American Recovery and Reinvestment Act: Stuff for Oregon

Carla Axtman

Just a little while ago, President Obama signed the economic stimulus/jobs bill known as the American Recovery and Reinvestment Act. As part of the implementation of this new spending package, the White House has unveiled a new website called recovery.org. The site is billed as a place for the American public to go in order to track where these funds are going.

Along with the roll out for the website, the White House also provided fact sheets outlining what they believe will be the job growth under this legislation. It's broken down by state and by congressional district.

An interesting aside to this story today, Obama spokesperson Robert Gibbs would not rule out the possibility of an additional stimulus bill, although Gibbs says it's currently not on the drawing board.

Update (11:22AM): The Associated Press says that Oregon will be receiving $453,788,475 from the economic stimulus package passed by Congress.

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    Hopefully we will get actual dollar amounts broken down the same way. These are good for what the White House has as their targets of jobs created, but the dollar amounts would have been good as well.

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    Agreed, Mitch. If anything like that hits my radar, I'll post.

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    This is from the FAQ on the website:

    Q: How can I see how much recovery money is coming to my community? A: Until the funding is distributed by the Federal government to states and local governments, and eventually to your community, we won't be able to determine exactly where all of the funding will go. Over the next few weeks and months, there's going to be a lot of data coming in, as we coordinate with different agencies. As soon as the first dollars start to go out, you'll be able to track where the money is going. Detailed state maps will be available to assist your tracking.

    So we will have to wait a bit before we get that, but it looks like was are going to get some real information and data. This is the sort of thing I have long advocated, give us information and context so we can truly be an informed citizenry. Hopefully Salem will do like wise.

  • Jason (unverified)
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    It doesn't seem like the market has much confidence in the stimulus plan. All three major indicators are off more than 3% (at 2:30pm eastern) and almost every time a major announcement has been made about the plan, the market takes a dive.

    I'm guessing it's two-fold:

    1. Lack of confidence that the plan will work
    2. Lack of understanding in its scope

    I sure hope it works, but I'm not too optimistic. I think we'll definitely see some short-term help, but my worry is the ability for this country to deal with the issue of the long-term debt. I especially fear how that will affect my two children when they become working adults.

  • Sid (unverified)
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    Boy the stock market sure took a dive today. You'd think with this great stimulus plan and recovery website, the market would be up? The market probably knows this stimulus will do nothing to improve the economy and that's why Obama is already prepping voters for a potential 2nd stimulus policy!

    But Im glad you're out there blogging Carla. Keep the propaganda coming.

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    Posted by: Jason | Feb 17, 2009 11:31:51 AM Posted by: Sid | Feb 17, 2009 11:49:03 AM

    Sorry but the Dow induced summary judgment of both of your comments is off-the-rails.

  • Scott J (unverified)
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    The economy would have eventually recovered on its' own, like it always has after past recessions.

    IT'S CALLED A BUSINESS CYCLE!!!

    This porkulous plan is nothing short of payback to Democratic political contributors.

    Disclosure: [I have not built any web-sites for Democratic or Republican candidates. As such, my opinions are my own]

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    So The Great Depression was just a bad business cycle?

    LOL...awesome.

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    As a follow-up to the policy by Dow chicken-little posts... the latest from the NYT:

    At 2:30 p.m., the Dow Jones industrial average was down more than 260 points, skidding below 7,600 as losses in General Motors, Bank of America and American Express dragged the blue chips lower.

    Yep, the fact that GM is publicly saying it may go into Chapter 11, and ongoing shaky bank stocks have nothing to do with the Dow slide, it has to be the stimulus bill! Man the pitchforks!

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    Posted by: Scott J | Feb 17, 2009 12:05:42 PM This porkulous plan...

    Dittohead alert.

    (scroll)

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    Posted by: Carla Axtman | Feb 17, 2009 12:07:00 PM So The Great Depression was just a bad business cycle?

    But Carla, don't you know that FDR caused the Great Depression because.. well... because.. er... he was an evil commie Democrat so he has to be the cause!

    ...or somethin'

    ;-)

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    The market probably knows this stimulus will do nothing to improve the economy and that's why Obama is already prepping voters for a potential 2nd stimulus policy!

    This would be the very same market which so recently demonstrated it's sheer miscomprehension of and/or utter indifference to sound economic principles by binging on subprime mortgages and especially on the unregulated, exotic financial instruments backed by the same? The very same market which glibly rode it's own greed to the brink of economic implosion as the Bush administration incompetently ignored the pending crisis?

    I submit that the markets are just about the very least reliable indicators of economically sound principles. The markets are about one thing and one thing only - the accumulation of wealth by any means possible, and the economy be damned!

  • Scott J (unverified)
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    Carla,

    Yes, it was part of the business cycle. It was a huge bust based on excessive speculation and made horrible based in part on credit in the banking system being tightened up rather than loosened. That is not disputed.

    One of the things that Bernanke has done right is opening the credit spigot. He has studied the Great Depression (apparently you haven't)and has tried not to make the same mistake.

    The one thing I give Pres. Obama credit for is the large number of tax cuts that are part of this wasteful bill. At least those tax cuts act as a cash flow stimulus to individuals.

    You may want to do a bit of research.

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    Scott J:

    Which "research" would you recommend for a poor, uniformed silly blogger like me to come to the enlightened realization that The Great Depression was nothing more than a "bad business cycle"?

    Please provide links.

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    I sure hope it works, but I'm not too optimistic. I think we'll definitely see some short-term help, but my worry is the ability for this country to deal with the issue of the long-term debt. I especially fear how that will affect my two children when they become working adults.

    Yes, remember how terrible things were coming out of World War II, when our national debt exceeded 100% of our national income. Remember how hard our parents and grandparents worked and scraped to pay off that debt?

    In fact, at the end of World War II, we were nearly $270 billion in debt. By the end of the 1950's we'd paid that down to almost $290 billion. Then, thanks to the booming '60s, we entered with 1970s with only about $370 billion in debt, which by 1980 exceeded $900 billion for the first time.

    Skip ahead to 1993, when Clinton took office, and we were about $4 trillion in debt, but by the time he left we had paid that down to just $5.7 trillion. Now, of course, we're over $10 trillion in debt and that is just outrageous, because that is nearly 70% of our national income.

    In other words, our debt has grown from $270 billion to over $10 trillion since World War II, but as a percentage of our national income, it has dropped from 120% to 70%. Over that period, it has gone from around the 40% range during the 1930s and the 1970s (not exactly boom years) to around 60% through most of the 1980s and 1990s.

    There are a lot of things to be concerned about but the long-term debt picture of the US government is not one of them.

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    At least those tax cuts act as a cash flow stimulus to individuals.

    You may want to do a bit of research.

    LOL indeed. The chief economist for Moody's has done "a bit of research", albeit apparently not in the same dimension of reality which Scott inhabits.

    Reality collides with Republican ideology. Ideology loses. Tax cuts are inefficient.

    Bush's $145 BILLION tax cut "stimulus" plan produced a miniscule economic boost for 1 quarter, after which the economy continued to implode.

  • mp97303 (unverified)
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    @Scott J:porkulous plan

    Ditto head

  • mp97303 (unverified)
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    Posted by: lestatdelc | Feb 17, 2009 12:09:11 PM

    Posted by: Scott J | Feb 17, 2009 12:05:42 PM This porkulous plan...

    Dittohead alert.

    That's what happens when you comment before continuing to read. Sorry lestatdelc for stepping on your toes...

  • joel dan walls (unverified)
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    Something's wrong with this comment thread. None of the dittoheads has yet mention the mythic Pelosi earmark for mouse-habitat preservation.

  • Eric (unverified)
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    Carla:

    Here's a really good analysis of the Great Depression: http://fraser.stlouisfed.org/docs/meltzer/fisdeb33.pdf. I'm not sure whether it bolsters anyone's argument here, and I'm not taking sides in the debate. It's just a good paper.

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    Posted by: mp97303 | Feb 17, 2009 12:55:49 PM That's what happens when you comment before continuing to read.

    Heh. No worries. 'Great minds alike' and all.

  • Bill Bodden (unverified)
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    It doesn't seem like the market has much confidence in the stimulus plan. All three major indicators are off more than 3% (at 2:30pm eastern) and almost every time a major announcement has been made about the plan, the market takes a dive.

    The evidence is overwhelming the "market" is full of crap. Have you ever paid attention to market analysts on television talking about the day's events. "The market dropped at 10 am because word got out the president had the 'flu. The market picked up at noon on word that The Donald bought another five blocks of Manhattan. The market sank again at 2:00 pm on news that Lemon Motor Corporation had to recall half a million cars. Just before the market closed it rallied on the news that The Donald was going to build a mega strip joint on Wall Street." Do these analysts really believe the drivel they spout? Perhaps they do. If so, they are like people locked into other religions surrendered to their faith.

    Noam Chomsky makes more sense of the markets and capitalism in this articleUnderstanding the Crisis — Markets, the State and Hypocrisy

  • Scott J (unverified)
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    Carla, ,

    Please see the following link in response to your request:

    http://www.federalreserve.gov/boarddocs/speeches/2004/200403022/default.htm

    The author is Ben Bernanke, the current Chairman of the Federal Reserve. Yes, President Obama's chairman.

    Since most of you are too lazy to do any research, let me spoon feed this to you, just like a nice Gov't tranfer payment:

    Go down to the 7th paragraph and start reading.

    Have a nice day and keep on celebrating Hugo Chavez's victory; we'll be there as a country within 10 years.

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    Boy the stock market sure took a dive today. You'd think with this great stimulus plan and recovery website, the market would be up?

    Um, guys, whether or not the stock market thinks highly or poorly of the stimulus plan, it sure as hell wouldn't have waited until today to react to last week's vote.

    It's not like there was any doubt as to whether Obama was going to sign the thing.

  • BOHICA (unverified)
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    Yes, President Obama's chairman.

    No, he just happens to be chairman now.

    Wiki link

    As stipulated in the Banking Act of 1935, the chairman is one of seven members of the Board of Governors of the Federal Reserve System who are appointed by the President from among the sitting Governors.[1] The chairman is subject to Senate confirmation to a four-year term. In practice the chairman is often re-appointed, but cannot serve longer than one 14-year term as governor (or, if appointed to fill a position whose previous occupant had not served out their term, then 14 years plus the time remaining in the previous unexpired term). By law, the chairman reports twice a year to Congress on the Federal Reserve's monetary policy objectives. He or she also testifies before Congress on numerous other issues and meets periodically with the Secretary of the Treasury.

    Currently, the chairman is Ben Bernanke, a Georgia macroeconomist nominated by George W. Bush and sworn into office on February 1, 2006, for a term lasting until 2010. Bernanke succeeded Alan Greenspan, who served for more than 18 years under four U.S. Presidents.

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    The author is Ben Bernanke, the current Chairman of the Federal Reserve.

    Scott J: Bernanke seems to be following the Friedman/Schwartz analysis of the causes of The Great Depression,specifically in regard to the gold standard and the lack of expansion of the monetary base (although this particular set of remarks hardly provides an indepth analysis of the issue).

    Paul Krugman has a short take down of that notion in the context of the current economic problems here and here.

    In addition, economists have widely varying opinions on the Great Depression, its causes and the causal relationships.

    A longer rebuttal of Friedman's economic theory (and Bernanke's) is here.

    To point to one short speech by a guy who articulates only one view as the ultimate resource on this topic is shallow, at best.

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    I don't see Bernanke inveighing against the stimulus package--in fact most of his public statements have been supportive.

    Kari is dead right; IF theories of market anticipation are correct, then the markets would have corrected once the final shape of the bill was clear.

    There is a nice article in the Sunday NYT business section about the silliness of attributing market volatility to market "reaction" to specific events ... BUT ...

    my reading of the business pages is that today's drop was a response to a) the continued substantial weakness in the Japanese economy (anemic growth, losses at the erstwhile bulletproof Toyota, and a drop in the Nikkei) and b) the speculation (real or not) that the Administration may allow a managed bankruptcy of GM.

    I rely mainly on the business page of the Times which i read pretty religiously and the WSJ which I read less often for perceptions of the stimulus, and while both criticize some aspects, I have seen virtually no notable voice on the right or the left claiming that we needed all tax cuts and no government spending.

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    My question as a parent: are we going to avoid another shortening of the PPS school year?

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    Damn TypePad seems to be eating comments again.

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    Posted by: Carla Axtman | Feb 17, 2009 4:13:48 PM

    Damn it Carla, ya beat me to it.

    I was going to point out that Bernanke was spouting (and Scott J was parroting) the Friedman/Schwartz explanations, which don't hold much water at this point. One needs only point to Greenspan (who was Bernanke's predecessor, and toed the Friedman line heart and soul... or did) being blind-sided by the current collapse and his admitting many of his assumptions were simply wrong.

    As Nixon famously proclaimed, "we are all Keynesians now" which, while tricky-Dick was a paranoid power-monger (and war criminal) he was right on that score, despite Friedman et al trying to blame FDR monetary polices ex post facto about causing the Great Depression.

    Posted by: paul g. | Feb 17, 2009 4:48:55 PM I have seen virtually no notable voice on the right or the left claiming that we needed all tax cuts and no government spending.

    Well, except the lunatic Republican caucus in the Senate which voted unanimously to try and adopt McCain's amendment as a substitute bill which was nothing but tax cuts and which went down in flames as a result.

  • Bill Bodden (unverified)
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    Damn TypePad seems to be eating comments again.

    Try making a copy of your comment before hitting the "Post" button. If your comment disappears, paste your copy to a new comment box.

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    Krugman is off-base with his recent columns claiming that experience in the current crisis "proves" monetary policy is insufficient. One of the basic tenets of monetarism is that monetary policy takes a long time to affect output and prices.

    Milton Friedman's favorite analogy was that using monetary policy to affect the economy is like stearing a large cruise ship. You turn the wheel and nothing happens, so you keep turning it more and more until finally it reacts, then proceeds to overreact, so you turn the wheel in the opposite direction, but nothing happens, so you keep turning, etc.

    The best lesson to learn from the 1930s is that, when in a crisis, use both monetary and fiscal policy to try to dig your way out. I think Obama and Bernanke are on the same page there.

    Ironically, Krugman had this to say about Bernanke in his new, revised edition of The Return of Depression Economics (and the crisis of 2008):

    "If you had to choose one individual to be in charge of the Fed during this crisis, that person would be Bernanke. He's a scholar of the Great Depression. His research on the way the banking crisis intensified the Depression led him to make a major theoretical contribution to monetary economics . . . .And he did extensive research on Japan's troubles in the 1990s. Nobody was more prepared, intellectually, for the mess we're in."

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    Jack, the thing is that monetary policy has shot its one bullet already. We have basically 0% interest rates for banks, and the credit market is still stuck. At this point, capitalization isn't the problem, it is that we basically have insolvent dead banks that are still walking around (i.e. the "zombie" banks) that will need to be taken over temporarily while being restructured.

    That's the path where this is headed, even uber laissez-faire advocates acknowledge this.

  • joel dan walls (unverified)
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    Boy the stock market sure took a dive today. You'd think with this great stimulus plan and recovery website, the market would be up?

    Wall Street also customarily takes a dive when they distressing news such as UNEMPLOYMENT IS TOO LOW, so excuse me for not bowing and scraping to the financial titans.

  • Bill R. (unverified)
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    By now we should all recognize that the stock market is crap shoot run by fools and idiots. They have no accuracy in predicting anything. Wall St. is the problem and not the solution.Wall St. has given us the likes of Bernard Maddow as big money fund managers. Need we say any more!

    The stimulus package is old fashioned Keynesian economics, priming the pump when the income stream is drying up, which is what we can do right now, and not much else. It's good economics and good politics. John Maynard Keynes and his theories helped save capitalism during the 1930s and he will do it again in our time, hopefully a more sane and regulated capitalism, with a wider and deeper safety net.

  • mp97303 (unverified)
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    @Joel:Wall Street also customarily takes a dive when they distressing news such as UNEMPLOYMENT IS TOO LOW

    The easiest way for a public company CEO to jack up his stock price is to lay off workers. The more they layoff, the higher the stock price goes.

    What a country....

  • mp97303 (unverified)
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    For those who like to call this bill "porkulus" I direct your attention to this:

    But Missouri immediately claimed bragging rights today for kicking off the first economic recovery act project in the nation today.

    Gov. Jay Nixon and other officials gathered at the Osage River Bridge near Tuscumbia on Route 17 today to begin the $8.5 million bridge replacement project. They waited until just after President Obama signed the bill in Denver. here

    Jobs on Day 1!!!

  • Bill Bodden (unverified)
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    "If you had to choose one individual to be in charge of the Fed during this crisis, that person would be Bernanke. He's a scholar of the Great Depression. His research on the way the banking crisis intensified the Depression led him to make a major theoretical contribution to monetary economics . . . .And he did extensive research on Japan's troubles in the 1990s. Nobody was more prepared, intellectually, for the mess we're in."

    Presumably, Krugman came to that conclusion on the assumption that Bernanke would be making judgments in something akin to an ivory tower on the basis of his studies and consequent knowledge. However, put Bernanke in another environment with political pressure from Bush, Paulson, Rove, Rubin, Summers, Geithner and that ilk and his judgment and opinions would be subject to impairment in keeping with most decision makers in Washington who have demonstrated a strong capacity for getting it wrong.

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    Jack, the thing is that monetary policy has shot its one bullet already. We have basically 0% interest rates for banks, and the credit market is still stuck. At this point, capitalization isn't the problem, it is that we basically have insolvent dead banks that are still walking around (i.e. the "zombie" banks) that will need to be taken over temporarily while being restructured.

    That's the path where this is headed, even uber laissez-faire advocates acknowledge this.

    I don't disagree that restoring the banking system is essential, although I'm not sure a Sweden-style "takeover" by the government is the best way to do that.

    But the argument that monetary policy won't work when interest rates are so low (Keynes' "liquidity trap" analysis that Krugman is so fond of) is not exactly a tried and true theory.

    I recently heard Bill Conerly, a libertarian free market economist, joke about how everyone always starts out saying monetary policy isn't working because of the time lag that I mentioned above. Then six to nine months later, things start to get better just as traditional monetarist theory predicta, but people credit it to something that is happening at the time (fiscal stimulus, new or repealed regulations, sun spots, etc.).

    However, I'm not convinced the liquidity trap isn't real and I favor fiscal stimulus in the spirit of "try everything"--particularly since I think history has demonstrated that the risks associated with excessive spending or debt during a recession are greatly exaggerated.

    I do think there is some risk to overreacting with either fiscal or monetary policy (or both) due to the time lags of each. I think that helped lead to the stop-and-go bouts of inflation, recession and stagflation during the 1970s.

  • Jill (unverified)
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    "raises the fee for recording a real estate title from $11 to $26. The fee, which would generate at least $15 million over the next two years, would be dedicated to affordable housing"

    The perpetual mission creep even while the economy tanks. Elections matter? And in the campaigns Democrats promised to raise fees for government subsidized housing?

    I must have missed that.

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    Lestat-- I haven't seen any evidence that TypePad is actually losing comments, just lots of double posting as folks ignore the note in the purple box. Comments can take a minute or two to actually move from the database to the published page. (Contact me offline if you have specific details to the contrary.)

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    I don't disagree that restoring the banking system is essential, although I'm not sure a Sweden-style "takeover" by the government is the best way to do that.

    I don't see any reason why we'd have to do it long term like the Swedes. But I don't see any objective evidence pointing to their model being a bad way to go either. They and their social-democratic Northern European neighbors consistently rank near the very top of annual global economic competitiveness surveys. Which demonstrates that they clearly have a viable model.

    Interestingly, the Swedes and their neighbors also happen to rank near the top of most heavily taxed countries... while Mexico is prominantly placed near the bottom of that same ranking. Which offers another interesting contrast of models which we Americans may or may not wish to emulate.

  • Zarathustra (unverified)
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    I think the street is reacting to the hidden bail-out, the third one. Besides ARRA and the bankers bonus bill, there's the fact that the Fed is keeping interest rates lower than they should properly be. Ultimately, they have to come up, which will cause a whole new set of effects, and it's hard to know how to account for that or to hold long positions with securities that you know are vulnerable to rate shocks.

  • Jason (unverified)
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    lestadelc,

    I was just making an observation. I agree that the Dow reacted to other things like GM, etc. But you can also track changes in the market when news (good or bad) has surfaced about the stimulus plan.

    I never said the market was the only indicator, or was even THE gauge for how the stimulus will work. The market is extremely emotionally driven, and I think yesterday's reaction was exactly that. That's all I was saying. You took my comments and ran with them.

    Jack, I agree; however, having an affinity toward Roman history, my fear is that the more debt we incur, the less powerful and more vulnerable we become to other nations, both militarily and financially.

  • Scott J (unverified)
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    Bill R,

    Your comments are quite funny.

    Wall street isn't the problem. This downturn was centered on and is still based on speculation in the real estate market. If the real estate market where more like the stock market (daily liquidity, constant real and transparent pricing) we wouldn't have nearly as many problems.

    The evil stock market you talk about is how all of your friends (and probably you) pay for their retirement through things like PERS, that invest heavily in the markets.

    Grow up.

  • Bill Bodden (unverified)
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    The evil stock market you talk about is how all of your friends (and probably you) pay for their retirement through things like PERS, that invest heavily in the markets.

    Which market is responsible for the recent large depletion of assets planned for retirement?

    The problem with some critics of the "market" is that they fail to recognize the market does get it right sometimes. The (probably greater) problem with pro-market people is that they believe because the market gets it right sometime the market is infallible. That isn't economic science. That's religion.

  • Harry Kershner (unverified)
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    Re: "while tricky-Dick was a paranoid power-monger (and war criminal)"

    You mean Nixon, the last liberal president?

    He opened relations with China and initiated detente with the Soviet Union. He implemented economic policies which called for wage and price control. His administration established the EPA. He proposed a guaranteed annual income by way of a negative income tax. Affirmative action in its most quota-oriented form was a Nixon policy. Even the Nixon "War on Drugs" allocated two-thirds of its funds for treatment, a far higher ratio than was to be the case under any subsequent President, Republican or Democrat.

    While he was a war criminal, his crimes were part of the train of criminality inherited from the LBJ/Kennedy administrations (Sound familiar?)

    Bring back Nixon.

  • Scott J (unverified)
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    Mr. Bodden,

    Are we bailing out home owners or mutual funds?

    Speculation in the real estate market due to easy credit terms and "see no evil" mortages agreed to by the buyer, mortgage broker, bank and Gov't arm (Fannie and Freddie) that bought the mortgages and then securitized them.

    There were very few victims in these mortgage contracts. Very few home buyers signed the contract with a gun held to their head.

    This is what created the problem and led to liquidations in the stock market.

    Just follow the facts.

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