The sage investor Julian Robertson says we're going to have 10 to 15 years of a bad economy. The credit crisis turns out to be worse that anybody expected. Excerpt:
"I don't mean to imply that this is going to last quite as long as what's been happening in Japan, but when they went into their decline in 1990, almost 20 years ago, their people were loaded with savings--but [Americans are] all broke," he said. "...If we leave out the home in the calculations, I'd say that 80-85 percent of Americans are broke. So they have to cut back on their spending."
Well, there you have it. Think of this in light of today's must-read Washington Post report about how Bill Clinton's financial brain trust -- Alan Greenspan, Robert Rubin and others -- were told in 1998 by an official that the government had better start regulating derivatives, or they might bring the whole financial crashing down. The Clinton team told her to shut up and go away.
Mind you, if a Republican president had been in office, he would have done the same thing. The point is that both parties had become captive to a turbocapitalist ideology in which Wall Street could do no wrong. Don't believe the Democratic line that this is all the GOP's fault. I say that not to defend the Republicans, who cannot be defended here, but to say that the Democrats are no better.
The new situation will reopen old rifts in the Democratic Party. On the one side, liberals will argue (are already arguing) that it was deregulation and trickle-down economic policies that led us to this crisis. Fears of fiscal insolvency are overblown. Democrats should use their control of government and the economic crisis as a once-in-a-lifetime chance to make some overdue changes. Liberals will make a full-bore push for European-style economic policies.On the other hand, the remaining moderates will argue that it was excess and debt that created this economic crisis. They will argue (are arguing) that it is perfectly legitimate to increase the deficit with stimulus programs during a recession, but that these programs need to be carefully targeted and should sunset as the crisis passes. The moderates will stress that the country still faces a ruinous insolvency crisis caused by entitlement burdens.
Obama will try to straddle the two camps -- he seems to sympathize with both sides -- but the liberals will win. Over the past decade, liberals have mounted a campaign against Robert Rubin-style economic policies, and they control the Congressional power centers. Even if he's so inclined, it's difficult for a president to overrule the committee chairmen of his own party. It is more difficult to do that when the president is a Washington novice and the chairmen are skilled political hands. It is most difficult when the president has no record of confronting his own party elders. It's completely impossible when the economy is in a steep recession, and an air of economic crisis pervades the nation.
OK, fine. If anybody expects to get decent Medicare or any Social Security benefits in the near long term, they're dreaming. But I think once Democrats come to terms with the role Clintonomics and Robert Rubin's role in it led to the crash, it will vastly strengthen the hand of the high-spending statists within the party.
Meanwhile, the rest of us should plan on living a lot poorer.
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A large segment of us Democrats opposed the DLC's Republican-Lite method to governing. The DLC was essentially liberal on social issues (Although Clinton himself would end up caving on half of them thanks to 'triangulation'.) but conservative on fiscal issues.
And I know there's recently been some confusion about what 'fiscal conservative' means. By 'conservative on fiscal issues', I meant he pushed 'less regulation' and 'free trade', to help the American stockholder at the detriment of the American worker and the American consumer.
I don't mean that he 'spent wildly while cutting taxes left and right' or 'shipped uncounted billions in cash to a war zone with no oversight on spending' or 'purchased banks and insurance companies with trillion dollar deals' or 'funded golden parachutes so the people that got us into this mess can waste our country's future on hookers and blow for the rest of their lives', which are, I believe, the New Fiscal Conservatism.
Larry, you're assuming facts not in evidence. You have no idea what I think about the last so many years of Republican rule.
Here's the answer: it's been decadent and corrupt. I have no patience for what Rod described as "a turbocapitalist ideology in which Wall Street could do no wrong." And the Democrats haven't done any better with attempting social engineering by encouraging sub-prime lending.
FWIW, I've never voted for a Republican presidential candidate in my life. I voted third party in 2000 and followed Alasdair MacIntyre's example by rejecting the ridiculous alternative of Bush or Gore in 2004.
But I think that Senator Obama's stated plans will do tremendous damage. And adding to that an unfettered Democratic congress and senate makes an especialy toxic combination. The bizarre imprudence of it all has created an opportunity for agreement between National Review and the New York Times on the folly of the plan. That doesn't happen very often, if ever.
And I'm still reeling from Senator Biden's statement in the last debate about what spending plans an Obama administration may not be able to afford, given the current economic downturn: "we may have to slow down our plan to double foreign aid."
Ponder that.
Doubling foreign aide would have a trivial impact on the budget.
I wasn't assuming anything, I was just wondering about the inconsistency of deploring one form of redistributionism versus an apparent, and still apparent, at least acquiescence to another. I am not really a socialist, but I would prefer socialism for everybody rather than just socialism for the rich, as we have now.
The Clinton team told her to shut up and go away
To be fair, so did the Republican Congress.
Partisans are stupid, and make their stupidity abundantly clear at every juncture.
The two "parties" are just different sides of the same coin, both sides bought and paid for. You dummies who finger point are tedious beyond belief. To reach the cliff of economic ruin it took fierce energy from both of the dumb parties, dining with lobbyists, taking bribes, ignoring constituencies.
Most of them, from both parties, should be shot, along with most of Wall St.
They've raped and pillaged an entire COUNTRY. They've done an equity extraction and taken the plunder to China, India, etc., leaving our economy and our workers in the dust.
Now as taxpayers, we have to pay for their "losses." What a sick joke! They make trillions from the housing bubble/derivatives, and walk away now that the easy money is gone. People should be rioting.
I am seriously thinking of leaving this country...
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