Paul Krugman and the Lost Decade of the Republicans, but in two days I’ll tell you what liberals and conservatives don’t want you to know about the jobless growth decade

http://www.nytimes.com/2009/12/28/opinion/28krugman.html?th&emc=th”>28/opinion/28krugman.html?th&emc=th

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Lenders Refuse to Renegotiate Mortgages for Homeowners Despite Government Plan–Tommorrow the Real Reason

http://www.nytimes.com/2009/12/30/nyregion/30foreclose.html?th&emc=th

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Bloomberg News Reports Consumer Spending Up

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6OSadlaD8vw&pos=1

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House of Representatives Loosen Restrictions of Derivitives Trading

The headline says it all. The Best Congress Money Can Buy.

The headline says it all.

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The Drug War is a Lost Cause, Just Like the Confederate States Civil War

Read the link below from the Wall Street Journal. It describes how the War on Drugs is a forty year and one trillion dollar lost cause. But what it doesn’t mention is that much of the war is waged by private contractors, which means it is a profitable war, and therefore something to be continued.

<a href="http://http://online.wsj.com/article/SB10001424052748704254604574614230731506644.html”&gt;

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Hedge Fund Manager Rakes In $7 Billion last Year Thanks to Government Bailouts

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CEO’s of Large Companies Are Largely Incompetent

Most CEOs of large corporations don’t have a clue about what they are doing. The new CEO of General Motors, for example, comes from the high tech sector. Other than driving a vehicle, his knowledge of building cars is as limited as the average joe on the streets. He is being brought in to cut jobs that will improve GM’s stock price. That’s his expertise. See the link below.

http://www.nytimes.com/2009/12/22/business/global/22saab.html?_r=1&th=&adxnnl=1&emc=th&adxnnlx=1261504971-EeEzc3rTKjWj2OnM9d1lRA

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Economic News of the Day

The economy grew at slower rate than originally thought during the third quarter. See link below. It should be pointed out, that growth doesn’t necessarily say a whole lot about the health of the economy, although it can be an indicator.

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The Senate Health Care Bill: Another Welfare Program for the Rich

In the Rolling Stone article “Obama’s Big Sellout,”  Matt Taibbi wrote that officials in the Obama Administration believe that what is good for Wall Street is good for Main Street. However, the exact opposite is true because all recessions began in the financial markets. I demonstrated this in my book, The Rigged Game: Corporate America and a People Betrayed.

I showed that aggregate corporate earnings grow at faster rates than dividends at the beginning of every business expansion. However, at some point, total dividend growth races ahead of profits. CEO’s are then forced to bring the rise of earnings in line with the speed at which dividends escalate by dipping into retained earnings, issuing new stock or borrowing. However, this can only be done for so long. When these actions fail to achieve the desired results, CEO’s initiate layoffs, freeze or reduce salaries, wages and benefits, curtail business-to-business transactions and engage in numerous other cost cutting actions.

In this way, earnings and dividend growth are brought back into harmony in the short term, but the demand for goods and services begins to slacken due to these cost reducing measures. As total demand slows, profits eventually decline, even as dividends soar. To bring dividend and profit growth back in tandem, CEO’s accelerate cost cutting procedures, further depressing demand and finally igniting recessions.

As CEOs slash expenditures, several events always occur: Job growth slows, manufacturing jobs are slashed, the hours of employees in the durable goods industries dips, the unemployment rate rises, the number of people living in poverty swells, food stamp applications expand and dividends surge. Only then does the U.S. economy plummet into recession.

Ultimately, The Rigged Game is not only a plausible explanation of boom and bust cycles, the book also reveals the dynamic interplay between publicly traded corporations and the financial markets function as a conduit through which income and wealth are redistributed from citizens that work for a living to the investor class and CEOs. As people are laid off, their wages, salaries and other compensation are diverted to earnings, which are then used to enhance dividends and stock prices. This process occurs during all phases of the business cycle, but it is most conspicuous during the months leading up to, and during, recessions.

The Senate Bill has no serious cost-cutting provisions, so not only will the health insurance companies receive 30 million new customers, they can still jack up their prices at will. Many of these people will be subsidized by the United States government. That means the Senate Bill is intended to transfer income and wealth from the middle class citizens of this country to the wealthy via higher health insurance company profits that will be shoveled to the rich via higher dividends and share prices.

This is why the stocks of insurance companies have jumped since the public option has been destroyed in the Senate Bill. With no competition, the insurance companies will jack up their prices probably faster than they are now since the U.S. will subsidize many of their customers.

So don’t look for health insurance policies to come down in price, unless there is a corresponding decline in coverage, since the federal government will simply be forced to increase its subsidies much to the delight in health insurance CEOs.

So much for hope and change. President Obama is a big fat liar face and Senator Reid is a bumbling weak kneed  corporate hack.

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