The Coming Green Boom — and Bubble

Most prophets of doom are a relentlessly dour lot – not only do they tell you why you’re heading straight to oblivion, they scowl at you while they do it. But John Rubino is different. He leavens his gloom mongering with a joke, a grin, and tales of life in Moscow, Idaho, where he skis, hikes and rides off-road vehicles with his family. You might call him a jocular Jeremiah.

There’s no denying John’s doom-saying credentials, though. Bacon’s Rebellion highlighted his thinking in an article aptly titled, “The Housing Bubble,” in November 2003, in which he elaborated upon his book, “How to Profit from the Coming Real Estate Bust.” John, a former Hanover County resident and writer for Virginia Business magazine, followed up that book by coauthoring another, “The Collapse of the Dollar and How to Profit from It.”

Now he’s written a third, “Clean Money: Picking the Winners in the Clean Tech Boom,” the first chapter of which lays out a case for looming environmental disaster that’s as alarming as anything coming out of Greenpeace. Yet, in characteristic Rubino fashion, while sounding the alarm for peak oil, rising energy prices, chronic water shortages and a host of environmental maladies from overfishing to soil erosion, he manages to find that profitable silver lining. Technology may not single-handedly save modern democratic capitalism, he says, but it will help prop it up. He’s a great believer in the power of the marketplace to clean up its own mess.

John’s themes are so similar to those we explore in Bacon’s Rebellion, and our way of thinking is so similar, that I plan to dedicate this and my next two blog posts to explicating his views on our current predicament. In this first post, I plan to sketch out his doom-sayer bona fides. In subsequent posts, I will delve into the rise of renewable energy and the smart grid, and then reinventing the automobile. Even before Obama’s porculus package promised to inject billions into “green tech,” venture capitalists were stuffing the technological pipeline for several years. A wave of innovation is about to burst upon us that will change the economics of energy.

Before we get into all that, let us return to the reasons for John’s pessimism.

First, John very clearly foresaw the outlines of our current economic crisis: Too much debt. “The basic thesis [of “The Coming Real Estate Bust”] was definitely right. We were borrowing too much money, and we were doing it via our houses. People would borrow against their houses to pay off their credit cards, and they would max out their credit cards to pay their mortgage.” The phenomenal run-up in debt was unsustainable. And when the housing bust finally occurred, it didn’t just lay waste to the residential housing industry, it took down consumer spending with it.

Sound familiar? Sounds like a no-brainer now. But John was saying that five years ago.

Is there anything he would have changed? If anything, John says, he was too prescient. It was 2003 when he predicted the popping of the housing bubble — too early. “From an investor’s standpoint, that’s almost as bad as being flat-out wrong,” he says. “If it had come out in 2006, it would have made a lot of people a lot of money.”

A sidebar to John’s prediction of the real estate bust was the collapse of the dollar. That hasn’t happened yet, but he’s still convinced it will. There is no pain-free solution to the U.S.’s economic woes. “We have only two choices – collapse under all the debt, like the Great Depression. Or repudiate the debt by cranking up the money supply.” The latter path, the one the U.S. currently is pursuing, will ineluctably lead to inflation and a plunging dollar. “We’ll borrow as much as it take to keep consumers spending and banks from collapsing. We’ll end up destroying the dollar.”

John has little faith in the Washington politicians. The Obama administration is making the same mistakes as the Bush administration – but on a larer scale. “Crisis is paradise for politicians,” he says. “There’s no limit to what they can spend. They’re actually under pressure to spend more. They’re enjoying themselves right now. … But if they understood economics, they couldn’t think they were actually fixing anything. Historians will not be kind to the people in charge for the last 20 years – or the voters who put them there.”

Following the Bush borrowing binge with an even bigger borrowing binge will only hasten the inevitable reckoning. The Bush/Obama presidencies may well create a brief spell of economic growth, but the next economic cycle will lead to an even bigger bubble and a bigger bust-up down the road.

Not only are our economic policies unsustainable, so are our environmental policies, John argues. “Even if we had a healthy economy, we’re facing a resource-related crisis that’s pretty big challenge. Even in good times, it would be hard to fix.”

The fiscal crisis limits our ability to make major changes right now, but it needs to be done. One of the few redeeming features of the Obama spending plan, says Rubino, is the billions of dollars he will be pumping into new technologies. A whole slew of companies have been launched with a slew of interesting technologies. All that government money will create a “huge tail wind” for them, creating the next generation of fabled growth companies. Some of these companies will become household names like, E-Bay and Microsoft – with valuations to match.

In all likelihood, the next financial bubble will be tied to green tech. Just as the Internet bubble transformed the economy in a mostly positive way, so should the green tech bubble. It may not be pretty when it ends, but it will re-shape our economy for the better. Although the trends John describes are national in scope, they will play out here in Virginia. If we don’t understand the nature of the problems we’re confronting, we cannot hope to address them.

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27 responses to “The Coming Green Boom — and Bubble”

  1. Anonymous Avatar

    I will be interested in reading this, but I hesitate to put the ‘bubble’ label on green tech. We are on the verge of some revolutionary stuff which will change our lives. Its like being around when the auto industry first got off the ground. Will some green tech start ups fail, taking investment money down with them- sure, just as some early car companies did. But does that make a green tech bubble? I mean what was so revolutionary about the housing industry? To me, that deserved the bubble label, whereas green tech is still an emerging field.

  2. agree.

    This is akin to one’s view of the “dot com” bust.

    Was it really a bust or did it get a bit ahead of itself and collapse back to a more realistic pace and then energize and take off for real?

    Take something simple like online purchasing.

    Who.. goes out now and pays for something major without at least checking it out online to see who is selling it and for how much?

    looking for a car or a house?

    etc, etc…

    “green” is about to explode.

    look at this:

    ” Google Power Meter Analyzes Home Energy Consumption”

    so the power companies will no longer be able to drag their heels on this technology….and the inevitable savings that will result – just as we’re seeing a powerful and irresistible trend towards more efficient cars….

    a simple breakthrough in solar technology such as this:

    ” Bio-Based Solar Cells “

    ….will transform the current power generation paradigm the same way that wi-fi netbook computers are transforming the computer world….

  3. Anonymous Avatar

    ” A wave of innovation is about to burst upon us that will change the economics of energy.”

    If that is the case, then we should wait for it and not waste any money on technology that is already outmoded.


  4. Great article.

    You can’t spiral consumer debt without creating a bubble and a bust. This happened in the Great Depression when people were buying stock on 95% margin. People without the capital to withstand a downturn were in the market with a nickle of cash per dollar of investment. Shoe shine guys were speculating in the market using borrowed money that they couldn’t repay when the market went down. The crash smashed the banks and many other industries. Sound familiar? The last house I bought was in 1994 (I have subsequently had a house built). In 1994 I had a good job and good credit. I was putting 20% of the purchase price down in cash. But I still had to provide years of bank statements, my employer had to write a signed letter to the lender vouching for my tenure and compensation, I had to write a letter specifically explaining two late credit card payments I had made years prior. Even with all that I had to sweat out getting the loan. It seemed like dozens of bank personnel were scrutinizing the loan and reviewing the application. The same process was in place for everybody I knew in 1994. It was not just me. Fast forward to 2004. I hear that people were borrowing money and refinancing loans with little to no documentation, little to no money down, bad credit, etc. I remain baffled as to how the lenders ever thought this could work – at least mid to long term. People tell me that the lenders were depending on the price of housing (and therefore the collateral for the loans) going perpetually up. Really? They were really that dumb? They thought the price of housing would go up forever? Wouldn’t that guarantee the price of housing would eventually reach a point where people couldn’t afford the housing, demand would fall and prices would follow? Were the lenders really this dumb? I guess they got caught up in the competition of the day (or, more correctly, of the quarter). Or, in translation, greed got the better of judgement. Naturally, the stockholders, 401(k) holders, etc pay the price.

    You can’s spiral national debt without causing an inflationary bubble and a bust. It’s good to hear that President Obama plans on cutting the deficit before the end of his first term. It was disappointing to hear him whine about inheriting the defecit. Yes he inherited the deficit and he’ll expand that deficit significantly with his bailout plan. If the recovery continues and if he can get broad based tax increases (taxing those making over $250,000 won’t make a dent) and if he can cut spending (which means the entitlement programs that suck up huge amounts of money) then he might get the deficit on the right trajectory. However, he will have to raise taxes on more people than he has admitted and he’ll need to cut programs he has claimed will be safe. Meanwhile, he needs to keep the foreigners buying our debt as the deficit escalates and their own economies crumble. My personal experience is that you just can’t build anything with as many critical moving parts as President Obama’s current plan. Something will not execute as planned. And then the whole house of cards will come tumbling down. I am afraid that the excessively large bailout has all but guaranteed a period of significant inflation in the US. Had the bailout been restricted to providing liquidity into the capital markets the plan might have worked. However, the sheer gluttony of the present plan will have us looking at 14% inflation in about 2 years. It will be interesting then to see how President Obama raises taxes and cuts spending. President Obama faced his first presidential test with the bailout plan and he failed that test miserably. Too bad. He is a good man with good ideas but his naievete with the size of this bailout will hurt us all. So, what should people do? Here’s what I am thinking. Oddly, buying real estate – particularly with fixed rate mortgage loans is a tried and true hedge against inflation. Gold may seem expensive right now but I bet it will be a good investment over a 2 year horizon. And Treasury Inflation Protected Securities (TIPS) should be a good investment too. Think in terms of holding the bonds until maturity rather than trying to profit from trading.

    You can’t push capital into an industry that lacks fundamentals without creating a bubble and a bust. Carbon based energy is still very cheap – as long as you don’t include the costs of the carbon dioxide it emits. In addition, the infrastructure for the production of carbon based energy production is very, very much entrenched in most places. Sounds like the dot com bubble to me. Conducting business over the internet sounded like a good idea because it is a good idea. But the brick and mortar stores were still in place, PC’s were not fully deployed, broadband was in its infancy and consumer behavior takes time to change. Take those factors and add a ridiculous pouring of capital into the market and you have … ta da … a bubble. And bubbles burst. At one point during the dot com bubble US telcos invested 105% of cumulative annual revenue in capital to build out networks. The average amount invested before this bubble year was 38% of cumulative annual revenue. There was no way that this investment was going to pay off and it didn’t. I see the green bubble the same way. The question isn’t whether green is a good idea. Of course it is – just like transacting commerce over the internet is a good idea. The question is whether greedy investment pimps will convince naieve people to pour too much capital into this area too fast. If history is any guide for the future – that will happen. The politicians could help by pushing taxes on carbon based energy usage. Of course, that would take something American politicians just don’t have – namely courage. Heck, President Obama can’t even imagine a mileage based tax.

  5. Anonymous Avatar

    ” My personal experience is that you just can’t build anything with as many critical moving parts as President Obama’s current plan. Something will not execute as planned. And then the whole house of cards will come tumbling down. I am afraid that the excessively large bailout has all but guaranteed a period of significant inflation in the US. “

    Me too.

    “And Treasury Inflation Protected Securities (TIPS) should be a good investment “

    Agreed. I also like heavy machinery: you can buy it for a song right now, pay for it with inflated dollars later, and it will be in demand for the next bubble. Meanwhile, you’ve got cool toys.

    I had a good experience during the dot-com bubble. I actually worked on a start-up that survivved and is in business today. Cool.

    “The question is whether greedy investment pimps will convince naieve people to pour too much capital into this area too fast.”

    Just what I said above, only it isn’t just the greedy investmetn pimps: overzealous geen promoters of all kinds may induce us to spend more than the benefits can support. Right now, aybody with anything to sell is painting it green first.

    Taxes on carbon based energy usage sufficient to offset their external costs is one thing. Taxes on carbon based energy usage sufficient to make renewables attractive is something else. As long as the second is less than or equal to the first, I don’t have a problem. But if we think we can make transit or renewables more attractive or less expensive by increasing the cost of the alternatives,then we are just kidding ourselves: in the end we will have more expensive power and transportation, and we will be able to use less of it.

    We will be poorer as a result.


  6. E M Risse Avatar

    Green tecnology and all the investment in green technology will be a Bubble and Bust too without

    Fundamental Transformation in human settlement patterns;

    Fundamental Transpformation in governace structure, and;

    Fundamental tranformation in the economic system.

    And that means a Fundamentaly new way to get citizens the information they need to make intelligent decision in the marketplace and in the voting booth.


  7. Anonymous Avatar

    When they go in that voting booth they will always vote for the policies that will help them, personally, in the marketplace.

    That is why the economy is number one on the list of concerns in the PEW poll.

    Unfortunately, we seldom get the chance to vote on poicies, instead we vote for the people who claim they will institute such policies. Once elected, they can do as they please.

    That is why the electorate is only a few percent of the population. We need a better way to poll people’s opinions than the voting booth, and a better way to make their opinions stick.

    If you fix the governance structure, the people will tell you how the settlement pattern will be.

    The economic system is governed primarily by economic laws, with governance flailing around the edge a little, like steering an ocean liner with an oar. We don’t devise or control the economic system: it controls us according to the ntural laws of energy and thermodynamics. You don’t expend one horsepower on a crop and two HP getting it to market unless you can sell it for at least three HP, plus profit.

    That isn;t going to change.


  8. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Green technology? Puzzling.

    If everyone puts solar cells on their houses, won’t they act like billions of mirrors reflecting sunlight back into the atmosphere making global warming worse?

    Then if the West Antarctic ice sheet falls into the ocean, global warming will cause increased evaporation and cloud cover, making all those solar cells totally ineffective.

    Maybe we are hurrying up the green revolution a bit too fast.

  9. Anonymous Avatar

    Nope, they absorb sunlight, no reflect it, which is how they make energy.

    But, they are not very efficient, so a lot of the sunlight turns into heat, which has to radiate off locally or be cooled convectively.

    If you have lots and lots of solar celss mounted on buildings, expect the urban heat island to get that much worse.

    Youare correct, water vapor is a greenhouse gas. the hotter it gets the more humidity in the air, the more heat gets trapped. but this also affects coud formation which can result in some coolong effects. The jury is still out on which effect is greater.

    Solar celss still work under cloud cover: direct sunlight is not required. But the cloud cover itself may increase the albedo (reflection back into space) and reduce the heat abosrbed by earth. Think of how bright Venus is, with its coud cover.

    Venus is very hot, but also closer to the sun. Even so, here on earth cold days are warmer if there is cloud cover and hot days are hotter if there is not. The clouds reflect some sun, but they act as insulaton to keep the earth from radiating out. Also, in cold weather the sun hits at a lower angle, so it has to penetrate more atmosphere and it is more prone to bounce off the cloud cover.

    I worry more about lots and lots of wind and wave or current units disrupting the global heat transfer engine: you don’t ever get energy for nothing.


  10. Anonymous Avatar

    Oh yeah, and natural gas puts out a lot of water vapor, too, so as we increase our dependence on that fuel we will add moisture to the atmosphere. A lot of it will rain out, but when and where is an issue.

    and of course when we swithc to a hydrogen economy, that puts out water, too.


  11. Anonymous Avatar

    I don’t see how the Green movement will survive once they find out we have global cooling now. The lack of solar activity and no sun spots for the past 16 months has lowered global temperatures to 100 year lows.

  12. Anonymous Avatar

    Having worked with John Rubino on several occasions, I agree with you that he is a a top-rate analyst of economics. He predicted as early as 2002 or 2003 the real estate bust back at Virginia Business (and the publisher after you left ran plenty of angry replies from real estate agents trying to knock him down). And John may be well right about the green thing although Ihaven’t seen the book yet.
    I do have a problem, however, is your (and presumably his) critcism of remedies for the current crisis. You say that Obama’s spending our way out of this mess is the wrong thing to do.
    According to you, what is the right thing to do? Do nothing? Leave the financial sector with a pile of debt that means no one is getting any loans? Not spend on anything at all?
    You cannot do that with a modern economy. Example: Sweden ended up in a big financial jam in the late 1980s. This had more to do with European exchange rates and fiscal policies other than bubble-related subprime mortgages. But the impact was similar. Sweden set up “bad” banks to soak up bad debt and spent to kickstart the economy. It got over the crisis swiftly. Japan was in the same boat after a real estate related real estate crisis. It didn’t spend. I raised taxes. It did little to address bad bet. What happened? A lost, deflationary decade.
    The problem with spendthrifts like you is that you stand around tut-tutting while the house is on fire.You don’t offer any helpful ideas other than don’t spend anything. Reminds me of the signature song from TV’s “Archie Bunker,” — “Mister we could use a man like Herbert Hoover again.”

    Peter Galuszka

  13. Peter – the problem with Conservatives and Conservative Republicans now days is that their fundamental philosophy is that government is an evil to be tolerated as a last resort and that it cannot solve problems only cause them

    and that the private sector needs to run free to do it’s thing – which is best for all of us…

    so now.. they are stuck hard on their own petard….

    and you are right – most of them will stand around unsure and uncertain of what needs to be done (by government) and like Hoover.. they would just let the economy self-destruct rather than have the bad old government “intervene”.

    THERE !

    that ought to get a rebuke from JAB – BOTH OF THEM (and perhaps others also)


  14. Anonymous Avatar

    Anon 2:44:

    It is too soon to tell. Sunspot activity is cyclical, but we have been burning fossil fuels for a hundred years or more. The loss of the CO2 satellite this week will be a big blow to learning the truth, whatever it turns out to be.

    I think prematurely claiming global cooling is as suspect as prematurely claiming global warming, but the weight seems to be on the global warming side of the balance right now.

    Global warming or not, there is no reason to burn fossil fuels, if we have reasonable alternatives. There is also no reason to buy insurance that costs more than the car is worth if the alternaitves are not so reasonable.

    On the other hand, suppose we find we do have global warming, but its impact will be spread out over 200 years instead of 50 or so. Then we can afford to buy SOME renewables now to postposne the problem further while we work ot the problems with the alternatives.

    If nothing else, we ought to be able to smooth out the bumps in the fuel supply.


  15. Oh… and as far as GREEN technology ….advancing… and becoming reality…

    … do I detect a tad Luddite skepticism in some of the comments?

    let me guess.. some of us still have our 8-tracks, cassette players and VHS decks.. right?

    .. and ..we … actually resent .. the onslaught of blue-ray and MP3 and HD… because then we have to buy new stuff and we hate to throw the old stuff away…???

    Now.. don’t get me wrong.. I actually have NONE of the 3 new things named… but give me credit.. I HAVE gotten rid of the really old stuff even though it worked “perfectly”.

    all of this actually gets back to how we, as individuals, accommodate change – because “GREEN” is just a type of change.. right?

    do we embrace it or do we prefer to pretend that if we ignore it will go away?

    fess up folks – how many of you have that older stuff still in your house somewhere?

  16. Anonymous Avatar

    Republicans are starting to sound like a bunchof kids singing 100 bottles of beer on the wall.

    TARP and Stimulus Package and whatever else is in the works is pretty much a done deal at ths point. Republicans can get on board and try to make it work, or they can sit on the sidelines and chant that it can’t work.

    If they are wrong it will take decades to recover. If they are right, there won’t be anything left to recover with, and tax cuts will be a fiscal impossibility.

    At this point they can have all the principles they like, but they are going to have to come up with an alternative plan that doesn’t llook like the Bush years. They can’t win with wedge issues, divisiveness, and false promises to the working folks.

    On the other hand, Obama is so far out on a limb, all they need to do is hand him one more thing and the whole thing will come crashing down. I don’t beleive he can fix, the economy, healthcare and the farm system at one time, though god knows they both need fixing. We ould put a lot of unemployed peole to work, just on those tasks.

    We don’t have to have the stimulus package. We could just let everything sit, but even my friend Jesus knows better than that “What good all that money, it no go round and round?”

    Some people think that is what we should do because it means we will consume less and destroy the planet less. But at the same time, it will mean we have less to spend on the planet as well.

    Whatever happens, the die is pretty well cast now, and all we can do is see how the game turns out. The Republicans need to figure out that there is a place for government besides defense, and the Democrats need to learn that government cannot do everything.

    My view is that we are where we are because the government didn’t do the one thing that is its primary job: protect people’s property.


  17. Anonymous Avatar

    I have none of the new stuff, and I keep the old stuff, if it works. I’ll even repair it a few times.
    But I’m also na early adopter when something new really works well: Hybrid car and geothermal het pump.

    I’m no luddite, just conservative and flinty cheap.

    We have plenty of people who think they are green by presefrving farms and making cars less usefull and more expensive.

    Now comes this:

    “Globally, livestock emissions outweigh emissions from the entire transport sector. Add in emissions from deforestation—which is often a consequence of razing trees for fresh pasture land—the plant and animal world makes up about 40% of global greenhouse-gas emissions.”

    I’ve said this before: the biggest contribution we can make to greenhouse gas emission with the least cost and the most benefit may be to just change our diet.

    Forget about cars and Mcmansions or even were they are located, and pay more attention to McNuggets.

    Just think, if we fix our diet, we can burn coal for another hundred years, maybe.


  18. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    I think even your buddy Jesus would say there is a difference between making money go round and round, and throwing it down a rat hole. Which is what both parties have been doing in this crisis.

    The banks have been getting trillions. Has it loosened credit or increased spending in the economy? Nope, it just disappears and they come back a few weeks later to ask for more.

    Now we have every corporation known to man lining up to get their share, and the only one not invited to the buffet is the American taxpayer. He gets a few pennies more a week and the bill to pay for it all.

    Then along comes Obama with even more deficit spending, proclaims it’s not a problem on national TV, and has the foolish notion that a few billion dollar cut in GWOT funding coupled with an increased tax bill on a soon to be bailing upper class is going to pay off 1.7 trillion dollars in a couple years. Did he forget about the other 9 trillion going into the sewer?

    The public is being stimulated alright, and that strike package is flying under the Feds radar. Our middle class isn’t going to sit around waiting for their bill either. Boomers are already talking retirement and grabbing SS ASAP. The rest are thinking they may as well quit and go on welfare. This country hasn’t even begun to see moral hazard. The tired cliche of unintended consequences will soon be the new growth industry. Purely intentional, of course.

  19. re: “disappearing down a rat-hole”

    doesn’t the money STILL go round and round rather than disappear?

    If we tax people more then we spend the money on “something”, are we not complaining that the “something” is not what we want to spend it on – and that is the problem?

    In other words – would you spend several hundred dollars a month on health care if you did not have to?

    Wouldn’t that money really come in handy for other stuff that you want instead?

    And in the end – whether it is spent on health car or other stuff – it WILL produce a job.

    The job might change – from a nursing job to someone who is manufacturing the “stuff” that you’d buy instead – right?

    So.. what the Government is doing, in effect, seems to me is that they are taking your money and telling you that they want it spent on something that will benefit you – whether you agree or not.


    The money the government takes from you – does not disappear down a rat-hole.

    It gets spent – on something – and someone has to produce that something and then gets paid to do it.


    and so the money STILL goes round and round…


    Isn’t the basic argument that it’s “better” for you to keep your money and decide what you want to spend it on than letting the government decide?

    Oh wait.

    But.. it’s okay for the government to take your money and spend it on a Humvee or a Warship….

    …but not okay for the Government to take your money and spend it on universal health care…

    just questions…

    anyone have thoughts?

  20. Anonymous Avatar

    “Has it loosened credit or increased spending in the economy? “

    How would we know?

    Interest rates are still low, but not too many people are interested in buying, because they are worried about how to make the payments with no job. They are not interested in buying a home that may fall anther 20%. and everything else they already have two of.

    The banks (and government,now) are stuck holidng a lot of paper that is worthless only because people are afraid to buy it. That same paper had a good cash flow a few months ago, and even today only a small part of it is actually bad: it is only that we can;t tell whih is which because it has been sliced and diced. And all of this is related to the mark to market accounting rule. If that same paper was vlued against cash flow there would be a lot less “loss” going down a rat hole.

    *California home sales and dollar volume were higher in December 2008 than in Dec 2007.

    *The Conference Board’s index of leading economic indicators has risen for two months in a row.

    *Producer prices have increased for two straight months.

    *Consumer prices rose in January –the first monthly gain in six months.

    *The Baltic Dry Index, which measures the cost of shipping key raw materials like copper, steel and iron, has more than doubled from its recent lows.

    *Existing-home sales rose in December, Another rise probably took place in January.

    *Pending home sales went up in December.

    *Builders’ confidence inched up this month.

    *Thanks to lower interest rates, applications for both new mortgages and refinancings of existing mortgages are rising.

    *Real hourly earnings rose 4.5% in December following a 3.3% increase in November.

    *An index of consumer expectations rose in January.

    *Retail sales shot up by 1% in January — the first monthly rise since June.

    *The decline in consumer credit moderated in the latest month.

    *New orders for consumer and nonmilitary capital goods went up in January.

    *The ISM index of manufacturing went up last month.

    *The ISM index of services rose last month for the second month in a row.

    *The money supply is soaring, a sign that there’s plenty of liquidity in the economy.

    So, OK, higher prices might not be a good sign. Higher hourly wages are partly because low wage workers don’t have jobs. You have to look at statistics acrefully, but this is only a partial list.

    It took us six months to determine (officially) that we were in a recession and we will be out of it six months before the government tells us about it.

    This recession could be over already, in which case the stimulus package will be a waste, except for all the stuff we needed to do anyway.


  21. Anonymous Avatar

    The American taxpayer is also the American stockholder and homeowner. If this stimulus works they MAY take lss of a bath than otherwise. If we do nothing they will take a bath anyway.

    Nobody knows how this will play out, and Darrell is right: it is going to cost money to play. Still some chance would seem to be better than a sure loss for a long period.


  22. Anonymous Avatar

    From a recent CBO report, here are effective tax rates (total taxes divided by total income) for 2005, the most recent year available:

    Lowest quintile: 4.3 percent
    Second quintile: 9.9 percent
    Middle quintile: 14.2 percent
    Fourth quintile: 17.4 percent
    Percentiles 81-90: 20.3 percent
    Percentiles 91-95: 22.4 percent
    Percentiles 96-99: 25.7 percent
    Percentiles 99.0-99.5: 29.7 percent
    Percentiles 99.5-99.9: 31.2 percent
    Percentiles 99.9-99.99: 32.1 percent
    Top 0.01 Percentile: 31.5 percent


  23. I would rather have President Obama’s present stimulus package than the nothing that Republicans want. The Republicans have no plan other than to complain about Obama.

    However, having said that, I’d really have preferred to have a stimulus package about 1/3 to 1/2 the size of the existing package.

    Do we have problems? Yes.

    Will government spending help head off runaway unemployment in the short term (next 2 years)? Yes.

    So, why don’t I support the current stimulus package? Because even a child knows not to eat a marshmallow in a single bite.

    In addition, Obama’s deception about the FY2011 tax hikes is disappointing. It won’t just be people making over $250,000. The numbers don’t work and he knows it.

  24. Anonymous Avatar

    Somewhere in that package are increased taxes on business and the carbon tax/cap&trade.

    Everyone knows who will really be paying those taxes, so the claim that no one earning less than $250,000 will see a tax increase is deceptive.

    Both sides are resorting to deception. Do they think we are stupid?


  25. re: “The Republicans have no plan other than to complain about Obama.”

    triple DITTO!

    Those guys had 8 years to demonstrate how to govern and they failed miserably to implement their espoused values of smaller more accountable government and empowered capitalism.

    All they have is a bunch of excuses…

    like “we had two wars” and we had ‘no choice” but to do them “off budget”.

    Since when?

    I don’t care for the size and scope of Obama’s approach and I do think in the end it will cost us all more but if you ask me should we have continued the Bush Republican approach instead..which is what the FOX folks are jabbering endlessly about…

    short answer: NO Friggen Way!

    The Pachyderms both the National and Virginia brands are idiots… who have no ideas and worse – no scruples… about governance..

    And now.. the “voice” of the Pachyderms is who? Well Rush L. of course.


  26. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    What’s sad is your money is being spent largely by a group of people with no political affiliation, and more importantly, no accountability.

    It’s not the TARP that kills you. It’s all the snakes hiding underneath.

  27. Anonymous Avatar

    “It’s not the TARP that kills you. It’s all the snakes hiding underneath.”



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