I Was Recently Reminded Of How Great The Economy Was During the Jimmy Carter Years.

Yeah, I know. You are surprised.  After all that Reagan said, surely I must jest? Actually no.  Today we have access to data; back then we really didn’t. We depended upon perception and that can be easily flipped with distraction.  Sort of the way the Greenville barons of Delaware have totally destroyed Mike Protack as a viable candidate…  Same thing.  Innuendo, Innuendo, and repetition…

In Carter’s defense this tactic was new, so Carter was sitting up there, like “no, I don’t have to respond to that outrageousness, everyone knows it is not true…”

Funny how things get manipulated…  But look at the Carter years on this chart… 1977 through all of 1980.

We had massive investment in our business community.  Jobs, Jobs, Jobs.  What these to charts show, is that America turned its profit from its corporations, to itself.  Investing in capital improvement at the greatest height since figures were started in 1948.  Jimmy Carter still rules the chart….  It is exactly what we lack now.

The top personal bracket was assessed at a rate of 70%…..  yet the effective Corporate Tax rate was steadily falling from its WWII high.

(Footnote — Notice how the Ronald Reagan recovery of 1983-84 was created?  Increased Corporate tax rates in the Great Reagan Compromise.  Raising taxes is what made Ronald Reagan so well loved and appreciated; not cutting them.   For future reference, just remember the effective corporate rate dropped under Jimmy Carter, and ROSE under Ronald Reagan.)

Social Security was at it’s best ever.

Pension Plans at their highest ever…

And for a closer look an employment, one can see here why and where we have lost jobs…

And most importantly, the era of Jimmy Carter was when the 99% owned it’s highest share of wealth, ever…

A lot can be said for Jimmy Carter.  He got such a bad rap.  When Ronald Reagan himself was overwhelmingly RE-ELECTED in 1984,  his unemployment level was only 3 tenths of a percent under Jimmy Carter’s back on the previous election day…  If one clicks on the link above which delineates the unemployment rate month by month, ones sees that unemployment did not return to the best of Jimmy Carter’s years, until the waning months of the the Reagan term….

The only class of America that wasn’t better off in the Carter years, was the wealthy….  And that is why, just as today, we had a smear campaign to discredit the person who did the most ever, to help the middle class….

The record shows that America’s middle class peaked in 79.  Then came Reagan.

And if we were totally fair with ourselves, the reason Carter was so throughly dissed was because we were embarrassed with ourselves in the seventies… Our cities in decay, our youth on drugs, the early creative musical giants had dissolved into disco.  We didn’t really like who we were. We had to blame… someone…  After all, this look was actually cool in 1979.

(Thank you Fullerton College)

Gee, no wonder we like Reagan so much…

Response to Duffy

Duffy is God’s answer to a prayer.. I miss the old days of blogging when we were debating principals instead of people… Duffy has stuck to the old line of debating principals with facts, and that is what makes him special in the eyes of bloggers everywhere…

Since the passing of Steve Newton, he has been the only one to challenge me in any argument, and usually some pretty good stuff comes out of both sides during the exchange… I have respected that.. Cause once again, opinions mean dick. Facts are what we steer by.. It is my hope that in responding to his challenge that an answer may make itself apparent.. Who knows? It may not come from me… But if I’m the catalyst for bringing it out in the open, then… none of this was in vain..

Why I like to debate Duffy is simple.. Neither side, he or I, is concretely set in their opinions… We accept it when the other side makes sense… I usually go into such debates having no idea where they’ll end up… I hope the rest of you enjoy the ride as welI….

That said..

Duffy leads: Wall Street’s problems were caused by Fannie and Freddie loaning money to people they knew couldn’t pay and moreover, forcing banks to lend money to people who couldn’t pay. That was not deregulation but misregulation

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate.

First off, the Community Reinvestment Act of 1977 was developed for, and locked in on, urban developmental areas and had no part of the subprime boom, which primarily occurred out in western desert regions where owning 4 to 5 investment homes was normal… Those homes were overwhelmingly funded by loan originators NOT SUBJECT to the act… We all know the crises was not because people couldn’t afford a payment on their house. It came about, because with no occupants, people could not afford the payments of 4 to 5 houses….. Instead of one loan per borrower turning up in default; four to five were.

Second off, The housing bubble reached its point of maximum inflation in 2005.

Courtesy of NYT

Third off, During those exact same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of loans secured by the Feds… Follow the dotted line on the very bottom of the graph…

Courtesy of NYT

Fourth off; During those exact same years, private secures, like Delaware’s own AIG, grabbed the lions share of the market.

Courtesy of NYT

Remember these graphs for later on when I discuss the results of deregulation, versus regulation… But like it or not, these graphs conclusively show that private insurers, who thanks to Marie Evans, we now know were deregulated by Phil Gramm in the 2000 Omnibus Bill, were the primary cause of the worlds financial collapse.. Probably put best by these words of AIG’s spokesperson, who when asked why they didn’t have sufficient funds to cover losses, said point blank, “We were deregulated. We were no laws requiring us to keep any funds, ..so we spent it…”

Duffy leads: The loosely regulated hedge funds escaped this mess largely unscathed. Why? They can’t count on a bailout like the big banks. The Too Big To Fail banks were counting on a bailout (not unlike the S&L bailouts which started on the Republican’s watch) and they got them.

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. I agree that the hedge funds did survive better than the banks. Not because of bailouts, but because they sold short during the crises and made billions while firms closed and people got thrown out of work. There is nothing wrong with that; I did the same. In fact close readers may remember my warnings that the crises was impending almost a year earlier. Very close readers may remember my telling them exactly when to sell, and at what point the stock market would rebound… I must say: I called it rather well. 🙂

“Hedge funds were not in my understanding, at fault in the credit crisis,” said David Ruder, former chairman of the Securities and Exchange Commission. “At the most what they did was to sell securities when some of their investments were declining and they needed to have liquid funds. They were not the architects of these problems.”

De regulated hedge funds are not the issue… De-regulated, excessively leveraged, mortgage securities, are a different story however… They, not the banks that held them, are the cause of the crises…Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month – and more recently have brought the global banking system to its knees.

Where you err is when you state that banks too big to fail, assumed they would be bailed out… By implication, you say imply they failed from squandering money, and wanted the bailouts.. But your tax dollars didn’t flow directly to the bottom line.

The roughly $200 billion the Treasury Department has handed out to battered banks was swapped for a special class of stock that pays a 5 percent dividend (rising to 9 percent after five years.) As of April 15, the Treasury had collected about $2.5 billion in dividend payments on its investment.

So in that sense, the bailout money represents an expense for banks. That’s one reason a number of banks have said they want to give the money back as soon as possible.

You say big banks were counting on a bailout, and they got them? That didn’t happen to these banks. New Mexico, Georgia, and Florida each lost a bank just last Friday. That brings to 8, the number of banks failed in June. Unfortunately if a bank is failing, it can’t bet on itself to fail, as can a hedge fund.

Duffy leads: Banks have successfully lobbied to get their losses absorbed by taxpayers and gains are kept private. How nice for them. They felt comfortable making insane gambles because they knew they’d be bailed out. Most of them were right. Also remember that it was Bill Clinton who tore down the wall between retail and investment banking. The idea was to give banks more stability as they typically perform as exact opposites in bull and bear markets. (FWIW, I think that was a good idea and I can tell you first hand that two of the Fortune 100 banks I worked for were carried by retail banking in bear years. They may not have had bonuses those years but they didn’t have layoffs either)

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. The idea is that the banks made bad decisions knowing taxpayers would bail them out is the issue that is inaccurate. For the record, I have no qualms that it was the Clinton legacy who tore down the wall between banks and investment banking. Like you, I feel it was a good idea to do so… Again the problem was not primarily with banks making loans to people who could not pay.. Although, it was as late as October 2009, when I was made aware of one private Bank in Denver still exaggerating income to make loans look good enough on paper to get approval of securitization. What caused the collapse was the leveraging of those loans as securities, so that as the housing market became overextended, and the ARM jumped past the low cost opening years, the damage was 100 times worse because of leveraging. What made the collapse criminal, was that the insurance most financial institutions had bought from AIG, to cover such an improbable event, had already spent by that companies executives, out on bonuses to themselves. What made it doubly criminal, was that when they received government dollars through a taxpayer bailout, those same executives assumed it was to first go towards paying their bonuses again. However, very recent events may give some cover to the argument that some collusion was implicit in the bailing out of Goldman Sacs and AIG… Basically, once bailed out, AIG paid Goldman Sacs for shares twice as much as they were worth. The documents also indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts.

Top Ten Ways Charlie Copeland Will Fund Delaware Schools

Delaware Watch has Charlies’ opponent Matt Denn’s methods up here.

Within that article the author states:

But Charlie Copeland seems to think that reducing costs and increasing public scrunity alone will magically cause more funds to be targeted for instruction:

On the highest authority in a rebuttal from one of Charlies’ closest friends, we have here, exactly how Charlie Copeland will improve education while slashing funding from it.

Paul, can you give us a drum roll please…………………………………..Starting with number 10……

10. Bust the union. Use incarcerated prisoners to do all of the back breaking work for free.

9. Force all transported kids to walk to school. Who needs buses? The exercise will do them well.

8. Force teachers to work for free. Eliminate their salaries. Have them live off their spouse’s incomes.

7. Rob the DSEA of all its pension plans. Use them to pay Delmarva Power…..

6. Unruly students will be killed and sold for fresh meat. Guaranteed free from salmonella…..

5. The rest can be chained to their seats, morning to night, eliminating hall monitoring.

4. Turn off all power.

3. Burn each classes’ and all of the library’s books for heat.

2. Fire all administration and use the National Guard……

And the number one way Charlie Copeland will cut down on a school’s expenses……………………

1. Home school them all……………………

And those naysayers said it couldn’t be done………

Mosquito Wars….

The long awaited Petraeus report is due today. Since the White House has admitted it will be responsible for content, one can assume that it will represent the Republican take of the war in Iraq.

However, timed to break just before the Petraeus report, were two other reports of which we have heard already. One, by David Walker of the GAO, could be said to represent the Democratic view of the crises at hand. The other, sponsored by Senator Warner, featuring General Jones (Retired: who looks like he stepped out of the move “White Christmas”) could be said to provide a centrist, or otherwise unbiased, review.

Oh boy….here we go again……surprisingly, all say the same thing………WHAT?…….. All say some progress has been made militarily, but the true solution needs to be political.

So when asked if the surge worked, the answers are all the same. There are gains in stability in some regions as a result of the surge. But politically, we are in the same spot or worse, as we were in January 07.

At each of these hearings, each time this same conclusion is uttered, the Dems posture and say the surge didn’t work….and the Republicans hunker down and say some progress shows momentum…..you can’t quit while you are moving forward.

Oh No! Parallels to Vietnam: In Vietnam, the US Military won every engagement it fought against the enemy. However our State Department was unable to matriculate a political solution. So it is in Iraq. I heard Lindsey Graham, (R-SC) make a speech that would have fit quite nicely in an anthology of “Hawk’s” statements from the early ’70’s.

America: we are smarter than this….We should not make the same mistake twice……

All three reports comment on the marvelous success we fell upon in Al Anbar province. However it was not our military that forced the issue. Rather it was the local population that became fed up with Al Qaeda’s brutality so much that they did something about it. It was fortuitous that the troops were there, to capitalize on the decision made by the Sunni sector.

Had we not had the surge and enough troops in the field, we could have still been holed up in the Green Zone, and the opportunity that presented itself, could have slipped through our fingers. Supposedly the tipping point for the Sunnis came when Al Qaeda made a point of punishing a tribe by killing 6 or 7 of its young boys. The chieftain asked for protection. The astute Lt Col. said “I’ll have a tank parked here in two hours”…… The domino effect rolled throughout the region based on the momentum off that one incident.

But one incident doth not a war make…. As we succeed in Al Anbar, we are unraveling in the South; insurgents are moving back in as the Brits pull out. This should surprise no one……going back 67 years ago:

“hostile forces will withdraw into the more remote parts of the country, or will be dispersed into numerous small groups which continue to oppose the occupation. Even though the recognized leaders may capitulate, the subordinate commanders often refuse to abide by the terms of the occupation. Escaping to the hinterland, they assemble heterogeneous armed groups of patriotic soldiers, malcontents, notorious outlaws,…… and by means of guerrilla warfare, continue to harass and oppose the intervening force in its attempt to restore peace and good order throughout the country as a whole.

Anyone out there recognize that? That was taken directly from the declassified version of the Marines’ Small Wars Manual, first published in 1940. It suggests that to countervail such forces, similar to what we anticipate today, we need numerous presence patrols organized with the help of local, native militias, and outposts that are erected dispersed over a wide area in order “to afford the maximum protection to the peaceful inhabitants of that country.”

This blanket approach of embedding Marines into local tribes, and assisting them in regaining some type of stability in their lives vis a vis their experience with the chaos caused by terrorists, means we often wind up doing the work, and leaving local militias with the credit. This has worked well in the southern Philippines, and has for many years worked well in Afghanistan. We did not employ these type of winning tactics in Iraq, until Petraeus took over, and because of bureaucratic squeamishness over causalities, we have let up on our winning strategy inside Afghanistan.

Americans are good…..and as long as we fight on the “side of good”, we continue to win the hearts and minds of local populations. On this direct level no one can compete with us. No one! Our administration lost sight of that. Intent on imposing a government made to help the image of the republican party, American forces found themselves, instead of fighting for the good in the local populations eyes, fighting for oil rights and Cheney/Bush’s tough machismo.

I call this post Mosquito Wars, because as I sat through each of these hearing, listening to all everyone had to say, the war became less of a military adventure, and more of a politically psychological one. After all, that is how the Soviet’s broken regime crumbled…..not by nuclear strikes or preemptive invasions. They just imploded.

The Soviet analogy sets this up well. During the peak of Cold War, we were beset by Soviet spies. They were relative easy to find, hard to kill, and harder still for their agency to replace. Today against the terror threat, the parameters have changed. The terrorists are very hard to find. easy to kill, and easy for their agency to replace.

The way you fight terrorism is with intelligence. If you know what terrorists are going to do, you can prevent it. But finding out is hard, especially when they mimic regular citizens. But as long as the root causes of terrorism are still out there, as long as there are breeding grounds to replace the ones killed or captured, terrorism itself will be never conquered.

Which brings us to mosquitoes. You can live with them, by walking around with mosquito netting over your head whenever you choose to go out, or you can spend 100 % of your outdoor time, watching your bare arms, and swatting whenever one lands. But if you really want to kill mosquitoes, you change the environment to one where they cannot survive. We did so as we built the Panama Canal. We suffocated their breeding grounds with oil; we sprayed standing water. We succeeded.

Terrorists are not lions, tigers or bears…oh my. They are mosquitoes. Totally harmless entities until they land on you. So lets fight them the same way we fight mosquitoes.

Fix the abject poverty in the area where they breed. For a mere 12 billion, it is estimated, we could permanently end poverty in the world…….Drill some wells, teach crop techniques, vaccinate their livestock, provide lifesaving medical attention, and do so with some M16’s standing by in case a lone mosquito slips in and needs a good swat…

It’s America…..it’s how we win…….and it is not to late to win in Iraq. Announce the timetable, work hard to build an Iraq ready for withdrawal, and leave whenever we are done, not a moment before. But announcing the timetable is the key to developing political will among all factions in Iraq.

Remember how the moment Reagan was sworn in, the Iranian hostages were released after 444 days of captivity? They were not going to budge an inch as long as Carter was still president.

Let us move things fast forward too, by changing our leadership on this side of the Atlantic, doing so on our fast forward timetable (67 votes), thereby giving Iraq some hope too………

It’s something to think about; the next time you swat a mosquito……