Agree. I guess my next question is what percentage of gdp is state and local deficit spending, because there seems to be a lot of it. Then once you account for the negative tax spiral from economy decline, what is the sustainable size of government (at all levels). What are the private sector knock on effects? Could be a pretty big decline.

This is straight out of Alinsky's rules - when called on the facts you attack the speaker and yell the falsehoods louder and with more conviction.

Fraud, State and local government has about $2.4 trillion out in debt at present. This is up from about $1.18 a decade ago, so yeah, it's a big jump and a roughly 7% annualized increase.

That absolutely cannot continue either, and most of it is contained in the idiotic and criminally unsustainable promises made to state and local employees and their pension funds.

It appears as though Tommy Boy doesn't do 'the maths' very well. I pity the poor suckers who are basing their personal finance planning on the shills who don't seem to understand exponents.

Many of the peasants are still operating on the Ramsey model for future financial planning, which is why there is STILL small investor 401K money in the markets, despite clear signs that they should pull most of their cash, or reduce their exposure.

Anecdotally, my son & his wife (in their late 20s) told me this last weekend that their 401K portfolio is in high-risk stuff, as advised by Ramsey. I would presume that Tommy Boy is operating off the same Skittles-crapping unicorn model, considering his grasp of your facts.

KD, I read the pajamas media article. In this instance, you and he need a "do over". You need to work together (in the manner you proposed) to expose and publicize the fraud and the fix we need.

It's irrelevant if your criticism was "too harsh" as he claims. He's in a public position (as are you) and neither can "back down", publicly.

Call him on the phone privately, agree to disagree on your little "spat", and work together for the public good.

In short, get over it - both of you.

Just my $.02.

So Karl, correct me if I am wrong, but it looks like we start with a baseline of about 20% in GDP contraction from just government reduction in size to a sustainable level. Once the bank failures, corporate liquidations, the real estate collapse (residential and commercial) and unemployment start to kick in, what is the add-on to that figure? Another 15-20%? 40% is not looking so ridiculous to me, as a best guess, at all.

40% wouldn't shock me.

Note that in 1920 we saw a ~40% DEFLATION at the PPI level within a few months.

We survived, incidentally, but it sure did suck.

It was also over fast - the government didn't interfere, the bad businesses failed, the market cleared and the reason we don't call that a "Depression" is that it didn't last long enough to meet the classical definition.

But in terms of violence down (and back up) it is arguably the most-violent delta on production and price in American history.

Nice shooting, KD.

Vox Day just linked you - I think you'll like his commentary:

http://voxday.blogspot.com/2011/10/karl-....

"If you removed the background in the photo, it would be easy to imagine two men leaving a house of ill repute, having just been serviced."

Who needs to imagine? I think you've described exactly what happened ;-)

Fallated ?

Never heard of that site. A lot of people there seem to be butt hurt over Karl though.

I went out for a bit this morning and tuned in Glenn Beck.

The republican right, the co-opted tea party movement is absolutely hysterical in fear of OWS.

Beck was screeching, whining and cursing OWS.

It must be working.

lol he actually goes out of his way to highlight his stupidest phrase by trying to defend it.

"with regulations gone wild"

He's of course, speaking in code here. Banking regulations like Glass-Steagal were created to keep banks from "going wild." Typically a bank could have a few risky years in which it rakes in the dough, the bankers walk away with huge bonuses, the bank collapses, and grandma doesn't even have money left for cat food.

The code HE is speaking when he uses the phrase "regulations gone wild" is:

REGULATE? That means the gubbermint is gonna CONTROL that business/industry.

CONTROL? That's central state-directed planning!

Awwww that's COMMUNISM!


The meme has been used often enough that he doesn't have to come out and say it specifically, he can just say "regulations gone wild" and everyone he WANTED to give a nudge and a wink to knows what he is saying.

so instead of REPORTING something, he's looking for a way to preach to the converted - in a cowardly way in which the assertion hopefully avoids being questioned/argued - it's couched in a way to avoid it happening.


He HAS TO couch it that way because it flies directly in the face of reality.

This reality has two main features

1. "regulation" means stopping banksters from lying and stealing. Regulation means making it so grandma can maybe afford more than cat food by preventing looting of her savings. So complaining about "regulations gone wild" is kind of a giveaway - he seems to be seeing this from the banker's perspective. To a banker, any regulation limiting his ability to loot is seen as those crazy, smelly, commie, "faceless" plebes trying to limit his "freedoms"

2. These Laws To Stop Rich Bankers From Lying To And Looting Everyone Else - which for shorthand we can call "regulations," were steadily REMOVED by the bankers. Glass-Steagal removed, the OCC blocked state regulation, Brooksley Born was blocked from doing her job, the SEC spent their time looking at porn, banks got waivers to keep essentially zero deposits, banks were allowed to commit hundreds of thousands of felonies (perjury), banks were allowed to bribe local governments, banks have been allowed to "transfer" ownership in ways that are not legal transfers, banks were allowed to dispense with standard accounting procedures, banks were allowed to sell crap investments as AAA... these are just the ones I can think of off the top of my head - there's been a total LACK OF REGULATION.


Contrary to what the anarcho-capitalists think, a truly capitalist system presumes the existence of a State - a state that ensures fair dealing, investigation of theft and fraud, punishment of theft and fraud. Anarcho-capitalists might say, hey, with no regulations, if you rip someone off, they'll just not patronize your business anymore and you'll fail. That might work in a small town of a few hundred people - if the General Store is ripping people off, they might stop going there. On a grand scale, corporations have as much resources as entire countries - they can dispense whatever propaganda they wish, make whatever claims they want, shift their assets to another corporation under a different name and let the old name fail...

Show me a society that decides to be lax on fraud prevention and punishment that has ended up being highly moral and trustworthy. No, you can't. What happens is the corruption becomes part of the culture - people give bribes, kickbacks, etc as an accepted part of doing business.


Pajamas Media is saying that even though regulations were cut to pieces by then, they were still way, way too much! Grandma living on cat food is kind of a given at this point - that's the price of keeping those bonuses going - but it's not enough! If we can take the catfood away from all those grandmas, we can keep the bonuses going a bit longer. Keep that wild, out-of-control regulation stuff out of banking so we can do God's work in peace!

Funny we are arguing over whether they were forced to take the bailouts

They were crying crocodile tears about taking the bailouts

Yet


They NEEDED those bailouts

Warren Buffett made statements suggesting strongly at that time that Goldman was kaput, if Goldman went down the rest would have went with them, I think that's obvious.


Joe Bob

Good rant

: )

There was no gun as they didn't pull the trigger. Were these Oligarchs, the boards, and anyone with a title thrown out onto the street that #OWS is on now, and sent into receivership, I doubt there would be objection. How many of these smiling faces got HUGE bonuses as a result of TARP?

I believe the meeting referred occurred in the WH and included Paulson, Cox, and at least 5-7 banksters: I remember that very well and know there are pictures & video of the banksters leaving and stopping to chat w/ reporters outside of the WH. That picture is of 2 guys leaving a different building (that's not the WH). What is being reported by pj as fact was just the approved cover story that was also released at the time "to protect" some of the participants ... consistent with the "we were just trying the window to see if it works" cover story.

Joe-bob wrote..

1. "regulation" means stopping banksters from lying and stealing. Regulation means making it so grandma can maybe afford more than cat food by preventing looting of her savings. So complaining about "regulations gone wild" is kind of a giveaway - he seems to be seeing this from the banker's perspective. To a banker, any regulation limiting his ability to loot is seen as those crazy, smelly, commie, "faceless" plebes trying to limit his "freedoms"

Exactly. The code word "regulation" to many conservatives, myself included, means choosing the spotted owl and the snail darter over economic prosperity, and having the Left's catspaw in the EPA outlaw every form of energy known to man.

The Banksters were able to use this distaste for "regulation" to re-activate their slimy looting schemes after the S&L crisis was forgotten, and con many conservatives into believing the poor, picked-on Big Bank meme.

Death to dead-beat borrowers! /sarcasm

Glenn Beck is worried about the OWS? Doesn't surprise me that he would stoop that low: he's so full of dogmatic bull**** that he can't pull his head out of his ass to see the math of the situation.



Good grief, I hope my mother don't listen to him still.

Anyway, I don't expect to hear back from this "Tom" guy, or is it "Andrew?" He'll go crawling back to his cave like Mish did, never to be heard from again.

And what's the big deal with being called "dumber than a box of rocks?" I mean, what's with folks' ego problems these days? It's the ****ing Internet for cripes sakes; it's not some formal Presidential debate! Every one of us on TF has been called every name in the book by someone or other who didn't agree with us; even Karl. I don't even think most folks get flustered by that; they just use it as a sorry-ass excuse cop-out when they can't prove their point, which is basically what our friend "Tom" just did...

"Oh oh, you just called me a name! I want an apology before I read your rebuttal!"



Here's one, "Tom." How 'bout you quit being a pussy, and read the ****ing Ticker! Maybe then you'll get some respect 'round here. I'm not holding my breath, though...

We need to distill our demands:

End the Fed

End the Income Tax

End the Nanny Wars

End Deficit Spending

That's the first post in a few hundred you've made that I fully concur with Agau. Well done.

Reed Irvine award for Karl
http://www.aim.org/press-release/m-stant....

Quote:

...and Karl Denninger has been a force to be reckoned with in exposing the true cost of federal bailouts and stimulus measures.”

And for extra credit, "Tom..."

That is a "Finest Moment", KD. gd post mike.

FYI: Tom replied to this, but not on the PJ site.

http://www.bizzyblog.com/2011/10/18/karl....

When you lose, don't address the issue.

Inventing quotes is, well, "utterly false."

This is also the tactic used when you don't want to address the actual issue which, incidentally, was the reason for my article originally - it had nothing to do with the quote.