IBDeditorials.com, outstanding as usual:
Since World War I — the start of the modern financial era — we’ve suffered four major downturns. In three of them, the government cut tax rates. And each time an economic boom ensued. In only one did the government respond by raising taxes, erecting trade barriers and enacting massive new spending programs to get out of the slump. Today, we call that time the Great Depression.
Of course, the Obama administration is using the strategy that didn’t work, and claiming that the ones that did work didn’t.
Michael Malone at Pajamas Media (“Turnaround Time“) thinks that Silicon Valley may be poised to lead a recovery –
All of my reporter’s instincts right now are telling me that Silicon Valley, and much of the rest of the high tech industry, is already starting to come out of this downturn. …. I have never so many entrepreneurial teams at work as I have in the last few months. And they are the tip of the iceberg: each one of these teams represents perhaps a dozen more hidden away in rented meeting rooms and home kitchens.
I may be dreaming, but what I think I’m seeing is the birth of the largest entrepreneurial boom in Silicon Valley history. …. My hunch is that by July enough of these new companies will have emerged that …. it will be obvious to everyone that high tech is booming again.
But, Obama’s stimulus might ruin it all:
If the Stimulus, as many predict, has the effect of attenuating rather than shortening the Crunch, these new companies will quickly hit a wall and many will die. The same thing will happen if Sarbanes-Oxley and other economically suicidal regulations remain in place. And it goes without saying that if Washington decides to outlaw risk and reward, supply and demand, and entrepreneurship most of all, not only will this boom, but all that should follow, will never occur.
The horses of high tech are already in their gates, waiting for doors to fly open. If the track is too muddy or if there is a wall across the first turn, don’t blame them for not finishing the race.
I wish ‘em luck. They’ll need it.
Recent NewsBusters items I did not cross-post at BizzyBlog are here “Chicago Alderman Sentenced to 4 Years; Sun-Times, AP Fail to Note Dem Party Affiliation”) and here (“Press Calls Plouffe ‘Former Campaign Manager’ As His E-Mails With That Title Continue to Fill Inboxes Across America”).
The former is about a Democratic Chicago Alderman who insisted on taking bribes before she would help developers get inner-city housing projects going. The Chicago Sun-Times ran six stories on her over almost two years and mentioned her party once. AP’s story yesterday didn’t mention it at all.
The latter is about Obama campaign manager David Plouffe, who is still having e-mails sent out in his name from Obama for America but is supposedly not Obama’s Campaign Manager any more. Funny — his e-mails are still signed “David Plouffe, Campaign Manager, Obama for America.”
In over his head: “(Sherrod) Brown has been named head of the Senate Banking Committee’s Subcommittee on Economic Policy. The subcommittee oversees economic growth, employment and price stability, and reviews monetary policy.”
There is nothing in his biography that would indicate that Brown is qualified for this position after barely two years in the Senate.
In fact, his hostility to free trade would indicate that his presence is dangerous. Free trade hasn’t hurt Ohio (five letters, Senator: H-O-N-D-A); wrong-headed state leadership for about 23 of the last 26 years has.
With the exception of roughly the first three years of George Voinovich (1991-1994), Ohio’s governors and compliant legislatures have done mostly the wrong high-tax, high-spending things since 1983 (Celeste 1983-1991, Voinovich 1994-1999, Taft 1999-2007, Strickland 2007-present). This is why I said here last year that the Buckeye State “went from pseudo-red to blue” in 2007, and in my concurrent New York Post column that Ohio has (economically, of course, since that was the topic under discussion) “mostly acted blue since the mid-1990s.”
Those assertions are both self-evidently true. Ohio has been economically governed like a blue state for most of the past quarter of a century, regardless of the party putatively in power.
Now we have a Celeste Administration refugee overseeing banking and economic policy bringing the worst aspects of the Ohio political mentality to an important position in Washington. Yikes.
GM’s and Chrysler’s march towards $100 billion of taxpayer money, predicted by some last year when all of this began, continues:
GENERAL MOTORS CORP.
- Asks for an additional $16.6 billion in loans and credit lines on top of $13.4 billion already granted, for a total of $30 billion. Previously GM said it only needed $18.4 billion to weather the auto sales downturn.
- Asks for an additional $5 billion in government loans, on top of $4 billion already received. Previously, Chrysler said it would need just an additional $3 billion.
Roughly 60 days after President Bush, with president-elect Obama’s enthusiastic agreement, released TARP money to the two companies, they’re already over one-third of the way towards sucking out $100 billion if the government opens up the cash spigots again. What’s more, if I’m correct, Congressional approval isn’t required for any additional “loans.” It will all come from Treasury Secretary Tax Cheat Tim Geithner’s TARP II.
And I’m pretty sure this doesn’t include the money provided to prop up GMAC and Chrysler credit to the tune of roughly $7 billion.
Combined, the companies say they needs over 60% more than they thought they needed only two months ago. After January’s disastrous sales result, this was completely predictable.
Tim Geithner needs to do something smart for a change and stop it now. Let the two companies file for bankruptcy before we all have to.