCain’s speech (not just from Code Pink). There were no protests at all by Democrats during Obama’s speech.

  29. 33

    Roger Rabbit spews:

    @10 I would make an editorial correction so it reads as follows:

    “Nowhere is it more self-evident than in the broad acknowledgment this week that the GOP is being led by a bilious radio talk-show host, and the ongoing fact that its most popular politician is a wingnutty, malinformed Alaska governor who got elected by shoveling public money into private pockets.”

  30. 34

    Roger Rabbit spews:

    Overheard at Republican meeting: “I don’t know where we’re going either, but 50 million lemmings can’t be wrong.”

  31. 35

    Roger Rabbit spews:

    2, 3 — True to form, the cheap labor conservatives’ solution to the economic crisis they created is to lay off 20,000 state workers and cut the wages of the rest.

    They won’t be satisfied until no American worker has a job and no American consumer has any money and there is no American economy at all.

  32. 36

    Roger Rabbit spews:

    Cheap Labor Conservative Motto

    “Your hard work is the foundation of my success, wealth, comfort, and idleness.”

  33. 37

    Marvin Stamn spews:

    31. Lee spews:
    @25
    That wasn’t the bet, Einstein. Go back and look up the old posts. The bet was how many people of the same party would cause trouble at the respective conventions. If you recall, there were protests from Republicans during McCain’s speech (not just from Code Pink). There were no protests at all by Democrats during Obama’s speech.

     
    When your high wears off post the links where we talked about protests during the speeches.
     
    And please, don’t tell me you’re high 365/24/7.
     
    Or you can just ignore the challenge to back up your words and go running to your blog.

  34. 38

    Harry Poon spews:

    Mr. Cynical: What, pray tell, is the difference between ‘privatization’ and using public funds to hire contractors to build a road?

    Yet, you call one thing (public money to private schools) capitalism and free enterprise and private public money to public schools ‘socialism’. Public money to private concerns for profit is croney capitalism, and has nothing to do with the free market.

  35. 39

    correctnotright spews:

    Oh yeah, cynical and all the republicans idiots who get their cue from Rush (drug addict) Limpbaugh – they finally came up with the republican alternative to the well-thought out democratic plan…and well, the republican plan was put together so badly and so fast, that it turns out they really don’t HAVE an alternative.

    What a bunch of irrelevant idiotic nay-sayers. All that complaining and they have NO viable alternative. Yeah, their plan is so ill-conceived that the republicans are actually RAISING taxes despite all the rhetoric about lowering taxes. Another big ooopsie for the idiot party:

    In 2008, 4.2 million Americans had to pay the Alternative Minimum Tax (AMT). The Republican proposal would lower marginal tax rates for individuals, but would not reduce AMT rates. Current law requires you to pay the greater of the two rates, so many of those receiving this lower marginal rate would now be held liable for the AMT.

    There is no question that Congress needs to — and will — act to prevent the number of taxpayers hit by the AMT from growing to an estimated 26 million this year. However, we confirmed with the non-partisan Joint Committee on Taxation that 26 million people would still be forced to pay the AMT this year under the GOP bill. Essentially, their tax bill would give with one hand and take away with the other, leaving 26 million families without the tax cut they promised in their bill.

  36. 41

    correctnotright spews:

    @14: More stupid blather from a cynical idiot:

    Gregoire has done NOTHING that is meaningful

    Yup, balancing the budget and making cuts in services is nothing meaningful – does cyncial think she should raise taxes?

    Cynical – your stupidity shines through so brightly, I think it has eclipsed your brain.

  37. 42

    spews:

    John want’s government to have much more power, and for them nationalize businesses as a reaction to this recession?

    John needs to study pre-World War Two Germany.

  38. 43

    ByeByeGOP spews:

    What is so funny is the GOP saying it knows how to get us out of trouble! They got us INTO trouble. Their tax cuts didn’t work. Their de-regulation didn’t work. Their war didn’t work. They created the largest deficit in US history. They created the largest trade deficit in US history. They presided over the largest decline in personal savings in US history. And I could go on and on. These are facts. They cannot be changed because the right lies or deflects. They are facts. This all happened during the time the GOP controlled the White House and the GOP set fiscal policy. No wonder America through the right wing turds out on their ass. They better hope that’s ALL that happens to them! They should be prosecuted!

  39. 44

    spews:

    @37
    When your high wears off post the links where we talked about protests during the speeches.

    You’re the one claiming to have won the bet, why don’t you?

    And please, don’t tell me you’re high 365/24/7.

    Oh, I can humiliate you when I’m high just as easily as I can when I’m not.

    Or you can just ignore the challenge to back up your words and go running to your blog.

    Nah, I think I’ll just make fun of you here today.

    Jump, Marvin, jump!

  40. 45

    Broadway Joe spews:

    Marvin is so easy to make fun of. Did he forget to take his meds again? Or has the Alzheimer’s progressed to the point where the drugs don’t matter any more…..?

  41. 47

    correctnotright spews:

    @42: Troll, with a lack of education and direction about what to study:

    Maybe you should study Herbert Hoover – he thought the free market could police and correct itself – he was totally and utterly WRONG.

    What is the great free market doing right now to make corrections? Are they hiring people and creating jobs?

    NO! They are firing people, even if the businesses are making a profit – so that they get a better Wall street stock market price. Microsoft has BILLIONS in reserve and still made a huge profit (just not as big as before). So what do they do? They lay off people and help make things worse.

    Boeing would have made a profit if they didn’t force a stupid strike – and they lay off workers. Where is the free market private industry hiring? Nowhere. What will happen to the economy when there are no jobs and people can’t find work?

    That is why government has to step in to prime the pump – because private industry would sink us into a thousand year hole of a depression if left alone. They would never get out on their own – because all they care about is next months profits and the stock value.

    Oh, and by the way the National Socialist party did get Germany out of their depression and put people to work. However, they also abrogated all the rules of a democracy and altered their constitution. Only the republicans want to abrogate and tear up the constitution – and allow torture and illegal wiretapping.

  42. 48

    ByeByeGOP spews:

    Speaking of money – PRESIDENT OBAMA has had a stroke of genius. REPUBLICAN on the short list to be Commerce Sec.

    http://cnnwire.blogs.cnn.com/2.....urce-says/

    Now what’s interesting is this guy is a GOP Senator in a Dem state so the Dem Gov would appoint his replacement – a Dem for sure giving us the magic 60 votes we need to stop the obstructionist GOP! HOLY FUCKING SHIT this is a great idea. The righties looooose here either way!!! LOL!

  43. 49

    spews:

    From The History Place.

    The Rise of Adolf Hitler.

    Please read.

    “When the stock market collapsed on Wall Street on Tuesday, October 29, 1929, it sent financial markets worldwide into a tailspin with disastrous effects.

    The German economy was especially vulnerable since it was built out of foreign capital, mostly loans from America and was very dependent on foreign trade. When those loans suddenly came due and when the world market for German exports dried up, the well oiled German industrial machine quickly ground to a halt.

    As production levels fell, German workers were laid off. Along with this, banks failed throughout Germany. Savings accounts, the result of years of hard work, were instantly wiped out. Inflation soon followed making it hard for families to purchase expensive necessities with devalued money.

    Overnight, the middle class standard of living so many German families enjoyed was ruined by events outside of Germany, beyond their control. The Great Depression began and they were cast into poverty and deep misery and began looking for a solution, any solution.

    Adolf Hitler knew his opportunity had arrived.”

    Sound familiar? Am I saying Obama is another Hitler? No. But I am saying Americans must be cautious not to over-react to our recession, like John is suggesting we do.

    http://www.historyplace.com/wo.....begins.htm

  44. 51

    Mr. Cynical spews:

    21. Daniel spews:

    Once again, you have missed the mark with your cynicism Mr Cynical. Direct your criticism at something that helps us now rather than complain about the past.

    You mean like the Bush-haters on your side obsessing with Bush and ignoring Obama’s boneheaded Stimulus Plan and his ridiculous Tax-cheating Appointments???

    C’mon Daniel……….get real.
    The buck stops with Gregoire and she takes zero blame for anything. Is that reasonable?

  45. 52

    WatchManOnThe Wall spews:

    Government owned banks ,
    yeahhhh mack daddy go,
    Then the government will be telling us what our money we work hard for is worth.
    We will all owe our soul to the company
    store,
    Mexico is looking good,They will all be here and I will be gone,livin the good life no obamassiah.
    VIVA LA MEXICO!!!!!!!!

  46. 54

    Mr. Cynical spews:

    41. correctnotright spews:

    @14: More stupid blather from a cynical idiot:

    Gregoire has done NOTHING that is meaningful

    Yup, balancing the budget and making cuts in services is nothing meaningful – does cyncial think she should raise taxes?

    So cnr, what has she cut that makes a significant impact on the Budget shortfall??
    All window-dressing and nothing of substance.
    Even Gary Locke & his former Budget Director called BS on Gregoire’s tiny cuts.
    Meanwhile, the Shortfall grows & grows….
    Gregoire has presented a Balanced Budget BECAUSE SHE IS LEGALLY REQUIRED TO DO SO.
    It calls for massive cuts.
    Her pals in the Legislature are scheming ways to either BORROW (pass overspending to our kids & grandkids) or INCREASE TAXES.
    Gregoire promised not to increase taxes…now she is quiet and more than willing to let it happen if possible.

    PS–
    Did you see that Property Taxes in King Kounty increased by an average 6.16%….IN THE FACE OF A RECESSION!
    Even Liberals are getting pissed off about it!

    When 49.3% of voters feel they are being OVERTAXED, the Conservatives will be put back into office. OVERTAXED is the defining issue. It means you either cannot afford the taxes or don’t feel you are getting your money’s worth.

    Atheist Progressive’s want all of our money so they can spend it for us….except for their money of course.

  47. 55

    Mr. Cynical spews:

    53. K spews:

    Yes, Mr C. Gregiore is to be blamed for the global economic crisis.

    She is to blame because the writing was on the wall AND SHE DID NOTHING!! Her inaction and teeny-tiny feel-good actions that Gary Locke & Locke’s Former Budget Director called INSIGNIFICANT have made a manageable situation worse.
    How can you justify adding more state employees, increase salaries putting more pressure on an already underfunded State Pension Fund AND increase spending by $8 BILLION in the face of a recession……Leadership???
    C’mon KLOWNS…get real.
    She is a failure.
    Waithing for an Obama handout.
    Sustainable Washington??? My ass.

  48. 57

    ROTCODDAM spews:

    So unless you lied again, no one on this blog can be considered moderate. The left-wingnuts on this blog won’t even write about it it here.

    Another conflation of moderation with partisanship.

    For anyone with a reasonable appreciation of global politics and history, those who regularly post articles on this blog, including Goldy, are political moderates. Their orientation may come from the left. But they do not advocate extremism or radical solutions to common social problems.

    However most of them may also be highly partisan. That is, they may be “extremist” in their determination to advocate for their point of view and the political movements and leaders that align with those points of view. In that sense they may be highly partisan. But they remain political moderates.

    Political moderation does not automatically entail a willingness to entertain seriously the political delusions of conservative extremists – which term by now unfortunately also includes the majority of GOP members of Congress. Demands for such a twisted definition of political moderation are entirely predictable coming from such political extremists. But because they are predictable does not make these demands reasonable.

    In the wake of a widespread repudiation of right wing extremism by the voters, today we are confronted by a chorus of such demands from the increasingly marginalized movement conservatives. They insist that if we are to be true to our political claims as “moderates” we must be willing to seek common ground with their suicidal idealogical death cult. In other words, we must be willing to follow them off the cliff… at least a little bit.

    Nonsense.

    As Americans, we find ourselves today facing political crisis on a host of domestic and global fronts precisely because of our broad willingness to entertain unsound ideas emanating from the right arising from our mistaken belief that it made us better moderates. It did not. It nearly ruined our nation.

    And the sooner we figure that out, and step back from the cliff’s edge, the better.

  49. 58

    Roger Rabbit spews:

    @42 “John want’s government to have much more power, and for them nationalize businesses as a reaction to this recession?”

    That’s the Bush plan, idiot!

  50. 60

    Roger Rabbit spews:

    @49 Don’t worry, troll, this recession will be bad enough that no reaction to it will be an overreaction.

  51. 61

    Harry Poon spews:

    There wouldn’t be an energy problem today if we’d stayed the course that Jimmy Carter set. You remember —all that crazy stuff about solar and wind power.

    But, noooooooooooooooooooooooo!!!!!! WE have to have Exxon posting record profits in the 21st century because of Ron the Magic Retard.

    As Steve Martin cogently observed in the 70′s: “If you have solar power on your house, what are the bigwigs gonna do if you don’t give ‘em money……Put a box over your house?”

    I wouldn’t put it past them — with the likes of Cynical cheering them on as avatars of the free market.

  52. 62

    Puddybud, Hey it's the New Year... spews:

    Headless lucy#61:

    You are kookoo for cocoa puffs again. What a moron. This was explained at length on this blog before by many people.

    Lock and load – let’s see if headless brings this useless canard again in the future.

    1985 – Oil price was $37
    1986 – Oil price was $14

    These wonderful Jimmy Peanut Solar Projects were no longer cost effective.

    Look it up Fool.
    HA has all the archives.

    So if Exxon didn’t make all those profits, how much taxes would they have not paid? Look that up too.

    Maybe if you Donkey didn’t drive their cars, drive their buses, or fly their 600 private jets to inaugurations, or inconvenient truth private showings, Exxon would not make “profits”

    BTW moron, I proved to GBS when the price was $3.409, which he accepted, that Exxon makes about 9.5 cents profit on a gallon. You can look that up to.

    Milk producers make more profits on milk than Exxon on gas ~10% vs ~12.4%.

    What a repetitive fool. Just like rerun@23.

    BTW Why did you recently resurrect Harry Poon again?

  53. 63

    spews:

    Something needs to be done about Wall Street execs stealing our money in the form of giving themselves multi-million dollar bonuses. I want them prosecuted and put in prison!

  54. 64

    delbert spews:

    Obama Plan Has Already Boosted IRS Tax Collections
    by Scott Ott for ScrappleFace · 35 Comments

    (2009-01-31) — In office less than two weeks, President Barack Obama has already increased tax receipts at the U.S. Treasury with an innovative plan to get tax-dodgers to pay up, in full, immediately.

    “The president’s plan is simple but ingenious,” said White House spokesman Robert Gibbs, “He targets wealthy individuals who filed inaccurate tax forms, cheating the government out of tens of thousands of dollars. Then he just nominates them for cabinet positions. They suddenly see the error of their ways, and they cut checks for the full amount owed, plus interest.”

  55. 66

    Harry Poon spews:

    re 62: PudWax™….. Your assumption is that the price of oil is a result of a free market that is not able to be manipulated by OPEC and the ‘Seven Sisters’. In an era when people were beginning to realize the necessity of developing alternative energy sources, cheap oil could make them forget their resolve and go back to an oil based energy model.

    The long term payoff for big oil is NOW.

    You are stupid and predictable. Ron the Magic Retard pulled the solar panels off the White House in 1981 — not 1985. He was showing the oil companies his fealty — bowing down to the powers that be.

    Like you.

    Do you know who the ‘Seven Sisters’ are?

  56. 67

    Puddybud, Hey it's the New Year... spews:

    Headless Douchy@66:

    Where in your earlier comment did you reference white house solar panels?

    But since you did, I must present the facts again to Mr I know blacks 24×7.

    I went to a source you can’t claim is biased. Wait a minute she and her gang are biased…”This symbolic installation was taken down in 1986 during the Reagan presidency.”

    Golly it looks like Puddy is right AGAIN Douchy!

    Try again with another topic. Puddy will again provide the necessary correct facts.

  57. 68

    Puddybud, Hey it's the New Year... spews:

    Headless Douchy@66:

    I see that Western States Hospital ECT program isn’t working. Maybe the voltage needs elevation?

    Speaking of energy conscious individuals.

    George Bush’s Ranch vs Al Gorebasm’s mansion.

    Google it fool.

    BTW Why did you recently resurrect Harry Poon again?

    See ya!

  58. 69

    Puddybud, Hey it's the New Year... spews:

    Hey slingshit,

    Did you finally figger out the P-I blog on Boeing yet?

  59. 70

    Puddybud, Hey it's the New Year... spews:

    Headless Douchy (TM) @66

    Seven Sisters
    – Did you accidentally cut off three fingers from both hands so now you only jerk off with seven?

    Yeah Seven Sisters of Oil so what?

    BTW Why did you recently resurrect Harry Poon again?

  60. 71

    Politically Incorrect spews:

    @2,

    Say what you will, but you know I’m correct: you can’t loan money to people who can’t pay it back.

    Of course, if you’re just giving money away, I could use a couple mil!!

  61. 72

    Harry Poon spews:

    re 70: Wax™— Harry Truman was convinced by big oil that they were so important to the country, that they needed to be made into an unassailable monopoly. So Truman did.

    This is an arrangement that exists to this day.

    So, when you blither like an idiot about big oil and the free market, I wonder what in the hell you are thinking in that pointy little cavity at the end of your neck.

    That’s what is ‘so what’ about the 7 sisters.