1838- YOUR SO BAIN
About a week ago I noticed something.
The media began running with a story that said ‘the austerity programs in Europe did not work- look- their economies are collapsing’.
Now- at first there were just a few people saying it- Paul Krugman from the N.Y. Times.
He is a liberal economist who has advocated for more stimulus spending.
He has said that 800 billion was not enough [the 1st stimulus] that we needed about 2 trillion.
Of course if your whole career is based on teaching this principle [Krugman is a Noble Prize winning economist] then instead of admitting you were wrong- you will say ‘they did not spend enough’.
So he just put out another book [how to spend our way out of this depression] and some others have jumped on the bandwagon.
These people know that we will never know if 2 trillion would have done the job- because we will never agree to another trillion in stimulus.
So- after hearing inklings of this over the past couple of weeks- I saw a report on the presidents meeting with the G-8 nations [top economies of the world] and the news report showed Obama and the U.S. on one side- and the E.U. nations on the other side.
They then said how Obama- and the stimulus- brought our country out of the recession- and that all these other E.U. nations tried austerity- and it failed.
The E.U. nations that are suffering their own ‘great depression’ got into this situation by spending more than they had.
Greece was the first one to see trouble- and others followed.
This is why we saw the Greek riots and stuff like that.
Now- out of the 17 nations that make up the common currency group- the Euro- Germany is the most stable of the bunch.
Germany has practiced austerity [spend less than you have] for years- they saw the writing on the wall and cut back their spending years ago.
They are also the strongest nation in the Euro Zone [note- there are 28 nations in the European Union- but only 17 are in the common currency called the Euro- Obviously Great Britain has the largest economy in Europe.]
So- after some of the ‘overspending nations’ got into trouble- they wanted the banks in the E.U. region to bail them out [U.S. style].
The banks- and the other more stable economies told Greece 'if you want the bail out- you must show us you are serious about getting your house in order’.
And this led to cutbacks in spending in Greece and a few other troubled nations.
Okay- the Greeks did not like the new cut back measures [called austerity] - many of the retired people lost half their pensions- other benefits were lost.
Greeks retire in their 50’s- with full benefits.
They gave too much over the years- and got in over their heads.
So Germany said ‘look- our people retire at 70- if you want our tax money to bail you out- then you need to retire at the age we do’!
Sure- they were mad- they were not going to subsidize another countries young retirees.
So all this played into the call for cuts.
Did the cuts work?
They never had a chance to.
The recent elections in Greece kicked out all the ‘cutters’ and put in new people who vowed to tax the rich.
In France- the new leader is calling for a 75 percent tax on the rich- 75!
So- the Euro Zone nations have not even been able to see if the cutting worked.
There spending went up the last few years- from 44 to 49 %- as compared to their GPD.
So- when the media reported ‘the Obama spending worked- and the E.U. cutting did not’ that’s really not the full story.
I find it funny how quick the media and the Obama people began running with this message- in no time at all they saw a political advantage in making it look like the Krugmans of the world were right.
Remember- the strongest economy in the Euro Zone is Germany- and they did not spend like the other weaker nations- or like the U.S.
They are the strongest because they reigned in spending- not increase it.
The U.S. economy did gain some benefit from the 800 billion stimulus- because much of the money that went to the states was used to simply prop up the states budgets- but that money is now gone.
Overall- the cost per job from the stimulus money was not worth it- and many of the programs [Solyndra] that we spent money on was lost.
So all in all- to say ‘the U.S. has proved that stimulus works- and the E.U. has proved that cutting does not’ is really not true.
Also- the other day I posted about the danger of the President going around and using the class warfare language.
Sure enough- we had 2 more incidents of anarchists [people mad at govt. and rich folk] who were arrested for planning terrorist attacks.
These guys [5 in all] were at the NATO meeting in Chicago and supposedly were planning bad stuff.
Some say they were set up by undercover agents- so how serious they were we don’t know.
But this happened just days after Biden went on a rage at some union event.
I’m sure you saw the clip ‘they don’t get us- they don’t know who we are!’
The ‘they’ are the rich folk [opps- Biden just happens to be one].
Now- he went on for a few minutes- in a rage.
The Obama campaign has continued to hit private enterprise hard- they are gonna wind up sinking Bain Capital.
Bain is the private equity firm that Romney ran.
Bain has gone in to businesses in trouble has done one of 2 things.
Sometimes they close the business and pass the profits off to the stock holders.
Other times they save the business- and create jobs.
I must admit- as media critic- I even began becoming influenced by the nonstop campaign against Bain.
Just recently I saw the stats- they actually have helped/created more jobs than they lost.
I never knew this.
Just yesterday Bain had to start putting out statements in defense of their business.
You must understand that the president’s choice to basically throw this private group under the bus is sad.
If you work- or have money invested in Bain- you are in trouble.
Look- private companies hire Bain to come in- and at times- help the company.
Now- if you are an employer- and word gets out ‘the boss hired Bain’! The Union guys will revolt!
You say ‘well John- that’s good- they will save their jobs’.
The company will simply avoid the media publicity from Bain and hire another firm.
So- the decision to blast Bain is an attack on jobs- in a way.
Even Cory Booker- the mayor of Newark- went on the defense of Bain on Sundays Meet the Press.
He had to back track later because he is a supporter of Obama.
But he too realizes that to attack private equity is stupid.
Private equity just bailed out Newark a year or so ago.
Mark Zuckerberg [Facebook founder] gave around 100 million to Newark to help with the schools.
Yeah- Corey had a dog in the fight- and it wasn’t Obama!
Okay- I think will end with this- I was gonna throw in another thing or 2- but let it wait.
Rarely is one side always right- and the other always wrong.
But when you see the trend of a false story develop in the media- and the concurrent Obama campaign narrative- then you need to be aware that this in not journalism.
It is simple advocacy.
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