Re: Dr. Michael Hudson: Obama's New Giveaway

On Mon, 02 Feb 2009 20:43:29 +0000, sinister wrote:

"Michael Coburn" <mikcob@xxxxxxxxxxx> wrote in message
news:gm79jg01tnb@xxxxxxxxxxxxxxxxxxxx

<snip>

I would like to sort of tippy toe into the area of "What does Obama and
what do WE do about it?". Obama is not the czar or the emperor or the
king and he did not set this crap up. When I look at the actions of
the

That's true. But he _did_ appoint Summers and Geithner.

last Congress I see a replay of the Iraq resolution. We have the Bush
administration holding all the cards and telling the Congress that the
sky will fall if they do not support the administration. As in the
Iraq game we have a complicit media that supports the people that pay
them. And last, but not least, we have the American public that gets
its information from this media. We live in a nation that is
supposedly

There's plenty of good information on the net. There's even people
making pretty reasonable noises in the mainstream media, electronic and
paper both. (E.g. read Krugman's column this morning.)

controlled by the misinformed people. I do not know what Obama or
anyone else will do or can do about turning this thing around. I never
saw him as "The Messiah".

If the ship of state is to be turned then it is the people who must
turn it and they must be able to get the facts as opposed to the pig
***. I cannot tell whether Obama and his "team" are going to try to
inform the people and let them decide or not. It is too early to make
such determinations and too early to tell how much of the current
overshoot will be allowed as the ship is turned.

I am not a big fan of Hudson even though I think his central thesis is
valid. I see the world more in monetary terms and come to the
conclusion that only by inflating the currency can we recover the
stolen money. That is what the stimulus and the no new taxes and even
tax cuts are about and it is the right thing to do (if you leave out
the land stuff). But even including the land stuff, it is the real
estate market that is deflating and to arrest that deflation before
attempting a long term fix seems a rational thing to do. There will
come a time when the Fed should

Arresting the deflating of the housing (really, LAND) bubble is a big
mistake, IMHO, except to the extent that it's an attempt to prevent
overshooting.

Most of the talk I see from the powers that be is in terms of actually
preventing the completion of the deflation of the bubble. Because of
the numbers, that's not really possible. Furthermore, if they do it by
say subsidizing mortgages (by pushing rates really low), homeowners who
buy under those rates are going to pay later when the rates are
eventually allowed to rise again.

Besides, if a homeowner is truly underwater, "help" for him is really
help for the bank which owns the mortgage.

be directed to control the dollar based on the price of land and the
rudimentary wage. That will end the bubbles. But right now we need
some "re-inflation".

So....

Too soon to tell whether Obama and the Democrats are doing what I want
them to do. The big test comes in the Senate. Will the Democrats find
their backbones and use the nuclear option to pass the stimulus or will
they destroy the stimulus in order to placate the Republicans and "play
it safe".

We shall see.

I am focusing on the stimulus as opposed to the bailout. I am not a big
fan of bailouts but I am a big fan of stimulus. If the bankruptcy laws
had not been screwed over then we would not have a problem. In all
probability the loans would not have been made in the first place. Even
now, if the bankruptcy laws are set back to the way they were in 1978 we
could just let the thing blow up like you say and the lenders would have
to eat it.

But the stimulus SHOULD be inflationary. That drives up the land prices
and devalues the currency. At present, all things considered, that is
the best way out of the trap so long as the inflation is driven from the
bottom.

There will come a point when the re-inflation starts to bubble the land
prices again as opposed to stopping the land price declines. That is the
time to worry about the taxation side of the problem.

--
"Those are my opinions and you can't have em" -- Bart Simpson
.

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