"A wise and frugal government which shall restrain men
from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
(Thomas Jefferson)

Monday, June 13, 2011

Larry Summers: More Stimulus Needed for Jobs Crisis (Only in Liberal Land)

Only a liberal could be in agreement with Summers that another stimulus is needed for jobs. Last time many states used the stimulus to add jobs to state and local governments. Guess they need another stimulus to keep those jobs going for another year.

What a waste gigantic waste of government tax dollars when you read where some of the money went from the stimulus. Giant sucking sound of tax dollars going into pockets of Democrat donors in a lot of instances. We found this one particular troubling$450 Million in U.S. Stimulus Money Going To Reid And Obama Donor-Backed Chinese “Green” Company? as reported by MSNBC.

They say timing is everything and this looks to be one of those cases -- Summers calls for a new round of stimulus in time to get the money into the economy for Obama/Democrat donors to turn around and donate our tax payer dollars to back to Obama and the Democrats. Fortunately this idea is DOA not only in the Republican House but in the Senate where Republicans can filibuster dumb ideas.

A little about Mr. Summers:

During the California energy crisis of 2000, then-Treasury Secretary Summers teamed with Alan Greenspan and Enron executive Kenneth Lay to lecture California Governor Gray Davis on the causes of the crisis, explaining that the problem was excessive government regulation.[16] Under the advice of Kenneth Lay, Summers urged Davis to relax California's environmental standards in order to reassure the markets.

In 1999 Summers endorsed the Gramm-Leach-Bliley Act which removed the separation between investment and commercial banks, saying "With this bill, the American financial system takes a major step forward towards the 21st Century."

The lack of regulation that allowed A.I.G. to sell hundreds of billions of dollars in credit default swaps on mortgage-backed securities was a direct result of efforts by the Treasury (first under Rubin and then under Summers), the Federal Reserve (under Greenspan), and the Securities and Exchange Commission (under Arthur Levitt) to deregulate the derivatives markets.

As director of the White House National Economic Council, he emerged as a key economic decision-maker in the Obama administration, where he attracted both praise and criticism. There had been friction between Summers and former Federal Reserve Chairman Paul Volcker, as Volcker accused Summers of delaying the effort to organize a panel of outside economic advisers, and Summers had cut Volcker out of White House meetings and had not shown interest in collaborating on policy solutions to the economic crisis

We don't usually quote Wikipedia because of some past problems of people changing the site but we double checked for other sources on Summers and the information was correct. Summers was the perfect Harvard background person for Obama -- he had also been in the Clinton Administration and was also part of fighting Bush tax cuts.

Why would we want to listen to what Summers had to say since the first stimulus package was a boondoggle except to pay back Democrat donors and the banking industry. Some people still call Summers a genius, but we have trouble finding the genius part and only see a political person trying to get donations for Obama by bailing out Democrats. Are we missing something?

Larry Summers: More Stimulus Needed For Jobs Crisis

First Posted: 06/13/11 08:52 AM ET Updated: 06/13/11 09:47 AM ET

By Lawrence H. Summers

CAMBRIDGE, Mass., June 12 (Reuters) - Even with the massive 2008-2009 policy effort that successfully prevented financial collapse and depression, the United States is now halfway to a lost economic decade.

Over the last five years, from the first quarter of 2006 to the first quarter of 2011, the U.S. economy's growth rate averaged less than 1 percent a year, about like Japan during the period when its bubble burst. At the same time, the fraction of the population working has fallen from 63.1 percent to 58.4 percent, reducing the number of those with jobs by more than 10 million. The fraction of the population working remains almost exactly at its recession trough and recent reports suggest that growth is slowing.

Beyond the lack of jobs and incomes, an economy producing below its potential for a prolonged interval sacrifices its future. To an extent that once would have been unimaginable, new college graduates are this month moving back in with their parents because they have no job or means of support. Strapped school districts across the country are cutting out advanced courses in math and science and in some cases only opening school four days a week. And reduced incomes and tax collections at present and in the future are the most important cause of unacceptable budget deficits at present and in the future.

You cannot prescribe for a malady unless you diagnose it accurately and understand its causes. Recessions are times when there is too little demand for the products of businesses, and so they fail to employ all those who want to work. That the problem in a period of high unemployment like the present one is a lack of business demand for employees, not any lack of desire to work is all but self-evident. It is demonstrated by the observations that (i) the propensity of workers to quit jobs and the level of job openings are at near-record low levels; (ii) rises in nonemployment have taken place among essentially all demographic skill and education groups; and (iii) rising rates of profit and falling rates of wage growth suggest that it is employers, not workers, who have the power in almost every market.

Excerpt:  Read More at AOL/HP

Note to Governor Perry if you run for President and win -- Please do not hire any Ivy League educated economists who have no practical experience in every day life.

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