Where's the Beef?

So over the weekend, I had a great conversation with a well-respected (and a rarity- an independent thinker) friend about the current economic situation. In the absence of the usual liberal garbage talking points, I was actually introduced to a few legitimate points worthy of my thoughts...

"He (Obama) is trying to stimulate the economy"

We are just going to have to agree to disagree here. I do not believe he is trying to stimulate the economy at all. I think he is just following his marching orders of the People's Democratic Party. I think they have identified that due to the unpopularity of George Bush and the economic recession, they have a limited window to push through the agenda that has repeatedly failed
for the last 10 years, as they can blame everything that is unpopular on Bush or say "we're trying to fix the economy". SWAT teams do the same thing- it's called flashbang grenades. I do not believe that he or the Democrat Machine care about anything more than their political careers and the Party agenda. They have decided what they think is good for all of us, and now for them it is about "winning".


"It isn't going to get better immediately...it's going to take time"

Of course it takes time. That is how a free-market capitalist economy works. The market goes up and down. When it goes down, over time it goes back up. The problem is that in a year or two, the market is going to go back up anyway. That's just how it works. As mentioned above, this is part of the Democratic smokescreen. First, they are going to say "look what our policies did" when it had nothing at all to do with our conversion to Socialism. Second, right now they are saying "this is going to take a year or so", which is convenient since that is how long is is going to take anyway. So basically they have set it up to where they have about one year to do anything they want under the cover of "we're working on it", and then when the market recovers anyway, they are going to take credit for it. Why is Socialism, or the "New new deal" not going to work? Jeff Macke, of Capital Strategies, had some good thoughts:

"Scared people don't spend. Americans are scared because no one's in charge and the plans that they hear don't make sense."
Since Obama took office on Jan. 20, the Dow has lost 900 points. "If the president changes his tune even a little bit, it's almost impossible to be worse in terms of his tone - if he improves a little bit, we can get 2,000 points out of this easily," Macke added.

As I've been saying, the market doesn't approve of Socialism. If you really want to stimulate the economy, step one is to reach out to business and show us that you are going to actually support the economy. Talk is cheap. Show up or shut up.


"We need to invest in renewable industry"

Renewable industry is a good idea. Clean coal? Fine. I agree this is something we need to pursue. Does this stimulate the economy of a country in a recession? No. There is a market for it, true. Business is going to move in that direction anyway, but it certainly doesn't hurt to have Government incentives. While this is a good idea, this is like shooting spitwads at a tank. Business is cyclical. We don't invent things and then rest on our laurels. We understand product life-cycles. Business, by definition, is renewable. Humanity will always have needs, and business is always evolving to fill them. Get out of the way.


"We need to stimulate the people, and they will stimulate business"

We did that once already by giving people a tax refund, including some people who don't pay taxes (which i'm still trying to figure out). It didn't really work. Why? Because a lot of (smart) people didn't spend it. The same thing happened when they gave the banks all that coin. They put it in the safe. What about jobs? Should we create jobs for the people? YES. The problem: it has to be perpetual and productive. The government jobs, as the current administration has been pushing, are not perpetual nor are productive. So you go hire people to construct a building or a road....what happens when it is finished? You lose your job. Not only that, but what about all the jobless people who are not construction workers? What about the laid off accountants? On top of that, how does a road contribute to the economy? Ok, you can drive to some business. Chances are, you can drive there now. Furthermore, government organizations do not produce anything. They provide jobs for a limited amount of people, and do not increase the wealth or the GDP. Private industry, on the other hand, contribute to the GDP, the market, and creates jobs exponentially. As the business grows, the jobs grow. Their vendors also grow.

Finally, wealth and the economy is not as simple as having a job. While a job does give you a paycheck, a large portion of the wealth in this county resides in the stock market. Giving people jobs does not create stock market wealth. Stock market wealth, however, gives people more jobs. It creates the largest single source of capital for business growth and expansion, including creating new jobs.