No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Archive for February 20th, 2009

Today’s statistic – $2.5 trillion

by @ 18:37. Filed under Politics - National.

Fox News has some disturbing numbers on the rate of deficit spending:

– The January 2009 deficit – $83.8 billion (compared to January 2008 surplus of $17.8 billion)
– The 4-month FY2009 deficit – somewhere over $454.8 billion (which was a full fiscal-year record, set in FY2008)
– The projected pre-Generational Theft Law FY2009 deficit (via the Congressional Budget Office) – $1.2 trillion
– Private economists’ estimate of the pre-Generational Theft Law FY2009 deficit – $1.6 trillion

Once last year’s deficit and the FY2009 portion of the $787 billion Generational Theft Law (for which $0 was budgeted) are added in, between November 1, 2007 and October 31, 2009, the federal government will have spent $2,500,000,000,000 more than it took in over that period. That is almost a quarter of the current national debt (the Fox News story goes further and says it is almost a quarter of the entire amount of debt ever taken on by the Feds).

For those of you who don’t remember Paul Ryan’s warnings before Bailoutpalooza hit (to the tune of roughly $1.6 trillion), it would take a doubling of the amount of taxes taken in to fund the government inside of 40 years to 40% of the GDP (for those of you in Rio Linda, that’s $4 out of every $10 produced by the economy). With Bailoutpalooza, it’s far closer to, and I’ll wager, beyond 50%.

Just Call Me “The Architect”

by @ 5:45. Filed under Politics - National.

I wrote two weeks ago about how President Obama seemed to be having a difficult time moving from Monday Morning Quarterback to that of the real thing.   Since that post and its list of fumbles, Obama has over promised and than hung Geithner out to dry on his attempt to roll out a bank plan.   He’s also tuned up his tin ear and rolled out a mortgage plan that looks eerily similar to one proposed by Congress last year and was summarily shouted down by the public because it appeared to reward reckless to stupid behavior on the behalf of too many of the home owners it claimed to help.

In today’s WSJ, Karl Rove notes the same inability for the Obama team to “get it right.”   Rove ascribes the problem to an inability to govern thus resulting in “winging it” on too many issues of substance.   Rove further states that this is out of character for the Obama who ran a tight, effective campaign:

Team Obama demonstrated remarkable discipline during the presidential campaign. From raising an unprecedented amount of money to milking every advantage from the Internet to grabbing lots of delegates from inexpensive caucus states, they left nothing to chance.

From my reading of his opinion piece, Rove sees the events and reasons for Obama’s foibles thus far similar to what I did with one exception:

The president, a bright and skilled politician, has plenty of time to recover. The danger is that what we have seen is not an aberration, but the early indications of his governing style. Barack Obama won the job he craved, now he must demonstrate that he and his team are up to its requirements. The signs are worrisome. The world is a dangerous place. The days of winging it need to end.

Rove seems to believe that Obama hasn’t yet reached the point of no return and that  Obama can change how he operates.   I agree with Rove that the point of no return hasn’t been reached.   However, I have a different perspective on Obama’s ability to change.

Over the years I’ve worked with several people who thought they were the smartest person around.   Along with a lack of humility, typical traits for these folks are thin skins and a dimissive, “you’re not smart enough to understand,” kind of response when they are asked to explain their logic.

Throughout the campaign, any time Obama was challenged directly he showed a tendency towards thin skin.   Even recently, as he saw the stimulus bill hit road blocks and he had to explain himself,  you could see his thin skinned responses towards any who questioned his analysis.   Dismissive, is there any other word for Obama’s “I won” response?

The other thing I’ve noted about folks who think they are smarter than anyone else is that it is very rare for them to change.   In fact, I can only think of one that I’ve known who has only did so after being dealt a serious personal blow.   My point is that unlike Rove, I don’t think Obama will change.   He’s found success with his current method and will stay with it for better or worse.   That makes me believe that while he hasn’t hit the point of no return, he’s careening down the path to the point and we can only hang on.

The Coming Housing Bubble?

by @ 5:13. Filed under Miscellaneous.

Yes, you read that correctly.   It’s entirely possible that there is another housing bubble coming.

Francis Cianfrocca tries to figure out what exactly the latest, no details included, proposal from President Obama means.

Yesterday, President Obama rolled out “a plan” to help homeowners who are behind on their payments.   Cianfrocca believes based on:

uniformly-enthusiastic reactions of banking-industry executives and spokesmen,

Cianfrocca believes that the $75 billion in Obama’s plan leads directly back to the banks/mortgage holders.

Cianfrocca believes the plan will work as such:

I think the proposal is intended to directly supplement mortgage payments for millions of people (using the 31%-of-pretax-income benchmark for mortgage affordability). There are reports that the plan will somehow facilitate refinancings at lower interest rates, which is somewhat similar in effect. If I’m right, this is effectively the same as reducing people’s mortgage payments (but not their mortgage principal amounts) to a level that reflects current market reality.

Great!   We’ve solved all the housing problems for the low, low price of $75 billion dollars!   Now that we’ve fixed it and we’ve learned from our past, all will be right as rain from here on out!

Um, no:

If the program proves popular, however, look for it to expand. And if that happens, look for the fortunes of the homebuilding industry to recover.

This sounds good, but it’s very evil. We have far too much housing already in this country, the residue of the last housing bubble. If we get another one now due to government deliberately overvaluing mortgages, we’ve set the stage for yet another nasty crash in some future year.

Just one more example where President Obama appears to “Hope” there will be “Change” that will be different than the most likely outcome of his plans.

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