Thursday, March 05, 2009
Guinness and Jim Cramer are Singing the Same Song (At Least for Now)
As most of you know--you’ve seen the video, I’m sure--Jim Cramer had harsh words for the White House and Obama’s decisions on the economy and how those decisions are destroying wealth in the nation. I’d say that’s undeniable: from a collapse in the stock market and housing prices that could take decades to recover and the very real possibility of inflation around the corner that will render even conservative savers’ nest eggs with tremendously less real buying power than they had just a few years ago, the wealth of millions of Americans has been brutally depleted over the last few months. These are simple facts and one wouldn’t think that they would invite much of a serious rebuttal.
The White House, though, did what it could to diminish Cramer’s words--the words of a man who has admitted to voting for Obama, for believing in Obama’s overall agenda, and for having donated money to Democratic causes in the past. In fact, in no way is Cramer removing himself from the left, but embracing a more measured approach than the administration’s headlong rush to implement sweeping changes on a very short schedule.
“I’m not entirely sure what he’s pointing to to make some of the statements,” Gibbs said about my point that President Obama’s budget may be one of the great wealth destroyers of all time. “And you can go back and look at any number of statements he’s made in the past about the economy and wonder where some of the backup for those are, too.”
Huh? Backup? Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies (one of the few areas still robust in the economy), tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world’s morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people.
The market’s the effect; much of what the president is fighting for is the cause. The market’s signal can’t be ignored. It’s too palpable, too predictive to be ignored, despite the prattle that the market’s predicted far more recessions than we have.
[...]Obama has undeniably made things worse by creating an atmosphere of fear and panic rather than an atmosphere of calm and hope. He’s done it by pushing a huge amount of change at a very perilous moment, by seeking to demonize the entire banking system and by raising taxes for those making more than $250,000 at the exact time when we need them to spend and build new businesses, and by revoking deductions for funds to charity that help eliminate the excess supply of homes.
We had a banking crisis coming into this regime, but now every area is in crisis. Each day is worse than the previous one for this miserable economy and while Obama’s champions cite the stimulus plan, it’s really just a hodgepodge of old Democratic pork and will not create nearly as many manufacturing or service jobs as we hoped. China’s stimulus plan is the model; ours is the parody.
Cramer sounds like he’s speaking sense to me. He has a clear-eyed view of the state of our economy and it doesn’t take a prophet to see the damage coming from some of the misguided policy and tax choices Obama’s administration is working to implement. Cramer is speaking good sense.
And he continues to make sense even when he’s championing things that I would fight in the future:
To be totally out of the closet, I actually embrace every part of Obama’s agenda, right down to the increase on personal taxes and the mortgage deduction. I am a fierce environmentalist who has donated multiple acres to the state of New Jersey to keep forever wild. I believe in cap and trade. I favor playing hardball with drug companies that hold up the U.S. government with me-too products.
[...]
But these are issues that we have no time for now, on the verge of a second Great Depression. This is an agenda that must be held back for better times. It is an agenda that at this moment is radical vs. what is called for.
Some of the arguments we have--we on the right with you on the left--can come later when the country is healthy again. Some of those arguments (about what constitutes a “fair” tax rate for whatever passes as wealthy, for example) are luxuries that we can’t afford when we’re just trying to pay the bills. Increasing taxes on the individuals and companies that keep the rest of us employed and paying our bills isn’t going to help. Increasing taxes on the folks who can invest in the new businesses, products, and ideas that fuel our economy isn’t going to help. Huge spending plans that don’t address the real needs of the country--filled with ridiculous earmarks from both parties--are luxuries that we can’t afford when we need to recover a safe climate for businesses to grow and for jobs to be created. Cramer understands that and vows to fight back against the Democrats when their policies will take our country in the wrong direction.
[Would it, then, be safe to say that he hopes that Obama fails in implementing those harmful policies? Or would that be painting him with too Limbaughian of a brush?]
It’s not just Cramer, though. Obviously, investors have no faith that Obama’s plans will create a secure environment for business to flourish. The market’s fall is broken by only occasional spots where bargain seekers buy in and quickly sell off--that downward trend is astonishing. Terrifying.
Which brings me to the Guinness. I like Guinness; it’s tasty beer. I’m on a mailing list where Guinness sends me notes about upcoming boozing events and opportunities to try some of the other alcoholic beverages produced or imported by Diagio North America. I mostly ignore these invitations because, frankly, I don’t need anyone encouraging me to drink. I do just fine on my own. Today’s message caught my eye, though: Guinness Needs Your Help.
God knows I’m willing to help Guinness in a time of need. Here’s what they had to say:
Hi Zombyboy,
As someone who enjoys great brands such as Smirnoff, Crown Royal, Captain Morgan, Johnnie Walker, Ketel One, Jose Cuervo, Tanqueray, Guinness, Beaulieu Vineyard or Sterling Vineyards wines, you are a member of the Diageo family. As a member of our family, you need to be aware that in the coming months, lawmakers will be proposing tax increases that will put jobs in your community at risk and raise the cost of your favorite drink.
There’s a real price to pay when elected officials misguidedly try to replenish state budgets with regressive taxes that will hit us at a time when we are already being hit hard enough economically. These taxes will cause people like bartenders, waiters, waitresses and other folks who work hard every day in our community restaurants and hotels to lose their jobs. In fact, the last time they raised taxes on alcohol, $1.3 billion in wages were lost, while 98,000 people found themselves out of work.
Hardly sounds fair, does it?
It’s time to SAY NO to higher taxes that will put jobs at risk and raise prices on the people who can afford it the least. CLICK HERE to join the fight against irresponsible and regressive taxes.
Together, we can protect our jobs, our livelihoods, and the right to responsibly enjoy a drink.
Cheers!
Guy L. Smith
Executive Vice President
Diageo North America
This is all in support of AxeTaxesNotJobs.com--an effort by Diageo to encourage people to contact their representatives and ask that they act responsibly to help right America’s economy. I doubt very seriously that Diageo wants to be seen as a politically activist company in much the same way that I doubt that Cramer wants to be seen as someone fighting against a popular president or the long-term agenda that he actually believes in. But both are being moved by circumstance to actions that they wouldn’t normally take: standing athwart bad economic policies yelling, “Stop!”
A crisis like this is bound to make some strange bedfellows. An painful economic crisis has--through what can only be seen as poor leadership and shortsighted policies in our political class, but especially in our White House--become something much worse: the potential for a second Great Depression. The potential for crippling unemployment and economic implosion. Good policies can help us avoid that fate, but bad policies--those that Cramer and Guinness fight against and that Limbaugh hopes will fail--will push us right down that hole.
These are scary times and we all need to do what we can to head off a complete economic disaster. We can get back to arguing over the other stuff later.
Since I have borrowed so liberally from Cramer (and please do read the whole thing--it’s insightful stuff), I am going to dip into the well once more to give a good leftist the last word and to encourage you to add your voice to his:
So I will fight the fight against that agenda. I will stand up for what I believe and for what I have always believed: Every person has a right to be rich in this country and I want to help them get there. And when they get there, if times are good, we can have them give back or pay higher taxes. Until they get there, I don’t want them shackled or scared or paralyzed. That’s what I see now.
If that makes me an enemy of the White House, then call me a general of an army that Obama may not even know exists—tens of millions of people who live in fear of having no money saved when they need it and who get poorer by the day.
Comments & Trackbacks
Here’s the thing. If the Left, especially those in power on the Left, ever agree that now is not the time to push for “high tax—high spend” economic plans because we are in crisis, then they are already conceding that they have lost.
If something is bad because it makes a bad situation become a crisis, or makes a crisis become even worse, then it is bad when times are good, too, because it can make a good economy turn south.
What we, as conservatives, need to do, I think, is keep hammering the connection between the current economic “policy” (man, is that a loose label if I’ve ever seen one) with the continued economic downturn. The more people we convince that high taxes and high spending is “parasitic drag”, then the more we establish in the national psyche that low taxes, low spending, and small government will make people better off.
It IS time to argue this point, I think. Right now, conservatives can’t do much BUT argue. We need to hammer it home. Just as we hammered home that smoking kills, that we need to wear seat belts, that...well, *you* pick the best example you can think of that demonstrates a shift in pervasive national thinking...we need to make people KNOW, make the UNDERSTAND the rising tide that lifts all boats, the invisible hand: low taxes helps create wealth and spread wealth through the recycling of money stocks through all hands by way of massively multiple transactions…
Sorry, I got excited.
On another note: I know that I’ve lost money on paper, but I really don’t feel like I’ve lost anything, because I know it will go up eventually, and I wasn’t planning on touching any of that investment money for another 25 years, at least.
So from that point of view, the stock market crash doesn’t really make me feel more poor.
This is why it was important that McCain won. While nearly none of the Democrats and few of the Republicans are practicing fiscal restraint in the Senate, McCain was one of the few with a semi-decent record in this regard. Do you think this “stimulus” would have been signed on McCain’s desk? Moot point, I know, but every solution offered thus far by the Obama team has resulted in further erosion in confidence and increasing amounts of capital going on strike. So much for an end to the politics of fear.
The unfettered free market failed. Economics is not a science and deals in only probability. Economic analysis is based on centuries before the present world. No one knows what works, they only can guess; although we have many Oracles among us.
We’ve never come close to an unfettered free market.
You know the excuse of Communists and Socialists? You know: “Pure Socialism/Communism has never actually been tried! The attempts by Soviets, Chinese, et al, was flawed and incomplete!”
While they have a point (Human nature prevents socialism/communism from being a valid option, any attempt will be crippled from the start), that’s more true even for Free Markets that for Socialism or Communism.
No, what killed our economy was the opposite of free markets: it was the government pushing banks to make bad loans, and then the Democratic Congress removing the chance for natural consequences to punish those responsible, along with dismantling incentives for people to work hard, invest, and save money.
Human nature hasn’t changed. What is punished, decreases; what is rewarded, increases. Arrange incentives for the behavior you want, and you get it. If the wrong behavior results, investigate your incentive system (Venitari: “Tax the rat farms.")
"If something is bad because it makes a bad situation become a crisis, or makes a crisis become even worse, then it is bad when times are good, too, because it can make a good economy turn south.”
If I may play the devil’s advocate (for just a moment), but you could make an analogy between investments or actions you could make when things are good that during bad times might not be so wise. Going back to school, for example.
And the argument could be made that spending to improve infrastructure is not only an investment, but one that is wise even in a bad economic climate.
The thing is, even if you look at it from an infrastructure point of view, Obama’s stimulus bill is still utter bullshit. (The moment is over!) Increased funding for NASA when we’re on the verge of “The Great Depression II”? BULLSHIT! And I’m inclined to think the Homeland Security Department can do without a new half a billion dollar HQ. Christ! Why don’t you just give government employees brand new shiny cars while you’re at it? Oh, that’s right… they’re actually doing that with hybrid vehicles.
"The unfettered free market failed. “
Yeah. And?
I mean, I hear rumors that people on the right think the free market never fails, but I don’t remember ever seeing coming across a free market absolutist. Maybe it’s just me, but I’ve heard of companies going out of business. Like democracy, it’s the worst system except for all the others that have been tried.
There’s nothing that can stop human stupidity 100% of the time. You can’t guarantee people will never go crazy over tulips, you can’t guarantee that the regulators will be wise. And the current crisis is a perfect example of this. The side that is pro-free markets ironically actually tried to head off the crisis with regulation. The side that talks about how free markets failed, that are currently advocated regulation and would be in charge of implementing that regulation, they were part of the problem. They were getting discounted mortgages, they were the ones in charge of Fannie Mae and Freddie Mac. The SEC received complaints about Madoff for years, they never caught him, and that’s just one example. The SEC was asleep at the wheel.
I’ve yet to hear one piece of regulation that was axed that contributed to the mess, and I’ve yet to hear one plausible alternate history where this mess wouldn’t have happened. (Emphasis on plausible.)
"I’ve yet to hear one piece of regulation that was axed that contributed to the mess, and I’ve yet to hear one plausible alternate history where this mess wouldn’t have happened. (Emphasis on plausible.) “
You see I have read another blogger who says the opposite, whom should I believe? My common sense tells me that I don’t have enough knowledge to discern that. It also tells me that anything said here as a solution, has a high probability of being as right as the President’s proposals. Its all ideology, because you have no proof as to what will work. We have never seen in our history the exact same problem with opposite solutions. Many say what FDR did prolonged the depression, but there isn’t any proof, just a best guess that fits into a particular ideology.
We live in an era of bullshit, because we do fear the unknown, that outlier.
Well, what is it then? Let’s have it.
I’m pretty confident that increased funding for NASA will do nothing to help the current economic situation. Would anyone here like to argue the contrary?
We do indeed live in the era of bullshit, but it is largely because so many things that are known, get crowded out by competing narratives that have only the passion of their promoters for support.
Which is how we got this unaccomplished neophyte for president, being lauded as the solution to all ills, whereas a twice-elected governor of a large state (the first ever to win re-election in that state) and former fighter pilot was derided as a dunce.