Cardinal Fastener & Specialty Co. 1s an example of success
2-7-09: A Stimulus Deal?
2-9-09: First Presidential Press Conference
2-14-09: Highlights of House-Senate economic stimulus plan
Text of President Barack Obama's inaugural address on Tuesday, January 20, 2009, as delivered:
Filed by Associated Press January 21st, 2009
``My fellow citizens:
I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors ...
Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because we the people have remained faithful to the ideals of our forebears, and true to our founding documents ...
That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some ...
On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.
On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.
We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free and all deserve a chance to pursue their full measure of happiness.
In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the faint-hearted, for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things, some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.
For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.
For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.
For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn ...
This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished.
But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions, that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.
For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act, not only to create new jobs, but to lay a new foundation for growth.
Now, there are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans ...
What the cynics fail to understand is that the ground has shifted beneath them, that the stale political arguments that have consumed us for so long no longer apply.
The question we ask today is not whether our government is too big or too small, but whether it works ...
Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control, and that a nation cannot prosper long when it favors only the prosperous.
The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart, not out of charity, but because it is the surest route to our common good.
As for our common defense, we reject as false the choice between our safety and our ideals. Our founding fathers, ... faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations.
Those ideals still light the world, and we will not give them up for expedience's sake. And so to all the other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more ...
We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort, even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet.
We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you ...
As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us, just as the fallen heroes who lie in Arlington whisper through the ages.
We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment, a moment that will define a generation, it is precisely this spirit that must inhabit us all.
For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate ...
What is required of us now is a new era of responsibility, a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
This is the source of our confidence, the knowledge that God calls on us to shape an uncertain destiny ...
So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:
"Let it be told to the future world, that in the depth of winter, when nothing but hope and virtue could survive, that the city and the country, alarmed at one common danger, came forth to meet (it)."
America, in the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come.
Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.
Thank you. God bless you. And God bless the United States of America.''
NEWS ARTICLE from The Plain Dealer, 1-23-09, by Andrew Taylor/Associated Press Writer
``Senate panel proposes $300 bonus for seniors in economic recovery plan
Highlights of Senate economic stimulus plan
Seniors, disabled and veterans -- $300 payments to Social Security beneficiaries, and $300 payment under the Supplemental Security income program for elderly and disabled people living in poverty. Veterans receiving disability or pension payments would also receive $300. The cash payments are one time only.
Individuals -- $500-per-worker, $1,000-per-couple tax cut for two years, costing about $142 billion; greater access to the $1,000 per-child tax credit for the working poor; expanding the earned-income tax credit to include families with three children; a $2,500 college tuition tax credit; $7,500 tax credit for middle-income, first-time home buyers who purchase homes in the first half of 2009; temporarily suspends taxation of unemployment benefits.
Businesses -- An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two; bonus depreciation for businesses investing in new plants and equipment; a doubling of the amount small businesses can write off for capital investments and new equipment purchases.
Energy -- $31 billion in tax credits to boost renewable energy production and promote energy efficiency, including making it easier for money-losing companies to benefit from energy tax credits. Makes tax credits for energy-efficient homes more generous.
Aid to the poor and unemployed -- $40 billion to provide extended unemployment benefits through Dec. 31, increase them by $25 a week and provide them to part-time and other workers.
Health care -- $27 billion to subsidize health care insurance for the unemployed and provide coverage through Medicaid; $87 billion to help states with Medicaid.
Infrastructure -- About $140 billion, including $27 billion for road and bridge construction and repair; $20 billion to repair and renovate school and university buildings; $9 billion for improved access to broadband; and $1.4 billion for western water projects.
Education -- Almost $100 billion, including $77 billion in grants to states for special education, local school districts, and a $500 increase in the maximum Pell Grant.''
``WASHINGTON -- Senior citizens receiving Social Security would get a bonus payment of $300 under the Senate version of President Barack Obama's economic recovery plan.
The $820 billion Senate measure includes tax cuts and spending proposals prepared by the Senate's two most powerful committees on Friday.
Finance Committee Chairman Max Baucus, D-Mont., unveiled a $455 billion plan combining $275 billion in tax cuts with $180 billion in spending in anticipation of a panel vote on Tuesday. That measure will be paired on the Senate floor with $365 billion in additional spending sought by the Appropriations Committee.
The Senate plan is likely to grow during committee debates Tuesday and subsequent floor action. The Social Security bonus is a one-time payment. Other provisions in the stimulus measure generally extend for two years.
A House companion measure slated for a vote Wednesday carries an $825 billion price tag, with one-third reserved for tax cuts ...
The bonus for seniors is but one chapter in the Senate proposal. There's also a temporary two-year $500 tax cut for most workers and $1,000 for couples, a $2,500 tax credit to help pay for college, tax cuts for businesses and to promote renewable energy, and $87 billion worth of help to states struggling with their 2009-2010 budgets for the Medicaid health care program for the poor and disabled.
A summary of spending items under the jurisdiction of the appropriations panel released Friday evening calls for approximately $140 billion in infrastructure and science spending, including $27 billion to states for highway construction and repair. That's likely to disappoint backers of road projects.
But there's also lots of money to build and repair schools and federal buildings such as VA hospitals, bring broadband Internet service to underserved areas, and relieve a backlog of water and sewer projects. The appropriations panel's plan would touch numerous accounts, from day care centers at military bases to health research financed by the National Institutes of Health.
For the poor, food stamp benefits would go up, while states would get $77 billion in aid for education and $25 billion as a block grant with no strings attached ...
The Finance panel plan also would subsidize for two years almost two-thirds of health insurance premiums for the unemployed retaining health care under the so-called COBRA program. It would extend unemployment benefits for the long-term jobless through the end of 2009, increase the weekly benefit by $25 and provide unemployment benefits to more part-time workers. Up to $2,400 in unemployment benefits would be tax free.
Both House and Senate would provide a $7,500 tax credit for middle-income, first-time home buyers who purchase homes in the first half of 2009.
For low-income workers, the measure would make the child tax credit more generous by making more people eligible for refunds if they earn too little to pay income tax. The earned income tax credit for the working poor would be made more generous for larger families ...''
COLUMN from The New York Times, 1-25-09, By PAUL KRUGMAN, Op-Ed Columnist
``Bad Faith Economics
As the debate over President Obama's economic stimulus plan gets under way, one thing is certain: many of the plan's opponents aren't arguing in good faith. Conservatives really, really don't want to see a second New Deal, and they certainly don't want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.
Some of these arguments are obvious cheap shots. John Boehner, the House minority leader, has already made headlines with one such shot: looking at an $825 billion plan to rebuild infrastructure, sustain essential services and more, he derided a minor provision that would expand Medicaid family-planning services, and called it a plan to "spend hundreds of millions of dollars on contraceptives."
But the obvious cheap shots don't pose as much danger to the Obama administration's efforts to get a plan through as arguments and assertions that are equally fraudulent but can seem superficially plausible to those who don't know their way around economic concepts and numbers.
So as a public service, let me try to debunk some of the major antistimulus arguments that have already surfaced ...
First, there's the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years.
It's as if an opponent of the school lunch program were to take an estimate of the cost of that program over the next five years, then divide it by the number of lunches provided in just one of those years, and assert that the program was hugely wasteful, because it cost $13 per lunch ...
Next, write off anyone who asserts that it's always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.
Here's how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets, and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.
The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it's clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts, and therefore costs less per job created (see the previous fraudulent argument), because a large fraction of any tax cut will simply be saved ...
Finally, ignore anyone who tries to make something of the fact that the new administration's chief economic adviser has in the past favored monetary policy over fiscal policy as a response to recessions.
It's true that the normal response to recessions is interest-rate cuts from the Fed, not government spending. And that might be the best option right now, if it were available. But it isn't, because we're in a situation not seen since the 1930s: the interest rates the Fed controls are already effectively at zero.
That's why we're talking about large-scale fiscal stimulus: it's what's left in the policy arsenal now that the Fed has shot its bolt ...
These are only some of the fundamentally fraudulent antistimulus arguments out there ...
But here's the thing: Most Americans aren't listening. The most encouraging thing I've heard lately is Mr. Obama's reported response to Republican objections to a spending-oriented economic plan: "I won." Indeed he did; and he should disregard the huffing and puffing of those who lost.''
NEWS ARTICLE from The Plain Dealer, 1-16-09, by Patrick O'Donnell/Plain Dealer Reporter
[Cardinal Fastener & Specialty Co. 1s an example of success in a new economy]
``BEDFORD HEIGHTS -- On a final tour before his inauguration, President-elect Barack Obama today visited a company that helps make wind turbines ...
In a speech to about 65 employees and guests, Obama used Cardinal Fastener & Specialty Co. as an example of success in a new economy ...
"The story of this company -- which began building wind turbine parts just two years ago, and is now poised to make half its earnings that way -- is that a renewable energy economy isn't some pie-in-the-sky, far-off future," Obama said. "It's happening all across America right now. It's providing alternatives to foreign oil now. It can create millions of additional jobs and entire new industries if we act right now."
Cardinal, started in 1983, makes fasteners like bolts and nuts that are used in bridges, towers, ships and trains. In the last few years it has focused on making fasteners for the towers and blades for wind turbines.
Obama met with Cardinal President John Grabner, then toured the plant for about half an hour ...
Obama's speech focused on what he is calling his American Recovery and Reinvestment Plan, a combination of several economic investments and tax credits that he and his transition team say will save or create 3 million to 4 million jobs. They also say the changes will position the country better for the 21st century economy.
"It's not too late to change course -- but only if we take dramatic action as soon as possible," Obama said.
And, he said, "I want to be clear -- we're not looking to create just any kind of jobs here. We're looking to create good jobs that pay well and won't be shipped overseas. Jobs that don't just put people to work in the short-term, but position our economy to be on the cutting edge in the long-term."
Cardinal Fastener was chosen because of modern production techniques and its role in producing so-called clean energy.
Obama's plan calls for the country to invest $150 million over 10 years on clean energy technologies and jobs in that field, plus have at least 25 percent of the nation's electricity come from clean sources by 2025 ...
The President-elect heads from here to Philadelphia, where he will board a charter train to travel to Washington, D.C. for Tuesday's inauguration. The trip, which includes stops in Delaware to pick up Vice President-elect Joseph Biden and in Baltimore, retraces the trip Abraham Lincoln made before his inauguration in 1861.''
Barack Obama's speech at Cardinal Fastener in Bedford Heights, Ohio
Posted by Plain Dealer staff January 16, 2009
Prepared remarks for President-elect Obama's address to workers at Cardinal Fastener on Friday, Jan. 16, 2009:
``I want to start by thanking the folks here at Cardinal Fastener for the tour you just gave me. The story of this company, which began building wind turbine parts just two years ago, and is now poised to make half its earnings that way, is that a renewable energy economy isn't some pie-in-the-sky, far-off future. It's happening all across America right now. It's providing alternatives to foreign oil now. It can create millions of additional jobs and entire new industries if we act right now.
The need for this action has never been more urgent. We've started this year in the midst of a crisis unlike any we've seen in our lifetime. Last month, we lost more than half a million jobs ' a total of nearly 2.6 million in 2008. Another 3.4 million people who want and need full-time work have had to settle for part-time jobs ...
The way I see it, the first job of my Administration is to put people back to work and get our economy working again. That's why I've moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth ...
Take the example of wind power alone: I'm told that if we don't act now, because of the economic downturn, half of the wind projects planned for 2009 could wind up being abandoned. Think about that. Think about all the businesses that wouldn't come to be, all the jobs that wouldn't be created, all the clean energy we wouldn't produce.
And think of what's happening in countries like Spain, Germany and Japan, where they're making real investments in renewable energy. They're surging ahead of us, poised to take the lead in these new industries.
This isn't because they're smarter than us, or work harder than us, or are more innovative than we are. It's because their governments have harnessed their people's hard work and ingenuity with bold investments, investments that are paying off in good, high-wage jobs, jobs they won't lose to other countries.
There is no reason we can't do the same thing right here in America. That's why, as part of our Recovery and Reinvestment plan, we're committing to double the production of renewable energy in the next three years, and to modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes.
In the process, we'll put nearly half a million people to work building wind turbines and solar panels; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to new jobs, more savings, and a cleaner, safer planet in the bargain.
Here at Cardinal Fastener, that could mean going from operating at 50 percent capacity to 90 percent capacity and creating even more good, made-in-America jobs right here in Ohio.
With our Recovery and Reinvestment Plan, we'll also create hundreds of thousands of jobs by improving health care, transitioning to a nationwide system of computerized medical records that won't just save money, but save lives by preventing deadly medical errors.
And we'll create hundreds of thousands more jobs in education, equipping tens of thousands of schools with 21st century classrooms, labs and computers to help our kids compete with any worker in the world for any job.
We'll put nearly 400,000 people to work by repairing our infrastructure ' our crumbling roads, bridges and schools. And we'll build the new infrastructure we need to succeed in this new century, investing in science and technology, and laying down miles of new broadband lines so that businesses across our nation can compete with their counterparts around the world ...
If anyone doubts that we can dig ourselves out of this hole, I invite them to come here to Ohio and look what you've done at Cardinal Fastener. I know it hasn't been easy ' and it hasn't been without risk. But you've set your sights on the future, and you haven't looked back ...
That's what we've always done in moments like this. We've looked ahead to the next big idea, that next new breakthrough. We've experimented and innovated, and when we've failed, we've picked ourselves up and tried again. And I know that if we can summon that determination and that great American spirit once again, we will meet the challenges of our time and build a better future for our children.''
EDITORIAL from The Morning Journal, 12-12-08,
``It's right time and place for Lorain County to capitalize on the wind
Proponents, manufacturers and believers in wind energy brought their messages to Cleveland this week and Lorain County took part in the effort.
An off-shore wind conference dealing with Lake Erie took place at Case Western Reserve University. Attendees included Lorain Mayor Anthony Krasienko and Mike Challender, executive director of Lorain Growth Corp., and a proponent of the wind-power industry here.
Also, the American Wind Energy Association's two-day Wind Power Supply Chain Workshop attracted 800 business people and even prompted a speech from Ohio Gov. Ted Strickland. The wind energy industry is growing worldwide and the steady breezes which blow across the lake can attract businesses and jobs for the state and Lorain County.
Representatives manning a Team Lorain County booth at the workshop fielded questions and outlined to manufacturers why the county is such a good fit for wind energy. Winds off Lorain have been clocked as among the most forceful on the Great Lakes.
We border one of the world's largest lakes, have a major river port and superb highway and rail systems. European wind energy manufacturers can be lured here.
The area already has some businesses which make components for wind turbines. Increasing that number substantially needs to be a primary goal for local officials during these difficult economic times.
The same expertise that helped produce cars and trucks here for generations can supply the wind industry.
Our location is key -- electricity produced from offshore winds can be transmitted to major markets surrounding Ohio.
Government and businesses in Lorain County must get in front of the wind energy phenomenon -- jobs and our future are riding on the wind.''
``As the financial sector shifts, so does the reach of the jolt to economic structures around the world. Economist Nassim Nicholas Taleb and his mentor, mathematician Benoit Mandelbrot, speak with Paul Solman about chain reactions and predicting the financial crisis ...
PAUL SOLMAN, NewsHour Economics Correspondent: We sat down with one of the world's hottest investment advisers these days, Nassim Nicholas Taleb, author of "The Black Swan," ... and the man he calls his mentor, mathematician Benoit Mandelbrot, pioneer of fractal geometry and chaos theory ...
NASSIM NICHOLAS TALEB: I don't know if we're entering the most difficult period since -- not since the Great Depression, since the American Revolution ...
PAUL SOLMAN: Professor Mandelbrot, can that possibly be true?
BENOIT MANDELBROT, Mathematician: It's very serious.
PAUL SOLMAN: More serious than the Great Depression, possibly?
BENOIT MANDELBROT: Possibly. I hope not.
PAUL SOLMAN: Mandelbrot's key insight came in the '60s with a study of cotton price surges and plunges, suggesting the world moves in fits and starts, especially the human world.
Decades later, after the stock market crash of 1987, Taleb came to the same conclusion. He appeared on the NewsHour two years ago to help explain the death of a hedge fund before the current crisis. He dubbed the event "a black swan," impossible, Europeans had always thought, because they'd never seen one.
NASSIM NICHOLAS TALEB: We saw a lot of white swans. Every white swan was confirming that, you know, hey, all swans were white.
PAUL SOLMAN: Taleb's book, published in April 2007, was called "The Black Swan" because, in 1697, Dutch explorers discovered Australia and black swans.
NASSIM NICHOLAS TALEB: And, sure enough, they saw that black version and said, "Hey, one single observation, OK, can destroy thousands of years of confirmation." So, likewise in the markets, all you need is one single bad month to destroy years of track record.
PAUL SOLMAN: In the book, Taleb wrote, "The increased concentration among banks seems to have the effect of making financial crises less likely. But when they happen, they are more global in scale and hit us very hard. True, we now have fewer failures, but, when they occur, I shiver at the thought."
NASSIM NICHOLAS TALEB: The banking system, the way we have it, is a monstrous giant built on feet of clay. And if that topples, we're gone.
Never in the history of the world have we faced so much complexity combined with so much incompetence and [mis]understanding of its properties.
PAUL SOLMAN: But there's been complexity before. There has been overextension of credit before. We've had crashes in American history many times before. We're a resilient system. Won't we pull out of it?
NASSIM NICHOLAS TALEB: Let me tell you why it's not like before. Look at what's happening. The world is getting so fragile that a small shortage of oil -- small -- can lead to the price going from $25 to $150 ...
NASSIM NICHOLAS TALEB: ... We live in a world that is way too complicated for our traditional economic structure. It's not as resilient as it used to be. We don't have slack. It's over-optimized.
PAUL SOLMAN: What do you mean by "over-optimized"?
NASSIM NICHOLAS TALEB: ... It's vastly more optimal to have one large bank than 10 small banks. It's more efficient.
PAUL SOLMAN: Well, we've certainly seen the consolidation of the industry.
NASSIM NICHOLAS TALEB: Exactly. And that consolidation is what's putting us at risk, because we are -- when one bank, large bank makes a mistake, OK, it's 10 times worse than a small bank making a mistake.
PAUL SOLMAN: ... The butterfly somewhere disturbs a little bit of air and, halfway across the world, a tornado hits or something, right? Is that what we're talking about here?
BENOIT MANDELBROT: Certainly very similar. The word "turbulence" is one which actually is common to physics and to social scientists, to economics. Everything which involves turbulence is enormously more complicated, not just a little bit more complicated, not just one year more schooling, just enormously more complicated.
PAUL SOLMAN: Turbulence is why, because it's badly understood, weather forecasters can't necessarily get it right.
BENOIT MANDELBROT: Precisely. In fact, the basic -- the basis of weather forecasting is looking from a satellite and seeing a storm coming, but not predicting that the storm will form. The behavior of economic phenomena is far more complicated than the behavior of liquids or gases.
PAUL SOLMAN: So, ... this is a system that ... doesn't have enough of a buffer, and that's the danger?
BENOIT MANDELBROT: ... Tools have been developed which assume that changes are always very small. If one of them comes, nothing bad happens. If several of them come together, very bad things have happened. And the theory does not take account of that, and the theory doesn't take account of very large and sudden changes in anything.
The theory thinks that things move slowly, gradually, and can be corrected as they change, whereas, in fact, they may change extremely brutally.
NASSIM NICHOLAS TALEB: Now you understand why I'm worried. I hope I'm wrong. I wake up every morning -- actually, I don't wake up every morning now. I start to wake up at night the last couple of weeks hoping that I'm wrong, begging to be wrong.
I think that we may be experiencing something that is vastly worse than we think it is.
PAUL SOLMAN: And we think it's pretty bad.
NASSIM NICHOLAS TALEB: It's worse. Of all the books you read on globalization, they talk about efficiency, all that stuff. They don't get the point. The network effect of that globalization, OK, means that a shock in the system can have much larger consequences.
PAUL SOLMAN: What is the doomsday scenario? I mean, what actually happens tomorrow, next week?
NASSIM NICHOLAS TALEB: ... The banks not lending to hedge funds will force hedge funds to liquidate positions.
PAUL SOLMAN: Sell off?
NASSIM NICHOLAS TALEB: Sell off positions. These positions, sold off by hedge funds, will impact other entities.
PAUL SOLMAN: Driving down the price.
NASSIM NICHOLAS TALEB: Driving down the price ... A supermarket, OK, needing funding, will not be able to find a bank solvent enough to lend them money against inventory to make payroll, OK? ...
PAUL SOLMAN: You've been around a lot longer than we have. That's possible. Is it likely? ...
BENOIT MANDELBROT: Everything is a possibility ... Everything is imaginable. What's the joke? That prediction is very easy when you predict the past or something?
PAUL SOLMAN: Well, predictions are -- predictions are difficult, particularly about the future.
BENOIT MANDELBROT: That's [the joke] I wanted to remember ...''
ARTICLE By James Quinn, 1-09
``The U.S. National Debt was $930 billion in 1980, or 33% of GDP (Gross Domestic Product). Today it is $10.7 trillion, or 76% of GDP. The National Debt has grown by 1,150% in 28 years ...
Total US consumer debt in 1980 was $352 billion. Today, US consumer debt totals $2.6 trillion. Consumers have increased their total debt level by 738% in 28 years. Revolving credit increased from $56 billion in 1980 to $982 billion today, a 1,750% increase in 28 years.
The personal savings rate was 12% in the early 1980's and reached negative 1% during the Bush administration. It has inched above 2% in the last few months ...
With virtually no income growth in three decades, consumers have lived hand to mouth and utilized easy debt to maintain their desired lifestyle. This was encouraged by government, banks, big media, corporate America and the advertising industry. [George W. Bush's call to action after 9-11-2001: GO SHOPPING!] ...
The Federal Reserve will keep interest rates at zero, buy up bad assets from financial institutions, buy bad mortgages, buy Treasury bonds to artificially depress rates, and keep printing money until glorious inflation comes back to save the day. Everyone has faith that they will turn the spigot off in time. Their past record of seeing crucial turning points should give us all a sense of calm ...
The single biggest dilemma facing President Obama is something he has absolutely no control over: The American public has been traumatized over the last year.
They have been misled by the government, lied to by Wall Street, and now they are losing their jobs by the millions. Their homes are worth 20% to 50% less and their retirement funds are worth 30% to 50% less ...
The combination of devastating losses to their net worth, miniscule retirement savings, and rapidly aging population will change the entire dynamic of U.S. society. Baby-boomers have been hit over the head with a shovel and it has knocked some sense into them ...
Americans will pay down debt for the next decade and increase their savings rate to 10% because they have to. They have no choice. They either reduce consumption and increase savings, or go hungry in their old age. This is the same conclusion that Japanese consumers came to in 1990 ...''
NEWS ARTICLE from The Plain Dealer, 2-7-09, Posted by the Associated Press
``Deal announced on stimulus bill
WASHINGTON -- With job losses soaring nationwide, Senate Democrats reached agreement with a small group of Republicans Friday night [2-6-09] on an economic stimulus measure at the heart of President Barack Obama's plan for combatting the worst recession in decades ...
Officials put the cost of the bill at $827 billion, including Obama's signature tax cut of up to $1,000 for working couples, even if they earn too little to pay income taxes. Also included are breaks for homebuyers and people buying new cars. Much of the new spending would be for victims of the recession, in the form of unemployment compensation, health care and food stamps ...
In a key reduction from the bill that reached the Senate floor earlier in the week, $40 billion would be cut from a "fiscal stabilization fund" for state governments' education costs.
$14 billion to boost the maximum for college Pell Grants by $400 to $5,250 would be preserved, as would aid to local school districts for the No Child Left Behind law and special education.
A plan to help the unemployed purchase health insurance would be reduced to a 50 percent subsidy instead of two-thirds ...
Senator Susan Collins, R- Maine, and Republican Senators Arlen Specter of Pennsylvania and Senator Olympia Snowe of Maine pledged to vote for the legislation ...
Late Friday night, White House press secretary Robert Gibbs said, "On the day when we learned 3.6 million people have lost their jobs since this recession began, we are pleased the process is moving forward; and we are closer to getting Americans a plan to create millions of jobs and get people back to work."
Obama said earlier in the day that further delay would be "inexcusable and irresponsible" given Friday's worst monthly unemployment report in a generation -- 598,000 jobs lost in January  and the national unemployment rate rising to 7.6 percent. And late Friday, federal regulators announced the closures of three banks, First Bank Financial Services in Georgia and Alliance Bank and County Bank in California, raising to nine the number of bank failures this year ...
At its core, the legislation is designed to ease the worst economic recession in generations, and combines hundreds of billions of dollars in new spending with tax cuts. Much of the money would go for victims of the recession in the form of food stamps, unemployment compensation and health care. There are funds, as well, for construction of highways and bridges.
But the administration also decided to use the bill to make a down payment on key domestic initiatives, including creation of a new health technology industry and so-called green jobs designed to make the country less dependent on imported oil ...
Posted by Commentator 1 on 02/06/09
Wait and see what Obama does before bad mouthing him. Give him at least 6 months before complaining about what he accomplishes. Afterall, he has to clean up the mess that he inherited.
Posted by Commentator 2 on 02/07/09
I am a republican and I may not fully support the plan, but the economy is already screwed by Bush. The guy just did not have the foresight to put us where we need to be as a country. His vision was clouded by the oil in his blood. If we did not go to war with Iraq, some of the problems we have today would not be there.
Posted by Commentator 1 on 02/07/09
Letting the so-called free market do whatever it pleased is what got us into this economic mess. People need jobs and health care and food and homes and utilities and children need to be educated. These things cannot wait for the free market to recover, the needs are now, not a few years from now. How long can people wait? Something must be done now.''
TRANSCRIPT from the News Hour, 2-5-09
``Lawmakers Wrangle Over Costs of Stimulus Package
Senate Democrats pushed for more votes on an economic stimulus bill Thursday amid efforts to trim the plan's costs. Office of Management and Budget Director Peter Orszag ... offers [his] views ...
KWAME HOLMAN: The name of the game under the Capitol Dome all day was "how to get to 60 votes." That's what it will take to get past any procedural hurdles and pass the bill ...
JEFFREY BROWN: From the White House, I'm joined by Budget Director Peter Orszag. [Peter Orszag, Office of Management and Budget] He's been negotiating with senators today and throughout the week.
Mr. Orszag, as we speak, how close are we to some kind of compromise that can pass the Senate?
PETER ORSZAG, White House budget director: Well, I hope we're close. And the reason I hope we're close is, again, we need to make sure we get this economy back on track.
The gap between how much the economy is producing and how much it could produce amounts to $2 trillion over the next two years ... That's $12,000 in lost income ... that's not there for a family of four on average.
Unemployment insurance claims this morning were the highest since 1982. The economy lost 2.5 million jobs last year. We're facing the worst crisis since the Great Depression. The time to act is now.
JEFFREY BROWN: But you're also facing a lot of criticism ...
PETER ORSZAG: Well, I think there's a healthy debate. It's part of the legislative process. Again, what I want to stay focused on is that, broadly speaking, the package is about the right size and I think it has the right balance between investments in infrastructure that will help promote future economic growth, tax provisions, assistance like unemployment insurance and food stamps and other provisions that spend out fast and help to bolster the economy immediately. The portfolio as a whole is well balanced ...
The package already includes provisions that have been put forward by prominent Republican senators. There's bonus depreciation for businesses to allow them to deduct the expenses of making investments faster. The alternative minimum tax was added to the package at the suggestion of Senator Grassley ...
JEFFREY BROWN: Another part of the criticism from opponents on the Republican side is the proper balance of taxes versus spending ...
PETER ORSZAG: Well, again, let's look at what the evidence suggests. Respectable economists, whether Republican or Democrat, will tell you that money that you get out the door for an infrastructure project or for direct spending has a higher bang for the buck in terms of creating jobs and jump-starting the economy than tax provisions do, because part of the tax provisions are saved rather than adding to aggregate demand. On the other hand, tax provisions can get out the door really quickly.
So, again, I think it's a balance between the high-bang-for-the-buck stuff, which may spend out slightly slower, and tax provisions, which can get out the door fast, but have lower bang for the buck. And that's what this package reflects ...
We have to remember the context here -- and I think it's easy to forget that -- that we are facing this very severe economic crisis that we're inheriting and that needs to be addressed and that will take some time to work our way out of ...
We are inheriting a large deficit even if we don't act ... We need to act ...''
OPENING REMARKS OF PRESIDENT BARACK OBAMA -- AS PREPARED FOR DELIVERY
First Presidential Press Conference
East Room, The White House
Monday, February 9th, 2009
``Good evening. Before I take your questions tonight, I'd like to speak briefly about the state of our economy and why I believe we need to put this recovery plan in motion as soon as possible.
I took a trip to Elkhart, Indiana today. Elkhart is a place that has lost jobs faster than anywhere else in America. In one year, the unemployment rate went from 4.7% to 15.3%. Companies that have sustained this community for years are shedding jobs at an alarming speed, and the people who've lost them have no idea what to do or who to turn to ...
As we speak, similar scenes are playing out in cities and towns across the country. Last Monday, more than 1,000 men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine ...
That is why the single most important part of this Economic Recovery and Reinvestment Plan is the fact that it will save or create up to 4 million jobs ...
It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that's moving through Congress is designed to do ...
When passed, this plan will ensure that Americans who have lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. We will also provide a $2,500 tax credit to folks who are struggling to pay the cost of their college tuition, and $1000 worth of badly-needed tax relief to working and middle-class families ...
But as we learned very clearly and conclusively over the last eight years, tax cuts alone cannot solve all our economic problems -- especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it has only helped lead us to the crisis we face right now.
That is why we have come together around a plan that combines hundreds of billions in tax cuts for the middle-class with direct investments in areas like health care, energy, education, and infrastructure -- investments that will save jobs, create new jobs and new businesses, and help our economy grow again -- now and in the future.
More than 90% of the jobs created by this plan will be in the private sector. These will not be make-work jobs, but jobs doing the work that America desperately needs done. Jobs rebuilding our crumbling roads and bridges, and repairing our dangerously deficient dams and levees so that we don't face another Katrina.
They will be jobs building the wind turbines and solar panels and fuel-efficient cars that will lower our dependence on foreign oil, and modernizing a costly health care system that will save us billions of dollars and countless lives. They'll be jobs creating 21st century classrooms, libraries, and labs for millions of children across America. And they'll be the jobs of firefighters, teachers, and police officers that would otherwise be eliminated if we do not provide states with some relief ...
Despite all of this, the plan is not perfect. No plan is. I can't tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans.
My administration inherited a deficit of over $1 trillion, [and a national debt that more than doubled under George W. Bush, from $5 trillion dollars to over $10 trillion dollars] but because we also inherited the most profound economic emergency since the Great Depression, doing too little or nothing at all will result in an even greater deficit of jobs, incomes, and confidence ...
The strongest democracies flourish ... when people of every background and belief find a way to set aside smaller differences in service of a greater purpose ... and it is our duty as leaders and citizens to stay true to that purpose in the weeks and months ahead. After a day of speaking with and listening to the fundamentally decent men and women who call this nation home, I have full faith and confidence that we can. And with that, I'll take your questions.''
NEWS ARTICLE from The Plain Dealer, 2-10-09, by Julie Hirschfeld David
``WASHINGTON -- Vote for the $800 billion-plus economic stimulus bill and you might buy yourself a nasty re-election contest against a conservative opponent next year ...
They are leaning particularly hard on Republicans who have backed the measure -- or might be toying with the idea of doing so.
"If they support the stimulus package, we will make sure every voter in their state knows how they tried to further bankrupt voters in an already bad economy," said Scott Wheeler, the executive director of the National Republican Trust PAC.
His group promised to spend millions over the next two years to back GOP primary challenges to any House or Senate Republican who supports the legislation. That includes the three Republicans who voted "yes" when the package passed the Senate on Tuesday, including one, Sen. Arlen Specter of Pennsylvania, who faces re-election in 2010.
The other GOP supporters, Maine Sens. Susan M. Collins and Olympia J. Snowe, don't face voters again until 2012 and 2014.
"We just want to send a message that we're going to have a long institutional memory, and we're going to remind your constituents of what you did," Wheeler said ...''
[Did Obama provoke this Republican savagery by saying that "No one is above the law"?]
NEWS ARTICLE from The Plain Dealer, 2-14-09. by The Associated Press
``Highlights of House-Senate economic stimulus plan
(AP) -- Highlights of a $787 billion compromise version of President Barack Obama's economic recovery plan ...
AID TO POOR AND UNEMPLOYED
$40 billion to provide extended unemployment benefits through Dec. 31,  and increase them by $25 a week;
$20 billion to increase food stamp benefits by 14 percent;
$4 billion for job training;
$3 billion in temporary welfare payments.
DIRECT CASH PAYMENTS
$14.2 billion to give one-time $250 payments to Social Security recipients, poor people on Supplemental Security Income, and veterans receiving disability and pensions.
$48 billion for transportation projects,
including $27.5 billion for highway and bridge construction and repair;
$8.4 billion for mass transit;
$8 billion for construction of high-speed railways and $1.3 billion for Amtrak;
$4.6 billion for the Army Corps of Engineers;
$4 billion for public housing improvements;
$6 billion for clean and drinking water projects;
$7.2 billion to bring broadband Internet service to underserved areas;
$4.2 billion to repair and modernize Defense Department facilities.
$24.7 billion to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA program;
$86.6 billion to help states with Medicaid;
$19 billion to modernize health information technology systems;
$10 billion for health research and construction of National Institutes of Health facilities;
$1 billion for prevention and wellness programs.
STATE BLOCK GRANTS
$8.8 billion in aid to states to defray budget cuts.
About $50 billion for energy programs, focused chiefly on efficiency and renewable energy,
including $5 billion to weatherize modest-income homes;
$6.4 billion to clean up nuclear weapons production sites;
$11 billion toward a so-called "smart electricity grid" to reduce waste;
$6 billion to subsidize loans for renewable energy projects;
$6.3 billion in state energy efficiency and clean energy grants;
and $4.5 billion make federal buildings more energy efficient;
$2 billion in grants for advanced batteries for electric vehicles.
$44.5 billion in aid to local school districts to prevent layoffs and cutbacks, with flexibility to use the funds for school modernization and repair;
$25.2 billion to school districts to fund special education and the No Child Left Behind law for students in K-12;
$15.6 billion to boost the maximum Pell Grant by $500 to $5,350;
$2 billion for Head Start.
$4 billion to repair and make more energy efficient public housing projects;
$2 billion for the redevelop foreclosed and abandoned homes;
$1.5 billion for homeless shelters;
$2 billion to pay off a looming shortfall in public housing accounts.
$3 billion for the National Science Foundation for basic science and engineering research;
$1 billion for NASA;
$1.6 billion for research in areas such as climate science, biofuels, high-energy physics and nuclear physics.
$2.8 billion for homeland security programs, including $1 billion for airport screening equipment.
$4 billion in grants to state and local law enforcement to hire officers and purchase equipment.
NEW TAX CREDIT
About $116 billion for a $400 per-worker, $800 per-couple tax credits in 2009 and 2010. For the last half of 2009, workers could expect to see about $13 a week less withheld from their paychecks starting around June. Millions of Americans who don't make enough money to pay federal income taxes could file returns next year and receive checks. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts.
ALTERNATIVE MINIMUM TAX
About $70 billion to spare about 24 million taxpayers from being hit with the alternative minimum tax in 2009. The change would save a family of four an average of $2,300 ...
EXPANDED COLLEGE CREDIT
About $14 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010. The credit is phased out for couples making more than $160,000.
CHILD TAX CREDIT
About $15 billion to provide the $1,000 child tax credit to more families that don't make enough money to pay income taxes.
EARNED INCOME TAX CREDIT
$4.7 billion to expand the Earned Income Tax Credit for low-income families with three or more children.
$6.6 billion ... for a $8,000 first-time home buyer tax credit ... for homes purchased from Jan. 1  to Nov. 30, unless the home is sold within three years.
$1.7 billion to makes sales taxes on paid on new cars, light trucks, recreational vehicles and motorcycles tax deductible through the end of the year .
RENEWABLE ENERGY INCENTIVES
About $20 billion in tax incentives for renewable energy and energy efficiency over 10 years, including extending tax credits for energy produced from wind, geothermal, hydropower and landfill gas; grants to build renewable energy facilities; tax credits for purchases of energy-efficient furnaces, windows and doors, or insulation; tax credit for families that purchase plug-in hybrid vehicles.
$5 billion to extend a provision allowing businesses buying equipment such as computers to speed up its depreciation through 2009.
REPEAL BANK CREDIT
Repeal a Treasury provision that allowed firms that buy money-losing banks to use more of the losses as tax credits to offset the profits of the merged banks for tax purposes. The change would increase taxes on the merged banks by $7 billion over 10 years.
DEBT LIMIT INCREASE
Increases the statutory limit on the national debt by $789 billion, to $12.1 trillion. [at least $5 trillion of this incurred under George W. Bush]''
NEWS ARTICLE from The Plain Dealer, 2-14-09. By PHILIP ELLIOTT, The Associated Press
``Congress strengthens executive pay limits
CHICAGO (AP) -- ... Sen. Christopher Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, inserted strict rules into the $787 billion economic stimulus package ... Dodd's limits on bankers' bonuses are significantly more aggressive than those sought by Obama or Geithner ...
The stimulus bill ... sets executive bonus limits on all banks that receive infusions from the government's $700 billion financial rescue fund. The number of executives affected depends on the amount of government assistance they receive. But as a rule, top executives will be prohibited from getting bonuses or incentives except as restricted stock that vests only after bailout funds are repaid and that is no greater than one-third of the executive's annual compensation.
The prohibition would not apply to bonuses that are spelled out in an executive's contract signed before Feb. 11, 2009 ...''