Mr. President, Nothing Says You've Failed Like The Calls For A Second Stimulus Package!

Have you noticed? Suddenly, there seems to be a chorus of calls for a second Stimulus Package. Those calls aren't coming from Republicans but from Democrats who are apparently quite nervous about the current state of the economy and the fact that the first stimulus isn't working.

Let's face it, when the $787 billion Stimulus Package was passed in early February, the unemployment rate was only 7.6 percent. Now, it's at 9.5 percent and expected to climb above 10 percent to possibly 11 percent by December's reporting.

Since the passage of the stimulus, things have only gotten worse. Besides the climbing unemployment rate, home foreclosures haven't abated. In fact, they are on the rise and a second wave of foreclosures is expected to hit in the 1st quarter of 2010 . Home prices have continued to fall; albeit at a somewhat slower rate. But, then, prices would have to naturally slow down; otherwise, every home in America would ultimately be worth zero. As it is, homes in some parts of the country are now selling for the same price they were selling for in 2001. Literally, 8 years of price appreciation on home values has been lost to this recession.

Except for the most credit-worthy borrowers, lending is still really tight. That fact has seriously effected both the housing and the auto industries. Consumer confidence and spending is falling again after only a brief pause. This is just one of those supposed "green shoots" the Obama Administration had been touting but has since turned brown and died.

GM and Chrysler are belly up and are mere shadows of their former selves. In the wake of that, thousands of dealers have gone out of business and their workers have lost their jobs. Scores of manufacturing jobs are yet to be lost due to the shutdown of further manufacturing operations at GM and Chrysler. In addition, the list of corporations announcing new rounds of layoffs is, once again, on the rise.

At least 8 states, lead by California, are getting close to bankruptcy. And, while the first stimulus supposedly saved teachers, police, and firemen jobs, there are now 33 states that are in the midst of such budget troubles that those jobs will be lost anyway, along with many others; stimulus or no stimulus.

Yes, sir. That stimulus package has really worked. It was so-immediate, so-targeted, and so-effective that my head is spinning. We "were" literally at crisis point and -- you gotta know -- that speed was everything. In fact, speed was so paramount that there was no time to even read the near thousand pages of legislation that doled out that $787 billion in spending.

When Reagan turned this country around from the inherited Jimmy Carter recession, he used massive tax cuts in what is now known as "Trickle Down" economics. What are we supposed to call the Obama plan? Trickle Out Economics!

Right now, the Democrats are fearing voter backlash and they want another stimulus package in the hopes that it could "save" their own jobs. Forget the economy! No one on the left or in the left-wing media is actually saying that Obama failed at reviving this economy. Instead, excuses (aka "spin") are being handed out in machine gun like fashion. The biggest of those excuses is, as always, that we were handed this recession by George W. Bush. But, that excuse is getting quite old and quite tired. With Obama and his cohorts having to constantly revive the blame-Bush excuse, it only speaks to their own failures. I don't believe that the American people are buying the Bush excuse anymore. I think most assume that Obama took responsibility on the day he signed the Stimulus Bill into law.

Just this week, Obama began a different tactic by saying that "the stimulus did it's job". He even repeated that fact this morning while in Ghana(See Full Story). When Bush was seen with a "Mission Accomplished" banner enblazoned behind him, the national press and the left had a field day mocking him. But, not so with Obama when, by saying "the stimulus did it's job", he is repeating that very same Bush mistake.

Obama seems to think that the only reason for the Stimulus Package was to extend unemployment benefits. However, we're hemorrhaging the losses of jobs and Mr. Obama seems content in just buying bandaids! You wouldn't need all the extended unemployment benefits if the stimulus package created jobs.

Another tactic by this Administration is to try and make lemonade out of a pile of lemons; but, with nothing but lemons. The Administration has sent "comb-over Joe" Biden to now say that the stimulus, by itself, was never intended to revive the economy. Biden says it was just part of many things that this Administration did to get the economy going. So, I guess we can derive from that comment, that everything Obama did to revive the economy was a failure; not just the stimulus package. I say this because the economy, today, is no better than it was five months ago. In fact, in many ways, it is worse.

All this psycho-babble baby-talk from Joe and Barack and the Obama economic team is just screaming of CYA spin. The more they talk, the more the public realizes that Obama's plan is a complete failure and the only thing it really did is create massive indebtedness for this country. These people really need some adult supervision. At the very least, someone who actually knows how to create jobs should check their work before they say or do anything. From the looks of Obama's rapidly falling approval ratings, the American people aren't buying all that fluff anymore and they are starting to hand out failing grades. Obama is not even close to being another Abraham Lincoln or FDR or JFK. Instead, he's just another Jimmy Carter; but, this time, on steroids!

Good job, Barack! Everyday you are looking more and more like a one-term president.

Just so the people reading this don't think I'm just another complaining conservative, here's what I think should be done to get this economy going again:

1. Stop any further and stoppable spending against the current Stimulus Package.
   
2. Stop any legislative action on Cap and Trade and Health Care until the economy can afford to pay for it.
   
3. Convene the best and the brightest in the country who are the leaders in large and small businesses, economics, banking, etc to conduct a round table/ brainstorming session and to come up with some kind of consensus plan. Be sure to involve the leadership of both political parties.
   
4. Implement a plan that is void of politics and any political payback and that truly has bipartisan approval. Let's put the country first; above politics.
   

Only then, can we be sure that the best possible actions were taken to get this country moving again.

Credit Is Easing

Don't quite pop the champagne yet, but it appears that there is some movement towards credit easing that could spell the end of the subprime/credit disaster, and avert the possibility of any long term recession. The London Interbank Offered Rate or LIBOR (pronounced lie-bore), is the measurement of what banks charge each other for short term loans to cover normal day-to-day shortages in cash. Since January, the LIBOR rate associated with the U.S. dollar has been rising and indicating a tightening of credit between banks. Not a good thing. Especially if you are a bank and you've got depositors yanking their money out of fear of a bank failure. Not having enough cash can cause a bank to easily fail in this environment.

Now, for the first time since January, the lending rate for 3-month loans between banks is breaking to the downside (See Full Story). All the billions of dollars of credit easing action by our Federal Reserve and Treasury Departments and World Banks appears to be starting to work.

Once the banking system can feel more confident about their operations, this can lead to consumer and business lending getting looser. This could free up cash to keep our economy going and avert a crippling and deep recession or, even a depression. It might just be that all the actions by the Bush Administration and the world's banks (like our own Federal Reserve) might have caused us to dodge a major bullet. We probably won't know that to be true until the summer of next year. Let's all hope for the best.

John Snow said it all in 2004

I know that Barack Obama blames the Bush Administration for the failures of our credit markets. However, you need only to do a few Google searches to know otherwise. Here's a quote from Bush's Secretary of the Treasury, John Snow, speaking for the Administration in 2004:

"We don't believe in a 'too big to fail' doctrine,but the reality is that the market treats the paper as if the government is backing it. We strongly resist that notion. You know there is that perception. And it's not a healthy perception and we need to disabuse people of that perception. Investments in Fannie and Freddie are uninsured investments...GSE reform is pending before the Congress right now ... it's a critical time, legislatively..." (See Full Story on John Snow's Comments)

Lest there be any doubt how Barack Obama and the Democrats fit into this whole mess, I suggest you read this article (click to see story as popup window).

First Things First!

Lately, I am hearing a chorus of chants from the Democrats to save Main Street and not worry about those greedy Wall Street bandits. While that might play well on the campaign trail, it is all wrong in terms of solving the credit problems that are squarely before us.

This country's economic system is like a human body. At the fingers and toes, you have Main Street; the individual homeowners and consumers. However, the "heart" of that body is Wall Street. The body is our banking system. Our money (our currency) is like the blood in the veins that flows from the heart to the fingers and toes. You can lose a few fingers and a few toes in terms of mortgage foreclosures and our economy will still survive. But, if you let the heart die, "all" the fingers and toes will die too. Wall Street and their selling of U. S. Treasury Bonds keeps the economy going, and keeps this country from going bankrupt by attracting investment in our government. Foreign investors and their governments invest in Wall Street to help keep this country and our businesses afloat. That's why it is so important to bail out Wall Street and bail it out quickly. People seem to forget that it was the stock market crash of 1929 that preceded the Great Depression of the 1930's. In that case, the heart died and all those on Main Street clearly suffered. The heart died because there was no confidence in our economic system when Wall Street collapsed in that great stock market crash. The entire thrust right now should be to restore confidence in Wall Street so that the heart doesn't die and so that "most" (not all) of the fingers and toes can keep working.

Foreclosures, bad credit, CEO pay, should not be at issue at this time. If our Democratic politicians want to address those issues, then do it when the patient is out of open heart surgery. Let's not worry about an infection in the fingers at a time when the heart is in such serious peril. We need to bolster the confidence in a secure and untainted credit system in this country. By using legislation to prop up bad mortgages and bad debts just leaves a financial system that is still in a critical condition. We are going to have to come to the realization that some of those fingers and toes will have to be allowed to die; otherwise, the blood stream will become so tainted with infection that the patient will be lost.

I don't know if the current course of action will completely put us back on to the road to recovery. But, certainly, having the Treasury Secretary, Paulson, and the Fed Chairman, Bernake, working on the problem is having the best people on the job. I agree with John McCain that an overseeing commission of financial gurus is appropriate so that we have another set of eyes and ears out there to insure that Bernake and Paulson aren't so close to the problem that they literally can't see the forest for the trees. That commission should be independent of Congress, because Congress will just muddy up the waters with concerns over garnering votes and lacks the pertinent focus on the problem. However, that commission should be able to work with the Senate Banking Committee to get any new laws enacted or old laws rescinded in order to right this ship in the water.

Plain and simple. The overall goal should be to restore confidence in our credit system in this country because credit is what keeps us all going. If you can't borrow to buy a car or a house, or you can't use you credit card to carry through purchases each month, our economy will just seize up. If credit does seize up, an economic depression is sure to follow; and, it won't just affect this country. It will affect the entire world!