Tag: housing

For anyone whose read my pieces in the past, knows that I hold a certain disdain towards former Reagan White House OMB Associate Director/conservative-libertarian Ayn Rand acolyte Larry Kudlow.  It’s nothing personal against the guy, it’s his ideas and economic policy objectives that I find fault with.  For the past couple of months, he’s been going on about this is the “Goldilocks economy.”  Essentially, that we’re worrying about nothing because one bad economic indicator is being offset by a good one (mind you, he’s often just used productivity as that one).  Well today, despite his claims that all is almost well, we got some news that just proves Larry Kudlow wrong!  

Since that surge is working so well, I guess we’re just going to have to keep surging. Forever. According to The Hill:

This year’s battle over Iraq war funding officially kicked off Wednesday as Defense Secretary Robert Gates reluctantly offered a price tag for the first time: $170 billion for fiscal 2009.

Speaking at a Senate Armed Services Committee hearing, Gates only gave the number after Chairman Carl Levin (D-Mich.) pressed him, but rejected his own estimate right off the bat, calling it a number that “will inevitably be wrong, and perhaps significantly so.”

“I will be giving you precision without accuracy,” warned Gates.

Levin insisted that he give his best estimate for next year’s war-funding needs.

“Well, a straight-line projection, Mr. Chairman, of our current expenditures would probably put the full-year cost, in a strictly arithmetic approach, at about $170 billion,” Gates responded.

Of course, Gates made clear that the number could be wrong; and I’m guessing he didn’t mean wrong as in an overestimate. But the Administration is very conscious of the drain on our federal budget. Not the drain from the war, mind you, the other drain. On Monday, the Washington Post reported that Bush wants to do something about it. Like slash and burn. You know- the low priority stuff.

President Bush plans to unveil a $2.5 trillion budget today eliminating dozens of politically sensitive domestic programs, including funding for education, environmental protection and business development, while proposing significant increases for the military and international spending, according to White House documents.

Overall, discretionary spending other than defense and homeland security would fall by nearly 1 percent, the first time in many years that funding for the major part of the budget controlled by Congress would actually go down in real terms, according to officials with access to the budget. The cuts are scattered across a wide swath of the government, affecting a cross-section of constituents, from migrant workers to train passengers to local police departments, according to officials who read portions of the documents to The Washington Post.

And one very important person is already on board.

Sen. John McCain (R-Ariz.) said on ABC’s “This Week.” “I hope we in Congress will have the courage to support it.”

Rep. King is furious.  Nine democrats in the House voted “No” on resolution he proposed stating that  “the Christian faith as one of the great religions of the world.” The resolution recognized “the international religious and historical importance of Christmas and the Christian faith.”

What could those nine have been thinking?   Could it have been something related to the separation of Church and State?  

More importantly, what was Rep. King’s motivation for such a resolution?

Speaking with FOX News Wednesday, King said he was motivated to push the resolution because of liberal activists and “secularists in the country who are trying to eradicate Christ from Christmas.”

“It’s time we stood up and said so and said to the rest of America, ‘Be who you are, and be confident, and let’s worship Christ and celebrate Christmas for the right reasons’,” he said

Below: Reverend Billy and the Stop Shopping Choir in the Mall of America.

That graph was posted alongside this article in the NYT, and it pretty much captures the unprecedented nature of the credit crisis we’re going through this autumn. In several sectors of the financial world, lending quite simply stopped. Leveraged buy-outs, the big story of the past 18 months, no longer exist. Asset-backed paper is seen as “toxic waste”, and no longer provided – it continues to exist in so far as banks would rather roll over paper that cannot be repaid rather than make all the underlying losses appear in plain sight.

As lending prior to that had been extravagantly exuberant, this is not having an immediate impact for many companies, which have sound balance sheets and advantageous existing credit lines, but as it drags on, the real economy will start to feel the pinch as it needs to finance or refinance its normal activities, let alone investment.